Blucora Reports Second Quarter 2022 Results

August 8, 2022

DALLAS, Aug. 08, 2022 (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, 2022.

Second Quarter Highlights and Recent Developments

  • Avantax added newly recruited assets of $514 million during the second quarter for a total of over $1.0 billion during the first six months of 2022. This exceeds full year 2021 newly recruited assets of $929 million.
  • Avantax continued to deliver net positive asset flows with $185 million for the quarter.
  • Grew total revenue over 1% year over year to $256.9 million in Q2 2022 compared to $254.3 million during Q2 2021.
  • Ended the second quarter with total client assets of $76.5 billion, growing advisory assets to $36.7 billion, or 48.0% of total client assets.
  • TaxAct gained market share during the tax season, ending Q2 2022 with an approximate 4.94% market share.
  • Continue to expect double-digit top line growth for TaxAct for tax year 2021.
  • On August 5th, the Company paid down its term loan balance by $35 million, resulting in an updated principal balance of $525.4 million.

“With our financial results on track for the year, despite a volatile macro picture, we are confident in our ability to deliver even stronger results next year driven by continued strong operating performance as well as favorable interest rate impacts. We expect our positive trajectory to deliver valuable free cash flow in the coming years as we continue to deliver differentiated value and services to our customers and clients. It’s an exciting time for the business.” commented Chris Walters, Blucora’s President and Chief Executive Officer. Mr. Walters continued, “I am proud of our Company’s performance this quarter. We have a lot of reasons to be optimistic about our future performance across the company, not just due to a favorable interest rate environment, but also because of the purposeful investments we chose to make leading into this environment that we believe will allow us to take full advantage of the opportunities that come from operating from a position of strength.”

Summary Financial Performance: Q2 2022

($ in millions, except per share amounts)Q2 2022 Q2 2021 Change
Revenue:     
Wealth Management$162.7  $162.4  0.2%
Tax Software 94.2   91.9  2.5%
Total Revenue$256.9  $254.3  1.0%
Segment Operating Income     
Wealth Management$15.9  $21.4  (25.7)%
Tax Software 53.9   63.4  (15.0)%
Total Segment Operating Income$69.7  $84.8  (17.8)%
Unallocated Corporate-Level General and Administrative Expenses$(7.7) $(6.3) (22.2)%
GAAP:     
Operating Income$50.8  $41.6  22.1%
Net Income$39.4  $31.6  24.7%
Net Income per share — Diluted$0.81  $0.64  26.6%
Non-GAAP:     
Adjusted EBITDA(1)$62.1  $78.6  (21.0)%
Net Income(1)$48.0  $63.1  (23.9)%
Net Income per share — Diluted(1)$0.99  $1.28  (22.7)%

_________________________
Note: Totals may not foot due to rounding.
(1)   See reconciliations of all non-GAAP to GAAP measures presented in this release in the tables below.

Full Year 2022 Outlook

($ in millions, except per share amounts)Full Year 2022 Outlook
Wealth Management Revenue$645.0 - $665.0
Tax Software Revenue$247.5 - $251.0
Total Revenue$892.5 - $916.0
Wealth Management Segment Operating Income$90.5 - $94.5
Tax Software Segment Operating Income$89.0 - $91.0
Unallocated Corporate-Level General and Administrative Expenses$30.5 - $29.0
GAAP: 
Net Income$28.5 - $43.5
Net Income per share — Diluted$0.58 - $0.89
Non-GAAP: 
Adjusted EBITDA(1)$149.0 - $156.5
Non-GAAP Net Income(1)$84.0 - $93.5
Non-GAAP Net Income per share — Diluted(1)$1.71 - $1.90

____________________________
(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 on Tuesday, August 9, 2022 at 8:30 a.m. Eastern Time during which the Company will further discuss second quarter results, its outlook for full year 2022, 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. 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 empower people to improve their financial wellness. Blucora operates in two segments (i) wealth management, through its Avantax Wealth Management and Avantax Planning Partners brands, with a collective $77 billion in total client assets as of June 30, 2022 and (ii) tax software, through its TaxAct business, a market leader in tax software with over 3 million consumer users and approximately 21,000 professional users in 2022. 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, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including without limitation, statements regarding the outlook of Blucora, Inc. (the “Company”) and its segments, expectations regarding net flows for its wealth business, and expectations with respect to the current tax season. 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 “anticipates,” “believes,” “plans,” “expects,” “future,” “intends,” “may,” “will,” “would,” “could,” “should,” “estimates,” “predicts,” “potential,” “continues,” “target,” “outlook,” and similar terms and expressions, but the absence of these words does not mean that the statement is not forward-looking. Actual results may differ significantly from management’s expectations due to various risks and uncertainties including, but not limited to: our ability to effectively compete within our industries; our ability to generate strong performance for our clients and the impact of the financial markets on our clients’ portfolios; our expectations concerning the revenues we generate from fees associated with the financial products that we distribute; our ability to attract and retain financial professionals, employees, clients, and customers, as well as our ability to provide strong customer/client service; the impact of the continuing COVID-19 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 government actions, and changes in customer behavior related to the foregoing; 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; any downgrade of the Company’s credit ratings; 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, including those of the Financial Industry Regulatory Authority, Inc. and the Securities and Exchange Commission (the “SEC”); risks associated with legal proceedings, including litigation and regulatory proceedings; 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 retain employees and acquired client assets following acquisitions; any compromise of confidentiality, availability or integrity of information, including cyberattacks; 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 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 ability to respond to rapid technological changes, including our ability to successfully release new products and services or improve upon existing products and services; risks related to goodwill and acquired 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; the seasonality of our business; our assessments and estimates that determine our effective tax rate; our ability to protect our intellectual property and the impact of any claim that we infringed on the intellectual property rights of others; and the effects on our business of actions of activist stockholders. A more detailed description of these and certain other factors that could affect actual results is included in the Company’s most recent Annual Report on Form 10-K and most recent Quarterly Report on Form 10-Q filed with the SEC. 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) (In thousands, except per share amounts)

 Three Months Ended June 30, Six Months Ended June 30,
  2022   2021   2022   2021 
Revenue:       
Wealth Management$162,669  $162,395  $329,072  $316,886 
Tax Software 94,214   91,917   235,364   215,809 
Total revenue 256,883   254,312   564,436   532,695 
Operating expenses:       
Cost of revenue:       
Wealth Management 113,644   113,910   233,518   222,533 
Tax Software 6,873   4,429   16,299   10,007 
Total cost of revenue 120,517   118,339   249,817   232,540 
Engineering and technology 8,620   7,231   17,124   14,359 
Sales and marketing 47,508   34,848   131,911   112,410 
General and administrative 26,646   23,832   55,721   48,517 
Acquisition and integration (6,792)  18,169   (5,126)  26,272 
Depreciation 3,137   3,204   6,068   5,504 
Amortization of acquired intangible assets 6,462   7,063   13,093   14,238 
Total operating expenses 206,098   212,686   468,608   453,840 
Operating income 50,785   41,626   95,828   78,855 
Interest expense and other, net(1) (8,117)  (8,024)  (15,958)  (15,907)
Income before income taxes 42,668   33,602   79,870   62,948 
Income tax expense (3,243)  (1,994)  (5,825)  (3,694)
Net income$39,425  $31,608  $74,045  $59,254 
        
Net income per share:       
Basic$0.83  $0.65  $1.54  $1.22 
Diluted$0.81  $0.64  $1.50  $1.20 
Weighted average shares outstanding:       
Basic 47,582   48,508   48,048   48,384 
Diluted 48,690   49,385   49,220   49,241 

_________________________
(1)   Interest expense and other, net consisted of the following (in thousands):

 Three Months Ended June 30, Six Months Ended June 30,
  2022  2021  2022  2021
Interest expense$7,265 $7,302 $14,395 $14,485
Amortization of debt issuance costs 399  377  788  740
Amortization of debt discount 299  284  591  561
Total interest expense 7,963  7,963  15,774  15,786
Interest income and other 154  61  184  121
Interest expense and other, net$8,117 $8,024 $15,958 $15,907
            

BLUCORA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)

 June 30,
2022
 December 31,
2021
 (Unaudited)  
ASSETS   
Current assets:   
Cash and cash equivalents$171,297  $134,824 
Accounts receivable, net 20,351   21,906 
Commissions and advisory fees receivable 21,214   25,073 
Prepaid expenses and other current assets 17,697   18,476 
Total current assets 230,559   200,279 
Long-term assets:   
Property, equipment, and software, net 75,741   73,638 
Right-of-use assets, net 19,879   20,466 
Goodwill, net 454,821   454,821 
Acquired intangible assets, net 291,540   302,289 
Other long-term assets 26,547   20,450 
Total long-term assets 868,528   871,664 
Total assets$1,099,087  $1,071,943 
LIABILITIES AND STOCKHOLDERS’ EQUITY   
Current liabilities:   
Accounts payable$6,962  $8,216 
Commissions and advisory fees payable 13,814   17,940 
Accrued expenses and other current liabilities 54,707   65,678 
Current deferred revenue 6,328   13,180 
Current lease liabilities 5,025   4,896 
Current portion of long-term debt 1,812   1,812 
Total current liabilities 88,648   111,722 
Long-term liabilities:   
Long-term debt, net 553,476   553,134 
Long-term lease liabilities 31,795   33,267 
Deferred tax liabilities, net 19,125   20,124 
Long-term deferred revenue 4,859   5,322 
Other long-term liabilities 11,731   6,752 
Total long-term liabilities 620,986   618,599 
Total liabilities 709,634   730,321 
    
Stockholders’ equity:   
Common stock, par value $0.0001 per share—900,000 authorized shares; 50,921 shares issued and 47,740 shares outstanding as of June 30, 2022; 50,137 shares issued and 48,831 shares outstanding as of December 31, 2021 5   5 
Additional paid-in capital 1,628,591   1,619,805 
Accumulated deficit (1,175,744)  (1,249,789)
Treasury stock, at cost—3,181 shares at June 30, 2022 and 1,306 shares at December 31, 2021 (63,399)  (28,399)
Total stockholders’ equity 389,453   341,622 
Total liabilities and stockholders’ equity$1,099,087  $1,071,943 
        

BLUCORA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (In thousands)

 Six Months Ended June 30,
  2022   2021 
Operating activities:   
Net income$74,045  $59,254 
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization of acquired intangible assets 22,769   21,583 
Stock-based compensation 11,423   10,770 
Change in the fair value of acquisition-related contingent consideration (5,320)  17,800 
Reduction of right-of-use lease assets 715   1,420 
Deferred income taxes (999)  (963)
Amortization of debt discount and issuance costs 1,379   1,301 
Accretion of lease liabilities 1,020   1,046 
Other non-cash items 2,574   481 
Changes in operating assets and liabilities, net of acquisitions and disposals:   
Accounts receivable, net 1,666   (5,948)
Commissions and advisory fees receivable         3,859                   (530)
Prepaid expenses and other current assets         1,776                   (4,057)
Other long-term assets (8,804)  (9,239)
Accounts payable (1,254)  874 
Commissions and advisory fees payable (4,316)  149 
Lease liabilities (2,491)  (431)
Deferred revenue (7,315)  (7,677)
Accrued expenses and other current and long-term liabilities (5,064)  11,438 
Net cash provided by operating activities 85,663   97,271 
Investing activities:   
Purchases of property, equipment, and software (11,790)  (13,544)
Asset acquisitions (1,858)  (881)
Net cash used by investing activities (13,648)  (14,425)
Financing activities:   
Proceeds from credit facilities, net of debt discount and issuance costs    (502)
Payments on credit facilities (906)  (906)
Acquisition-related contingent consideration payments (98)   
Stock repurchases (35,000)   
Proceeds from stock option exercises 174   284 
Proceeds from issuance of stock through employee stock purchase plan 2,324   1,845 
Tax payments from shares withheld for equity awards (2,036)  (1,329)
Net cash used by financing activities (35,542)  (608)
Net increase in cash, cash equivalents, and restricted cash 36,473   82,238 
Cash, cash equivalents, and restricted cash, beginning of period 134,824   150,762 
Cash, cash equivalents, and restricted cash, end of period$171,297  $233,000 
    
Supplemental cash flow information:   
Cash paid for income taxes$1,958  $596 
Cash paid for interest$14,301  $14,324 
        

BLUCORA, INC.
Segment Information and Revenue
(Unaudited) (In thousands)

Information on reportable segments currently presented to our Chief Executive Officer (our chief operating decision maker) and a reconciliation to consolidated net income are presented below:

 Three Months Ended June 30, Six Months Ended June 30,
  2022   2021   2022   2021 
Revenue:       
Wealth Management$162,669  $162,395  $329,072  $316,886 
Tax Software 94,214   91,917   235,364   215,809 
Total revenue 256,883   254,312   564,436   532,695 
Operating income (loss):       
Wealth Management 15,873   21,396   32,294   40,792 
Tax Software 53,859   63,448   111,889   114,336 
Corporate-level activity (18,947)  (43,218)  (48,355)  (76,273)
Total operating income 50,785   41,626   95,828   78,855 
Interest expense and other, net (8,117)  (8,024)  (15,958)  (15,907)
Income before income taxes 42,668   33,602   79,870   62,948 
Income tax expense (3,243)  (1,994)  (5,825)  (3,694)
Net income$39,425  $31,608  $74,045  $59,254 
                

Revenues by major category within each segment are presented below:

 Three Months Ended June 30, Six Months Ended June 30,
  2022  2021  2022  2021
Wealth Management:       
Advisory$104,155 $96,508 $211,324 $187,627
Commission 42,835  51,702  90,490  104,236
Asset-based 6,964  5,526  12,627  10,855
Transaction and fee 8,715  8,659  14,631  14,168
Total Wealth Management revenue$162,669 $162,395 $329,072 $316,886
Tax Software:       
Consumer$91,027 $88,846 $216,288 $199,413
Professional 3,187  3,071  19,076  16,396
Total Tax Software revenue$94,214 $91,917 $235,364 $215,809
            

Corporate-level activity included the following:

 Three Months Ended June 30, Six Months Ended June 30,
  2022   2021  2022   2021
Unallocated corporate-level general and administrative expenses$7,680  $6,259 $14,972  $11,953
Stock-based compensation 5,198   5,160  11,423   10,770
Acquisition and integration (6,792)  18,169  (5,126)  26,272
Depreciation 5,002   4,102  9,676   7,345
Amortization of acquired intangible assets 6,462   7,063  13,093   14,238
Contested proxy and other legal and consulting costs 1,397   2,465  4,317   5,695
Total corporate-level activity$18,947  $43,218 $48,355  $76,273
              

BLUCORA, INC.
Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures (1)
(Unaudited) (In thousands, except per share amounts)

Adjusted EBITDA Reconciliation (1)

 Three Months Ended June 30, Six Months Ended June 30,
  2022   2021  2022   2021
Net income(2)$39,425  $31,608 $74,045  $59,254
Stock-based compensation 5,198   5,160  11,423   10,770
Depreciation and amortization of acquired intangible
assets
 11,464   11,165  22,769   21,583
Interest expense and other, net 8,117   8,024  15,958   15,907
Acquisition and integration—Excluding change in the fair value of HKFS Contingent Consideration 228   6,669  194   8,472
Acquisition and integration—Change in the fair value of HKFS Contingent Consideration (7,020)  11,500  (5,320)  17,800
Contested proxy and other legal and consulting costs 1,397   2,465  4,317   5,695
Income tax expense 3,243   1,994  5,825   3,694
Adjusted EBITDA(1)$62,052  $78,585 $129,211  $143,175
              

Non-GAAP Net Income and Non-GAAP Net Income Per Share Reconciliation (1)

 Three Months Ended June 30, Six Months Ended June 30,
  2022   2021   2022   2021 
Net income(2)$39,425  $31,608  $74,045  $59,254 
Stock-based compensation 5,198   5,160   11,423   10,770 
Amortization of acquired intangible assets 6,462   7,063   13,093   14,238 
Acquisition and integration—Excluding change in the fair value of HKFS Contingent Consideration 228   6,669   194   8,472 
Acquisition and integration—Change in the fair value of HKFS Contingent Consideration (7,020)  11,500   (5,320)  17,800 
Contested proxy and other legal and consulting costs 1,397   2,465   4,317   5,695 
Cash tax impact of adjustments to GAAP net income (353)  (649)  (1,312)  (1,192)
Non-cash income tax (benefit) expense 2,655   (694)  4,161   (963)
Non-GAAP Net Income(1)$47,992  $63,122  $100,601  $114,074 
Per diluted share:       
Net income(2)(4)$0.81  $0.64  $1.50  $1.20 
Stock-based compensation 0.11   0.10   0.23   0.22 
Amortization of acquired intangible assets 0.14   0.14   0.28   0.29 
Acquisition and integration—Excluding change in the fair value of HKFS Contingent Consideration    0.14      0.17 
Acquisition and integration—Change in the fair value of HKFS Contingent Consideration (0.14)  0.23   (0.11)  0.36 
Contested proxy and other legal and consulting costs 0.03   0.05   0.09   0.12 
Cash tax impact of adjustments to GAAP net income (0.01)  (0.01)  (0.03)  (0.02)
Non-cash income tax (benefit) expense 0.05   (0.01)  0.08   (0.02)
Non-GAAP Net Income per share — Diluted(1)$0.99  $1.28  $2.04  $2.32 
Diluted weighted average shares outstanding 48,690   49,385   49,220   49,241 
                

BLUCORA, INC.
Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures (1)
(Unaudited) (In thousands, except per share amounts)

Adjusted EBITDA Reconciliation for Forward-Looking Guidance (1)

 Ranges for year ending
 December 31, 2022
 Low High
Net income$28,500 $43,500
Stock-based compensation 22,500  21,500
Depreciation and amortization of acquired intangible assets 49,000  48,000
Interest expense and other, net 36,000  35,000
Acquisition, integration, and contested proxy and other legal and consulting costs(3) 9,500  5,500
Income tax expense 3,500  3,000
Adjusted EBITDA(1)$149,000 $156,500
      

Non-GAAP Net Income and Non-GAAP Net Income Per Share Reconciliation
for Forward-Looking Guidance (1)

 Ranges for year ending
 December 31, 2022
 Low High
Net income$28,500  $43,500 
Stock-based compensation 22,500   21,500 
Amortization of acquired intangible assets 26,000   25,500 
Acquisition, integration, and contested proxy and other legal and consulting costs(3) 9,500   5,500 
Cash tax impact of adjustments to net income (2,000)  (2,000)
Non-cash income tax (benefit) expense (500)  (500)
Non-GAAP Net Income(1)$84,000  $93,500 
Per diluted share:   
Net income$0.58  $0.89 
Stock-based compensation 0.46   0.44 
Amortization of acquired intangible assets 0.53   0.51 
Acquisition, integration, and contested proxy and other legal and consulting costs(3) 0.19   0.11 
Cash tax impact of adjustments to net income (0.04)  (0.04)
Non-cash income tax (benefit) expense (0.01)  (0.01)
Non-GAAP Net Income per share — Diluted(1)$1.71  $1.90 
Diluted weighted average shares outstanding 49,084   49,084 

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

(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, interest expense and other, net, acquisition and integration costs, contested proxy and other legal and consulting costs, and income tax expense. Interest expense and other, net primarily consists of interest expense, net. Acquisition and integration costs primarily relate to the acquisitions of Avantax Planning Partners and 1st Global.

      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 (Loss) 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, 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 taxes 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 expire, if not utilized, between 2022 and 2024.

      We believe that Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) 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 that have not been, or are not expected to be, settled in cash. Additionally, we believe that Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) per share are common measures used by investors and analysts to evaluate our performance and the valuation of our business. Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) 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 GAAP net income (loss) per share. Other companies may calculate Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) per share differently, and, therefore, these measures may not be comparable to similarly titled measures of other companies.

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

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

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