Blucora (NASDAQ:BCOR), operating in the online search space and DIY tax preparation software, added E-commerce to its line-up during Q3 2013 through the acquisition of Monoprice. The company reported the numbers for Q3 2013 on Nov 5th after market close. We looked at the performance and opine that the company has performed splendidly in Q3 2013.
Business performance in Q3 2013
The company reported a solid topline growth in Q3 2013. The search and Tax revenues grew 18% on a Y/Y basis. Including revenue from Monoprice, for the period Aug 22 2013 – Sep 30 2013, the revenues add up to $124.1 million representing a Y/Y gain of 34%. The quarter saw one time losses of $5.3 million and a non-cash loss on derivative instruments of $3.6 million which is reflected in the adjusted EBITDA numbers. The key indicators of operating margin, adjusted EBITDA and Non-GAAP EPS adjusted for one-time expenses and gains saw a positive growth.
Actual performance v/s Analyst estimates
According to streetinsider.com analyst consensus estimates for Blucora were non-GAAP earnings per share (EPS) of 17 cents and revenue of $91 million. The company trumped both the estimates. The non-GAAP EPS of 30 cents beat analyst estimates by 13 cents, leading to an earnings surprise of 76%. The reported revenues came in 73% ahead of analyst expectations. The quarter was the 5th straight quarter the company has beaten analyst estimates.
Blucora Q4 2013 Guidance
The management gave a Q4 2013 revenue guidance of $156 million to $164 million. At the midpoint of $160 million, the guidance represents a Y/Y growth of 64% over Q4 2012 and a sequential increase of 29% over Q3 2013. The company also guided the non-GAAP EPS for Q4 2013 to be in the range of 34 cents to 39 cents. The average EPS guidance of 36.5 cents will represent a 12.5 cent increase over Q4 2012 or a 52% Y/Y increase.
The company reported a solid quarter which saw topline growth ahead of expectations and marginal increase in profit margins. The negatives are the high value of Intangibles and Goodwill, which are currently carried in the company’s books. On the positive side we expect the overall margins to improve over the coming quarters. This will be mainly due to higher proportion of revenues from Monoprice, which enjoys higher margins compared to Blucora’s other two segments. We continue to uphold our positive outlook on the company as we expect to see improved margins and revenue growth in the coming quarters.
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