Segment Information and Revenues |
Note 4: Segment Information and Revenues We have two reportable segments: (1) the Wealth Management segment and (2) the Tax Preparation segment. Our Chief Executive Officer is the chief operating decision maker and reviews financial information presented on a disaggregated basis. This information is used for purposes of allocating resources and evaluating financial performance. We do not allocate certain general and administrative costs (including personnel and overhead costs), stock-based compensation, depreciation, amortization of intangible assets, acquisition and integration costs, executive transition costs, headquarters relocation costs, or impairment of goodwill and an intangible asset to the reportable segments. Such amounts are reflected in the table below under the heading “Corporate-level activity.” In addition, we do not allocate other loss, net, or income taxes to the reportable segments. We do not report assets or capital expenditures by segment to the chief operating decision maker. Information on reportable segments currently presented to our chief operating decision maker and a reconciliation to consolidated net income (loss) are presented below (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended September 30, | | Nine months ended September 30, | | 2020 | | 2019 | | 2020 | | 2019 | Revenue: | | | | | | | | Wealth Management | $ | 135,932 | | | $ | 145,428 | | | $ | 396,805 | | | $ | 362,791 | | Tax Preparation | 39,421 | | | 3,588 | | | 202,990 | | | 205,733 | | Total revenue | 175,353 | | | 149,016 | | | 599,795 | | | 568,524 | | Operating income (loss): | | | | | | | | Wealth Management | 17,498 | | | 20,631 | | | 51,827 | | | 49,150 | | Tax Preparation | 16,234 | | | (12,075) | | | 60,646 | | | 108,565 | | Corporate-level activity | (32,719) | | | (80,667) | | | (357,905) | | | (131,683) | | Total operating income (loss) | 1,013 | | | (72,111) | | | (245,432) | | | 26,032 | | Other loss, net | (11,963) | | | (2,606) | | | (23,386) | | | (11,682) | | Income tax benefit (expense) | (15,256) | | | 12,331 | | | (23,237) | | | 16,470 | | Net income (loss) attributable to Blucora, Inc. | $ | (26,206) | | | $ | (62,386) | | | $ | (292,055) | | | $ | 30,820 | |
Revenues by major category within each segment are presented below (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended September 30, | | Nine months ended September 30, | | 2020 | | 2019 | | 2020 | | 2019 | Wealth Management: | | | | | | | | Advisory | $ | 82,612 | | | $ | 75,579 | | | $ | 227,672 | | | $ | 176,746 | | Commission | 44,921 | | | 52,623 | | | 135,337 | | | 137,851 | | Asset-based | 4,351 | | | 13,618 | | | 18,911 | | | 36,530 | | Transaction and fee | 4,048 | | | 3,608 | | | 14,885 | | | 11,664 | | Total Wealth Management revenue | $ | 135,932 | | | $ | 145,428 | | | $ | 396,805 | | | $ | 362,791 | | Tax Preparation: | | | | | | | | Consumer | $ | 38,482 | | | $ | 4,280 | | | $ | 186,724 | | | $ | 190,908 | | Professional | 939 | | | (692) | | | 16,266 | | | 14,825 | | Total Tax Preparation revenue | $ | 39,421 | | | $ | 3,588 | | | $ | 202,990 | | | $ | 205,733 | |
Wealth Management revenue recognition Wealth management revenue primarily consists of advisory revenue, commission revenue, asset-based revenue, and transaction and fee revenue. The timing of Wealth Management revenue recognition was as follows (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended September 30, | | 2020 | | 2019 | | Recognized Upon Transaction | | Recognized Over Time | | Total | | Recognized Upon Transaction | | Recognized Over Time | | Total | Advisory revenue | $ | — | | | $ | 82,612 | | | $ | 82,612 | | | $ | — | | | $ | 75,579 | | | $ | 75,579 | | Commission revenue | 16,884 | | | 28,037 | | | 44,921 | | | 23,195 | | | 29,428 | | | 52,623 | | Asset-based revenue | — | | | 4,351 | | | 4,351 | | | — | | | 13,618 | | | 13,618 | | Transaction and fee revenue | 1,067 | | | 2,981 | | | 4,048 | | | 1,054 | | | 2,554 | | | 3,608 | | Total Wealth Management revenue | $ | 17,951 | | | $ | 117,981 | | | $ | 135,932 | | | $ | 24,249 | | | $ | 121,179 | | | $ | 145,428 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nine months ended September 30, | | 2020 | | 2019 | | Recognized Upon Transaction | | Recognized Over Time | | Total | | Recognized Upon Transaction | | Recognized Over Time | | Total | Advisory revenue | $ | — | | | $ | 227,672 | | | $ | 227,672 | | | $ | — | | | $ | 176,746 | | | $ | 176,746 | | Commission revenue | 55,068 | | | 80,269 | | | 135,337 | | | 59,348 | | | 78,503 | | | 137,851 | | Asset-based revenue | — | | | 18,911 | | | 18,911 | | | — | | | 36,530 | | | 36,530 | | Transaction and fee revenue | 4,063 | | | 10,822 | | | 14,885 | | | 2,624 | | | 9,040 | | | 11,664 | | Total Wealth Management revenue | $ | 59,131 | | | $ | 337,674 | | | $ | 396,805 | | | $ | 61,972 | | | $ | 300,819 | | | $ | 362,791 | | | | | | | | | | | | | |
Tax Preparation revenue recognition We generate revenue from the sale of tax preparation digital services, packaged tax preparation software, ancillary services, and multiple element arrangements that may include a combination of these items. The timing of Tax Preparation revenue recognition was as follows (in thousands): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended September 30, | | 2020 | | 2019 | | Recognized Upon Transaction | | Recognized Over Time | | Total | | Recognized Upon Transaction | | Recognized Over Time | | Total | Consumer | $ | 38,480 | | | $ | 2 | | | $ | 38,482 | | | $ | 3,268 | | | $ | 1,012 | | | $ | 4,280 | | Professional | 641 | | | 298 | | | 939 | | | (619) | | | (73) | | | (692) | | Total Tax Preparation revenue | $ | 39,121 | | | $ | 300 | | | $ | 39,421 | | | $ | 2,649 | | | $ | 939 | | | $ | 3,588 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nine months ended September 30, | | 2020 | | 2019 | | Recognized Upon Transaction | | Recognized Over Time | | Total | | Recognized Upon Transaction | | Recognized Over Time | | Total | Consumer | $ | 186,721 | | | $ | 3 | | | $ | 186,724 | | | $ | 188,340 | | | $ | 2,568 | | | $ | 190,908 | | Professional | 13,822 | | | 2,444 | | | 16,266 | | | 12,682 | | | 2,143 | | | 14,825 | | Total Tax Preparation revenue | $ | 200,543 | | | $ | 2,447 | | | $ | 202,990 | | | $ | 201,022 | | | $ | 4,711 | | | $ | 205,733 | |
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