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Intuit Reports Third-quarter Results; Total Revenue Increases 13 Percent
Small Business Group Grows Revenue 17 Percent
MOUNTAIN VIEW, Calif. – May. 21, 2013 – Intuit Inc. (Nasdaq: INTU) today announced financial results for its third fiscal quarter, which ended April 30. Unless otherwise noted, all growth rates refer to the current fiscal period versus the comparable prior-year period. Where applicable, the business metrics and associated growth rates refer to worldwide business results.
- Recorded third-quarter revenue of $2.178 billion, up 13 percent.
- Grew total Small Business Group revenue, including Demandforce, 17 percent for the quarter, led by strong growth in online customers.
- Continued to innovate across Small Business, setting the stage for the next phase of growth.
- Introduced QuickBooks Online for the iPad, designed for small businesses that are mobile by nature.
- Launched Intuit Pay in the U.K., making Intuit the first to market a mobile payments solution in the region for small businesses.
- Doubled QuickBooks Online paying customers to 27,000 in more than 100 countries outside the United States.
Snapshot of Third-quarter Results
Dollars are in millions, except earnings per share. See “About Non-GAAP Financial Measures” below for more information regarding financial measures not prepared in accordance with Generally Accepted Accounting Principles. All figures in the table above have been reclassified to reflect Intuit Websites as discontinued operations and to exclude its results from non-GAAP EPS. Q3 FY13 GAAP operating income and EPS include a $46 million or $0.14 per share charge related to the impairment of the goodwill and intangible assets of Intuit Health.
Snapshot of Year-to-date Results
Dollars are in millions, except earnings per share. See “About Non-GAAP Financial Measures” below for more information regarding financial measures not prepared in accordance with Generally Accepted Accounting Principles. All figures in the table above have been reclassified to reflect Intuit Websites as discontinued operations and to exclude its results from non-GAAP EPS. YTD FY13 GAAP operating income and EPS include a $46 million or $0.14 per share charge related to the impairment of the goodwill and intangible assets of Intuit Health.
“We continue to see strong progress delivering on our connected services strategy across our businesses in the third quarter,” said Brad Smith, Intuit’s president and chief executive officer. “TurboTax paid units increased 4 percent, and we expect TurboTax revenue growth of about 4 percent for the fiscal year. While it was a challenging tax season overall, we made progress in several key areas, growing new customers including first-time filers and former tax store customers, and significantly increasing mobile adoption. Activity is already well underway for next year, with an intense focus on product and customer experience.
“It was another strong quarter across our small business division. The team continues to do great work growing customers in what remains a weak environment for small businesses. Each business in this segment delivered double-digit growth this quarter.
“Across the company we are sharpening our focus on our core businesses, enabling us to move faster to better capitalize on the long-term growth opportunities that we see in North America and around the world. I am excited about the future we have as a company as we enter the next chapter of our Connected Services journey,” Smith said.
Quarterly Business Segment Results and Highlights
Total Small Business Group revenue grew 17 percent for the quarter, including Demandforce. Connected services offerings continued to attract online small business customers.
- Financial Management Solutions revenue increased 24 percent for the quarter, 12 percent excluding Demandforce. QuickBooks Online subscribers grew 26 percent. Demandforce, acquired in May 2012, contributed strong subscriber growth of over 65 percent.
- Employee Management Solutions revenue grew 11 percent for the quarter. Online payroll subscribers grew 20 percent.
- Payment Solutions revenue grew 13 percent for the quarter. Customers grew 12 percent, while card transaction volume grew 7 percent.
- Consumer Tax revenue increased 14 percent for the quarter.
- Total paid federal TurboTax units were up 4 percent, and TurboTax Online units grew 6 percent for the season.
- Accounting Professionals revenue increased 9 percent for the quarter and 4 percent year to date.
- Financial Services revenue increased 9 percent for the quarter, or 6 percent when adjusted for the addition of Mint revenue, net of the sale of the corporate banking business. Higher mobile banking revenue continued to drive growth in this segment.
- Other Businesses revenue, which includes Intuit’s global business, Quicken, and Intuit Health, grew 3 percent for the quarter, or 10 percent when adjusted for the transfer of Mint revenue to the Financial Services segment.
Intuit paid a quarterly cash dividend of $0.17 per share, totaling $51 million, during the third quarter of fiscal 2013. Intuit’s board of directors approved a new quarterly cash dividend of $0.17 to be paid on July 18 to shareholders of record as of the close of business on July 10.
Stock Repurchase Program
Intuit repurchased $92 million of its common stock during the third quarter, totaling $292 million for the first nine months of the fiscal year. At the end of the quarter the current authorization had $1.4 billion remaining for stock repurchases through August 2014.
Intuit reiterated revenue and non-GAAP operating income and earnings per share guidance and updated GAAP operating income and EPS guidance for full fiscal year 2013, which ends July 31. The company expects:
- Revenue of $4.495 billion to $4.520 billion, growth of 8 to 9 percent.
- GAAP operating income of $1.23 billion to $1.25 billion, growth of 5 to 6 percent, which includes a $46 million charge related to the impairment of Intuit Health.
- Non-GAAP operating income of $1.51 billion to $1.53 billion, growth of 8 to 9 percent.
- GAAP diluted EPS of $2.77 to $2.81, growth of 7 to 8 percent, which includes a $0.14 charge recorded in the third quarter related to the impairment of Intuit Health.
- Non-GAAP diluted EPS of $3.31 to $3.35, growth of 11 to 13 percent.
For the fourth quarter of fiscal 2013, Intuit expects:
- Revenue of $702 million to $727 million.
- GAAP operating loss of $31 million to $51 million.
- Non-GAAP operating income of $14 million to $34 million.
- GAAP loss per share of $0.07 to $0.11.
- Non-GAAP diluted EPS of $0.03 to $0.07.
Conference Call Information
Intuit executives will discuss the financial results on a conference call at 1:30 p.m. Pacific time on May 21. To hear the call, dial 866-731-8333 in the United States or 973-935-8686 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 Investor Relations website 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 1612402.
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 $4.15 billion in its fiscal year 2012. The company has approximately 8,500 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 and the TurboTax logo, among others, are registered trademarks and/or registered service marks of Intuit Inc. in the United States and other countries. Live tax advice is a free service available year round via phone or live chat. Restrictions apply. Experience levels, hours of operation and availability vary and are subject to change without notice. See http://www.turbotax.com for details.
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; expectations regarding growth from connected services and from current or future products and services; expectations regarding changes to our products for next year; expectations regarding the amount and timing of any future dividends and share repurchases; its prospects for the business in fiscal 2013; 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; 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 2012 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 May 21, 2013, and we do not undertake any duty to update any forward-looking statement or other information in these materials.