In its report of financial results for the first quarter, Blucora saidthere could be further impairment charges if the economy worsen, although executives said during the recent webcast for earnings for the period ended March 31 that they believe they have taken adequate steps that further action is not likely.
Blucora also saw tax preparation revenue drop because of the extension of the tax season deadline from April 15 to July 15. Tax prep revenue for the most recently ended period was $116.3, down 13 percent from a year earlier as filers waited. The extension has also added cost to the tax prepraration unit's operations.
“We required to extend our marketing campaign over the extension period,” CEO Chris Walters said during the webcast. The delay has also meant providing support to TaxAct customers for longer than normal.
Overall, Blucora lost $315.5 million for the first quarter becuse of the writedown, compared to net income of $62.2 million a year earlier. Revenue was $263.3 million,a 16.6-percent increase from $225.8 million in last year’s corresponding period. Wealth management revenue was slightly less than $145 million, up 62 percent from $89.6 million.
The company decided not to discount its tax products so heavily this season, which has led to a loss in filers. However, Wolters said TaxAct had undergone a significant change. “We anticipate product improvement will drive sales,” he said. Already, the new user mix is “double where we would have peaked the prior year.” That growth was spurred by last year’s acquisition of 1st. Global.