Blucora, Inc. (BCOR) reported Q3 2022 losses, but topped revenue estimates. Third quarter 2022 diluted Earnings Per Share (EPS) for the quarter came in at a reported loss of $0.20, matching consensus estimates. Here are five things you should know about this earnings call:
- BCOR announced that they have entered into an agreement for the sale of TaxAct to an affiliate of Cinven for $720 million in an all-cash deal. After tax proceeds are expected to be around $620 million. Post-close, BCOR plans to use the net proceeds to pay down existing debt and return excess capital to shareholders in the range of $400-$450 million. This will allow BCOR to transition into a pure-play wealth management firm and allow them to rebrand as “Avantax.”
- Total revenue year-to-date (YTD) was $736.1 million, up from $706.9 million last year, or 4.1%. Net income for 3Q2022 was $21.8 million. Post-closing of the TaxAct deal, BCOR is targeting a leverage ratio of 2.0x to 3.0x net debt/Earnings Before Interest Depreciation and Amortization (EBITDA). BCOR’s anticipated long-term pro forma revenue growth range is 8.5-11% and their adjusted EBITDA margin range is 16-18%.
- The wealth management sector’s quarterly revenue was $165.0 million, down 2.4% from $169.1 this time last year. The segment’s quarterly financial professional production retention rate was 98.6%. Financial professionals’ attrition was less than anticipated with low producing financial professionals accounting for 81% of the attrition rate. BCOR’s anticipated 2023 estimated wealth adjusted EBITDA range is $135 to $170 million. This incorporates a more efficient corporate structure that will provide sizeable run-rate savings by end of 2023.
- BCOR reduced their term loan balance by $35 million. In addition, they also paid the last earn-out obligation related to the HKFS acquisition for $23 million. BCOR ended 3Q 2022 with $91.1 million in cash and cash equivalents.
- BCOR’s Avantax wealth management ended Q3 with total client assets of $72.6 billion and advisory assets of $35.4 billion, or 48.8% of total client assets. Total client assets were down approximately 5.0% from Q2. The company attributes this to declining market conditions. Avantax wealth management service added $214 million of newly recruited assets in the third quarter totaling approximately $1.3 billion of new assets for YTD 2022. YTD newly recruited assets surpass the entire year of 2021’s $929 million.
To learn more visit – Blucora Reports Third Quarter 2022 Results
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