Avantax, Inc. · GETTEX:3EV
Avantax — Blucora — Investor Day (June 2021)
113 slides from Avantax's investor day presentation, Jun 15, 2021
Slide 1: Investor Day Presentation June 15, 2021
Investor Day Presentation June 15, 2021 Exhibit 99.2
Slide 2: A Repositioned Company: Executing a Clear Strategy to Deliver Sustained Growth
A Repositioned Company: Executing a Clear Strategy to Deliver Sustained Growth Chris Walters President & CEO
Slide 3: Forward-Looking Statements and Non-GAAP Financial Measures
Forward-Looking Statements and Non-GAAP Financial Measures Forward-Looking Statements This presentation 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. These forward-looking statements general
Slide 4: Addressing Key Investor Questions
Addressing Key Investor Questions How will we drive sustainable organic growth in each business? When will meaningful synergies be realized between the two businesses? What are most attractive capital allocation opportunities for the business? What is the timeline for delivering these plans?
Slide 5: Blucora – Repositioned to Deliver Sustainable Growth
Blucora – Repositioned to Deliver Sustainable Growth Solid progress repositioning Blucora Building on two strong businesses Executing clear, sustainable growth strategy Delivering strong results
Slide 6: Blucora – Repositioned to Deliver Sustainable Growth
Blucora – Repositioned to Deliver Sustainable Growth Solid progress repositioning Blucora Building on two strong businesses Executing clear, sustainable growth strategy Delivering strong results
Slide 7: A Leading Provider of Tax-Focused Financial Solutions
A Leading Provider of Tax-Focused Financial Solutions Revenue (2020) $755mm up 5% vs. 2019 Employees ~9001 Market Cap. ~$825mm1 Balance Sheet Strong Two Synergistic Businesses Dallas, Texas Wealth Management ~60% of 2020 Operating Income2* Tax Software ~40% of 2020 Operating Income2* Headquarters 1
Slide 8: Building on a Solid Performance Record Despite COVID-19 Headwinds
Building on a Solid Performance Record Despite COVID-19 Headwinds ~$8651 $1.601 $456 $1.06 Revenue ($mm) Non-GAAP Net Income Per Share* 16% CAGR Pre-COVID 26% CAGR Pre-COVID 1 Reflects midpoint of 2021E guidance issued June 15, 2021. See slide 89 for estimated range of guidance. * Non-GAAP measure.
Slide 9: Our Repositioning is Well Underway
Our Repositioning is Well Underway Built scale in two segments – tax-focused software and wealth management Divested unrelated businesses New leadership team Refined sustainable growth strategy Managed through pandemic Executing new strategy with both organic and inorganic growth Build Platform Repo
Slide 10: Summary of Key Repositioning Actions in 2020 / 2021
Summary of Key Repositioning Actions in 2020 / 2021 1 Gross figure for Financial Professionals. 2 As a percent of revenue, reflects comparison of 2020 vs. midpoint of 2021E guidance. 3 Change in internal Employee Engagement Surveys taken in 2020 and 2021 Repositioning for Long-Term Success Elevated
Slide 11: Our Leadership: Updates Since 2020
Our Leadership: 8 Updates Since 2020 Jody Diaz Chief Human Resources Officer Raj Doshi Chief Growth and Marketing Officer Ann Bruder Chief Legal & Administration Officer Curtis Campbell President of TaxAct and Software Chris Walters* President & Chief Executive Officer Erin Gajdalo SVP of Operationa
Slide 12: Transforming Our Culture to Maximize Potential
Transforming Our Culture to Maximize Potential Glassdoor Rating Culture Alignment* “The people here at Blucora are supportive, collaborative and caring. I have been very impressed with the interactions I've had with all levels across the organization. Leadership is solidifying and stable. Communicat
Slide 13: Blucora – Repositioned to Deliver Sustainable Growth
Blucora – Repositioned to Deliver Sustainable Growth Solid progress repositioning Blucora Building on two strong businesses Executing clear, sustainable growth strategy Delivering strong results
Slide 14: Blucora is Building on Two Strong, Differentiated Businesses
Tax focus at our core Positioned in large growing markets Strong competitive advantages 1 2 3 Blucora is Building on Two Strong, Differentiated Businesses Wealth Strong position in both segments Tax Building on two strong businesses
Slide 15: The Blucora Difference: Tax Focus at Our Core
The Blucora Difference: Tax Focus at Our Core Most approaches do not deliver effective, holistic, long-term tax optimization strategies Holistic approach with taxes at the core Focus on maximizing once-a- year refund Tax Software Industry Focus on investment returns; largely ignores taxes Wealth Man
Slide 16: Why a Strong Tax Focus Makes a Difference
Americans spend more on taxes than mortgages, groceries, and vehicles2 Mortgage – refinance opportunity? Retirement contributions – adequate? Student loan interest – consolidation? Why a Strong Tax Focus Makes a Difference 80% of people view tax professionals as most trusted financial advisor1 Tax p
Slide 17: Positioned in Large Growing Markets with Positive Secular Trends
Positioned in Large Growing Markets with Positive Secular Trends DIY Tax Market1 Tax Professional Market2 ~3-4% Annual Unit Growth Total Market: ~$4bn ~5% software share 1 Sourced per IRS data / internal TaxAct data. 2 Sourced per Blucora surveys and internal estimates. Total Tax Professionals: ~300
Slide 18: Strong Competitive Advantages in Both Segments
Strong Competitive Advantages in Both Segments Tax Software Value Features Best Guarantee Brand Great experience at up to 20%-50%* discount vs. market leader Simpler and easier to use compared to competitors Offer highest customer guarantee of $100K for maximum refund Respected value-oriented brand
Slide 19: Strong ESG Profile
Strong ESG Profile Launched paperless workplace initiative Environmental Social Governance Millions of tax returns filed electronically, eliminating paper waste New LEED certified corporate headquarters Donated 500K meals to COVID-19 relief 41% of roles in workforce are held by women 63% of Leadersh
Slide 20: Blucora – Repositioned to Deliver Sustainable Growth
Blucora – Repositioned to Deliver Sustainable Growth Solid progress repositioning Blucora Building on two strong businesses Executing clear, sustainable growth strategy Delivering strong results
Slide 21: Our Focused Strategy to Drive Sustainable Growth
Our Focused Strategy to Drive Sustainable Growth Propel conversion and retention through focus on customer experience Execute on Synergies Drive Net New Asset growth Enhance customer satisfaction with tech / tools Maximize operating leverage by reducing costs as a % of revenue Drive Customer Acquisi
Slide 22: Building The New Blucora Culture
Building The New Blucora Culture Market appreciation, acquisitions Cross-segment synergies Ideas with limited resources allocated Inconsistent across divisions; lack of focus Tax Software growth focus Unsustainable growth driven by price Wealth Management growth drivers Past Future Realize value of
Slide 23: We Are Executing on Blucora-Wide Synergies Today
We Are Executing on Blucora-Wide Synergies Today 2024 Goals 2021E Revenue Acceleration Technology Expertise Cost Effective Shared Services1 3.2%2 <3.0% Efforts launched Learnings underway Executing refinements Tax smart applications Account opening Client portal Continued technology enhancements 1 R
Slide 24: How We Will Measure Success: Our Growth Goals
Blucora has ~25K TaxAct Professionals and ~3,700 Avantax financial professionals Target TaxAct customer base and utilize tax data to make wealth management recommendations Develop tools to improve advisor productivity allowing more time for wealth management How We Will Measure Success in the Next 3
Slide 25: Blucora – Repositioned to Deliver Sustainable Growth
Blucora – Repositioned to Deliver Sustainable Growth Solid progress repositioning Blucora Building on two strong businesses Executing clear, sustainable growth strategy Delivering strong results
Slide 26: How We Will Measure Success: Our Growth Targets
How We Will Measure Success In The Next 3 Years: Our Growth Targets >20% >10% >75% 7 – 9% Organic Revenue Growth Adj. EBITDA Growth* CFO to FCF Conversion* Non-GAAP EPS Growth* Pre-Tax Non-GAAP EPS Growth* *Non-GAAP measure. See the appendix for a description of Non-GAAP measures in this presentatio
Slide 27: In Summary: Repositioned to Deliver Sustainable Growth
Solid Progress Repositioning Blucora Building on two strong businesses Executing clear, sustainable strategy for growth Transformed leadership team, changing culture, and stabilized both franchises amidst COVID-19 Sharp focus on tax-centric financial services with distinctive positioning within tax
Slide 28: Driving Growth by Delighting Our Customers
Driving Growth by Delighting Our Customers Curtis Campbell President of TaxAct and Software
Slide 29: Tax Software at a Glance
Tax Software at a Glance Tax Software Best fully featured value offering for consumers and professionals Delivering a premium experience at a reasonable price point Consumer Professional Revenue Breakdown 2.2mm Professional e-Files1 56 NPS Metric ~24,500 Tax Pro Customers (FYE 2021E) FY Revenue Esti
Slide 30: TaxAct – Repositioned to Deliver Sustainable Growth
TaxAct – Repositioned to Deliver Sustainable Growth Solid progress repositioning Tax Software Building on a strong platform Executing clear, sustainable growth strategy Delivering strong results
Slide 31: Our New Team Has Moved Decisively …
Our New Team Has Moved Decisively … VP PMO VP HR VP Business Development VP Marketing VP Product VP Finance VP Engineering President of TaxAct and Software VP Operations VP Customer Care General Manager Pro Tax Recently Promoted New Talent VP Legal Head of Design Existing Talent Solid progress repos
Slide 32: … Delivering Strong Outcomes Amidst a Challenging Season
… Delivering Strong Outcomes Amidst a Challenging Season Strong Business Results Improved Start Rate Improved Conversion Rate Improved Paid Customer Retention Increased Revenue Guidance Increased Segment Income Guidance Gaining Share within Tax Pro Market Expanded Partnerships Hired skilled partners
Slide 33: Tax Year 2020 Key Metrics Summary
Continued Increases in Engagement/ CSAT Marketing Spend Improved Marketing Efficiency Focused marketing spend on target segments with higher likelihood to convert Higher start rate driven by better quality traffic and optimized/personalized user journeys Tax Year 2020 Key Metrics Summary Season Resu
Slide 34: 2021 Continues TaxAct’s Track Record of Top-Line Growth
2021 Continues TaxAct’s Track Record of Top-Line Growth TaxAct Revenue1 ($mm) Segment Operating Income ($mm) ’16-21 Projected CAGR: Total: ~10% Pre COVID: 13% CAGR 2 2 Source: U.S. Census, IRS Data, TaxPro Survey (N=512), and Company filings. Data as of March 8, 2021. 1 Excludes SimpleTax. Non-GAAP
Slide 35: TaxAct – Repositioned to Deliver Sustainable Growth
TaxAct – Repositioned to Deliver Sustainable Growth Solid progress repositioning Tax Software Building on a strong platform Executing clear, sustainable growth strategy Delivering strong results
Slide 36: DIY Tax Software is a ~$4B Top-Line Market
DIY Tax Software is a ~$4B Top-Line Market With Consistent Growth Continued Secular Shift To Digital Steady Market Growth % of filings by DIY Software2 DIY Tax Software Market1 4% CAGR DIY Tax Returns Filed Electronically2 1 Sourced from IRS / internal TaxAct data. 2 Sourced from IRS – cumulative st
Slide 37: TaxAct Is Positioned to Deliver for Consumer and Tax Pros
TaxAct Is Positioned to Deliver for Consumer and Tax Pros 23 years of deep tax expertise Taxes create fear, uncertainty and doubt Customer Pain Points The TaxAct Solution A full-featured value offering Tax preparation is a significant annual expense Delivering simple and delightful experiences Taxes
Slide 38: Meet Our Customers Video
Meet Our Customers Video Building on a strong platform
Slide 39: TaxAct Delivers a Full Featured Value Offering
TaxAct Delivers a Full Featured Value Offering … Tax Professionals Simplicity and ease of use focused on needs of solo and small tax office Q&A and Forms Entry Roll Over Unused e-Files Hybrid Deployment Options Consumers TaxAct – great experience and price, up to 50%* off vs. market leader Value Lea
Slide 40: … Including a Return to Value Positioning
… Including a Return to Value Positioning … Deluxe Premier Self-employed Medium complexity (e.g., Homeowners, childcare expenses) High complexity (e.g., Investments, sale of rental property) More tax law requirements vs. other products 25-38% 22-50% 28-33% Source: IRS data / internal TaxAct data. No
Slide 41: … To Bend our Market Share Back to Growth
… To Bend our Market Share Back to Growth Execution is leading to improved market share performance with an expectation of shifting to stable to growing share by 2024 1 Source: IRS / internal TaxAct data. Building on a strong platform
Slide 42: TaxAct – Repositioned to Deliver Sustainable Growth
TaxAct – Repositioned to Deliver Sustainable Growth Solid progress repositioning Tax Software Building on a strong platform Executing clear, sustainable growth strategy Delivering strong results
Slide 43: Our Plan for Future Growth
Maximize Customer Retention and Value Drive Customer Acquisition Executing on Synergies Our Plan for Future Growth Shared services Start Rate, Conversion and Value-added Add-ons Increase efficiency of marketing and expand partnerships 1 2 3 1 1 3 Executing clear, sustainable growth strategy
Slide 44: Enhancing Marketing to Drive Customer Acquisition
Enhancing Marketing to Drive Customer Acquisition Brand Awareness First Party Data Collection Personalized Customer Experiences Marketing Automation Build brand awareness through upper funnel media presence Prioritize first party data collection to expand one-to-one reach Improve start rate through
Slide 45: Investing to Improve the Client Experience
“Help me spend less doing my taxes” What We Heard From Our Customers Improved Product Experiences Data Import Quick Start Life Events Guide “Help make the complex simple as I am no tax expert” ProTips Deduction Maximizer Tax Expert Help “Give me confidence that I can get the best outcome” TaxAct My
Slide 46: W-2 Import Eliminates The Hard Work
W-2 Import Eliminates The Hard Work Our Easy Import Feature Our Simple Quick Start Experience Making Getting Started Even Easier for Filers … Import data directly from the W-2 payroll provider Reduces data entry by 30% Easy import of data from a previous return or a return from a competitor Reduces
Slide 47: Building Confidence Through Each Step of the Return Process
… Building Confidence Through Each Step of the Return Process Pro Tips – Helping Find Hidden Money Get Xpert Help in Moments of Doubt Deduction Maximizer Checks for Savings Opportunities We double check hundreds of details to make sure you get every dollar you deserve so you can file with confidence
Slide 48: Improving Retention, Particularly Among Y2 Filers
Improving Retention, Particularly Among Y2 Filers Year-round Engagement Personalized Communications Compelling Messaging/Offers Dedicated User Flows Engage users in the off-season with relevant and personalized tax information/guidance Tailor re-engagement campaigns to specific user characteristics
Slide 49: Continued Progress in our TaxAct Pro Business
Continued Progress in our TaxAct Pro Business TaxAct Pro Revenue ($mm) ’16-21 CAGR: FastTrack Onboarding Program TaxAct Pro New Features PreAck Easy Advance Client Manager Redesign Increased Forms Coverage and E-File Capabilities Redesign Web and Shopping Experience E Total: ~7% Executing clear, sus
Slide 50: We Are Executing on Blucora-Wide Synergies Today
We Are Executing on Blucora-Wide Synergies Today Executing clear, sustainable growth strategy 2024 Goals 2021E Revenue Acceleration Technology Expertise Cost Effective Shared Services1 3.2%2 <3.0% Efforts launched Learnings underway Executing refinements Tax smart applications Account opening Client
Slide 51: TaxAct – Repositioned to Deliver Sustainable Growth
TaxAct – Repositioned to Deliver Sustainable Growth Solid progress repositioning Tax Software Building on a strong platform Executing clear, sustainable growth strategy Delivering strong results
Slide 52: Multiple Drivers of Revenue Growth
Multiple Drivers of Revenue Growth Maximize Customer Retention & Value Accelerate Growth & Margin via Synergies/ Initiatives Shift to online tax filing Improved marketing and expand partnerships Improving value proposition Continued improvement of start, complete and retention rates Xpert Help / DIF
Slide 53: Solid Progress Repositioning Tax: In Summary
Solid Progress Repositioning Tax Building on a Strong Platform Executing Clear, Sustainable Strategy For Growth New team, stabilizing market share, strong 2020 season Growth market, distinctive value positioning Increasing marketing efficiency, ease of use and retention, capitalizing on synergies Dr
Slide 54: Profitably Scaling Tax-Focused Advice
Profitably Scaling Tax-Focused Advice Todd Mackay President, Wealth Management
Slide 55: Wealth Management at a Glance
Wealth Management at a Glance Wealth Management $85bn Total Client Assets ~3,700 Financial Professionals $556mm* Segment Revenue ~430,000 End Clients1 Recurring Revenue $476M or 86% Commission $187mm Advisory $327mm Asset-based $18mm Transaction/Fee $23mm (12 months ended Q1 2021) Revenue Breakdown
Slide 56: Avantax – Repositioned to Deliver Sustainable Growth
Avantax – Repositioned to Deliver Sustainable Growth Solid progress improving Wealth Management Building on a strong franchise Executing clear, sustainable growth strategy Delivering strong results
Slide 57: We Have Put a New Leadership Team in Place
We Have Put a New Leadership Team in Place VP, General Counsel VP, Finance VP, Software Development VP, Marketing VP, Human Resources VP, Wealth Management Growth VP, Wealth Management Investment Solutions Chief of Staff VP, Enterprise Relationships & Business Consulting President, Wealth Management
Slide 58: Growing Assets Despite Tail-end of Predictable Attrition From Acquisitions
Growing Assets Despite Tail-end of Predictable Attrition From Acquisitions Total Advisory and Brokerage Assets ($bn, at period end) 2018 2019 2020 2021 Solid progress improving Wealth Management
Slide 59: 2021 Continues Avantax’s Track Record of Top-Line Growth
2021 Continues Avantax’s Track Record of Top-Line Growth Avantax Revenue1 ($mm) Segment Operating Income ($mm) 2021 - $205.0M 2021 - $84M ’16-’21E CAGR: Total: ~15% Pre COVID: 14% CAGR 1 Source: Company filings. 1 Reflects midpoint of 2021E guidance, issued June 15, 2021. See slide 89 for estimated
Slide 60: Continued Strong Financial Results
Long-Term Asset Growth Continued Strong Financial Results Shift To More Durable Advisory Platforms Improving Returns as We Scale and Shift Toward Plan-Based Advice +100% +13pp Total Client Assets ($bn) Advisory Assets as a % of Total Client Assets Segment Operating Income ($mm) ~100bps ROA1 on advis
Slide 61: Avantax – Repositioned to Deliver Sustainable Growth
Avantax – Repositioned to Deliver Sustainable Growth Solid progress improving Wealth Management Building on a strong franchise Executing clear, sustainable growth strategy Delivering strong results
Slide 62: We Benefit From Powerful Secular Tailwinds
We Benefit From Powerful Secular Tailwinds $15.2 $21.3 IBD RIA Other1 5% 10% 3% CAGR ’13-’20 5% CAGR Strong Industry Asset Growth in Independent Channels Industry Shifting to Advisory (US $tn) +9pp (Industry Advisory Fees as % of Revenue) Source: Cerulli. 1 Defined as Wirehouse, National/Regional BD
Slide 63: We are a Leader in the Tax-Smart Wealth Advice Market
We are a Leader in the Tax-Smart Wealth Advice Market We Have Significant Upside in the Tax Professional Space1 … … And Have Significant Opportunity to Serve More US Households2 Our share of Tax Professional Market Source: IRS and Cerulli. 1 Sourced per Blucora surveys and internal estimates. 2 Sour
Slide 64: Many Financial Professionals Fail to Deliver Tax-Smart Wealth Advice
Many Financial Professionals Fail to Deliver Tax-Smart Wealth Advice We Help Address an Unfilled Client Need Tax-Centric Advisors are Uniquely Positioned Other financial professionals provide insufficient advice on tax planning Avantax financial professionals fill that gap with both tax and wealth k
Slide 65: Wealth Advice is a Natural Capability Extension for Tax Professionals
Wealth Advice is a Natural Capability Extension for Tax Professionals … Clients Look to Tax Pros for Wealth Advice Effectiveness of wealth advisor lead generation ~80% Financial Professional Survey Wealth Advice Enhances Tax Pros’ Franchises Tangible benefits Ability to offer holistic financial advi
Slide 66: Avantax is the Wealth Partner of Choice for Tax Professionals
Scale and Network Can my wealth management affiliation model align with my commitment to my tax practice? … And Avantax is the Wealth Partner of Choice for Tax Professionals Service Excellence Will my wealth partner make the business turnkey for me? Does my partner have the resources to meet my need
Slide 67: Our Flexible Affiliation Models are a Unique Strategic Advantage
Our Flexible Affiliation Models are a Unique Strategic Advantage CPAs Choose Because … Fastest speed to service offering Turnkey – least ongoing work required Avantax responsible for all wealth services ROAs1 27bps Affiliation Model RIA Branding Avantax Planning Partners Avantax Planning Partners Ta
Slide 68: Our Wealth Advisors and CPA Affiliates Are Our Best Brand Ambassadors
Our Wealth Advisors and CPA Affiliates Are Our Best Brand Ambassadors Video Building on a strong franchise
Slide 69: Avantax – Repositioned to Deliver Sustainable Growth
Avantax – Repositioned to Deliver Sustainable Growth Solid progress improving Wealth Management Building on a strong franchise Executing clear, sustainable growth strategy Delivering strong results
Slide 70: Recent Initiatives Will Continue Strengthening the Business
Recent Initiatives Will Continue Strengthening the Business Greater mix of fee-based assets Increased satisfaction Reduced processing times Expanded relationship management teams Additional Service and Operations employees Growth in the Retirement Planning Services team Investment in Teams Home offi
Slide 71: We Have Acted Decisively to Improve the Advisor Experience
We Have Acted Decisively to Improve the Advisor Experience Tangible Improvements in Operations … … Driving Meaningfully Improved Advisor Satisfaction (-70%) +25pp Average Speed to Answer1 Overall Satisfaction with Avantax2 +27pp New leadership team has made significant investments in middle- and bac
Slide 72: We Are Executing a Focused Plan to Unlock Incremental Upside
We Are Executing a Focused Plan to Unlock Incremental Upside Realize Cross-Business Synergies Strategies to deliver on benefits of common ownership with TaxAct Rigorously tracking performance across each initiative Scale Retirement Planning Solutions Simple, SME-focused turnkey 401(k) solution Expan
Slide 73: Our Tax-Smart Investing Platform Drives Results
Our Tax-Smart Investing Platform Drives Results for Advisors and Clients Our Tax Professional advisors are time constrained, and benefit significantly from our automated platform. Strong adoption of new platform tools, with additional features coming throughout 2021 Executing Plan to Deliver End-to-
Slide 74: Taking Action to Accelerate RPS Growth
+91% Number of Pipeline Deals Taking Action to Accelerate RPS Growth Growth Initiative Status Reinvigorated sales organization Implemented rigorous, data-driven client targeting process Rollout to 3,700 independent affiliates at AWM Complete Rollout in process; strong results from early participants
Slide 75: We Are Executing on Blucora-Wide Synergies Today
We Are Executing on Blucora-Wide Synergies Today Executing clear, sustainable growth strategy 2024 Goals 2021E Revenue Acceleration Technology Expertise Cost Effective Shared Services1 3.2%2 ~$2bn Net New Assets <3.0% Efforts launched Learnings underway Executing refinements Tax smart applications A
Slide 76: Avantax – Repositioned to Deliver Sustainable Growth
Avantax – Repositioned to Deliver Sustainable Growth Solid progress improving Wealth Management Building on a strong franchise Executing clear, sustainable growth strategy Delivering strong results
Slide 77: Organic Initiatives Lead to Meaningful Growth
Organic Initiatives Lead to Meaningful Growth Maximize Client Retention & Value Accelerate Growth & Margin via Synergies/ Initiatives Enhanced recruiting Improved marketing RPS Initiative Improved Financial Professional Experience Increased production Mix Shift to Advisory Synergy Opportunities Expa
Slide 78: Multiple Potential Drivers of Upside to Forecast
Multiple Potential Drivers of Upside to Forecast Equity Market Interest Rates 4% annual increase in S&P 500 No increase in Fed Funds Rate RIA Acquisitions $15-25mm allocated annually Guidance Assumption Impact of Upside Flex (Annual $mm of Segment Operating Income) +/- $2mm +$40mm to $55mm1 +$35mm t
Slide 79: Profitably Scaling Tax-Focused Advice: In Summary
New leadership team, improved advisor satisfaction / retention shift to advisory Powerful secure tailwinds, leader in large, fragmented market Innovate investment solutions, scale retirement solutions, realize synergies Profitably Scaling Tax-Focused Advice Strong Progress Improving Wealth Managemen
Slide 80: Creating Value Through Disciplined Execution and Capital Allocation
Creating Value Through Disciplined Execution and Capital Allocation Marc Mehlman Chief Financial Officer
Slide 81: Blucora – Repositioned to Deliver Sustainable Growth
Blucora – Repositioned to Deliver Sustainable Growth Solid progress repositioning Blucora Building on two strong businesses Executing clear, sustainable growth strategy Delivering strong results
Slide 82: On Right Path to Maximizing Value for Our Stockholders
On Right Path to Maximizing Value for Our Stockholders Solid Performance Track Record Strong Financial Outlook Disciplined Capital Allocation Delivering strong results
Slide 83: Building on a Solid Performance Record Despite COVID-19 Headwinds
Building on a Solid Performance Record Despite COVID-19 Headwinds ~$8651 $1.601 $456 $1.06 Revenue ($mm) Non-GAAP Net Income Per Share* 16% CAGR Pre-COVID 26% CAGR Pre-COVID 1 Reflects midpoint of 2021E guidance, issued June 15, 2021. See slide 89 for estimated range of guidance. * Non-GAAP measure.
Slide 84: Blucora Has Carefully Managed Expenses to Expand Margins
Blucora Has Carefully Managed Expenses to Expand Margins < 3.4% % of Gross Revenue +80-100bps +370bps2 Adjusted EBITDA Margin Ex-Sweep* 1 Reflects unallocated corporate-level general & administrative expenses. 2 Based on mid-point 2021E Adjusted EBITDA guidance issued June 15, 2021. See slide 89 for
Slide 85: Stable Business Model Producing Strong Free Cash Flow
Stable Business Model Producing Strong Free Cash Flow 84% Average CFO to FCF Conversion Last 5 Years3* $338mm Operating FCF Last 5 Years* 1 Paid federal retention rate. 2 Reflects trailing twelve months ended March 31, 2021. 3 Average of 93% for the years 2016-2019. * Non-GAAP measure. See the appen
Slide 86: Track Record of Balanced and Disciplined Capital Deployment
$68mm Product/UX Enhancements InfoSec & Tech Protection Relationship Management & Recruiting Clearing Platform Conversion $320mm1 Tax-focused IBD Scale RIA Platform & Practices IP & Capabilities $108mm Share repurchases 3% of 2019 OS 27% non-GAAP payout ratio 20192* Discretionary debt repayment 2018
Slide 87: Track Record of High-Impact, High-Return Strategic Capital Allocation
Track Record of High-Impact, High-Return Strategic Capital Allocation 2019 2020 2021 Acquisitions Strategic Focus Reinforce leadership as #1 tax-focused wealth advisor Increase economies of scale Expand wealth channel Enter Retirement Planning Services market Position for faster growth Improved marg
Slide 88: On Right Path to Maximizing Value for Our Stockholders
On Right Path to Maximizing Value for Our Stockholders Solid Performance Track Record Strong Financial Outlook Disciplined Capital Allocation Delivering strong results
Slide 89: Revising 2021 Outlook in Light of YTD Performance
Revising 2021 Outlook in Light of YTD Performance * Non-GAAP measure. See the appendix for a description of Non-GAAP measures in this presentation and reconciliations of non-GAAP to GAAP measures (as applicable). Wealth Management Revenue Growth Segment Operating Income Non-GAAP EPS Unallocated Corp
Slide 90: Poised to Deliver Sustainable Growth in the Next Years
Poised to Deliver Sustainable Growth in the Next 3 Years *Non-GAAP measure. See the appendix for a description of Non-GAAP measures in this presentation, including a note concerning the inability to reconcile forward-looking 2024 non-GAAP financial metrics to the nearest applicable GAAP metrics. Rev
Slide 91: How We Will Measure Success: Our Growth Goals
How We Will Measure Success in the Next 3 Years: Our Growth Goals >20% >10% >75% 7 – 9% Organic Revenue Growth Adj. EBITDA Growth* CFO to FCF Conversion* Non-GAAP EPS Growth* Pre-Tax Non-GAAP EPS Growth* 10 – 14% Strong financial outlook Increase in Monetized TaxAct Units & ARPU Continued Shift to A
Slide 92: Multiple Potential Drivers of Upside to Forecast
Multiple Potential Drivers of Upside to Forecast Equity Market Interest Rates 4% annual increase in S&P 500 No increase in Fed Funds Rate RIA Acquisitions $15-25mm allocated annually Guidance Assumption Impact of Upside Flex (Annual $mm of Segment Operating Income) +/- $2mm +$40mm to $55mm1 +$35mm t
Slide 93: On Right Path to Maximizing Value for Our Stockholders
On Right Path to Maximizing Value for Our Stockholders Solid Performance Track Record Strong Financial Outlook Disciplined Capital Allocation
Slide 94: Disciplined Capital Allocation Priorities
Unlocking upside across the business Technology, marketing, and service enhancement to create sustainable growth Invest to Fuel Business Growth Ample capital to support growth On track to deleverage Disciplined capital allocation approach Significant opportunities within our ecosystem Capital Alloca
Slide 95: Strong Balance Sheet with Capacity to Invest
Strong Balance Sheet with Capacity to Invest Capacity to Invest for Future Growth Balance Sheet Cash Revolver Capacity Revolver Access Covenant-lite Flexible Debt Net Leverage Ratio* Target Net Leverage Ratio* Incremental M&A Debt Capacity $350-450mm4 2.0-3.0x $192mm1 $90mm2 ü ü 3.5x3 1 Excludes cas
Slide 96: The Path to Target Leverage
Net Leverage Ratio* The Path to Target Leverage Committed to Deleveraging Committed to maintaining target net leverage range of 2.0x to 3.0x 2021 Segment Income Improvement Strong Business Generated Cash Flow Ample Balance Sheet Cash Position Optional Discretionary Debt Pay Down * Non-GAAP measure.
Slide 97: We Are Investing in the Business to Fuel Organic Growth
We Are Investing in the Business to Fuel Organic Growth Investment Areas Impact Tax Software Segment Growth Focus Product Experience Marketing Capabilities Partnerships Monetized Filers & Retention Lower Cost Per Complete Wealth Management Segment Growth Investment Solutions Service Excellence Marke
Slide 98: We Will Continue to Invest in Acquisitions That Meet Our Criteria
Attractive returns over short-to-medium term Valuation based on reasonable multiples IRR > WACC Quickly accretive Aligns with strategic growth priorities Build scale & enhance products Reinforces Roadmap Limited distraction to core business Manageable amount of execution risk We Will Continue to Inv
Slide 99: Blucora Opportunity to Move Wealth Assets to RIA
Blucora Opportunity to Move Wealth Assets to RIA ~$6bn additional assets with opportunity for expanded production through regional hub model ~$20bn assets of FPs over age 60 with potential interest in RIA succession plan ~$80bn AUA – All FPs1 ~$35-$50mm+ Potential Additional Wealth Management Segmen
Slide 100: Repositioned to Deliver Sustainable Growth: In Summary
Repositioned to Deliver Sustainable Growth Solid Progress Repositioning Blucora Building on two strong businesses Executing clear, sustainable strategy for growth Transformed leadership team, changing culture, and stabilized both franchises amidst COVID-19 Sharp focus on tax-centric financial servic
Slide 101: Appendix
Appendix
Slide 102: Note Concerning Forward-Looking 2024 Non-GAAP Financial Metrics
Note Concerning Forward-Looking 2024 Non-GAAP Financial Metrics Within this presentation, we have provided certain forward-looking growth metrics that are based on certain forward-looking non-GAAP metrics for the year ending December 31, 2024. See the “Notes to Reconciliations of Non-GAAP Financial
Slide 103: Reconciliation of Adjusted EBITDA
Blucora Reconciliation of Adjusted EBITDA (1), Adjusted EBITDA and Total Revenue (Excluding Sweep Revenue) (4)(5), and Adjusted EBITDA Margin (Excluding Sweep Revenue) (6)
Slide 104: Reconciliation of Adjusted EBITDA for Forward-Looking Guidance
Blucora Reconciliation of Adjusted EBITDA (1), Adjusted EBITDA and Total Revenue (Excluding Sweep Revenue) (4)(5), and Adjusted EBITDA Margin (Excluding Sweep Revenue) (6) for Forward-Looking Guidance
Slide 105: Reconciliation of Non-GAAP Net Income and Per Share
Blucora Reconciliation of Non-GAAP Net Income (1), Non-GAAP Net Income Per Share (1), Non-GAAP Net Income Before Taxes (7), Non-GAAP Net Income Per Share Before Taxes (7), and Non-GAAP Payout Ratio (9)
Slide 106: Reconciliation of Non-GAAP Net Income for Forward-Looking Guidance
Blucora Reconciliation of Non-GAAP Net Income and Non-GAAP Net Income Per Share for Forward-Looking Guidance (1)
Slide 107: Reconciliation of Net Leverage Ratio and Net Debt
Blucora Reconciliation of Net Leverage Ratio (12) and Net Debt (13) * Reflects midpoint of 2021E guidance.
Slide 108: Reconciliation of Operating Free Cash Flow and CFO to FCF Conversion Ratio
Blucora Reconciliation of Operating Free Cash Flow (15) and CFO to FCF Conversion Ratio (16)
Slide 109: Reconciliation of Tax Software Revenue, Excluding SimpleTax
Blucora Reconciliation of Tax Software Revenue, Excluding SimpleTax (18)
Slide 110: Reconciliation of Operating Income, Excluding Corporate-Level Activity
Blucora Reconciliation of Operating Income, Excluding Corporate-Level Activity (17)
Slide 111: Definitions of Non-GAAP Measures: Adjusted EBITDA
We define Adjusted EBITDA as net income (loss), determined in accordance with GAAP, excluding the effects of stock-based compensation, depreciation and amortization of acquired intangible assets, other loss, net, acquisition and integration costs, executive transition costs, headquarters relocation
Slide 112: Definitions of Non-GAAP Measures (continued)
Total revenue, excluding sweep revenue, is a non-GAAP measure that represents total revenue (as presented in our consolidated statements of operations) less sweep revenue. See information in footnote 4 on why excluding sweep revenue from total revenue is meaningful. Adjusted EBITDA margin is a non-G
Slide 113: faa)
x ad O =) _ faa)