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Intuit Exceeds Expectations for Second-Quarter Operating Income and Earnings Per Share
MOUNTAIN VIEW, Calif – Feb. 19, 2009 – Intuit Inc. (Nasdaq: INTU) today announced second quarter GAAP operating income of $110 million, and GAAP diluted earnings per share of 26 cents, well above its expected range. Second-quarter revenue of $791 million, a five percent decrease from the year-ago quarter, reflects timing changes of $58 million of revenue in its tax businesses between the second and third quarters. Without those changes, revenue would have grown two percent.
“Second-quarter operating income and earnings per share significantly exceeded our guidance, and revenue was within our expected range,” said Brad Smith, Intuit’s president and chief executive officer. “We continue to adapt in this strained economy and manage the business by focusing on customer acquisition and investing in innovation. By managing our expenses, we expect to deliver strong earnings growth for the year.
“While our company is not recession-proof, we are resilient. Consumers and small business owners are focused on saving and making money, and that is what our products are designed to deliver. We help them put more money in their pockets, which creates demand for many of our offerings in any environment. That’s why we still expect to deliver positive revenue growth for fiscal year 2009,” Smith said.
Second-Quarter 2009 Financial Highlights
- Revenue of $791 million, down 5 percent from the year-ago quarter. Revenue would have grown 2 percent without shifts of Consumer Tax and Accounting Professionals revenue due to the timing of revenue recognition for services bundled with the offerings.
- GAAP (Generally Accepted Accounting Principles) operating income from continuing operations of $110 million, down from $174 million in the year-ago quarter. GAAP diluted earnings per share of 26 cents, compared to 34 cents per share in the year-ago quarter. Without the change in revenue timing, GAAP operating income from continuing operations would have been approximately $168 million.
- Non-GAAP operating income of $172 million, down from $225 million in the year-ago quarter. Non-GAAP diluted earnings per share of 34 cents compared to 40 cents per share in the year-ago quarter. Without the change in revenue timing, non-GAAP operating income would have been approximately $230 million.
Second-Quarter 2009 Business Segment Results
- Consumer Tax revenue was $187 million, down 25 percent from the year-ago quarter. The decline includes a deferral of $70 million in revenue associated with the bundling of Federal electronic filing with the desktop product. Without that shift, revenue would have grown 4 percent year-over-year.
- QuickBooks revenue was $164 million, down 2 percent from the year-ago quarter.
- Payroll and Payments revenue was $158 million, up 14 percent from the year-ago quarter.
- Accounting Professionals revenue was $133 million, up 14 percent from the year-ago quarter. The increase includes a shift of $12 million from Q3 to Q2 due to changes in the offering.
- Financial Institutions revenue was $76 million, up 5 percent from the year-ago quarter.
- Other Businesses revenue was $73 million, down 21 percent from the year-ago quarter.
Third-Quarter 2009 Guidance
Intuit provided guidance for its third quarter of fiscal year 2009, which will end on April 30. Intuit’s expected results for the third quarter are:
- Revenue of $1.38 billion to $1.46 billion, or growth of 5 percent to 11 percent.
- GAAP operating income from continuing operations of $723 million to $778 million, or growth of 7 percent to 15 percent. This represents GAAP diluted earnings per share of $1.38 to $1.49, or growth of 4 percent to 12 percent.
- Non-GAAP operating income of $783 million to $838 million, or growth of 8 percent to 15 percent. This represents non-GAAP diluted earnings per share of $1.57 to $1.68, or growth of 13 percent to 21 percent.
Fiscal 2009 Guidance
Intuit also updated its previous guidance for fiscal year 2009. For fiscal 2009, the company now expects:
- Revenue of $3.13 billion to $3.25 billion, or growth of 2 percent to 6 percent. Prior guidance was for growth of 6 percent to 10 percent.
- GAAP operating income from continuing operations of $682 million to $735 million, or growth of 5 percent to 13 percent. This represents GAAP diluted earnings per share of $1.32 to $1.43, or a decline of 6 percent to growth of 1 percent.
- Non-GAAP operating income of $917 million to $970 million, or growth of 7 percent to 13 percent. This represents non-GAAP diluted earnings per share of $1.78 to $1.89, or growth of 11 percent to 18 percent.
Intuit also updated previously given fiscal 2009 business segment revenue guidance. The company now expects:
- Consumer Tax revenue of $1.0 billion to $1.04 billion, or growth of 8 percent to 12 percent over the prior year, unchanged from prior guidance.
- QuickBooks revenue of $580 million to $620 million, or a decline of 7 percent to flat compared with the prior year. Prior guidance was $650 million to $675 million.
- Payroll and Payments revenue of $619 million to $642 million, or growth of 10 percent to 14 percent over the prior year, unchanged from prior guidance.
- Accounting Professionals revenue of $345 million to $358 million, or growth of 5 percent to 9 percent over the prior year, unchanged from prior guidance.
- Financial Institutions revenue of $313 million to $325 million, or growth of 5 percent to 9 percent over the prior year, unchanged from prior guidance.
- Other Businesses revenue of $270 million to $290 million, or a decline of 19 percent to 13 percent compared with the prior year. Prior guidance was $320 million to $340 million.
Webcast and Conference Call Information
A live audio webcast of Intuit’s second-quarter 2009 conference call is available at http://investors.intuit.com/events.cfm. The call begins today at 1:30 p.m. Pacific time. The replay of the audio webcast will remain on Intuit’s Web site for one week after the conference call. Intuit has also posted this press release, including the attached tables and non-GAAP to GAAP reconciliations on its Web site and will post the conference call script shortly after the conference call concludes. These documents may be found at http://investors.intuit.com/releases.cfm.
The conference call number is 866-814-1918 in the United States or 703-639-1362 from international locations. No reservation or access code is needed. A replay of the call will be available for one week by calling 888-266-2081, or 703-925-2533 from international locations. The access code for this call is 1327578.
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 which follow it. A copy of the press release issued by Intuit on February 19, 2009 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 2009 and beyond; and all of the statements under the headings “Third-Quarter 2009 Guidance” and “Fiscal 2009 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 2008 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 February 19, 2009, and we do not undertake any duty to update any forward-looking statement or other information in these remarks.