Press Releases

Intuit Fiscal '04 Revenue Grows 13 Percent to Record $1.9 Billion
Fourth-Quarter Revenue Also Rises 13 Percent
MOUNTAIN VIEW, Calif. - August 18, 2004 - Intuit Inc. (Nasdaq: INTU) today announced results for its fourth quarter and fiscal 2004, which ended July 31, 2004. "Intuit again delivered solid growth for the quarter and year," said Steve Bennett, Intuit's president and chief executive officer. "TurboTax and Small Business Products and Services - our two largest segments - had particularly strong years. Looking ahead, we expect our portfolio to deliver steady revenue and strong profit growth."

Fiscal 2004 Financial Highlights

  • Revenue of $1.87 billion increased 13 percent from fiscal 2003. Growth was driven by solid performance in Intuit's TurboTax and Small Business Products and Services segments.
  • Intuit's pro forma net income of $335.1 million increased 14 percent from fiscal 2003. Pro forma diluted earnings per share of $1.67 grew 20 percent over the year-ago period.
  • On a GAAP (Generally Accepted Accounting Principles) basis, Intuit had net income of $317.0 million, down 8 percent from $343.0 million in fiscal 2003. This represents $1.58 per diluted share versus $1.63 per diluted share in fiscal 2003, a decrease of 3 percent. Last year's GAAP results benefited from a $71.0 million after-tax gain on the sale of Intuit's Japanese subsidiary.
Fiscal 2004 Business Segment Revenue Growth
  • QuickBooks revenue grew 12 percent over fiscal 2003 to $272.6 million.
  • Small Business Products and Services revenue increased 20 percent over fiscal 2003 to $544.6 million. This unit includes payroll, supplies, technical support and information technology solutions.
  • TurboTax revenue grew 16 percent over the prior-year period to $490.0 million.
  • Professional Accounting Solutions revenue increased 3 percent over fiscal 2003 to $251.9 million.
  • Vertical Business Management Solutions revenue grew 15 percent over the prior-year period to $109.1 million.
  • Revenue from Other Businesses, which includes Quicken and Canada, was up 4 percent year-over-year to $199.5 million.

Fourth-Quarter 2004 Highlights

  • Revenue of $275.9 million increased 13 percent from the year-ago quarter. Growth was primarily driven by strong performance in Intuit's Small Business Products and Services segment.
  • Intuit had a pro forma net loss of $11.4 million versus a pro forma net loss of $10.7 million in the year-ago quarter. Intuit typically posts a seasonal loss in its fourth quarter when it has little revenue from its tax businesses but expenses remain constant. The fourth-quarter pro forma diluted loss per share was $0.06 versus a loss of $0.05 in the fourth quarter of fiscal 2003, reflecting a lower share count in the fourth quarter 2004.
  • On a GAAP basis, Intuit had a net loss of $42.1 million versus a loss of $24.7 million in the year-ago quarter. This represents a loss of $0.22 per diluted share versus a loss of $0.12 in the fourth quarter of fiscal 2003. The fourth-quarter 2004 GAAP results included a goodwill impairment charge of $18.7 million, or $0.10 per diluted share, for its public sector business management solutions business.

Intuit to Sell Public Sector Solutions Business
Intuit said it has decided to sell its public sector business management solutions business.

"Intuit is very rigorous about managing our portfolio so that we're always focused on the right growth opportunities," said Bennett. "Over the past several years, we've made a number of changes to our portfolio - acquiring or developing businesses that fit our growth criteria and exiting those that don't. A combination of industry dynamics, our competitive position and our other opportunities make this the right decision for Intuit. We like our other verticals businesses and are pleased with the solid revenue and profit growth they're delivering."

Intuit Public Sector Solutions (IPSS) contributed $13 million in revenue in fiscal 2004. Without the business, Intuit's verticals portfolio had 17 percent revenue growth in fiscal 2004.

While IPSS performance is included in the results Intuit reported today and will be included in its upcoming Form 10-K, it will be treated as a discontinued business in future financial filings, as required. As a result, Intuit did not include past or future results from IPSS when it developed pro forma first-quarter and fiscal year 2005 guidance, but has included it in GAAP earnings per share guidance.

Forward-Looking Guidance for Fiscal 2005
Intuit provided more detail on its financial guidance for fiscal 2005, which will end July 31, 2005:

  • Revenue of $1.97 billion to $2.02 billion, or year-over-year growth of approximately 6 percent to 9 percent.
  • Pro forma operating income of $535 million to $559 million, or growth of approximately 12 percent to 17 percent over fiscal 2004. On a GAAP basis, operating income is expected to be $503 million to $527 million, or growth of approximately 14 percent to 20 percent over fiscal 2004.
  • Pro forma diluted earnings per share of $1.93 to $2.01, or growth of approximately 15 percent to 20 percent over fiscal 2004. On a GAAP basis, including IPSS, diluted earnings per share is expected to be $1.82 to $1.90, up approximately 15 percent to 20 percent from fiscal 2004.

Forward-Looking Guidance for First-Quarter 2005
Although financial analysts have developed their own estimates for Intuit's first-quarter 2005, Intuit has not previously issued guidance for the quarter. Intuit's expected results for the first quarter of fiscal 2005, which will end Oct. 31, 2004, are:

  • Revenue of $251 million to $263 million, or year-over-year growth of 5 percent to 10 percent.
  • A pro forma operating loss of $85 million to $75 million and a GAAP operating loss of $93 million to $83 million. Intuit typically posts a seasonal loss in its first quarter when it has little revenue from its tax businesses but expenses remain constant.
  • A pro forma net loss per diluted share of $0.29 to $0.25and a GAAP net loss per diluted share of $0.32 to $0.28, including IPSS.
 
Conference Call Scripts, Webcast and Conference Call Information
The script that accompanies Intuit's conference call and a live audio webcast of the call is available at http://www.intuit.com/about_intuit/investors/webcast_events.html. The call begins today at 1:30 p.m. (PDT). The replay of the audio webcast will remain on Intuit's Web site for one week after the conference call. This press release, including the tables, is available at that site and any other supplemental financial and statistical information required to be posted, including pro forma reconciliations, will be posted to that site.

The conference call number is (888) 243-0813 in the United States and (703) 925-2400 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 in the United States and (703) 925-2533 from international locations. The access code is 520520.
 
Intuit, the Intuit logo, Quicken, QuickBooks, and TurboTax, among others, are registered trademarks and/or registered service marks of Intuit Inc. in the United States and other countries.

About pro forma, or non-GAAP, financial measures
Intuit's management believes that the pro forma financial measures it uses provide meaningful supplemental information regarding Intuit's core operating results because they exclude amounts that are not necessarily related to Intuit's core operating results. Intuit's management refers to these pro forma financial measures in assessing the performance of Intuit's ongoing operations and for planning and forecasting in future periods. These pro forma financial measures also facilitate management's internal comparisons to Intuit's historical operating results. In addition, Intuit has historically reported similar pro forma financial measures and believes that the inclusion of comparative numbers provides consistency in its financial reporting. Intuit computes pro forma financial measures using the same consistent method from quarter to quarter and year to year.

Intuit computes its pro forma, or non-GAAP, financial measures using the same consistent method from quarter to quarter and year to year. Pro forma operating income excludes acquisition-related charges, such as amortization of intangibles and impairment charges, as well as amortization of purchased software and charges for purchased research and development. Pro forma net income and diluted earnings per share exclude discontinued operations, gains and losses on marketable securities and other investments, as well as the tax effects of these transactions. These pro forma financial measures are not prepared in accordance with generally accepted accounting principles and likely are different from non-GAAP or pro forma financial measures used by other companies. The accompanying tables and fact sheet have more details on Intuit's historical performance and financial projections, the GAAP financial measures that are most directly comparable to Intuit's pro forma financial measures, and the reconciliation of pro forma financial measures to GAAP.

Cautions About Forward-Looking Statements
This press release contains forward-looking statements, including forecasts of our expected financial results. Mr. Bennett's statement regarding our expectations for delivering steady revenue and strong profit growth and all of the statements under the headings "Forward-Looking Guidance for Fiscal 2005," and "Forward-Looking Guidance for First Quarter Fiscal 2005" are forward-looking statements. A number of risks and uncertainties may cause our actual results to differ materially from our expressed expectations. Some of the important factors that could cause our results to differ include the following: product introductions and price competition from our competitors, including competition from Microsoft in our software businesses and governmental encroachment in our tax businesses, can have unpredictable negative effects on our revenue, profitability and market position; we are implementing new information systems and problems with the design or implementation of these new systems could interfere with our ability to ship and deliver products and gather information to effectively manage our business; revenue growth for some of our products is slowing and we must successfully introduce new products and services to meet our growth and profitability objectives; our new product offerings may not succeed or they may negatively impact our profitability if customers elect to purchase lower-priced simplified offerings; our revenue and earnings are highly seasonal and may cause significant quarterly fluctuations in our financial results; litigation involving intellectual property, antitrust, shareholder and other matters may increase our costs; and our failure to maintain reliable and responsive service levels for our offerings could cause us to lose customers and negatively impact our revenues and profitability. More details about these and other risks that may impact our business are included in our Form 10-K for fiscal 2003 and in subsequent Form 10-Q, and other SEC filings. You can locate these reports through our website at http://www.intuit.com/about_intuit/investors. We do not undertake any duty to update the information in this press release except as otherwise required by law.

(Financial Statements and Fact Sheet follow)