Intuit Grows Revenue 12 Percent in Third Quarter; Raises Full Year Guidance

On May 23, 2019, Intuit Inc. (Nasdaq: INTU) announced financial results for the third quarter of fiscal 2019, which ended April 30. The Official Intuit Press Release maybe accessed here: https://www.businesswire.com/news/home/20190523005695/en/

Sasan Goodarzi chief executive officer (CEO) of Intuit, who leads the company on its mission of powering prosperity around the world, said “This was a strong quarter across the company... we are on-track to exceed the guidance we provided at the beginning of the year."

"We had a great tax season, growing the Do-It-Yourself (DIY) category overall as well as our share within the category driven by our innovation and significantly improved customer experience. We produced our most robust free offering yet and made significant progress in our effort to transform the assisted category.

"We continue to see momentum in our Small Business and Self-Employed Group driven by Online Ecosystem revenue growth. We’re making progress in solving key customer pain points and becoming the center of small business growth around the globe," said Goodarzi.

Financial Highlights

For the third quarter, Intuit:

  • Grew total revenue to $3.3 billion, up 12 percent.
  • Increased TurboTax Online share within the DIY category by an estimated half a point.
  • Increased Small Business Online Ecosystem revenue by 38 percent.
  • Grew Consumer Group revenue by 10 percent to $2.2 billion.
  • Grew Small Business and Self-Employed Group revenue 19 percent to $887 million.

Unless otherwise noted, all growth rates refer to the current period versus the comparable prior-year period, and the business metrics and associated growth rates refer to worldwide business metrics. Fiscal 2018 amounts have been restated for the adoption of the new accounting standard on revenue accounting, ASC 606.

Business Segment Results

Small Business and Self-Employed Group

Intuit is focused on becoming the center of small business growth by helping customers get paid faster, pay their employees and contractors, access capital and have total confidence that their books are done right.

  • QuickBooks Capital has funded $360 million in cumulative loans in the last 18 months. At the end of Q3, the notes receivable balance was $96 million.
  • QuickBooks Online subscribers grew 32 percent ending the quarter with over 4.2 million subscribers.
  • Growth remains strong across multiple geographies, with U.S. subscribers up 25 percent to over 3.1 million and international subscribers increasing 55 percent to over 1.1 million.
  • Within QuickBooks Online, Self-Employed subscribers grew to approximately 970,000, up from roughly 680,000 one year ago.
  • Approximately 440,000 QuickBooks Self-Employed customers are from the TurboTax Self-Employed offering, up from 330,000 last year.

Consumer and Strategic Partner Groups

Intuit is focused on expanding its share in DIY, transforming the assisted tax preparation category and expanding beyond tax with a consumer platform. This is in service to helping customers make ends meet, get their largest tax refund and make smart decisions with their money.

  • TurboTax Online units grew 7 percent this season.
  • Customers using TurboTax Live more than tripled year-over-year.
  • The Turbo platform has over 14 million registered users, up from 5 million last year.
  • The Strategic Partner Group reported $235 million of professional tax revenue for the third quarter, in line with expectations.

Capital Allocation Summary

In the third quarter the company:

  • Repurchased $135 million of shares, with $2.8 billion remaining on the company's authorization.
  • Received Board approval for a quarterly dividend of $0.47 per share, payable July 18, 2019. This represents a 21 percent increase compared to last year.

Forward-looking Guidance

"With strong performance and momentum across the company, we are raising our revenue, operating income and earnings per share guidance for fiscal year 2019," said Michelle Clatterbuck, Intuit's chief financial officer. "We will continue to execute against our strategy of becoming an A.I.-driven expert platform that focuses on our customers' common set of needs as we pursue our mission to power prosperity around the world."

Intuit announced guidance for the fourth quarter of fiscal year 2019, which ends July 31. The company expects:

  • Revenue growth of 10 to 12 percent,
  • GAAP loss per share of $0.35 to $0.33, and
  • Non-GAAP diluted loss per share of $0.16 to $0.14.

Intuit raised guidance for full fiscal year 2019. The company now expects:

  • Revenue of $6.738 billion to $6.758 billion, growth of 12 percent.
  • GAAP operating income of $1.827 billion to $1.837 billion, growth of 17 to 18 percent.
  • Non-GAAP operating income of $2.258 billion to $2.268 billion, growth of 10 to 11 percent.
  • GAAP diluted earnings per share of $5.72 to $5.74, growth of 12 to 13 percent.
  • Non-GAAP diluted earnings per share of $6.67 to $6.69, growth of 15 to 16 percent.

The company also updated segment revenue results. For fiscal year 2019, the company now expects:

  • Small Business and Self-Employed Group: growth of 15 percent.
  • Consumer Group: growth of 10 percent.
  • Strategic Partner Group: growth of 4 percent.

Conference Call Details

Intuit executives will discuss the financial results on a conference call at 1:30 p.m. Pacific time on May 23. To hear the call, dial 844-246-4601 in the United States or 703-639-1172 from international locations. No reservation or access code is needed. The conference call can also be heard live at http://investors.intuit.com/Events/default.aspx. Prepared remarks for the call will be available on Intuit’s website after the call ends.

Replay Information

A replay of the conference call will be available for one week by calling 855-859-2056, or 404-537-3406 from international locations. The access code for this call is 8488901.

The audio webcast will remain available on Intuit’s website for one week after the conference call.

About Intuit

Intuit’s mission is to Power Prosperity Around the World. Our global products and platforms, including TurboTax, QuickBooks, Mint and Turbo, are designed to empower consumers, self-employed and small businesses to improve their financial lives, finding them more money with the least amount of work, while giving them complete confidence in their actions and decisions. Our innovative ecosystem of financial management solutions serves approximately 50 million customers worldwide, unleashing the power of many for the prosperity of one. Please visit us for the latest news and in-depth information about Intuit and its brands and find us on social.

About Non-GAAP Financial Measures

This press release and the accompanying tables include non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles, please see the section of the accompanying tables titled "About Non-GAAP Financial Measures" as well as the related Table B1, Table B2, and Table E. A copy of the press release issued by Intuit today can be found on the investor relations page of Intuit's website.

Cautions About Forward-looking Statements

This press release contains forward-looking statements, including forecasts of expected growth and future financial results of Intuit and its reporting segments; Intuit’s prospects for the business in fiscal 2019 and beyond; expectations regarding timing and growth of revenue for each of Intuit’s reportable segments and from current or future products and services; expectations regarding customer growth; expectations regarding changes to our products and their impact on Intuit’s business; expectations regarding the amount and timing of any future dividends or share repurchases; expectations regarding Intuit's corporate tax rate; expectations regarding availability of our offerings; expectations regarding the impact of our strategic decisions on Intuit’s business; and all of the statements under the heading “Forward-looking Guidance.”

Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results to differ materially from the expectations expressed in the forward-looking statements. These factors include, without limitation, the following: our ability to compete successfully; our participation in the Free File Alliance; governmental encroachment in our tax businesses, our ability to adapt to technological change; our ability to predict consumer behavior; our ability to protect our intellectual property rights; our reliance on third party intellectual property; any harm to our reputation; risks associated with acquisitions and divestitures; issue of additional shares as consideration or incurring debt to fund an acquisition; our cybersecurity incidents (including those affecting the third parties we rely on); customer concerns about privacy and cybersecurity incidents; fraudulent activities by third parties using our offerings; failure to process transactions effectively; interruption or failure of our information technology; ability to maintain critical third party business relationships; our ability to attract and retain talent; deficiency in quality, accuracy or timely launch of products; difficulties in processing or filing customer tax submissions; risks associated with international operations; changes to public policy, laws or regulations affecting our businesses; litigation in which we are involved; seasonal nature of our tax business; changes in tax rates and tax reform legislation; global economic changes; exposure to credit risk of the businesses we provide capital to; amortization of acquired intangible assets and impairment charges; our ability to repay outstanding debt; our ability to repurchase shares or distribute dividends; volatility of our stock price; and our ability to successfully market our offerings. More details about these and other risks that may impact our business are included in our Form 10-K for fiscal 2018 and in our other SEC filings. You can locate these reports through our website at http://investors.intuit.com. Fiscal 2019 guidance speaks only as of the date it was publicly issued by Intuit. Other forward-looking statements represent the judgment of the management of Intuit as of the date of this presentation. We do not undertake any duty to update any forward-looking statement or other information in this presentation.

Editor's note:

Some URLs or other links provided within the graphic text of this document are not 'active' links, we regret that Metro Publishing does not allow us to make links available within captured images.