Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Feb. 18, 2022 | Jun. 30, 2021 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2021 | ||
Current Fiscal Year End Date | --12-31 | ||
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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 836.5 | ||
Entity Common Stock, Shares Outstanding (in shares) | 48,450,662 | ||
Documents Incorporated by Reference | Portions of the Proxy Statement for the registrant’s 2022 Annual Meeting of Stockholders (the “Proxy Statement”), to be filed within 120 days of the end of the fiscal year ended December 31, 2021, are incorporated by reference in Part III hereof. Except with respect to information specifically incorporated by reference in this Form 10-K, the Proxy Statement is not deemed to be filed as part hereof. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2021 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001068875 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2021 | |
Audit Information [Abstract] | |
Auditor Name | Ernst & Young LLP |
Auditor Location | Dallas, Texas |
Auditor Firm ID | 42 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 134,824 | $ 150,125 |
Cash segregated under federal or other regulations | 0 | 637 |
Accounts receivable, net | 21,906 | 12,736 |
Commissions and advisory fees receivable | 25,073 | 26,132 |
Prepaid expenses and other current assets | 18,476 | 11,038 |
Total current assets | 200,279 | 200,668 |
Long-term assets: | ||
Property, equipment, and software, net | 73,638 | 58,500 |
Right-of-use assets, net | 20,466 | 23,455 |
Goodwill | 454,821 | 454,821 |
Acquired intangible assets, net | 302,289 | 322,179 |
Other long-term assets | 20,450 | 4,569 |
Total long-term assets | 871,664 | 863,524 |
Total assets | 1,071,943 | 1,064,192 |
Current liabilities: | ||
Accounts payable | 8,216 | 9,290 |
Commissions and advisory fees payable | 17,940 | 19,021 |
Accrued expenses and other current liabilities | 65,678 | 56,419 |
Current deferred revenue | 13,180 | 12,298 |
Current lease liabilities | 4,896 | 2,304 |
Current portion of long-term debt | 1,812 | 1,812 |
Total current liabilities | 111,722 | 101,144 |
Long-term liabilities: | ||
Long-term debt, net | 553,134 | 552,525 |
Deferred tax liabilities, net | 20,124 | 30,663 |
Long-term deferred revenue | 5,322 | 6,247 |
Long-term lease liabilities | 33,267 | 36,404 |
Other long-term liabilities | 6,752 | 24,919 |
Total long-term liabilities | 618,599 | 650,758 |
Total liabilities | 730,321 | 751,902 |
Commitments and contingencies (Note 10) | ||
Stockholders’ equity: | ||
Common stock, par value $0.0001 per share—900,000 shares authorized; 50,137 shares issued and 48,831 shares outstanding at December 31, 2021; 49,483 shares issued and 48,177 shares outstanding at December 31, 2020 | 5 | 5 |
Additional paid-in capital | 1,619,805 | 1,598,230 |
Accumulated deficit | (1,249,789) | (1,257,546) |
Treasury stock, at cost—1,306 shares at December 31, 2021 and December 31, 2020 | (28,399) | (28,399) |
Total stockholders’ equity | 341,622 | 312,290 |
Total liabilities and stockholders’ equity | $ 1,071,943 | $ 1,064,192 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par or stated value per share (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) | 50,137,000 | 49,483,000 |
Common stock, shares outstanding (in shares) | 48,831,000 | 48,177,000 |
Treasury stock (in shares) | 1,306,000 | 1,306,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue: | |||
Total revenue | $ 885,200 | $ 754,952 | $ 717,945 |
Cost of revenue: | |||
Cost of revenue | 479,851 | 398,290 | 362,772 |
Engineering and technology | 30,704 | 27,258 | 30,931 |
Sales and marketing | 173,331 | 177,618 | 126,205 |
General and administrative | 98,671 | 82,158 | 78,529 |
Acquisition and integration | 32,798 | 31,085 | 25,763 |
Depreciation | 10,906 | 7,293 | 5,479 |
Amortization of acquired intangible assets | 28,320 | 29,745 | 37,357 |
Impairment of goodwill and an intangible asset | 0 | 270,625 | 50,900 |
Total operating expenses | 854,581 | 1,024,072 | 717,936 |
Operating income (loss) | 30,619 | (269,120) | 9 |
Interest expense and other, net | (32,080) | (31,304) | (16,915) |
Loss before income taxes | (1,461) | (300,424) | (16,906) |
Income tax benefit (expense) | 9,218 | (42,331) | 65,054 |
Net income (loss) | $ 7,757 | $ (342,755) | $ 48,148 |
Net income (loss) per share: | |||
Basic (in USD per share) | $ 0.16 | $ (7.14) | $ 1 |
Diluted (in USD per share) | $ 0.16 | $ (7.14) | $ 0.98 |
Weighted average shares outstanding: | |||
Basic (in shares) | 48,578 | 47,978 | 48,264 |
Diluted (in shares) | 49,526 | 47,978 | 49,282 |
Comprehensive income (loss): | |||
Net income (loss) | $ 7,757 | $ (342,755) | $ 48,148 |
Other comprehensive income, net of income taxes | 0 | 272 | 174 |
Comprehensive income (loss) | 7,757 | (342,483) | 48,322 |
Wealth Management | |||
Revenue: | |||
Total revenue | 658,213 | 546,189 | 507,979 |
Cost of revenue: | |||
Cost of revenue | 464,293 | 385,962 | 352,081 |
Tax Software | |||
Revenue: | |||
Total revenue | 226,987 | 208,763 | 209,966 |
Tax Software | |||
Cost of revenue: | |||
Cost of revenue | $ 15,558 | $ 12,328 | $ 10,691 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ 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 income (loss) | Treasury stock |
Beginning Balance at Dec. 31, 2018 | $ 24,945 | |||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||
Reclassification of mandatorily redeemable noncontrolling interests | (22,428) | |||||||
Redemption of noncontrolling interests | (2,517) | |||||||
Ending Balance at Dec. 31, 2019 | 0 | |||||||
Beginning balance (in shares) at Dec. 31, 2018 | 48,044,000 | 0 | ||||||
Beginning balance at Dec. 31, 2018 | 607,595 | $ 5 | $ 1,569,725 | $ (961,689) | $ (446) | $ 0 | ||
Beginning balance (Accounting Standards Update 2016-02) at Dec. 31, 2018 | $ (1,636) | $ (1,636) | ||||||
Beginning balance (Accounting Standards Update 2016-02, Consolidated Deferred Tax) at Dec. 31, 2018 | $ 386 | $ 386 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Common stock issued pursuant to stock incentive plans and employee stock purchase plan (in shares) | 1,015,000 | |||||||
Common stock issued pursuant to stock incentive plans and employee stock purchase plan | $ 6,599 | 6,599 | ||||||
Stock repurchases (in shares) | (1,300,000) | (1,306,000) | ||||||
Stock repurchases | $ (28,399) | $ (28,399) | ||||||
Foreign currency translation adjustment | 174 | 174 | ||||||
Stock-based compensation | 16,300 | 16,300 | ||||||
Tax payments from shares withheld for equity awards | (5,652) | (5,652) | ||||||
Net income (loss) | 48,148 | 48,148 | ||||||
Ending balance (in shares) at Dec. 31, 2019 | 49,059,000 | (1,306,000) | ||||||
Ending balance at Dec. 31, 2019 | 643,515 | $ 5 | 1,586,972 | (914,791) | (272) | $ (28,399) | ||
Ending Balance at Dec. 31, 2020 | 0 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Common stock issued pursuant to stock incentive plans and employee stock purchase plan (in shares) | 424,000 | |||||||
Common stock issued pursuant to stock incentive plans and employee stock purchase plan | $ 2,355 | 2,355 | ||||||
Stock repurchases (in shares) | 0 | |||||||
Foreign currency translation adjustment | $ 272 | 272 | ||||||
Stock-based compensation | 10,066 | 10,066 | ||||||
Tax payments from shares withheld for equity awards | (1,163) | (1,163) | ||||||
Net income (loss) | $ (342,755) | (342,755) | ||||||
Ending balance (in shares) at Dec. 31, 2020 | 48,177,000 | 49,483,000 | (1,306,000) | |||||
Ending balance at Dec. 31, 2020 | $ 312,290 | $ 5 | 1,598,230 | (1,257,546) | 0 | $ (28,399) | ||
Ending Balance at Dec. 31, 2021 | 0 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Common stock issued pursuant to stock incentive plans and employee stock purchase plan (in shares) | 654,000 | |||||||
Common stock issued pursuant to stock incentive plans and employee stock purchase plan | $ 3,856 | 3,856 | ||||||
Stock repurchases (in shares) | 0 | |||||||
Stock-based compensation | $ 19,363 | 19,363 | ||||||
Tax payments from shares withheld for equity awards | (1,644) | (1,644) | ||||||
Net income (loss) | $ 7,757 | 7,757 | ||||||
Ending balance (in shares) at Dec. 31, 2021 | 48,831,000 | 50,137,000 | (1,306,000) | |||||
Ending balance at Dec. 31, 2021 | $ 341,622 | $ 5 | $ 1,619,805 | $ (1,249,789) | $ 0 | $ (28,399) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating activities: | |||
Net income (loss) | $ 7,757 | $ (342,755) | $ 48,148 |
Adjustments to reconcile net income (loss) to net cash from operating activities: | |||
Depreciation and amortization of acquired intangible assets | 43,426 | 39,907 | 44,208 |
Stock-based compensation | 20,754 | 10,066 | 16,300 |
Impairment of goodwill and an intangible asset | 0 | 270,625 | 50,900 |
Reduction of right-of-use lease assets | 3,046 | 8,908 | 4,425 |
Deferred income taxes | (10,539) | 41,059 | (67,549) |
Amortization of debt discount and issuance costs | 2,668 | 2,065 | 1,270 |
Gain on sale of a business | 0 | (349) | (3,256) |
Change in the fair value of acquisition-related contingent consideration | 22,400 | 8,300 | 0 |
Accretion of lease liabilities | 1,250 | 1,922 | 599 |
Other non-cash expenses | 2,602 | 1,508 | 135 |
Changes in operating assets and liabilities, net of acquisitions and disposals: | |||
Accounts receivable, net | (9,152) | 10,705 | 871 |
Commissions and advisory fees receivable | 1,059 | (4,956) | (471) |
Prepaid expenses and other current assets | (7,438) | 3,847 | 15,043 |
Other long-term assets | (17,861) | 2,232 | 3,377 |
Accounts payable | (1,074) | (4,192) | 29 |
Commissions and advisory fees payable | (857) | (884) | 432 |
Lease liabilities | (1,853) | (3,894) | (7,335) |
Deferred revenue | (43) | (796) | (17,367) |
Accrued expenses and other current and long-term liabilities | (19,314) | 761 | 3,045 |
Net cash provided by operating activities | 36,831 | 44,079 | 92,804 |
Investing activities: | |||
Purchases of property, equipment, and software, net | (30,276) | (36,002) | (10,501) |
Business acquisitions, net of cash acquired | 0 | (101,910) | (166,560) |
Asset acquisitions | (8,316) | (3,143) | 0 |
Proceeds from sale of a business, net of cash | 0 | 349 | 7,467 |
Net cash used by investing activities | (38,592) | (140,706) | (169,594) |
Financing activities: | |||
Proceeds from credit facilities, net of debt discount and issuance costs | (502) | 226,278 | 131,489 |
Payments on credit facilities | (1,812) | (66,531) | (313) |
Acquisition-related contingent consideration payments | (14,075) | 0 | (943) |
Stock repurchases | 0 | 0 | (28,399) |
Payment of redeemable noncontrolling interests | 0 | 0 | (24,945) |
Proceeds from stock option exercises | 579 | 97 | 4,387 |
Proceeds from issuance of stock through employee stock purchase plan | 3,277 | 2,258 | 2,212 |
Tax payments from shares withheld for equity awards | (1,644) | (1,163) | (5,652) |
Net cash provided (used) by financing activities | (14,177) | 160,939 | 77,836 |
Effect of exchange rate changes on cash, cash equivalents, and restricted cash | 0 | 0 | 38 |
Net increase (decrease) in cash, cash equivalents, and restricted cash | (15,938) | 64,312 | 1,084 |
Cash, cash equivalents, and restricted cash, beginning of period | 150,762 | 86,450 | 85,366 |
Cash, cash equivalents, and restricted cash, end of period | 134,824 | 150,762 | 86,450 |
Supplemental cash flow information: | |||
Cash paid for income taxes | 3,056 | 1,776 | 3,106 |
Cash paid for interest | 28,897 | 24,279 | 18,852 |
Non-cash investing activities: | |||
Purchases of property, equipment, and software through leasehold incentives | $ 0 | $ 9,726 | $ 0 |
Description of the Business
Description of the Business | 12 Months Ended |
Dec. 31, 2021 | |
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 Software business. Wealth Management Our Wealth Management business consists of the operations of Avantax Wealth Management and Avantax Planning Partners (collectively, the “Wealth Management business” or the “Wealth Management segment” ). Avantax Wealth Management provides tax-focused wealth management solutions for financial professionals, tax professionals, certified public accounting ( “CPA” ) firms, and their clients. Avantax Wealth Management offers its services through its registered broker-dealer, registered investment advisor ( “RIA” ), and insurance agency subsidiaries and is a leading U.S. tax-focused independent broker-dealer. Avantax Wealth Management works with a nationwide network of financial professionals that operate as independent contractors. Avantax Wealth Management provides these financial professionals with an integrated platform of technical, practice, compliance, operations, sales, and product support tools that enable them to offer tax-advantaged investing and wealth management services to their clients. Avantax Planning Partners is an in-house/employee-based RIA and wealth management business that partners with CPA firms in order to provide their consumer and small business clients with holistic financial planning and advisory services, as well as retirement plan solutions through Avantax Retirement Plan Services. Avantax Planning Partners formerly operated as Honkamp Krueger Financial Services, Inc. ( “HKFS” ). We acquired HKFS in July 2020 (the “ HKFS Acquisition ”) and subsequently rebranded it in order to create tighter brand alignment through one common and recognizable brand. Any reference to Avantax Planning Partners in this Form 10-K is inclusive of HKFS. Tax Software Our Tax Software business consists of the operations of TaxAct, Inc. ( “TaxAct,” the “Tax Software business,” or the “Tax Software segment” ) and provides digital tax preparation services and ancillary services for consumers, small business owners, and tax professionals through its website www.TaxAct.com and its mobile applications. We referred to this business as the “Tax Preparation business” and “Tax Preparation segment” in previous filings. Our Tax Software 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 Software segment typically reports losses because revenue from the segment is minimal while core operating expenses continue. Segments We have two reportable segments: (1) the Wealth Management segment and (2) the Tax Software segment. Net capital and regulatory requirements The Avantax Wealth Management broker-dealer subsidiary operates in a highly regulated industry and is subject to various regulatory capital requirements. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have substantial monetary and non-monetary impacts to Avantax Wealth Management’s operations. As of December 31, 2021, Avantax Wealth Management met all capital adequacy requirements to which it was subject. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2: Summary of Significant Accounting Policies Principles of consolidation and use of estimates The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ( “GAAP” ). These consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany accounts and transactions have been eliminated. Certain items in these consolidated financial statements have been reclassified to conform to current period presentation. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and disclosure of contingencies. Actual amounts may differ from estimates. 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): December 31, 2021 2020 Cash and cash equivalents $ 134,824 $ 150,125 Cash segregated under federal or other regulations — 637 Total cash, cash equivalents, and restricted cash $ 134,824 $ 150,762 We generally invest our available cash in high-quality marketable investments. These investments include 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 Avantax Wealth Management business clients and is considered restricted cash on the consolidated balance sheets. Accounts receivable, net Accounts receivable are stated at amounts due from customers, net of an allowance for credit losses. Our estimates of credit losses are based on our historical experience, the aging of our trade receivables, and management judgment. The allowance for credit losses was not material as of December 31, 2021 and 2020. Property, equipment, and software, net Property, equipment, and software, net, are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the following estimated useful lives: Estimated Useful Life Computer equipment 3 years Purchased software 3 years Data center servers 3 years Internally developed software 3 years Office equipment 7 years Office furniture 7 years Airplane 25 years Leasehold improvements Shorter of lease term or economic life Costs incurred to develop software intended for our internal use, primarily contractor costs and employee salaries and benefits, are capitalized during the application development stage. Capitalization of such costs ceases once the project is substantially complete and ready for its intended use. We also capitalize costs related to specific upgrades and enhancements when it is probable that the expenditure will result in additional functionality. Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred. We capitalized $24.3 million, $19.3 million, and $7.4 million of internally developed software costs for the years ended December 31, 2021, 2020, and 2019, respectively. Business combinations We allocate the fair value of the purchase consideration for our business combinations to the assets acquired and liabilities assumed, generally based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Purchase consideration includes assets transferred, liabilities assumed, and/or equity interests issued by us, all of which are measured at their fair value as of the date of acquisition. Our business combinations may be structured to include a combination of up-front, deferred, and contingent payments to be made at specified dates subsequent to the date of acquisition. Deferred and contingent payments determined to be purchase consideration are recorded at fair value as of the acquisition date. Our contingent consideration arrangements are generally obligations to make future payments to sellers contingent upon the achievement of future financial targets and are remeasured to fair value at the end of each reporting period until the obligations are settled. The valuation of the net assets acquired as well as certain elements of purchase consideration requires management to make significant estimates and assumptions, especially with respect to future expected cash flows, discount rates, growth and attrition rates, and estimated useful lives. Management’s assumptions and estimates of fair value are based on comparable market data and information obtained from the management of acquired entities. These assumptions and estimates are believed to be reasonable, but are inherently uncertain and, as a result, actual results may differ from estimates. During the measurement period, we may record adjustments to the assets acquired and liabilities assumed with a corresponding offset to goodwill. Subsequent changes to the fair value of contingent consideration are reflected in “Acquisition and integration” expense on the consolidated statements of comprehensive income (loss). Acquisition costs are expensed as incurred and are included in “Acquisition and integration” expense on the consolidated statements of comprehensive income (loss). We include the results of operations from acquired businesses in our consolidated financial statements from the effective date of the acquisition. Asset acquisitions Acquisitions that do not meet the criteria to be accounted for as a business combination are accounted for as an asset acquisition. Using a cost accumulation model, the purchase price, including certain acquisition-related costs, is allocated to the acquired assets and assumed liabilities based upon their relative fair values as of the acquisition date. No goodwill is contemplated in the allocation process. Our asset acquisitions typically include contingent consideration arrangements that encompass obligations to make future payments to sellers contingent upon the achievement of future financial targets. Contingent consideration is not recognized until all contingencies are resolved and the consideration is paid, at which point the consideration is allocated to the assets acquired on a relative fair value basis. Goodwill and acquired intangible assets, net We test goodwill and indefinite-lived intangible assets for impairment annually, as of November 30, or more frequently when events or circumstances indicate that impairment may have occurred. For purposes of goodwill impairment testing, our reporting units are consistent with our reporting segments. We test goodwill for impairment either by assessing qualitative factors to determine whether it is more likely than not that the fair values of our reporting units are less than their carrying amounts, or by performing a quantitative test. Qualitative factors include industry and market conditions, overall financial performance, and other relevant events and circumstances affecting each reporting unit. If we choose to perform a qualitative assessment and, after considering the totality of events or circumstances, we determine it is more likely than not the fair value(s) of our reporting unit(s) are less than their carrying amounts, then we perform a quantitative fair value test. Our quantitative test utilizes a weighted combination of a discounted cash flow model (known as the income approach) and a market approach which estimates a reporting unit’s fair value by applying income-based valuation multiples for a set of comparable companies to the reporting unit’s income. These approaches involve judgmental assumptions, including forecasted future cash flows expected to be generated by each reporting unit over an extended period of time, long-term growth rates, the identification of comparable companies, and each reporting unit’s weighted average cost of capital. The weighted average cost of capital factors in the relevant risk associated with business-specific characteristics and the uncertainty of achieving projected cash flows. These assumptions are unobservable inputs and are considered Level 3 measurements. Impairment is recognized as the excess of a reporting unit’s carrying amount, including goodwill, over its fair value. We test indefinite-lived intangible assets for impairment either through a qualitative assessment similar to our evaluation for goodwill, or by performing a quantitative test. Our quantitative test estimates the fair values of the assets based on estimated future earnings derived from the assets using an income approach. This discounted cash flow model involves judgmental assumptions, including forecasted future cash flows from estimated royalty rates and the asset’s weighted average cost of capital. The weighted average cost of capital factors in the relevant risk associated with business-specific characteristics and the uncertainty of achieving projected cash flows. These assumptions are unobservable inputs and are considered Level 3 measurements. Impairment is recognized as the excess of the indefinite-lived intangible asset’s carrying amount over its fair value. Impairment of long-lived assets Long-lived assets, including definite-lived intangibles, are reviewed for impairment when events or circumstances indicate that the carrying value of an asset or group of assets may not be recoverable. Factors we consider important that may trigger an impairment review include, but are not limited to, significant under-performance relative to historical or projected future operating results, and significant changes in the manner of our use of the asset. If circumstances require that an asset or group of assets be tested for impairment, determination of recoverability is based on an estimate of the undiscounted cash flows expected to be generated by the asset or group of assets. If the carrying amount of the asset or group of assets is not recoverable on an undiscounted cash flow basis, impairment is recognized equal to the excess of the carrying value over its fair value. Financial professional loans We periodically extend credit to our financial professionals in the form of recruiting or retention loans, commission advances and other loans. The decision to extend credit to a financial professional is generally based on affiliation with Avantax Wealth Management and their ability to generate future revenues. Loans made in connection with recruiting or retention can either be repayable or forgivable over terms generally up to fifteen years provided that the financial professional remains a service provider to the Company. Forgivable loans are not repaid in cash and are amortized over the term of the loan. If a financial professional terminates their arrangement with the Company prior to the loan maturity date, the remaining balance becomes repayable immediately. We estimate an allowance for credit loss related to both repayable and forgivable loans at inception using estimates and assumptions based on historical loss experience and expectations of future loss rates. Management monitors the adequacy of these estimates on a periodic basis against actual trends experienced. The allowance for credit loss associated with these loans was not material as of December 31, 2021 and 2020. As of December 31, 2021 and 2020, outstanding loans issued to financial professionals were $22.0 million and $2.7 million, respectively. Of these amounts, $17.7 million and $2.0 million, respectively, were included within “other long-term assets” on the consolidated balance sheets, and $4.3 million and $0.7 million, respectively, were included in “prepaid and other current assets” on the consolidated balance sheets. During the years ended December 31, 2021, 2020, and 2019, we recognized $2.3 million, $0.9 million, and $0.8 million, respectively, of forgivable loan amortization within “cost of revenue” in the consolidated statements of comprehensive income (loss). Substantially all of our outstanding financial professional loans are considered forgivable. Leases We determine if an arrangement contains a lease at inception. Right-of-use ( “ROU” ) assets represent our right to use an underlying asset for the lease term and the corresponding lease liabilities represent our obligation to make lease payments arising from the lease. On the commencement date, leases are evaluated for classification, and ROU assets and lease liabilities are recognized based on the present value of lease payments over the lease term. The ROU asset is reduced for tenant incentives and excludes any initial direct costs incurred. We have elected to combine the lease and non-lease components of a contract, if applicable, into a single lease component. The implicit rates within our leases are generally not readily determinable, and instead we use our incremental borrowing rate at the lease commencement date to determine the present value of lease payments. Fixed lease cost is recognized on a straight-line basis over the lease term. Variable lease payments are not included in the calculation of the ROU assets and lease liabilities and are recognized as lease costs as incurred. Our variable lease payments generally relate to amounts paid to lessors for common area maintenance. Our lease terms are contractually fixed but may include extension or termination options. These options are included in lease values when it is reasonably certain we will exercise such options. We have elected not to recognize a ROU asset or lease liability for short-term leases, defined as those which have an initial lease term of twelve months or less. Our leases do not contain residual value guarantees or material variable lease payments. We do not have any material restrictions or covenants imposed by leases that would impact our ability to pay dividends or cause us to incur additional financial obligations. Fair value of financial instruments We measure our financial instruments and contingent consideration from our business combinations at fair value at each reporting period using a fair value hierarchy. The classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Fair value inputs 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. Revenue recognition We recognize revenue when all five of the following revenue recognition criteria have been satisfied: • contract(s) with customers have been identified; • performance obligations have been identified; • transaction prices have been determined; • transaction prices have been allocated to the performance obligations; and • the performance obligations have been fulfilled by transferring control over the promised services to the customer. The determination of when these criteria are satisfied varies by product or service and is explained in more detail below. Wealth Management revenue recognition. Wealth management revenue primarily consists of advisory revenue, commission revenue, asset-based revenue, and transaction and fee revenue. Revenue is recognized upon the transfer of services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those services. Payments received by us in advance of the performance of service are deferred and recognized as revenue when we have satisfied our performance obligation. Advisory revenue includes fees charged to clients in advisory accounts for which we are the RIA. These fees are based on the value of assets within these advisory accounts. For advisory revenues generated by Avantax Wealth Management, advisory fees are typically billed quarterly, in advance, and the related advisory revenues are deferred and recognized ratably over the period in which our performance obligations have been completed. For advisory revenues generated by Avantax Planning Partners, advisory fees are typically billed quarterly, in arrears, and the related advisory revenues are accrued and recognized over the period in which our performance obligations were completed. Commissions represent amounts generated by clients’ purchases and sales of securities and investment products. We serve as the registered broker-dealer or insurance agent for those trades. We generate two types of commissions: (1) transaction-based commissions and (2) trailing commissions. Transaction-based commissions are generated on a per-transaction basis and are recognized as revenue on the trade date, which is when our performance obligations have been substantially completed. Trailing commissions are earned by us based on our ongoing account support to clients. Trailing commissions are based on a percentage of the current market value of clients’ investment holdings in trail-eligible assets and recognized over the period during which our services are performed. Since trailing commission revenue is generally paid in arrears, we estimate it based on a number of factors, including stock market index levels and the amount of trailing commission revenues received in prior periods. These estimates are primarily based on historical information, and there is not significant judgment involved. A substantial portion of advisory revenue and commission revenue is ultimately paid to our financial professionals. In Avantax Wealth Management, advisory fee payments to financial professionals typically occur at the beginning of the quarter, in advance, and therefore do not result in an advisory fee payable amount at quarter end. In Avantax Planning Partners, advisory fee payments (which are primarily composed of payments to CPA firms under fee sharing arrangements) are typically made quarterly, in arrears, and we record an estimate for the advisory fee payable based on the historical payout ratios and financial market movement for the period. For transaction-based commissions, we record an estimate for commissions payable based upon the payout rate of the financial professional generating the accrued commission revenue. For trailing commissions, we record an estimate for trailing commissions payable based upon historical payout ratios. Such amounts are recorded as “Commissions and advisory fees payable” on the consolidated balance sheets and “Wealth management cost of revenue” on the consolidated statements of comprehensive income (loss). Asset-based revenue primarily includes fees from financial product manufacturer sponsorship programs, cash sweep programs, and other asset-based revenues, primarily margin revenues and asset-based retirement plan service fees. Asset-based revenue is recognized ratably over the period in which services are provided. Transaction and fee revenue primarily includes (1) support fees charged to financial professionals, which are recognized over time as support services are provided, (2) fees charged for executing certain transactions in client accounts, which are recognized on a trade-date basis, and (3) other fees related to services provided and other account charges as generally outlined in agreements with financial professionals, clients, and financial institutions, which are recognized as services are performed or as earned, as applicable. 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. Digital revenues include digital software products sold to customers and businesses primarily for the preparation of individual or business tax returns, and are generally recognized when customers and businesses complete and file returns. Digital revenues are recognized net of an allowance for the portion of the returns filed using our refund payment transfer services (as explained below) that we estimate will not be accepted and funded by the IRS. Packaged tax preparation software revenues are generated from the sale of our downloadable software products and are recognized when legal title transfers, which is when customers download the software. Ancillary service revenues primarily include fees we charge for refund payment transfer services, audit defense services, and referral and marketing arrangements with third party partners. Refund payment transfer services allow the cost of TaxAct software products to be deducted from a taxpayer’s refund instead of being paid at the time of filing. The fees the customer pays for refund payment transfer services and audit defense services are recognized at the time of filing. Revenue for our referral and marketing arrangements with third party partners is recognized at a point in time or over time based on the nature of the performance obligation under each arrangement. Certain of our tax preparation software packages marketed towards professional tax preparers contain multiple elements, including a software element and an unlimited e-filing capability element. For these software packages that contain multiple elements, we allocate the total consideration of the package to the two elements. We then recognize revenue for the software element upon download or shipment and recognize revenue for the unlimited filing element over time based on an estimated filing timeline. The impact of multiple element arrangements is not material and only impacts the timing of revenue recognition over the tax filing season, which is typically concentrated within the first two quarters of each year. Advertising expenses Costs for advertising are recorded within “Sales and marketing” on the consolidated statements of comprehensive income (loss) when the advertisement appears. Advertising expense totaled $64.5 million, $80.0 million, and $54.5 million for the years ended December 31, 2021, 2020, and 2019, respectively. Stock-based compensation We measure stock-based compensation for awards of stock options, restricted stock units ( “RSUs” ), and other similar awards based on the estimated fair value of the awards on the date of grant. RSUs typically include service-based vesting requirements ( “time-based RSUs” ) or performance-based vesting requirements ( “performance-based RSUs” ). Compensation expense for awards that vest ratably is recognized net of estimated forfeitures (if applicable) over the requisite service period of the award for each vesting tranche using the straight-line method. Compensation expense for awards that cliff vest is recognized over the requisite service period of the award using the straight-line method. We estimate forfeitures for employee awards at the time of grant, based upon historical data, and revise those estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We recognize forfeitures as they occur for awards to non-employee financial professionals. The fair value of stock options is estimated using a Black-Scholes-Merton valuation method on the date of grant. The fair value of time-based RSUs is equal to the closing price of the Company’s stock on the date of grant. The fair value of performance-based RSUs that contain a market component is estimated using a Monte-Carlo simulation model on the date of grant. For performance-based RSUs, compensation expense is originally based on the number of shares that would vest if we achieve the level of performance that we estimate is the most probable outcome at the grant date. Throughout the requisite service period, we monitor the probability of achieving the performance condition, and adjust compensation expense based on future expected performance. Compensation expense for performance-based RSUs that contain a market component is not reversed if the market criteria are not satisfied. Income taxes We account for income taxes under the asset and liability method, under which deferred tax assets, including net operating loss carryforwards, and deferred tax liabilities are determined based on temporary differences between the book and tax basis of assets and liabilities. We periodically evaluate the likelihood of the realization of deferred tax assets and reduce the carrying amount of the deferred tax assets by a valuation allowance to the extent we believe it is more likely than not a portion will not be realized. We consider many factors when assessing the likelihood of future realization of deferred tax assets, including expectations of future taxable income, recent cumulative earnings experience by taxing jurisdiction, and other relevant factors. There is a wide range of possible judgments relating to the valuation of our deferred tax assets. We record liabilities to address uncertain tax positions that have been taken in previously filed tax returns or that are expected to be taken in a future tax return. The determination for required liabilities is based upon an analysis of each individual tax position, taking into consideration whether it is more likely than not that the tax position, based on technical merits, will be sustained upon examination. The tax benefit to be recognized in the financial statements from such a position is measured as the largest amount of benefit that has a greater than 50% cumulative likelihood of being realized upon ultimate settlement with the taxing authority. The difference between the amount recognized and the total tax position is recorded as a liability. The ultimate resolution of these tax positions may be greater or less than the liabilities recorded. We recognize interest and penalties related to uncertain tax positions in interest expense and general and administrative expense, respectively. Concentration of credit risk Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents, short-term investments, trade accounts receivable, and commissions receivable. These instruments are generally unsecured and uninsured. For cash equivalents, short-term investments, and commissions receivable, we attempt to manage exposure to counterparty credit risk by only entering into agreements with major financial institutions and investment sponsors that are expected to be able to fully perform under the terms of the applicable agreement. Accounts receivable are typically unsecured and are derived from revenues earned from customers primarily located in the United States operating in a variety of geographic areas. We perform ongoing credit evaluations of our customers and maintain allowances for potential credit losses. Geographic revenue information Substantially all of our revenue for 2021, 2020, and 2019 was generated from customers located in the United States. All of our tangible fixed assets are located in the United States. Recently issued accounting pronouncements In March 2020 and January 2021, the Financial Accounting Standards Board issued Accounting Standard Update ( “ASU” ) No. 2020-04 “Reference Rate Reform (ASC 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” , and ASU 2021-01 “Reference Rate Reform (ASC 848): Scope” which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform in contracts and other transactions that reference the London Interbank Offered Rate ( “LIBOR” ) or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. ASU 2020-04 and ASU 2021-01 are effective for all entities as of March 12, 2020 through December 31, 2022. |
Segment Information and Revenue
Segment Information and Revenues | 12 Months Ended |
Dec. 31, 2021 | |
Segment Reporting [Abstract] | |
Segment Information and Revenues | Note 3: Segment Information and Revenue We have two reportable segments: (1) the Wealth Management segment and (2) the Tax Software 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 acquired intangible assets, acquisition and integration costs, executive transition costs, headquarters relocation costs, contested proxy and other legal and consulting costs, or impairment of goodwill and acquired intangible assets to the reportable segments. Such amounts are reflected in the table below under the heading “Corporate-level activity.” In addition, we do not allocate interest expense and other, 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): Year Ended December 31, 2021 2020 2019 Revenue: Wealth Management $ 658,213 $ 546,189 $ 507,979 Tax Software 226,987 208,763 209,966 Total revenue 885,200 754,952 717,945 Operating income (loss): Wealth Management 82,212 72,195 68,292 Tax Software 81,879 49,621 96,249 Corporate-level activity (133,472) (390,936) (164,532) Total operating income (loss) 30,619 (269,120) 9 Interest expense and other, net (32,080) (31,304) (16,915) Loss before income taxes (1,461) (300,424) (16,906) Income tax benefit (expense) 9,218 (42,331) 65,054 Net income (loss) $ 7,757 $ (342,755) $ 48,148 Wealth Management revenue recognition Wealth Management revenue primarily consists of advisory revenue, commission revenue, asset-based revenue, and transaction and fee revenue. Revenues by major category within the Wealth Management segment and the timing of Wealth Management revenue recognition was as follows (in thousands): Year Ended December 31, 2021 2020 2019 Recognized upon transaction: Commission $ 89,970 $ 74,788 $ 82,604 Transaction and fee 4,210 6,494 3,457 Total Wealth Management revenue recognized upon transaction $ 94,180 $ 81,282 $ 86,061 Recognized over time: Advisory $ 395,800 $ 314,751 $ 252,367 Commission 120,707 110,413 108,446 Asset-based 22,101 23,688 48,182 Transaction and fee 25,425 16,055 12,923 Total Wealth Management revenue recognized over time $ 564,033 $ 464,907 $ 421,918 Total Wealth Management revenue: Advisory $ 395,800 $ 314,751 $ 252,367 Commission 210,677 185,201 191,050 Asset-based 22,101 23,688 48,182 Transaction and fee 29,635 22,549 16,380 Total Wealth Management revenue $ 658,213 $ 546,189 $ 507,979 Tax Software revenue recognition We generate Tax Software revenue from the sale of digital tax preparation services, packaged tax preparation software, ancillary services, and multiple element arrangements that may include a combination of these items. Revenues by major category within the Tax Software segment and the timing of Tax Software revenue recognition was as follows (in thousands): Year Ended December 31, 2021 2020 2019 Recognized upon transaction: Consumer $ 209,747 $ 192,223 $ 192,438 Professional 14,841 14,031 12,616 Total Tax Software revenue recognized upon transaction $ 224,588 $ 206,254 $ 205,054 Recognized over time: Consumer $ 1 $ 3 $ 2,566 Professional 2,398 2,506 2,346 Total Tax Software revenue recognized over time $ 2,399 $ 2,509 $ 4,912 Total Tax Software revenue: Consumer $ 209,748 $ 192,226 $ 195,004 Professional 17,239 16,537 14,962 Total Tax Software revenue $ 226,987 $ 208,763 $ 209,966 |
Asset Acquisitions
Asset Acquisitions | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Asset Acquisitions | Note 4: Asset Acquisitions During the years ended December 31, 2021 and 2020, we completed several acquisitions in our Wealth Management business that met the criteria to be accounted for as asset acquisitions. Total initial purchase consideration, including acquisition costs and fixed deferred payments, was $8.5 million and $4.4 million, respectively. This purchase consideration was allocated to the acquired assets, primarily customer relationship intangibles. Customer relationship intangibles are amortized on a straight-line basis over an amortization period of 180 months. |
Goodwill and Acquired Intangibl
Goodwill and Acquired Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Acquired Intangible Assets, Net | Note 5: Goodwill and Acquired Intangible Assets, Net Goodwill The following table presents goodwill by reportable segment (in thousands): Wealth Management Tax Software Total Balance as of December 31, 2019 $ 473,833 $ 188,542 $ 662,375 Acquired 63,737 — 63,737 Purchase accounting adjustments (666) — (666) Impairment (270,625) — (270,625) Balance as of December 31, 2020 266,279 188,542 454,821 Balance as of December 31, 2021 $ 266,279 $ 188,542 $ 454,821 Beginning in March 2020, the COVID-19 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 Software reporting unit for potential impairment. As a result of our quantitative impairment test described in “Note 2—Summary of Significant Accounting Policies”, we recorded a $270.6 million goodwill impairment for the Wealth Management reporting unit in the first quarter of 2020. No incremental impairments were recognized as of our annual impairment tests performed on November 30, 2021 and 2020. Acquired intangible assets, net Acquired intangible assets, net, consisted of the following (in thousands): December 31, 2021 December 31, 2020 Weighted average amortization period (months) Gross Accumulated Net Gross Accumulated Net Definite-lived intangible assets: Financial professional relationships 170 $ 318,700 $ (111,916) $ 206,784 $ 318,700 $ (92,436) $ 226,264 Sponsor relationships 143 17,200 (5,655) 11,545 17,200 (4,680) 12,520 Technology 5 2,980 (2,852) 128 16,470 (14,026) 2,444 Trade names 11 3,100 (2,379) 721 3,100 (1,346) 1,754 Customer relationships 164 65,573 (5,729) 59,844 57,143 (1,784) 55,359 CPA firm relationships 162 4,070 (407) 3,663 4,070 (136) 3,934 Curriculum 5 900 (796) 104 900 (496) 404 Total definite-lived intangible assets 412,523 (129,734) 282,789 417,583 (114,904) 302,679 Indefinite-lived intangible assets: Trade name 19,500 — 19,500 19,500 — 19,500 Total acquired intangible assets, net $ 432,023 $ (129,734) $ 302,289 $ 437,083 $ (114,904) $ 322,179 Expected amortization of definite-lived intangible assets held as of December 31, 2021 was as follows (in thousands): 2022 $ 25,511 2023 24,197 2024 23,637 2025 22,958 2026 22,336 Thereafter 164,150 Total $ 282,789 In September 2019, we announced a rebranding of our Wealth Management business to Avantax Wealth Management (the “2019 Rebranding” ). In connection with the 2019 Rebranding, HD Vest (which comprised all of the Wealth Management business prior to the acquisition of 1st Global) was renamed Avantax Wealth Management in September 2019, and 1st Global converted in late October 2019. As a result, the Company evaluated the HD Vest trade name indefinite-lived asset by performing a quantitative impairment test of that intangible asset, as described in “Note 2—Summary of Significant Accounting Policies”. As a result of this test, we recognized an impairment charge of $50.9 million on the “Impairment of goodwill and an intangible asset” line on the consolidated statement of comprehensive income (loss) for the year ended December 31, 2019. For segment purposes, the impairment of intangible asset is in “Corporate-level activity.” Following the impairment, the remaining useful life of the HD Vest trade name asset was estimated to be three years. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Note 6: Debt Our debt consisted of the following (in thousands): December 31, 2021 December 31, 2020 Unamortized Unamortized Principal amount Discount Debt issuance costs Net carrying value Principal amount Discount Debt issuance costs Net carrying value Senior secured credit facility $ 561,344 $ (3,027) $ (3,371) $ 554,946 $ 563,156 $ (4,173) $ (4,646) $ 554,337 Less: Current portion of long-term debt, net (1,812) (1,812) Long-term debt, net $ 553,134 $ 552,525 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 (as amended, the “ Senior Secured Credit Facility ” ). On April 26, 2021, to ensure adequate liquidity and flexibility to support the Company’s growth, we entered into Amendment No. 5 to the Credit Agreement (the “Credit Agreement Amendment” ). Pursuant to the Credit Agreement Amendment, the Credit Agreement was amended to, among other things, refinance the existing $65.0 million Revolver and add $25.0 million of additional revolving credit commitments, for an aggregate principal amount of $90.0 million in revolving credit commitments (the “New Revolver” ). The Company capitalized approximately $0.5 million of debt issuance costs paid in connection with the Credit Agreement Amendment, which are included in other long-term assets on the Company’s consolidated balance sheets as part of the total deferred financing costs associated with the New Revolver. As of December 31, 2021, the Senior Secured Credit Facility provided up to $765.0 million of borrowings and consisted of a committed $90.0 million under the New Revolver and a $675.0 million Term Loan that mature on February 21, 2024 and May 22, 2024, respectively. As of December 31, 2021, we had $561.3 million in principal amount outstanding under the Term Loan and no amounts outstanding under the New Revolver. Based on aggregate loan commitments as of December 31, 2021, approximately $90.0 million was available for future borrowing under the Senior Secured Credit Facility, subject to customary terms and conditions. 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. In addition, 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, in an amount equal to approximately $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. The future principal payments on the Term Loan as of December 31, 2021 are as follows (in thousands): 2022 $ 1,812 2023 1,812 2024 557,720 Total future principal payments on the Term Loan $ 561,344 The interest rate on the Term Loan is variable at the London Interbank Offered Rate, plus the applicable interest rate margin of 4.0% for Eurodollar Rate Loans (as defined in the Credit Agreement) and 3.0% for ABR Loans (as defined in the Credit Agreement). As of December 31, 2021, the applicable interest rate on the Term Loan was 5.0%. Depending on the Consolidated First Lien Net Leverage Ratio (as defined in the Credit Agreement), the applicable interest rate margin on the New Revolver ranges from 2.0% to 2.5% for Eurodollar Rate Loans and 1.0% to 1.5% for ABR Loans. The Company is required to pay a commitment fee on the undrawn commitment under the New Revolver in a percentage that is dependent on the Consolidated First Lien Net Leverage Ratio that ranges from 0.35% to 0.4%. Interest is payable at the end of each interest period, typically quarterly. Obligations under the Senior Secured Credit Facility are guaranteed by certain of the Company’s subsidiaries and secured by substantially all the assets of the Company and certain of its subsidiaries (including certain subsidiaries acquired in the acquisition of Avantax Planning Partners and certain other material subsidiaries). The Senior Secured Credit Facility includes financial and operating covenants (including a Consolidated Total Net Leverage Ratio), which are set forth in detail in the Credit Agreement. Pursuant to the Credit Agreement Amendment, if the Company’s usage of the New Revolver exceeds 30% of the aggregate commitments under the New Revolver on the last day of any calendar quarter, the Company shall not permit the Consolidated Total Net Leverage Ratio (as defined in the Credit Agreement) to exceed (i) 4.75 to 1.00 for the period beginning on April 1, 2021 and ending on December 31, 2021, (ii) 4.25 to 1.00 for the period beginning on January 1, 2022 and ending on September 30, 2022, (iii) 4.00 to 1.00 for the period beginning on October 1, 2022 and ending on December 31, 2022, and (iv) 3.50 to 1.00 for the period beginning on January 1, 2023 and ending on February 21, 2024. Except as described above, the New Revolver has substantially the same terms as the previous Revolver, including certain covenants and events of default. The Company was in compliance with the debt covenants of the Senior Secured Credit Facility as of December 31, 2021. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Leases | Note 7: Leases Our leases are primarily related to office space and are classified as operating leases. Operating lease cost, net of sublease income, is recognized in “General and administrative” expense for those net costs related to leases used in our operations and within “Acquisition and integration” expense for those net costs related to the unoccupied lease resulting from our acquisition of 1st Global, Inc. and 1st Global Insurance Services, Inc. (together, the “1st Global Acquisition” ) on the consolidated statements of comprehensive income (loss). Operating lease cost, net of sublease income, cash paid on operating lease liabilities, and ROU assets obtained in exchange for lease obligations for the years ended December 31, 2021, 2020, and 2019 were as follows (in thousands): Year Ended December 31, 2021 2020 2019 Fixed lease cost $ 4,188 $ 6,762 $ 5,224 Variable lease cost 1,057 893 1,315 Operating lease cost, before sublease income 5,245 7,655 6,539 Sublease income (464) (1,235) (1,287) Total operating lease cost, net of sublease income $ 4,781 $ 6,420 $ 5,252 Additional lease information: Cash paid on operating lease liabilities $ 1,853 $ 3,818 $ 7,339 ROU assets obtained in exchange for lease obligations $ 93 $ 21,766 $ 15,829 Right-of-use assets and operating leases were recorded on the consolidated balance sheets as follows (in thousands): December 31, 2021 2020 Right-of-use assets, net $ 20,466 $ 23,455 Current lease liabilities $ 4,896 $ 2,304 Long-term lease liabilities 33,267 36,404 Total operating lease liabilities $ 38,163 $ 38,708 Weighted-average remaining lease term (in years) 10.3 11.0 Weighted-average discount rate 5.4 % 5.4 % The maturities of our operating lease liabilities as of December 31, 2021 are as follows (in thousands): Undiscounted cash flows: 2022 $ 5,040 2023 5,172 2024 5,080 2025 5,013 2026 4,193 Thereafter 26,130 Total undiscounted cash flows 50,628 Imputed interest (12,465) Present value of cash flows $ 38,163 During the year ended December 31, 2020, we began subleasing a portion of our former office building acquired in the 1st Global Acquisition for rental rates that were less than those of the original building lease, representing a triggering event to test the right-of-use asset for impairment. The estimated fair value of the asset was calculated using a discounted cash flow analysis that included forecasted cash flows and a discount rate derived from market data, both of which are Level 3 fair value inputs. As a result of this test, we recognized impairment expense of $4.1 million for the year ended December 31, 2020, which was included in “Acquisition and integration” expense on the consolidated statements of comprehensive income (loss). There was no impairment recognized during the years ended December 31, 2021 and 2019. |
Balance Sheet Components
Balance Sheet Components | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Balance Sheet Components | Note 8: Balance Sheet Components Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2021 2020 Prepaid expenses $ 13,138 $ 9,643 Other current assets 5,338 1,395 Total prepaid expenses and other current assets $ 18,476 $ 11,038 Property, equipment, and software, net, consisted of the following (in thousands): December 31, 2021 2020 Internally developed software $ 42,356 $ 22,983 Computer equipment 5,946 4,289 Purchased software 7,228 7,300 Leasehold improvements 16,953 17,647 Airplane 3,770 3,770 Office furniture 7,257 6,116 Office equipment 2,459 2,536 Data center servers 972 3,518 Capital projects in progress (1) 17,839 14,053 Property, equipment, and software, gross 104,780 82,212 Less: Accumulated depreciation (31,142) (23,712) Total property, equipment, and software, net $ 73,638 $ 58,500 ____________________________ (1) Represents costs that have been capitalized for internally developed software projects that have not yet been placed into service. Total depreciation expense (including for internally developed software) was $15.1 million, $10.2 million, and $6.9 million for the years ended December 31, 2021, 2020, and 2019, respectively. The net carrying value of internally developed software was $41.9 million and $26.6 million at December 31, 2021 and 2020, respectively. We recorded depreciation expense for internally developed software of $8.9 million, $5.4 million, and $3.2 million for the years ended December 31, 2021, 2020, and 2019, respectively. Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2021 2020 Salaries and related benefit expenses $ 26,417 $ 19,317 HKFS Contingent Consideration liability (2) 28,300 17,900 Contingent liability from 1st Global Acquisition (2) — 11,328 Accrued legal costs 2,871 363 Accrued vendor and advertising costs 3,777 2,984 Other 4,313 4,527 Total accrued expenses and other current liabilities $ 65,678 $ 56,419 ____________________________ (2) For more information on the Company’s contingent liabilities, see “Note 10—Commitments and Contingencies.” |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 9: Fair Value Measurements 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 December 31, 2021 Quoted prices in active markets using identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Cash equivalents: money market and other funds $ 4,293 $ 4,293 $ — $ — Total assets at fair value $ 4,293 $ 4,293 $ — $ — HKFS Contingent Consideration liability $ 28,300 $ — $ — $ 28,300 Total liabilities at fair value $ 28,300 $ — $ — $ 28,300 Fair value measurements at the reporting date using December 31, 2020 Quoted prices in active markets using identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Cash equivalents: money market and other funds $ 4,290 $ 4,290 $ — $ — Total assets at fair value $ 4,290 $ 4,290 $ — $ — HKFS Contingent Consideration liability $ 35,900 $ — $ — $ 35,900 Total liabilities at fair value $ 35,900 $ — $ — $ 35,900 Cash equivalents are classified within Level 1 of the fair value hierarchy because we value them utilizing quoted prices in active markets. The HKFS Contingent Consideration liability relates to post-closing earn-out payments resulting from the acquisition of Avantax Planning Partners, formerly “HKFS” (see "Note 10—Commitments and Contingencies"). Based on advisory asset levels and the achievement of performance goals for the first earn-out period, we made the full $30.0 million payment in the third quarter of 2021. Of this total payment, $16.8 million is included within net cash from operating activities. The remainder of the $30.0 million payment is included in net cash from financing activities. The estimated fair value of the portion of the HKFS Contingent Consideration liability related to the second earn-out period (calculated in accordance with the amended HKFS Purchase Agreement and based on estimated advisory asset levels as of June 30, 2022) was $28.3 million as of December 31, 2021 and is included in “Accrued expenses and other current liabilities” on the consolidated balance sheets. The estimated fair value of the second earn-out payment 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 as of June 30, 2022, a risk-adjusted discount rate (which reflects the risk in the advisory asset projection) of 12.2%, asset volatility of 24.6%, and a credit spread of 1.9%. Significant increases to the discount rate, asset 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, while a significant decrease to the forecasted advisory asset levels would have resulted in a significantly lower fair value measurement. A roll forward of the HKFS Contingent Consideration liability is as follows (in thousands): HKFS Contingent Consideration Liability Balance as of December 31, 2019 $ — Recognized at acquisition date 27,600 Valuation change recognized as expense 8,300 Balance as of December 31, 2020 35,900 HKFS Contingent Consideration first earn-out payment (30,000) Valuation change recognized as expense 22,400 Balance as of December 31, 2021 $ 28,300 Changes in the fair value of this contingent consideration are reflected in “Acquisition and integration” expense on the consolidated statements of comprehensive income (loss). Fair value of financial instruments We consider the carrying values of accounts receivable, commissions receivable, other receivables, prepaid expenses, other current assets, financial professional loans, accounts payable, commissions and advisory fees payable, accrued expenses, and other current liabilities to approximate fair values primarily due to their short-term natures. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10: Commitments and Contingencies Purchase commitments Our purchase commitments primarily consist of outsourced information technology and marketing services, commitments to our portfolio management tool vendor, commitments to our clearing firm provider, and commitments for financial professional support programs. As of December 31, 2021, our purchase commitments for the next five years and thereafter were as follows (in thousands): 2022 $ 33,855 2023 11,158 2024 8,125 2025 5,241 2026 4,575 Thereafter 3,394 Total purchase commitments $ 66,348 Liability from 1st Global Acquisition On May 6, 2019, we closed the 1st Global Acquisition. As part of the 1st Global Acquisition, we assumed a contingent liability related to a regulatory inquiry by the SEC. This contingent liability was recorded as part of the opening balance sheet when the acquisition was closed. As of December 31, 2020, an $11.3 million reserve (including accrued interest) was included within “Accrued expenses and other current liabilities” of the consolidated balance sheets. In the second quarter of 2021, we re-evaluated the range of probable losses as a result of our on-going discussions with the SEC and recorded a $5.5 million increase to the reserve. This increase to the reserve was recognized in “Acquisition and integration” expense on the accompanying consolidated statements of comprehensive income (loss). In December 2021, 1st Global (which is now known as Avantax Investment Services, Inc.) consented to a settlement with the SEC, which resulted in us (without admitting or denying the findings set forth in the SEC’s Order) agreeing to pay disgorgement, interest and a penalty in the total amount of $16.9 million. The total $16.9 million reserve was settled in cash prior to December 31, 2021. As part of the 1st Global Acquisition, we purchased representation and warranty insurance from a third party to supplement the indemnification provisions of the stock purchase agreement, dated as of March 18, 2019, by and among 1G Acquisitions, LLC, an indirect wholly owned subsidiary of the Company, 1st Global, Inc. and 1st Global Insurance Services, Inc., certain selling stockholders named therein and joinder sellers (the “1st Global Sellers” ) and SAB Representative, LLC, as the Sellers’ representative, pursuant to which, the 1st Global Sellers agreed, among other things, to indemnify us from certain losses arising from breaches of representation, warranties, and covenants. At this time, we cannot yet estimate with reasonable probability the recovery related to these matters from insurance or the 1st Global Sellers, if any. HKFS Contingent Consideration liability On July 1, 2020, we closed the acquisition of Avantax Planning Partners, formerly “HKFS”, for an upfront cash purchase price of $104.4 million. The purchase price was subject to variable contingent consideration, or earn-out payments (the “HKFS Contingent Consideration” ) totaling a maximum of $60.0 million. The HKFS Contingent Consideration to be paid is determined based on advisory asset levels and the achievement of certain performance goals (i) for the period beginning July 1, 2020 and ending June 30, 2021 and (ii) for the period beginning July 1, 2021 and ending June 30, 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 on April 7, 2020, June 30, 2020, and June 29, 2021) (the “HKFS Purchase Agreement” ), the maximum aggregate amount that we would be required to pay for each earn-out period is $30.0 million. If the asset market values on the applicable measurement date fall below certain specified thresholds, no payment of consideration is owed to the Sellers for such period. Based on advisory asset levels and the achievement of performance goals for the first earn-out period specified in the HKFS Purchase Agreement, we paid the full $30.0 million to the sellers in the third quarter of 2021. The estimated fair value of the HKFS Contingent Consideration liability for the second earn-out period was $28.3 million as of December 31, 2021, and is included in “Accrued expenses and other current liabilities” on the consolidated balance sheets. Litigation 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 that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated. Although we believe that resolving such claims, individually or in aggregate, will not have a material adverse impact on our financial statements, these matters are subject to inherent uncertainties. Aside from the contingent liability related to the HKFS Contingent Consideration, we are not currently a party to any such matters for which we have recognized a material liability on our consolidated balance sheet as of December 31, 2021. We have entered into indemnification agreements in the ordinary course of business with our officers and directors. Pursuant to these agreements, we may be obligated to advance payment of legal fees and costs incurred by the defendants pursuant to our obligations under these indemnification agreements and applicable Delaware law. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | Note 11: Stockholders' Equity Stock repurchase plan On March 19, 2019, we announced that our board of directors authorized a stock repurchase plan pursuant to which we may repurchase up to $100.0 million of our common stock. For the year ended December 31, 2019, we repurchased 1.3 million shares of our common stock under the stock repurchase plan for an aggregate purchase price of $28.3 million. On December 9, 2021, we announced that our board of directors authorized the Company to repurchase an additional $28.3 million of our common stock pursuant to the stock repurchase plan, bringing the total authorized repurchases under the stock repurchase plan back to $100.0 million. Pursuant to the stock repurchase plan, share repurchases may be made through a variety of methods, including open market or privately negotiated transactions. The timing and number of shares repurchased depends on a variety of factors, including price, general business and market conditions, and alternative investment opportunities. Our repurchase program does not obligate us to repurchase any specific number of shares, may be suspended or discontinued at any time, and does not have a specified expiration date. |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Note 12: Stock-based Compensation Employee stock purchase plan The 2016 Employee Stock Purchase Plan ( “ESPP” ) permits eligible employees to contribute up to 15% of their base earnings toward the twice-yearly purchase of our common stock, subject to an annual maximum dollar amount. The purchase price is the lesser of 85% of the fair market value of common stock on the first day or on the last day of an offering period. An aggregate of 2.7 million shares of common stock are authorized for issuance under the ESPP. Of this amount, 0.5 million shares were available for issuance as of December 31, 2021. We issue new shares upon purchase through the ESPP. Stock incentive plan We may grant incentive or non-qualified stock options, stock, RSUs, cash-settled restricted stock units , stock appreciation rights, and performance shares or performance units to employees, non-employee directors, consultants, and financial professionals. In 2018, our stockholders approved the Blucora, Inc. 2018 Long-term Incentive Plan (the “2018 Plan” ), which replaced the Blucora, Inc. 2015 Incentive Plan (as amended and restated). Upon approval of the 2018 Plan, RSUs and options are granted under the 2018 Plan, except for inducement awards made under the Blucora, Inc. 2016 Equity Inducement Plan. RSUs typically include time-based RSUs or performance-based RSUs. Stock options and time-based RSUs generally vest over a period of one Cash-settled restricted stock units represent hypothetical restricted stock units that, upon vesting, require cash settlement equal to the fair value of the Company’s common stock on the date of vesting, less applicable withholding taxes. Because these awards are required to be settled in cash, they are accounted for under the liability method of ASC 718 - Stock Compensation. Compensation expense for these awards is recognized based on the underlying vesting terms. We issue new shares upon the exercise of stock options and upon the vesting of RSUs. If a stock option or RSU is surrendered or otherwise unused, the related shares will continue to be available for issuance under the 2018 Plan. A summary of stock options and RSUs at December 31, 2021 is as follows: Number of shares authorized for awards 11,782,709 Options and RSUs outstanding 3,556,164 Options and RSUs expected to vest 3,229,727 Options and RSUs available for grant 5,463,646 For the year ended December 31, 2021, the following activity occurred under our stock incentive plans: Number of options Weighted average exercise price Intrinsic value Weighted average remaining contractual term (in years) Stock options: Outstanding at December 31, 2020 1,364,327 $ 17.31 Granted 450,234 $ 15.06 Forfeited (20,565) $ 14.24 Expired (50,570) $ 20.97 Exercised (40,071) $ 10.34 Outstanding at December 31, 2021 1,703,355 $ 16.81 $ 4,335 4.5 Exercisable at December 31, 2021 777,125 $ 17.83 $ 1,759 3.1 Vested and expected to vest after December 31, 2021 1,586,021 $ 16.93 $ 3,987 4.4 To estimate stock-based compensation expense, we used the Black-Scholes-Merton valuation method with the following assumptions for stock options granted: Year Ended December 31, 2021 2020 2019 Risk-free interest rate 0.20% - 0.84% 0.24% - 1.62% 2.28% - 2.88% Expected dividend yield — % — % — % Expected volatility 48% - 51% 39% - 56% 38% - 42% Expected life 3.5 3.5 3.6 The risk-free interest rate was based on the implied yield available on U.S. Treasury issues with an equivalent remaining term. The expected dividend yield was zero since we have not paid a dividend since 2008. The expected volatility was based on historical volatility of our stock for the related expected life of the award. The expected life of the award was based on historical experience, including historical post-vesting termination behavior. Number of units Weighted average grant date fair value Intrinsic value Weighted average remaining contractual term (in years) RSUs: Time and performance-based Outstanding at December 31, 2020 1,501,365 $ 23.19 Granted 1,005,096 $ 15.87 Forfeited (211,893) $ 19.96 Vested (441,759) $ 21.09 Outstanding at December 31, 2021 1,852,809 $ 20.09 $ 32,092 0.9 Expected to vest after December 31, 2021 1,643,706 $ 20.37 $ 28,469 0.8 Cash-settled Outstanding at December 31, 2020 — $ — Granted 314,165 $ 17.34 Forfeited (14,700) $ 17.34 Vested — $ — Outstanding at December 31, 2021 299,465 $ 17.34 $ 5,187 2.2 Supplemental information is presented below: Year Ended December 31, 2021 2020 2019 Stock options: Weighted average grant date fair value per option granted $ 6.37 $ 6.04 $ 8.88 Total intrinsic value of options exercised (in thousands) $ 268 $ 71 $ 17,674 Total fair value of options vested (in thousands) $ 1,420 $ 4,488 $ 2,593 RSUs: Time and performance-based Weighted average grant date fair value per unit granted $ 15.87 $ 19.06 $ 28.89 Total intrinsic value of units vested (in thousands) $ 7,167 $ 4,115 $ 10,679 Total fair value of units vested (in thousands) $ 10,427 $ 6,182 $ 6,368 Cash-settled Weighted average grant date fair value per unit granted $ 17.34 $ — $ — We account for stock-based compensation in accordance with ASC 718, Stock Compensation , which requires that compensation related to all share-based awards (including stock options, RSUs, and ESPP shares) be recognized in the consolidated financial statements. Amounts recognized for stock-based compensation expense on the consolidated statements of comprehensive income (loss) were as follows (in thousands): Year Ended December 31, 2021 2020 2019 Cost of revenue $ 5,099 $ 5,129 $ 4,082 Engineering and technology 754 795 715 Sales and marketing 2,867 1,776 346 General and administrative (1) 12,034 2,366 11,157 Total $ 20,754 $ 10,066 $ 16,300 ____________________________ (1) Stock-based compensation expense for the year ended December 31, 2020 was reduced by $8.5 million related to the reversal of stock-based compensation expense due to: (1) forfeitures resulting from executive departures and (2) the reversal of stock-based compensation expense for performance-based RSUs that are not expected to vest. As of December 31, 2021, total unrecognized stock-based compensation expense related to unvested stock awards was as follows: Expense (in thousands) Weighted average period over which to be recognized (in years) Stock options $ 1,552 1.3 Time and performance-based RSUs 9,081 1.3 Cash-settled RSUs 3,795 2.2 Total $ 14,428 |
Interest Expense and Other, Net
Interest Expense and Other, Net | 12 Months Ended |
Dec. 31, 2021 | |
Other Income and Expenses [Abstract] | |
Interest Expense and Other, Net | Note 13: Interest Expense and Other, Net “Interest expense and other, net” on the consolidated statements of comprehensive income (loss) consisted of the following (in thousands): Year Ended December 31, 2021 2020 2019 Interest expense $ 28,807 $ 24,570 $ 19,017 Amortization of debt issuance costs 1,522 1,372 1,042 Accretion of debt discounts 1,146 693 228 Total interest expense 31,475 26,635 20,287 Interest income (21) (65) (449) Gain on sale of a business — (349) (3,256) Non-capitalized debt issuance expenses — 3,687 — Other 626 1,396 333 Interest expense and other, net $ 32,080 $ 31,304 $ 16,915 |
401 (k) Plan
401 (k) Plan | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
401 (k) Plan | Note 14: 401(k) Plan We have a 401(k) savings plan covering our employees. Eligible employees may contribute through payroll deductions. Pursuant to a continuing resolution by our board of directors, we match a portion of the 401(k) contributions made by our employees. The amount we have contributed ranges from 1% to 4% of an employee’s salary, depending upon the percentage contributed by the employee. For the years ended December 31, 2021, 2020, and 2019, we contributed $4.0 million, $2.8 million, and $2.4 million, respectively, to our employees’ 401(k) plans. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 15: Income Taxes Loss before income taxes consisted of the following (in thousands): Year Ended December 31, 2021 2020 2019 United States $ (1,461) $ (300,424) $ (18,088) Foreign — — 1,182 Loss before income taxes $ (1,461) $ (300,424) $ (16,906) Income tax expense (benefit) consisted of the following (in thousands): Year Ended December 31, 2021 2020 2019 Current: U.S. federal $ — $ — $ (732) State 1,321 1,272 2,901 Foreign — — 333 Total current expense 1,321 1,272 2,502 Deferred: U.S. federal (8,970) 40,857 (62,580) State (1,569) 202 (4,970) Foreign — — (6) Total deferred expense (benefit) (10,539) 41,059 (67,556) Income tax expense (benefit) $ (9,218) $ 42,331 $ (65,054) Income tax expense (benefit) differed from the amount calculated by applying the statutory federal income tax rate of 21% as follows (in thousands): Year Ended December 31, 2021 2020 2019 Income tax benefit at the statutory federal income tax rate $ (307) $ (63,089) $ (3,550) Non-deductible compensation 1,594 1,681 1,933 State income taxes, net of federal benefit 891 1,053 (1,897) Excess tax (benefits) and deficiencies of stock-based compensation 402 1,004 (4,100) Uncertain tax positions and audit settlements (966) (575) (1,227) Valuation allowance (50,934) 23,911 (56,881) Net operating loss write-off 17,539 21,051 — Capital loss carryforwards write-off 22,324 — — Other 239 464 (691) Non-deductible acquisition-related transaction costs — — 1,359 Non-deductible goodwill — 56,831 — Income tax expense (benefit) $ (9,218) $ 42,331 $ (65,054) For the year ended December 31, 2021, the primary difference between the statutory tax rate and the annual effective tax rate was due to a reduction in our valuation allowance. This reduction included the utilization of net operating losses for current year taxable income, the write-off of expired federal net operating losses, and the write-off of expired capital loss carryforwards. Other differences between the statutory rate and the annual effective tax rate are related to uncertain tax positions, non-deductible compensation, state taxes, and excess tax deficiencies for stock compensation. For the year ended December 31, 2020, the primary difference between the statutory tax rate and the annual effective tax rate was the impact of the non-deductible goodwill impairment, incremental valuation allowance, and the write-off of expired federal net operating losses. Other differences between the statutory rate and the annual effective tax rate are related to non-deductible compensation, state taxes, excess tax deficiencies for stock compensation, and uncertain tax positions. The tax effect of temporary differences and net operating loss carryforwards that gave rise to our deferred tax assets and liabilities were as follows (in thousands): December 31, 2021 2020 Deferred tax assets: Net operating loss and credit carryforwards $ 23,560 $ 54,196 Capital loss 429 22,753 Accrued compensation 7,800 7,094 Stock-based compensation 5,839 4,848 Deferred revenue 3,977 3,935 Lease liabilities 9,083 9,193 Other, net 2,395 3,583 Total gross deferred tax assets 53,083 105,602 Valuation allowance (16,801) (67,735) Deferred tax assets, net of valuation allowance 36,282 37,867 Deferred tax liabilities: Amortization (49,347) (59,580) Depreciation (1,157) (1,947) Right-of-use assets (4,871) (5,571) Other, net (1,031) (1,432) Total gross deferred tax liabilities (56,406) (68,530) Net deferred tax liabilities $ (20,124) $ (30,663) At December 31, 2021, we evaluated the need for a valuation allowance for deferred tax assets based upon our assessment of whether it is more likely than not that we will generate sufficient future taxable income necessary to realize the deferred tax benefits. We maintain a valuation allowance against our deferred tax assets that are capital in nature to the extent that it is more likely than not that the related deferred tax benefit will not be realized. We also have a deferred tax asset related to the net operating losses ( “NOLs” ) that we believe are more likely than not to expire before utilization. In 2021, we decreased the valuation allowance by $50.9 million related to the utilization of NOLs to offset current year taxable income and for the expiration of certain federal net operating losses and capital loss carryforwards. Although we have concluded it is more likely than not that the related deferred tax benefits associated with our deferred tax assets will not be realized, our valuation allowance does not prevent us from utilizing unexpired NOLs to offset taxable income in future periods. The changes in the valuation allowance for deferred tax assets are shown below (in thousands): Year Ended December 31, 2021 2020 2019 Balance at beginning of year $ 67,735 $ 43,824 $ 100,705 Increase (decrease) in valuation allowance—future year utilization 2,105 18,136 (45,651) Increase (decrease) in valuation allowance—current year utilization and expiration (53,039) 5,047 (10,943) Increase (decrease) in valuation allowance—other — 728 (287) Balance at end of year $ 16,801 $ 67,735 $ 43,824 As of December 31, 2021, our U.S. federal and state net operating loss carryforwards for income tax purposes were $105.2 million and $15.4 million, respectively, which primarily related to excess tax benefits for stock-based compensation. If unutilized, our federal net operating loss carryforwards will expire between 2022 and 2037, with the majority of them expiring between 2022 and 2024. Additionally, changes in ownership, as defined by Section 382 of the Internal Revenue Code, may limit the amount of net operating loss carryforwards used in any one year. A reconciliation of the unrecognized tax benefit balances is as follows (in thousands): Year Ended December 31, 2021 2020 2019 Balance at beginning of year $ 7,476 $ 19,483 $ 22,590 Gross decreases for tax positions of prior years — (11,972) (1,858) Gross increases for tax positions of current year — — 60 Purchase accounting for 1st Global Acquisition — (35) 442 Settlements with taxing authorities — — (563) Statute of limitations expirations (2,811) — (1,188) Balance at end of year $ 4,665 $ 7,476 $ 19,483 The total amount of unrecognized tax benefits that could affect our effective tax rate if recognized was $1.8 million and $2.8 million as of December 31, 2021 and 2020, respectively. The remaining $2.9 million and $4.7 million was not recognized on our consolidated balance sheets as of December 31, 2021 and 2020, respectively, and if recognized, would create a deferred tax asset subject to a valuation allowance. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2017, although NOL carryforwards and tax credit carryforwards from any year are subject to examination and adjustment for at least three years following the year in which they are fully utilized. As of December 31, 2021, no significant adjustments have been proposed relative to our tax positions. For the year ended December 31, 2021, we reversed $0.2 million of interest and penalties related to uncertain tax positions. For the year ended December 31, 2020, the amount recognized for interest and penalties related to uncertain tax positions was not material. For the year ended December 31, 2019, we reversed $0.4 million of interest and penalties related to uncertain tax positions. We had $1.3 million and $1.5 million accrued for interest and penalties as of December 31, 2021 and 2020, respectively. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share | Note 16: Net Income (Loss) Per Share “Basic net income (loss) per share” is calculated using the weighted average number of common shares outstanding during the applicable 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 applicable period. Dilutive potential common shares consist of the incremental common shares issuable upon the exercise of outstanding stock options and the vesting of outstanding RSUs using the treasury stock method. Cash-settled restricted stock units are not settled in common shares and are therefore excluded from dilutive potential common shares. Dilutive potential common shares are excluded from the calculation of diluted net income per share if their effect is antidilutive. Certain of our performance-based RSUs are considered contingently issuable shares and are excluded from the diluted weighted average common shares outstanding computation because the related performance-based criteria were not achieved as of the end of the reporting period. The calculation of basic and diluted net income (loss) per share is as follows (in thousands, except per share amounts): Year Ended December 31, 2021 2020 2019 Numerator: Net income (loss) $ 7,757 $ (342,755) $ 48,148 Denominator: Basic weighted average common shares outstanding 48,578 47,978 48,264 Dilutive potential common shares 948 — 1,018 Diluted weighted average common shares outstanding 49,526 47,978 49,282 Net income (loss) per share: Basic $ 0.16 $ (7.14) $ 1.00 Diluted $ 0.16 $ (7.14) $ 0.98 Shares excluded (1) 1,218 2,936 1,150 ____________________________ (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 year ended December 31, 2020, all potential common shares were excluded from the calculation of diluted net income (loss) per share due to the net loss recognized. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Event | Note 17: Subsequent Event |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Segments | Segments We have two reportable segments: (1) the Wealth Management segment and (2) the Tax Software segment. |
Principles of consolidation | The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ( “GAAP” ). These consolidated financial statements |
Use of estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and disclosure of contingencies. Actual amounts may differ from estimates. |
Cash equivalents | We generally invest our available cash in high-quality marketable investments. These investments include 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 Avantax Wealth Management business clients and is considered restricted cash on the consolidated balance sheets. |
Accounts receivable, net | Accounts receivable are stated at amounts due from customers, net of an allowance for credit losses. Our estimates of credit losses are based on our historical experience, the aging of our trade receivables, and management judgment. |
Property, equipment, and software, net | Property, equipment, and software, net, are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the following estimated useful lives: Estimated Useful Life Computer equipment 3 years Purchased software 3 years Data center servers 3 years Internally developed software 3 years Office equipment 7 years Office furniture 7 years Airplane 25 years Leasehold improvements Shorter of lease term or economic life Costs incurred to develop software intended for our internal use, primarily contractor costs and employee salaries and benefits, are capitalized during the application development stage. Capitalization of such costs ceases once the project is substantially complete and ready for its intended use. We also capitalize costs related to specific upgrades and enhancements when it is probable that the expenditure will result in additional functionality. Costs related to preliminary project activities and post-implementation operating activities are expensed as incurred. We capitalized $24.3 million, $19.3 million, and $7.4 million of internally developed software costs for the years ended December 31, 2021, 2020, and 2019, respectively. |
Business combinations | We allocate the fair value of the purchase consideration for our business combinations to the assets acquired and liabilities assumed, generally based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Purchase consideration includes assets transferred, liabilities assumed, and/or equity interests issued by us, all of which are measured at their fair value as of the date of acquisition. Our business combinations may be structured to include a combination of up-front, deferred, and contingent payments to be made at specified dates subsequent to the date of acquisition. Deferred and contingent payments determined to be purchase consideration are recorded at fair value as of the acquisition date. Our contingent consideration arrangements are generally obligations to make future payments to sellers contingent upon the achievement of future financial targets and are remeasured to fair value at the end of each reporting period until the obligations are settled. The valuation of the net assets acquired as well as certain elements of purchase consideration requires management to make significant estimates and assumptions, especially with respect to future expected cash flows, discount rates, growth and attrition rates, and estimated useful lives. Management’s assumptions and estimates of fair value are based on comparable market data and information obtained from the management of acquired entities. These assumptions and estimates are believed to be reasonable, but are inherently uncertain and, as a result, actual results may differ from estimates. During the measurement period, we may record adjustments to the assets acquired and liabilities assumed with a corresponding offset to goodwill. Subsequent changes to the fair value of contingent consideration are reflected in “Acquisition and integration” expense on the consolidated statements of comprehensive income (loss). |
Asset acquisitions | Acquisitions that do not meet the criteria to be accounted for as a business combination are accounted for as an asset acquisition. Using a cost accumulation model, the purchase price, including certain acquisition-related costs, is allocated to the acquired assets and assumed liabilities based upon their relative fair values as of the acquisition date. No goodwill is contemplated in the allocation process. Our asset acquisitions typically include contingent consideration arrangements that encompass obligations to make future payments to sellers contingent upon the achievement of future financial targets. Contingent consideration is not recognized until all contingencies are resolved and the consideration is paid, at which point the consideration is allocated to the assets acquired on a relative fair value basis. |
Goodwill and acquired intangible assets, net | We test goodwill and indefinite-lived intangible assets for impairment annually, as of November 30, or more frequently when events or circumstances indicate that impairment may have occurred. For purposes of goodwill impairment testing, our reporting units are consistent with our reporting segments. We test goodwill for impairment either by assessing qualitative factors to determine whether it is more likely than not that the fair values of our reporting units are less than their carrying amounts, or by performing a quantitative test. Qualitative factors include industry and market conditions, overall financial performance, and other relevant events and circumstances affecting each reporting unit. If we choose to perform a qualitative assessment and, after considering the totality of events or circumstances, we determine it is more likely than not the fair value(s) of our reporting unit(s) are less than their carrying amounts, then we perform a quantitative fair value test. Our quantitative test utilizes a weighted combination of a discounted cash flow model (known as the income approach) and a market approach which estimates a reporting unit’s fair value by applying income-based valuation multiples |
Impairment of long-lived assets | Long-lived assets, including definite-lived intangibles, are reviewed for impairment when events or circumstances indicate that the carrying value of an asset or group of assets may not be recoverable. Factors we consider important that may trigger an impairment review include, but are not limited to, significant under-performance relative to historical or projected future operating results, and significant changes in the manner of our use of the asset. If circumstances require that an asset or group of assets be tested for impairment, determination of recoverability is based on an estimate of the undiscounted cash flows expected to be generated by the asset or group of assets. If the carrying amount of the asset or group of assets is not recoverable on an undiscounted cash flow basis, impairment is recognized equal to the excess of the carrying value over its fair value. |
Financial professional loans | We periodically extend credit to our financial professionals in the form of recruiting or retention loans, commission advances and other loans. The decision to extend credit to a financial professional is generally based on affiliation with Avantax Wealth Management and their ability to generate future revenues. Loans made in connection with recruiting or retention can either be repayable or forgivable over terms generally up to fifteen years provided that the financial professional remains a service provider to the Company. Forgivable loans are not repaid in cash and are amortized over the term of the loan. If a financial professional terminates their arrangement with the Company prior to the loan maturity date, the remaining balance becomes repayable immediately. We estimate an allowance for credit loss related to both repayable and forgivable loans at inception using estimates and assumptions based on historical loss experience and expectations of future loss rates. Management monitors the adequacy of these estimates on a periodic basis against actual trends experienced. |
Leases | We determine if an arrangement contains a lease at inception. Right-of-use ( “ROU” ) assets represent our right to use an underlying asset for the lease term and the corresponding lease liabilities represent our obligation to make lease payments arising from the lease. On the commencement date, leases are evaluated for classification, and ROU assets and lease liabilities are recognized based on the present value of lease payments over the lease term. The ROU asset is reduced for tenant incentives and excludes any initial direct costs incurred. We have elected to combine the lease and non-lease components of a contract, if applicable, into a single lease component. The implicit rates within our leases are generally not readily determinable, and instead we use our incremental borrowing rate at the lease commencement date to determine the present value of lease payments. Fixed lease cost is recognized on a straight-line basis over the lease term. Variable lease payments are not included in the calculation of the ROU assets and lease liabilities and are recognized as lease costs as incurred. Our variable lease payments generally relate to amounts paid to lessors for common area maintenance. Our lease terms are contractually fixed but may include extension or termination options. These options are included in lease values when it is reasonably certain we will exercise such options. We have elected not to recognize a ROU asset or lease liability for short-term leases, defined as those which have an initial lease term of twelve months or less. Our leases do not contain residual value guarantees or material variable lease payments. We do not have any material restrictions or covenants imposed by leases that would impact our ability to pay dividends or cause us to incur additional financial obligations. |
Fair value of financial instruments | We measure our financial instruments and contingent consideration from our business combinations at fair value at each reporting period using a fair value hierarchy. The classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Fair value inputs 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. |
Revenue recognition | We recognize revenue when all five of the following revenue recognition criteria have been satisfied: • contract(s) with customers have been identified; • performance obligations have been identified; • transaction prices have been determined; • transaction prices have been allocated to the performance obligations; and • the performance obligations have been fulfilled by transferring control over the promised services to the customer. The determination of when these criteria are satisfied varies by product or service and is explained in more detail below. Wealth Management revenue recognition. Wealth management revenue primarily consists of advisory revenue, commission revenue, asset-based revenue, and transaction and fee revenue. Revenue is recognized upon the transfer of services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those services. Payments received by us in advance of the performance of service are deferred and recognized as revenue when we have satisfied our performance obligation. Advisory revenue includes fees charged to clients in advisory accounts for which we are the RIA. These fees are based on the value of assets within these advisory accounts. For advisory revenues generated by Avantax Wealth Management, advisory fees are typically billed quarterly, in advance, and the related advisory revenues are deferred and recognized ratably over the period in which our performance obligations have been completed. For advisory revenues generated by Avantax Planning Partners, advisory fees are typically billed quarterly, in arrears, and the related advisory revenues are accrued and recognized over the period in which our performance obligations were completed. Commissions represent amounts generated by clients’ purchases and sales of securities and investment products. We serve as the registered broker-dealer or insurance agent for those trades. We generate two types of commissions: (1) transaction-based commissions and (2) trailing commissions. Transaction-based commissions are generated on a per-transaction basis and are recognized as revenue on the trade date, which is when our performance obligations have been substantially completed. Trailing commissions are earned by us based on our ongoing account support to clients. Trailing commissions are based on a percentage of the current market value of clients’ investment holdings in trail-eligible assets and recognized over the period during which our services are performed. Since trailing commission revenue is generally paid in arrears, we estimate it based on a number of factors, including stock market index levels and the amount of trailing commission revenues received in prior periods. These estimates are primarily based on historical information, and there is not significant judgment involved. A substantial portion of advisory revenue and commission revenue is ultimately paid to our financial professionals. In Avantax Wealth Management, advisory fee payments to financial professionals typically occur at the beginning of the quarter, in advance, and therefore do not result in an advisory fee payable amount at quarter end. In Avantax Planning Partners, advisory fee payments (which are primarily composed of payments to CPA firms under fee sharing arrangements) are typically made quarterly, in arrears, and we record an estimate for the advisory fee payable based on the historical payout ratios and financial market movement for the period. For transaction-based commissions, we record an estimate for commissions payable based upon the payout rate of the financial professional generating the accrued commission revenue. For trailing commissions, we record an estimate for trailing commissions payable based upon historical payout ratios. Such amounts are recorded as “Commissions and advisory fees payable” on the consolidated balance sheets and “Wealth management cost of revenue” on the consolidated statements of comprehensive income (loss). Asset-based revenue primarily includes fees from financial product manufacturer sponsorship programs, cash sweep programs, and other asset-based revenues, primarily margin revenues and asset-based retirement plan service fees. Asset-based revenue is recognized ratably over the period in which services are provided. Transaction and fee revenue primarily includes (1) support fees charged to financial professionals, which are recognized over time as support services are provided, (2) fees charged for executing certain transactions in client accounts, which are recognized on a trade-date basis, and (3) other fees related to services provided and other account charges as generally outlined in agreements with financial professionals, clients, and financial institutions, which are recognized as services are performed or as earned, as applicable. 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. Digital revenues include digital software products sold to customers and businesses primarily for the preparation of individual or business tax returns, and are generally recognized when customers and businesses complete and file returns. Digital revenues are recognized net of an allowance for the portion of the returns filed using our refund payment transfer services (as explained below) that we estimate will not be accepted and funded by the IRS. Packaged tax preparation software revenues are generated from the sale of our downloadable software products and are recognized when legal title transfers, which is when customers download the software. Ancillary service revenues primarily include fees we charge for refund payment transfer services, audit defense services, and referral and marketing arrangements with third party partners. Refund payment transfer services allow the cost of TaxAct software products to be deducted from a taxpayer’s refund instead of being paid at the time of filing. The fees the customer pays for refund payment transfer services and audit defense services are recognized at the time of filing. Revenue for our referral and marketing arrangements with third party partners is recognized at a point in time or over time based on the nature of the performance obligation under each arrangement. Certain of our tax preparation software packages marketed towards professional tax preparers contain multiple elements, including a software element and an unlimited e-filing capability element. For these software packages that contain multiple elements, we allocate the total consideration of the package to the two elements. We then |
Advertising expenses | Costs for advertising are recorded within “Sales and marketing” on the consolidated statements of comprehensive income (loss) when the advertisement appears. |
Stock-based compensation | We measure stock-based compensation for awards of stock options, restricted stock units ( “RSUs” ), and other similar awards based on the estimated fair value of the awards on the date of grant. RSUs typically include service-based vesting requirements ( “time-based RSUs” ) or performance-based vesting requirements ( “performance-based RSUs” ). Compensation expense for awards that vest ratably is recognized net of estimated forfeitures (if applicable) over the requisite service period of the award for each vesting tranche using the straight-line method. Compensation expense for awards that cliff vest is recognized over the requisite service period of the award using the straight-line method. We estimate forfeitures for employee awards at the time of grant, based upon historical data, and revise those estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We recognize forfeitures as they occur for awards to non-employee financial professionals. The fair value of stock options is estimated using a Black-Scholes-Merton valuation method on the date of grant. The fair value of time-based RSUs is equal to the closing price of the Company’s stock on the date of grant. The fair value of performance-based RSUs that contain a market component is estimated using a Monte-Carlo simulation model on the date of grant. For performance-based RSUs, compensation expense is originally based on the number of shares that would vest if we achieve the level of performance that we estimate is the most probable outcome at the grant date. Throughout the requisite service period, we monitor the probability of achieving the performance condition, and adjust compensation expense based on future expected performance. Compensation expense for performance-based RSUs that contain a market component is not reversed if the market criteria are not satisfied. |
Income taxes | We account for income taxes under the asset and liability method, under which deferred tax assets, including net operating loss carryforwards, and deferred tax liabilities are determined based on temporary differences between the book and tax basis of assets and liabilities. We periodically evaluate the likelihood of the realization of deferred tax assets and reduce the carrying amount of the deferred tax assets by a valuation allowance to the extent we believe it is more likely than not a portion will not be realized. We consider many factors when assessing the likelihood of future realization of deferred tax assets, including expectations of future taxable income, recent cumulative earnings experience by taxing jurisdiction, and other relevant factors. There is a wide range of possible judgments relating to the valuation of our deferred tax assets. We record liabilities to address uncertain tax positions that have been taken in previously filed tax returns or that are expected to be taken in a future tax return. The determination for required liabilities is based upon an analysis of each individual tax position, taking into consideration whether it is more likely than not that the tax position, based on technical merits, will be sustained upon examination. The tax benefit to be recognized in the financial statements from such a position is measured as the largest amount of benefit that has a greater than 50% cumulative likelihood of being realized upon ultimate settlement with the taxing authority. The difference between the amount recognized and the total tax position is recorded as a liability. The ultimate resolution of these tax positions may be greater or less than the liabilities recorded. We recognize interest and penalties related to uncertain tax positions in interest expense and general and administrative expense, respectively. |
Concentration of credit risk | Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents, short-term investments, trade accounts receivable, and commissions receivable. These instruments are generally unsecured and uninsured. For cash equivalents, short-term investments, and commissions receivable, we attempt to manage exposure to counterparty credit risk by only entering into agreements with major financial institutions and investment sponsors that are expected to be able to fully perform under the terms of the applicable agreement. Accounts receivable are typically unsecured and are derived from revenues earned from customers primarily located in the United States operating in a variety of geographic areas. We perform ongoing credit evaluations of our customers and maintain allowances for potential credit losses. |
Recently issued accounting pronouncements | In March 2020 and January 2021, the Financial Accounting Standards Board issued Accounting Standard Update ( “ASU” ) No. 2020-04 “Reference Rate Reform (ASC 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” , and ASU 2021-01 “Reference Rate Reform (ASC 848): Scope” which provides temporary optional guidance to ease the potential burden in accounting for reference rate reform in contracts and other transactions that reference the London Interbank Offered Rate ( “LIBOR” ) or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. ASU 2020-04 and ASU 2021-01 are effective for all entities as of March 12, 2020 through December 31, 2022. |
Earnings Per Share | Basic net income (loss) per share” is calculated using the weighted average number of common shares outstanding during the applicable 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 applicable period. Dilutive potential common shares consist of the incremental common shares issuable upon the exercise of outstanding stock options and the vesting of outstanding RSUs using the treasury stock method. Cash-settled restricted stock units are not settled in common shares and are therefore excluded from dilutive potential common shares. Dilutive potential common shares are excluded from the calculation of diluted net income per share if their effect is antidilutive. Certain of our performance-based RSUs are considered contingently issuable shares and are excluded from the diluted weighted average common shares outstanding computation because the related performance-based criteria were not achieved as of the end of the reporting period. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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): December 31, 2021 2020 Cash and cash equivalents $ 134,824 $ 150,125 Cash segregated under federal or other regulations — 637 Total cash, cash equivalents, and restricted cash $ 134,824 $ 150,762 |
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): December 31, 2021 2020 Cash and cash equivalents $ 134,824 $ 150,125 Cash segregated under federal or other regulations — 637 Total cash, cash equivalents, and restricted cash $ 134,824 $ 150,762 |
Schedule of Property and Equipment | Property, equipment, and software, net, are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the following estimated useful lives: Estimated Useful Life Computer equipment 3 years Purchased software 3 years Data center servers 3 years Internally developed software 3 years Office equipment 7 years Office furniture 7 years Airplane 25 years Leasehold improvements Shorter of lease term or economic life Property, equipment, and software, net, consisted of the following (in thousands): December 31, 2021 2020 Internally developed software $ 42,356 $ 22,983 Computer equipment 5,946 4,289 Purchased software 7,228 7,300 Leasehold improvements 16,953 17,647 Airplane 3,770 3,770 Office furniture 7,257 6,116 Office equipment 2,459 2,536 Data center servers 972 3,518 Capital projects in progress (1) 17,839 14,053 Property, equipment, and software, gross 104,780 82,212 Less: Accumulated depreciation (31,142) (23,712) Total property, equipment, and software, net $ 73,638 $ 58,500 ____________________________ |
Segment Information and Reven_2
Segment Information and Revenues (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
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): Year Ended December 31, 2021 2020 2019 Revenue: Wealth Management $ 658,213 $ 546,189 $ 507,979 Tax Software 226,987 208,763 209,966 Total revenue 885,200 754,952 717,945 Operating income (loss): Wealth Management 82,212 72,195 68,292 Tax Software 81,879 49,621 96,249 Corporate-level activity (133,472) (390,936) (164,532) Total operating income (loss) 30,619 (269,120) 9 Interest expense and other, net (32,080) (31,304) (16,915) Loss before income taxes (1,461) (300,424) (16,906) Income tax benefit (expense) 9,218 (42,331) 65,054 Net income (loss) $ 7,757 $ (342,755) $ 48,148 |
Schedule of Segment Reporting Information, by Segment | Revenues by major category within the Wealth Management segment and the timing of Wealth Management revenue recognition was as follows (in thousands): Year Ended December 31, 2021 2020 2019 Recognized upon transaction: Commission $ 89,970 $ 74,788 $ 82,604 Transaction and fee 4,210 6,494 3,457 Total Wealth Management revenue recognized upon transaction $ 94,180 $ 81,282 $ 86,061 Recognized over time: Advisory $ 395,800 $ 314,751 $ 252,367 Commission 120,707 110,413 108,446 Asset-based 22,101 23,688 48,182 Transaction and fee 25,425 16,055 12,923 Total Wealth Management revenue recognized over time $ 564,033 $ 464,907 $ 421,918 Total Wealth Management revenue: Advisory $ 395,800 $ 314,751 $ 252,367 Commission 210,677 185,201 191,050 Asset-based 22,101 23,688 48,182 Transaction and fee 29,635 22,549 16,380 Total Wealth Management revenue $ 658,213 $ 546,189 $ 507,979 |
Schedule of Disaggregation of Revenue | Revenues by major category within the Tax Software segment and the timing of Tax Software revenue recognition was as follows (in thousands): Year Ended December 31, 2021 2020 2019 Recognized upon transaction: Consumer $ 209,747 $ 192,223 $ 192,438 Professional 14,841 14,031 12,616 Total Tax Software revenue recognized upon transaction $ 224,588 $ 206,254 $ 205,054 Recognized over time: Consumer $ 1 $ 3 $ 2,566 Professional 2,398 2,506 2,346 Total Tax Software revenue recognized over time $ 2,399 $ 2,509 $ 4,912 Total Tax Software revenue: Consumer $ 209,748 $ 192,226 $ 195,004 Professional 17,239 16,537 14,962 Total Tax Software revenue $ 226,987 $ 208,763 $ 209,966 |
Goodwill and Acquired Intangi_2
Goodwill and Acquired Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Goodwill Activity | The following table presents goodwill by reportable segment (in thousands): Wealth Management Tax Software Total Balance as of December 31, 2019 $ 473,833 $ 188,542 $ 662,375 Acquired 63,737 — 63,737 Purchase accounting adjustments (666) — (666) Impairment (270,625) — (270,625) Balance as of December 31, 2020 266,279 188,542 454,821 Balance as of December 31, 2021 $ 266,279 $ 188,542 $ 454,821 |
Schedule of Intangible Assets Other than Goodwill | Acquired intangible assets, net, consisted of the following (in thousands): December 31, 2021 December 31, 2020 Weighted average amortization period (months) Gross Accumulated Net Gross Accumulated Net Definite-lived intangible assets: Financial professional relationships 170 $ 318,700 $ (111,916) $ 206,784 $ 318,700 $ (92,436) $ 226,264 Sponsor relationships 143 17,200 (5,655) 11,545 17,200 (4,680) 12,520 Technology 5 2,980 (2,852) 128 16,470 (14,026) 2,444 Trade names 11 3,100 (2,379) 721 3,100 (1,346) 1,754 Customer relationships 164 65,573 (5,729) 59,844 57,143 (1,784) 55,359 CPA firm relationships 162 4,070 (407) 3,663 4,070 (136) 3,934 Curriculum 5 900 (796) 104 900 (496) 404 Total definite-lived intangible assets 412,523 (129,734) 282,789 417,583 (114,904) 302,679 Indefinite-lived intangible assets: Trade name 19,500 — 19,500 19,500 — 19,500 Total acquired intangible assets, net $ 432,023 $ (129,734) $ 302,289 $ 437,083 $ (114,904) $ 322,179 |
Schedule of Intangible Assets Other than Goodwill | Acquired intangible assets, net, consisted of the following (in thousands): December 31, 2021 December 31, 2020 Weighted average amortization period (months) Gross Accumulated Net Gross Accumulated Net Definite-lived intangible assets: Financial professional relationships 170 $ 318,700 $ (111,916) $ 206,784 $ 318,700 $ (92,436) $ 226,264 Sponsor relationships 143 17,200 (5,655) 11,545 17,200 (4,680) 12,520 Technology 5 2,980 (2,852) 128 16,470 (14,026) 2,444 Trade names 11 3,100 (2,379) 721 3,100 (1,346) 1,754 Customer relationships 164 65,573 (5,729) 59,844 57,143 (1,784) 55,359 CPA firm relationships 162 4,070 (407) 3,663 4,070 (136) 3,934 Curriculum 5 900 (796) 104 900 (496) 404 Total definite-lived intangible assets 412,523 (129,734) 282,789 417,583 (114,904) 302,679 Indefinite-lived intangible assets: Trade name 19,500 — 19,500 19,500 — 19,500 Total acquired intangible assets, net $ 432,023 $ (129,734) $ 302,289 $ 437,083 $ (114,904) $ 322,179 |
Schedule of Information About Expected Amortization of Definite-Lived Intangible Assets | Expected amortization of definite-lived intangible assets held as of December 31, 2021 was as follows (in thousands): 2022 $ 25,511 2023 24,197 2024 23,637 2025 22,958 2026 22,336 Thereafter 164,150 Total $ 282,789 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Company's Debt | Our debt consisted of the following (in thousands): December 31, 2021 December 31, 2020 Unamortized Unamortized Principal amount Discount Debt issuance costs Net carrying value Principal amount Discount Debt issuance costs Net carrying value Senior secured credit facility $ 561,344 $ (3,027) $ (3,371) $ 554,946 $ 563,156 $ (4,173) $ (4,646) $ 554,337 Less: Current portion of long-term debt, net (1,812) (1,812) Long-term debt, net $ 553,134 $ 552,525 |
Schedule of Future Principal Payments on Term Loan | The future principal payments on the Term Loan as of December 31, 2021 are as follows (in thousands): 2022 $ 1,812 2023 1,812 2024 557,720 Total future principal payments on the Term Loan $ 561,344 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Leases [Abstract] | |
Schedule of Summary of Operating Lease Expense | cash paid on operating lease liabilities, and ROU assets obtained in exchange for lease obligations for the years ended December 31, 2021, 2020, and 2019 were as follows (in thousands): Year Ended December 31, 2021 2020 2019 Fixed lease cost $ 4,188 $ 6,762 $ 5,224 Variable lease cost 1,057 893 1,315 Operating lease cost, before sublease income 5,245 7,655 6,539 Sublease income (464) (1,235) (1,287) Total operating lease cost, net of sublease income $ 4,781 $ 6,420 $ 5,252 Additional lease information: Cash paid on operating lease liabilities $ 1,853 $ 3,818 $ 7,339 ROU assets obtained in exchange for lease obligations $ 93 $ 21,766 $ 15,829 |
Schedule of Supplemental Balance Sheet Information Related to Leases | Right-of-use assets and operating leases were recorded on the consolidated balance sheets as follows (in thousands): December 31, 2021 2020 Right-of-use assets, net $ 20,466 $ 23,455 Current lease liabilities $ 4,896 $ 2,304 Long-term lease liabilities 33,267 36,404 Total operating lease liabilities $ 38,163 $ 38,708 Weighted-average remaining lease term (in years) 10.3 11.0 Weighted-average discount rate 5.4 % 5.4 % |
Maturity of Operating Lease Liabilities | The maturities of our operating lease liabilities as of December 31, 2021 are as follows (in thousands): Undiscounted cash flows: 2022 $ 5,040 2023 5,172 2024 5,080 2025 5,013 2026 4,193 Thereafter 26,130 Total undiscounted cash flows 50,628 Imputed interest (12,465) Present value of cash flows $ 38,163 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): December 31, 2021 2020 Prepaid expenses $ 13,138 $ 9,643 Other current assets 5,338 1,395 Total prepaid expenses and other current assets $ 18,476 $ 11,038 |
Schedule of Property and Equipment | Property, equipment, and software, net, are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the following estimated useful lives: Estimated Useful Life Computer equipment 3 years Purchased software 3 years Data center servers 3 years Internally developed software 3 years Office equipment 7 years Office furniture 7 years Airplane 25 years Leasehold improvements Shorter of lease term or economic life Property, equipment, and software, net, consisted of the following (in thousands): December 31, 2021 2020 Internally developed software $ 42,356 $ 22,983 Computer equipment 5,946 4,289 Purchased software 7,228 7,300 Leasehold improvements 16,953 17,647 Airplane 3,770 3,770 Office furniture 7,257 6,116 Office equipment 2,459 2,536 Data center servers 972 3,518 Capital projects in progress (1) 17,839 14,053 Property, equipment, and software, gross 104,780 82,212 Less: Accumulated depreciation (31,142) (23,712) Total property, equipment, and software, net $ 73,638 $ 58,500 ____________________________ |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2021 2020 Salaries and related benefit expenses $ 26,417 $ 19,317 HKFS Contingent Consideration liability (2) 28,300 17,900 Contingent liability from 1st Global Acquisition (2) — 11,328 Accrued legal costs 2,871 363 Accrued vendor and advertising costs 3,777 2,984 Other 4,313 4,527 Total accrued expenses and other current liabilities $ 65,678 $ 56,419 ____________________________ (2) For more information on the Company’s contingent liabilities, see “Note 10—Commitments and Contingencies.” |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Hierarchy of Financial Assets and Liabilities 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 December 31, 2021 Quoted prices in active markets using identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Cash equivalents: money market and other funds $ 4,293 $ 4,293 $ — $ — Total assets at fair value $ 4,293 $ 4,293 $ — $ — HKFS Contingent Consideration liability $ 28,300 $ — $ — $ 28,300 Total liabilities at fair value $ 28,300 $ — $ — $ 28,300 Fair value measurements at the reporting date using December 31, 2020 Quoted prices in active markets using identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Cash equivalents: money market and other funds $ 4,290 $ 4,290 $ — $ — Total assets at fair value $ 4,290 $ 4,290 $ — $ — HKFS Contingent Consideration liability $ 35,900 $ — $ — $ 35,900 Total liabilities at fair value $ 35,900 $ — $ — $ 35,900 |
Schedule of Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | A roll forward of the HKFS Contingent Consideration liability is as follows (in thousands): HKFS Contingent Consideration Liability Balance as of December 31, 2019 $ — Recognized at acquisition date 27,600 Valuation change recognized as expense 8,300 Balance as of December 31, 2020 35,900 HKFS Contingent Consideration first earn-out payment (30,000) Valuation change recognized as expense 22,400 Balance as of December 31, 2021 $ 28,300 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Contractual Commitments | As of December 31, 2021, our purchase commitments for the next five years and thereafter were as follows (in thousands): 2022 $ 33,855 2023 11,158 2024 8,125 2025 5,241 2026 4,575 Thereafter 3,394 Total purchase commitments $ 66,348 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock Options, RSUs | A summary of stock options and RSUs at December 31, 2021 is as follows: Number of shares authorized for awards 11,782,709 Options and RSUs outstanding 3,556,164 Options and RSUs expected to vest 3,229,727 Options and RSUs available for grant 5,463,646 |
Stock Incentive Plans Activity | For the year ended December 31, 2021, the following activity occurred under our stock incentive plans: Number of options Weighted average exercise price Intrinsic value Weighted average remaining contractual term (in years) Stock options: Outstanding at December 31, 2020 1,364,327 $ 17.31 Granted 450,234 $ 15.06 Forfeited (20,565) $ 14.24 Expired (50,570) $ 20.97 Exercised (40,071) $ 10.34 Outstanding at December 31, 2021 1,703,355 $ 16.81 $ 4,335 4.5 Exercisable at December 31, 2021 777,125 $ 17.83 $ 1,759 3.1 Vested and expected to vest after December 31, 2021 1,586,021 $ 16.93 $ 3,987 4.4 The risk-free interest rate was based on the implied yield available on U.S. Treasury issues with an equivalent remaining term. The expected dividend yield was zero since we have not paid a dividend since 2008. The expected volatility was based on historical volatility of our stock for the related expected life of the award. The expected life of the award was based on historical experience, including historical post-vesting termination behavior. Number of units Weighted average grant date fair value Intrinsic value Weighted average remaining contractual term (in years) RSUs: Time and performance-based Outstanding at December 31, 2020 1,501,365 $ 23.19 Granted 1,005,096 $ 15.87 Forfeited (211,893) $ 19.96 Vested (441,759) $ 21.09 Outstanding at December 31, 2021 1,852,809 $ 20.09 $ 32,092 0.9 Expected to vest after December 31, 2021 1,643,706 $ 20.37 $ 28,469 0.8 Cash-settled Outstanding at December 31, 2020 — $ — Granted 314,165 $ 17.34 Forfeited (14,700) $ 17.34 Vested — $ — Outstanding at December 31, 2021 299,465 $ 17.34 $ 5,187 2.2 |
Stock Option Grants, Valuation Assumptions | To estimate stock-based compensation expense, we used the Black-Scholes-Merton valuation method with the following assumptions for stock options granted: Year Ended December 31, 2021 2020 2019 Risk-free interest rate 0.20% - 0.84% 0.24% - 1.62% 2.28% - 2.88% Expected dividend yield — % — % — % Expected volatility 48% - 51% 39% - 56% 38% - 42% Expected life 3.5 3.5 3.6 |
Schedule of Supplemental Information | Supplemental information is presented below: Year Ended December 31, 2021 2020 2019 Stock options: Weighted average grant date fair value per option granted $ 6.37 $ 6.04 $ 8.88 Total intrinsic value of options exercised (in thousands) $ 268 $ 71 $ 17,674 Total fair value of options vested (in thousands) $ 1,420 $ 4,488 $ 2,593 RSUs: Time and performance-based Weighted average grant date fair value per unit granted $ 15.87 $ 19.06 $ 28.89 Total intrinsic value of units vested (in thousands) $ 7,167 $ 4,115 $ 10,679 Total fair value of units vested (in thousands) $ 10,427 $ 6,182 $ 6,368 Cash-settled Weighted average grant date fair value per unit granted $ 17.34 $ — $ — |
Stock-Based Compensation Expense | We account for stock-based compensation in accordance with ASC 718, Stock Compensation , which requires that compensation related to all share-based awards (including stock options, RSUs, and ESPP shares) be recognized in the consolidated financial statements. Amounts recognized for stock-based compensation expense on the consolidated statements of comprehensive income (loss) were as follows (in thousands): Year Ended December 31, 2021 2020 2019 Cost of revenue $ 5,099 $ 5,129 $ 4,082 Engineering and technology 754 795 715 Sales and marketing 2,867 1,776 346 General and administrative (1) 12,034 2,366 11,157 Total $ 20,754 $ 10,066 $ 16,300 ____________________________ (1) Stock-based compensation expense for the year ended December 31, 2020 was reduced by $8.5 million related to the reversal of stock-based compensation expense due to: (1) forfeitures resulting from executive departures and (2) the reversal of stock-based compensation expense for performance-based RSUs that are not expected to vest. |
Unrecognized Stock-Based Compensation Expense | As of December 31, 2021, total unrecognized stock-based compensation expense related to unvested stock awards was as follows: Expense (in thousands) Weighted average period over which to be recognized (in years) Stock options $ 1,552 1.3 Time and performance-based RSUs 9,081 1.3 Cash-settled RSUs 3,795 2.2 Total $ 14,428 |
Interest Expense and Other, N_2
Interest Expense and Other, Net (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Other Income and Expenses [Abstract] | |
Schedule of Interest Expense and Other, Net | “Interest expense and other, net” on the consolidated statements of comprehensive income (loss) consisted of the following (in thousands): Year Ended December 31, 2021 2020 2019 Interest expense $ 28,807 $ 24,570 $ 19,017 Amortization of debt issuance costs 1,522 1,372 1,042 Accretion of debt discounts 1,146 693 228 Total interest expense 31,475 26,635 20,287 Interest income (21) (65) (449) Gain on sale of a business — (349) (3,256) Non-capitalized debt issuance expenses — 3,687 — Other 626 1,396 333 Interest expense and other, net $ 32,080 $ 31,304 $ 16,915 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income (Loss) from Continuing Operations | Loss before income taxes consisted of the following (in thousands): Year Ended December 31, 2021 2020 2019 United States $ (1,461) $ (300,424) $ (18,088) Foreign — — 1,182 Loss before income taxes $ (1,461) $ (300,424) $ (16,906) |
Income Tax Expense (Benefit) from Continuing Operations | Income tax expense (benefit) consisted of the following (in thousands): Year Ended December 31, 2021 2020 2019 Current: U.S. federal $ — $ — $ (732) State 1,321 1,272 2,901 Foreign — — 333 Total current expense 1,321 1,272 2,502 Deferred: U.S. federal (8,970) 40,857 (62,580) State (1,569) 202 (4,970) Foreign — — (6) Total deferred expense (benefit) (10,539) 41,059 (67,556) Income tax expense (benefit) $ (9,218) $ 42,331 $ (65,054) |
Income Tax Expense (Benefit) from Continuing Operations Differed from Amount Computed by Applying Statutory Federal Income Tax Rate | Income tax expense (benefit) differed from the amount calculated by applying the statutory federal income tax rate of 21% as follows (in thousands): Year Ended December 31, 2021 2020 2019 Income tax benefit at the statutory federal income tax rate $ (307) $ (63,089) $ (3,550) Non-deductible compensation 1,594 1,681 1,933 State income taxes, net of federal benefit 891 1,053 (1,897) Excess tax (benefits) and deficiencies of stock-based compensation 402 1,004 (4,100) Uncertain tax positions and audit settlements (966) (575) (1,227) Valuation allowance (50,934) 23,911 (56,881) Net operating loss write-off 17,539 21,051 — Capital loss carryforwards write-off 22,324 — — Other 239 464 (691) Non-deductible acquisition-related transaction costs — — 1,359 Non-deductible goodwill — 56,831 — Income tax expense (benefit) $ (9,218) $ 42,331 $ (65,054) |
Deferred Tax Assets and Liabilities | The tax effect of temporary differences and net operating loss carryforwards that gave rise to our deferred tax assets and liabilities were as follows (in thousands): December 31, 2021 2020 Deferred tax assets: Net operating loss and credit carryforwards $ 23,560 $ 54,196 Capital loss 429 22,753 Accrued compensation 7,800 7,094 Stock-based compensation 5,839 4,848 Deferred revenue 3,977 3,935 Lease liabilities 9,083 9,193 Other, net 2,395 3,583 Total gross deferred tax assets 53,083 105,602 Valuation allowance (16,801) (67,735) Deferred tax assets, net of valuation allowance 36,282 37,867 Deferred tax liabilities: Amortization (49,347) (59,580) Depreciation (1,157) (1,947) Right-of-use assets (4,871) (5,571) Other, net (1,031) (1,432) Total gross deferred tax liabilities (56,406) (68,530) Net deferred tax liabilities $ (20,124) $ (30,663) |
Changes in Valuation Allowance for Deferred Tax Assets | The changes in the valuation allowance for deferred tax assets are shown below (in thousands): Year Ended December 31, 2021 2020 2019 Balance at beginning of year $ 67,735 $ 43,824 $ 100,705 Increase (decrease) in valuation allowance—future year utilization 2,105 18,136 (45,651) Increase (decrease) in valuation allowance—current year utilization and expiration (53,039) 5,047 (10,943) Increase (decrease) in valuation allowance—other — 728 (287) Balance at end of year $ 16,801 $ 67,735 $ 43,824 |
Reconciliation of Unrecognized Tax Benefit Balances | A reconciliation of the unrecognized tax benefit balances is as follows (in thousands): Year Ended December 31, 2021 2020 2019 Balance at beginning of year $ 7,476 $ 19,483 $ 22,590 Gross decreases for tax positions of prior years — (11,972) (1,858) Gross increases for tax positions of current year — — 60 Purchase accounting for 1st Global Acquisition — (35) 442 Settlements with taxing authorities — — (563) Statute of limitations expirations (2,811) — (1,188) Balance at end of year $ 4,665 $ 7,476 $ 19,483 |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Earnings Per Share [Abstract] | |
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 is as follows (in thousands, except per share amounts): Year Ended December 31, 2021 2020 2019 Numerator: Net income (loss) $ 7,757 $ (342,755) $ 48,148 Denominator: Basic weighted average common shares outstanding 48,578 47,978 48,264 Dilutive potential common shares 948 — 1,018 Diluted weighted average common shares outstanding 49,526 47,978 49,282 Net income (loss) per share: Basic $ 0.16 $ (7.14) $ 1.00 Diluted $ 0.16 $ (7.14) $ 0.98 Shares excluded (1) 1,218 2,936 1,150 ____________________________ (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 year ended December 31, 2020, all potential common shares were excluded from the calculation of diluted net income (loss) per share due to the net loss recognized. |
Description of the Business (De
Description of the Business (Detail) | 12 Months Ended |
Dec. 31, 2021segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of segments | 2 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 134,824 | $ 150,125 | ||
Cash segregated under federal or other regulations | 0 | 637 | ||
Total cash, cash equivalents, and restricted cash | $ 134,824 | $ 150,762 | $ 86,450 | $ 85,366 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Estimated Useful Life of Property and Equipment (Detail) | 12 Months Ended |
Dec. 31, 2021 | |
Computer equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Purchased software | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Data center servers | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Internally developed software | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Office equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 7 years |
Office furniture | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 7 years |
Airplane | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 25 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Narrative (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Software development costs | $ 24.3 | $ 19.3 | $ 7.4 |
General term of loans | 15 years | ||
Outstanding loans issued to financial professionals | $ 22 | 2.7 | |
Forgivable loan amortization | 2.3 | 0.9 | 0.8 |
Advertising expense | 64.5 | 80 | $ 54.5 |
Other Noncurrent Assets | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Outstanding loans issued to financial professionals | 17.7 | 2 | |
Prepaid Expenses and Other Current Assets | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Outstanding loans issued to financial professionals | $ 4.3 | $ 0.7 |
Segment Information and Reven_3
Segment Information and Revenues - Information on Reportable Segments (Detail) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021USD ($)segment | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of reportable segments | segment | 2 | ||
Revenue: | |||
Total revenue | $ 885,200 | $ 754,952 | $ 717,945 |
Operating income (loss): | |||
Total operating income (loss) | 30,619 | (269,120) | 9 |
Interest expense and other, net | (32,080) | (31,304) | (16,915) |
Loss before income taxes | (1,461) | (300,424) | (16,906) |
Income tax benefit (expense) | 9,218 | (42,331) | 65,054 |
Net income (loss) | 7,757 | (342,755) | 48,148 |
Corporate-level activity | |||
Operating income (loss): | |||
Total operating income (loss) | (133,472) | (390,936) | (164,532) |
Wealth Management | |||
Revenue: | |||
Total revenue | 658,213 | 546,189 | 507,979 |
Wealth Management | Operating Segments | |||
Operating income (loss): | |||
Total operating income (loss) | 82,212 | 72,195 | 68,292 |
Tax Software | |||
Revenue: | |||
Total revenue | 226,987 | 208,763 | 209,966 |
Tax Software | Operating Segments | |||
Operating income (loss): | |||
Total operating income (loss) | $ 81,879 | $ 49,621 | $ 96,249 |
Segment Information and Reven_4
Segment Information and Revenues - Revenue by Major Category (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||
Total revenue | $ 885,200 | $ 754,952 | $ 717,945 |
Wealth Management | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 658,213 | 546,189 | 507,979 |
Wealth Management | Advisory revenue | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 395,800 | 314,751 | 252,367 |
Wealth Management | Commission | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 210,677 | 185,201 | 191,050 |
Wealth Management | Asset-based revenue | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 22,101 | 23,688 | 48,182 |
Wealth Management | Transaction and fee | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 29,635 | 22,549 | 16,380 |
Recognized upon transaction: | Wealth Management | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 94,180 | 81,282 | 86,061 |
Recognized upon transaction: | Wealth Management | Commission | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 89,970 | 74,788 | 82,604 |
Recognized upon transaction: | Wealth Management | Transaction and fee | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 4,210 | 6,494 | 3,457 |
Recognized over time: | Wealth Management | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 564,033 | 464,907 | 421,918 |
Recognized over time: | Wealth Management | Advisory revenue | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 395,800 | 314,751 | 252,367 |
Recognized over time: | Wealth Management | Commission | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 120,707 | 110,413 | 108,446 |
Recognized over time: | Wealth Management | Asset-based revenue | |||
Segment Reporting Information [Line Items] | |||
Total revenue | 22,101 | 23,688 | 48,182 |
Recognized over time: | Wealth Management | Transaction and fee | |||
Segment Reporting Information [Line Items] | |||
Total revenue | $ 25,425 | $ 16,055 | $ 12,923 |
Segment Information and Reven_5
Segment Information and Revenues - Disaggregation of Revenues (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 885,200 | $ 754,952 | $ 717,945 |
Tax Software | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 226,987 | 208,763 | 209,966 |
Tax Software | Consumer | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 209,748 | 192,226 | 195,004 |
Tax Software | Professional | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 17,239 | 16,537 | 14,962 |
Tax Software | Recognized upon transaction: | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 224,588 | 206,254 | 205,054 |
Tax Software | Recognized upon transaction: | Consumer | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 209,747 | 192,223 | 192,438 |
Tax Software | Recognized upon transaction: | Professional | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 14,841 | 14,031 | 12,616 |
Tax Software | Recognized over time: | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 2,399 | 2,509 | 4,912 |
Tax Software | Recognized over time: | Consumer | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1 | 3 | 2,566 |
Tax Software | Recognized over time: | Professional | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 2,398 | $ 2,506 | $ 2,346 |
Asset Acquisitions (Details)
Asset Acquisitions (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Business Acquisition [Line Items] | |
Acquisition cost | $ 8.5 |
Fixed deferred payments | $ 4.4 |
Customer relationships | |
Business Acquisition [Line Items] | |
Useful life | 180 months |
Maximum | |
Business Acquisition [Line Items] | |
Maximum future contingent payments | $ 14.8 |
Goodwill and Acquired Intangi_3
Goodwill and Acquired Intangible Assets, Net - Summary of Goodwill Activity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2020 | |
Goodwill [Roll Forward] | ||
Goodwill, gross, beginning balance | $ 662,375 | $ 662,375 |
Acquired | 63,737 | |
Purchase accounting adjustments | (666) | |
Impairment | (270,625) | |
Goodwill, gross, ending balance | 454,821 | |
Wealth Management | ||
Goodwill [Roll Forward] | ||
Goodwill, gross, beginning balance | 473,833 | 473,833 |
Acquired | 63,737 | |
Purchase accounting adjustments | (666) | |
Impairment | (270,600) | (270,625) |
Goodwill, gross, ending balance | 266,279 | |
Tax Software | ||
Goodwill [Roll Forward] | ||
Goodwill, gross, beginning balance | $ 188,542 | 188,542 |
Acquired | 0 | |
Purchase accounting adjustments | 0 | |
Impairment | 0 | |
Goodwill, gross, ending balance | $ 188,542 |
Goodwill and Acquired Intangi_4
Goodwill and Acquired Intangible Assets, Net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill, Impairment Loss | $ 270,625 | |||
Impairment of goodwill and an intangible asset | $ 0 | 270,625 | $ 50,900 | |
HD Vest Trade Name | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Remaining amortization period | 3 years | |||
Wealth Management | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill, Impairment Loss | $ 270,600 | $ 270,625 |
Goodwill and Acquired Intangi_5
Goodwill and Acquired Intangible Assets, Net - Intangible Assets Other Than Goodwill (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 412,523 | $ 417,583 |
Accumulated amortization | (129,734) | (114,904) |
Total | 282,789 | 302,679 |
Indefinite-lived Intangible Assets [Line Items] | ||
Gross carrying amount | 432,023 | 437,083 |
Accumulated amortization | (129,734) | (114,904) |
Net | 302,289 | 322,179 |
Trade name | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 19,500 | 19,500 |
Financial professional relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 170 months | |
Gross carrying amount | $ 318,700 | 318,700 |
Accumulated amortization | (111,916) | (92,436) |
Total | 206,784 | 226,264 |
Indefinite-lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ (111,916) | (92,436) |
Sponsor relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 143 months | |
Gross carrying amount | $ 17,200 | 17,200 |
Accumulated amortization | (5,655) | (4,680) |
Total | 11,545 | 12,520 |
Indefinite-lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ (5,655) | (4,680) |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 5 months | |
Gross carrying amount | $ 2,980 | 16,470 |
Accumulated amortization | (2,852) | (14,026) |
Total | 128 | 2,444 |
Indefinite-lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ (2,852) | (14,026) |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 11 months | |
Gross carrying amount | $ 3,100 | 3,100 |
Accumulated amortization | (2,379) | (1,346) |
Total | 721 | 1,754 |
Indefinite-lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ (2,379) | (1,346) |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 164 months | |
Gross carrying amount | $ 65,573 | 57,143 |
Accumulated amortization | (5,729) | (1,784) |
Total | 59,844 | 55,359 |
Indefinite-lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ (5,729) | (1,784) |
CPA firm relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 162 months | |
Gross carrying amount | $ 4,070 | 4,070 |
Accumulated amortization | (407) | (136) |
Total | 3,663 | 3,934 |
Indefinite-lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ (407) | (136) |
Curriculum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 5 months | |
Gross carrying amount | $ 900 | 900 |
Accumulated amortization | (796) | (496) |
Total | 104 | 404 |
Indefinite-lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ (796) | $ (496) |
Goodwill and Acquired Intangi_6
Goodwill and Acquired Intangible Assets, Net - Information About Expected Amortization of Definite-Lived Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2022 | $ 25,511 | |
2023 | 24,197 | |
2024 | 23,637 | |
2025 | 22,958 | |
2026 | 22,336 | |
Thereafter | 164,150 | |
Total | $ 282,789 | $ 302,679 |
Debt - Schedule of Company's De
Debt - Schedule of Company's Debt (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||
Less: Current portion of long-term debt, net | $ (1,812) | $ (1,812) |
Long-term debt, net | 553,134 | 552,525 |
Senior secured credit facility | ||
Debt Instrument [Line Items] | ||
Principal amount | 561,344 | 563,156 |
Discount | (3,027) | (4,173) |
Debt issuance costs | (3,371) | (4,646) |
Net carrying value | $ 554,946 | $ 554,337 |
Debt - Narrative (Details)
Debt - Narrative (Details) - Senior secured credit facility - USD ($) | Apr. 26, 2021 | Dec. 31, 2021 | Apr. 25, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||||
Credit facility | $ 765,000,000 | |||
Principal amount | 561,344,000 | $ 563,156,000 | ||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Credit facility | $ 90,000,000 | 90,000,000 | $ 65,000,000 | |
Additional revolving credit commitments | 25,000,000 | |||
Payments of debt issuance costs | $ 500,000 | |||
Principal amount outstanding | 0 | |||
Amount available for future borrowings | $ 90,000,000 | |||
Percentage of aggregate commitments draw | 30.00% | |||
Revolving Credit Facility | April 1, 2021 Through December 31, 2021 | ||||
Debt Instrument [Line Items] | ||||
Maximum consolidated total net leverage ratio | 475.00% | |||
Revolving Credit Facility | January 1, 2022 Through September 30, 2022 | ||||
Debt Instrument [Line Items] | ||||
Maximum consolidated total net leverage ratio | 425.00% | |||
Revolving Credit Facility | October 1, 2022 Through December 31, 2022 | ||||
Debt Instrument [Line Items] | ||||
Maximum consolidated total net leverage ratio | 400.00% | |||
Revolving Credit Facility | January 1, 2023 Through February 21, 2024 | ||||
Debt Instrument [Line Items] | ||||
Maximum consolidated total net leverage ratio | 350.00% | |||
Revolving Credit Facility | Minimum | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, commitment fee percentage | 0.35% | |||
Revolving Credit Facility | Maximum | ||||
Debt Instrument [Line Items] | ||||
Line of credit facility, commitment fee percentage | 0.40% | |||
Revolving Credit Facility | Eurodollar | Minimum | ||||
Debt Instrument [Line Items] | ||||
Variable interest rate | 2.00% | |||
Revolving Credit Facility | Eurodollar | Maximum | ||||
Debt Instrument [Line Items] | ||||
Variable interest rate | 2.50% | |||
Revolving Credit Facility | ABR | Minimum | ||||
Debt Instrument [Line Items] | ||||
Variable interest rate | 1.00% | |||
Revolving Credit Facility | ABR | Maximum | ||||
Debt Instrument [Line Items] | ||||
Variable interest rate | 1.50% | |||
Term Loan | ||||
Debt Instrument [Line Items] | ||||
Principal amount | $ 675,000,000 | |||
Debt instrument, periodic payment, principal | $ 500,000 | |||
Variable interest rate | 5.00% | |||
Term Loan | Eurodollar | ||||
Debt Instrument [Line Items] | ||||
Variable interest rate | 4.00% | |||
Term Loan | ABR | ||||
Debt Instrument [Line Items] | ||||
Variable interest rate | 3.00% |
Debt - Future Principal Payment
Debt - Future Principal Payments on Term Loan (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Debt Disclosure [Abstract] | |
2022 | $ 1,812 |
2023 | 1,812 |
2024 | 557,720 |
Total future principal payments on the Term Loan | $ 561,344 |
Leases - Operating Lease Expens
Leases - Operating Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Lease, Cost [Abstract] | |||
Fixed lease cost | $ 4,188 | $ 6,762 | $ 5,224 |
Variable lease cost | 1,057 | 893 | 1,315 |
Operating lease cost, before sublease income | 5,245 | 7,655 | 6,539 |
Sublease income | (464) | (1,235) | (1,287) |
Total operating lease cost, net of sublease income | 4,781 | 6,420 | 5,252 |
Additional lease information: | |||
Cash paid on operating lease liabilities | 1,853 | 3,818 | 7,339 |
ROU assets obtained in exchange for lease obligations | $ 93 | $ 21,766 | $ 15,829 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information Related to Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
Right-of-use assets, net | $ 20,466 | $ 23,455 |
Current lease liabilities | 4,896 | 2,304 |
Long-term lease liabilities | 33,267 | 36,404 |
Total operating lease liabilities | $ 38,163 | $ 38,708 |
Weighted-average remaining operating lease term | 10 years 3 months 18 days | 11 years |
Weighted-average operating lease discount rate | 5.40% | 5.40% |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2022 | $ 5,040 | |
2023 | 5,172 | |
2024 | 5,080 | |
2025 | 5,013 | |
2026 | 4,193 | |
Thereafter | 26,130 | |
Total undiscounted cash flows | 50,628 | |
Imputed interest | (12,465) | |
Total operating lease liabilities | $ 38,163 | $ 38,708 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
1st Global | |||
Lessee, Lease, Description [Line Items] | |||
Impairment expense | $ 0 | $ 4.1 | $ 0 |
Balance Sheet Components - Prep
Balance Sheet Components - Prepaid Expenses and Other Current Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Prepaid expenses and other current assets, net | ||
Prepaid expenses | $ 13,138 | $ 9,643 |
Other current assets | 5,338 | 1,395 |
Prepaid expenses and other current assets | $ 18,476 | $ 11,038 |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Property and equipment | ||
Property, equipment, and software, gross | $ 104,780 | $ 82,212 |
Less: Accumulated depreciation | (31,142) | (23,712) |
Total property, equipment, and software, net | 73,638 | 58,500 |
Internally developed software | ||
Property and equipment | ||
Property, equipment, and software, gross | 42,356 | 22,983 |
Total property, equipment, and software, net | 41,900 | 26,600 |
Computer equipment | ||
Property and equipment | ||
Property, equipment, and software, gross | 5,946 | 4,289 |
Purchased software | ||
Property and equipment | ||
Property, equipment, and software, gross | 7,228 | 7,300 |
Leasehold improvements | ||
Property and equipment | ||
Property, equipment, and software, gross | 16,953 | 17,647 |
Airplane | ||
Property and equipment | ||
Property, equipment, and software, gross | 3,770 | 3,770 |
Office furniture | ||
Property and equipment | ||
Property, equipment, and software, gross | 7,257 | 6,116 |
Office equipment | ||
Property and equipment | ||
Property, equipment, and software, gross | 2,459 | 2,536 |
Data center servers | ||
Property and equipment | ||
Property, equipment, and software, gross | 972 | 3,518 |
Capital projects in progress | ||
Property and equipment | ||
Property, equipment, and software, gross | $ 17,839 | $ 14,053 |
Balance Sheet Components - Narr
Balance Sheet Components - Narrative (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 10,906 | $ 7,293 | $ 5,479 |
Definite-lived intangible assets, net | 73,638 | 58,500 | |
Property, Plant and Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation | 15,100 | 10,200 | 6,900 |
Internally Developed Software | |||
Property, Plant and Equipment [Line Items] | |||
Depreciation | 8,900 | 5,400 | $ 3,200 |
Definite-lived intangible assets, net | $ 41,900 | $ 26,600 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Expenses and Other Current Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||
Salaries and related benefit expenses | $ 26,417 | $ 19,317 |
Accrued legal costs | 2,871 | 363 |
Accrued vendor and advertising costs | 3,777 | 2,984 |
Other | 4,313 | 4,527 |
Total accrued expenses and other current liabilities | 65,678 | 56,419 |
Honkamp Krueger Financial Services, Inc. | ||
Business Acquisition [Line Items] | ||
Contingent liability | 28,300 | 17,900 |
1st Global | ||
Business Acquisition [Line Items] | ||
Contingent liability | $ 0 | $ 11,328 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value Hierarchy of Financial Assets and Liabilities Carried at Fair Value and Measured on Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 |
Honkamp Krueger Financial Services, Inc. | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
HKFS Contingent Consideration liability | $ 28,300 | |
Fair Value Measurements, Recurring | ||
Cash equivalents: | ||
Total assets at fair value | 4,293 | $ 4,290 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Total liabilities at fair value | 28,300 | 35,900 |
Fair Value Measurements, Recurring | Honkamp Krueger Financial Services, Inc. | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
HKFS Contingent Consideration liability | 28,300 | 35,900 |
Fair Value Measurements, Recurring | Money Market and Other Funds | ||
Cash equivalents: | ||
Cash equivalents: money market and other funds | 4,293 | 4,290 |
Fair Value Measurements, Recurring | Quoted prices in active markets using identical assets (Level 1) | ||
Cash equivalents: | ||
Total assets at fair value | 4,293 | 4,290 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Total liabilities at fair value | 0 | 0 |
Fair Value Measurements, Recurring | Quoted prices in active markets using identical assets (Level 1) | Honkamp Krueger Financial Services, Inc. | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
HKFS Contingent Consideration liability | 0 | 0 |
Fair Value Measurements, Recurring | Quoted prices in active markets using identical assets (Level 1) | Money Market and Other Funds | ||
Cash equivalents: | ||
Cash equivalents: money market and other funds | 4,293 | 4,290 |
Fair Value Measurements, Recurring | Significant other observable inputs (Level 2) | ||
Cash equivalents: | ||
Total assets at fair value | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Total liabilities at fair value | 0 | 0 |
Fair Value Measurements, Recurring | Significant other observable inputs (Level 2) | Honkamp Krueger Financial Services, Inc. | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
HKFS Contingent Consideration liability | 0 | 0 |
Fair Value Measurements, Recurring | Significant other observable inputs (Level 2) | Money Market and Other Funds | ||
Cash equivalents: | ||
Cash equivalents: money market and other funds | 0 | 0 |
Fair Value Measurements, Recurring | Significant unobservable inputs (Level 3) | ||
Cash equivalents: | ||
Total assets at fair value | 0 | 0 |
Liabilities, Fair Value Disclosure [Abstract] | ||
Total liabilities at fair value | 28,300 | 35,900 |
Fair Value Measurements, Recurring | Significant unobservable inputs (Level 3) | Honkamp Krueger Financial Services, Inc. | ||
Liabilities, Fair Value Disclosure [Abstract] | ||
HKFS Contingent Consideration liability | 28,300 | 35,900 |
Fair Value Measurements, Recurring | Significant unobservable inputs (Level 3) | Money Market and Other Funds | ||
Cash equivalents: | ||
Cash equivalents: money market and other funds | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 30, 2021USD ($) | Dec. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Decrease to cash used in financing activities | $ (14,177) | $ 160,939 | $ 77,836 | |
Fair Value | Term Loan | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt instrument, fair value disclosure | 561,300 | 563,200 | ||
Carrying Value | Term Loan | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Debt instrument, fair value disclosure | $ 559,900 | 561,700 | ||
Measurement Input, Discount Rate | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Business combination, contingent consideration, liability, measurement input | 0.122 | |||
Measurement Input, Price Volatility | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Business combination, contingent consideration, liability, measurement input | 0.246 | |||
Measurement Input, Credit Spread | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Business combination, contingent consideration, liability, measurement input | 0.019 | |||
Honkamp Krueger Financial Services, Inc. | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Payment For Contingent Consideration Liability | $ 30,000 | |||
Payment for contingent consideration liability, operating activities | $ 16,800 | |||
HKFS contingent consideration | $ 28,300 | |||
Honkamp Krueger Financial Services, Inc. | Fair Value Measurements, Recurring | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
HKFS contingent consideration | $ 28,300 | $ 35,900 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Unobservable Inputs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Acquisition-related contingent consideration liability: | ||
Beginning balance | $ 35,900 | $ 0 |
HKFS Contingent Consideration first earn-out payment | (30,000) | |
Valuation change recognized as expense | 22,400 | 8,300 |
Ending balance | $ 28,300 | 35,900 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases | $ 27,600 |
Commitment and Contingencies -P
Commitment and Contingencies -Purchase Commitments (Details) $ in Thousands | Dec. 31, 2021USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2022 | $ 33,855 |
2023 | 11,158 |
2024 | 8,125 |
2025 | 5,241 |
2026 | 4,575 |
Thereafter | 3,394 |
Total purchase commitments | $ 66,348 |
Commitment and Contingencies- N
Commitment and Contingencies- Narrative (Details) - USD ($) $ in Thousands | Jul. 01, 2020 | Jun. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Lessee, Lease, Description [Line Items] | |||||
Change in the fair value of acquisition-related contingent consideration | $ 22,400 | $ 8,300 | $ 0 | ||
1st Global | |||||
Lessee, Lease, Description [Line Items] | |||||
HKFS Contingent Consideration liability | $ 11,300 | ||||
Change in the fair value of acquisition-related contingent consideration | $ 5,500 | ||||
Reserve for loss contingency accrual | 16,900 | ||||
Honkamp Krueger Financial Services, Inc. | |||||
Lessee, Lease, Description [Line Items] | |||||
HKFS Contingent Consideration liability | $ 28,300 | ||||
Business combination purchase price | $ 104,400 | ||||
Undiscounted contingent consideration | 60,000 | ||||
Contingent consideration arrangement, maximum range per earn-out period | $ 30,000 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Detail) - USD ($) $ in Millions | 2 Months Ended | 12 Months Ended | ||||
Feb. 23, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 09, 2021 | Mar. 19, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Authorized repurchase amount, stock repurchase program | $ 100 | $ 100 | ||||
Stock repurchases (in shares) | 0 | 0 | 1,300,000 | |||
Stock repurchases | $ 28.3 | |||||
Stock repurchase program, additional | $ 28.3 | |||||
Subsequent Event | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock repurchases (in shares) | 600,000 | |||||
Stock repurchases | $ 11 | |||||
Authorized repurchase amount remaining | $ 89 |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) - shares | 12 Months Ended | |||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for issuance | 5,463,646 | |||
Vesting period | 3 years | |||
Expected dividend yield | 0.00% | |||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Stock Options And Time-Based Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expiration period | 7 years | |||
Stock Options And Time-Based Restricted Stock Units | Share-based Payment Arrangement, Tranche One | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
Vesting percentage | 33.33% | |||
Performance-Based Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | |
2016 Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of employee base earnings | 15.00% | |||
Purchase price of common stock, percent | 85.00% | |||
Shares available for issuance | 500,000 | 2,700,000 |
Stock-based Compensation - Summ
Stock-based Compensation - Summary of Stock Options, RSUs and MSUs (Detail) | Dec. 31, 2021shares |
Share-based Payment Arrangement [Abstract] | |
Number of shares authorized for awards (in shares) | 11,782,709 |
Options and RSUs outstanding (in shares) | 3,556,164 |
Options and RSUs expected to vest (in shares) | 3,229,727 |
Options and RSUs available for grant (in shares) | 5,463,646 |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock Incentive Plans Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Options, outstanding, beginning balance (in shares) | 1,364,327 | ||
Options, Granted (in shares) | 450,234 | ||
Options, Forfeited (in shares) | (20,565) | ||
Options, Expired (in shares) | (50,570) | ||
Options, Exercised (in shares) | (40,071) | ||
Options, outstanding, ending balance (in shares) | 1,703,355 | 1,364,327 | |
Options, Exercisable, period end (in shares) | 777,125 | ||
Options, Vested and expected to vest after period end (in shares) | 1,586,021 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |||
Weighted average exercise price, beginning balance (in USD per share) | $ 17.31 | ||
Weighted average exercise price, Granted (in USD per share) | 15.06 | ||
Weighted average exercise price, Forfeited (in USD per share) | 14.24 | ||
Weighted-average exercise price, Expired (in USD per share) | 20.97 | ||
Weighted average exercise price, Exercised (in USD per share) | 10.34 | ||
Weighted average exercise price, ending balance (in USD per share) | 16.81 | $ 17.31 | |
Weighted average exercise price, Exercisable, period end (in USD per share) | 17.83 | ||
Weighted average exercise price, Expected to vest after period end (in USD per share) | $ 16.93 | ||
Intrinsic value, Outstanding | $ 4,335 | ||
Intrinsic value, Exercisable, period end | 1,759 | ||
Intrinsic value, Vested and expected to vest after period end | $ 3,987 | ||
Weighted average remaining contractual term (in years), Outstanding | 4 years 6 months | ||
Weighted average remaining contractual term (in years), Exercisable, period end | 3 years 1 month 6 days | ||
Weighted average remaining contractual term (in years), Vested and expected after period end | 4 years 4 months 24 days | ||
Time and performance-based RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||
Stock units, Outstanding, Beginning balance (in shares) | 1,501,365 | ||
Stock units, Granted (in shares) | 1,005,096 | ||
Stock units, Forfeited (in shares) | (211,893) | ||
Stock units, Vested (in shares) | (441,759) | ||
Stock units, Outstanding, Ending balance (in shares) | 1,852,809 | 1,501,365 | |
Stock units, Expected to vest after period end (in shares) | 1,643,706 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Weighted average grant date fair value, Outstanding, Beginning balance (in USD per share) | $ 23.19 | ||
Weighted average grant date fair value, Granted (in USD per share) | 15.87 | $ 19.06 | $ 28.89 |
Weighted average grant date fair value, Forfeited (in USD per share) | 19.96 | ||
Weighted average grant date fair value, Vested (in USD per share) | 21.09 | ||
Weighted average grant date fair value, Outstanding, Ending balance (in USD per share) | 20.09 | $ 23.19 | |
Weighted average grant date fair value, Expected to vest after period end (in USD per share) | $ 20.37 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value [Abstract] | |||
Intrinsic value, Outstanding | $ 32,092 | ||
Intrinsic value, Expected to vest after period end | $ 28,469 | ||
Weighted average remaining contractual term (in years), Outstanding | 10 months 24 days | ||
Weighted average remaining contractual term (in years), Expected to vest after period end | 9 months 18 days | ||
Cash-settled RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||
Stock units, Outstanding, Beginning balance (in shares) | 0 | ||
Stock units, Granted (in shares) | 314,165 | ||
Stock units, Forfeited (in shares) | (14,700) | ||
Stock units, Vested (in shares) | 0 | ||
Stock units, Outstanding, Ending balance (in shares) | 299,465 | 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |||
Weighted average grant date fair value, Outstanding, Beginning balance (in USD per share) | $ 0 | ||
Weighted average grant date fair value, Granted (in USD per share) | 17.34 | $ 0 | $ 0 |
Weighted average grant date fair value, Forfeited (in USD per share) | 17.34 | ||
Weighted average grant date fair value, Vested (in USD per share) | 0 | ||
Weighted average grant date fair value, Outstanding, Ending balance (in USD per share) | $ 17.34 | $ 0 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value [Abstract] | |||
Intrinsic value, Outstanding | $ 5,187 | ||
Weighted average remaining contractual term (in years), Outstanding | 2 years 2 months 12 days |
Stock-based Compensation - Sche
Stock-based Compensation - Schedule of Supplemental Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant date fair value per option granted (in USD per share) | $ 6.37 | $ 6.04 | $ 8.88 |
Total intrinsic value of options exercised | $ 268 | $ 71 | $ 17,674 |
Total fair value of options vested | $ 1,420 | $ 4,488 | $ 2,593 |
Time and performance-based RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant date fair value per unit granted (In USD per share) | $ 15.87 | $ 19.06 | $ 28.89 |
Total intrinsic value of units vested | $ 7,167 | $ 4,115 | $ 10,679 |
Total fair value of units vested | $ 10,427 | $ 6,182 | $ 6,368 |
Cash-settled RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant date fair value per unit granted (In USD per share) | $ 17.34 | $ 0 | $ 0 |
Stock-based Compensation - St_2
Stock-based Compensation - Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 20,754 | $ 10,066 | $ 16,300 |
Scenario, Adjustment | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | (8,500) | ||
Cost of revenue | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 5,099 | 5,129 | 4,082 |
Engineering and technology | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 754 | 795 | 715 |
Sales and marketing | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | 2,867 | 1,776 | 346 |
General and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense | $ 12,034 | $ 2,366 | $ 11,157 |
Stock-based Compensation - St_3
Stock-based Compensation - Stock Option Grants and Warrant (Detail) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | 0.00% | ||
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected life | 3 years 6 months | 3 years 6 months | 3 years 7 months 6 days |
Minimum | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 0.20% | 0.24% | 2.28% |
Expected volatility | 48.00% | 39.00% | 38.00% |
Maximum | Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Risk-free interest rate | 0.84% | 1.62% | 2.88% |
Expected volatility | 51.00% | 56.00% | 42.00% |
Stock-based Compensation - Unre
Stock-based Compensation - Unrecognized Stock-Based Compensation Expense (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2021USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expense | $ 14,428 |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expense | $ 1,552 |
Weighted average period over which to be recognized (in years) | 1 year 3 months 18 days |
Time and performance-based RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expense | $ 9,081 |
Weighted average period over which to be recognized (in years) | 1 year 3 months 18 days |
Cash-settled RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expense | $ 3,795 |
Weighted average period over which to be recognized (in years) | 2 years 2 months 12 days |
Interest Expense and Other, N_3
Interest Expense and Other, Net- Schedule of Interest Expense and Other, Net (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Other Income and Expenses [Abstract] | |||
Interest expense | $ 28,807 | $ 24,570 | $ 19,017 |
Amortization of debt issuance costs | 1,522 | 1,372 | 1,042 |
Accretion of debt discounts | 1,146 | 693 | 228 |
Total interest expense | 31,475 | 26,635 | 20,287 |
Interest income | (21) | (65) | (449) |
Gain on sale of a business | 0 | (349) | (3,256) |
Non-capitalized debt issuance expenses | 0 | 3,687 | 0 |
Other | 626 | 1,396 | 333 |
Interest expense and other, net | $ 32,080 | $ 31,304 | $ 16,915 |
401 (K) Plan (Details)
401 (K) Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Employer discretionary contribution amount | $ 4 | $ 2.8 | $ 2.4 |
Minimum | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer matching contribution as a percentage of employees' gross pay | 1.00% | ||
Maximum | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer matching contribution as a percentage of employees' gross pay | 4.00% |
Income Taxes Income Taxes - Inc
Income Taxes Income Taxes - Income (Loss) from Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
United States | $ (1,461) | $ (300,424) | $ (18,088) |
Foreign | 0 | 0 | 1,182 |
Loss before income taxes | $ (1,461) | $ (300,424) | $ (16,906) |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Benefit) from Continuing Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current: | |||
U.S. federal | $ 0 | $ 0 | $ (732) |
State | 1,321 | 1,272 | 2,901 |
Foreign | 0 | 0 | 333 |
Total current expense | 1,321 | 1,272 | 2,502 |
Deferred: | |||
U.S. federal | (8,970) | 40,857 | (62,580) |
State | (1,569) | 202 | (4,970) |
Foreign | 0 | 0 | (6) |
Total deferred expense (benefit) | (10,539) | 41,059 | (67,556) |
Income tax expense (benefit) | $ (9,218) | $ 42,331 | $ (65,054) |
Income Taxes - Income Tax Exp_2
Income Taxes - Income Tax Expense (Benefit) from Continuing Operations Differed from Amount Computed by Applying Statutory Federal Income Tax Rate (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Income tax benefit at the statutory federal income tax rate | $ (307) | $ (63,089) | $ (3,550) |
Non-deductible compensation | 1,594 | 1,681 | 1,933 |
State income taxes, net of federal benefit | 891 | 1,053 | (1,897) |
Excess tax (benefits) and deficiencies of stock-based compensation | 402 | 1,004 | (4,100) |
Uncertain tax positions and audit settlements | (966) | (575) | (1,227) |
Valuation allowance | (50,934) | 23,911 | (56,881) |
Net operating loss write-off | 17,539 | 21,051 | 0 |
Capital loss carryforwards write-off | 22,324 | 0 | 0 |
Other | 239 | 464 | (691) |
Non-deductible acquisition-related transaction costs | 0 | 0 | 1,359 |
Non-deductible goodwill | 0 | 56,831 | 0 |
Income tax expense (benefit) | $ (9,218) | $ 42,331 | $ (65,054) |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||||
Net operating loss and credit carryforwards | $ 23,560 | $ 54,196 | ||
Capital loss | 429 | 22,753 | ||
Accrued compensation | 7,800 | 7,094 | ||
Stock-based compensation | 5,839 | 4,848 | ||
Deferred revenue | 3,977 | 3,935 | ||
Lease liabilities | 9,083 | 9,193 | ||
Other, net | 2,395 | 3,583 | ||
Total gross deferred tax assets | 53,083 | 105,602 | ||
Valuation allowance | (16,801) | (67,735) | $ (43,824) | $ (100,705) |
Deferred tax assets, net of valuation allowance | 36,282 | 37,867 | ||
Deferred tax liabilities: | ||||
Amortization | (49,347) | (59,580) | ||
Depreciation | (1,157) | (1,947) | ||
Right-of-use assets | (4,871) | (5,571) | ||
Other, net | (1,031) | (1,432) | ||
Total gross deferred tax liabilities | (56,406) | (68,530) | ||
Net deferred tax liabilities | $ (20,124) | $ (30,663) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||
Valuation allowance | $ (50,934,000) | $ 23,911,000 | $ (56,881,000) |
Federal net operating loss carryforwards for income tax purposes | 105,200,000 | ||
State net operating loss carryforwards for income tax purposes | 15,400,000 | ||
Unrecognized tax benefits impacting effective tax rate | 2,900,000 | 4,700,000 | |
Deferred tax asset subject to valuation allowance | 1,800,000 | 2,800,000 | |
Significant adjustments | 0 | ||
Uncertain tax position, interest and penalties | 200,000 | 0 | $ 400,000 |
Interest and penalties accrued | $ 1,300,000 | $ 1,500,000 |
Income Taxes - Changes in Valua
Income Taxes - Changes in Valuation Allowance for Deferred Tax Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred Tax Assets Valuation Allowance [Roll Forward] | |||
Balance at beginning of year | $ 67,735 | $ 43,824 | $ 100,705 |
Increase (decrease) in valuation allowance—future year utilization | 2,105 | 18,136 | (45,651) |
Increase (decrease) in valuation allowance—current year utilization and expiration | (53,039) | 5,047 | (10,943) |
Increase (decrease) in valuation allowance—other | 0 | 728 | (287) |
Balance at end of year | $ 16,801 | $ 67,735 | $ 43,824 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Unrecognized Tax Benefit Balances (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits, Beginning Balance | $ 7,476 | $ 19,483 | $ 22,590 |
Gross decreases for tax positions of prior years | 0 | (11,972) | (1,858) |
Gross increases for tax positions of current year | 0 | 0 | 60 |
Purchase accounting for 1st Global Acquisition | 0 | (35) | |
Purchase accounting for 1st Global Acquisition | 442 | ||
Settlements with taxing authorities | 0 | 0 | (563) |
Statute of limitations expirations | (2,811) | 0 | (1,188) |
Unrecognized tax benefits, Ending Balance | $ 4,665 | $ 7,476 | $ 19,483 |
Net Income (Loss) Per Share - S
Net Income (Loss) Per Share - Summary of Dilutive Effect for Awards with Exercise Price Less Than Average Stock Price (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | |||
Net income (loss) | $ 7,757 | $ (342,755) | $ 48,148 |
Denominator: | |||
Basic weighted average common shares outstanding (in shares) | 48,578 | 47,978 | 48,264 |
Dilutive potential common shares (in shares) | 948 | 0 | 1,018 |
Diluted weighted average common shares outstanding (in shares) | 49,526 | 47,978 | 49,282 |
Net income (loss) per share: | |||
Basic (in USD per share) | $ 0.16 | $ (7.14) | $ 1 |
Diluted (in USD per share) | $ 0.16 | $ (7.14) | $ 0.98 |
Shares excluded (in shares) | 1,218 | 2,936 | 1,150 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ in Millions | 2 Months Ended | 12 Months Ended | ||
Feb. 23, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Subsequent Event [Line Items] | ||||
Stock repurchases (in shares) | 0 | 0 | 1,300,000 | |
Stock repurchases | $ 28.3 | |||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Stock repurchases (in shares) | 600,000 | |||
Stock repurchases | $ 11 | |||
Authorized repurchase amount remaining | $ 89 |
Uncategorized Items - bcor-2021
Label | Element | Value |
Wealth Management [Member] | ||
Goodwill | us-gaap_Goodwill | $ 266,279,000 |
Tax Software [Member] | ||
Goodwill | us-gaap_Goodwill | $ 188,542,000 |