The delay of the tax season filing deadline under the impact of the COVID-19 virus bit into the tax preparation business for Blucora for the second quarter ended June 30. Revenue for the company’s TaxAct business was $42.4 million for the most recently ended quarter, down $31.4 million from slightly less than $66 million a year ago.Overall, Blucora revenue was $161.1 million, an increase of 16.8 percent from $193.7 million in last year’s corresponding period.
In the recent earnings call, CFO Marc Mehlman said the company expects full-year revenue for TaxAct to be $203 million to $206 million, down 2 percent to 3 percent from 2019 with the revenue from the tax business shifting into the current quarter. The delay was also costly because Blucora had revamped its marketing and overall led to an extra $20 million in increased marketing costs, along with keeping the call center staff on the payroll and having to spend on the current season while planning for the next.
CEO Chris Walters said in addition, the company increased marketing because of “weak performance through first peak.”
Wealth management revenue dropped to $115.9 million in the second quarter, down 8 percent from $127.8 percent in last year’s corresponding period. Walters said company’s financial professionals—the term which has replaced “advisors” because of a change in SEC regulations—were concentrating on service existing clients instead of prospecting were hampered in their ability to sell more complex products. That led a 35-percent drop in transaction revenue sequentially.
Wealth Management revenue is expected to his $530 million to $541 million for 2020. The acquisition of Honkamp Krueger Financial Services closed after the quarter and had no impact on the reported results, but will contribute to the second half.
