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    Intuit Inc (INTU)

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    Business Description

    Intuit Inc. is a global financial technology platform dedicated to empowering prosperity for consumers and small to mid-market businesses by providing financial management, compliance, and marketing products and services. The company operates through four main segments: Global Business Solutions, Consumer, Credit Karma, and ProTax, offering a range of products such as QuickBooks, Mailchimp, TurboTax, and more . Intuit's offerings are primarily sold in the United States, with a small portion of revenue coming from international markets .

    1. Global Business Solutions - Offers financial management, payroll, payment processing, and marketing automation services to small and mid-market businesses, featuring products like QuickBooks and Mailchimp.
    2. Consumer - Provides tax preparation products and services through TurboTax, catering to individual consumers.
    3. Credit Karma - Delivers a personal finance platform that includes credit and loan recommendations for consumers.
    4. ProTax - Supplies tax products specifically designed for professional accountants.

    Q4 2024 Summary

    Initial Price$625.13May 1, 2024
    Final Price$647.35July 31, 2024
    Price Change$22.22
    % Change+3.55%

    What went well

    • Strong acceleration in QuickBooks Online (QBO) due to growth in services, mid-market traction, and pricing power ; QBO U.S. grew 11%, QBO Advanced customers grew 28%, with larger customers adopting services at higher rates, driving overall ecosystem revenue.
    • Significant investments and progress in AI-driven expert platform leading to reimagined customer experiences and future growth ; Intuit Assist is engaging approximately 1 million businesses, delivering "done for you" experiences, and AI is driving higher revenue per user through increased attach rates of services.
    • Strategic focus on mid-market expansion with a comprehensive business suite combining all key capabilities, expected to drive sustained growth ; Leveraging AI-powered innovation and experts, Intuit is confident in achieving 20% online ecosystem revenue growth and capturing the significant opportunity in the mid-market segment.

    What went wrong

    • Intuit experienced two quarters of deceleration in QuickBooks Online subscriptions and online services before the recent acceleration into Q1, raising concerns about the sustainability of growth.
    • The company conducted a restructuring, laying off about 8% of its talent across the company, which may indicate underlying operational challenges or performance issues.
    • Intuit adjusted its long-term expectations in the Consumer segment to be more prudent until TurboTax Live becomes a larger part of the franchise, suggesting potential slowing growth in this segment.

    Q&A Summary

    1. Mid-Market Expansion
      Q: How big is the opportunity to expand into the mid-market?
      A: Intuit is doubling down on its focus on the mid-market, a strategy five years in the making. The company now offers a business suite that provides all the capabilities for businesses to grow customers, manage cash flow, and handle accounting—all in one place. They plan to announce a platform at Investor Day that will take them further upmarket, aiming to serve businesses beyond 10 to 100 employees. This positions Intuit to grow with existing customers and acquire new ones, tapping into a market where many mid-market customers are currently nonconsumption.

    2. TurboTax Live Growth and Guidance
      Q: Why adjust guidance for TurboTax despite strong momentum?
      A: While TurboTax Live grew 17% this past year, with full-service customers doubling and new customers tripling, Intuit adjusted its long-term expectations to be prudent. Until TurboTax Live, which is currently 30% of the franchise, becomes a larger part, they wanted to be cautious. They still expect TurboTax Live to grow between 15% to 20%. The total tax market is $35 billion in TAM, with $5 billion in DIY and $30 billion in assisted services. The focus remains on both assisted growth and being assertive in pursuing lower-income customers based on positive experiments.

    3. QBO Growth and Q1 Acceleration
      Q: What drives confidence in QBO's Q1 acceleration?
      A: Acceleration comes from three areas: increased services adoption (payments, payroll, live platform, Mailchimp), mid-market traction with QBO Advanced growing 28%, and price increases. Larger customers are adopting services at a higher rate, and more than half of growth comes from volume and mix. The business suite offering attracts customers who value having everything in one place.

    4. Reinvestment from Restructuring
      Q: How are savings from restructuring being reinvested?
      A: All savings are being reinvested in five key areas, including marketing, customer success, and additional engineering headcount. The restructuring affected about 8% of talent across the company, focusing on areas with opportunities for better performance. Intuit is positioning for the next 2–3 years, with no expectations of immediate payoff in the coming year.

    5. Mailchimp Reacceleration
      Q: What is needed to reaccelerate Mailchimp's growth?
      A: Intuit focuses on three areas: integrating Mailchimp with the QuickBooks platform, accelerating mid-market growth, and expanding internationally. Data and tech integration is a priority, and they are building momentum in mid-market with integrated offerings and enhanced go-to-market capabilities. This positions Mailchimp to contribute more significantly in the coming year and future.

    6. Impact of AI and Intuit Assist
      Q: How will AI and Intuit Assist impact future growth?
      A: Intuit Assist currently engages about 1 million businesses and will play a significant role in the future. Examples include automating marketing campaigns and streamlining invoicing and payment processes. While no impact from Intuit Assist is included in this year's guidance, it is expected to drive new customer growth and adoption of services over time.

    7. Global Business Solutions Group Growth
      Q: What's the growth outlook for the Global Business Solutions Group?
      A: The group is expected to be north of $11 billion, growing 16% to 17% in the coming year, with online growth at 20%. Intuit aims to serve larger customers in the mid-market and believes there is significant room to grow beyond the current $10 billion run rate.

    8. QBO Live and Mid-Market Push
      Q: How does QBO Live support moving upmarket?
      A: QBO Live has more than tripled its client base by offering expert services in bookkeeping and accounting. The platform addresses businesses' needs for integrated expert support, and larger customers expect such services. Intuit sees higher adoption of services like payments and payroll among QBO Live users, which will aid in accelerating their upmarket push.

    9. Health of Small Business Customers
      Q: Any changes in the health of small business customers?
      A: The overall health is stable. Small businesses show increased revenue and profitability compared to last fiscal year. Cash reserves are down 6% to 7% from last year but remain significantly higher than pre-pandemic levels. Hours worked are also higher, indicating steady business activity.

    10. Impact of AI on Costs and Productivity
      Q: What is the impact of AI on revenue and costs?
      A: While AI's revenue impact is immaterial this year and not included in next year's guidance, it's expected to be a significant driver in future years. AI initiatives are broad-based, enhancing services, conversion, and retention. Intuit is not building its own data centers but uses AWS, keeping investments asset-light. The company is also seeing improvements in internal productivity through AI.

    Key Metrics

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    Executive Team

    NamePositionStart DateShort Bio
    Sasan K. GoodarziPresident, Chief Executive Officer, and DirectorJanuary 1, 2019Sasan K. Goodarzi has been serving as the President and Chief Executive Officer of Intuit Inc. since January 1, 2019. He is also a member of the Board of Directors, having joined the board in 2019. Before becoming CEO, Mr. Goodarzi held various leadership roles at Intuit, including Executive Vice President and General Manager of the Small Business & Self-Employed Group from 2016 to 2018 .
    Scott D. CookFounder and Director1984Scott D. Cook is the Founder of Intuit Inc. and has been a Director since 1984. He served as Intuit's Chairman of the Board from 1993 to 1998 and was the President and Chief Executive Officer from 1984 to 1994 .
    Sandeep S. AujlaExecutive Vice President and Chief Financial OfficerAugust 2023Sandeep S. Aujla has been serving as the Executive Vice President and Chief Financial Officer of Intuit Inc. since August 2023. Prior to this role, he was the Senior Vice President of Finance for Intuit's Small Business & Self-Employed Group and Technology Organization from January 2019 to July 2023 .
    Alex G. BalazsExecutive Vice President and Chief Technology OfficerSeptember 5, 2023Alex G. Balazs has been serving as the Executive Vice President and Chief Technology Officer at Intuit since September 5, 2023. Prior to this role, he was the Senior Vice President and Chief Technology Architect from April 2021 to September 2023 .
    Laura A. FennellExecutive Vice President, Chief People & Places OfficerAugust 2018Laura A. Fennell has been serving as the Executive Vice President, Chief People & Places Officer at Intuit since August 2018. Before this role, she was the Executive Vice President, General Counsel and Corporate Secretary from August 2015 to July 2018 .
    Kerry J. McLeanExecutive Vice President, General Counsel, and Corporate SecretaryAugust 2020Kerry J. McLean has been serving as Executive Vice President, General Counsel, and Corporate Secretary at Intuit since August 2020. Prior to this role, she was the Senior Vice President, General Counsel, and Corporate Secretary from August 2018 to July 2020 .
    Mark NotarainniExecutive Vice President and General Manager, Consumer GroupAugust 2023Mark Notarainni has been the Executive Vice President and General Manager of Intuit's Consumer Group since August 2023. He previously served as Executive Vice President of Customer Success for five years .
    Marianna TesselExecutive Vice President and General Manager, Small Business & Self-Employed GroupSeptember 2023Marianna Tessel has been serving as the Executive Vice President and General Manager of Intuit's Small Business & Self-Employed Group since September 2023. Prior to this role, she was the Executive Vice President and Chief Technology Officer at Intuit from January 2019 to September 2023 .
    Lauren D. HotzSenior Vice President and Chief Accounting OfficerAugust 2022Lauren D. Hotz has been serving as the Senior Vice President and Chief Accounting Officer at Intuit since August 2022. Prior to this role, she was the Vice President and Chief Accounting Officer from February 2022 to July 2022 .

    Questions to Ask Management

    1. In light of two quarters of deceleration in QuickBooks Online subscriptions and online services, how confident are you in the forecasted acceleration for Q1, and is this primarily driven by price increases or by organic growth in units and services?

    2. Can you provide more specifics on the recent restructuring, particularly which areas of the business saw reduced headcount, and how you plan to mitigate any execution risks associated with these reductions?

    3. With Mailchimp's revenue growth impacted by prior price and lineup changes, what concrete steps are you taking to reaccelerate Mailchimp's growth to desired levels, especially in terms of integration with QuickBooks, mid-market focus, and international expansion?

    4. Given your plans to test standalone SKUs where an AI agent does everything for the customer, what challenges do you anticipate in implementing this vision, and how will you ensure accuracy and data privacy in delivering these AI-driven financial management experiences?

    5. Despite strong growth in TurboTax Live, you've adjusted your long-term expectations for the Consumer segment; what strategies are you employing to accelerate adoption in the assisted tax market and among complex, higher-income DIY customers to capture more of the $30 billion assisted tax TAM?

    Share Repurchase Program

    Program DetailsProgram 1Program 2
    Approval DateAugust 22, 2023 August 20, 2024
    End Date/DurationNo expiration No expiration
    Total additional amount$2.3 billion $3 billion
    Remaining authorization$1.3 billion $3 billion
    DetailsCan be suspended/terminated anytime Can be suspended/terminated anytime

    Past Guidance

    Q1 2025 Earnings Call

    • Issued Period: Q1 2025
    • Guided Period: FY 2025 and Q1 2025
    • Guidance:
      • Total Company Revenue Growth: 5% to 6%
      • Small Business and Self-Employed Group Revenue Growth: 6% to 7%
      • Desktop Ecosystem Revenue: Expected to decline by approximately 20%
      • Online Ecosystem Revenue Growth: Expected to accelerate to approximately 19%
      • Credit Karma Revenue: Expected to grow
      • Consumer Group and ProTax Revenue: Expected to decline due to the previous year's extended California tax filing deadline
      • GAAP Earnings Per Share: $0.61 to $0.66
      • Non-GAAP Earnings Per Share: $2.33 to $2.38
      • GAAP Guidance: Reflects an expected $19 million restructuring charge related to the reorganization announced in July .

    Q4 2024 Earnings Call

    • Issued Period: Q4 2024
    • Guided Period: FY 2025 and Q1 2025
    • Guidance:
      • Total Company Revenue: $18.160 billion to $18.347 billion, growth of 12% to 13%
      • Small Business and Self-Employed Group Revenue Growth: 16% to 17%
      • Online Ecosystem Revenue Growth: Approximately 20%
      • Desktop Ecosystem Revenue Growth: Low single digits
      • Consumer Group Revenue Growth: 7% to 8%
      • Credit Karma Revenue Growth: 5% to 8%
      • GAAP Diluted EPS: $12.34 to $12.54, growth of 18% to 20%
      • Non-GAAP Diluted EPS: $19.16 to $19.36, growth of 13% to 14%
      • GAAP Tax Rate: Approximately 23%
      • Restructuring Charge: Expected $24 million restructuring charge
      • Q1 2025 Specific Guidance:
        • Total Company Revenue Growth: 5% to 6%
        • Small Business and Self-Employed Group Revenue Growth: 6% to 7%
        • Desktop Ecosystem Revenue: Expected to decline approximately 20%
        • Online Ecosystem Revenue Growth: Expected to accelerate to approximately 19%
        • Credit Karma Revenue: Expected to grow
        • Consumer Group and ProTax Revenue: Expected to decline
        • GAAP EPS: $0.61 to $0.66
        • Non-GAAP EPS: $2.33 to $2.38
        • Restructuring Charge for Q1: Expected $19 million restructuring charge .

    Q3 2024 Earnings Call

    • Issued Period: Q3 2024
    • Guided Period: Q4 2024 and FY 2024
    • Guidance:
      • Fiscal 2024 Guidance:
        • Total Company Revenue Growth: 13%
        • GAAP Operating Income Growth: 21% to 22%
        • Non-GAAP Operating Income Growth: 16%
        • GAAP Diluted EPS Growth: 28% to 29%
        • Non-GAAP Diluted EPS Growth: 17%
      • Q4 2024 Guidance:
        • Revenue Growth: 13% to 14%
        • GAAP EPS: $0.25 to $0.30
        • Non-GAAP EPS: $1.80 to $1.85
      • Segment-Specific Guidance:
        • Small Business & Self-Employed Group Revenue Growth: 18%
        • Credit Karma Revenue Growth: 2%
        • Consumer Group Revenue Growth: $4.44 billion to $4.45 billion
        • ProTax Group Revenue Growth: 6% to 7% .

    Q2 2024 Earnings Call

    • Issued Period: Q2 2024
    • Guided Period: Q3 2024 and FY 2024
    • Guidance:
      • Full Fiscal Year 2024 Guidance:
        • Total Company Revenue Growth: 11% to 12%
        • GAAP Operating Income Growth: 15% to 18%
        • Non-GAAP Operating Income Growth: 12% to 14%
        • GAAP EPS Growth: 11% to 15%
        • Non-GAAP EPS Growth: 12% to 14%
      • Q3 2024 Guidance:
        • Revenue Growth: 10% to 11%
        • GAAP EPS: $7.77 to $7.84
        • Non-GAAP EPS: $9.31 to $9.38 .

    Competitors

    Competitors mentioned in the company's latest 10K filing.

    • Business software providers, such as those that provide accounting, business management and financial software, marketing automation, customer relationship management, inventory management, payroll and employee management .
    • Private and publicly-funded tax preparation and filing service providers .
    • Accounting, consulting, and tax firms .
    • Companies and banks that provide payments services, including merchant payment processing, checking, bill pay, savings, loans, point of sale devices, and small business financing .
    • Companies that provide personal finance management products and tools, including access to credit scores, credit and identity monitoring, credit-building tools, and tools to help understand net worth and make financial progress .
    • Companies that provide a marketplace of consumer financial offerings .
    • Financial institutions .
    • Credit bureaus .
    • Large platform companies that could develop competing technology solutions to any of the problems that our customers may face .

    Latest news

    Recent developments and announcements about INTU.

    Financial Reporting

      Earnings Report

      ·
      Nov 21, 2024, 9:33 PM

      Intuit Inc. (INTU) Earnings Release - November 21, 2024

      Intuit Inc. has announced its financial results for the first quarter of fiscal 2025, which ended on October 31, 2024. Here are the key highlights from the earnings release:

      • Revenue Growth: Intuit reported a total revenue of $3.3 billion, marking a 10% increase compared to the same period last year. The Global Business Solutions Group revenue grew to $2.5 billion, up 9%, while the Online Ecosystem revenue increased by 20% to $1.9 billion .

      • Segment Performance:

        • Credit Karma: Revenue grew by 29% to $524 million, driven by strong performance in personal loans, auto insurance, and credit cards .
        • Consumer Group: Revenue was $176 million, down 6%, attributed to the previous year's extended tax filing deadline for California filers .

      • Earnings Per Share: GAAP diluted earnings per share were reported at $0.70, a decrease from $0.85 in the previous year. Non-GAAP diluted earnings per share were $2.50, showing a slight increase from $2.47 .

      • Operating Income: GAAP operating income was $271 million, down 12% from the previous year, while non-GAAP operating income was $953 million, a slight decrease of 1% .

      • Forward Guidance: Intuit reiterated its full fiscal year 2025 guidance, expecting revenue growth of approximately 12 to 13%, with GAAP operating income growth of 28 to 30% and non-GAAP operating income growth of 13 to 14% .

      • Dividend Announcement: The Board of Directors approved a quarterly cash dividend of $1.04 per share, payable on January 17, 2025, representing a 16% increase per share compared to the previous year .

      These results reflect Intuit's strong start to the fiscal year, driven by its AI-driven platform strategy and robust performance across its business segments, particularly in the Global Business Solutions Group and Credit Karma .