Press Releases

Intuit Reports Second-quarter Results: Reiterates Full-year Revenue Guidance; Raises EPS Growth Estimate

Small Business Group Grows Revenue 15 Percent

Mountain View, Calif. – Feb. 17, 2011 – Intuit Inc. (Nasdaq: INTU) today announced financial results for its second fiscal quarter, which ended Jan. 31.

Second-quarter Highlights:
  • Revenue increased to $878 million, up 5 percent over the year-ago quarter.
  • On Jan. 7, Intuit estimated that approximately $40 million to $60 million of tax revenue and operating income (GAAP and non-GAAP) would shift from its second fiscal quarter to its third fiscal quarter due to the Internal Revenue Service not accepting certain e-filed tax returns until mid-February.
  • Intuit reiterated full-year revenue guidance: For fiscal year 2011, the company expects revenue of $3.74 billion to $3.84 billion, growth of 8 to 11 percent.
  • Total TurboTax federal units were up 1 percent season-to-date through Feb. 12, and accelerated to 11 percent growth during the period from Feb. 1 through Feb. 12 versus the comparable period a year ago.
  • Intuit's Small Business Group revenue increased 15 percent compared to the year-ago quarter. Within Small Business, Financial Management Solutions revenue increased 21 percent compared to the year-ago quarter.

Intuit also increased fiscal 2011 diluted earnings per share guidance to reflect the extension of the research and development tax credit, which will lower the company's effective tax rate. Intuit now expects non-GAAP diluted earnings per share growth of 14 to 18 percent.

 

GAAP Non-GAAP
  Q2 FY11

Q2 FY10

Change Q2 FY11 Q2 FY10 Change
Revenue $878 $837 5% $878 $837 5%

Operating

Income

$111 $139 (20%) $164 $206 (20%)
EPS $0.23 $0.35 (34%) $0.32 $0.38 (16%)
  • Dollars in millions, except EPS.

Note: GAAP diluted EPS for Q2 FY10 included $0.10 for the gain on the sale of the Intuit Real Estate Solutions business.

Company Perspective

"Intuit delivered strong financial results for the fiscal second quarter," said Brad Smith, Intuit's president and chief executive officer. "Reiterating our full-year guidance demonstrates our confidence in our growth strategy and our ability to execute for the remainder of the tax season and the fiscal year. 

"Small Business continues to perform well, with growth accelerating from last quarter. Our core business is growing, and our connected services are driving customer acquisition and revenue growth. We are capitalizing on secular tailwinds as customer preferences move toward more digital, connected services in the small business sector.

"We believe that later acceptance of tax returns will simply mean a shorter tax season as filers are getting started later. This is supported by the unit growth acceleration we've seen in TurboTax Online in February. The move toward do-it-yourself digital tax solutions continues as a macro trend, and it basically comes down to staying laser focused on execution.  All indications are that we're competing effectively for market share, and we have confidence in our game plan for the balance of the season," Smith said.

Quarterly Business Segment Results and Highlights

Total Small Business Group revenue grew 15 percent compared to the year-ago quarter. Growth in small business was led by strength in Financial Management Solutions and Employee Management Solutions.

  • Financial Management Solutions revenue increased 21 percent compared to the year-ago quarter, driven by strong growth in QuickBooks Enterprise and Online. QuickBooks Online subscribers grew 52 percent year over year.
  • Employee Management Solutions revenue grew 11 percent compared to the year-ago quarter.  Increases in online and enhanced payroll subscribers, as well as strong retention, contributed to growth.
  • Payments Solutions revenue grew 7 percent compared to the year-ago quarter. Merchants grew 14 percent compared to the year-ago quarter, while transaction volume per merchant grew 1 percent.
  • Intuit GoPayment, a mobile offering that lets merchants accept payments over their iPhone and other devices, has become an effective customer acquisition channel.
Consumer Tax
  • Revenue was down 6 percent over the comparable quarter last year. The company believes the decline was driven by a shift in revenue from the second fiscal quarter to the third fiscal quarter due primarily to taxpayers waiting longer to file their returns. Expected revenue growth for the fiscal year remains at 10 to 13 percent.
  • Intuit launched SnapTax nationwide this tax season for iPhone and Android mobile filers. The innovative mobile application allows people to prepare and file their taxes from start to finish and is receiving strong customer and industry praise.
Accounting Professionals
  • Revenue declined by 2 percent compared to the year-ago quarter. Expected revenue growth for the fiscal year remains at 4 to 7 percent.
Financial Services
  • Revenue increased 3 percent compared to the year-ago quarter.
  • Internet banking users increased by 10 percent, while bill pay users grew 23 percent compared to the same quarter last year.
  • Adjusting for the sale of Intuit's lending business in fiscal 2010 and a nonrecurring revenue item, Financial Services revenue would have grown approximately 7 percent for the quarter.
Other Businesses
  • Revenue grew 5 percent compared to the year-ago quarter.
  • Intuit Health received certification for timely access of electronic health records. This helps providers using Intuit's solution qualify for meaningful use and receive government funding.
Share Repurchase Program
  • Intuit repurchased $530 million of its common stock in the second quarter, bringing repurchases to a total of $860 million for the first two quarters of the fiscal year.
  • At the end of the quarter, the company had approximately $1.1 billion remaining on the current authorization.

"We're executing against the right strategic plan, and that's evident in the numbers," said Neil Williams, chief financial officer.  "We continue to manage the company for long-term, double-digit organic revenue growth. We're focused on allocating capital in the most effective ways, using the cash we generate to grow the business and return value to shareholders. I'm pleased with our strong performance this quarter and believe we are well positioned to succeed in the second half of the year."

 

Forward-looking Guidance

For the third-quarter the company expects:

  • Revenue of $1.76 billion to $1.83 billion, growth of 10 to 14 percent. 
  • GAAP operating income of $1 billion to $1.05 billion, growth of 13 to 18 percent.
  • GAAP diluted EPS of $2.10 to $2.18, growth of 18 to 22 percent.
  • Non-GAAP operating income of $1.05 billion to $1.1 billion, growth of 12 to 17 percent.
  • Non-GAAP diluted EPS of $2.22 to $2.30, growth of 17 to 22 percent.

Intuit also reiterated its full-year fiscal 2011 revenue and operating income guidance. Intuit increased fiscal 2011 diluted earnings per share guidance to reflect the extension of the research and development tax credit. For the fiscal year ending July 31, Intuit expects:

  • Revenue of $3.74 billion to $3.84 billion, growth of 8 to 11 percent.
  • GAAP operating income of $980 million to $1.015 billion, growth of 14 to 18 percent. 
  • GAAP diluted EPS of $1.93 to $2.00, growth of 9 to 13 percent. GAAP EPS growth rates are 7 points higher when the gain from the sale of discontinued operations is excluded from the fiscal year 2010 GAAP results.
  • Non-GAAP operating income of $1.215 billion to $1.25 billion, growth of 11 to 14 percent.
  • Non-GAAP diluted EPS of $2.41 to $2.48, growth of 14 to 18 percent.
Conference Call Information

Intuit executives will discuss the financial results on a conference call today at 1:30 p.m. Pacific time.  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 website after the call ends.

Replay information

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 1511656.


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

About Intuit Inc.

Intuit Inc. is a leading provider of business and financial management solutions for small and mid-sized businesses; financial institutions, including banks and credit unions; consumers and accounting professionals. Its flagship products and services, including QuickBooks®, Quicken® and TurboTax®, simplify small business management and payroll processing, personal finance, and tax preparation and filing. ProSeries® and Lacerte® are Intuit's leading tax preparation offerings for professional accountants. Intuit Financial Services helps banks and credit unions grow by providing on-demand solutions and services that make it easier for consumers and businesses to manage their money.

Founded in 1983, Intuit had annual revenue of $3.5 billion in its fiscal year 2010. The company has approximately 7,700 employees with major offices in the United States, Canada, the United Kingdom, India and other locations. More information can be found at www.intuit.com.

###

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; forecasts of future expected financial results for its Consumer Tax and Accounting Professionals group; its prospects for the business in fiscal 2011; its prospects for the current tax season; its belief that tax revenue and operating income (GAAP and NonGAAP) will shift to its third fiscal quarter,  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: inherent difficulty in predicting consumer behavior; further delay in the IRS's ability to accept e-filed returns for certain tax filers; difficulties in receiving, processing, or filing customer tax submissions; consumers may not respond as we expected to our advertising and promotional activities; 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; we may not be able to successfully innovate and introduce new offerings and business models to meet our growth and profitability objectives, and current and future offerings may not adequately address customer needs and may not achieve broad market acceptance, which could harm our operating results and financial condition; business interruption or failure of our information technology and communication systems may impair the availability of our products and services, which may damage our reputation and harm our future financial results; as we upgrade and consolidate our customer facing applications and supporting information technology infrastructure, any problems with these implementations could interfere with our ability to deliver our offerings; any failure to properly use and protect personal customer information and data could harm our revenue, earnings and reputation; if we are unable to develop, manage and maintain critical third party business relationships, our business may be adversely affected; increased government regulation of our businesses may harm our operating results; if we fail to process transactions effectively or fail to adequately protect against potential fraudulent activities, our revenue and earnings may be harmed; any significant offering quality problems or delays in our offerings 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; the continuing global economic downturn may continue to impact consumer and small business spending, financial institutions and tax filings, which could negatively affect our revenue and profitability; year-over-year changes in the total number of tax filings that are submitted to government agencies due to economic conditions or otherwise may result in lost revenue opportunities; 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; 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; our inability to adequately protect our intellectual property rights may weaken our competitive position and reduce our revenue and earnings; our acquisition and divestiture activities may disrupt our ongoing business, may involve increased expenses and may present risks not contemplated at the time of the transactions; our use of significant amounts of debt to finance acquisitions or other activities could harm our financial condition and results of operation; 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 2010 and in our other SEC filings.  You can locate these reports through our website at http://investors.intuit.com.  Forward-looking statements are based on information as of Feb. 17, 2011, and we do not undertake any duty to update any forward-looking statement or other information in these materials.

(Financial Statements follow)

Media Contacts

Media Resources

Product Press Kits