Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 02, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 000-25131 | |
Entity Registrant Name | Blucora, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 91-1718107 | |
Entity Address, Address Line One | 3200 Olympus Blvd, Suite 100 | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75019 | |
City Area Code | 972 | |
Local Phone Number | 870-6400 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | BCOR | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 48,043,723 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0001068875 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 151,166 | $ 80,820 |
Cash segregated under federal or other regulations | 203 | 5,630 |
Accounts receivable, net of allowance | 12,191 | 16,266 |
Commissions receivable | 22,656 | 21,176 |
Other receivables | 5,811 | 2,902 |
Prepaid expenses and other current assets, net | 9,428 | 12,349 |
Total current assets | 201,455 | 139,143 |
Long-term assets: | ||
Property and equipment, net | 53,940 | 18,706 |
Right-of-use assets, net | 24,028 | 10,151 |
Goodwill, net | 449,221 | 662,375 |
Other intangible assets, net | 331,014 | 290,211 |
Deferred tax asset, net | 0 | 9,997 |
Other long-term assets | 4,093 | 6,989 |
Total long-term assets | 862,296 | 998,429 |
Total assets | 1,063,751 | 1,137,572 |
Current liabilities: | ||
Accounts payable | 6,464 | 10,969 |
Commissions and advisory fees payable | 16,893 | 19,905 |
Accrued expenses and other current liabilities | 42,815 | 36,144 |
Deferred revenue—current | 4,281 | 12,014 |
Lease liabilities—current | 1,552 | 3,272 |
Current portion of long-term debt, net | 1,782 | 11,228 |
Total current liabilities | 73,787 | 93,532 |
Long-term liabilities: | ||
Long-term debt, net | 552,417 | 381,485 |
Deferred tax liability, net | 12,802 | 0 |
Deferred revenue—long-term | 6,478 | 7,172 |
Lease liabilities—long-term | 36,973 | 5,916 |
Other long-term liabilities | 22,150 | 5,952 |
Total long-term liabilities | 630,820 | 400,525 |
Total liabilities | 704,607 | 494,057 |
Commitments and contingencies (Note 10) | ||
Stockholders’ equity: | ||
Common stock, par value $0.0001 per share—900,000 authorized shares; 49,350 shares issued and 48,044 shares outstanding at September 30, 2020; 49,059 shares issued and 47,753 shares outstanding at December 31, 2019 | 5 | 5 |
Additional paid-in capital | 1,594,384 | 1,586,972 |
Accumulated deficit | (1,206,846) | (914,791) |
Accumulated other comprehensive loss | 0 | (272) |
Treasury stock, at cost—1,306 shares at September 30, 2020 and December 31, 2019 | (28,399) | (28,399) |
Total stockholders’ equity | 359,144 | 643,515 |
Total liabilities and stockholders’ equity | $ 1,063,751 | $ 1,137,572 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 900,000,000 | 900,000,000 |
Common stock, shares issued (in shares) | 49,350,000 | 49,059,000 |
Common stock, shares outstanding (in shares) | 48,044,000 | 47,753,000 |
Treasury stock (in shares) | 1,306,000 | 1,306,000 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue: | ||||
Total revenue | $ 175,353 | $ 149,016 | $ 599,795 | $ 568,524 |
Cost of revenue: | ||||
Total cost of revenue | 98,814 | 103,663 | 292,091 | 259,864 |
Engineering and technology | 6,007 | 8,635 | 21,899 | 22,323 |
Sales and marketing | 31,018 | 19,976 | 150,785 | 104,804 |
General and administrative | 18,605 | 19,642 | 63,533 | 55,721 |
Acquisition and integration | 10,276 | 6,759 | 18,782 | 17,739 |
Depreciation | 1,874 | 1,470 | 5,345 | 3,846 |
Amortization of other acquired intangible assets | 7,746 | 10,082 | 22,167 | 27,295 |
Impairment of goodwill and an intangible asset | 0 | 50,900 | 270,625 | 50,900 |
Total operating expenses | 174,340 | 221,127 | 845,227 | 542,492 |
Operating income (loss) | 1,013 | (72,111) | (245,432) | 26,032 |
Other loss, net | (11,963) | (2,606) | (23,386) | (11,682) |
Income (loss) before income taxes | (10,950) | (74,717) | (268,818) | 14,350 |
Income tax benefit (expense) | (15,256) | 12,331 | (23,237) | 16,470 |
Net income (loss) attributable to Blucora, Inc. | $ (26,206) | $ (62,386) | $ (292,055) | $ 30,820 |
Net income (loss) per share attributable to Blucora, Inc.: | ||||
Basic (in USD per share) | $ (0.55) | $ (1.28) | $ (6.09) | $ 0.64 |
Diluted (in USD per share) | $ (0.55) | $ (1.28) | $ (6.09) | $ 0.62 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 48,039 | 48,652 | 47,936 | 48,456 |
Diluted (in shares) | 48,039 | 48,652 | 47,936 | 49,596 |
Comprehensive income (loss): | ||||
Net income (loss) | $ (26,206) | $ (62,386) | $ (292,055) | $ 30,820 |
Other comprehensive income (loss) | 0 | (64) | 272 | 174 |
Comprehensive income (loss) attributable to Blucora, Inc. | (26,206) | (62,450) | (291,783) | 30,994 |
Wealth Management Services | ||||
Revenue: | ||||
Total revenue | 135,932 | 145,428 | 396,805 | 362,791 |
Cost of revenue: | ||||
Total cost of revenue | 96,122 | 102,030 | 282,332 | 250,881 |
Tax Preparation Services | ||||
Revenue: | ||||
Total revenue | 39,421 | 3,588 | 202,990 | 205,733 |
Cost of revenue: | ||||
Total cost of revenue | $ 2,692 | $ 1,633 | $ 9,759 | $ 8,983 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common stock | Additional paid-in capital | Accumulated deficit | Accumulated deficitCumulative Effect, Period of Adoption, Adjustment | Accumulated other comprehensive loss | Treasury stock |
Balance as of beginning of period at Dec. 31, 2018 | $ 24,945 | |||||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||||
Reclassification of mandatorily redeemable noncontrolling interests | (22,428) | |||||||
Net income (loss) | 0 | |||||||
Balance as of end of period at Mar. 31, 2019 | 2,517 | |||||||
Balance (in shares) at Mar. 31, 2019 | 48,255 | 0 | ||||||
Balance at Dec. 31, 2018 | 607,595 | $ (1,636) | $ 5 | $ 1,569,725 | $ (961,689) | $ (1,636) | $ (446) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Common stock issued for stock options, restricted stock units (in shares) | 211 | |||||||
Common stock issued for stock options and restricted stock units | 283 | 283 | ||||||
Stock-based compensation | 2,443 | 2,443 | ||||||
Tax payments from shares withheld for equity awards | (2,425) | (2,425) | ||||||
Cumulative translation adjustment | 107 | 107 | ||||||
Net income (loss) | 62,170 | 62,170 | ||||||
Balance (in shares) at Dec. 31, 2018 | 48,044 | 0 | ||||||
Balance at Mar. 31, 2019 | 668,537 | $ 5 | 1,570,026 | (901,155) | (339) | $ 0 | ||
Balance as of beginning of period at Dec. 31, 2018 | 24,945 | |||||||
Balance as of end of period at Sep. 30, 2019 | 0 | |||||||
Balance (in shares) at Sep. 30, 2019 | 48,895 | 561 | ||||||
Balance at Dec. 31, 2018 | 607,595 | $ (1,636) | $ 5 | 1,569,725 | (961,689) | $ (1,636) | (446) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative translation adjustment | 174 | |||||||
Net income (loss) | 30,820 | |||||||
Balance (in shares) at Dec. 31, 2018 | 48,044 | 0 | ||||||
Balance at Sep. 30, 2019 | 634,846 | $ 5 | 1,580,336 | (932,505) | (272) | $ (12,718) | ||
Balance as of beginning of period at Mar. 31, 2019 | 2,517 | |||||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||||
Redemption of noncontrolling interests | (2,517) | |||||||
Net income (loss) | 0 | |||||||
Balance as of end of period at Jun. 30, 2019 | 0 | |||||||
Balance (in shares) at Jun. 30, 2019 | 48,779 | 0 | ||||||
Balance at Mar. 31, 2019 | 668,537 | $ 5 | 1,570,026 | (901,155) | (339) | $ 0 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Common stock issued for stock options, restricted stock units, and employee stock purchase plan (in shares) | 524 | |||||||
Common stock issued for stock options, restricted stock units, and employee stock purchase plan | 4,181 | 4,181 | ||||||
Stock-based compensation | 4,082 | 4,082 | ||||||
Tax payments from shares withheld for equity awards | (2,735) | (2,735) | ||||||
Cumulative translation adjustment | 131 | 131 | ||||||
Net income (loss) | 31,036 | 31,036 | ||||||
Balance (in shares) at Mar. 31, 2019 | 48,255 | 0 | ||||||
Balance at Jun. 30, 2019 | 705,232 | $ 5 | 1,575,554 | (870,119) | (208) | $ 0 | ||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||||
Net income (loss) | 0 | |||||||
Balance as of end of period at Sep. 30, 2019 | 0 | |||||||
Balance (in shares) at Sep. 30, 2019 | 48,895 | 561 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Common stock issued for stock options, restricted stock units (in shares) | 116 | |||||||
Common stock issued for stock options and restricted stock units | 491 | $ 491 | ||||||
Stock-based compensation | 4,639 | 4,639 | ||||||
Tax payments from shares withheld for equity awards | (348) | (348) | ||||||
Cumulative translation adjustment | (64) | (64) | ||||||
Net income (loss) | (62,386) | (62,386) | ||||||
Stock repurchases (in shares) | (561) | |||||||
Stock repurchases | (12,718) | $ (12,718) | ||||||
Balance (in shares) at Jun. 30, 2019 | 48,779 | 0 | ||||||
Balance at Sep. 30, 2019 | 634,846 | $ 5 | 1,580,336 | (932,505) | (272) | $ (12,718) | ||
Balance as of beginning of period at Dec. 31, 2019 | 0 | |||||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||||
Net income (loss) | 0 | |||||||
Balance as of end of period at Mar. 31, 2020 | 0 | |||||||
Balance (in shares) at Mar. 31, 2020 | 49,148 | 1,306 | ||||||
Balance at Dec. 31, 2019 | 643,515 | $ 5 | 1,586,972 | (914,791) | (272) | $ (28,399) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Common stock issued for stock options, restricted stock units (in shares) | 89 | |||||||
Common stock issued for stock options and restricted stock units | 0 | |||||||
Stock-based compensation | (1,201) | (1,201) | ||||||
Tax payments from shares withheld for equity awards | (917) | (917) | ||||||
Cumulative translation adjustment | 272 | 272 | ||||||
Net income (loss) | (315,494) | (315,494) | ||||||
Balance (in shares) at Dec. 31, 2019 | 49,059 | 1,306 | ||||||
Balance at Mar. 31, 2020 | 326,175 | $ 5 | 1,584,854 | (1,230,285) | 0 | $ (28,399) | ||
Balance as of beginning of period at Dec. 31, 2019 | 0 | |||||||
Balance as of end of period at Sep. 30, 2020 | 0 | |||||||
Balance (in shares) at Sep. 30, 2020 | 49,350 | 1,306 | ||||||
Balance at Dec. 31, 2019 | 643,515 | $ 5 | 1,586,972 | (914,791) | (272) | $ (28,399) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Cumulative translation adjustment | 272 | |||||||
Net income (loss) | (292,055) | |||||||
Balance (in shares) at Dec. 31, 2019 | 49,059 | 1,306 | ||||||
Balance at Sep. 30, 2020 | 359,144 | $ 5 | 1,594,384 | (1,206,846) | 0 | $ (28,399) | ||
Balance as of beginning of period at Mar. 31, 2020 | 0 | |||||||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||||
Net income (loss) | 0 | |||||||
Balance as of end of period at Jun. 30, 2020 | 0 | |||||||
Balance (in shares) at Jun. 30, 2020 | 49,340 | 1,306 | ||||||
Balance at Mar. 31, 2020 | 326,175 | $ 5 | 1,584,854 | (1,230,285) | 0 | $ (28,399) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Common stock issued for stock options, restricted stock units, and employee stock purchase plan (in shares) | 192 | |||||||
Common stock issued for stock options, restricted stock units, and employee stock purchase plan | 1,226 | 1,226 | ||||||
Stock-based compensation | 3,904 | 3,904 | ||||||
Tax payments from shares withheld for equity awards | (89) | (89) | ||||||
Net income (loss) | 49,645 | 49,645 | ||||||
Balance (in shares) at Mar. 31, 2020 | 49,148 | 1,306 | ||||||
Balance at Jun. 30, 2020 | 380,861 | $ 5 | 1,589,895 | (1,180,640) | 0 | $ (28,399) | ||
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | ||||||||
Net income (loss) | 0 | |||||||
Balance as of end of period at Sep. 30, 2020 | 0 | |||||||
Balance (in shares) at Sep. 30, 2020 | 49,350 | 1,306 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Common stock issued for stock options, restricted stock units (in shares) | 10 | |||||||
Common stock issued for stock options and restricted stock units | 0 | |||||||
Stock-based compensation | 4,517 | 4,517 | ||||||
Tax payments from shares withheld for equity awards | (28) | (28) | ||||||
Cumulative translation adjustment | 0 | |||||||
Net income (loss) | (26,206) | (26,206) | ||||||
Balance (in shares) at Jun. 30, 2020 | 49,340 | 1,306 | ||||||
Balance at Sep. 30, 2020 | $ 359,144 | $ 5 | $ 1,594,384 | $ (1,206,846) | $ 0 | $ (28,399) |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating activities: | ||
Net income (loss) | $ (292,055) | $ 30,820 |
Adjustments to reconcile net income (loss) to net cash from operating activities: | ||
Stock-based compensation | 7,220 | 11,164 |
Depreciation and amortization of acquired intangible assets | 29,619 | 32,078 |
Impairment of goodwill and an intangible asset | 270,625 | 50,900 |
Reduction of right-of-use lease assets | 8,335 | 3,117 |
Deferred income taxes | 23,199 | (23,343) |
Amortization of debt issuance costs | 1,006 | 848 |
Accretion of debt discounts | 414 | 189 |
Gain on sale of a business | (349) | (3,256) |
Change in fair value of acquisition-related contingent consideration | (1,000) | 0 |
Accretion of lease liability | 1,413 | 460 |
Other | 984 | 48 |
Cash provided (used) by changes in operating assets and liabilities: | ||
Accounts receivable | 12,267 | 352 |
Commissions receivable | (1,480) | (19) |
Other receivables | (2,909) | (18) |
Prepaid expenses and other current assets | 2,555 | 13,828 |
Other long-term assets | 2,763 | 497 |
Accounts payable | (7,018) | (2,346) |
Commissions and advisory fees payable | (3,012) | (602) |
Lease liabilities | (3,568) | (3,371) |
Deferred revenue | (8,582) | (21,694) |
Accrued expenses and other current and long-term liabilities | (5,113) | 6,595 |
Net cash provided by operating activities | 35,314 | 96,247 |
Investing activities: | ||
Business acquisition, net of cash acquired | (102,425) | (166,561) |
Purchases of property and equipment | (28,711) | (6,887) |
Proceeds from sale of a business, net of cash | 349 | 7,467 |
Net cash used by investing activities | (130,787) | (165,981) |
Financing activities: | ||
Proceeds from credit facilities | 226,278 | 121,489 |
Payments on credit facilities | (66,078) | 0 |
Stock repurchases | 0 | (11,968) |
Payment of redeemable noncontrolling interests | 0 | (24,945) |
Proceeds from stock option exercises | 25 | 3,811 |
Proceeds from issuance of stock through employee stock purchase plan | 1,201 | 1,144 |
Tax payments from shares withheld for equity awards | (1,034) | (5,508) |
Contingent consideration payments for business acquisition | 0 | (943) |
Net cash provided by financing activities | 160,392 | 83,080 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 0 | 38 |
Net increase in cash, cash equivalents, and restricted cash | 64,919 | 13,384 |
Cash, cash equivalents, and restricted cash, beginning of period | 86,450 | 85,366 |
Cash, cash equivalents, and restricted cash, end of period | 151,369 | 98,750 |
Supplemental cash flow information: | ||
Accrued stock repurchases | 0 | 750 |
Cash paid for income taxes | 1,657 | 3,154 |
Cash paid for interest | 16,994 | 13,901 |
Non-cash investing activities: | ||
Purchases of property and equipment through leasehold incentives (investing) | $ 9,726 | $ 0 |
Description of the Business
Description of the Business | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business | Note 1: Description of the Business Blucora, Inc. (the “Company,” “Blucora,” “we,” “our,” or “us” ) operates two primary businesses: the Wealth Management business and the digital Tax Preparation business. Wealth Management The Wealth Management business consists of the operations of Avantax Wealth Management ( “Avantax” ) and HKFS (defined below) (collectively, the “Wealth Management business” or the “Wealth Management segment” ). Avantax provides tax-focused wealth management solutions for financial professionals, tax preparers, certified public accounting firms, and their clients. Avantax offers its services through its registered broker-dealer, registered investment advisor ( “RIA” ), and insurance agency subsidiaries and is the largest U.S. tax-focused independent broker-dealer. Avantax works with a nationwide network of financial professionals that operate as independent contractors. Avantax provides these financial professionals with an integrated platform of technical, practice, and product support tools to assist in making each financial professional a comprehensive financial service center for his or her clients. Avantax formerly operated under the HD Vest and 1st Global brands prior to the rebranding of the Wealth Management business to Avantax Wealth Management in 2019. On July 1, 2020, we acquired all of the issued and outstanding common stock of Honkamp Krueger Financial Services, Inc. ( “HKFS,” and such acquisition, the “HKFS Acquisition” ). HKFS operates as a captive, or employee-based, RIA and wealth management business that partners with CPA firms in order to provide their consumer and small business clients with holistic planning and financial advisory services. The operations of HKFS are included in operating results as part of the Wealth Management segment from the date of the HKFS Acquisition. For additional information, see "Note 3—Acquisitions." Tax Preparation The Tax Preparation business consists of the operations of TaxAct, Inc. ( “TaxAct,” the “Tax Preparation business,” or the “Tax Preparation segment” ) and provides digital tax preparation solutions for consumers, small business owners, and tax professionals through its website www.TaxAct.com. The Tax Preparation segment is highly seasonal, with a significant portion of its annual revenue typically earned in the first four months of the 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. In March 2020 and as a result of the coronavirus pandemic, the Internal Revenue Service ( “IRS” ) extended the filing deadline for federal tax returns from April 15, 2020 to July 15, 2020. This filing extension resulted in the shifting of a significant portion of Tax Preparation segment revenue that is usually earned in the first and second quarters of 2020 to the third quarter of 2020. In addition, sales and marketing expenses were elevated for the nine months ended September 30, 2020. Segments |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2: Summary of Significant Accounting Policies Interim financial information The accompanying condensed consolidated financial statements have been prepared by us under the rules and regulations of the Securities and Exchange Commission (the “ SEC” ) for interim financial reporting. These condensed consolidated financial statements are unaudited and, in management’s opinion, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for a fair presentation of the consolidated financial position, results of operations, and cash flows for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in conformity with United States generally accepted accounting principles ( “ GAAP” ) have been omitted in accordance with the rules and regulations of the SEC. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2019. Interim results are not necessarily indicative of results for a full year. Cash, cash equivalents, and restricted cash The following table presents cash, cash equivalents, and restricted cash as reported on the consolidated balance sheets and the consolidated statements of cash flows (in thousands): September 30, 2020 December 31, 2019 Cash and cash equivalents $ 151,166 $ 80,820 Cash segregated under federal or other regulations 203 5,630 Total cash, cash equivalents, and restricted cash $ 151,369 $ 86,450 We generally invest our available cash in high-quality marketable investments, which primarily consist of investments in money market funds invested in securities issued by agencies of the U.S. government. We may invest, from time-to-time, in other vehicles, such as debt instruments issued by the U.S. federal government and its agencies, international governments, municipalities and publicly held corporations, as well as commercial paper and insured time deposits with commercial banks. Specific holdings can vary from period to period depending upon our cash requirements. Such investments are reported at fair value on the consolidated balance sheets. Cash segregated under federal and other regulations is held in a separate bank account for the exclusive benefit of our Wealth Management business clients and is considered restricted cash. Business combinations We account for business combinations using the acquisition method. Under the acquisition method, the purchase price of the HKFS Acquisition has been allocated to HKFS’s acquired tangible and identifiable intangible assets and assumed liabilities based on their estimated fair values at the time of the HKFS Acquisition. This allocation involves a number of assumptions, estimates, and judgments that could materially affect the timing or amounts recognized in our financial statements. The most subjective areas of the acquisition accounting method included determining the fair value of the following: • intangible assets, including the valuation methodology, estimates of future cash flows, discount rates, growth rates, as well as the estimated useful life of intangible assets; • contingent consideration, including the valuation methodology, estimates of future advisory asset levels, discount rates, growth rates, and volatility levels; and • goodwill, as measured as the excess of consideration transferred over the acquisition date fair value of the assets acquired, including the amount assigned to identifiable intangible assets, and the liabilities assumed. Our assumptions and estimates are based upon comparable market data and information obtained from the management of HKFS. Goodwill is assigned to reporting units that are expected to benefit from the synergies of the business combination as of the acquisition date. Our reporting units are consistent with our reportable segments, and accordingly, the goodwill acquired from HKFS was assigned to the Wealth Management reporting unit. Identifiable intangible assets with finite lives are amortized over their useful lives on a straight-line basis. Acquisition-related costs, including advisory, legal, accounting, valuation, and other similar costs, are expensed in the periods in which the costs are incurred. The results of operations of acquired businesses are included in the consolidated financial statements from the acquisition date. Recently adopted accounting pronouncements Changes to GAAP are established by the Financial Accounting Standards Board ( “FASB” ) in the form of accounting standards updates ( “ASUs” ) to the FASB’s Accounting Standards Codification ( “ASC” ). We consider the applicability and impact of all recent ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position and results of operations. We have recently adopted the ASUs described below. Measurement of Credit Losses . In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ( “ASU 2016-13” ), which changes how entities account for credit losses of financial assets measured at amortized cost. ASU 2016-13 requires financial assets measured at amortized cost to be presented on the balance sheet at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. ASU 2016-13 replaces the previous “incurred loss” model with a “current expected credit loss” model that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of the financial asset. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including the interim periods within those fiscal years. Entities must apply ASU 2016-13 using a modified-retrospective approach by recording a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which ASU 2016-13 is effective. We adopted ASU 2016-13 effective January 1, 2020. Our financial assets within the scope of ASU 2016-13 primarily consisted of our commissions receivable and accounts receivable. While we have implemented the current expected credit loss model and assessed the impact of this new model on our in-scope financial assets, the adoption of ASU 2016-13 did not have a material impact on our consolidated financial statements and did not result in a cumulative-effect adjustment to retained earnings as of January 1, 2020. Goodwill . In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Accounting for Goodwill ( “ASU 2017-04” ), which simplifies the subsequent measurement of goodwill by eliminating the previously applicable step two from the goodwill impairment test. Under the amended guidance of ASU 2017-04, when required to test goodwill for recoverability, an entity will perform its goodwill impairment test by comparing the fair value of the reporting unit to its carrying value and recognizing an impairment charge for the amount by which the carrying value exceeds the fair value of the reporting unit. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, and entities must apply ASU 2017-04 on a prospective basis. We adopted ASU 2017-04 effective January 1, 2020 and applied this new guidance to the goodwill impairment test we performed as of March 31, 2020. For more information on this impairment test, see “Note 5—Goodwill and Other Intangible Assets.” |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | Note 3: Acquisitions HKFS Acquisition On July 1, 2020, we closed the HKFS Acquisition for an upfront cash purchase price of $104.4 million, which was paid with a portion of the proceeds from the $175.0 million increase in the Term Loan (as defined in "Note 6—Debt"). The purchase price is subject to customary adjustment and two potential post-closing earn-out payments (the “HKFS Contingent Consideration” ) by us. The amount of the HKFS Contingent Consideration is determined based on advisory asset levels and the achievement of certain performance goals (i) for the period beginning on July 1, 2020 and ending on July 1, 2021 and (ii) for the period beginning on July 1, 2021 and ending on July 1, 2022. Pursuant to the Stock Purchase Agreement, dated as of January 6, 2020, by and among the Company, HKFS, the selling stockholders named therein (the “Sellers” ), and JRD Seller Representative, LLC, as the Sellers’ representative, as amended, the maximum aggregate amount that we would be required to pay for each earn-out period is $30.0 million, provided that any unearned amounts during the first earn-out period may also be earned during the second earn-out period. If the asset values on the applicable measurement date fall below certain specified thresholds, we would not be required to make any earn-out payment to the Sellers for such period. On the HKFS Acquisition date, the fair value of the HKFS Contingent Consideration was $27.6 million. We recorded the short-term and long-term portions of the HKFS Contingent Consideration in “Accrued expenses and other current liabilities” and “Other long-term liabilities,” respectively, on the consolidated balance sheet. Subsequent to the HKFS Acquisition date, the HKFS Contingent Consideration is remeasured to an estimated fair value at each reporting date until the contingency is resolved. As of September 30, 2020, the fair value of the HKFS Contingent Consideration was $26.6 million. Changes in estimated fair value are recognized in “Acquisition and integration” expenses on the condensed consolidated statements of comprehensive income (loss) in the period in which they occur. For additional information on the HKFS Contingent Consideration, see "Note 9—Fair Value Measurements." The purchase price of the HKFS Acquisition was allocated to HKFS’s tangible assets, identifiable intangible assets, and assumed liabilities based on their estimated fair values at the time of the HKFS Acquisition. The preliminary fair value of assets acquired and liabilities assumed in the HKFS Acquisition were as follows (in thousands): Purchase Price Allocation at Assets acquired: Tangible assets acquired, including cash of $1,980 (1) 15,517 Identifiable intangible assets 62,970 Goodwill 58,137 Liabilities assumed (5,134) Total assets acquired and liabilities assumed $ 131,490 Cash paid at HKFS Acquisition date $ 104,404 Adjustment receivable (514) HKFS Contingent Consideration 27,600 Total purchase price $ 131,490 __________________________ (1) Included in tangible assets acquired were accounts receivable of $7.8 million, which primarily consisted of advisory fees receivable. As an insignificant amount of these receivables was expected to be uncollectible, the acquired amount approximates the fair value of the accounts receivable. The identifiable intangible assets were as follows (in thousands, except as otherwise indicated): Estimated Fair Value Accumulated Amortization through September 30, 2020 Useful Life at HKFS Acquisition Date (in months) Customer relationships $ 58,400 $ 973 180 CPA firm relationships 4,070 68 180 Trade name 500 42 36 Total identified intangible assets $ 62,970 $ 1,083 179 For both the three and nine months ended September 30, 2020, we recognized amortization expenses related to acquired intangible assets of HKFS of $1.1 million in “Amortization of other acquired intangible assets” on the consolidated statements of comprehensive income (loss). The excess of the total consideration over the tangible assets, identifiable intangible assets, and assumed liabilities was recorded as goodwill in the amount of $58.1 million. Goodwill consists largely of the cost, revenue, and marketing synergies expected from incorporating HKFS into our existing Wealth Management business. These synergies include, but are not limited to, increased scale, enhanced capabilities, and an integrated platform. All of the acquired goodwill recognized is expected to be deductible for income tax purposes. The preliminary estimates of the net assets acquired were based upon preliminary calculations and valuations. Due to the recent timing of the HKFS Acquisition, those estimates and assumptions are subject to change as we obtain additional information for those estimates during the measurement period (up to one year from the HKFS Acquisition date). We have incurred inception-to-date transaction costs related to the HKFS Acquisition of $10.6 million, of which $4.7 million and $7.5 million were recognized for the three and nine months ended September 30, 2020, respectively. In addition, we have incurred inception-to-date integration costs of $1.7 million, of which $0.8 million and $1.7 million were recognized for the three and nine months ended September 30, 2020, respectively. In addition, we recognized a $1.0 million gain related to the fair value change of the HKFS Contingent Consideration liability for the three and nine months ended September 30, 2020. These transaction and integration costs were recognized as “Acquisition and integration” expense on the consolidated statements of comprehensive income (loss). The operations of HKFS are included in operating results as part of the Wealth Management segment from the date of the HKFS Acquisition. From the date of the HKFS Acquisition, HKFS contributed $9.2 million of revenue and $2.0 million of income before income taxes to our consolidated results. Pro forma financial information of the HKFS Acquisition The financial information in the table below summarizes the combined results of operations of Blucora and HKFS, on a pro forma basis, for the three and nine months ended September 30, 2020 and 2019. The pro forma results are presented as if the HKFS Acquisition had occurred on January 1, 2019 and includes adjustments for amortization expense on the definite-lived intangible assets identified in the HKFS Acquisition, debt-related expenses associated with the Term Loan increase used to finance the HKFS Acquisition, acquisition and integration costs related to the HKFS Acquisition, the removal of historic interest expense for debt issuances of HKFS that were not assumed in the HKFS Acquisition, and the reduction of historic cost of revenue associated with fee-sharing arrangements that did not continue after the HKFS Acquisition. In addition, income taxes were also adjusted for the pro forma results of the combined entity. The following pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had the HKFS Acquisition occurred on January 1, 2019 (amounts in thousands): Three months ended Nine months ended 2020 2019 2020 2019 Revenue $ 175,353 $ 157,358 $ 615,934 $ 592,375 Net income (loss) (18,114) (63,510) (282,551) 18,761 1st Global Acquisition On May 6, 2019, we 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 operations of 1st Global are included in our operating results as part of the Wealth Management segment from the date of the 1st Global Acquisition. The purchase price was allocated to 1st Global’s tangible assets, identifiable intangible assets, and assumed liabilities based on their estimated fair values at the time of the 1st Global Acquisition. The fair values of assets acquired and liabilities assumed in the 1st Global Acquisition were as follows (in thousands): Purchase Price Allocation at Purchase Price Allocation Adjustments Since Final Purchase Price Allocation Assets acquired: Tangible assets acquired, including cash of $12,389 $ 38,413 $ — $ 38,413 Goodwill 117,792 (666) 117,126 Identifiable intangible assets 83,980 — 83,980 Liabilities assumed: Contingent liability (11,052) — (11,052) Deferred revenues (17,715) — (17,715) Other current liabilities (12,956) 281 (12,675) Deferred tax liabilities, net (18,462) 385 (18,077) Total assets acquired and liabilities assumed $ 180,000 $ — $ 180,000 Subsequent to December 31, 2019, we adjusted the fair values of goodwill, other current liabilities, and deferred tax liabilities, net, due to the pre-acquisition 1st Global tax returns that were filed in the first quarter of 2020. As one year has elapsed since the 1st Global Acquisition date, the measurement period for the 1st Global Acquisition has ended, and the purchase price allocation is considered final. |
Segment Information and Revenue
Segment Information and Revenues | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information and Revenues | Note 4: Segment Information and Revenues We have two reportable segments: (1) the Wealth Management segment and (2) the Tax Preparation segment. Our Chief Executive Officer is the chief operating decision maker and reviews financial information presented on a disaggregated basis. This information is used for purposes of allocating resources and evaluating financial performance. We do not allocate certain general and administrative costs (including personnel and overhead costs), stock-based compensation, depreciation, amortization of intangible assets, acquisition and integration costs, executive transition costs, headquarters relocation costs, or impairment of goodwill and an intangible asset to the reportable segments. Such amounts are reflected in the table below under the heading “Corporate-level activity.” In addition, we do not allocate other loss, net, or income taxes to the reportable segments. We do not report assets or capital expenditures by segment to the chief operating decision maker. Information on reportable segments currently presented to our chief operating decision maker and a reconciliation to consolidated net income (loss) are presented below (in thousands): Three months ended Nine months ended 2020 2019 2020 2019 Revenue: Wealth Management $ 135,932 $ 145,428 $ 396,805 $ 362,791 Tax Preparation 39,421 3,588 202,990 205,733 Total revenue 175,353 149,016 599,795 568,524 Operating income (loss): Wealth Management 17,498 20,631 51,827 49,150 Tax Preparation 16,234 (12,075) 60,646 108,565 Corporate-level activity (32,719) (80,667) (357,905) (131,683) Total operating income (loss) 1,013 (72,111) (245,432) 26,032 Other loss, net (11,963) (2,606) (23,386) (11,682) Income tax benefit (expense) (15,256) 12,331 (23,237) 16,470 Net income (loss) attributable to Blucora, Inc. $ (26,206) $ (62,386) $ (292,055) $ 30,820 Revenues by major category within each segment are presented below (in thousands): Three months ended Nine months ended 2020 2019 2020 2019 Wealth Management: Advisory $ 82,612 $ 75,579 $ 227,672 $ 176,746 Commission 44,921 52,623 135,337 137,851 Asset-based 4,351 13,618 18,911 36,530 Transaction and fee 4,048 3,608 14,885 11,664 Total Wealth Management revenue $ 135,932 $ 145,428 $ 396,805 $ 362,791 Tax Preparation: Consumer $ 38,482 $ 4,280 $ 186,724 $ 190,908 Professional 939 (692) 16,266 14,825 Total Tax Preparation revenue $ 39,421 $ 3,588 $ 202,990 $ 205,733 Wealth Management revenue recognition Wealth management revenue primarily consists of advisory revenue, commission revenue, asset-based revenue, and transaction and fee revenue. The timing of Wealth Management revenue recognition was as follows (in thousands): Three months ended September 30, 2020 2019 Recognized Upon Transaction Recognized Over Time Total Recognized Upon Transaction Recognized Over Time Total Advisory revenue $ — $ 82,612 $ 82,612 $ — $ 75,579 $ 75,579 Commission revenue 16,884 28,037 44,921 23,195 29,428 52,623 Asset-based revenue — 4,351 4,351 — 13,618 13,618 Transaction and fee revenue 1,067 2,981 4,048 1,054 2,554 3,608 Total Wealth Management revenue $ 17,951 $ 117,981 $ 135,932 $ 24,249 $ 121,179 $ 145,428 Nine months ended September 30, 2020 2019 Recognized Upon Transaction Recognized Over Time Total Recognized Upon Transaction Recognized Over Time Total Advisory revenue $ — $ 227,672 $ 227,672 $ — $ 176,746 $ 176,746 Commission revenue 55,068 80,269 135,337 59,348 78,503 137,851 Asset-based revenue — 18,911 18,911 — 36,530 36,530 Transaction and fee revenue 4,063 10,822 14,885 2,624 9,040 11,664 Total Wealth Management revenue $ 59,131 $ 337,674 $ 396,805 $ 61,972 $ 300,819 $ 362,791 Tax Preparation revenue recognition We generate revenue from the sale of tax preparation digital services, packaged tax preparation software, ancillary services, and multiple element arrangements that may include a combination of these items. The timing of Tax Preparation revenue recognition was as follows (in thousands): Three months ended September 30, 2020 2019 Recognized Upon Transaction Recognized Over Time Total Recognized Upon Transaction Recognized Over Time Total Consumer $ 38,480 $ 2 $ 38,482 $ 3,268 $ 1,012 $ 4,280 Professional 641 298 939 (619) (73) (692) Total Tax Preparation revenue $ 39,121 $ 300 $ 39,421 $ 2,649 $ 939 $ 3,588 Nine months ended September 30, 2020 2019 Recognized Upon Transaction Recognized Over Time Total Recognized Upon Transaction Recognized Over Time Total Consumer $ 186,721 $ 3 $ 186,724 $ 188,340 $ 2,568 $ 190,908 Professional 13,822 2,444 16,266 12,682 2,143 14,825 Total Tax Preparation revenue $ 200,543 $ 2,447 $ 202,990 $ 201,022 $ 4,711 $ 205,733 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 5: Goodwill and Other Intangible Assets The following table presents goodwill by reportable segment (in thousands): Wealth Management Tax Preparation Total Balance as of December 31, 2019 $ 473,833 $ 188,542 $ 662,375 Purchase accounting adjustment (666) — (666) Acquired (1) 58,137 — 58,137 Impairment (270,625) — (270,625) Balance as of September 30, 2020 $ 260,679 $ 188,542 $ 449,221 Gross goodwill as of September 30, 2020 $ 531,304 $ 188,542 $ 719,846 Accumulated impairment as of September 30, 2020 $ (270,625) $ — $ (270,625) Goodwill, net of accumulated impairment, as of September 30, 2020 $ 260,679 $ 188,542 $ 449,221 _________________________ (1) Represents goodwill acquired in the HKFS Acquisition. For additional information, see "Note 3—Acquisitions." Goodwill represents the cost of an acquisition less the fair value of the net identifiable assets of the acquired business. We evaluate goodwill for impairment annually, as of November 30, or more frequently when events or circumstances indicate it is more likely than not that the fair value of one or more of our reporting units is less than its carrying amount. To determine whether it is necessary to perform a goodwill impairment test, we first assess qualitative factors to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. We may elect to perform a goodwill impairment test without completing a qualitative assessment. Beginning in March 2020, the coronavirus pandemic had a significant negative impact on the U.S. and global economy and caused substantial disruption in the U.S. and global securities markets, and as a result, negatively impacted certain key Wealth Management business drivers, such as client asset levels and interest rates. These macroeconomic and Company-specific factors, in totality, served as a triggering event that resulted in the testing of the goodwill of the Wealth Management reporting unit and the Tax Preparation reporting unit for potential impairment. As part of the goodwill impairment test, we compared the estimated fair values of the Wealth Management and Tax Preparation reporting units to their respective carrying values. Estimated fair value was calculated using Level 3 inputs and utilized a blended valuation method that factored in the income approach and the market approach as of March 31, 2020. The income approach estimated fair value by using the present value of future discounted cash flows. Significant estimates used in the discounted cash flow model included our forecasted cash flows, our long-term rates of growth, and our weighted average cost of capital. The weighted average cost of capital factors in the relevant risk associated with business-specific characteristics and the uncertainty related to the ability to achieve our projected cash flows. The market approach estimated fair value by taking income-based valuation multiples for a set of comparable companies and applying the valuation multiple to each reporting unit’s income. For the Wealth Management reporting unit, the carrying value of the reporting unit exceeded its fair value by $270.6 million. Therefore, we recorded an impairment of goodwill of $270.6 million for the three months ended March 31, 2020. For the Tax Preparation reporting unit, the carrying value of the reporting unit was significantly below its fair value, and therefore, no impairment of goodwill was deemed necessary. While no goodwill impairment triggering events were identified during the three months ended September 30, 2020, the Wealth Management reporting unit is considered to be at risk for a future impairment of its goodwill in the event of a further decline in general economic, market, or business conditions, or any significant unfavorable changes in our forecasted revenue, expenses, cash flows, weighted average cost of capital, and/or market valuation multiples. We will continue to monitor for events and circumstances that could negatively impact the key assumptions in determining the fair value of the Wealth Management reporting unit. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Note 6: Debt The Company’s debt consisted of the following as of the periods indicated in the table below (in thousands): September 30, 2020 December 31, 2019 Principal Discount Debt issuance costs Net Principal Discount Debt issuance costs Net Senior secured credit facility $ 563,609 $ (4,452) $ (4,958) $ 554,199 $ 399,687 $ (1,366) $ (5,608) $ 392,713 Less: Current portion of long-term debt, net (1,782) (11,228) Long-term debt, net $ 552,417 $ 381,485 In May 2017, we entered into a credit agreement (as the same has been amended, the “Credit Agreement” ) with a syndicate of lenders that provides for a term loan facility (the “Term Loan” ) and a revolving line of credit (including a letter of credit sub-facility) (the “Revolver” ) for working capital, capital expenditures, and general business purposes (the “Senior Secured Credit Facility” ). Credit Agreement Amendments No. 1 and No. 2 In November 2017, we amended the Credit Agreement in order to refinance and reprice the initial Term Loan. In May 2019, we amended the Credit Agreement to, among other things, increase the outstanding principal amount of the Term Loan by $125.0 million to finance the 1st Global Acquisition. Credit Agreement Amendment No. 3 The Senior Secured Credit Facility includes financial and operating covenants, including a Consolidated Total Net Leverage Ratio (as defined in the Credit Agreement) that governs the Revolver. On May 1, 2020, we entered into Amendment No. 3 to the Credit Agreement ( “Credit Agreement Amendment No. 3” ). This amendment amended the Credit Agreement to, among other things: (i) provide that, during the period commencing on the effective date of Credit Agreement Amendment No. 3 and ending on December 31, 2020 (the “Third Amendment Relief Period” ), if an advance under the Revolver is requested, then the Company must be in pro forma compliance with certain covenants, (ii) provide that, for purposes of determining compliance with the Consolidated Total Net Leverage Ratio for the Revolver, during the Third Amendment Relief Period certain limitations to add-backs do not apply when calculating Consolidated EBITDA (as defined in the Credit Agreement), (iii) solely with respect to the Revolver, add restrictions on certain restricted payments during the Third Amendment Relief Period, and (iv) solely with respect to the Revolver, if the Revolver usage is over $0 on the last day of any calendar quarter during the Third Amendment Relief Period, impose a minimum liquidity financial covenant that requires the Company and its Restricted Subsidiaries (as defined in the Credit Agreement) to maintain liquidity of at least $115.0 million on the last day of such quarter. Solely with respect to the Revolver and solely if the Revolver usage exceeds $0 on the last day of any calendar quarter during the Third Amendment Relief Period, Credit Agreement Amendment No. 3 increases the maximum Consolidated Total Net Leverage Ratio to (i) 5.75 to 1.00 for the fiscal quarter ended June 30, 2020 and (ii) 3.75 to 1.00 for the fiscal quarters ending September 30, 2020 and December 31, 2020. Credit Agreement Amendment No. 4 On July 1, 2020, the Company entered into Amendment No. 4 to the Credit Agreement ( “Credit Agreement Amendment No. 4” ) in connection with the closing of the HKFS Acquisition. Pursuant to Credit Agreement Amendment No. 4, the Credit Agreement was amended to, among other things, (i) increase the Term Loan by an aggregate principal amount of $175.0 million and (ii) increase the applicable margin under the Term Loan to 4.00% for Eurodollar Rate Loans (as defined in the Credit Agreement) and 3.00% for ABR Loans (as defined in the Credit Agreement). Approximately $104.4 million of the proceeds from the increase to the Term Loan were used to fund the purchase price of the HKFS Acquisition, as well as to pay related fees and expenses. We intend to use the remainder of the proceeds from the increase to the Term Loan for additional working capital. The increase in the Term Loan resulted in non-capitalizable debt issuance costs of $3.7 million that were recognized as expense in “Other loss, net” on the condensed consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2020. The Company is required to make mandatory annual prepayments on the Term Loan in certain circumstances, including in the event that the Company generates Excess Cash Flow (as defined in the Credit Agreement) in a given fiscal year. The Credit Agreement permits the Company to voluntarily prepay the Term Loan without premium or penalty, subject to a 1.00% premium for certain prepayments made during the first six months following the effective date of Credit Agreement Amendment No. 4. The Company is required to make principal amortization payments on the Term Loan quarterly on the last business day of each March, June, September and December, beginning on September 30, 2020, in an amount equal to $0.5 million (subject to reduction for prepayments), with the remaining principal amount of the Term Loan due on the maturity date of May 22, 2024. Depending on the Consolidated First Lien Net Leverage Ratio (as defined in the Credit Agreement), the applicable interest rate margin on the Revolver is from 2.75% to 3.25% for Eurodollar Rate Loans and 1.75% to 2.25% for ABR Loans. Interest is payable at the end of each interest period. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | Note 7: Leases Our leases are primarily related to office space and are classified as operating leases. Operating lease expense, net of sublease income, is recognized in “General and administrative” expense (for net lease expense related to leases used in our operations) and “Acquisition and integration” expense (for net lease expense related to the unoccupied lease resulting from the 1st Global Acquisition) on the condensed consolidated statements of comprehensive income (loss). Lease expense, cash paid on operating lease liabilities, and lease liabilities obtained from new right-of-use assets for the three and nine months ended September 30, 2020 and 2019 were as follows (in thousands): Three months ended Nine months ended 2020 2019 2020 2019 Fixed lease expense $ 1,566 $ 1,373 $ 5,652 $ 3,628 Variable lease expense 191 298 778 940 Lease expense, before sublease income 1,757 1,671 6,430 4,568 Sublease income (464) (326) (1,119) (961) Total lease expense, net of sublease income $ 1,293 $ 1,345 $ 5,311 $ 3,607 Additional lease information: Cash paid on operating lease liabilities $ 1,037 $ 1,252 $ 3,509 $ 3,357 Lease liabilities obtained from new right-of-use assets $ 1,352 $ — $ 21,766 $ 15,829 As of September 30, 2020, our weighted-average remaining operating lease term was approximately 11.3 years, and our weighted-average operating lease discount rate was 5.4%. Operating leases were recorded on the condensed consolidated balance sheets as follows (in thousands): September 30, 2020 December 31, 2019 Lease liabilities—current $ 1,552 $ 3,223 Lease liabilities—long-term 36,973 5,865 Total operating lease liabilities $ 38,525 $ 9,088 The maturities of the Company's operating lease liabilities as of September 30, 2020 were as follows (in thousands): (in thousands) Undiscounted cash flows: Remainder of 2020 $ 309 2021 2,666 2022 5,056 2023 5,138 2024 5,077 Thereafter $ 35,337 Total undiscounted cash flows $ 53,583 Imputed interest (15,058) Present value of cash flows $ 38,525 Lease liabilities obtained from new right-of-use assets were $1.4 million and $21.8 million for the three and nine months ended September 30, 2020. In 2019, we signed a new corporate headquarters lease, which commenced in January 2020 and, therefore, a right-of-use asset of $20.7 million and a lease liability of $20.4 million was reflected on the condensed consolidated financial statements beginning in January 2020. The new headquarters lease is classified as an operating lease, and the term of the lease extends to June 2033. Lease payments begin in August 2021 and will result in $45.2 million in undiscounted fixed lease payments, which are partially offset by a $9.7 million tenant improvement allowance. Under the new lease, we will also make variable payments for operating expenses and utilities. As part of the HKFS Acquisition, we acquired various operating leases, for which we recognized a right-of-use asset of $1.5 million and a lease liability of $1.4 million as of the HKFS Acquisition date. The acquired leases primarily relate to office spaces and have remaining lease terms ranging from one year to four years. In addition, in July 2020, we began subleasing a portion of our former office building (acquired in the 1st Global Acquisition) located in Dallas, TX. As the terms of the sublease were at rental rates below those of the original building lease, we tested the related asset group (which consisted of the right-of-use asset and leasehold improvements) for impairment by comparing the estimated fair value of the asset group to its carrying value. Estimated fair value was calculated using a discounted cash flow analysis that utilized Level 3 inputs, which included forecasted cash flows and a discount rate derived from market data. As the carrying value of the asset group exceeded its estimated fair value, we determined the asset group to be impaired. As a result, we recognized impairment expense of $4.1 million, which was included in “Acquisition and integration” expense on the condensed consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2020. |
Leases | Note 7: Leases Our leases are primarily related to office space and are classified as operating leases. Operating lease expense, net of sublease income, is recognized in “General and administrative” expense (for net lease expense related to leases used in our operations) and “Acquisition and integration” expense (for net lease expense related to the unoccupied lease resulting from the 1st Global Acquisition) on the condensed consolidated statements of comprehensive income (loss). Lease expense, cash paid on operating lease liabilities, and lease liabilities obtained from new right-of-use assets for the three and nine months ended September 30, 2020 and 2019 were as follows (in thousands): Three months ended Nine months ended 2020 2019 2020 2019 Fixed lease expense $ 1,566 $ 1,373 $ 5,652 $ 3,628 Variable lease expense 191 298 778 940 Lease expense, before sublease income 1,757 1,671 6,430 4,568 Sublease income (464) (326) (1,119) (961) Total lease expense, net of sublease income $ 1,293 $ 1,345 $ 5,311 $ 3,607 Additional lease information: Cash paid on operating lease liabilities $ 1,037 $ 1,252 $ 3,509 $ 3,357 Lease liabilities obtained from new right-of-use assets $ 1,352 $ — $ 21,766 $ 15,829 As of September 30, 2020, our weighted-average remaining operating lease term was approximately 11.3 years, and our weighted-average operating lease discount rate was 5.4%. Operating leases were recorded on the condensed consolidated balance sheets as follows (in thousands): September 30, 2020 December 31, 2019 Lease liabilities—current $ 1,552 $ 3,223 Lease liabilities—long-term 36,973 5,865 Total operating lease liabilities $ 38,525 $ 9,088 The maturities of the Company's operating lease liabilities as of September 30, 2020 were as follows (in thousands): (in thousands) Undiscounted cash flows: Remainder of 2020 $ 309 2021 2,666 2022 5,056 2023 5,138 2024 5,077 Thereafter $ 35,337 Total undiscounted cash flows $ 53,583 Imputed interest (15,058) Present value of cash flows $ 38,525 Lease liabilities obtained from new right-of-use assets were $1.4 million and $21.8 million for the three and nine months ended September 30, 2020. In 2019, we signed a new corporate headquarters lease, which commenced in January 2020 and, therefore, a right-of-use asset of $20.7 million and a lease liability of $20.4 million was reflected on the condensed consolidated financial statements beginning in January 2020. The new headquarters lease is classified as an operating lease, and the term of the lease extends to June 2033. Lease payments begin in August 2021 and will result in $45.2 million in undiscounted fixed lease payments, which are partially offset by a $9.7 million tenant improvement allowance. Under the new lease, we will also make variable payments for operating expenses and utilities. As part of the HKFS Acquisition, we acquired various operating leases, for which we recognized a right-of-use asset of $1.5 million and a lease liability of $1.4 million as of the HKFS Acquisition date. The acquired leases primarily relate to office spaces and have remaining lease terms ranging from one year to four years. In addition, in July 2020, we began subleasing a portion of our former office building (acquired in the 1st Global Acquisition) located in Dallas, TX. As the terms of the sublease were at rental rates below those of the original building lease, we tested the related asset group (which consisted of the right-of-use asset and leasehold improvements) for impairment by comparing the estimated fair value of the asset group to its carrying value. Estimated fair value was calculated using a discounted cash flow analysis that utilized Level 3 inputs, which included forecasted cash flows and a discount rate derived from market data. As the carrying value of the asset group exceeded its estimated fair value, we determined the asset group to be impaired. As a result, we recognized impairment expense of $4.1 million, which was included in “Acquisition and integration” expense on the condensed consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2020. |
Balance Sheet Components
Balance Sheet Components | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | Note 8: Balance Sheet Components Prepaid expenses and other current assets, net, consisted of the following (in thousands): September 30, 2020 December 31, 2019 Prepaid expenses $ 6,044 $ 7,982 Prepaid regulatory license fees 498 1,991 Prepaid insurance 339 1,492 Prepaid advertising 1,991 322 Other current assets 556 562 Total prepaid expenses and other current assets, net $ 9,428 $ 12,349 Accrued expenses and other current liabilities consisted of the following (in thousands): September 30, 2020 December 31, 2019 Salaries and related expenses $ 17,207 $ 15,053 HKFS Contingent Consideration liability (1) 11,370 — Contingent liability from 1st Global Acquisition 11,328 11,052 Retained purchase price from 1st Global Acquisition — 1,050 Accrued vendor and advertising costs 1,159 4,351 Other 1,751 4,638 Total accrued expenses and other current liabilities $ 42,815 $ 36,144 __________________________ (1) Represents the short-term portion of the HKFS Contingent Consideration liability. The long-term portion of the HKFS Contingent Consideration liability was classified in “Other long-term liabilities” on the consolidated balance sheet. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 9: Fair Value Measurements In accordance with ASC 820, Fair Value Measurements and Disclosures , certain of our assets and liabilities are carried at fair value and are valued using inputs that are classified in one of the following three categories: • Level 1: Quoted market prices in active markets for identical assets or liabilities. • Level 2: Observable market-based inputs, other than Level 1, or unobservable inputs that are corroborated by market data. • Level 3: Unobservable inputs that are not corroborated by market data and reflect our own assumptions. Assets and liabilities measured on a recurring basis The fair value hierarchy of our financial assets and liabilities carried at fair value and measured on a recurring basis was as follows (in thousands): Fair value measurements at the reporting date using September 30, 2020 Quoted prices in Significant other Significant Cash equivalents: money market and other funds $ 4,290 $ 4,290 $ — $ — Total assets at fair value $ 4,290 $ 4,290 $ — $ — HKFS Contingent Consideration $ 26,600 $ — $ — $ 26,600 Total liabilities at fair value $ 26,600 $ — $ — $ 26,600 Fair value measurements at the reporting date using December 31, 2019 Quoted prices in Significant other Significant Cash equivalents: money market and other funds $ 4,264 $ 4,264 $ — $ — Total assets at fair value $ 4,264 $ 4,264 $ — $ — Cash equivalents are classified within Level 1 of the fair value hierarchy because we value cash equivalents utilizing quoted prices in active markets. On the HKFS Acquisition date, we recognized a liability related to the HKFS Contingent Consideration (see "Note 3—Acquisitions") of $27.6 million. The amount of the two potential earn-out payments under the HKFS Contingent Consideration arrangement is determined based on advisory asset levels and the achievement of certain performance goals (i) for the period beginning on July 1, 2020 and ending July 1, 2021 and (ii) for the period beginning on July 1, 2021 and ending on July 1, 2022. The estimated fair value of HKFS Contingent Consideration was determined using a Monte Carlo simulation model in a risk neutral framework with the underlying simulated variable of advisory asset levels and the related achievement of certain advisory asset growth levels. The Monte Carlo simulation model utilized Level 3 inputs, which included forecasted advisory asset levels at July 1, 2021 and July 1, 2022, a credit-adjusted discount rate of 11.5%, volatility of 33.5%, and a credit spread of 4.7%. Significant increases to the discount rate, volatility, or credit spread inputs would have resulted in a significantly lower fair value measurement, with a similar inverse relationship existing for significant decreases to these inputs. A significant increase to the forecasted advisory assets levels would have resulted in a significantly higher fair value measurement, with a directionally-similar change resulting from a significantly lower fair value measurement. A reconciliation of the HKFS Contingent Consideration liability was as follows (in thousands): HKFS Contingent Consideration Liability Balance as of December 31, 2019 $ — Recognized at HKFS Acquisition 27,600 Valuation change included in net income (1) (1,000) Balance as of September 30, 2020 $ 26,600 _________________________ (1) Recognized in “Acquisition and integration” expense on the consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2020. Fair value of financial instruments We consider the carrying values of accounts receivable, commissions receivable, other receivables, prepaid expenses, other current assets, accounts payable, commissions and advisory fees payable, accrued expenses, and other current liabilities to approximate fair values primarily due to their short-term natures. As of September 30, 2020, the Term Loan’s principal amount was $563.6 million, and the fair value of the Term Loan’s principal amount was $552.3 million. The fair value of the Term Loan’s principal amount was based on Level 2 inputs from a third-party market quotation. As of December 31, 2019, the Term Loan’s principal amount approximated its fair value as the Term Loan is a variable rate instrument, and its applicable margin at that date approximated market conditions. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10: Commitments and Contingencies From time to time, we are subject to various legal proceedings, regulatory matters or fines, or claims that arise in the ordinary course of business. We accrue a liability when management believes both that it is probable that a liability has been incurred and that the amount of loss can be reasonably estimated. Aside from the contingent liability related to the 1st Global Acquisition and the contingent consideration liability related to the HKFS Acquisition (see “Note 3—Acquisitions”), we are not currently party to any such matters for which we have incurred a material liability on our consolidated balance sheets. |
Other Loss, Net
Other Loss, Net | 9 Months Ended |
Sep. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Other Loss, Net | Note 11: Other Loss, Net “Other loss, net” on the condensed consolidated statements of comprehensive income (loss) consisted of the following (in thousands): Three months ended Nine months ended 2020 2019 2020 2019 Interest expense $ 7,254 $ 5,469 $ 17,410 $ 14,015 Amortization of debt issuance costs 362 301 1,006 848 Accretion of debt discounts 276 66 414 189 Total interest expense 7,892 5,836 18,830 15,052 Interest income (2) (52) (27) (341) Gain on sale of a business (349) (3,256) (349) (3,256) Non-capitalized debt issuance expenses 3,687 — 3,687 — Other 735 78 1,245 227 Other loss, net $ 11,963 $ 2,606 $ 23,386 $ 11,682 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 12: Income Taxes Three months ended Nine months ended 2020 2019 2020 2019 Income tax benefit (expense) $ (15,256) $ 12,331 $ (23,237) $ 16,470 The Company recorded income tax expense of $15.3 million and $23.2 million for the three and nine months ended September 30, 2020, respectively. The Company's effective income tax rate for the three and nine months ended September 30, 2020 differed from the 21% statutory rate primarily due to expiring net operating loss tax benefits in the current year, an adjustment to the valuation allowance against the deferred tax assets for net operating losses expected to expire in future years of $23.5 million, and non-deductible officer compensation expense. The goodwill impairment charge of $270.6 million did not have an impact on the estimated annual effective income tax rate. In addition, the Company has elected to treat the HKFS Acquisition as an asset acquisition under the Internal Revenue Code, and therefore, the Company will have a tax basis in all assets acquired equal to the purchase price. As a result, there are no basis differences in assets or liabilities on the opening balance sheet. The Company recorded income tax benefits of $12.3 million and $16.5 million for the three and nine months ended September 30, 2019, respectively. The Company’s effective income tax rate for the three and nine months ended September 30, 2019 differed from the 21% statutory rate primarily due to the release of valuation allowances, offset by the effect of state income taxes, non-deductible compensation, and acquisition costs. For the three months ended September 30, 2019, our discrete benefit of $10.6 million primarily related to the HD Vest trade name impairment and impacts associated with the 1st Global Acquisition. |
Net Income Per Share
Net Income Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Note 13: Net Income Per Share “Basic net income (loss) per share” is calculated using the weighted average number of common shares outstanding during the period. “Diluted net income (loss) per share” is calculated using the weighted average number of common shares outstanding plus the number of dilutive potential common shares outstanding during the period. Dilutive potential common shares consist of the incremental common shares issuable upon the exercise of outstanding stock options and the vesting of unvested RSUs. Dilutive potential common shares are excluded from the calculation of diluted net income (loss) per share if their effect is antidilutive. The calculation of basic and diluted net income (loss) per share attributable to Blucora, Inc. is as follows (in thousands): Three months ended Nine months ended 2020 2019 2020 2019 Numerator: Net income (loss) attributable to Blucora, Inc. $ (26,206) $ (62,386) $ (292,055) $ 30,820 Denominator: Weighted average common shares outstanding—basic 48,039 48,652 47,936 48,456 Dilutive potential common shares (1) — — — 1,140 Weighted average common shares outstanding—diluted 48,039 48,652 47,936 49,596 Net income (loss) per share attributable to Blucora, Inc.: Basic $ (0.55) $ (1.28) $ (6.09) $ 0.64 Diluted $ (0.55) $ (1.28) $ (6.09) $ 0.62 Shares excluded (1) 3,165 3,084 2,869 1,217 _________________________ (1) Potential common shares were excluded from the calculation of diluted net income (loss) per share for these periods because their effect would have been anti-dilutive. For the three and nine months ended September 30, 2020 and the three months ended September 30, 2019, all potential common shares were excluded from the calculation of diluted net loss per share as their effect would have been anti-dilutive due to the net loss recognized for the periods. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Segments | We have two reportable segments: (1) the Wealth Management segment and (2) the Tax Preparation segment. |
Interim financial information | The accompanying condensed consolidated financial statements have been prepared by us under the rules and regulations of the Securities and Exchange Commission (the “ SEC” ) for interim financial reporting. These condensed consolidated financial statements are unaudited and, in management’s opinion, include all adjustments, consisting of normal recurring adjustments and accruals, necessary for a fair presentation of the consolidated financial position, results of operations, and cash flows for the periods presented. Certain information and footnote disclosures normally included in financial statements prepared in conformity with United States generally accepted accounting principles ( “ GAAP” ) have been omitted in accordance with the rules and regulations of the SEC. These |
Cash, cash equivalents, and restricted cash | We generally invest our available cash in high-quality marketable investments, which primarily consist of investments in money market funds invested in securities issued by agencies of the U.S. government. We may invest, from time-to-time, in other vehicles, such as debt instruments issued by the U.S. federal government and its agencies, international governments, municipalities and publicly held corporations, as well as commercial paper and insured time deposits with commercial banks. Specific holdings can vary from period to period depending upon our cash requirements. Such investments are reported at fair value on the consolidated balance sheets. Cash segregated under federal and other regulations is held in a separate bank account for the exclusive benefit of our Wealth Management business clients and is considered restricted cash. |
Business combinations | Business combinations We account for business combinations using the acquisition method. Under the acquisition method, the purchase price of the HKFS Acquisition has been allocated to HKFS’s acquired tangible and identifiable intangible assets and assumed liabilities based on their estimated fair values at the time of the HKFS Acquisition. This allocation involves a number of assumptions, estimates, and judgments that could materially affect the timing or amounts recognized in our financial statements. The most subjective areas of the acquisition accounting method included determining the fair value of the following: • intangible assets, including the valuation methodology, estimates of future cash flows, discount rates, growth rates, as well as the estimated useful life of intangible assets; • contingent consideration, including the valuation methodology, estimates of future advisory asset levels, discount rates, growth rates, and volatility levels; and • goodwill, as measured as the excess of consideration transferred over the acquisition date fair value of the assets acquired, including the amount assigned to identifiable intangible assets, and the liabilities assumed. Our assumptions and estimates are based upon comparable market data and information obtained from the management of HKFS. Goodwill is assigned to reporting units that are expected to benefit from the synergies of the business combination as of the acquisition date. Our reporting units are consistent with our reportable segments, and accordingly, the goodwill acquired from HKFS was assigned to the Wealth Management reporting unit. Identifiable intangible assets with finite lives are amortized over their useful lives on a straight-line basis. Acquisition-related costs, including advisory, legal, accounting, valuation, and other similar costs, are expensed in the periods in which the costs are incurred. The results of operations of acquired businesses are included in the consolidated financial statements from the acquisition date. |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements Changes to GAAP are established by the Financial Accounting Standards Board ( “FASB” ) in the form of accounting standards updates ( “ASUs” ) to the FASB’s Accounting Standards Codification ( “ASC” ). We consider the applicability and impact of all recent ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position and results of operations. We have recently adopted the ASUs described below. Measurement of Credit Losses . In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ( “ASU 2016-13” ), which changes how entities account for credit losses of financial assets measured at amortized cost. ASU 2016-13 requires financial assets measured at amortized cost to be presented on the balance sheet at the net amount expected to be collected. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial asset to present the net carrying value at the amount expected to be collected on the financial asset. ASU 2016-13 replaces the previous “incurred loss” model with a “current expected credit loss” model that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of the financial asset. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including the interim periods within those fiscal years. Entities must apply ASU 2016-13 using a modified-retrospective approach by recording a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which ASU 2016-13 is effective. We adopted ASU 2016-13 effective January 1, 2020. Our financial assets within the scope of ASU 2016-13 primarily consisted of our commissions receivable and accounts receivable. While we have implemented the current expected credit loss model and assessed the impact of this new model on our in-scope financial assets, the adoption of ASU 2016-13 did not have a material impact on our consolidated financial statements and did not result in a cumulative-effect adjustment to retained earnings as of January 1, 2020. Goodwill . In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Accounting for Goodwill ( “ASU 2017-04” ), which simplifies the subsequent measurement of goodwill by eliminating the previously applicable step two from the goodwill impairment test. Under the amended guidance of ASU 2017-04, when required to test goodwill for recoverability, an entity will perform its goodwill impairment test by comparing the fair value of the reporting unit to its carrying value and recognizing an impairment charge for the amount by which the carrying value exceeds the fair value of the reporting unit. ASU 2017-04 is effective for fiscal years beginning after December 15, 2019, and entities must apply ASU 2017-04 on a prospective basis. We adopted ASU 2017-04 effective January 1, 2020 and applied this new guidance to the goodwill impairment test we performed as of March 31, 2020. For more information on this impairment test, see “Note 5—Goodwill and Other Intangible Assets.” |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table presents cash, cash equivalents, and restricted cash as reported on the consolidated balance sheets and the consolidated statements of cash flows (in thousands): September 30, 2020 December 31, 2019 Cash and cash equivalents $ 151,166 $ 80,820 Cash segregated under federal or other regulations 203 5,630 Total cash, cash equivalents, and restricted cash $ 151,369 $ 86,450 |
Schedule of Restrictions on Cash and Cash Equivalents | The following table presents cash, cash equivalents, and restricted cash as reported on the consolidated balance sheets and the consolidated statements of cash flows (in thousands): September 30, 2020 December 31, 2019 Cash and cash equivalents $ 151,166 $ 80,820 Cash segregated under federal or other regulations 203 5,630 Total cash, cash equivalents, and restricted cash $ 151,369 $ 86,450 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of Fair Values of Assets and Liabilities Assumed | The purchase price of the HKFS Acquisition was allocated to HKFS’s tangible assets, identifiable intangible assets, and assumed liabilities based on their estimated fair values at the time of the HKFS Acquisition. The preliminary fair value of assets acquired and liabilities assumed in the HKFS Acquisition were as follows (in thousands): Purchase Price Allocation at Assets acquired: Tangible assets acquired, including cash of $1,980 (1) 15,517 Identifiable intangible assets 62,970 Goodwill 58,137 Liabilities assumed (5,134) Total assets acquired and liabilities assumed $ 131,490 Cash paid at HKFS Acquisition date $ 104,404 Adjustment receivable (514) HKFS Contingent Consideration 27,600 Total purchase price $ 131,490 __________________________ (1) Included in tangible assets acquired were accounts receivable of $7.8 million, which primarily consisted of advisory fees receivable. As an insignificant amount of these receivables was expected to be uncollectible, the acquired amount approximates the fair value of the accounts receivable. The fair values of assets acquired and liabilities assumed in the 1st Global Acquisition were as follows (in thousands): Purchase Price Allocation at Purchase Price Allocation Adjustments Since Final Purchase Price Allocation Assets acquired: Tangible assets acquired, including cash of $12,389 $ 38,413 $ — $ 38,413 Goodwill 117,792 (666) 117,126 Identifiable intangible assets 83,980 — 83,980 Liabilities assumed: Contingent liability (11,052) — (11,052) Deferred revenues (17,715) — (17,715) Other current liabilities (12,956) 281 (12,675) Deferred tax liabilities, net (18,462) 385 (18,077) Total assets acquired and liabilities assumed $ 180,000 $ — $ 180,000 |
Schedule of Identifiable Intangible Assets Acquired | The identifiable intangible assets were as follows (in thousands, except as otherwise indicated): Estimated Fair Value Accumulated Amortization through September 30, 2020 Useful Life at HKFS Acquisition Date (in months) Customer relationships $ 58,400 $ 973 180 CPA firm relationships 4,070 68 180 Trade name 500 42 36 Total identified intangible assets $ 62,970 $ 1,083 179 |
Schedule of Pro Forma Financial Information | The following pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved had the HKFS Acquisition occurred on January 1, 2019 (amounts in thousands): Three months ended Nine months ended 2020 2019 2020 2019 Revenue $ 175,353 $ 157,358 $ 615,934 $ 592,375 Net income (loss) (18,114) (63,510) (282,551) 18,761 |
Segment Information and Reven_2
Segment Information and Revenues (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Information on Reportable Segments for Reconciliation to Consolidated Net Income | Information on reportable segments currently presented to our chief operating decision maker and a reconciliation to consolidated net income (loss) are presented below (in thousands): Three months ended Nine months ended 2020 2019 2020 2019 Revenue: Wealth Management $ 135,932 $ 145,428 $ 396,805 $ 362,791 Tax Preparation 39,421 3,588 202,990 205,733 Total revenue 175,353 149,016 599,795 568,524 Operating income (loss): Wealth Management 17,498 20,631 51,827 49,150 Tax Preparation 16,234 (12,075) 60,646 108,565 Corporate-level activity (32,719) (80,667) (357,905) (131,683) Total operating income (loss) 1,013 (72,111) (245,432) 26,032 Other loss, net (11,963) (2,606) (23,386) (11,682) Income tax benefit (expense) (15,256) 12,331 (23,237) 16,470 Net income (loss) attributable to Blucora, Inc. $ (26,206) $ (62,386) $ (292,055) $ 30,820 |
Schedule of Segment Reporting Information, by Segment | Revenues by major category within each segment are presented below (in thousands): Three months ended Nine months ended 2020 2019 2020 2019 Wealth Management: Advisory $ 82,612 $ 75,579 $ 227,672 $ 176,746 Commission 44,921 52,623 135,337 137,851 Asset-based 4,351 13,618 18,911 36,530 Transaction and fee 4,048 3,608 14,885 11,664 Total Wealth Management revenue $ 135,932 $ 145,428 $ 396,805 $ 362,791 Tax Preparation: Consumer $ 38,482 $ 4,280 $ 186,724 $ 190,908 Professional 939 (692) 16,266 14,825 Total Tax Preparation revenue $ 39,421 $ 3,588 $ 202,990 $ 205,733 |
Schedule of Disaggregation of Revenue | The timing of Wealth Management revenue recognition was as follows (in thousands): Three months ended September 30, 2020 2019 Recognized Upon Transaction Recognized Over Time Total Recognized Upon Transaction Recognized Over Time Total Advisory revenue $ — $ 82,612 $ 82,612 $ — $ 75,579 $ 75,579 Commission revenue 16,884 28,037 44,921 23,195 29,428 52,623 Asset-based revenue — 4,351 4,351 — 13,618 13,618 Transaction and fee revenue 1,067 2,981 4,048 1,054 2,554 3,608 Total Wealth Management revenue $ 17,951 $ 117,981 $ 135,932 $ 24,249 $ 121,179 $ 145,428 Nine months ended September 30, 2020 2019 Recognized Upon Transaction Recognized Over Time Total Recognized Upon Transaction Recognized Over Time Total Advisory revenue $ — $ 227,672 $ 227,672 $ — $ 176,746 $ 176,746 Commission revenue 55,068 80,269 135,337 59,348 78,503 137,851 Asset-based revenue — 18,911 18,911 — 36,530 36,530 Transaction and fee revenue 4,063 10,822 14,885 2,624 9,040 11,664 Total Wealth Management revenue $ 59,131 $ 337,674 $ 396,805 $ 61,972 $ 300,819 $ 362,791 The timing of Tax Preparation revenue recognition was as follows (in thousands): Three months ended September 30, 2020 2019 Recognized Upon Transaction Recognized Over Time Total Recognized Upon Transaction Recognized Over Time Total Consumer $ 38,480 $ 2 $ 38,482 $ 3,268 $ 1,012 $ 4,280 Professional 641 298 939 (619) (73) (692) Total Tax Preparation revenue $ 39,121 $ 300 $ 39,421 $ 2,649 $ 939 $ 3,588 Nine months ended September 30, 2020 2019 Recognized Upon Transaction Recognized Over Time Total Recognized Upon Transaction Recognized Over Time Total Consumer $ 186,721 $ 3 $ 186,724 $ 188,340 $ 2,568 $ 190,908 Professional 13,822 2,444 16,266 12,682 2,143 14,825 Total Tax Preparation revenue $ 200,543 $ 2,447 $ 202,990 $ 201,022 $ 4,711 $ 205,733 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Summary of Changes in Carrying Value of Goodwill | The following table presents goodwill by reportable segment (in thousands): Wealth Management Tax Preparation Total Balance as of December 31, 2019 $ 473,833 $ 188,542 $ 662,375 Purchase accounting adjustment (666) — (666) Acquired (1) 58,137 — 58,137 Impairment (270,625) — (270,625) Balance as of September 30, 2020 $ 260,679 $ 188,542 $ 449,221 Gross goodwill as of September 30, 2020 $ 531,304 $ 188,542 $ 719,846 Accumulated impairment as of September 30, 2020 $ (270,625) $ — $ (270,625) Goodwill, net of accumulated impairment, as of September 30, 2020 $ 260,679 $ 188,542 $ 449,221 _________________________ (1) Represents goodwill acquired in the HKFS Acquisition. For additional information, see "Note 3—Acquisitions." |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Company's Debt | The Company’s debt consisted of the following as of the periods indicated in the table below (in thousands): September 30, 2020 December 31, 2019 Principal Discount Debt issuance costs Net Principal Discount Debt issuance costs Net Senior secured credit facility $ 563,609 $ (4,452) $ (4,958) $ 554,199 $ 399,687 $ (1,366) $ (5,608) $ 392,713 Less: Current portion of long-term debt, net (1,782) (11,228) Long-term debt, net $ 552,417 $ 381,485 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Schedule of Summary of Operating Lease Expense | Operating lease expense, net of sublease income, is recognized in “General and administrative” expense (for net lease expense related to leases used in our operations) and “Acquisition and integration” expense (for net lease expense related to the unoccupied lease resulting from the 1st Global Acquisition) on the condensed consolidated statements of comprehensive income (loss). Lease expense, cash paid on operating lease liabilities, and lease liabilities obtained from new right-of-use assets for the three and nine months ended September 30, 2020 and 2019 were as follows (in thousands): Three months ended Nine months ended 2020 2019 2020 2019 Fixed lease expense $ 1,566 $ 1,373 $ 5,652 $ 3,628 Variable lease expense 191 298 778 940 Lease expense, before sublease income 1,757 1,671 6,430 4,568 Sublease income (464) (326) (1,119) (961) Total lease expense, net of sublease income $ 1,293 $ 1,345 $ 5,311 $ 3,607 Additional lease information: Cash paid on operating lease liabilities $ 1,037 $ 1,252 $ 3,509 $ 3,357 Lease liabilities obtained from new right-of-use assets $ 1,352 $ — $ 21,766 $ 15,829 |
Schedule of Supplemental Balance Sheet Information Related to Leases | Operating leases were recorded on the condensed consolidated balance sheets as follows (in thousands): September 30, 2020 December 31, 2019 Lease liabilities—current $ 1,552 $ 3,223 Lease liabilities—long-term 36,973 5,865 Total operating lease liabilities $ 38,525 $ 9,088 |
Schedule of Maturities of Operating Lease Liabilities | The maturities of the Company's operating lease liabilities as of September 30, 2020 were as follows (in thousands): (in thousands) Undiscounted cash flows: Remainder of 2020 $ 309 2021 2,666 2022 5,056 2023 5,138 2024 5,077 Thereafter $ 35,337 Total undiscounted cash flows $ 53,583 Imputed interest (15,058) Present value of cash flows $ 38,525 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets, net, consisted of the following (in thousands): September 30, 2020 December 31, 2019 Prepaid expenses $ 6,044 $ 7,982 Prepaid regulatory license fees 498 1,991 Prepaid insurance 339 1,492 Prepaid advertising 1,991 322 Other current assets 556 562 Total prepaid expenses and other current assets, net $ 9,428 $ 12,349 |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): September 30, 2020 December 31, 2019 Salaries and related expenses $ 17,207 $ 15,053 HKFS Contingent Consideration liability (1) 11,370 — Contingent liability from 1st Global Acquisition 11,328 11,052 Retained purchase price from 1st Global Acquisition — 1,050 Accrued vendor and advertising costs 1,159 4,351 Other 1,751 4,638 Total accrued expenses and other current liabilities $ 42,815 $ 36,144 __________________________ (1) Represents the short-term portion of the HKFS Contingent Consideration liability. The long-term portion of the HKFS Contingent Consideration liability was classified in “Other long-term liabilities” on the consolidated balance sheet. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Hierarchy of Financial Assets Carried at Fair Value and Measured on Recurring Basis | The fair value hierarchy of our financial assets and liabilities carried at fair value and measured on a recurring basis was as follows (in thousands): Fair value measurements at the reporting date using September 30, 2020 Quoted prices in Significant other Significant Cash equivalents: money market and other funds $ 4,290 $ 4,290 $ — $ — Total assets at fair value $ 4,290 $ 4,290 $ — $ — HKFS Contingent Consideration $ 26,600 $ — $ — $ 26,600 Total liabilities at fair value $ 26,600 $ — $ — $ 26,600 Fair value measurements at the reporting date using December 31, 2019 Quoted prices in Significant other Significant Cash equivalents: money market and other funds $ 4,264 $ 4,264 $ — $ — Total assets at fair value $ 4,264 $ 4,264 $ — $ — |
Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | A reconciliation of the HKFS Contingent Consideration liability was as follows (in thousands): HKFS Contingent Consideration Liability Balance as of December 31, 2019 $ — Recognized at HKFS Acquisition 27,600 Valuation change included in net income (1) (1,000) Balance as of September 30, 2020 $ 26,600 _________________________ (1) Recognized in “Acquisition and integration” expense on the consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2020. |
Other Loss, Net (Tables)
Other Loss, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Other Income and Expenses [Abstract] | |
Summary of Other Loss, Net | “Other loss, net” on the condensed consolidated statements of comprehensive income (loss) consisted of the following (in thousands): Three months ended Nine months ended 2020 2019 2020 2019 Interest expense $ 7,254 $ 5,469 $ 17,410 $ 14,015 Amortization of debt issuance costs 362 301 1,006 848 Accretion of debt discounts 276 66 414 189 Total interest expense 7,892 5,836 18,830 15,052 Interest income (2) (52) (27) (341) Gain on sale of a business (349) (3,256) (349) (3,256) Non-capitalized debt issuance expenses 3,687 — 3,687 — Other 735 78 1,245 227 Other loss, net $ 11,963 $ 2,606 $ 23,386 $ 11,682 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Three months ended Nine months ended 2020 2019 2020 2019 Income tax benefit (expense) $ (15,256) $ 12,331 $ (23,237) $ 16,470 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Summary of Dilutive Effect for Awards with Exercise Price Less Than Average Stock Price | The calculation of basic and diluted net income (loss) per share attributable to Blucora, Inc. is as follows (in thousands): Three months ended Nine months ended 2020 2019 2020 2019 Numerator: Net income (loss) attributable to Blucora, Inc. $ (26,206) $ (62,386) $ (292,055) $ 30,820 Denominator: Weighted average common shares outstanding—basic 48,039 48,652 47,936 48,456 Dilutive potential common shares (1) — — — 1,140 Weighted average common shares outstanding—diluted 48,039 48,652 47,936 49,596 Net income (loss) per share attributable to Blucora, Inc.: Basic $ (0.55) $ (1.28) $ (6.09) $ 0.64 Diluted $ (0.55) $ (1.28) $ (6.09) $ 0.62 Shares excluded (1) 3,165 3,084 2,869 1,217 _________________________ |
Description of the Business (De
Description of the Business (Details) | 9 Months Ended |
Sep. 30, 2020Segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 151,166 | $ 80,820 | ||
Cash segregated under federal or other regulations | 203 | 5,630 | ||
Total cash, cash equivalents, and restricted cash | $ 151,369 | $ 86,450 | $ 98,750 | $ 85,366 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) | Jul. 01, 2020USD ($)earn_out_payment | May 06, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Business Acquisition [Line Items] | |||||||
Contingent consideration | $ 27,600,000 | ||||||
Amortization of other acquired intangible assets | $ 7,746,000 | $ 10,082,000 | $ 22,167,000 | $ 27,295,000 | |||
Goodwill | 449,221,000 | 449,221,000 | $ 662,375,000 | ||||
Change in fair value of acquisition-related contingent consideration | (1,000,000) | $ 0 | |||||
Term Loan | Senior secured credit facility | |||||||
Business Acquisition [Line Items] | |||||||
Aggregate principal amount | 175,000,000 | $ 125,000,000 | |||||
1st Global | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price | $ 180,000,000 | ||||||
Goodwill | 117,126,000 | 117,126,000 | 117,792,000 | ||||
Contingent liability, recognized | (11,328,000) | (11,328,000) | (11,052,000) | ||||
Honkamp Krueger Financial Services, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price | $ 104,400,000 | ||||||
Number of potential earn-out payments | earn_out_payment | 2 | ||||||
Undiscounted contingent consideration | 30,000,000 | 30,000,000 | |||||
Contingent consideration | $ 27,600,000 | 26,600,000 | 26,600,000 | ||||
Amortization of other acquired intangible assets | 1,100,000 | 1,100,000 | |||||
Goodwill | 58,137,000 | 58,100,000 | 58,100,000 | ||||
Business combination, acquisition related costs | 10,600,000 | 4,700,000 | 7,500,000 | ||||
Business combination, acquisition integration costs | $ 1,700,000 | 800,000 | 1,700,000 | ||||
Contingent liability, recognized | (11,370,000) | (11,370,000) | $ 0 | ||||
Change in fair value of acquisition-related contingent consideration | 1,000,000 | $ 1,000,000 | |||||
Revenue of acquiree since acquisition date | 9,200,000 | ||||||
Income of acquiree since acquisition date | $ 2,000,000 |
Acquisitions - Fair Values of A
Acquisitions - Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jul. 01, 2020 | Sep. 30, 2020 | Jul. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 449,221 | $ 662,375 | ||
HKFS Contingent Consideration | $ 27,600 | |||
Purchase accounting adjustment | (666) | |||
Adjustments to other current liabilities | 281 | |||
Adjustments to deferred income tax liabilities | 385 | |||
1st Global | ||||
Business Acquisition [Line Items] | ||||
Tangible assets acquired, including cash | 38,413 | 38,413 | ||
Cash | 12,389 | |||
Identifiable intangible assets | 83,980 | 83,980 | ||
Goodwill | 117,126 | 117,792 | ||
Contingent liability | (11,052) | (11,052) | ||
Deferred revenues | (17,715) | (17,715) | ||
Other current liabilities | (12,675) | (12,956) | ||
Deferred tax liabilities, net | (18,077) | (18,462) | ||
Total assets acquired and liabilities assumed | 180,000 | $ 180,000 | ||
Purchase accounting adjustment | (666) | |||
Honkamp Krueger Financial Services, Inc. | ||||
Business Acquisition [Line Items] | ||||
Tangible assets acquired, including cash | 15,517 | |||
Cash | $ 1,980 | |||
Identifiable intangible assets | 62,970 | |||
Goodwill | 58,137 | 58,100 | ||
Liabilities assumed | (5,134) | |||
Total assets acquired and liabilities assumed | 131,490 | |||
Cash paid at HKFS Acquisition date | 104,404 | |||
Adjustment receivable | (514) | |||
HKFS Contingent Consideration | 27,600 | $ 26,600 | ||
Total purchase price | 131,490 | |||
Accounts receivable | $ 7,800 |
Acquisitions - Identified Intan
Acquisitions - Identified Intangible Assets (Details) - Honkamp Krueger Financial Services, Inc. $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Fair Value | $ 62,970 |
Accumulated Amortization through September 30, 2020 | $ 1,083 |
Useful Life at HKFS Acquisition Date (in months) | 179 months |
Customer relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Fair Value | $ 58,400 |
Accumulated Amortization through September 30, 2020 | $ 973 |
Useful Life at HKFS Acquisition Date (in months) | 180 months |
CPA firm relationships | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Fair Value | $ 4,070 |
Accumulated Amortization through September 30, 2020 | $ 68 |
Useful Life at HKFS Acquisition Date (in months) | 180 months |
Trade name | |
Acquired Finite-Lived Intangible Assets [Line Items] | |
Estimated Fair Value | $ 500 |
Accumulated Amortization through September 30, 2020 | $ 42 |
Useful Life at HKFS Acquisition Date (in months) | 36 months |
Acquisitions - Pro Forma Financ
Acquisitions - Pro Forma Financial Information (Details) - Honkamp Krueger Financial Services, Inc. - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Business Acquisition, Pro Forma Information [Abstract] | ||||
Revenue | $ 175,353 | $ 157,358 | $ 615,934 | $ 592,375 |
Net income (loss) | $ (18,114) | $ (63,510) | $ (282,551) | $ 18,761 |
Segment Information and Reven_3
Segment Information and Revenues - Information on Reportable Segments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2020USD ($)Segment | Sep. 30, 2019USD ($) | |
Segment Reporting Information [Line Items] | ||||||||
Number of reportable segments | Segment | 2 | |||||||
Revenue: | ||||||||
Revenues | $ 175,353 | $ 149,016 | $ 599,795 | $ 568,524 | ||||
Operating income (loss): | ||||||||
Total operating income (loss) | 1,013 | (72,111) | (245,432) | 26,032 | ||||
Other loss, net | (11,963) | (2,606) | (23,386) | (11,682) | ||||
Income tax benefit (expense) | (15,256) | 12,331 | (23,237) | 16,470 | ||||
Net income (loss) attributable to Blucora, Inc. | (26,206) | $ 49,645 | $ (315,494) | (62,386) | $ 31,036 | $ 62,170 | (292,055) | 30,820 |
Corporate-level activity | ||||||||
Operating income (loss): | ||||||||
Total operating income (loss) | (32,719) | (80,667) | (357,905) | (131,683) | ||||
Segment Reconciling Items | ||||||||
Operating income (loss): | ||||||||
Other loss, net | (11,963) | (2,606) | (23,386) | (11,682) | ||||
Income tax benefit (expense) | (15,256) | 12,331 | (23,237) | 16,470 | ||||
Wealth Management | ||||||||
Revenue: | ||||||||
Revenues | 135,932 | 145,428 | 396,805 | 362,791 | ||||
Wealth Management | Advisory revenue | ||||||||
Revenue: | ||||||||
Revenues | 82,612 | 75,579 | 227,672 | 176,746 | ||||
Wealth Management | Commission revenue | ||||||||
Revenue: | ||||||||
Revenues | 44,921 | 52,623 | 135,337 | 137,851 | ||||
Wealth Management | Asset-based revenue | ||||||||
Revenue: | ||||||||
Revenues | 4,351 | 13,618 | 18,911 | 36,530 | ||||
Wealth Management | Transaction and fee revenue | ||||||||
Revenue: | ||||||||
Revenues | 4,048 | 3,608 | 14,885 | 11,664 | ||||
Wealth Management | Operating Segments | ||||||||
Operating income (loss): | ||||||||
Total operating income (loss) | 17,498 | 20,631 | 51,827 | 49,150 | ||||
Tax Preparation | ||||||||
Revenue: | ||||||||
Revenues | 39,421 | 3,588 | 202,990 | 205,733 | ||||
Tax Preparation | Consumer | ||||||||
Revenue: | ||||||||
Revenues | 38,482 | 4,280 | 186,724 | 190,908 | ||||
Tax Preparation | Professional | ||||||||
Revenue: | ||||||||
Revenues | 939 | (692) | 16,266 | 14,825 | ||||
Tax Preparation | Operating Segments | ||||||||
Operating income (loss): | ||||||||
Total operating income (loss) | $ 16,234 | $ (12,075) | $ 60,646 | $ 108,565 |
Segment Information and Reven_4
Segment Information and Revenues - Details of Wealth Management Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 175,353 | $ 149,016 | $ 599,795 | $ 568,524 |
Wealth Management | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 135,932 | 145,428 | 396,805 | 362,791 |
Wealth Management | Recognized Upon Transaction | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 17,951 | 24,249 | 59,131 | 61,972 |
Wealth Management | Recognized Over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 117,981 | 121,179 | 337,674 | 300,819 |
Wealth Management | Advisory revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 82,612 | 75,579 | 227,672 | 176,746 |
Wealth Management | Advisory revenue | Recognized Upon Transaction | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Wealth Management | Advisory revenue | Recognized Over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 82,612 | 75,579 | 227,672 | 176,746 |
Wealth Management | Commission revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 44,921 | 52,623 | 135,337 | 137,851 |
Wealth Management | Commission revenue | Recognized Upon Transaction | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 16,884 | 23,195 | 55,068 | 59,348 |
Wealth Management | Commission revenue | Recognized Over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 28,037 | 29,428 | 80,269 | 78,503 |
Wealth Management | Asset-based revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 4,351 | 13,618 | 18,911 | 36,530 |
Wealth Management | Asset-based revenue | Recognized Upon Transaction | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Wealth Management | Asset-based revenue | Recognized Over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 4,351 | 13,618 | 18,911 | 36,530 |
Wealth Management | Transaction and fee revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 4,048 | 3,608 | 14,885 | 11,664 |
Wealth Management | Transaction and fee revenue | Recognized Upon Transaction | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,067 | 1,054 | 4,063 | 2,624 |
Wealth Management | Transaction and fee revenue | Recognized Over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 2,981 | $ 2,554 | $ 10,822 | $ 9,040 |
Segment Information and Reven_5
Segment Information and Revenues - Details of Tax Preparation Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 175,353 | $ 149,016 | $ 599,795 | $ 568,524 |
Tax Preparation | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 39,421 | 3,588 | 202,990 | 205,733 |
Tax Preparation | Consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 38,482 | 4,280 | 186,724 | 190,908 |
Tax Preparation | Professional | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 939 | (692) | 16,266 | 14,825 |
Tax Preparation | Recognized Upon Transaction | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 39,121 | 2,649 | 200,543 | 201,022 |
Tax Preparation | Recognized Upon Transaction | Consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 38,480 | 3,268 | 186,721 | 188,340 |
Tax Preparation | Recognized Upon Transaction | Professional | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 641 | (619) | 13,822 | 12,682 |
Tax Preparation | Recognized Over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 300 | 939 | 2,447 | 4,711 |
Tax Preparation | Recognized Over Time | Consumer | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 2 | 1,012 | 3 | 2,568 |
Tax Preparation | Recognized Over Time | Professional | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 298 | (73) | 2,444 | 2,143 |
Wealth Management | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 135,932 | 145,428 | 396,805 | 362,791 |
Wealth Management | Advisory revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 82,612 | 75,579 | 227,672 | 176,746 |
Wealth Management | Commission revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 44,921 | 52,623 | 135,337 | 137,851 |
Wealth Management | Asset-based revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 4,351 | 13,618 | 18,911 | 36,530 |
Wealth Management | Transaction and fee revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 4,048 | 3,608 | 14,885 | 11,664 |
Wealth Management | Recognized Upon Transaction | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 17,951 | 24,249 | 59,131 | 61,972 |
Wealth Management | Recognized Upon Transaction | Advisory revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Wealth Management | Recognized Upon Transaction | Commission revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 16,884 | 23,195 | 55,068 | 59,348 |
Wealth Management | Recognized Upon Transaction | Asset-based revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Wealth Management | Recognized Upon Transaction | Transaction and fee revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,067 | 1,054 | 4,063 | 2,624 |
Wealth Management | Recognized Over Time | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 117,981 | 121,179 | 337,674 | 300,819 |
Wealth Management | Recognized Over Time | Advisory revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 82,612 | 75,579 | 227,672 | 176,746 |
Wealth Management | Recognized Over Time | Commission revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 28,037 | 29,428 | 80,269 | 78,503 |
Wealth Management | Recognized Over Time | Asset-based revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 4,351 | 13,618 | 18,911 | 36,530 |
Wealth Management | Recognized Over Time | Transaction and fee revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 2,981 | $ 2,554 | $ 10,822 | $ 9,040 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2020 | |
Goodwill [Roll Forward] | |||
Balance as of December 31, 2019 | $ 662,375 | $ 662,375 | |
Purchase accounting adjustment | (666) | ||
Acquired | 58,137 | ||
Impairment | (270,600) | (270,625) | |
Balance as of September 30, 2020 | 449,221 | ||
Gross goodwill as of September 30, 2020 | $ 719,846 | ||
Accumulated impairment as of September 30, 2020 | (270,625) | ||
Goodwill, net of accumulated impairment, as of September 30, 2020 | 662,375 | 449,221 | 449,221 |
Wealth Management | |||
Goodwill [Roll Forward] | |||
Balance as of December 31, 2019 | 473,833 | 473,833 | |
Purchase accounting adjustment | (666) | ||
Acquired | 58,137 | ||
Impairment | (270,625) | ||
Balance as of September 30, 2020 | 260,679 | ||
Gross goodwill as of September 30, 2020 | 531,304 | ||
Accumulated impairment as of September 30, 2020 | (270,625) | ||
Goodwill, net of accumulated impairment, as of September 30, 2020 | 473,833 | 260,679 | 260,679 |
Tax Preparation | |||
Goodwill [Roll Forward] | |||
Balance as of December 31, 2019 | 188,542 | 188,542 | |
Purchase accounting adjustment | 0 | ||
Acquired | 0 | ||
Impairment | 0 | ||
Balance as of September 30, 2020 | 188,542 | ||
Gross goodwill as of September 30, 2020 | 188,542 | ||
Accumulated impairment as of September 30, 2020 | 0 | ||
Goodwill, net of accumulated impairment, as of September 30, 2020 | $ 188,542 | $ 188,542 | $ 188,542 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Mar. 31, 2020 | Sep. 30, 2020 | |
Goodwill [Line Items] | ||
Impairment of goodwill and an intangible asset | $ 270,600 | $ 270,625 |
Debt - Schedule of Company's De
Debt - Schedule of Company's Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Less: Current portion of long-term debt, net | $ (1,782) | $ (11,228) |
Long-term debt, net | 552,417 | 381,485 |
Senior secured credit facility | ||
Debt Instrument [Line Items] | ||
Principal amount | 563,609 | 399,687 |
Discount | (4,452) | (1,366) |
Debt issuance costs | (4,958) | (5,608) |
Net carrying value | $ 554,199 | $ 392,713 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Jul. 01, 2020 | Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2020 | May 01, 2020 | Dec. 31, 2019 | May 06, 2019 |
Debt Instrument [Line Items] | ||||||||
Required prepayment percentage | 1.00% | |||||||
Honkamp Krueger Financial Services, Inc. | ||||||||
Debt Instrument [Line Items] | ||||||||
Purchase price | $ 104,400,000 | |||||||
Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt outstanding | $ 563,600,000 | $ 563,600,000 | ||||||
Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt outstanding | 0 | 0 | ||||||
Senior secured credit facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Credit facility | 740,000,000 | 740,000,000 | ||||||
Principal amount | 563,609,000 | 563,609,000 | $ 399,687,000 | |||||
Amount available for future borrowings | 65,000,000 | 65,000,000 | ||||||
Senior secured credit facility | Term Loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount | 175,000,000 | $ 125,000,000 | ||||||
Principal amount | 675,000,000 | 675,000,000 | ||||||
Debt issuance costs | $ 3,700,000 | 3,700,000 | ||||||
Debt instrument, periodic payment, principal | $ 500,000 | |||||||
Senior secured credit facility | Term Loan | Eurodollar | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable interest rate | 4.00% | |||||||
Senior secured credit facility | Term Loan | ABR | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable interest rate | 3.00% | |||||||
Senior secured credit facility | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Amount outstanding, that triggers minimum liquidity requirement | $ 0 | |||||||
Liquidity requirement | 115,000,000 | |||||||
Borrowing amount that triggers increase in maximum consolidated net leverage ratio | $ 0 | |||||||
Maximum consolidated total net leverage ratio | 375.00% | 575.00% | ||||||
Credit facility | $ 65,000,000 | $ 65,000,000 | ||||||
Senior secured credit facility | Revolving Credit Facility | Minimum | Eurodollar | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable interest rate | 2.75% | |||||||
Senior secured credit facility | Revolving Credit Facility | Minimum | ABR | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable interest rate | 1.75% | |||||||
Senior secured credit facility | Revolving Credit Facility | Maximum | Eurodollar | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable interest rate | 3.25% | |||||||
Senior secured credit facility | Revolving Credit Facility | Maximum | ABR | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable interest rate | 2.25% | |||||||
Senior secured credit facility | Revolving Credit Facility | Forecast | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum consolidated total net leverage ratio | 375.00% |
Leases - Operating Lease Expens
Leases - Operating Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Lease, Cost [Abstract] | ||||
Fixed lease expense | $ 1,566 | $ 1,373 | $ 5,652 | $ 3,628 |
Variable lease expense | 191 | 298 | 778 | 940 |
Lease expense, before sublease income | 1,757 | 1,671 | 6,430 | 4,568 |
Sublease income | (464) | (326) | (1,119) | (961) |
Total lease expense, net of sublease income | 1,293 | 1,345 | 5,311 | 3,607 |
Additional lease information: | ||||
Cash paid on operating lease liabilities | 1,037 | 1,252 | 3,509 | 3,357 |
Lease liabilities obtained from new right-of-use assets | $ 1,352 | $ 0 | $ 21,766 | $ 15,829 |
Weighted-average remaining operating lease term | 11 years 3 months 18 days | 11 years 3 months 18 days | ||
Weighted-average operating lease discount rate | 5.40% | 5.40% |
Leases - Supplement Balance She
Leases - Supplement Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Lease liabilities—current | $ 1,552 | $ 3,223 |
Lease liabilities—long-term | 36,973 | 5,865 |
Total operating lease liabilities | $ 38,525 | $ 9,088 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:LiabilitiesCurrentAbstract | bcor:LeaseLiabilitiesCurrent |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | bcor:LeaseLiabilitiesNonCurrent | bcor:LeaseLiabilitiesNonCurrent |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Leases [Abstract] | |
Remainder of 2020 | $ 309 |
2021 | 2,666 |
2022 | 5,056 |
2023 | 5,138 |
2024 | 5,077 |
Thereafter | 35,337 |
Total undiscounted cash flows | 53,583 |
Imputed interest | (15,058) |
Present value of cash flows | $ 38,525 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jul. 13, 2020 | Jan. 31, 2020 | Dec. 31, 2019 | |
Lessee, Lease, Description [Line Items] | |||||||
Lease liabilities obtained from new right-of-use assets | $ 1,352 | $ 0 | $ 21,766 | $ 15,829 | |||
Right of use lease asset | 24,028 | 24,028 | $ 10,151 | ||||
Total operating lease liabilities | 38,525 | 38,525 | $ 9,088 | ||||
Undiscounted lease payments | 53,583 | 53,583 | |||||
Impairment expense | $ 4,100 | $ 4,100 | |||||
Honkamp Krueger Financial Services, Inc. | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Right of use lease asset | $ 1,500 | ||||||
Total operating lease liabilities | $ 1,400 | ||||||
Honkamp Krueger Financial Services, Inc. | Minimum | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Remaining lease term | 1 year | 1 year | |||||
Honkamp Krueger Financial Services, Inc. | Maximum | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Remaining lease term | 4 years | 4 years | |||||
Corporate office headquarters | |||||||
Lessee, Lease, Description [Line Items] | |||||||
Right of use lease asset | $ 20,700 | ||||||
Total operating lease liabilities | $ 20,400 | ||||||
Undiscounted lease payments | $ 45,200 | $ 45,200 | |||||
Tenant improvement allowance | $ 9,700 | $ 9,700 |
Balance Sheet Components - Prep
Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid expenses | $ 6,044 | $ 7,982 |
Prepaid regulatory license fees | 498 | 1,991 |
Prepaid insurance | 339 | 1,492 |
Prepaid advertising | 1,991 | 322 |
Other current assets | 556 | 562 |
Total prepaid expenses and other current assets, net | $ 9,428 | $ 12,349 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||
Salaries and related expenses | $ 17,207 | $ 15,053 |
Retained purchase price from 1st Global Acquisition | 0 | 1,050 |
Accrued vendor and advertising costs | 1,159 | 4,351 |
Other | 1,751 | 4,638 |
Total accrued expenses and other current liabilities | 42,815 | 36,144 |
Honkamp Krueger Financial Services, Inc. | ||
Business Acquisition [Line Items] | ||
Contingent liability | 11,370 | 0 |
1st Global | ||
Business Acquisition [Line Items] | ||
Contingent liability | $ 11,328 | $ 11,052 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Hierarchy of Financial Assets Carried at Fair Value and Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jul. 01, 2020 | Dec. 31, 2019 |
Liabilities | |||
HKFS Contingent Consideration | $ 27,600 | ||
Honkamp Krueger Financial Services, Inc. | |||
Liabilities | |||
HKFS Contingent Consideration | $ 26,600 | $ 27,600 | |
Fair value measurements, Recurring | |||
ASSETS | |||
Total assets at fair value | 4,290 | $ 4,264 | |
Liabilities | |||
Total liabilities at fair value | 26,600 | ||
Fair value measurements, Recurring | Honkamp Krueger Financial Services, Inc. | |||
Liabilities | |||
HKFS Contingent Consideration | 26,600 | ||
Fair value measurements, Recurring | Money market and other funds | |||
ASSETS | |||
Cash equivalents: money market and other funds | 4,290 | 4,264 | |
Fair value measurements, Recurring | Quoted prices in active markets using identical assets (Level 1) | |||
ASSETS | |||
Total assets at fair value | 4,290 | 4,264 | |
Liabilities | |||
Total liabilities at fair value | 0 | ||
Fair value measurements, Recurring | Quoted prices in active markets using identical assets (Level 1) | Honkamp Krueger Financial Services, Inc. | |||
Liabilities | |||
HKFS Contingent Consideration | 0 | ||
Fair value measurements, Recurring | Quoted prices in active markets using identical assets (Level 1) | Money market and other funds | |||
ASSETS | |||
Cash equivalents: money market and other funds | 4,290 | 4,264 | |
Fair value measurements, Recurring | Significant other observable inputs (Level 2) | |||
ASSETS | |||
Total assets at fair value | 0 | 0 | |
Liabilities | |||
Total liabilities at fair value | 0 | ||
Fair value measurements, Recurring | Significant other observable inputs (Level 2) | Honkamp Krueger Financial Services, Inc. | |||
Liabilities | |||
HKFS Contingent Consideration | 0 | ||
Fair value measurements, Recurring | Significant other observable inputs (Level 2) | Money market and other funds | |||
ASSETS | |||
Cash equivalents: money market and other funds | 0 | 0 | |
Fair value measurements, Recurring | Significant unobservable inputs (Level 3) | |||
ASSETS | |||
Total assets at fair value | 0 | ||
Liabilities | |||
Total liabilities at fair value | 26,600 | ||
Fair value measurements, Recurring | Significant unobservable inputs (Level 3) | Honkamp Krueger Financial Services, Inc. | |||
Liabilities | |||
HKFS Contingent Consideration | 26,600 | ||
Fair value measurements, Recurring | Significant unobservable inputs (Level 3) | Money market and other funds | |||
ASSETS | |||
Cash equivalents: money market and other funds | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands | Sep. 30, 2020USD ($) | Jul. 01, 2020USD ($)earn_out_payment |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
HKFS Contingent Consideration | $ 27,600 | |
Honkamp Krueger Financial Services, Inc. | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
HKFS Contingent Consideration | $ 26,600 | $ 27,600 |
Number of potential earn-out payments | earn_out_payment | 2 | |
Measurement Input, Discount Rate | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 0.115 | |
Measurement Input, Price Volatility | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 0.335 | |
Measurement Input, Credit Spread | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Business combination, contingent consideration, liability, measurement input | 0.047 | |
Carrying Value | Term Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value disclosure | $ 563,600 | |
Fair Value | Term Loan | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument, fair value disclosure | $ 552,300 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Fair Value Measured on Recurring Basis (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance as of December 31, 2019 | $ 0 |
Recognized at HKFS Acquisition | 27,600 |
Valuation change included in net income (1) | (1,000) |
Balance as of September 30, 2020 | $ 26,600 |
Other Loss, Net - Schedule of O
Other Loss, Net - Schedule of Other Loss, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Other Income and Expenses [Abstract] | ||||
Interest expense | $ 7,254 | $ 5,469 | $ 17,410 | $ 14,015 |
Amortization of debt issuance costs | 362 | 301 | 1,006 | 848 |
Accretion of debt discounts | 276 | 66 | 414 | 189 |
Total interest expense | 7,892 | 5,836 | 18,830 | 15,052 |
Interest income | (2) | (52) | (27) | (341) |
Gain on sale of a business | (349) | (3,256) | (349) | (3,256) |
Non-capitalized debt issuance expenses | 3,687 | 0 | 3,687 | 0 |
Other | 735 | 78 | 1,245 | 227 |
Other loss, net | $ 11,963 | $ 2,606 | $ 23,386 | $ 11,682 |
Income Taxes - Components of In
Income Taxes - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income tax benefit (expense) | $ (15,256) | $ 12,331 | $ (23,237) | $ 16,470 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |||||
Income tax benefit (expense) | $ (15,256) | $ 12,331 | $ (23,237) | $ 16,470 | |
Increase in deferred tax asset valuation allowance | 23,500 | ||||
Impairment of goodwill and an intangible asset | $ 270,600 | $ 270,625 | |||
Discrete benefit related to the HD Vest trade name impairment and 1st Global acquisition | $ 10,600 |
Net Income Per Share - Summary
Net Income Per Share - Summary of Dilutive Effect for Awards with Exercise Price Less than Average Stock Price (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator: | ||||
Net income (loss) attributable to Blucora, Inc. | $ (26,206) | $ (62,386) | $ (292,055) | $ 30,820 |
Denominator: | ||||
Weighted average common shares outstanding, basic (in shares) | 48,039 | 48,652 | 47,936 | 48,456 |
Dilutive potential common shares (in shares) | 0 | 0 | 0 | 1,140 |
Weighted average common shares outstanding, diluted (in shares) | 48,039 | 48,652 | 47,936 | 49,596 |
Net income (loss) per share attributable to Blucora, Inc.: | ||||
Basic (in USD per share) | $ (0.55) | $ (1.28) | $ (6.09) | $ 0.64 |
Diluted (in USD per share) | $ (0.55) | $ (1.28) | $ (6.09) | $ 0.62 |
Shares excluded (in shares) | 3,165 | 3,084 | 2,869 | 1,217 |
Uncategorized Items - bcor-2020
Label | Element | Value |
Accounting Standards Update [Extensible List] | us-gaap_AccountingStandardsUpdateExtensibleList | us-gaap:AccountingStandardsUpdate201602Member |