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Intuit Exceeds Second-Quarter Revenue and Earnings Guidance; Raises Outlook for Fiscal Year Results

MOUNTAIN VIEW, Calif. – Feb. 18, 2010 – Intuit Inc. (Nasdaq: INTU) today announced financial results for its second quarter ended Jan. 31.

Second-Quarter Highlights
  • Revenue increased 8 percent over the comparable quarter, to $837 million. Revenue was more than $20 million higher than guidance adjusted for the sale of the Intuit Real Estate Solutions business.
  • On a GAAP basis, (Generally Accepted Accounting Principles) operating income grew 26 percent to $139 million. Non-GAAP operating income grew 20 percent, to $206 million, $31 million over the top end of the guidance range.
  • GAAP diluted earnings per share were 35 cents, up 35 percent over the second quarter of last year. Non-GAAP diluted earnings per share were 38 cents, 6 cents above the top of the guidance range.
  • Total TurboTax federal units were up 11 percent through Feb. 13.
  • The Financial Institutions segment reported 10 percent revenue growth, driven by strong bill pay user growth and positive early results for TurboTax for Online Banking.
  • In the small business group, Employee Management Solutions and Payment Solutions revenue grew double digits and each of the small business segments saw an increase in average revenue per customer compared to the second quarter of last year.

Note: all comparisons are versus the same period a year ago.

 

   GAAP   Non-GAAP
  Q2 10 Q2 09 % change Q2 10 Q2 09 % change
Revenue  $837  $773  8  $837  $773  8
Operating Income  $139  $111  26  $206  $172  20
EPS  $0.35  $0.26  35  $0.38  $0.34  12

Dollars in millions except for EPS

Based on these strong results, particularly in the tax business, Intuit raised its full-year revenue and earnings guidance.  For fiscal year 2010 the company expects revenue growth of 6 to 9 percent,  $3.3 billion to $3.4 billion.  All comparisons exclude the Intuit Real Estate Solutions business, which is accounted for as a discontinued operation.

Company Perspective

"We are very pleased that our fiscal second quarter revenue and earnings per share exceeded the top end of our guidance," said Brad Smith, Intuit's president and chief executive officer. "While it is still early in the year, we are confident in our ability to perform well in the second half and therefore are raising our revenue and earnings guidance for the year."

"We wanted to come out of the recession stronger than we went in, so we focused on adding customers and continued to invest in innovation. These results demonstrate that our strategy is working. We continue to see great success growing our core businesses, with a strong quarter in tax and good results in our small business division. At the same time we're making strides in building out adjacent businesses, entering new geographies and transitioning to connected services."

Quarterly Business Segment Results and Highlights

Small Business total revenue was up 5 percent for the second-quarter. Each of the three small business segments saw an increase in average revenue per customer compared to the second quarter of last year.

Financial Management Solutions

  • Revenue was down 3 percent, while revenue per customer was up.
  • Intuit has more than doubled the Intuit Websites customer base since completing the acquisition of Homestead at the end of 2007. These customers are largely new to the franchise, and have the potential to adopt other Intuit services like payments and email marketing.

Employee Management Solutions

  • Revenue grew 12 percent, reflecting the acquisition of PayCycle, and steady performance in the desktop payroll business.


Payment Solutions

  • Revenue was up 14 percent, driven by strong customer base growth, which was up 13 percent this quarter.


Consumer Tax Group

  • Revenue grew 15 percent over the comparable quarter, driven by very strong growth in TurboTax Online.  Total TurboTax federal units were up 11 percent through Feb. 13.
  • Intuit added a new product, SnapTax, into its tax offerings this tax season. Building on the growing trend toward a digital world and more use of mobile devices, SnapTax lets California taxpayers prepare and file their simple federal and state returns from their iPhones. They snap a photo of their 2009 W-2, answer a few basic questions and click "send" to submit and e-file, all within a matter of minutes.


Accounting Professionals

  • Segment revenue declined 7 percent from last year. Revenue would have been flat year-over-year if not for a $9 million revenue shift that has been deferred from the second to the third quarter. Expected revenue growth for the year remains at 3 percent to 7 percent.

Financial Institutions

  • Revenue grew 10 percent, with 16 percent bill pay user growth contributing to another strong quarter.
  • About 1,200 financial institutions are offering TurboTax for Online Banking this tax season. The offering demonstrates Intuit's unique ability to combine capabilities across business segments to create innovative solutions to reach more customers and solve their financial problems.


Other Businesses

  • Segment revenue grew 38 percent, driven primarily by strength in Personal Finance.
  • Personal Finance benefited from the Mint.com acquisition and a strong new Quicken desktop release. Since the acquisition, the number of new Mint.com registered users has accelerated.
  • Intuit launched its first product for the Indian market, Intuit Money Manager, in December. This is an online personal finance tool developed specifically to help consumers plan, track, and grow their money. This innovative product has the potential to help tens of millions of consumers save time, save money, and make better financial decisions.
  • Quicken Health Expense Tracker is now in market and available to more than 26 million health plan members.
Forward-looking Guidance

For fiscal year 2010 Intuit expects:

  • Revenue of $3.3 billion to $3.4 billion, growth of 6 to 9 percent.
  • GAAP operating income of $785 million to $825 million. Non-GAAP operating income of $1.01 billion to $1.05 billion, growth of 9 to 13 percent.
  • GAAP diluted earnings per share of $1.63 to $1.70, or growth of 21 to 26 percent. Non-GAAP diluted EPS of $1.97 to $2.04, growth of 8 to 12 percent.

For the third-quarter Intuit expects:

  • Revenue of $1.51 billion to $1.59 billion, growth of 7 to 12 percent.
  • GAAP operating income of $811 million to $861 million, growth of 6 to 13 percent. Non-GAAP operating income of $860 million to $910 million, growth of 3 to 9 percent.
  • GAAP diluted EPS of $1.64 to $1.74, growth of 12 to 18 percent. Non-GAAP diluted EPS of $1.75 to $1.85, growth of 4 to 10 percent.
Conference Call Information

Intuit executives will discuss the financial results on a conference call at 1:30 p.m. Pacific time today. To hear the call, dial 866-238-1645 in the United States or 703-639-1163 from international locations. No reservation or access code is needed. The conference call can also be heard live via webcast at http://investors.intuit.com/events.cfm. Prepared remarks for the call will be available on Intuit's Web site after the call ends.

A replay of the conference call will also be available for one week by calling 888-266-2081, or 703-925-2533 from international locations. The access code for this call is 1427610.

The audio webcast will remain available on Intuit's Web site for one week after the conference call.

Intuit, the Intuit logo and QuickBooks, among others, are registered trademarks and/or registered service marks of Intuit Inc. in the United States and other countries.

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 B and Table E. A copy of the press release issued by Intuit today can be found on the investor relations page of Intuit's Web site.

Cautions About Forward-Looking Statements

This press release contains forward-looking statements, including forecasts of Intuit's future expected financial results; its prospects for the business in fiscal 2010; 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: product introductions and price competition from our competitors can have unpredictable negative effects on our revenue, profitability and market position; governmental encroachment in our tax businesses or other governmental activities or public policy affecting the preparation and filing of tax returns could negatively affect our operating results and market position; if economic and market conditions in the U.S. and worldwide continue to decline, our customers may delay or reduce technology purchases which may harm our business, results of operations and financial condition; we may not be able to successfully introduce new products and services to meet our growth and profitability objectives, and current and future products and services may not adequately address customer needs and may not achieve broad market acceptance, which could harm our operating results and financial condition; any failure to maintain reliable and responsive service levels for our offerings could cause us to lose customers and negatively impact our revenues and profitability; any significant product quality problems or delays in our products could harm our revenue, earnings and reputation; our participation in the Free File Alliance may result in lost revenue opportunities and cannibalization of our traditional paid franchise; any failure to properly use and protect personal customer information could harm our revenue, earnings and reputation; our acquisition activities may be disruptive to Intuit and may not result in expected benefits; our use of significant amounts of debt to finance acquisitions or other activities could harm our financial condition and results of operations; our revenue and earnings are highly seasonal and the timing of our revenue between quarters is difficult to predict, which may cause significant quarterly fluctuations in our financial results; predicting tax-related revenues is challenging due to the heavy concentration of activity in a short time period; we have implemented, and are continuing to upgrade, new information systems and any problems with these new systems could interfere with our ability to deliver products and services and gather information to effectively manage our business; our financial position may not make repurchasing shares advisable or we may issue additional shares in an acquisition causing our number of outstanding shares to grow; and litigation involving intellectual property, antitrust, shareholder and other matters may increase our costs.  More details about these and other risks that may impact our business are included in our Form 10-K for fiscal 2009 and in our other SEC filings.  You can locate these reports through our website at http://www.intuit.com/about_intuit/investors.  Forward-looking statements are based on information as of Feb. 18, 2010, and we do not undertake any duty to update any forward-looking statement or other information in these materials.

(Financial Statements follow)

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