Blucora (NASDAQ:BCOR) was formed in 1996 as a Delaware corporation under the name InfoSpace, Inc. n 2008, InfoSpace began principally focusing on internet search services and content. In January 2012, InfoSpace acquired TaxAct. In connection with this acquisition, InfoSpace changed its name to Blucora, Inc. in June 2012.  In July 2015, Blucora acquired SimpleTax Software Inc. (“SimpleTax”), a provider of digital tax preparation services for individuals in Canada.

Blucora operates two primary businesses: a Wealth Management business and a digital Tax Preparation business. The Wealth Management business consists of the operations of Avantax Wealth Management, which provides tax-focused wealth management solutions for financial advisors, tax preparers, certified public accounting firms, and their clients. The Tax Preparation business consists of the operations of TaxAct, Inc. and provides digital tax preparation solutions for consumers, small business owners, and tax professionals through its website www.TaxAct.com.

On May 6, 2019, the company closed the acquisition of all of the issued and outstanding common stock of 1st Global, Inc. and 1st Global Insurance Services, Inc. (together, “1st Global”), a tax-focused wealth management company, for a cash purchase price of $180.0 million (the “1st Global Acquisition”). The 1st Global Acquisition was strategically important as it expands its presence as the leading tax-focused independent broker-dealer while also providing the scale to compete more broadly in the wealth management market. The purchase price was paid with a combination of information cash on hand and (ii) the proceeds from a $125.0 million increase in the term loan under its credit agreement. The operations of 1st Global are included in its operating results as part of the Wealth Management segment from the date of the 1st Global Acquisition.

Following an evaluation of the Tax Preparation business’s strategic initiatives, including which aspects of the Tax Preparation business were considered non-core strategies, on September 4, 2019, the company completed the disposition of all of the issued and outstanding stock of SimpleTax for proceeds of $9.6 million. This amount was received in the third quarter of 2019, resulting in a $3.3 million gain on sale for the year ended December 31, 2019. Prior to its sale, SimpleTax was a component of its Tax Preparation business.

On September 9, 2019, the company announced a rebranding of its Wealth Management business to Avantax Wealth Management (the “Rebranding”). In connection with the Rebranding, HD Vest (which comprised all of the Wealth Management business prior to the 1st Global Acquisition) was renamed Avantax Wealth Management in mid-September 2019, and 1st Global converted in late October 2019. The Rebranding is designed to bring broader awareness to its Tax-Smart wealth management approach, providing tax-focused wealth management advice with technology-advantaged tools, allowing its financial advisors to easily provide Tax-Smart wealth solutions to their clients.

Business Overview

Blucora has two reportable segments: (1) the Wealth Management segment and (2) the Tax Preparation segment.1

Wealth Management Business

Through its registered broker-dealer, registered investment advisor, and insurance agency subsidiaries, Avantax Wealth Management operates the largest U.S. tax-focused independent broker-dealer, providing tax-smart wealth management solutions to financial advisors and their clients nationwide.2

Avantax works with a nationwide network of nearly 4,000 advisors that operate as independent contractors. Avantax provides these advisors with an integrated platform of technical, practice, and product support tools to assist in making each financial advisor a comprehensive financial service center for his or her clients.

Unlike traditional independent broker-dealers and investment advisors whose client relationships are limited to providing investment advice, most Avantax advisors have long-standing tax advisory relationships that anchor their wealth management businesses. This is because Avantax primarily recruits and serves independent tax professionals, CPA firms, and financial advisors who partner with established tax practices. The company believe that tax and accounting professionals, with their existing client relationships and in-depth knowledge of their clients’ financial situations, possess a competitive advantage as their tax advisory relationships provide a large base of potential wealth management clients. This results in an experienced and stable network of financial advisors who are ideally positioned to provide tailored and comprehensive financial solutions that enable clients to meet their financial goals, including their tax goals. In turn, its advisors have multiple revenue-generating options to diversify their earnings sources.

Tax Preparation Business

TaxAct, a leading provider of digital tax preparation solutions, has leveraged its strong brand, comprehensive suite of tax preparation solutions, and proven digital lead generation capabilities to enable the filing of more than 68 million federal consumer tax returns since 2000. TaxAct operates as the value player in its market, with a mission to empower people to navigate the complexities of tax preparation with ease and accuracy at a fair price.3


The company's Tax Preparation segment is highly seasonal, with a significant portion of its annual revenue earned in the first four months of its fiscal year. During the third and fourth quarters, the Tax Preparation segment typically reports losses because revenue from the segment is minimal while core operating expenses continue. The company anticipate that the seasonal nature of that part of the business will continue in the foreseeable future.

Financial highlights

For the year ended December 31, 2019 compared to the year ended December 31, 2018, operating income decreased $67.7 million, consisting of a $225.2 million increase in operating expenses, partially offset by a $157.5 million increase in revenue.

Revenue increased $157.5 million due to increases of $134.8 million and $22.7 million in revenue related to its Wealth Management and Tax Preparation businesses, respectively,

Operating expenses increased $225.2 million primarily due to $110.7 million of incremental Wealth Management operating expenses contributed by 1st Global. Operating expenses also increased due to a $91.9 million increase in corporate-level expenses, which included a $50.9 million intangible asset impairment in connection with the Rebranding, as well as $25.8 million in acquisition and integration costs primarily due to the 1st Global Acquisition.

Recent developments

On March 16, 2020 Blucora, Inc. announced that that Mimi Carsley has been named interim Chief Financial Officer as the company continues its nationwide search to fill the position on a permanent basis. A member of the Blucora team since 2018, Carsley has held a number of leadership roles inside the company including as Vice President, Financial Planning & Analysis and as CFO of its Avantax Wealth Management business unit. Her Blucora experience also includes having served as Vice President of Corporate Development and Integration Management Office where she helped with the successful acquisition and integration of 1st Global.4


As of December 31, 2019, the company had 690 full-time employees. There is significant competition for qualified personnel in the industries in which the company operate, particularly for software development and other technical staff. The company believe that its future success will depend in part on its continued ability to hire and retain qualified personnel.


  1. ^ https://www.sec.gov/ix?doc=/Archives/edgar/data/1068875/000106887520000056/bcor10-k2019.htm#s99525DA876EA5B62A51FB3D1C14F7807
  2. ^ https://www.avantaxwealthmanagement.com
  3. ^ https://www.taxact.com
  4. ^ http://www.blucora.com/index.php/news-releases/news-release-details/blucora-names-mimi-carsley-interim-chief-financial-officer
Created by Asif Farooqui on 2020/03/23 14:14
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