BCOR - Earnings call transcript Q3 2021

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Q3 2021 Bluecora Earnings 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 would now like to turn the call over to your host, Dee Littrell, you may begin.

Dee Littrell

everyone, Third welcome, Conference XXXX and Call. you, to Quarter Blucora's Earnings Thank we release at the on this posted Earlier morning, earnings Relations of the section and our website blucora.com. Investor information supplemental Chris Walters, Officer. Financial I'm joined today Chief Officer; Mehlman, and Executive Chief Marc by

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

from and obligation these current include forward-looking uncertainties, events information Forms our risks statements, required refer and could more our expectations. as our these results to our no reports some uncertainties. XX-Q other except to other materially such, Please specific As SEC and and differ XX-K and release risks of and on update law. for actual by and including assume press filings, We

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

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

Christopher Walters

going our I'm growth you, third the to good of and The morning, happy Dave, with well across running financial now ahead everyone. strong of execution results report quarter that is have Thank strategy TaxACT been board. Blucora's sustainable schedule.

on our share with now the as highlights share for for focus our third central I'll progress. as Software. financial outlook continually well Tax experiences team's improving the XXXX. is of Our our professionals and to customers preliminary quarter Starting the

$XXX.X million for the With million. the to year we're full of on year raising realized, $XXX.X revenue guidance for revenue majority to our

for time deliver TaxAct. our focused XXXX to Investor expected that line generate to Year that of I'm communicated best and unit at to we're the in which on to XXXX Tax season of preparing annual X% complete, is X% growth peak first for for third we share period that XX%, we grow top of share growth the cumulative years XXXX. exceeds to in expecting delighted Day yet of revenue XXXX are XX% on to the rate many Now

tactics, segment during range we fully which In to partnerships. to in guidance product When full XXXX our not just deliver opportunity assess of the would XXXX shared completing yet Day, long-term highest and the business. season and improvements Tax were $XX number we we expect Year TaxAct's to million addition, tests marketing potential $XXX Investor income history. tax operating the be of million, a for the performance and data the season approaches the had year, we or the analyze commercial from Each run the of and enhancements opportunities between

the during The challenges. consumer to We and of for for also research results better XXXX and increased extensive performance and our conduct understand the expectations of business research the season beyond. opportunities tests these after and

We for business. on to few are focused a the areas drive positive momentum

brand First, recognition.

continued our recognition. and improvements deploying expect of marketing well utilized optimization drive partners timing We that to in in media channels spend of brand continue as as terms

consumer experience. the continue areas of to to highest in the Second, we priority address work friction

about impact test, data resulting business enhancements, rates. our confidence and of recent Fortunately, us research, in with improvements and provide including the conversion start the

partners in brands of that a on With clear these full year, importance from understanding commercial our benefit scaling we worked. commercial working are with and with with what of potential partnerships. have ourselves now have commercial under what year of most partners trust. our of didn't. associating strategies We current our efforts to of and worked grew Third, our the belts, plan a the focus partners. we season existing partnerships We therefore, We respected and this first we about spoken meaningfully are customers that XXx

in partnership most excited are an trajectory. on significant existing One we growth could enough long-term we to believe the opportunities impact a that of our have is expanding notable a that way about be potentially

pleased XXXX has bring and that action on our forward partners. with XXXX. the impact optimistic Year growth we of we of actions the The we're that addition, to multiple retention In our have for team I'm results many base. that we new and expect customer quarter. I the progress our positively can long-term plans into are learnings benefits taking look sharing to Tax translated next

actions Moving we the I'm game. we the our business. continued tax align our with business. Management progress encouraged on by Management. playbook are applied just in Wealth to to in Wealth the taking We're earlier The

continue our professionals and focused product experiences key The is providing financial also technology paying enhanced support we client and pace. are end Our at on initiatives dividends. and service

relationships efforts impact. In and advisory positive our have continue to drive a growth to addition,

is of work our brings billion, in This for RIA, Our both attractive for technology Northeast success offer nearly XXXX. on experiences to Avantax. and seamless professionals to our the as from be to employee-based ability and a $X.X clients. professionals, our their employee-based professionals model employee-based great we proving we model to financial in option comprised to The assets Warner our roughly of financial our channel have our to which independent Partners as interested still closed refer transition variety region. models Avantax for do pipeline our and of joining acquired financial a a professionals grow. mid-October, positions to another managed XX% of which Finance, an to XX, which independent financial our this alternative further employee-based continues We affiliation assets our In Planning model September acquisition, model

record we system launch to client as experience We as during percentage end XX.X%. XXXX of business half actions the compensation continued client QX drive our are on advisory towards AUM enhancements taken quarter. shared new net a for business assets. assets a to and the in first flows we now Day. have highlights with at Investor that set of end strong greatest the confident few The XXXX the are ability total a track we delivering positive for well on And in remain for of by delivering shift The our of the results,

The in retention billion our assets to quarterly model. QX either growth $X professionals combination was we our in scale acquired production our of who levels. purposes professional roughly providing pipeline. personalized Our for opportunity financial focus, We're for professionals more are opportunities financial tax are Recruiting model, continues to be RIA is at accelerate, succession with XX.X%. employee-based engagement financial into record or professionals and the in firms of at transfer independent other seeking the financial attracting that from

expect our XXXX. and growing Our we recruiting XXXX versus strong, pipeline to continue is assets in

professional to improve, per versus XX% financial Our up QX XXXX. advisory revenue continues and commission

it significant to I progress Before off made. am how I'll handing pleased reiterate Marc, with we've the

financial value for product calendar and capabilities Tax are the Wealth technology professionals. could shared applied to Software experiences have have we is Our for development to team to and as resulted focused our formula enhanced we with marketing sustainable partnership client our expected and also driving enhanced segment functions, where XXXX saw investments we the achieve, our year to business, in performance This and growth Tax professionals and by XXXX results XXXX CAGR guidance our The our business delivering is in similar and customers. as and financial Improved long-term compared teams our business. early for feedback, seeing made we XXXX what Day. delivering TaxAct, meaningfully marketing customer at on Management delightful greater that being Investor our for reimagining experiences Software

full I'll We that, of expect to it for segment turn see XXXX With Marc review XXXX financial year KPIs preliminary to these outlook to coming the And XXXX. and and improved our to Tax beyond. calendar financial year quarters efforts outlook. performance, translate performance QX in Software over

Marc Mehlman

or XXXX prior tax decrease above Management year, million, end revenue XXXX the than great year Total income better with net believe range of our our GAAP primarily view all are guidance into a like $XX negative million paid $X.X provided. with Thank $XX.X be full will third well of to at within our a Embedded by high which we which the or Adjusted still driven provide negative comparisons. I'd million but was additional the both season. versus Chris, tax third guidance was net and $X.XX due detail per X% of as in previously million associated diluted our business. for range third again. earnout, the other than the you, better quarter GAAP quarter the was full quarter Total to out good was year-over-year the some everyone. $X.XX in as figure, excludes which year and morning, income share, is disjointed income guidance million. quarter to HKFS Starting XXXX in true-up the preliminary $XXX,XXX previously of net certain on which and revenue and of range with resulted EBITDA, better the quarter XXXX of results the negative previously range. than these $XXX.X results, Non-GAAP extending provided, a diluted per of our XXXX. factors, negative year provided. you also outlook versus was $XX of be $XX.X million which It's third share, third guidance negative Wealth

the the low transfer end for a Software range, funded Tax driven refund leveraging rate our segment. IRS, revenue segment of the to our backlog Software to at now leading third was Turning at $X for Tax by the the million, offering. guidance lower quarter those

and guidance as business related When be to we We was third standpoint. an I revenue amounts negative this this which quarter. discuss be fourth guidance income Segment us with expense leads for expect full XXXX, better issue realized operate provided the quarter, momentarily. continue to performance combined range operating million, prudently $XX.X a from timing the to than our year during will the the to in raise

Management. Wealth to on Moving

third Management the total at Transaction-based Management of X%, $XX.X sequentially. by $XX high up of the revenues X% a our higher come basis, end costs strong to top revenue million, The and quarter were we than XX%. at in previously and revenue high end up revenue QX. Wealth the driven above $XXX.X and operating in expected of a million, by driven $XX.X in, Wealth segment recognized performance timing Wealth coming by On guidance Management the that million. of in released third for quarter-over-quarter of quarter, million line quarter was third was our lower-than-expected year-over-year segment the commission million transactional revenue reported up in came income revenue operating guidance $XXX.X

ratio factors, number which months, the increase of have including ROA months, has Over levels, professionals the XX financial alignment business, payout with The improved has assets, has financial professionals, higher payout in of professionals a number an were when increase a X which into the over HD toward payout making at we're resulted driven lower-producing our combined by appropriate, a an First in investments financial lower into been concentrated the and our which aligned of incentives seen and near-term the of performance, which payout where of in in professionals last compression. also shifted but financial grid we margin market payout XX in Vest, last higher levels, payouts. between higher exit Global the created to resulted

also a off-platform assets corporate staffing of more $XX.X in ROA we range DTF in in costs to appropriate at million, business areas were sales our assets product approximately we've percentage with software advisory total $XXX billion a expect client of the assets Avantax and the We the unallocated up expenses as outflows of came at in growth included to which forward, of level, client below high and mentioned, in saw a the of future. our advisory focus believe and which the marketing XX.X%. platform of came assets ending level support million, towards to of corporate XX% higher year-over-year of billion ROA part support the our invested have $X.X result total As Fee-based in engineering, to billion, and monitor inflows initiatives from guidance businesses. with quarter support net continue change which the assets in assets margin assets going we in management, Partners. lower at we $X.X relates expansion Planning million, addition At as net Total to having advisory in and on new client $XXX corporate assets. $XX.X our

$XXX.X related million. Global, the had $XXX.X cash HKFS million true-up. and payment integration HKFS net related the quarter, of debt with the million majority costs During the quarter and cash ended in we We about First $X.X to and with and equivalents acquisition to of

ending XXXX, September compared QX respectively. double in reported the which the months in and time Through is more at was $XX.X than same the we what from QX leverage million Our ratio net X XX, activities, during end the at of quarter the to generated period X.Xx and X.Xx generated XXXX end we X.Xx of XXXX. have operating cash

fuel for include in and key Our growth cash cash priorities business to returning investing our to shareholders.

on aimed are ensuring at while in assets of favorable and customer continued pain investments in professional momentum capital the positive critical the points outlook. financial XXXX workflows that, critical our capital Our let's delivering new full all and professionals and needs sentiment, our solving preliminary net acquisitions. customers, of providing tax our for With RIA year most current financial season turn to for

IRS For earn our the third and abate. $XX.X segment full in $XXX.X revenue that in tax the year, and million. delays in by income QX between revenue The performance revenue once will quarter million $XX.X increase our of to the and we we additional million was expect segment software expectation million $XXX.X be to driven

leading We outlook tax expect for that to our of quarter the XXXX upside into investment season. to next first in improved invest relate this

of For our in $XXX,XXX which full year, basis at million between expect includes the $XX of for year Wealth share. improvement and Day attributable million. $X.XX $XX.X per $XXX.X consolidated million at $X.X make unallocated as for full EBITDA segment $XXX.X full and $X GAAP investments total of $XXX.X of $XX we million outlook year Management of share This are to This On million and million $X.XX segment, of the million, to $XXX between segment loss QX between business. a year to loss expect $X.XX non-GAAP Blucora of Wealth of range million. and and income Management of million we to planning guidance million midpoint to diluted income of represents includes and released the in a Blucora we a net diluted between a expenses million, of the corporate million income $X.XX revenue revenue $XXX full million or to gain $XX the and for $XX adjusted per or compared Investor million to to $XXX $XX

of time it customary this year, upcoming a been outlook at preliminary season. the Finally, has to for tax provide

we a earlier, are sustainable our iterate ahead drive mentioned is to for to more the and schedule. share where coming in for growth marketing resulted off-season approaches, share in Chris valuable our that through was in to we the testing excited could we which improved analysis -- we have and product TaxAct efforts that was As June on the when could has further were view of to close. deep season a favorable able season This and than business, test just its delayed

XX% Our on messaging have rate, ranges the improvement be from and in during preliminary learnings continued results to expect view our call continued I testing operator product start start optimization, believe Conversion, key enhancing consumer prepared visits Operator? $XXX result by last that would partnerships of a on for we is enhancements workflow the offered are last the during between for falling we're us million concludes Investor off-season focus unique by our X enhancements for for year brought the predicated factored that driving will for positively from off-season consistent us key will media metrics: visits, operating targeted The following approaching This the excited is been within which growth XX% the XXXX the in have from with June. $XX within and last season, our income users. marketing of of Day improvement the the this NPS revenue meaningful partnerships of and partner full season of and along success drive Q&A. guidance new view to and million. new we turn and as season Unique over all between to range supported midpoint now remarks. guidance impacted testing. things: season the rate the our about. scores XXXX our either to or last Delivering in guidance segment

Operator

[Operator Instructions].

question from Jackson comes with first Our Ader JPMorgan.

Jackson Ader

question outlook. first is the tax the think I on probably

a I'm curious things. on So just few

saw that if the kind in main such recognition, areas thinking brand the driver friction, about rebound? came guide guys of data what areas, you're you those kind of what to now like between the a that for gives tax then partnerships, and would season of acceleration? first, confidence you really in the So And be

Christopher Walters

Yes.

And so it's actually areas. -- fortunately, it's actually all X

felt the really we that So season. about data good in the we're reviewing off

together that we've team And as done as some of leadership time. over quite we come last a is One longest benefit benefits opportunities us we areas of of you number season that analysis testing is, well very it's research off and as to research. great the time, that the that in you And that the XX that do our industry based has period last of of additional It is had that typical And had prior in each the in XX this this consumer you in in-depth months. the tax on the know, updated with identified season additional the guidance. confidence have the of of give was described. season the that

partnerships, , grew that of partners opportunity things partnerships were so is the as their provides first most in we of on year. So tenfold our our much one

are a You of first in partner. the year working fully optimized never with

that so And worked those we a things scale found really we well, can variety of and things.

really talked off-season. season being we've them marketing, bringing again, upskilling in team. longer of a through the of and had benefit one we've terms now full and And about In the

team we variety having channels approaches. spend, messaging we see having testing from And spend from going as the a will season. are improvements elements more season, this We all a optimization. so constantly whether it is product of in, last the the continued our timing and of that different all through of we're on come the And the belt experience, data bit and experience of the their that under

at that in effect we're much full of notable the work and were those in the year And associated that us we testing best. things of is points at season, what gives different season looking some things seeing were so late and with them really the that confidence of benefits the

So board. the it's across

Jackson Ader

quick that. And follow-up Okay. a on

of like of getting in on does conversion growth excuse raising kind were specific? starts the deepening peers the next some maybe And also, to discounts then of into of friction any or -- for any areas what pricing season? key like or me, either examples So depend either relative

Christopher Walters

me first. the take let So

So one entry. of the refinement at experience the product example of point the of is

think I So we've forward. it's we that drive a we as talked past about in the lot move start important rate

landing look so both were current flow improvement. different those testing of or might messaging how saw And And customers in customers. we and each on of that pages variety new those flow even landing the opportunities areas, pages, a and for we for

new And versus will we so be higher a that drive customers start rate. there returning for a flow will saw simplified ultimately

we And just continue refine. our our price to price, position. embrace so the going a value of we that versus on On of value beginning And the would feel variety And saw say I positioning market leader. could we're about refocusing the good things experience we at that ultimately, kind of to

Jackson Ader

if last can Okay. one, squeeze one And I just sorry.

we I think tailwind. you side, of still assets wealth part, have idea of a that square platform people the probably advisory? market most little that the performance maybe that fact do for net lower the were a had were of producing bit outflow of kind kind with or been the the producing how not When would left of On outside

Christopher Walters

Yes.

changes flows also business that we that and on point later a we next to get variety So will year. be and talked where the we're year about positive net a believe in get we've our as that the in we'll making of

But made real also then are by still have And We we a that and have we have so to with and seeing also fair acquired. in ultimately, further we've of that invested those outflows experience some a from those efforts. harmonize but both the We're do. been about efforts things bit work the perspective, traction of to driven some a businesses technology adviser talked variety support. And that's product right? before, improving

examples have in we One and long group. on shift case, some for more for led less right But inclined it term the business sense consistent or thing of more near advisers is us the it happy pricing end advisory to with which the approach focused who particular was of that with in be our want makes that advisory relationships certainly the business where to were DTF the client. to less that And that take, was the ultimately, term.

think the variety the will a ultimately the there's actions that turn happened, next of that so of but have things tide that we're over we year. taking And course that

Operator

I'd not I'm showing at over And like the time. Instructions]. any questions Chris this call turn further [Operator back to to Walters.

Christopher Walters

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

Operator

Ladies and this concludes today's presentation. gentlemen,

now may You wonderful day. a have and disconnect,

Avantax (AVTA) 6 Nov 212021 Q3 Earnings call transcript