Blucora, which owns TaxAct and Avantax Wealth Management, reported a 26-percent drop on operating income on a 5-percent rise in revenue for 2020. The company’s bottom line was $342.8 million loss for the year ended December 31, with a majority of that a $270.7 million impairment charge for goodwill for its wealth management business, which was taken in the first quarter.The company’s tax software business took a $20-million hit because of the extension of last year’s tax season to July 15. Blucora says that came from increased costs such as marketing and extended call center staffing. It also decided to invest another $20 million on additional marketing to overcome the weaker performance through the first peak, but also to more effectively drive sustainable unit growth.
Meanwhile, the decline in interest rates took toll on sweep revenue, which fell by 87 percent and costing the company about $21 million in income. Those three items trimmed more than $60 million from revenue.
Overall, tax preparation revenue of $208.8 million for the most recently ended year was down 1 percent from $210 million for 2019. Operating income for the tax business dropped 48 percent to $49.6 million from $96.2 million for the compared years.
Wealth management revenue last year was $546.2 million, an increase of 8 percent from $508 million the prior year. Operating income for the segment rose to $72.2 million, up 6 percent from $68.3 million.
