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Blucora Announces Second Quarter 2021 Results

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DALLAS, Aug. 04, 2021 (GLOBE NEWSWIRE) -- Blucora, Inc. (NASDAQ: BCOR), a leading provider of technology-enabled, tax focused financial solutions, today announced financial results for the second quarter ended June 30, 2021.

Second Quarter Highlights and Recent Developments

  • Total revenue increased to $254.3 million, or a 58% increase versus Q2 2020

  • GAAP Net Income of $31.6 million, or $0.64 per diluted share

  • Non-GAAP Net Income of $63.1 million, or $1.28 per diluted share

  • Total client assets ended the quarter up 28% year-over-year to $87.8 billion, with $39.4 billion, or 44.9% in advisory assets

  • Advisory assets increased 49% year-over-year, including approximately $5.3 billion in Avantax Planning Partners (“APP”) assets

  • Agreed to acquire Headquarters Advisory Group, LLC, an existing FP with approximately $1.1 billion in assets; once closed, the assets would expand the nationwide footprint of Avantax’s in-house RIA

“Our wealth management and tax software businesses continue to exceed expectations during the year, both completing a strong second quarter”, commented Chris Walters, Blucora’s President and Chief Executive Officer. Mr. Walters continued, “We continue to operate effectively in executing our strategic priorities, which were designed to drive long-term sustainable growth for both businesses.”

Summary Financial Performance: Q2 2021
($ in millions except per share amounts)

Q2 2021

Q2 2020

Change

Revenue:

Wealth Management

$

162.4

$

115.9

40%

Tax Software

$

91.9

$

45.2

103%

Total Revenue

$

254.3

$

161.1

58%

Segment Operating Income

Wealth Management

$

21.4

$

11.7

83%

Tax Software

$

63.4

$

6.7

846%

Total Segment Operating Income

$

84.8

$

18.4

361%

Unallocated Corporate-Level General and Administrative Expenses

$

(6.3

)

$

(5.8

)

(9)%

GAAP:

Operating Income (Loss)

$

41.6

$

(4.6

)

1004%

Net Income

$

31.6

$

49.6

(36)%

Diluted Net Income Per Share

$

0.64

$

1.03

(38)%

Non-GAAP: (1)

Adjusted EBITDA

$

78.6

$

12.6

524%

Net Income

$

63.1

$

4.5

1302%

Diluted Net Income per Share

$

1.28

$

0.09

1322%

_________________________
(1) See reconciliations of all non-GAAP to GAAP measures presented in this release in the tables below.

Third Quarter and Full Year 2021 Outlook

($ in millions except per share amounts)

3Q 2021

Full Year 2021

Wealth Management Revenue

$158.5 - $162.5

$631.5 - $649.5

Tax Software Revenue

$5.0 - $5.5

$223.5 - $226.5

Total Revenue

$163.5 - $168.0

$855.0 - $876.0

Wealth Management Segment Operating Income

$16.5 - $18.0

$79.0 - $83.5

Tax Software Segment Operating Income

($15.5) - ($15.0)

$80.0 - $82.0

Unallocated Corporate-Level General and Administrative Expenses

$7.5 - $7.0

$27.5 - $26.5

GAAP:

Net Income (loss)

($34.0) - $(30.5)

($8.5) - $1.0

Net Income (loss) per diluted share

($0.69) - ($0.62)

($0.17) - $0.02

Non-GAAP:

Adjusted EBITDA (1)

($6.5) - ($4.0)

$131.5 - $139.0

Non-GAAP Net Income (loss) (1)

($19.0) - ($16.0)

$76.0 - $84.5

Non-GAAP Net Income (loss) per diluted share (1)

($0.39) - ($0.33)

$1.52 - $1.70

____________________________

(1) See reconciliations of all non-GAAP to GAAP measures presented in this release in the tables below.

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 second quarter results, its outlook for full year 2021, its tax season update, and other business matters. We will also provide supplemental financial information to our results on the Investor Relations section of the Blucora corporate website at www.blucora.com prior to the call. The supplemental financial information has also been furnished with the SEC on Form 8-K. A replay of the call will be available on our website.

About Blucora®

Blucora, Inc. (NASDAQ: BCOR) is a provider of data and technology-driven solutions that empowers people to improve their financial wellness. Blucora operates in two segments including (i) wealth management, through its Avantax Wealth Management and Avantax Planning Partners brands, with a collective $88 billion in total client assets as of June 30, 2021 and (ii) tax software, through its TaxAct business, a market leader in tax software with approximately 3 million consumer and approximately 24,500 professional users in 2021. With integrated tax-focused software and wealth management, Blucora is uniquely positioned to assist our customers in achieving better long-term outcomes via holistic, tax-advantaged solutions. For more information on Blucora, visit www.blucora.com.

Source: Blucora

Blucora Investor Relations
Dee Littrell (972) 870-6463
IR@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. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by words such as “believes,” “estimates,” “should,” “could,” “would,” “plans,” “expects,” “intends,” “anticipates,” “may,” “forecasts,” “future,” “will,” “projects,” “predicts,” “potential,” “continues,” “target,” “outlook” and similar expressions and variations. Actual results may differ significantly from management’s expectations due to various risks and uncertainties including, but not limited to: the impact of the coronavirus pandemic on our results of operations and our business, including the impact of the resulting economic and market disruption, the extension of tax filing deadlines and other related relief; our ability to effectively implement our future business plans and growth strategy; our ability to effectively compete within our industry; our ability to attract and retain financial professionals, qualified employees, clients, and customers, as well as our ability to provide strong customer/client service; our ability to close, finance, and realize all of the anticipated benefits of acquisitions, as well as our ability to integrate the operations of recently acquired businesses, and the potential impact of such acquisitions on our existing indebtedness and leverage; our ability to fulfill the closing conditions to, and consummate, the acquisition of Headquarters Advisory Group; our ability to retain employees and acquired client assets following such acquisition; our future capital requirements and the availability of financing, if necessary; our ability to meet our current and future debt service obligations, including our ability to maintain compliance with our debt covenants; downgrade of the Company’s credit ratings; our ability to generate strong performance for our clients and the impact of the financial markets on our clients’ portfolios; the impact of new or changing legislation and regulations (or interpretations thereof) on our business, including our ability to successfully address and comply with such legislation and regulations (or interpretations thereof) and increased costs, reductions of revenue, and potential fines, penalties or disgorgement to which we may be subject as a result thereof; risks, burdens, and costs, including fines, penalties or disgorgement, associated with our business being subjected to regulatory inquiries, investigations or initiatives; risks associated with legal proceedings, including litigation and regulatory proceedings; our ability to manage leadership and employee transitions, including costs and time burdens on management and our board of directors related thereto; political and economic conditions and events that directly or indirectly impact the wealth management and tax software industries; our ability to respond to rapid technological changes, including our ability to successfully release new products and services or improve upon existing products and services; the compromising of confidentiality, availability or integrity of information, including cyberattacks; our expectations concerning the revenues we generate from fees associated with the financial products that we distribute; risks related to goodwill and other intangible asset impairment; our ability to develop, establish, and maintain strong brands; risks associated with the use and implementation of information technology and the effect of security breaches, computer viruses, and computer hacking attacks; our ability to comply with laws and regulations regarding privacy and protection of user data; our ability to maintain our relationships with third-party partners, providers, suppliers, vendors, distributors, contractors, financial institutions, industry associations, and licensing partners, and our expectations regarding and reliance on the products, tools, platforms, systems, and services provided by these third parties; our beliefs and expectations regarding the seasonality of our business; our assessments and estimates that determine our effective tax rate; and our ability to protect our intellectual property and the impact of any claim that we have infringed on the intellectual property rights of others. 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 hereof. The Company undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date hereof, except as may be required by law.

Blucora, Inc.
Condensed Consolidated Statements of Operations
(Unaudited) (Amounts in thousands, except per share data)

Three months ended
June 30,

Six months ended
June 30,

2021

2020

2021

2020

Revenues:

Wealth management services revenue

$

162,395

$

115,884

$

316,886

$

260,873

Tax software services revenue

91,917

45,238

215,809

163,569

Total revenue

254,312

161,122

532,695

424,442

Operating expenses:

Cost of revenue:

Wealth management services cost of revenue

113,910

83,868

222,533

186,210

Tax software services cost of revenue

4,429

3,054

10,007

7,067

Total cost of revenue

118,339

86,922

232,540

193,277

Engineering and technology

7,231

7,377

14,359

15,892

Sales and marketing

34,848

40,057

112,410

119,767

General and administrative

23,832

20,200

48,517

44,928

Acquisition and integration

18,169

2,824

26,272

8,506

Depreciation

3,204

1,675

5,504

3,471

Amortization of other acquired intangible assets

7,063

6,673

14,238

14,421

Impairment of goodwill

270,625

Total operating expenses

212,686

165,728

453,840

670,887

Operating income (loss)

41,626

(4,606

)

78,855

(246,445

)

Other loss, net (1)

(8,024

)

(5,288

)

(15,907

)

(11,423

)

Income (loss) before income taxes

33,602

(9,894

)

62,948

(257,868

)

Income tax benefit (expense)

(1,994

)

59,539

(3,694

)

(7,981

)

Net income (loss)

$

31,608

$

49,645

$

59,254

$

(265,849

)

Net income (loss) per share:

Basic

$

0.65

$

1.04

$

1.22

$

(5.55

)

Diluted

$

0.64

$

1.03

$

1.20

$

(5.55

)

Weighted average shares outstanding:

Basic

48,508

47,941

48,384

47,884

Diluted

49,385

48,092

49,241

47,884

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

Three months ended
June 30,

Six months ended
June 30,

2021

2020

2021

2020

Interest expense

$

7,302

$

4,840

$

14,485

$

10,156

Amortization of debt issuance costs

377

331

740

644

Accretion of debt discounts

284

70

561

138

Total interest expense

7,963

5,241

15,786

10,938

Interest income

(11

)

(2

)

(25

)

Other

61

58

123

510

Other loss, net

$

8,024

$

5,288

$

15,907

$

11,423


Blucora, Inc.
Condensed Consolidated Balance Sheets
(Unaudited) (Amounts in thousands)

June 30,
2021

December 31,
2020

ASSETS

Current assets:

Cash and cash equivalents

$

232,409

$

150,125

Cash segregated under federal or other regulations

591

637

Accounts receivable, net of allowance

18,784

12,736

Commissions and advisory fees receivable

26,662

26,132

Other receivables

1,045

717

Prepaid expenses and other current assets, net

13,972

10,321

Total current assets

293,463

200,668

Long-term assets:

Property and equipment, net

65,004

58,500

Right-of-use assets, net

21,245

23,455

Goodwill, net

454,821

454,821

Other intangible assets, net

308,743

322,179

Other long-term assets

13,613

4,569

Total long-term assets

863,426

863,524

Total assets

$

1,156,889

$

1,064,192

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

10,164

$

9,290

Commissions and advisory fees payable

19,170

19,021

Accrued expenses and other current liabilities

80,359

56,419

Deferred revenue—current

5,084

12,298

Lease liabilities—current

3,768

2,304

Current portion of long-term debt, net

1,788

1,784

Total current liabilities

120,333

101,116

Long-term liabilities:

Long-term debt, net

552,828

552,553

Deferred tax liability, net

29,700

30,663

Deferred revenue—long-term

5,784

6,247

Lease liabilities—long-term

34,765

36,404

Other long-term liabilities

30,972

24,919

Total long-term liabilities

654,049

650,786

Total liabilities

774,382

751,902

Stockholders’ equity:

Common stock, par $0.0001—900,000 authorized shares; 49,962 shares issued and 48,656 shares outstanding at June 30, 2021; 49,483 shares issued and 48,177 shares outstanding at December 31, 2020

5

5

Additional paid-in capital

1,609,193

1,598,230

Accumulated deficit

(1,198,292

)

(1,257,546

)

Treasury stock, at cost—1,306 shares at June 30, 2021 and December 31, 2020

(28,399

)

(28,399

)

Total stockholders’ equity

382,507

312,290

Total liabilities and stockholders’ equity

$

1,156,889

$

1,064,192

Blucora, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited) (Amounts in thousands)

Six months ended June 30,

2021

2020

Operating activities:

Net income (loss)

$

59,254

$

(265,849

)

Adjustments to reconcile net income (loss) to net cash from operating activities:

Stock-based compensation

10,770

2,703

Depreciation and amortization of acquired intangible assets

21,583

19,253

Impairment of goodwill

270,625

Reduction of right-of-use lease assets

1,420

3,196

Deferred income taxes

(963

)

8,784

Amortization of debt issuance costs

740

644

Accretion of debt discounts

561

138

Change in fair value of acquisition-related contingent consideration

17,800

Accretion of lease liability

1,046

901

Other

481

670

Cash provided (used) by changes in operating assets and liabilities:

Accounts receivable

(5,948

)

184

Commissions and advisory fees receivable

(530

)

5,586

Other receivables

(406

)

(2,809

)

Prepaid expenses and other current assets

(3,651

)

1,435

Other long-term assets

(9,239

)

3,162

Accounts payable

874

2,942

Commissions and advisory fees payable

149

(5,210

)

Lease liabilities

(431

)

(2,572

)

Deferred revenue

(7,677

)

(8,299

)

Accrued expenses and other current and long-term liabilities

11,438

(1,110

)

Net cash provided by operating activities

97,271

34,374

Investing activities:

Purchases of property and equipment

(13,544

)

(19,072

)

Asset acquisitions

(881

)

Net cash used by investing activities

(14,425

)

(19,072

)

Financing activities:

Proceeds from credit facilities, net of debt issuance costs and debt discounts

(502

)

55,000

Payments on credit facilities

(906

)

(65,625

)

Proceeds from stock option exercises

284

25

Proceeds from issuance of stock through employee stock purchase plan

1,845

1,201

Tax payments from shares withheld for equity awards

(1,329

)

(1,006

)

Net cash used by financing activities

(608

)

(10,405

)

Net increase in cash, cash equivalents, and restricted cash

82,238

4,897

Cash, cash equivalents, and restricted cash, beginning of period

150,762

86,450

Cash, cash equivalents, and restricted cash, end of period

$

233,000

$

91,347

Blucora, Inc.
Segment Information
(Unaudited) (Amounts in thousands)

Three months ended
June 30,

Six months ended
June 30,

2021

2020

2021

2020

Revenue:

Wealth Management (1)

$

162,395

$

115,884

$

316,886

$

260,873

Tax Software (1)

91,917

45,238

215,809

163,569

Total revenue

254,312

161,122

532,695

424,442

Operating income (loss):

Wealth Management

21,396

11,731

40,792

34,329

Tax Software

63,448

6,659

114,336

44,412

Corporate-level activity (2)

(43,218

)

(22,996

)

(76,273

)

(325,186

)

Total operating income (loss)

41,626

(4,606

)

78,855

(246,445

)

Other loss, net

(8,024

)

(5,288

)

(15,907

)

(11,423

)

Income (loss) before income taxes

33,602

(9,894

)

62,948

(257,868

)

Income tax benefit (expense)

(1,994

)

59,539

(3,694

)

(7,981

)

Net income (loss)

$

31,608

$

49,645

$

59,254

$

(265,849

)

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

Three months ended
June 30,

Six months ended
June 30,

2021

2020

2021

2020

Wealth Management:

Advisory

$

96,508

$

66,303

$

187,627

$

145,060

Commission

51,702

39,836

104,236

90,416

Asset-based

5,526

3,981

10,855

14,560

Transaction and fee

8,659

5,764

14,168

10,837

Total Wealth Management revenue

$

162,395

$

115,884

$

316,886

$

260,873

Tax Software:

Consumer

$

88,846

$

44,421

$

199,413

$

148,242

Professional

3,071

817

16,396

15,327

Total Tax Software revenue

$

91,917

$

45,238

$

215,809

$

163,569

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

Three months ended
June 30,

Six months ended
June 30,

2021

2020

2021

2020

Unallocated corporate-level general and administrative expenses

$

6,259

$

5,810

$

11,953

$

12,826

Stock-based compensation

5,160

3,904

10,770

2,703

Acquisition and integration costs

18,169

2,824

26,272

8,506

Depreciation

4,102

2,412

7,345

4,832

Amortization of acquired intangible assets

7,063

6,673

14,238

14,421

Impairment of goodwill

270,625

Executive transition costs

636

9,820

Headquarters relocation costs

737

1,453

Contested proxy and other legal and consulting costs

2,465

5,695

Total corporate-level activity

$

43,218

$

22,996

$

76,273

$

325,186

Blucora, Inc.
Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures (1)

Adjusted EBITDA Reconciliation (1)
(Unaudited) (Amounts in thousands)

Three months ended
June 30,

Six months ended
June 30,

2021

2020

2021

2020

Net income (loss) (2)

$

31,608

$

49,645

$

59,254

$

(265,849

)

Stock-based compensation

5,160

3,904

10,770

2,703

Depreciation and amortization of acquired intangible assets

11,165

9,085

21,583

19,253

Other loss, net

8,024

5,288

15,907

11,423

Acquisition and integration—Excl. Change in fair value of acquisition-related contingent consideration

6,669

2,824

8,472

8,506

Acquisition and integration—Change in fair value of acquisition-related contingent consideration

11,500

17,800

Impairment of goodwill

270,625

Executive transition costs

636

9,820

Headquarter relocation costs

737

1,453

Contested proxy and other legal and consulting costs

2,465

5,695

Income tax (benefit) expense

1,994

(59,539

)

3,694

7,981

Adjusted EBITDA (1)

$

78,585

$

12,580

$

143,175

$

65,915

Non-GAAP Net Income and Non-GAAP Net Income Per Share Reconciliation (1)
(Unaudited) (Amounts in thousands, except per share amounts)

Three months ended
June 30,

Six months ended
June 30,

2021

2020

2021

2020

Net income (loss) (2)

$

31,608

$

49,645

$

59,254

$

(265,849

)

Stock-based compensation

5,160

3,904

10,770

2,703

Amortization of acquired intangible assets

7,063

6,673

14,238

14,421

Acquisition and integration—Excluding change in fair value of HKFS Contingent Consideration

6,669

2,824

8,472

8,506

Acquisition and integration—Change in fair value of HKFS Contingent Consideration

11,500

17,800

Impairment of goodwill

270,625

Executive transition costs

636

9,820

Headquarters relocation costs

737

1,453

Contested proxy and other legal and consulting costs

2,465

5,695

Cash tax impact of adjustments to GAAP net income

(649

)

(259

)

(1,192

)

(995

)

Non-cash income tax (benefit) expense

(694

)

(59,697

)

(963

)

7,340

Non-GAAP net income

$

63,122

$

4,463

$

114,074

$

48,024

Per diluted share:

Net income (loss) (2) (3)

$

0.64

$

1.03

$

1.20

$

(5.52

)

Stock-based compensation

0.10

0.08

0.22

0.06

Amortization of acquired intangible assets

0.14

0.14

0.29

0.30

Acquisition and integration—Excluding change in fair value of HKFS Contingent Consideration

0.14

0.06

0.17

0.18

Acquisition and integration—Change in fair value of HKFS Contingent Consideration

0.23

0.36

Impairment of goodwill

5.62

Executive transition costs

0.01

0.20

Headquarters relocation costs

0.02

0.03

Contested proxy and other legal and consulting costs

0.05

0.12

Cash tax impact of adjustments to GAAP net income

(0.01

)

(0.01

)

(0.02

)

(0.02

)

Non-cash income tax (benefit) expense

(0.01

)

(1.24

)

(0.02

)

0.15

Non-GAAP net income per share

$

1.28

$

0.09

$

2.32

$

1.00

Weighted average shares outstanding used in computing per diluted share amounts

49,385

48,092

49,241

48,172

Adjusted EBITDA Reconciliation for Forward-Looking Guidance (1)
(Amounts in thousands)

Ranges for the three months ending

Ranges for the year ending

September 30, 2021

December 31, 2021

Low

High

Low

High

Net income (loss)

$

(34,000

)

$

(30,500

)

$

(8,500

)

$

1,000

Stock-based compensation

5,400

5,200

21,700

21,300

Depreciation and amortization of acquired intangible assets

12,200

12,000

46,100

45,600

Other loss, net

8,400

8,000

32,600

31,900

Acquisition, integration, and contested proxy and other legal and consulting costs (4)

3,100

2,800

38,100

37,400

Income tax expense

(1,600

)

(1,500

)

1,500

1,800

Adjusted EBITDA

$

(6,500

)

$

(4,000

)

$

131,500

$

139,000

Non-GAAP Net Income and Non-GAAP Net Income Per Share Reconciliation
for Forward-Looking Guidance (1)
(Amounts in thousands, except per share amounts)

Ranges for the three months ending

Ranges for the year ending

September 30, 2021

December 31, 2021

Low

High

Low

High

Net income (loss)

$

(34,000

)

$

(30,500

)

$

(8,500

)

$

1,000

Stock-based compensation

5,400

5,200

21,700

21,300

Amortization of acquired intangible assets

7,000

7,000

28,300

28,200

Acquisition, integration, and contested proxy and other legal and consulting costs (4)

3,100

2,800

38,100

37,400

Cash tax impact of adjustments to net loss

(500

)

(400

)

(2,200

)

(2,000

)

Non-cash income tax benefit

(100

)

(1,400

)

(1,400

)

Non-GAAP net income

$

(19,000

)

$

(16,000

)

$

76,000

$

84,500

Per diluted share:

Net income (loss) (3)

$

(0.69

)

$

(0.62

)

$

(0.17

)

$

0.02

Stock-based compensation

0.11

0.11

0.43

0.43

Amortization of acquired intangible assets

0.14

0.13

0.57

0.57

Acquisition, integration, and contested proxy and other legal and consulting costs (4)

0.06

0.06

0.76

0.75

Cash tax impact of adjustments to net loss

(0.01

)

(0.01

)

(0.04

)

(0.04

)

Non-cash income tax benefit

(0.03

)

(0.03

)

Non-GAAP net income per share

$

(0.39

)

$

(0.33

)

$

1.52

$

1.70

Weighted average shares outstanding used in computing per diluted share amounts

49,100

49,000

50,000

49,800

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

(1) 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, impairment of goodwill, executive transition costs, headquarters relocation costs, contested proxy and other legal and consulting costs, and income tax benefit (expense). Other loss, net primarily constitutes our interest expense, net of interest income. Acquisition and integration costs primarily relate to the acquisition of HKFS and the acquisition of 1st Global, including the increase to the contingent liability reserve related to a regulatory inquiry assumed in the acquisition of 1st Global. Impairment of goodwill relates to the impairment of our Wealth Management reporting unit goodwill in the first quarter of 2020. Executive transition costs relate to the departure of certain Company executives in the first quarter of 2020. Headquarters relocation costs relate to the process of moving from our Dallas and Irving offices to our new headquarters.

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 (loss). 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 (loss), determined in accordance with GAAP, excluding the effects of stock-based compensation, amortization of acquired intangible assets, acquisition and integration costs, impairment of goodwill, executive transition costs, headquarters relocation costs, contested proxy and other legal and consulting costs, the related cash tax impact of those adjustments, and non-cash income tax (benefit) expense. We exclude the non-cash portion of income tax expense 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 either be utilized or expire between 2021 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 and non-GAAP net income per share 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 (loss) and net income (loss) per share. Other companies may calculate non-GAAP net income and non-GAAP net income per share differently, and, therefore, our non-GAAP net income and non-GAAP net income per share may not be comparable to similarly titled measures of other companies.

(2) As presented in the condensed consolidated statements of operations (unaudited).

(3) Any difference in the “per diluted share” amounts between this table and the condensed consolidated statements of comprehensive income is due to using different weighted average shares outstanding in the event that there is GAAP net loss but non-GAAP net income and vice versa.

(4) The breakout of components cannot be determined on a forward-looking basis without unreasonable efforts.