8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

May 4, 2017

Date of Report

(Date of earliest event reported)

BLUCORA, INC.

(Exact name of registrant as specified in its charter)

DELAWARE	000-25131	91-1718107
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

10900 NE 8th Street, Suite 800

Bellevue, Washington 98004

(Address of principal executive offices)

(425) 201-6100

Registrant’s telephone number, including area code

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02    RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On May 4, 2017, Blucora, Inc. (the “Company”) announced its financial results for the quarter ended March 31, 2017. Copies of the press release and a supplemental investor presentation are furnished to, but not filed with, the Securities and Exchange Commission as Exhibits 99.1 and 99.2 hereto.

The press release includes non-GAAP financial measures as that term is defined in Regulation G. The press release also includes the most directly comparable financial measures calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”), information reconciling the non-GAAP financial measures to the GAAP financial measures, and a discussion of the reasons why the Company’s management believes that presentation of the non-GAAP financial measures provides useful information to investors regarding the Company’s financial condition and results of operations. The non-GAAP financial information presented therein should be considered in addition to, not as a substitute for, or superior to, financial measures calculated and presented in accordance with GAAP.

Item 9.01    FINANCIAL STATEMENTS AND EXHIBITS

99.1	Press release dated	May 4, 2017
99.2	Investor presentation dated	May 4, 2017

Safe Harbor Statement Under the Private Securities and Litigation Reform Act

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual results may differ significantly from management’s expectations due to various risks and uncertainties including, but not limited to: risks associated with the Company’s strategic transformation and the successful execution of its strategic initiatives, operating plans and marketing strategies; general economic, political, industry, and market conditions; the Company’s ability to attract and retain productive advisors; the Company’s ability to successfully make technology enhancements and introduce new products and services; information technology and cybersecurity risks; the effect of current, pending and future legislation, regulation and regulatory actions, such as the new Department of Labor rule and any changes in tax laws; dependence on third parties to distribute products and services; litigation risks; the Company’s ability to hire, retain and motivate key employees; the Company’s ability to protect its intellectual property; and financing risks, including risks related to the Company’s existing debt obligations and the closing of its proposed credit facility. A more detailed description of these and certain other factors that could affect actual results is included in the Company’s filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this report. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of this report.

-2-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BLUCORA, INC.
By	/s/ Eric M. Emans
	Eric M. Emans
	Chief Financial Officer
	May 4, 2017

-3-

EXHIBIT INDEX

Exhibit No	Description
99.1	Press release dated	May 4, 2017
99.2	Investor presentation dated	May 4, 2017

-4-

EX-99.1

Exhibit 99.1

Blucora Announces First Quarter2017 Results and Preliminary Tax Season Results

Strong Performance Drives Double Digit Revenue, Segment Income and EPS Growth

BELLEVUE, WA — (GLOBE NEWSWIRE) — May 4, 2017 — Blucora, Inc. (NASDAQ: BCOR), a leading provider of technology-enabled financial solutions to consumers, small businesses and tax professionals, today announced financial results for the first quarter ended March 31, 2017.

First Quarter Highlights and Recent Developments

• TaxAct revenue and segment income expected to grow approximately 15 and 14 percent respectively for the six months through June 30, 2017 compared to the same period last year

• HD Vest exceeded $11 billion in fee-based assets under management, up 16 percent versus prior year

• Repaid $38 million in debt and exited the quarter with a 3.3x leverage ratio down from 5.2x in the same period last year

• Expect to close new credit facility in May 2017 that we believe will simplify capital structure, increase tenor and reduce interest expense by approximately $3.4 million in cash annually

• Appointed two new independent directors with substantial financial services and public company board experience

“A focus on operational execution, a continued shift to profitable customers in tax preparation, and market tailwinds in wealth management have together driven double-digit revenue and segment income growth for the first quarter,” said John Clendening, Blucora’s President and Chief Executive Officer. “The strong segment performance coupled with continued debt reduction resulted in strong EPS growth. The efforts we have taken to transform and reposition our company while reducing debt are bearing fruit, which we believe will continue to become more evident as the year progresses.”

Summary Financial Performance: Q12017

($ in millions except per share amounts)

	Q1			Q1
	2017			2016			Change
Revenue	$	182.4		$	165.8		10	%
Wealth Management	$	82.7		$	77.3		7	%
Tax Preparation	$	99.7		$	88.5		13	%
Segment Income	$	65.0		$	58.5		11	%
Wealth Management	$	11.9		$	10.9		9	%
Tax Preparation	$	53.1		$	47.6		12	%
Unallocated Corporate Operating Expenses	$	(6.8	)	$	(4.7	)	44	%
GAAP:
Operating Income	$	43.9		$	39.4		11	%
Net Income Attributable to Blucora, Inc.	$	30.6		$	22.7		35	%
Diluted Net Income Per Share Attributable to Blucora, Inc. (EPS)	$	0.67		$	0.54		24	%
Non-GAAP:
Adjusted EBITDA	$	58.2		$	53.8		8	%
Net Income	$	47.4		$	39.3		21	%
Diluted Net Income Per Share (EPS)	$	1.04		$	0.94		11	%
See reconciliations of all non-GAAP to GAAP measures presented in this release in the tables below.

Tax Season Update

“This is our second year in a multi-year pivot in our TaxAct business to focus on profitable customers,” Clendening continued. “Our new strategy, utilizing our pricing power, enabled us to grow average revenue per user, increase our completion and retention rate, and improve paid mix.  We are encouraged by these metrics and believe that they reinforce the merits of our strategy of focusing on higher value customers despite that as expected, we lost share in DDIY e-files.”

(in thousands, except %s)	Tax seasons ended
	April 18, 2017	April 19, 2016	% change
Consumer:
Online e-files	3,958	4,613	(14	)%
Desktop e-files	184	234	(21	)%
Sub-total e-files	4,142	4,847	(15	)%
Free File Alliance e-files	164	158	4	%
Total consumer e-files	4,306	5,005	(14	)%
Professional tax preparer:
E-files	1,717	1,630	5	%
Total e-files (consumer and preparer)	6,023	6,635	(9	)%
Tax season begins on the first day that the IRS begins accepting e-files and ends on tax day +1. This information includes non-financial metrics used in measuring the performance of the consumer and professional tax preparer sides of the Tax Preparation business.

Second Quarter and Full Year 2017 Outlook

For the second quarter of 2017, the Company expects revenues to be between $135.0 million and $138.5 million, GAAP net loss attributable to Blucora, Inc. to be between $4.0 million and $0.2 million, or $(0.09) to nil per diluted share, Adjusted EBITDA to be between $39.4 million and $42.0 million, and Non-GAAP net income to be between $28.5 million and $31.5 million, or $0.63 to $0.69 per diluted share.

For the full year 2017, the Company expects revenues to be between $493.0 million and $506.0 million, GAAP net income (loss) attributable to Blucora, Inc. to be between $(3.4) million and $2.9 million, or $(0.08) to $0.06 per diluted share, Adjusted EBITDA to be between $96.0 million and $103.3 million, and Non-GAAP net income to be between $59.0 million and $66.8 million, or $1.28 to $1.45 per diluted share.

The second quarter and fiscal 2017 outlook for GAAP net income or loss attributable to Blucora assumes an estimated tax rate of approximately 20%. Our actual tax rate may differ significantly from this estimated tax rate due to our projected near break even pre-tax income, and the adoption of Accounting Standards Update No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Accounting (“ASU 2016-09”). In addition, our GAAP net income or loss attributable to Blucora outlook excludes any impact to tax expense for discrete items, which are affected by ASU 2016-09, and variable stock-based compensation related to grants to non-employee advisors, and including these items in our actual results when they occur may cause our actual results to differ significantly from the outlook provided.

Conference Call and Webcast

A conference call and live webcast will be held today at 8:30 a.m. Eastern Time during which the Company will further discuss first quarter results, its outlook for the second quarter and full year 2017, tax season update, and other business matters. We will also provide the prepared remarks for the conference call along with supplemental financial information to our results on the Investor Relations section of the Blucora corporate website at http://www.blucora.com prior to the call. The supplemental financial information has also been filed with the SEC on Form 8-K. A replay of the call be available on our website.

About Blucora®

Blucora, Inc. (NASDAQ: BCOR) is a leading provider of technology-enabled financial solutions to consumers, small businesses and tax professionals. Our products and services in tax preparation and wealth management, through TaxAct and HD Vest, help consumers manage their financial lives. TaxAct is an affordable digital tax preparation solution for individuals, business owners and tax professionals. HD Vest Financial Services ^®supports an independent network of tax professionals who provide comprehensive financial planning solutions. For more information on Blucora or its businesses, please visit www.blucora.com.

Source: Blucora

Blucora Contact:

Bill Michalek (972) 870-6463

bill.michalek@blucora.com

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual results may differ significantly from management’s expectations due to various risks and uncertainties including, but not limited to: risks associated with the Company’s strategic transformation and the successful execution of its strategic initiatives, operating plans and marketing strategies; general economic, political, industry, and market conditions; the Company’s ability to attract and retain productive advisors; the Company’s ability to successfully make technology enhancements and introduce new products and services; information technology and cybersecurity risks; the effect of current, pending and future legislation, regulation and regulatory actions, such as the new Department of Labor rule and any changes in tax laws; dependence on third parties to distribute products and services; litigation risks; the Company’s ability to hire, retain and motivate key employees; the Company’s ability to protect its intellectual property; and financing risks, including risks related to the Company’s existing debt obligations and the closing of its proposed credit facility. A more detailed description of these and certain other factors that could affect actual results is included in the Company’s filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of this release.

Blucora, Inc.

Preliminary Condensed Consolidated Statements of Operations

(Unaudited)

(Amounts in thousands, except per share data)

	Three months ended March 31,
	2017			2016
Revenue:
Wealth management services revenue	$	82,667		$	77,291
Tax preparation services revenue	99,708			88,474
Total revenue	182,375			165,765
Operating expenses:
Cost of revenue:
Wealth management services cost of revenue	55,874			52,269
Tax preparation services cost of revenue	3,818			3,207
Amortization of acquired technology	48			667
Total cost of revenue (1)	59,740			56,143
Engineering and technology (1)	4,748			4,295
Sales and marketing (1)	48,998			43,837
General and administrative (1)	13,483			12,753
Depreciation	940			975
Amortization of other acquired intangible assets	8,288			8,316
Restructuring (1)	2,289			—
Total operating expenses	138,486			126,319
Operating income	43,889			39,446
Other loss, net (2)	(9,708		)	(7,514		)
Income from continuing operations before income taxes	34,181			31,932
Income tax expense	(3,471		)	(11,643		)
Income from continuing operations	30,710			20,289
Discontinued operations, net of income taxes	—			2,522
Net income	30,710			22,811
Net income attributable to noncontrolling interests	(126		)	(144		)
Net income attributable to Blucora, Inc.	$	30,584		$	22,667
Net income per share attributable to Blucora, Inc. - basic:
Continuing operations	$	0.73		$	0.49
Discontinued operations	—			0.06
Basic net income per share	$	0.73		$	0.55
Net income per share attributable to Blucora, Inc. - diluted:
Continuing operations	$	0.67		$	0.48
Discontinued operations	—			0.06
Diluted net income per share	$	0.67		$	0.54
Weighted average shares outstanding:
Basic	42,145			41,171
Diluted	45,428			41,610

⁽¹⁾ Stock-based compensation expense was allocated among the following captions (in thousands):

	Three months ended March 31,
	2017		2016
Cost of revenue	$	46	$	42
Engineering and technology	285		411
Sales and marketing	691		601
General and administrative	1,543		3,175
Restructuring	443		—
Total stock-based compensation expense	$	3,008	$	4,229

⁽²⁾Other loss, net consisted of the following (in thousands):

	Three months ended March 31,
	2017			2016
Interest income	$	(20	)	$	(25	)
Interest expense	6,436			9,191
Amortization of debt issuance costs	387			610
Accretion of debt discounts	1,085			1,406
(Gain) loss on debt extinguishment and modification expense	1,780			(3,843		)
Other	40			175
Other loss, net	$	9,708		$	7,514

Blucora, Inc.

Preliminary Condensed Consolidated Balance Sheets

(Unaudited)

(Amounts in thousands)

	March 31, 2017			December 31, 2016
ASSETS
Current assets:
Cash and cash equivalents	$	74,609		$	51,713
Cash segregated under federal or other regulations	1,872			2,355
Available-for-sale investments	160			7,101
Accounts receivable, net of allowance	11,448			10,209
Commissions receivable	15,402			16,144
Other receivables	2,380			4,004
Prepaid expenses and other current assets, net	6,800			6,321
Total current assets	112,671			97,847
Long-term assets:
Property and equipment, net	8,990			10,836
Goodwill, net	548,778			548,741
Other intangible assets, net	353,847			362,178
Other long-term assets	2,897			3,057
Total long-term assets	914,512			924,812
Total assets	$	1,027,183		$	1,022,659
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	7,223		$	4,536
Commissions and advisory fees payable	16,389			16,587
Accrued expenses and other current liabilities	25,887			18,528
Deferred revenue	7,435			12,156
Current portion of long-term debt, net	2,560			2,560
Total current liabilities	59,494			54,367
Long-term liabilities:
Long-term debt, net	212,264			248,221
Convertible senior notes, net	165,350			164,176
Deferred tax liability, net	59,102			111,126
Deferred revenue	1,145			1,849
Other long-term liabilities	8,546			10,205
Total long-term liabilities	446,407			535,577
Total liabilities	505,901			589,944
Redeemable noncontrolling interests	15,822			15,696
Stockholders’ equity:
Common stock	4			4
Additional paid-in capital	1,516,421			1,510,152
Accumulated deficit	(1,010,628		)	(1,092,756		)
Accumulated other comprehensive loss	(337		)	(381		)
Total stockholders’ equity	505,460			417,019
Total liabilities and stockholders’ equity	$	1,027,183		$	1,022,659

Blucora, Inc.

Preliminary Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Amounts in thousands)

	Three months ended March 31,
	2017			2016
Operating Activities:
Net income	$	30,710		$	22,811
Less: Discontinued operations, net of income taxes	—			2,522
Net income from continuing operations	30,710			20,289
Adjustments to reconcile net income from continuing operations to net cash from operating activities:
Stock-based compensation	2,565			4,229
Depreciation and amortization of acquired intangible assets	9,470			10,105
Restructuring (non-cash)	864			—
Deferred income taxes	(481		)	(5,127		)
Amortization of premium on investments, net	10			79
Amortization of debt issuance costs	387			610
Accretion of debt discounts	1,085			1,406
(Gain) loss on debt extinguishment and modification expense	1,780			(3,843		)
Other	—			13
Cash provided (used) by changes in operating assets and liabilities:
Accounts receivable	(1,239		)	(2,967		)
Commissions receivable	742			1,266
Other receivables	2,198			20,146
Prepaid expenses and other current assets	(479		)	2,709
Other long-term assets	122			95
Accounts payable	2,687			5,217
Commissions and advisory fees payable	(198		)	(1,705		)
Deferred revenue	(5,425		)	(2,610		)
Accrued expenses and other current and long-term liabilities	8,102			18,809
Net cash provided by operating activities from continuing operations	52,900			68,721
Investing Activities:
Purchases of property and equipment	(1,165		)	(677		)
Proceeds from sales of investments	249			—
Proceeds from maturities of investments	7,092			—
Purchases of investments	(409		)	(403		)
Net cash provided (used) by investing activities from continuing operations	5,767			(1,080		)
Financing Activities:
Repurchase of convertible notes	—			(20,667		)
Repayment of credit facility	(38,000		)	(40,000		)
Proceeds from stock option exercises	4,234			1,088
Proceeds from issuance of stock through employee stock purchase plan	662			562
Tax payments from shares withheld for equity awards	(2,209		)	(329		)
Contingent consideration payments for business acquisition	(946		)	—
Net cash used by financing activities from continuing operations	(36,259		)	(59,346		)
Net cash provided by continuing operations	22,408			8,295
Net cash provided by operating activities from discontinued operations	—			9,795
Net cash used by investing activities from discontinued operations	—			(479		)
Net cash used by financing activities from discontinued operations	—			(5,000		)
Net cash provided by discontinued operations	—			4,316
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	5			—
Net increase in cash, cash equivalents, and restricted cash	22,413			12,611
Cash, cash equivalents, and restricted cash, beginning of period	54,868			59,830
Cash, cash equivalents, and restricted cash, end of period	$	77,281		$	72,441

Blucora, Inc.

Preliminary Segment Information

(Unaudited)

(Amounts in thousands)

	Three months ended March 31,
	2017			2016
Revenue:
Wealth Management (1)	$	82,667		$	77,291
Tax Preparation (1)	99,708			88,474
Total revenue	182,375			165,765
Operating income:
Wealth Management	11,853			10,906
Tax Preparation	53,133			47,573
Corporate-level activity (2)	(21,097		)	(19,033		)
Total operating income	43,889			39,446
Other loss, net	(9,708		)	(7,514		)
Income tax expense	(3,471		)	(11,643		)
Discontinued operations, net of income taxes	—			2,522
Net income	$	30,710		$	22,811

⁽¹⁾ Revenues by major category within each segment are presented below (in thousands):

	Three months ended March 31,
	2017		2016
Wealth Management:
Commission	$	39,595	$	36,856
Advisory	33,576		31,532
Asset-based	5,966		5,818
Transaction and fee	3,530		3,085
Total Wealth Management revenue	$	82,667	$	77,291
Tax Preparation:
Consumer	$	88,242	$	77,471
Professional	11,466		11,003
Total Tax Preparation revenue	$	99,708	$	88,474

⁽²⁾ Corporate-level activity included the following (in thousands):

	Three months ended March 31,
	2017		2016
Operating expenses	$	6,773	$	4,699
Stock-based compensation	2,565		4,229
Depreciation	1,134		1,122
Amortization of acquired intangible assets	8,336		8,983
Restructuring	2,289		—
Total corporate-level activity	$	21,097	$	19,033

Blucora, Inc.

Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures

Preliminary Adjusted EBITDA Reconciliation⁽¹⁾ 

(Unaudited)

(Amounts in thousands)

	Three months ended March 31,
	2017		2016
Operating income (loss) (2)	$	43,889	$	39,446
Stock-based compensation	2,565		4,229
Depreciation and amortization of acquired intangible assets	9,470		10,105
Restructuring	2,289		—
Adjusted EBITDA	$	58,213	$	53,780

Preliminary Non-GAAP Net Income Reconciliation⁽¹⁾ 

(Unaudited)

(Amounts in thousands, except per share amounts)

	Three months ended March 31,
	2017			2016
Net income attributable to Blucora, Inc.(2)	$	30,584		$	22,667
Discontinued operations, net of income taxes	—			(2,522		)
Stock-based compensation	2,565			4,229
Amortization of acquired intangible assets	8,336			8,983
Accretion of debt discount on Convertible Senior Notes	934			963
Accelerated accretion of debt discount on Convertible Senior Notes	—			1,628
Gain on Convertible Senior Notes repurchased	—			(7,724		)
Restructuring	2,289			—
Impact of noncontrolling interests	126			144
Cash tax impact of adjustments to GAAP net income	(587		)	339
Non-cash income tax expense (1)	3,160			10,579
Non-GAAP net income	$	47,407		$	39,286
Per diluted share:
Net income attributable to Blucora, Inc.	$	0.67		$	0.54
Discontinued operations, net of income taxes	—			(0.06		)
Stock-based compensation	0.06			0.10
Amortization of acquired intangible assets	0.18			0.23
Accretion of debt discount on Convertible Senior Notes	0.02			0.02
Accelerated accretion of debt discount on Convertible Senior Notes	—			0.04
Gain on Convertible Senior Notes repurchased	—			(0.19		)
Restructuring	0.05			—
Impact of noncontrolling interests	0.00			0.00
Cash tax impact of adjustments to GAAP net income	(0.01		)	0.01
Non-cash income tax expense	0.07			0.25
Non-GAAP net income	$	1.04		$	0.94
Weighted average shares outstanding used in computing per diluted share amounts	45,428			41,610

Preliminary Adjusted EBITDA Reconciliation for Forward-Looking Guidance

(Amounts in thousands)

	Ranges for the three months ending						Ranges for the year ending
	June 30, 2017						December 31, 2017
Net income (loss) attributable to Blucora, Inc.	$	(4,000	)	$	(200	)	$	(3,400	)	$	2,900
Stock-based compensation	3,500			3,400			12,600			12,400
Depreciation and amortization of acquired intangible assets	9,600			9,400			38,100			37,900
Restructuring	700			600			3,300			3,100
Other loss, net (3)	25,600			25,300			45,800			45,400
Impact of noncontrolling interests	200			200			400			700
Income tax (benefit) expense	3,800			3,300			(800		)	900
Adjusted EBITDA	$	39,400		$	42,000		$	96,000		$	103,300

Preliminary Non-GAAP Net Income Reconciliation for Forward-Looking Guidance

(Amounts in thousands)

	Ranges for the three months ending						Ranges for the year ending
	June 30, 2017						December 31, 2017
Net income (loss) attributable to Blucora, Inc.	$	(4,000	)	$	(200	)	$	(3,400	)	$	2,900
Stock-based compensation	3,500			3,400			12,600			12,400
Amortization of acquired intangible assets	8,400			8,300			33,400			33,300
Accretion of debt discount on Convertible Senior Notes	800			800			1,800			1,800
Loss on debt extinguishment and modification expense	16,100			16,100			16,100			16,100
Restructuring	700			600			3,300			3,100
Impact of noncontrolling interests	200			200			400			700
Cash tax impact of adjustments to net income (loss)	—			—			(600		)	(600		)
Non-cash income tax (benefit) expense	2,800			2,300			(4,600		)	(2,900		)
Non-GAAP net income	$	28,500		$	31,500		$	59,000		$	66,800

Notes to Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures

⁽¹⁾ We define Adjusted EBITDA as operating income, determined in accordance with GAAP, excluding the effects of depreciation, amortization of acquired intangible assets (including acquired technology), stock-based compensation, and restructuring costs. Restructuring costs relate to the upcoming move of our corporate headquarters, which was announced in the fourth quarter of 2016.

We believe that Adjusted EBITDA provides meaningful supplemental information regarding our performance. We use this non-GAAP financial measure for internal management and compensation purposes, when publicly providing guidance on possible future results, and as a means to evaluate period-to-period comparisons. We believe that Adjusted EBITDA is a common measure used by investors and analysts to evaluate our performance, that it provides a more complete understanding of the results of operations and trends affecting our business when viewed together with GAAP results, and that management and investors benefit from referring to this non-GAAP financial measure. Items excluded from Adjusted EBITDA are significant and necessary components to the operations of our business and, therefore, Adjusted EBITDA should be considered as a supplement to, and not as a substitute for or superior to, GAAP net income. Other companies may calculate Adjusted EBITDA differently and, therefore, our Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

We define non-GAAP net income as net income attributable to Blucora, Inc., determined in accordance with GAAP, excluding the effects of discontinued operations, stock-based compensation, amortization of acquired intangible assets (including acquired technology), accretion of debt discount and accelerated accretion of debt discount on the Convertible Senior Notes, gain on Convertible Senior Notes repurchased, restructuring costs, the impact of noncontrolling interests, the related cash tax impact of those adjustments, and non-cash income taxes. Restructuring costs relate to the upcoming move of our corporate headquarters, which was announced in the fourth quarter of 2016. We exclude the non-cash portion of income taxes because of our ability to offset a substantial portion of our cash tax liabilities by using deferred tax assets, which primarily consist of U.S. federal net operating losses. The majority of these net operating losses will expire, if unutilized, between 2020 and 2024.

We believe that non-GAAP net income and non-GAAP net income per share provide meaningful supplemental information to management, investors, and analysts regarding our performance and the valuation of our business by excluding items in the statement of operations that we do not consider part of our ongoing operations or have not been, or are not expected to be, settled in cash. Additionally, we believe that non-GAAP net income and non-GAAP net income per share are common measures used by investors and analysts to evaluate our performance and the valuation of our business. Non-GAAP net income should be evaluated in light of our financial results prepared in accordance with GAAP and should be considered as a supplement to, and not as a substitute for or superior to, GAAP net income. Other companies may calculate non-GAAP net income differently, and, therefore, our non-GAAP net income may not be comparable to similarly titled measures of other companies.

⁽²⁾ As presented in the Preliminary Condensed Consolidated Statements of Operations (unaudited).

⁽³⁾ Other loss, net primarily includes items such as interest income, interest expense, amortization of debt issuance costs, accretion of debt discounts, and gain/loss on debt extinguishment and modification expense.

EX-99.2

Exhibit 99.2

Blucora, Inc.

Supplemental Information

March 31, 2017

Table of Contents

Financial Information
Consolidated Financial Results	2
Reconciliation of Non-GAAP Financial Measures	4
Net Leverage Ratio	5
Reconciliation of Operating Free Cash Flow from Continuing Operations	6
Operating Metrics
Wealth Management	7
Tax Preparation	8

Blucora Consolidated Financial Results ⁽¹⁾ 

(in thousands except %s and per share amounts, rounding differences may exist)	2015				2016																	2017
	FY 12/31				1Q			2Q			3Q			4Q			FY 12/31					1Q
	pro forma				as reported			as reported			as reported			as reported			as reported					as reported
Segment revenue:
Wealth Management (1)	$	319,739			$	77,291		$	76,117		$	80,088		$	83,050		$	316,546				$	82,667
Tax Preparation (2)	117,708				88,474			43,991			3,149			3,751			139,365					99,708
Total	$	437,447			$	165,765		$	120,108		$	83,237		$	86,801		$	455,911				$	182,375
Segment income (loss): (3)
Wealth Management (1)	$	42,997			$	10,906		$	9,924		$	11,628		$	13,838		$	46,296				$	11,853
Tax Preparation (2)	56,984				47,573			29,796			(4,382		)	(6,090		)	66,897					53,133
Total	$	99,981			$	58,479		$	39,720		$	7,246		$	7,748		$	113,193				$	64,986
Segment income (loss) % of revenue:
Wealth Management (1)	13		%		14		%	13		%	15		%	17		%	15		%			14		%
Tax Preparation (2)	48		%		54		%	68		%	(139		)%	(162		)%	48		%			53		%
Total	23		%		35		%	33		%	9		%	9		%	25		%			36		%
Unallocated corporate operating expenses (3)	$	17,750			$	4,699		$	4,460		$	4,907		$	4,933		$	18,999				$	6,773
Adjusted EBITDA	$	82,231			$	53,780		$	35,260		$	2,339		$	2,815		$	94,194				$	58,213
Other unallocated operating expenses: (3)
Stock-based compensation (4)	$	13,591			$	4,229		$	3,023		$	3,364		$	3,512		$	14,128				$	2,565
Acquisition-related costs	—				—			391			—			—			391					—
Depreciation	4,613				1,122			1,127			1,137			1,159			4,545					1,134
Amortization of acquired intangible assets (4)	40,851				8,983			8,365			8,346			8,449			34,143					8,336
Restructuring	—				—			—			—			3,870			3,870					2,289
Operating income (loss)	$	23,176			$	39,446		$	22,354		$	(10,508	)	$	(14,175	)	$	37,117				$	43,889
Unallocated other income/loss: (3)
Interest income	$	(609	)		$	(25	)	$	(11	)	$	(18	)	$	(27	)	$	(81	)			$	(20	)
Interest expense (5)	37,059				9,191			8,381			7,824			7,028			32,424					6,436
Amortization of debt issuance costs (5)	1,894				610			417			413			400			1,840					387
Accretion of debt discounts (5)	4,880				1,406			1,094			1,099			1,091			4,690					1,085
(Gain) loss on debt extinguishment and modification expense (6)	—				(3,843		)	997			2,205			1,677			1,036					1,780
Other (income) loss, net	(1,290		)		175			38			(70		)	(271		)	(128		)			40
Total	$	41,934			$	7,514		$	10,916		$	11,453		$	9,898		$	39,781				$	9,708
Income (loss) from continuing operations before income taxes	$	(18,758	)		$	31,932		$	11,438		$	(21,961	)	$	(24,073	)	$	(2,664	)			$	34,181
Income tax (benefit) expense: (3) (7)
Cash	$	2,200			$	1,064		$	600		$	775		$	78		$	2,517				$	311
Non-cash (8)	(9,422		)		10,579			5,193			(9,312		)	(10,262		)	(3,802		)			3,160
Total	$	(7,222	)		$	11,643		$	5,793		$	(8,537	)	$	(10,184	)	$	(1,285	)			$	3,471
GAAP income (loss) from continuing operations (9)	$	(11,536	)		$	20,289		$	5,645		$	(13,424	)	$	(13,889	)	$	(1,379	)			$	30,710
GAAP income (loss) from continuing operations per share - diluted	$	(0.28	)		$	0.48		$	0.13		$	(0.33	)	$	(0.34	)	$	(0.05	)			$	0.67
GAAP discontinued operations, net of income taxes (10)	$	(27,348	)		$	2,522		$	(19,975	)	$	(40,528	)	$	(5,140	)	$	(63,121	)			$	—
GAAP impact of noncontrolling interests (9)	—				(144		)	(115		)	(167		)	(232		)	(658		)			(126		)
GAAP net income (loss) attributable to Blucora, Inc.	$	(38,884	)		$	22,667		$	(14,445	)	$	(54,119	)	$	(19,261	)	$	(65,158	)			$	30,584
Non-GAAP net income (loss)	$	36,950			$	39,286		$	23,424		$	(10,142	)	$	(7,472	)	$	45,096				$	47,407
Non-GAAP net income (loss) per share - diluted	$	0.88		(11)	$	0.94		$	0.55		$	(0.24	)	$	(0.18	)	$	1.06		(12	)	$	1.04
Outstanding Shares	40,954				41,245			41,495			41,711			41,845			41,845					42,635
Basic shares - GAAP	40,959				41,171			41,405			41,635			41,766			41,494					42,145
Diluted shares - GAAP	40,959				41,610			42,298			41,635			41,766			41,494					45,428

Notes to Consolidated Financial Results on next page

2

Notes to Consolidated Financial Results

⁽¹⁾  On October 14, 2015, Blucora announced the acquisition of HD Vest, which closed on December 31, 2015. As part of that announcement, we also stated our plans to divest the Search and Content and E-Commerce businesses in order to focus more strategically on the technology-enabled financial solutions market. The pro forma information represents the combination of HD Vest, TaxAct, and corporate expenses as if the acquisition closed on January 1, 2014. The Company believes that this presentation most accurately reflects the financial performance of the Company on a go-forward basis.

⁽²⁾  As a highly seasonal business, almost all of the Tax Preparation revenue is generated in the first four months of the calendar year.

⁽³⁾  We do not allocate certain general and administrative costs (including personnel and overhead costs), stock-based compensation, acquisition-related costs, depreciation, amortization of acquired intangible assets, restructuring, other income/loss, or income taxes to the reportable segments.  The general and administrative costs are included in "Unallocated corporate operating expenses." In addition, "Unallocated corporate operating expenses" for the pro forma 2015 results exclude transaction costs related to the HD Vest acquisition and CEO separation-related costs.

⁽⁴⁾  Includes stock-based compensation for Blucora share-based award grants to HD Vest employees and amortization of the definite-lived intangible assets identified in the HD Vest acquisition.

⁽⁵⁾  Excludes interest expense and amortization of debt-related costs associated with the TaxAct 2013 credit facility and HD Vest's previous debt facility, both of which were paid off at the acquisition date, and includes similar expenses associated with the TaxAct - HD Vest 2015 credit facility that was used to finance the HD Vest acquisition.

⁽⁶⁾  1Q16 gain on debt extinguishment and modification expense related to the repurchase of a portion of the Convertible Senior Notes below par value, offset by a loss on debt extinguishment and modification expense related to the prepayment of a portion of the TaxAct - HD Vest 2015 credit facility, which resulted in the write-down of a portion of the unamortized discount and debt issuance costs. 2Q16, 3Q16, 4Q16 and 1Q17 loss on debt extinguishment and modification expense related to the prepayment of a portion of the TaxAct - HD Vest 2015 credit facility during each of those quarters.

⁽⁷⁾  Pro forma excludes historical tax expense and includes tax expense using an effective tax rate of 38.5% with anticipated cash taxes of $2.2 million, given expected net operating loss utilization.

⁽⁸⁾  Amounts represent the non-cash portion of income taxes from continuing operations. We exclude the non-cash portion of income taxes because of our ability to offset a substantial portion of our cash tax liabilities by using deferred tax assets, which primarily consist of U.S. federal net operating losses. The majority of these net operating losses will expire, if unutilized, between 2020 and 2024.

⁽⁹⁾  GAAP income (loss) from continuing operations excludes the impact of noncontrolling interests associated with HD Vest management rollover equity ownership of 4.48%. The impact of noncontrolling interests is recorded separately and after GAAP income (loss) from continuing operations.

⁽¹⁰⁾  On October 14, 2015, Blucora announced plans to divest of the Search and Content and E-Commerce businesses. Accordingly, our financial condition, results of operations, and cash flows reflect the Search and Content and E-Commerce businesses as discontinued operations for all periods presented. On August 9, 2016, we closed on an agreement with OpenMail, under which OpenMail acquired substantially all of the assets and assumed certain specified liabilities of the Search and Content business for $45.2 million. On November 17, 2016, we closed on an agreement with YFC, under which YFC acquired the E-Commerce business for $40.5 million. As a result, we recognized a combined loss on sale of discontinued operations before income taxes of $73.8 million in FY 2016.

⁽¹¹⁾  Calculation in FY 2015 used 41,861,000 diluted shares due to non-GAAP net income.

⁽¹²⁾  Calculation in FY 2016 used 42,686,000 diluted shares due to non-GAAP net income.

3

Blucora Reconciliation of Non-GAAP Financial Measures^{(1) (2)} 

	2015			2016															2017
(in thousands except per share amounts, rounding differences may exist)	FY 12/31			1Q			2Q			3Q			4Q			FY 12/31			1Q
	pro forma			as reported			as reported			as reported			as reported			as reported			as reported
Adjusted EBITDA
Operating income (loss) (3)	$	23,176		$	39,446		$	22,354		$	(10,508	)	$	(14,175	)	$	37,117		$	43,889
Stock-based compensation	13,591			4,229			3,023			3,364			3,512			14,128			2,565
Depreciation and amortization of acquired intangible assets	45,464			10,105			9,492			9,483			9,608			38,688			9,470
Acquisition-related costs	—			—			391			—			—			391			—
Restructuring	—			—			—			—			3,870			3,870			2,289
Adjusted EBITDA	$	82,231		$	53,780		$	35,260		$	2,339		$	2,815		$	94,194		$	58,213
Non-GAAP Net Income (Loss)
Net income (loss) attributable to Blucora, Inc. (3)	$	(38,884	)	$	22,667		$	(14,445	)	$	(54,119	)	$	(19,261	)	$	(65,158	)	$	30,584
Discontinued operations, net of income taxes	27,348			(2,522		)	19,975			40,528			5,140			63,121			—
Stock-based compensation	13,591			4,229			3,023			3,364			3,512			14,128			2,565
Amortization of acquired intangible assets	40,851			8,983			8,365			8,346			8,449			34,143			8,336
Accretion of debt discount on Convertible Senior Notes	3,866			963			885			901			917			3,666			934
Accelerated accretion of debt discount on Convertible Senior Notes	—			1,628			—			—			—			1,628			—
Gain on Convertible Senior Notes repurchased	—			(7,724		)	—			—			—			(7,724		)	—
Acquisition-related costs	—			—			391			—			—			391			—
Restructuring	—			—			—			—			3,870			3,870			2,289
Impact of noncontrolling interests	—			144			115			167			232			658			126
Cash tax impact of adjustments to GAAP net income	(400		)	339			(78		)	(17		)	(69		)	175			(587		)
Non-cash income tax (benefit) expense	(9,422		)	10,579			5,193			(9,312		)	(10,262		)	(3,802		)	3,160
Non-GAAP net income (loss)	$	36,950		$	39,286		$	23,424		$	(10,142	)	$	(7,472	)	$	45,096		$	47,407
Non-GAAP net income (loss) per share	$	0.88		$	0.94		$	0.55		$	(0.24	)	$	(0.18	)	$	1.06		$	1.04
Diluted shares	41,861			41,610			42,298			41,635			41,766			42,686			45,428

⁽¹⁾  On October 14, 2015, Blucora announced the acquisition of HD Vest, which closed on December 31, 2015. As part of that announcement, we also stated our plans to divest the Search and Content and E-Commerce businesses in order to focus more strategically on the technology-enabled financial solutions market. The pro forma information represents the combination of HD Vest, TaxAct, and corporate expenses as if the acquisition closed on January 1, 2014. The Company believes that this presentation most accurately reflects the financial performance of the Company on a go-forward basis.

⁽²⁾  For definitions of these non-GAAP financial measures and their relationship to our GAAP financial statements, please see Note 1 to our Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures in exhibit 99.1 to the May 4, 2017 Current Report on Form 8-K. Acquisition-related costs include professional services fees and other direct transaction costs and changes in the fair value of contingent consideration liabilities related to acquired companies. The SimpleTax acquisition included contingent consideration, for which the fair value of that liability was revalued in 2Q16. Restructuring costs relate to the upcoming move of our corporate headquarters, which was announced in 4Q16. Effective with 1Q16, we also define Non-GAAP Net Income (Loss) to exclude the impact of noncontrolling interests from the HD Vest acquisition that we began recognizing in 1Q16, as well as the gain on Convertible Senior Notes repurchased in 1Q16 (which we repurchased below par value) and the related accelerated accretion of debt discount.

⁽³⁾  As presented in the Blucora Consolidated Financial Results (unaudited) on page 2.

4

Blucora Net Leverage Ratio

	2015				2016																				2017
(in thousands except ratio, rounding differences may exist)	FY 12/31				1Q				2Q				3Q				4Q				FY 12/31				1Q
CASH:
Cash and cash equivalents	$	55,473			$	67,955			$	74,273			$	71,165			$	51,713			$	51,713			$	74,609
Available-for-sale investments	11,301				11,642				7,821				4,492				7,101				7,101				160
	$	66,774			$	79,597			$	82,094			$	75,657			$	58,814			$	58,814			$	74,769
DEBT:
TaxAct - HD Vest 2015 credit facility	$	400,000			$	360,000			$	340,000			$	295,000			$	260,000			$	260,000			$	222,000
Convertible Senior Notes	201,250				172,859				172,859				172,859				172,859				172,859				172,859
Note payable, related party	6,400				6,400				6,400				6,400				3,200				3,200				3,200
	$	607,650			$	539,259			$	519,259			$	474,259			$	436,059			$	436,059			$	398,059
NET DEBT FROM CONTINUING OPERATIONS	$	(540,876	)		$	(459,662	)		$	(437,165	)		$	(398,602	)		$	(377,245	)		$	(377,245	)		$	(323,290	)
OTHER:
Add: Escrow receivable (1)	$	20,000			$	—			$	—			$	—			$	—			$	—			$	—
TOTAL NET DEBT FROM CONTINUING OPERATIONS	$	(520,876	)		$	(459,662	)		$	(437,165	)		$	(398,602	)		$	(377,245	)		$	(377,245	)		$	(323,290	)
Last twelve months (pro forma): (2)
SEGMENT INCOME:
Wealth Management	$	42,997			$	45,256			$	44,563			$	44,703			$	46,296			$	46,296			$	47,243
Tax Preparation	56,984				60,412				70,318				68,478				66,897				66,897				72,457
	99,981				105,668				114,881				113,181				113,193				113,193				119,700
Unallocated corporate operating expenses	(17,750		)		(18,073		)		(17,871		)		(18,345		)		(18,999		)		(18,999		)		(21,073		)
ADJUSTED EBITDA	$	82,231			$	87,595			$	97,010			$	94,836			$	94,194			$	94,194			$	98,627
LEVERAGE RATIO	6.3			x	5.2			x	4.5			x	4.2			x	4.0			x	4.0			x	3.3			x

⁽¹⁾  Amount represents consideration funded to escrow that was contingent upon HD Vest's 2015 earnings performance. The contingent consideration was not achieved; therefore, the amount was returned to the Company from escrow in 1Q16.

⁽²⁾  The pro forma information represents the combination of HD Vest, TaxAct, and corporate expenses as if the acquisition closed on January 1, 2014. The Company believes that this presentation most accurately reflects the financial performance of the Company on a go-forward basis.

5

Blucora Reconciliation of Operating Free Cash Flow from Continuing Operations⁽¹⁾ 

	2015				2016																2017
(in thousands, rounding differences may exist)	FY 12/31				1Q				2Q			3Q			4Q			FY 12/31			1Q
Net cash provided (used) by operating activities from continuing operations	$	24,308		(2)	$	68,721		(2)	$	22,165		$	(2,349	)	$	(2,567	)	$	85,970		$	52,900
Purchases of property and equipment	(1,512		)		(677		)		(851		)	(1,120		)	(1,164		)	(3,812		)	(1,165		)
Operating free cash flow from continuing operations	$	22,796			$	68,044			$	21,314		$	(3,469	)	$	(3,731	)	$	82,158		$	51,735

⁽¹⁾  We define operating free cash flow from continuing operations as net cash provided (used) by operating activities from continuing operations less purchases of property and equipment. We believe operating free cash flow is an important liquidity measure that reflects the cash generated by the continuing businesses, after the purchases of property and equipment, that can then be used for, among other things, strategic acquisitions and investments in the businesses, stock repurchases, and funding ongoing operations.

⁽²⁾  FY 2015 includes $20.0 million of consideration funded to escrow that was contingent upon HD Vest's 2015 earnings performance. The contingent consideration was not achieved; therefore, the amount was returned to the Company from escrow in 1Q16.

6

Blucora Operating Metrics - Wealth Management

	2015			2016															2017
(in thousands except %s, rounding differences may exist)	FY 12/31			1Q			2Q			3Q			4Q			FY 12/31			1Q
	pro forma			as reported			as reported			as reported			as reported			as reported			as reported
Segment revenue	$	319,739		$	77,291		$	76,117		$	80,088		$	83,050		$	316,546		$	82,667
Segment net revenue (1)	$	99,749		$	25,022		$	25,094		$	25,167		$	27,267		$	102,550		$	26,793
Segment income (2)	$	42,997		$	10,906		$	9,924		$	11,628		$	13,838		$	46,296		$	11,853
Segment income % of revenue	13		%	14		%	13		%	15		%	17		%	15		%	14		%
Segment income % of net revenue	43		%	44		%	40		%	46		%	51		%	45		%	44		%

(in thousands except %s, rounding differences may exist)			2015			2016															2017
	Sources of Revenue	Primary Drivers	FY 12/31			1Q			2Q			3Q			4Q			FY 12/31			1Q
			pro forma			as reported			as reported			as reported			as reported			as reported			as reported
Advisor-driven	Commission	- Transactions - Asset levels	$	156,943		$	36,856		$	35,252		$	38,962		$	39,055		$	150,125		$	39,595
	Advisory	- Advisory asset levels	129,433			31,532			31,522			32,705			33,658			129,417			33,576
Other revenue	Asset-based	- Cash balances - Interest rates - Number of accounts - Client asset levels	18,871			5,818			5,395			5,476			5,964			22,653			5,966
	Transaction and fee	- Account activity - Number of clients - Number of advisors - Number of accounts	14,492			3,085			3,948			2,945			4,373			14,351			3,530
	Total revenue		$	319,739		$	77,291		$	76,117		$	80,088		$	83,050		$	316,546		$	82,667
	Total recurring revenue (3)		$	247,993		$	60,069		$	61,160		$	62,543		$	65,538		$	249,310		$	63,907
	Recurring revenue rate (3)		77.6		%	77.7		%	80.3		%	78.1		%	78.9		%	78.8		%	77.3		%

(in thousands except %s and as otherwise indicated, rounding differences may exist)	2015			2016															2017
	FY 12/31			1Q			2Q			3Q			4Q			FY 12/31			1Q
	pro forma			as reported			as reported			as reported			as reported			as reported			as reported
Total Assets Under Administration (“AUA”)	$	36,573,766		$	36,505,384		$	37,233,522		$	38,482,620		$	38,663,595		$	38,663,595		$	40,424,515
Advisory Assets Under Management (“AUM”)	$	9,692,244		$	9,592,025		$	9,814,232		$	10,204,448		$	10,397,071		$	10,397,071		$	11,090,767
% of total AUA	26.5		%	26.3		%	26.4		%	26.5		%	26.9		%	26.9		%	27.4		%
Number of advisors (in ones)	4,600			4,584			4,561			4,568			4,472			4,472			4,427

⁽¹⁾  Amount represents segment revenue less advisor commission payout.

⁽²⁾  Excludes expenses associated with non-recurring projects.

⁽³⁾  Recurring revenue consists of trailing commissions, advisory fees, fees from cash sweep programs, and certain transaction and fee revenue.

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Blucora Operating Metrics - Tax Preparation

(in thousands except %s, rounding differences may exist)	U.S. tax seasons ended				Three months ended March 31,
Consumers	April 18, 2017	April 19, 2016	% change		2017	2016	% change
Online e-files	3,958	4,613	(14	)%	2,876	3,466	(17	)%
Desktop e-files	184	234	(21	)%	122	156	(22	)%
Sub-total e-files	4,142	4,847	(15	)%	2,998	3,622	(17	)%
Free File Alliance e-files (1)	164	158	4	%	115	114	1	%
Total e-files	4,306	5,005	(14	)%	3,113	3,736	(17	)%

(in thousands except %s and as otherwise indicated, rounding differences may exist)	U.S. tax seasons ended				Three months ended March 31,
Preparers	April 18, 2017	April 19, 2016	% change		2017	2016	% change
E-files	1,717	1,630	5	%	1,302	1,269	3	%
Units sold (in ones)	20,964	20,114	4	%	20,327	19,794	3	%
E-files per unit sold (in ones)	81.9	81.0	1	%	64.0	64.1	—	%

⁽¹⁾  Free File Alliance e-files are provided as part of an IRS partnership that provides free electronic tax filing services to taxpayers meeting certain income-based guidelines.

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