BCOR - Earnings call transcript Q1 2021

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the First Quarter 2021 Blucora Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I'd now like to hand the conference over to your host, Dee Littrell, Investor Relations. Please go ahead.

Dee Littrell

everyone, first welcome, conference XXXX and call. you, to quarter Blucora's earnings Thank should opportunity had copy now, have By you the earnings and of release to supplemental information. our a review

are not Chief these section have Financial our blucora.com. Walters, Officer. by at joined website the and Chief you If Executive of documents, they Officer; Investor available reviewed Relations today Chris I'm on Marc Mehlman,

see contains it let me speak as remind forward-looking discussion statements begin, today's environment based we of Before we as that currently that only date. the the on everyone current

some results statements, such, events current uncertainties. and risks As except Risk recent more forward-looking include and no of they assume refer We law. on and Please differ uncertainties, Factors to as our these and from specific XX-K update actual our by our most for Forms and risks materially in required obligation to could XX-Q expectations. information

and measures discuss financial today. both will GAAP We non-GAAP

blucora.com financial nearest Our full applicable earnings the Chris. me supplemental With each and GAAP to reconciliations hand release available measure. information over that, and financial discussed to call of let include non-GAAP measure the on are

Christopher Walters

to quarter Thank been a first It you, everyone. as we of laid the on has XXXX, the and we productive but Dee business. vision busy, good continue have execute for morning, out

expanding We positioning strides sustainable the on in while have focusing profitability. great growth, made business for all long-term

address the in the quarter, meeting. to like details annual delve I to the Before of I'd

and maximizing to Management's toward we all to Transparency of value valuable received effecting as company. during positive the the essential behalf investors reiterate acknowledge Board's on the I strategy and and to on we feedback want support commitment commitment. said, First, Board, execute their the I is That want engagement to for shareholders shareholders. thank change this the continue extensive conversations for and for with

as that June projections segments, can for deliver both the will the our XXth, value our them planned consumers. dive for significant including value between executing that growth each crossover by and During we financial our professionals sustainable into business as benefits two Day, can to strategies for shareholders, the well be growth Investor created long-term financial incremental and segment,

of looking I that to form tax the XXXX our engaging want financial end reiterate with are forward nearing we may around driving the and in are extended our whatever season, to the we expectations which strategy shareholder value, take. the Now executing. are investors we commitment to KPIs on that of

and has of all value. perspective toward driving within attention Our company and thought our shareholders, the of Board our the continue first takes quarter. and and to will seriously, turn that, let's diversity maximum from boardroom, highlights evaluate With shareholder across the the for avenues

IRS and Louisiana the XXth Oklahoma deadline June Texas, extended XX. XXXX to to the most for know, you May tax As states, for filing and

has business, this much on manage we from our to year, some change. While the are in having better of impact this learned effects last our experience position

other seen revenue, timing than impact a discuss shortly, in will material change, relative season, the XXXX from address. current during which tax to this Marc as a haven't the will we season, As Marc financial of tax XXXX the expected change

ARPU As left, our income, days efficiently XX on upping with guidance revenue it the and are performance. by for a growth to relates we driven season segment executing improved critical our more

Investor Day. on point. share business at the more A provide that can few drivers observations we TaxAct on of detail will We the during performance this

several believe market advantage, least first relative upon grow over to point position. the our this pricing seasons. awareness will embraced to have in in and the for tax year pricing the Depending discount next a campaign, at in tax value We leader. five seasons. XX% season, we time We this lowered the federal We had messaging the XX%

should which improvements into the scores, business, us season. We translate this relative of through continue year's offering is off season retention point we strong metrics our last of hybrid-assisted the this attractive drive last enabled seen to which has to NPS ARPU have the for Further, expected, have as launch of what NPS to year.

pleased the even For full the adoption and launching with in a this growth and and first future. see results learnings, pad year, we are as for the greater the

governmental purposes there we As the limiting past, without for marketing customer customer discussed our ability place in consent. have data meaningful are restrictions use to in

has base XX% April Our goal of customers of year. of approximately consent throughout This our consent the with XXth. across customer as driving providing been facilitates successful, engagement user largely consent

strides made marketing our season. Lastly, great has new in full first their team

new reminder, marketing the a this season. virtually we technology entire As launched revamped organization tool and

on been have pleased progress have business. our tests this but with provided of helped us their executed including Investor others, areas way providing upcoming growth to we KPIs season financial throughout to the There number forward more and potential execute the season. that impact to maximize these are in that results insights We the the able team the work We of with cost-effective on has this on to us Day. done, a detail at be is and more look

Management. Moving Wealth onto

tax most professional our enhancements related our throughout improvements, technology in about wealth been service attrition cases operational rollout clearing year. turnover, have we management professionals acquisitions and financial the continue accelerate expectations first as in the and platform in as potential changes, regulatory the relationship to has optimistic resulted be during years, We over independent including quarter. change management, amount experience This of would several and financial predictable experienced has expected differentiated some discussed, Blucora's improve a As strategy. changes focused But with integration in last significant remain the of environment. we the with of line

non-producing gross professionals of other inflows amount billion. with record few efforts We $X.X business encouraged that now very for us. planning are of defined and take efforts to $XX,XXX taking which affiliate all financial top financial this the XX% XX% compares financial or financial The into in professionals, of our a less financial quality comprehensive XXXX. in and than in the that notice QX, to as professionals toward production. XXX professionals highlights starting from departing are also QX, And Of and advisory gross This are is firms set our for evidence were in quarter. hold. choosing at advisory rolling believe XXX to of March departing We the approximately greatest a focus is

was Our production XX% to QX XXXX. in retention rate in XX% QX, compared

million in dealer with a reached first gross financial exceeding in business or milestone professional advisor concession $XX driven Our revenue. QX, significant our

the with affiliates industry. licensed the at during professionals, quarter, While we of time entering them on XX newly wealth new management financial same XX brought the

for large, experienced as toward pathway streams. well a diversification revenue destination We who seek as firms, greater those be both continue to their a in

who year-to-date. continue two clients interested those above grow professionals expectations financial serve executed April acquired We be Our RIA acquired of through QX. delivered accelerate strategy XXth. with and our their succession pipeline growth and acquisitions the and with an The assets a this than $X different their financial a more affiliation into business opportunity want in-house succession plan. is service Early are critical RIA capabilities continues as whereby opportunity for we to provide who technology in independent as billion turnkey have to of or compelling in to plan, to professionals independent for in model part

one Technologies, prospecting. needs, most increased The is announced of in their March, client help professionals designed first, GuideVine with in demand financial to our

area, in is our our our experience time. of These a client, relationship. Stepping this and our operate to financial back, our where practices our our environment second Avantax. recent I Ultimately, remain triggered professionals to which interests improve drive work assets services. provide evolution acquisitions an be marketing style focus believe services our comprehensive complete and stimulus based the over the value executing their and the extended challenges offer planning tax payments, Whether Xst professionals Partners. ability disasters it Worth to more in integration added another season, agency execution. natural HKFS, for Iowa which to on end accelerates team am proxy Signifi, within to facilitate committed lastly, and The resources toward or on we of customer financial continues challenges. in through we focus clients, Dallas-Fort strategy. pose a The financial now our the And financial with growth employees advisory customized unwavering and And to of acquisition continues marketing of team the benefit to proud strategy financial IRS their we professionals from to professional will two to Avantax Global affecting natural Planning the the contest to best

our QX I'll expanding Our our growth is track. well With and Management strategic year business way to full drive plans turn in position, shift margins over a our within on to that, tax review are within to under it Marc Wealth and and outlook. is performance strong

Marc Mehlman

on full year. to our Good I'd and detail Chris. everyone. morning, outlook and you, our results first like Thank additional XXXX for quarter QX, provide

guidance As a for I in not reminder, where applicable. and corporate potential provide of income our segment for call, in the ranges the but quarter's delay tax comparisons for Management, unallocated we light comments Wealth provide with QX season, guidance full will on revenue to business last my did did along expense guidance reference activity. in

these approximately expect as million million. as first mentioned impact GAAP share. expense up at an be tax to true associated per on are the million. $XXX,XXX number of was income of $XX that in HKFS, factors, an associated $X.XX $X.X but I with million proxy approximately million Non-GAAP Adjusted paid; million; net consolidated calls, the reflect which which amount other final share. doesn't fees or our are with excludes of $XX.X million net figure results. the we treatment the we certain accounting million of income where quarter income $XX approach formerly Avantax provision earnout Embedded for previous Planning income Now, costs payments, with $X.XX $X.XX additional revenue EBITDA, the date; net within $XX.X two was GAAP we the Partners, until first per expect Total $X.X starting earnout, have and or diluted contest, diluted full a $XXX.X

QX, deadlines was income TaxAct by to of demand and $XX.X and now was million. shifting was in XXXX, Similar segment Turning operating generation impacted QX, timing delay tax revenue filing million XXXX. the out preparation. to the of revenue $XXX.X

Moving onto Management. Wealth

which X% outflows line This performance were revenue billion, was which Planning level, a in assets reported XX% $XXX revenue net increased related to $XX.X expense to revenue a to assets based came million the $X.X which the billion, driven of revenue. by declined of unallocated with Management client better a At million came included increase net assets million, billion of considerably million and loss range expectations. addition and Management expenses primarily advisory X% from We platform driven a market year-over-year G&A business. $XXX.X revenue million, of at $XXX guidance modestly the of Management close $X.X up client acquisition was On to at end assets range. Total and Wealth our in was as in sequentially, up of increase improvement included included revenue from the inflows income the $X approximately quarter of ROA Avantax Wealth guidance with Avantax end sequential relates the quarter advisory commission Management. sequentially assets XX% transaction at at ending growth stemming of saw Wealth total assets Planning Wealth APP the for has Avantax in client corporate First increased a a total year-over-year total revenue million, at high Partners. than to Fee on attrition. advisory range, to assets, year-over-year by percentage segment basis, XX% which target the from into corporate Partners. up assets X%, post shift which operating high $XX.X having $XX.X the XX.X%.

related with in of integration net HKFS the equivalents million quarter, with primarily and cash of HKFS with million. earnout XG, associated $XXX.X costs, and cash provision. $X.X the of $X.X ended had million million mark-to-market the and we During about debt to acquisition quarter the $XXX.X attributed We and

the at XXXX. the X.X ratio of end Our times compared quarter to of was reported leverage at X.X times the end net

and assess As ROI below capital three remain such accelerators, that, XXXX to let's or outlook. to as our will we such With for quarter of We versus ratio assess and a net other focus having our long-term allocation, we alternatives investments committed turn as year times. priorities leverage in debt will opportunities. RIA on opportunities these acquisition second paydown full

expect quarter, million Tax For the million. of income second Software $XX between to million segment $XX.X and revenue we $XX.X to segment $XX of million

$XXX.X expect again, between $XXX.X total $XXX and $XX.X we Blucora between expect of million of million $XX.X quarter quarter segment, million On APP, million second million. to quarter, or a million to basis million revenue and $XX.X $X.XX For the $XX including consolidated $XX.X second our and or EBITDA including $X.XX unallocated million; APP, revenue Wealth for $XX.X to includes GAAP $X.X of This to segment Management $XXX million million; we income adjusted of per million. attributable income non-GAAP $X.XX net $XX Blucora net corporate of to expenses income per million of to second $X.XX million to to operating to expected $X million share. $XX.X level share; of outlook

to year, Tax between $XX of segment income of and revenue $XXX.X full expect million. $XXX segment For million Software we the million million and $XX.X

of concludes This segment million. $XX loss million income revenue, translates to to of million; corporate income For consolidated with income million $XX.X which diluted net adjusted revenue $XX includes to our of a $XXX.X of $XXX.X $XXX.X in income and EBITDA $X.XX including full share; full This non-GAAP share, per APP, Blucora to APP, to to outlook, to of and million net net $XXX.X year to million million million loss expense. net between prepared our of Wealth and to million of a $X.XX expect $XX.X of to $X $XXX attributable or $XX.X $XX.X net $X.XX million of again, million of GAAP $XXX.X unallocated Management between per or segment, remarks. million; million million $XX.X diluted $X.XX year we

the to We will over call Q&A. for Operator? the operator turn now

Operator

Thank Instructions] Morgan. from line J.P. Our Ader comes question [Operator of with the you. first Jackson

Your now open. line is

Jackson Ader

Great. Good my questions. Thanks morning, taking guys. for

year of a year from the filers are from season, the a First this one, sticking tax they about stimulus we high side. level XXXX influx the think XXXX? taxes on ago around If from big XXXX the all in for

Christopher Walters

contribute of early in and of of that through now, growth. industry the stimulus dynamic the get of confusion when to year, some some But won't until season. And saw end we slowness in season. season this healthy the we to stick the will obviously, -- the we did right really payments. for was due units the those year, the to unemployment about stick just demand payments end around entire you really really, ultimately, So, last the hard but described ultimately the It's we to until expect know market how much predict to get we of what

Jackson Ader

Okay. was you there think on a return. comment, made Chris, And per I revenue

revenue clarify, you is to Just up or to are you saying season? that return expect entering per better than guys expected you actually tax it year-over-year, had be the

Christopher Walters

It's the season. tax we better coming expected into than

Jackson Ader

sense. Okay. on Yes. right. All makes Last one tax. That

Just -- okay.

regardless days with I do How the -- Marc, left XX how mentioned, expectations, expected sit to is? left. XX days think, you days would you XX you where days do You've to sit relative of feel? have XX when deadline versus

Christopher Walters

That's Yeah. to [Indiscernible] directed you.

Marc Mehlman

obviously, bit from revenue profitability our our upped perspective. say reaffirmed the guidance What guidance a and side I'd is on Sure. we've a

the we've of be. years expectations our our XX will left market, our good the last experience. amount of of heading XX this been feel days. has curves relative have so, our good certainly based over we of feel to filing final consumers assessment seen Nonetheless, the how into the share year our expectations, The and than with different been demand what we and And that's what on

Jackson Ader

right. Okay. Thank All you.

Operator

you. Thank

Kurnos The question next line comes Our Dan the with from of Company. Benchmark

is Your open. line

Daniel Kurnos

Good Thanks. guys. morning,

save the of product Chris, looking gives on rate help expand us initial is dry powder trying thoughts anything it extent and Just you're that initial feedback, rollout pushing Day. or hybrid-assist on are tax just some how for that the obviously maybe, Investor But the kind expansion the to know to going? or I to you some just

Christopher Walters

Sure.

Investor we detailed say, through So, excited officially end will year. having the January I share this really we of more in metrics launched in the get after and generally, would of season we're Day. hybrid-assisted

it potential And ton out. with specifics first Day. play just share Investor over a it be of are put so seasons we how of the happy and terms last work outcomes to there we're when of in more into a year. far, we'll we've And seen That's could what couple ready. of team Our to the get number

Daniel Kurnos

not users then, of just up getting that users guys terms -- what talked of in getting kind to granularity around following the delta tax to last will without pushing sort bit but even extent about trying sort to you NPS, specific And You the you that first ex people pricing, decision season and can or funnel, little to to rush about of side, about your the are the I talked that's rates. are and raised the move How you drive in -- efforts higher? funnel are here. just just who again, do out incentivize, trying of doing? lot But that's up on of but been the you question, is sort there, push think pricing which on I people you talking of think guys get you envelope, to the us the education pricing, up retention helpful, make kind move to brand, the give sort a comforting to and knows much talking to education tax what any there, doing guys then of given educate math ARPU a KPIs hybrid-assist profitability

Christopher Walters

Sure.

that's the tax anticipated, coming a offering. more our right? in we a of when is across first, favorably There bit variety So, -- of higher driven about elements rates we talk than ARPU by

right, like email hybrid-assisted, communication. elements former terms value doing our it's and people both to we're what educate of our via and outreach, direct customers offer to pricing In customers about

the then start traditional communication to feature the a value as have on and And based radio, the completing And product both at of them it's communicate process We very on multi-channel so of their different how they of things are set -- we different strategy all the using taxes, where right, product the through through based have -- elements throughout our offering. media, our finally, of service relevant of channels. and elements are well also done extensively of for our the as television highlighted sit elements about clear and offering we then digital performance they both beginning as and marketing what people appropriately far. move or

Daniel Kurnos

helpful. then just for one That's it. last maybe And Got Marc.

think some an to write perspective, originally setup. attrition -- was about come have there lot the from came guide, then you Management around in sequentially, nothing of XQ but kind I a seem income same the segment guide sort of noise, especially a does -- bit XQ expectation margin the little which Wealth to posted better,

just Wealth could takes if wondering of puts I'm as segment give us about we income. Management just So, you some maybe think and the

Marc Mehlman

Sure.

So, experience some came making bit little high guidance a associated as in is later nature. than in-person quarter deserve, in we for financial our shared, we of are point the one-time just initially expenses also place things with in of the first professionals certain QX. the of to of we anticipated. hiring certain so what events, investments ensure took that that There shy have would and been they We've

profit when And associated another plays in so, certain you'll a we with deliver have quarter well as as versus expense number versus another. from into quarter-to-quarter, headcount one the items, non-recurring may timing

guidance relative with come to takes we'll you just the really about have the that in hiring feel when that we we expenses when those good full So, range. place one-time to play. that of But when about think is provided, some year come to and where do driver

Daniel Kurnos

increase, I think Does guess, about? we that -- events, those up vaccinations should as pick how in-person

Marc Mehlman

tend see correct. once really that our We the greater landscape. as a That's and great of in-person come their to share events. their really one And imagine things the community positive what's excited we're engagement also together with as they in during to can with those engage is financial across terms ideas a working of ability and there professionals customers knock-on effect It's about. you

Daniel Kurnos

Got it. color. the Thanks for Perfect. it, all Appreciate guys.

Operator

a have follow-up do We the line of Jackson with Ader from Morgan. Instructions] [Operator question you. Thank J.P.

Your line open. now is

Jackson Ader

back. I'm you. Thank

the of any public? Just have before don't announcement I you like saw a kind will We any like of or an investors formal won't was vote. a couple -- any of additional was vote I on to whether that the you is any kind active follow-ups. process? if of But -- proxy the business know, be Management the other commentary Curious for that one know business, there some there ask just continued the would than for other actually the have interest engagement over. bid I kind Management heard and Wealth made Wealth the with

Christopher Walters

Yeah.

would all So, and before, are comment which shareholders. Management What speculation. or value on shared team our to what we I don't value different say maximize Board we've focused approaches for is is publicly create on

And so, to we'll continue options. evaluate all

shareholders, with engage will perspective. engagement of right, with terms interest and we In all their value have deeply are who shareholders

we'll of past continue our practice so, doing And so.

Jackson Ader

appointment Okay. kind Board, expertise of just or saw And -- business, able what bring to of will announcement tax what the then, morning this as speaking to the either wealth or be the Perry. the Curious of both? Tina to of she the

Christopher Walters

Yeah.

She culturally. organizations from have Tina extensive we're perspective and transforming to board performance experience has ago, So, the in and a months Tina joined thrilled joined.

largest And years, items, within cultural we support company. is the experience business. in multiple important media we line the spending And also so, as cost, you And it's know, terms over have TaxAct one has the put of drive that she on media. our in of businesses extensive as alignment actually together to

landscape. And leadership transformation so, experience, general of also the but to thrilled management experience her deep and both her transformation we're and cultural understanding and media performance have

Jackson Ader

much. you Thank right. very All Okay.

Operator

no Chris Thank for back to Walters call the now I'd closing remarks. questions. you. turn There further are

Christopher Walters

interest to Blucora. you for quarter. and you speak all in We'll today Thank next Great. us for your joining

Operator

you and call. today's Thank for concludes Ladies gentlemen, conference your participation. this

You may now disconnect.

Avantax (AVTA) 7 May 212021 Q1 Earnings call transcript