Intuit Inc. announced financial results for the second quarter of fiscal 2018, which ended Jan. 31.
“We’ve reached the midway point of our fiscal year. Strong growth across our businesses during the second quarter gives us confidence we’re on pace to deliver for the full year,” said Brad Smith, Intuit’s chairman and chief executive officer.
“Tax season is in full swing and we’re laser focused on executing with excellence until the April 17 tax filing deadline. In our Small Business and Self-Employed Group, subscriber growth continues at a rapid pace and remains strong across geographies,” said Smith.
For the second quarter, Intuit:
- Grew revenue to $1,165 million, up 15 percent.
- Grew TurboTax e-filed returns 2 percent through Feb. 16.
- Increased Small Business and Self-Employed Online Ecosystem revenue by 39 percent.
- Added approximately 275,000 QuickBooks Online subscribers in the quarter, reaching more than 2.8 million worldwide.
- Within QuickBooks Online, grew Self-Employed subscribers to roughly 490,000, up from 425,000 last quarter, and 180,000 one year ago.
Unless otherwise noted, all growth rates refer to the current period versus the comparable prior-year period, and the business metrics and associated growth rates refer to worldwide business metrics.
On Feb. 9 the company announced a shift in quarterly outlook citing the late opening to the tax season and reaffirmed full-year revenue and operating income guidance. Intuit also raised full year earnings per share guidance due to new U.S. tax legislation.
Business Segment Results
Small Business & Self-Employed Group
- Grew total segment revenue by 19 percent.
- Increased U.S. subscribers 47 percent to approximately 2.2 million and grew international subscribers 69 percent to approximately 630,000.
- Launched a new brand campaign “QuickBooks: Backing You.” to raise QuickBooks brand awareness and drive more prospective customers to Intuit.com.
Consumer and Strategic Partner Groups
- Grew Consumer Group revenue by 12 percent.
- Introduced TurboTax Live, leveraging one-way video technology, giving customers access to an expert so they have the confidence they need to complete a return on their own.
- Built an end-to-end expert platform that enables approximately 2,000 certified public accountants and enrolled agents to serve customers.
- Launched Turbo, providing customers with a full view of their overall financial health by combining a credit score, verified income data and a debt-to-income ratio to show customers where they truly stand. Customers can transfer their tax data into a Turbo account when they complete their return this season.
- In the Strategic Partner Group, professional tax revenue of $95 million.
Capital Allocation Summary
In the second quarter the company:
- Completed three acquisitions with cash and other consideration totaling approximately $400 million.
- Repurchased $83 million of shares, with $1.3 billion remaining on the authorization.
- Received board approval for a $0.39 per share dividend for the second quarter of fiscal 2018, payable on April 18, 2018, an increase of 15 percent over last year.
“When considering how to leverage the benefits from tax legislation change, we apply our financial principles as we take a disciplined approach to capital management,” said Michelle Clatterbuck, Intuit’s chief financial officer. “We’ll continue to assess investment opportunities as we revisit our long-term plan.”
Intuit announced guidance for the third quarter of fiscal year 2018, which ends April 30. The company expects:
- Revenue of $2.785 billion to $2.835 billion, growth of 10 to 12 percent.
- GAAP operating income of $1.535 billion to $1.555 billion.
- Non-GAAP operating income of $1.635 billion to $1.655 billion.
- GAAP diluted earnings per share of $4.32 to $4.37.
- Non-GAAP diluted earnings per share of $4.57 to $4.62.
Intuit affirmed guidance for full fiscal year 2018. The company expects:
- Revenue of $5.640 billion to $5.740 billion, growth of 9 to 11 percent.
- GAAP operating income of $1.485 billion to $1.535 billion, growth of 6 to 10 percent.
- Non-GAAP operating income of $1.885 billion to $1.935 billion, growth of 9 to 12 percent.
- GAAP diluted earnings per share of $4.20 to $4.30, growth of 13 to 16 percent.
- Non-GAAP diluted earnings per share of $5.30 to $5.40, growth of 20 to 22 percent.
- QuickBooks Online subscribers of 3.275 million to 3.375 million.
- This guidance is based on a GAAP tax rate of 26 percent and a non-GAAP tax rate of 27 percent.
Conference Call Details
Intuit executives will discuss the financial results on a conference call at 1:30 p.m. Pacific time on Feb. 22. To hear the call, dial 844-246-4601 in the United States or 703-639-1172 from international locations. No reservation or access code is needed. The conference call can also be heard live at http://investors.intuit.com/Events/default.aspx. Prepared remarks for the call will be available on Intuit’s website after the call ends.
A replay of the conference call will be available for one week by calling 855-859-2056, or 404-537-3406 from international locations. The access code for this call is 3193027.
The audio webcast will remain available on Intuit’s website for one week after the conference call.