- Revenue: $6.7 billion, up 12% year-over-year.
- GAAP Operating Income: $3.1 billion, up 12% year-over-year.
- Non-GAAP Operating Income: $3.7 billion, up 11% year-over-year.
- GAAP Diluted Earnings Per Share (EPS): $8.42, up 14% year-over-year.
- Non-GAAP Diluted EPS: $9.88, up 11% year-over-year.
- Consumer Group Revenue: $3.7 billion, up 9% year-over-year.
- TurboTax Live Revenue: Expected to grow 17% to $1.4 billion in fiscal year 2024.
- Small Business and Self-Employed Group Revenue: Grew 18% year-over-year.
- Online Ecosystem Revenue: Grew 19% year-over-year.
- QuickBooks Online Accounting Revenue: Grew 19% year-over-year.
- Credit Karma Revenue: $443 million, up 8% year-over-year.
- Cash and Investments: Approximately $4.7 billion.
- Debt: $6 billion.
- Stock Repurchase: $584 million during the third quarter.
- Quarterly Dividend: $0.90 per share, a 15% increase year-over-year.
- Full Year Revenue Growth Guidance: 13%, up from prior guidance of 11% to 12% growth.
- Full Year GAAP Operating Income Growth Guidance: 21% to 22%, up from prior guidance of 15% to 18% growth.
- Full Year Non-GAAP Operating Income Growth Guidance: 16%, up from prior guidance of 14% growth.
- Full Year GAAP Diluted EPS Growth Guidance: 28% to 29%, up from prior guidance of 11% to 15% growth.
- Full Year Non-GAAP Diluted EPS Growth Guidance: 17%, up from prior guidance of 12% to 14% growth.
Release Date: May 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Intuit Inc (INTU, Financial) reported a 12% increase in third-quarter revenue, demonstrating strong overall performance.
- Small Business and Self-Employed Group revenue grew by 18%, showcasing the platform's importance and momentum.
- TurboTax Live customers are expected to grow by 12%, with revenue projected to increase by 17% in fiscal year 2024.
- Intuit Assist, the company's AI-powered financial assistant, was used by more than 24 million customers, enhancing the TurboTax experience.
- Credit Karma saw an 8% revenue growth, driven by product integration with TurboTax and increased customer engagement.
Negative Points
- Intuit Inc (INTU) experienced friction in seamless log-ins and app performance for TurboTax users within Credit Karma, leading to customer drop-offs.
- The company expects a decline of approximately 80 basis points in its share of total consumer returns due to a strategic focus on higher-value customers.
- Credit Karma's overall performance remains mixed due to uncertain macro trends and conservative credit extension by partners.
- Mailchimp's revenue growth decelerated as the company lapped a larger benefit from price and lineup changes made last year.
- Cash reserves for small businesses on Intuit's platform are down 8% compared to the previous year, indicating some financial strain.
Q & A Highlights
Q: The shift towards higher ARPC customers in the tax business seems more pronounced this year. Why can't Intuit price for the low end and attract those customers as well as the higher ARPC customers?
A: (Sasan K. Goodarzi, CEO) We are bullish on TurboTax Live, which is growing at 17% and now represents 30% of the TurboTax franchise. Our focus is on quality customers, particularly in the assisted segment, rather than those who bounce between platforms for free services. This strategy is aimed at accelerating growth in the assisted segment.
Q: Can you expand on the integration between Credit Karma and TurboTax? What should we expect going forward?
A: (Sasan K. Goodarzi, CEO) We saw a 76% growth in TurboTax customers using the embedded Credit Karma experience. However, we faced issues with seamless log-ins and app performance, which we are addressing. We are confident that improving these areas will enhance the integration and customer experience.
Q: What is your vision and strategy for the Money platform, especially after recent acquisitions and executive hires?
A: (Sasan K. Goodarzi, CEO) We are focused on digitizing the process from estimating to invoicing to getting paid, and we are seeing positive results. We are also excited about the integration of TurboTax and Credit Karma, which saw a 28% increase in customers depositing their refunds into Credit Karma Money accounts. We are accelerating investments in these areas.
Q: Should we think differently about TurboTax's share of total IRS returns given the focus on the assisted category?
A: (Sasan K. Goodarzi, CEO) We aim to increase our share of total IRS returns over time. As TurboTax Live grows from 30% to 70% of our franchise, it will accelerate the growth of the entire TurboTax business. We are also focused on high-value customers and assisted segments.
Q: What are your thoughts on Mailchimp's performance and its potential for growth?
A: (Sasan K. Goodarzi, CEO) The deceleration in Mailchimp's revenue growth was due to lapping a large price increase from last year. We are integrating Mailchimp with QuickBooks, focusing on mid-market and international expansion. We are accelerating investments in these areas given the positive indicators we are seeing.
Q: What are the key areas where Intuit Assist has shown proof points and how is it driving monetizable outcomes?
A: (Sasan K. Goodarzi, CEO) Intuit Assist has been used by 24 million TurboTax customers to understand their refunds and answer questions. In Credit Karma, nearly 20 million users have used it for financial decisions. In Mailchimp, it helps create personalized marketing campaigns, and in QuickBooks, it turns unstructured data into invoices. These capabilities are driving better customer engagement and monetization.
Q: What are the learnings from TurboTax Full Service and how do you plan to target this segment more aggressively?
A: (Sasan K. Goodarzi, CEO) We created significant demand through aggressive go-to-market strategies and price transparency. However, we need to improve the shopping experience by making it more seamless and personalized. We are working on these areas to enhance customer conversion and satisfaction.
Q: How is Intuit performing in the paid DIY tax segment, and what are the opportunities for growth?
A: (Sasan K. Goodarzi, CEO) We feel good about our performance in the paid DIY segment, with paying customers growing 2% and retention up 3 points. We are focused on high-value customers and are not pursuing those who frequently switch platforms for free services.
Q: Can you discuss the changes in the desktop ecosystem and the opportunities for QuickBooks Advanced?
A: (Sasan K. Goodarzi, CEO) We are transitioning desktop customers to a subscription model and building capabilities on our online platform. QuickBooks Advanced is being enhanced to attract larger customers, and we see significant opportunities for growth in this area.
Q: How is the Small Business and Self-Employed segment performing, and what are the growth drivers?
A: (Sasan K. Goodarzi, CEO) The segment grew 18%, driven by a 19% increase in the online ecosystem. We are seeing strong engagement and usage from customers, particularly in payments and payroll. We are well-positioned to continue this growth despite the uncertain macro environment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
