Earnings Release
Intuit Reports Strong First Quarter Results and Reiterates Full Year Guidance
Global Business Solutions Group Online Ecosystem Revenue Grew 20 percent
MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Intuit Inc. (Nasdaq: INTU), the global financial technology platform that makes Intuit TurboTax, Credit Karma, QuickBooks, and Mailchimp, announced financial results for the first quarter of fiscal 2025, which ended October 31.
"We've had a strong start to the year as we demonstrate the power of Intuit's AI-driven expert platform strategy. By delivering 'done-for-you' experiences, enabled by AI with access to AI-powered human experts, we continue to fuel the success of consumers and businesses," said Sasan Goodarzi, Intuit's chief executive officer. "Our innovation and the proof points we're observing continue to bolster our confidence in our strategy."
Financial Highlights
For the first quarter, Intuit:
- Grew total revenue to $3.3 billion, up 10 percent.
- Increased Global Business Solutions Group revenue to $2.5 billion, up 9 percent; grew Online Ecosystem revenue to $1.9 billion, up 20 percent.
- Grew Credit Karma revenue to $524 million, up 29 percent.
- Reported Consumer Group revenue of $176 million, down 6 percent, and ProTax Group revenue of $39 million, down 7 percent, as the company lapped the period a year ago that included the extended tax filing deadline for most California filers.
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.
Snapshot of First-quarter Results
| GAAP | Non-GAAP |
| Q1
FY25 | Q1
FY24 | Change | Q1
FY25 | Q1
FY24 | Change |
Revenue | $3,283 | $2,978 | 10% | $3,283 | $2,978 | 10% |
Operating Income | $271 | $307 | (12)% | $953 | $960 | (1)% |
Earnings Per Share | $0.70 | $0.85 | (18)% | $2.50 | $2.47 | 1% |
| | | | | | |
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 (GAAP). |
| | | | | | |
GAAP results reflect a restructuring charge of $9 million recognized in the quarter related to the organizational changes we announced in July, and a $42 million net loss on a private company investment, included in other long-term investments. |
"We delivered strong first quarter fiscal 2025 results across the company driven by our Global Business Solutions Group and Credit Karma," said Sandeep Aujla, Intuit's chief financial officer. "We are confident in delivering double-digit revenue growth and margin expansion this year, and we are reiterating our full year guidance for fiscal 2025."
Business Segment Results
Global Business Solutions Group
Global Business Solutions Group revenue grew to $2.5 billion, up 9 percent, and Online Ecosystem revenue increased to $1.9 billion, up 20 percent.
- Online Services revenue grew 19 percent, driven by growth in money, payroll, and Mailchimp offerings.
- QuickBooks Online Accounting revenue grew 21 percent in the quarter, driven by customer growth, higher effective prices, and mix-shift.
- Total international Online Ecosystem revenue grew 10 percent on a constant currency basis.
Desktop Ecosystem revenue declined 17 percent, reflecting changes the company made to its QuickBooks desktop offerings in early fiscal 2024 to complete the transition to a recurring subscription model, including more frequent product updates.
Credit Karma
Credit Karma revenue grew 29 percent to $524 million in the quarter, driven by strength in personal loans, auto insurance, and credit cards.
Consumer Group
Consumer Group revenue of $176 million was down 6 percent in the quarter, as the company lapped the period a year ago that included the extended tax filing deadline for most California filers.
Capital Allocation Summary
In the first quarter, the company:
- Reported a total cash and investments balance of approximately $3.4 billion and $6.1 billion in debt as of October 31, 2024.
- Repurchased $570 million of stock, with $4.3 billion remaining on the company's share repurchase authorization.
- Received Board approval for a quarterly dividend of $1.04 per share, payable January 17, 2025. This represents a 16 percent increase per share compared to the same period last year.
Forward-looking Guidance
Intuit reiterated guidance for the full fiscal year 2025. The company expects:
- Revenue of $18.160 billion to $18.347 billion, growth of approximately 12 to 13 percent.
- GAAP operating income of $4.649 billion to $4.724 billion, growth of approximately 28 to 30 percent.
- Non-GAAP operating income of $7.241 billion to $7.316 billion, growth of approximately 13 to 14 percent.
- GAAP diluted earnings per share of $12.34 to $12.54, growth of approximately 18 to 20 percent.
- Non-GAAP diluted earnings per share of $19.16 to $19.36, growth of approximately 13 to 14 percent.
The company also reiterated full fiscal year 2025 segment revenue guidance:
- Global Business Solutions Group: growth of 16 to 17 percent. This includes Online Ecosystem revenue growth of approximately 20 percent, and Desktop Ecosystem revenue growth in the low single digits.
- Consumer Group: growth of 7 to 8 percent.
- ProTax Group: growth of 3 to 4 percent.
- Credit Karma: growth of 5 to 8 percent.
Intuit announced guidance for the second quarter of fiscal year 2025, which ends January 31. The company expects:
- Revenue of $3.812 billion to $3.845 billion, growth of approximately 13 to 14 percent. The company expects a single digit decline in Consumer Group revenue due to some promotional changes in retail channels largely related to its desktop offering. This only impacts revenue timing and does not impact overall unit or revenue expectations for fiscal year 2025. The company expects Global Business Solutions Group Desktop Ecosystem revenue to return to growth in the second quarter.
- GAAP diluted earnings per share of $0.84 to $0.90.
- Non-GAAP diluted earnings per share of $2.55 to $2.61.
Conference Call Details
Intuit executives will discuss the financial results on a conference call at 1:30 p.m. Pacific time on November 21. The conference call can be heard live at https://investors.intuit.com/news-events. Prepared remarks for the call will be available on Intuit’s website after the call ends.
Replay Information
A replay of the conference call will be available for one week by calling 800-839-4198, or 402-220-2988 from international locations. There is no passcode required. The audio call will remain available on Intuit’s website for one week after the conference call.
About Intuit
Intuit is the global financial technology platform that powers prosperity for the people and communities we serve. With approximately 100 million customers worldwide using products such as TurboTax, Credit Karma, QuickBooks, and Mailchimp, we believe that everyone should have the opportunity to prosper. We never stop working to find new, innovative ways to make that possible. Please visit us at Intuit.com and find us on social for the latest information about Intuit and our products and services.
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 B1, Table B2, and Table E. A copy of the press release issued by Intuit today can be found on the investor relations page of Intuit's website.
Cautions About Forward-looking Statements
This press release contains forward-looking statements, including expectations regarding: forecasts and timing of growth and future financial results of Intuit and its reporting segments; Intuit’s prospects for the business in fiscal 2025; timing and growth of revenue from current or future products and services; Intuit's corporate tax rate; the amount and timing of any future dividends or share repurchases; and the impact of acquisitions and other strategic decisions on our business; as well as 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 risks and uncertainties may be amplified by the effects of global developments and conditions or events, including macroeconomic uncertainty and geopolitical conditions, which have caused significant global economic instability and uncertainty. Given these risks and uncertainties, persons reading this communication are cautioned not to place any undue reliance on such forward-looking statements. These factors include, without limitation, the following: our ability to compete successfully; potential governmental encroachment in our tax business; our ability to develop, deploy, and use artificial intelligence in our platform and products; our ability to adapt to technological change and to successfully extend our platform; our ability to predict consumer behavior; our reliance on intellectual property; our ability to protect our intellectual property rights; any harm to our reputation; risk associated with our ESG and DEI practices; risks associated with acquisition and divestiture activity; the issuance of equity or incurrence of debt to fund acquisitions or for general business purposes; cybersecurity incidents (including those affecting the third parties we rely on); customer or regulator concerns about privacy and cybersecurity incidents; fraudulent activities by third parties using our offerings; our failure to process transactions effectively; interruption or failure of our information technology; our ability to maintain critical third-party business relationships; our ability to attract and retain talent and the success of our hybrid work model; any deficiency in the quality or accuracy of our offerings (including the advice given by experts on our platform); any delays in product launches; difficulties in processing or filing customer tax submissions; risks associated with international operations; risk associated with climate change; changes to public policy, laws or regulations affecting our businesses; legal proceedings in which we are involved; fluctuations in the results of our tax business due to seasonality and other factors beyond our control; changes in tax rates and tax reform legislation; global economic conditions (including, without limitation, inflation); exposure to credit, counterparty and other risks in providing capital to businesses; amortization of acquired intangible assets and impairment charges; our ability to repay or otherwise comply with the terms of our outstanding debt; our ability to repurchase shares or distribute dividends; volatility of our stock price; our ability to successfully market our offerings; our expectations regarding the timing and costs associated with our plan of reorganization (“Plan”); risks related to the preliminary nature of the estimate of the charges to be incurred in connection with the Plan, which is subject to change; and risks related to any delays in the timing for implementing the Plan or potential disruptions to our business or operations as we execute on the Plan.
More details about these and other risks that may impact our business are included in our Form 10-K for fiscal 2024 and in our other SEC filings. You can locate these reports through our website at http://investors.intuit.com. Second-quarter and full-year fiscal 2025 guidance speaks only as of the date it was publicly issued by Intuit. Other forward-looking statements represent the judgment of the management of Intuit as of the date of this presentation. Except as required by law, we do not undertake any duty to update any forward-looking statement or other information in this presentation.
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TABLE A INTUIT INC. GAAP CONSOLIDATED STATEMENTS OF OPERATIONS (In millions, except per share amounts) (Unaudited) |
| | |
| | Three Months Ended |
| | October 31,
2024 | | October 31,
2023 |
Net revenue: | | | | |
Service | | $ | 2,889 | | | $ | 2,450 | |
Product and other | | | 394 | | | | 528 | |
Total net revenue | | | 3,283 | | | | 2,978 | |
Costs and expenses: | | | | |
Cost of revenue: | | | | |
Cost of service revenue | | | 772 | | | | 707 | |
Cost of product and other revenue | | | 14 | | | | 15 | |
Amortization of acquired technology | | | 37 | | | | 38 | |
Selling and marketing | | | 962 | | | | 769 | |
Research and development | | | 704 | | | | 680 | |
General and administrative | | | 394 | | | | 342 | |
Amortization of other acquired intangible assets | | | 120 | | | | 120 | |
Restructuring | | | 9 | | | | — | |
Total costs and expenses [A] | | | 3,012 | | | | 2,671 | |
Operating income | | | 271 | | | | 307 | |
Interest expense | | | (60 | ) | | | (65 | ) |
Interest and other income, net | | | 2 | | | | 22 | |
Income before income taxes | | | 213 | | | | 264 | |
Income tax provision [B] | | | 16 | | | | 23 | |
Net income | | $ | 197 | | | $ | 241 | |
| | | | |
Basic net income per share | | $ | 0.70 | | | $ | 0.86 | |
Shares used in basic per share calculations | | | 280 | | | | 280 | |
| | | | |
Diluted net income per share | | $ | 0.70 | | | $ | 0.85 | |
Shares used in diluted per share calculations | | | 283 | | | | 283 | |
|
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See accompanying Notes. |
INTUIT INC. |
NOTES TO TABLE A |
[A] | | The following table summarizes the total share-based compensation expense that we recorded in operating income for the periods shown. |
| | | |
| | | Three Months Ended |
| | (In millions) | October 31,
2024 | | October 31,
2023 |
| | Cost of revenue | $ | 111 | | $ | 101 |
| | Selling and marketing | | 137 | | | 123 |
| | Research and development | | 161 | | | 161 |
| | General and administrative | | 102 | | | 110 |
| | Total share-based compensation expense | $ | 511 | | $ | 495 |
| | | | | |
[B] | | We compute our provision for or benefit from income taxes by applying the estimated annual effective tax rate to income or loss from recurring operations and adding the effects of any discrete income tax items specific to the period. |
| | |
| | We recognized excess tax benefits on share-based compensation of $28 million in our provision for income taxes for each of the three months ended October 31, 2024 and 2023. |
| | |
| | Our effective tax rate for the three months ended October 31, 2024 was approximately 8%. Excluding discrete tax items primarily related to share-based compensation, our effective tax rate was approximately 24%. The difference from the federal statutory rate of 21% was primarily due to state income taxes and non-deductible share-based compensation, which were partially offset by the tax benefit we received from the federal research and experimentation credit. |
| | |
| | Our effective tax rate for the three months ended October 31, 2023 was approximately 9%. Excluding discrete tax items primarily related to share-based compensation, our effective tax rate was approximately 24%. The difference from the federal statutory rate of 21% was primarily due to state income taxes and non-deductible share-based compensation, which were partially offset by the tax benefit we received from the federal research and experimentation credit. |
| | |
| | In the current global tax policy environment, the U.S. and other domestic and foreign governments continue to consider, and in some cases enact, changes in corporate tax laws. As changes occur, we account for finalized legislation in the period of enactment. |
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TABLE B1 INTUIT INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES (In millions, except per share amounts) (Unaudited) |
| | |
| | Fiscal 2025 |
| | Q1 | | Q2 | | Q3 | | Q4 | | Year to Date |
GAAP operating income (loss) | | $ | 271 | | | $ | — | | $ | — | | $ | — | | $ | 271 | |
Amortization of acquired technology | | | 37 | | | | — | | | — | | | — | | | 37 | |
Amortization of other acquired intangible assets | | | 120 | | | | — | | | — | | | — | | | 120 | |
Restructuring | | | 9 | | | | — | | | — | | | — | | | 9 | |
Net (gain) loss on executive deferred compensation plan liabilities [A] | | | 5 | | | | — | | | — | | | — | | | 5 | |
Share-based compensation expense | | | 511 | | | | — | | | — | | | — | | | 511 | |
Non-GAAP operating income (loss) | | $ | 953 | | | $ | — | | $ | — | | $ | — | | $ | 953 | |
| | | | | | | | | | |
GAAP net income (loss) | | $ | 197 | | | $ | — | | $ | — | | $ | — | | $ | 197 | |
Amortization of acquired technology | | | 37 | | | | — | | | — | | | — | | | 37 | |
Amortization of other acquired intangible assets | | | 120 | | | | — | | | — | | | — | | | 120 | |
Restructuring | | | 9 | | | | — | | | — | | | — | | | 9 | |
Net (gain) loss on executive deferred compensation plan liabilities [A] | | | 5 | | | | — | | | — | | | — | | | 5 | |
Share-based compensation expense | | | 511 | | | | — | | | — | | | — | | | 511 | |
Net (gain) loss on debt securities and other investments [B] | | | 42 | | | | — | | | — | | | — | | | 42 | |
Net (gain) loss on executive deferred compensation plan assets [A] | | | (4 | ) | | | — | | | — | | | — | | | (4 | ) |
Income tax effects and adjustments [C] | | | (208 | ) | | | — | | | — | | | — | | | (208 | ) |
Non-GAAP net income (loss) | | $ | 709 | | | $ | — | | $ | — | | $ | — | | $ | 709 | |
| | | | | | | | | | |
GAAP diluted net income (loss) per share | | $ | 0.70 | | | $ | — | | $ | — | | $ | — | | $ | 0.70 | |
Amortization of acquired technology | | | 0.13 | | | | — | | | — | | | — | | | 0.13 | |
Amortization of other acquired intangible assets | | | 0.42 | | | | — | | | — | | | — | | | 0.42 | |
Restructuring | | | 0.03 | | | | — | | | — | | | — | | | 0.03 | |
Net (gain) loss on executive deferred compensation plan liabilities [A] | | | 0.02 | | | | — | | | — | | | — | | | 0.02 | |
Share-based compensation expense | | | 1.80 | | | | — | | | — | | | — | | | 1.80 | |
Net (gain) loss on debt securities and other investments [B] | | | 0.15 | | | | — | | | — | | | — | | | 0.15 | |
Net (gain) loss on executive deferred compensation plan assets [A] | | | (0.02 | ) | | | — | | | — | | | — | | | (0.02 | ) |
Income tax effects and adjustments [C] | | | (0.73 | ) | | | — | | | — | | | — | | | (0.73 | ) |
Non-GAAP diluted net income (loss) per share | | $ | 2.50 | | | $ | — | | $ | — | | $ | — | | $ | 2.50 | |
| | | | | | | | | | |
Shares used in GAAP diluted per share calculations | | | 283 | | | | — | | | — | | | — | | | 283 | |
| | | | | | | | | | |
Shares used in non-GAAP diluted per share calculations | | | 283 | | | | — | | | — | | | — | | | 283 | |
| | |
[A] | | During the first quarter of fiscal 2025, we began to exclude from non-GAAP measures both the gains and losses on executive deferred compensation plan liabilities, and the related gains and losses on executive deferred compensation plan assets. Prior periods have not been reclassified as the amounts are not material. |
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[B] | | During the three months ended October 31, 2024, we recognized a $42 million net loss on other long-term investments. |
| | |
[C] | | As discussed in “About Non-GAAP Financial Measures - Income Tax Effects and Adjustments” following Table E, our long-term non-GAAP tax rate eliminates the effects of non-recurring and period-specific items. Income tax adjustments consist primarily of the tax impact of the non-GAAP pre-tax adjustments and tax benefits related to share-based compensation. |
| | |
See “About Non-GAAP Financial Measures” immediately following Table E for information on these measures, the items excluded from the most directly comparable GAAP measures in arriving at non-GAAP financial measures, and the reasons management uses each measure and excludes the specified amounts in arriving at each non-GAAP financial measure. |
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TABLE B2 INTUIT INC. RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES (In millions, except per share amounts) (Unaudited) |
| | |
| | Fiscal 2024 |
| | Q1 | | Q2 | | Q3 | | Q4 | | Full Year |
GAAP operating income (loss) | | $ | 307 | | | $ | 369 | | | $ | 3,105 | | | $ | (151 | ) | | $ | 3,630 | |
Amortization of acquired technology | | | 38 | | | | 36 | | | | 36 | | | | 36 | | | | 146 | |
Amortization of other acquired intangible assets | | | 120 | | | | 120 | | | | 120 | | | | 123 | | | | 483 | |
Restructuring [A] | | | — | | | | — | | | | — | | | | 223 | | | | 223 | |
Professional fees for business combinations | | | — | | | | — | | | | — | | | | 5 | | | | 5 | |
Share-based compensation expense | | | 495 | | | | 475 | | | | 451 | | | | 494 | | | | 1,915 | |
Non-GAAP operating income (loss) | | $ | 960 | | | $ | 1,000 | | | $ | 3,712 | | | $ | 730 | | | $ | 6,402 | |
| | | | | | | | | | |
GAAP net income (loss) | | $ | 241 | | | $ | 353 | | | $ | 2,389 | | | $ | (20 | ) | | $ | 2,963 | |
Amortization of acquired technology | | | 38 | | | | 36 | | | | 36 | | | | 36 | | | | 146 | |
Amortization of other acquired intangible assets | | | 120 | | | | 120 | | | | 120 | | | | 123 | | | | 483 | |
Restructuring [A] | | | — | | | | — | | | | — | | | | 223 | | | | 223 | |
Professional fees for business combinations | | | — | | | | — | | | | — | | | | 5 | | | | 5 | |
Share-based compensation expense | | | 495 | | | | 475 | | | | 451 | | | | 494 | | | | 1,915 | |
Net (gain) loss on debt securities and other investments | | | 1 | | | | (3 | ) | | | 1 | | | | 1 | | | | — | |
Loss on disposal of a business | | | 1 | | | | — | | | | 9 | | | | (1 | ) | | | 9 | |
Income tax effects and adjustments [B] | | | (198 | ) | | | (235 | ) | | | (202 | ) | | | (298 | ) | | | (933 | ) |
Non-GAAP net income (loss) | | $ | 698 | | | $ | 746 | | | $ | 2,804 | | | $ | 563 | | | $ | 4,811 | |
| | | | | | | | | | |
GAAP diluted net income (loss) per share | | $ | 0.85 | | | $ | 1.25 | | | $ | 8.42 | | | $ | (0.07 | ) | | $ | 10.43 | |
Amortization of acquired technology | | | 0.13 | | | | 0.13 | | | | 0.13 | | | | 0.13 | | | | 0.51 | |
Amortization of other acquired intangible assets | | | 0.42 | | | | 0.42 | | | | 0.42 | | | | 0.43 | | | | 1.70 | |
Restructuring [A] | | | — | | | | — | | | | — | | | | 0.79 | | | | 0.79 | |
Professional fees for business combinations | | | — | | | | — | | | | — | | | | 0.02 | | | | 0.02 | |
Share-based compensation expense | | | 1.75 | | | | 1.67 | | | | 1.59 | | | | 1.74 | | | | 6.75 | |
Net (gain) loss on debt securities and other investments | | | 0.01 | | | | (0.01 | ) | | | — | | | | — | | | | — | |
Loss on disposal of a business | | | 0.01 | | | | — | | | | 0.03 | | | | — | | | | 0.03 | |
Income tax effects and adjustments [B] | | | (0.70 | ) | | | (0.83 | ) | | | (0.71 | ) | | | (1.05 | ) | | | (3.29 | ) |
Non-GAAP diluted net income (loss) per share | | $ | 2.47 | | | $ | 2.63 | | | $ | 9.88 | | | $ | 1.99 | | | $ | 16.94 | |
| | | | | | | | | | |
Shares used in GAAP diluted per share calculations | | | 283 | | | | 284 | | | | 284 | | | | 280 | | | | 284 | |
| | | | | | | | | | |
Shares used in non-GAAP diluted per share calculations | | | 283 | | | | 284 | | | | 284 | | | | 283 | | | | 284 | |
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[A] | | Restructuring charges for the three and twelve months ended July 31, 2024 includes $25 million in share-based compensation expense. See "About Non-GAAP Financial Measures" for further information on restructuring charges. |
| | |
[B] | | As discussed in "About Non-GAAP Financial Measures - Income Tax Effects and Adjustments" following Table E, our long-term non-GAAP tax rate eliminates the effects of non-recurring and period-specific items. Income tax adjustments consist primarily of the tax impact of the non-GAAP pre-tax adjustments and tax benefits related to share-based compensation. |
| | |
See “About Non-GAAP Financial Measures” immediately following Table E for information on these measures, the items excluded from the most directly comparable GAAP measures in arriving at non-GAAP financial measures, and the reasons management uses each measure and excludes the specified amounts in arriving at each non-GAAP financial measure. |
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TABLE C INTUIT INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In millions) (Unaudited) |
| | | | |
| | October 31,
2024 | | July 31,
2024 |
ASSETS | | | | |
Current assets: | | | | |
Cash and cash equivalents | | $ | 2,872 | | $ | 3,609 |
Investments | | | 486 | | | 465 |
Accounts receivable, net | | | 426 | | | 457 |
Notes receivable held for investment, net | | | 892 | | | 779 |
Notes receivable held for sale | | | 10 | | | 3 |
Income taxes receivable | | | 27 | | | 78 |
Prepaid expenses and other current assets | | | 407 | | | 366 |
Current assets before funds receivable and amounts held for customers | | | 5,120 | | | 5,757 |
Funds receivable and amounts held for customers | | | 5,606 | | | 3,921 |
Total current assets | | | 10,726 | | | 9,678 |
| | | | |
Long-term investments | | | 90 | | | 131 |
Property and equipment, net | | | 1,008 | | | 1,009 |
Operating lease right-of-use assets | | | 538 | | | 411 |
Goodwill | | | 13,844 | | | 13,844 |
Acquired intangible assets, net | | | 5,662 | | | 5,820 |
Long-term deferred income tax assets | | | 798 | | | 698 |
Other assets | | | 527 | | | 541 |
Total assets | | $ | 33,193 | | $ | 32,132 |
| | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | |
Current liabilities: | | | | |
Short-term debt | | $ | 499 | | $ | 499 |
Accounts payable | | | 652 | | | 721 |
Accrued compensation and related liabilities | | | 413 | | | 921 |
Deferred revenue | | | 892 | | | 872 |
Income taxes payable | | | 21 | | | 8 |
Other current liabilities | | | 536 | | | 549 |
Current liabilities before funds payable and amounts due to customers | | | 3,013 | | | 3,570 |
Funds payable and amounts due to customers | | | 5,606 | | | 3,921 |
Total current liabilities | | | 8,619 | | | 7,491 |
| | | | |
Long-term debt | | | 5,625 | | | 5,539 |
Operating lease liabilities | | | 592 | | | 458 |
Other long-term obligations | | | 221 | | | 208 |
Total liabilities | | | 15,057 | | | 13,696 |
| | | | |
Stockholders’ equity | | | 18,136 | | | 18,436 |
Total liabilities and stockholders’ equity | | $ | 33,193 | | $ | 32,132 |
| | | | |
TABLE D INTUIT INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) (Unaudited) |
| | | | |
| | Three Months Ended |
| | October 31,
2024 | | October 31,
2023 |
Cash flows from operating activities: | | | | |
Net income | | $ | 197 | | | $ | 241 | |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | | | | |
Depreciation | | | 44 | | | | 33 | |
Amortization of acquired intangible assets | | | 157 | | | | 158 | |
Non-cash operating lease cost | | | 19 | | | | 22 | |
Share-based compensation expense | | | 511 | | | | 495 | |
Deferred income taxes | | | (91 | ) | | | (126 | ) |
Other | | | 63 | | | | 28 | |
Total adjustments | | | 703 | | | | 610 | |
Originations and purchases of loans held for sale | | | — | | | | (44 | ) |
Sales and principal repayments of loans held for sale | | | — | | | | 35 | |
Changes in operating assets and liabilities: | | | | |
Accounts receivable | | | 31 | | | | 33 | |
Income taxes receivable | | | 51 | | | | 12 | |
Prepaid expenses and other assets | | | (27 | ) | | | (33 | ) |
Accounts payable | | | (75 | ) | | | (5 | ) |
Accrued compensation and related liabilities | | | (507 | ) | | | (232 | ) |
Deferred revenue | | | 19 | | | | (159 | ) |
Income taxes payable | | | 12 | | | | (565 | ) |
Operating lease liabilities | | | (22 | ) | | | (20 | ) |
Other liabilities | | | (20 | ) | | | 30 | |
Total changes in operating assets and liabilities | | | (538 | ) | | | (939 | ) |
Net cash provided by (used in) operating activities | | | 362 | | | | (97 | ) |
Cash flows from investing activities: | | | | |
Purchases of corporate and customer fund investments | | | (306 | ) | | | (92 | ) |
Sales of corporate and customer fund investments | | | 55 | | | | 94 | |
Maturities of corporate and customer fund investments | | | 235 | | | | 301 | |
Purchases of property and equipment | | | (33 | ) | | | (84 | ) |
Originations and purchases of loans held for investment | | | (666 | ) | | | (377 | ) |
Sales of loans originally classified as held for investment | | | 110 | | | | — | |
Principal repayments of loans held for investment | | | 420 | | | | 358 | |
Other | | | (3 | ) | | | 10 | |
Net cash provided by (used in) investing activities | | | (188 | ) | | | 210 | |
Cash flows from financing activities: | | | | |
Proceeds from issuance of long-term debt, net of discount and issuance costs | | | — | | | | 3,956 | |
Repayments of debt | | | — | | | | (4,200 | ) |
Proceeds from borrowings under secured revolving credit facilities | | | 85 | | | | — | |
Proceeds from issuance of stock under employee stock plans | | | 96 | | | | 92 | |
Payments for employee taxes withheld upon vesting of restricted stock units | | | (239 | ) | | | (212 | ) |
Cash paid for purchases of treasury stock | | | (557 | ) | | | (584 | ) |
Dividends and dividend rights paid | | | (296 | ) | | | (260 | ) |
Net change in funds receivable and funds payable and amounts due to customers | | | 1,672 | | | | 2,040 | |
Other | | | — | | | | 17 | |
Net cash provided by financing activities | | | 761 | | | | 849 | |
Effect of exchange rates on cash, cash equivalents, restricted cash, and restricted cash equivalents | | | — | | | | (17 | ) |
Net increase in cash, cash equivalents, restricted cash, and restricted cash equivalents | | | 935 | | | | 945 | |
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period | | | 7,099 | | | | 2,852 | |
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period | | $ | 8,034 | | | $ | 3,797 | |
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents reported within the condensed consolidated balance sheets to the total amounts reported on the condensed consolidated statements of cash flows | | | | |
Cash and cash equivalents | | $ | 2,872 | | | $ | 1,734 | |
Restricted cash and restricted cash equivalents included in funds receivable and amounts held for customers | | | 5,162 | | | | 2,063 | |
Total cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period | | $ | 8,034 | | | $ | 3,797 | |
| | | | |
Supplemental schedule of non-cash investing activities: | | | | |
Transfers of loans originated or purchased as held for investment to held for sale | | $ | 113 | | | $ | — | |
| | |
TABLE E INTUIT INC. RECONCILIATION OF FORWARD-LOOKING GUIDANCE FOR NON-GAAP FINANCIAL MEASURES TO PROJECTED GAAP REVENUE, OPERATING INCOME, AND EPS (In millions, except per share amounts) (Unaudited) |
| | |
| | Forward-Looking Guidance |
| | GAAP Range of Estimate | | | | Non-GAAP Range of Estimate |
| | From | | To | | Adjmts | | From | | To |
Three Months Ending January 31, 2025 | | | | | | | | | | |
Revenue | | $ | 3,812 | | $ | 3,845 | | $ | — | | $ | 3,812 | | $ | 3,845 |
Operating income | | $ | 337 | | $ | 357 | | $ | 646 | [a] | $ | 983 | | $ | 1,003 |
Diluted net income per share | | $ | 0.84 | | $ | 0.90 | | $ | 1.71 | [b] | $ | 2.55 | | $ | 2.61 |
| | | | | | | | | | |
Twelve Months Ending July 31, 2025 | | | | | | | | | | |
Revenue | | $ | 18,160 | | $ | 18,347 | | $ | — | | $ | 18,160 | | $ | 18,347 |
Operating income | | $ | 4,649 | | $ | 4,724 | | $ | 2,592 | [c] | $ | 7,241 | | $ | 7,316 |
Diluted net income per share | | $ | 12.34 | | $ | 12.54 | | $ | 6.82 | [d] | $ | 19.16 | | $ | 19.36 |
| | |
See “About Non-GAAP Financial Measures” immediately following Table E for information on these measures, the items excluded from the most directly comparable GAAP measures in arriving at non-GAAP financial measures, and the reasons management uses each measure and excludes the specified amounts in arriving at each non-GAAP financial measure. |
| | |
[a] | | Reflects estimated adjustments for share-based compensation expense of approximately $486 million; amortization of other acquired intangible assets of approximately $120 million; amortization of acquired technology of approximately $37 million; and restructuring charges of approximately $3 million. |
| | |
[b] | | Reflects estimated adjustments in item [a], income taxes related to these adjustments, and other income tax effects related to the use of the non-GAAP tax rate. |
| | |
[c] | | Reflects estimated adjustments for share-based compensation expense of approximately $1.9 billion; amortization of other acquired intangible assets of approximately $482 million; amortization of acquired technology of approximately $148 million; restructuring charges of approximately $14 million; and net losses on executive deferred compensation plan liabilities of $5 million. |
| | |
[d] | | Reflects estimated adjustments in item [c], income taxes related to these adjustments, other income tax effects related to the use of the non-GAAP tax rate, and adjustments for a net loss on other long-term investments. |
INTUIT INC.
ABOUT NON-GAAP FINANCIAL MEASURES
The accompanying press release dated November 21, 2024 contains non-GAAP financial measures. Table B1, Table B2, and Table E reconcile the non-GAAP financial measures in that press release to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures include non-GAAP operating income (loss), non-GAAP net income (loss), and non-GAAP net income (loss) per share.
Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same names, and may differ from non-GAAP financial measures with the same or similar names that are used by other companies.
We compute non-GAAP financial measures using the same consistent method from quarter to quarter and year to year. We may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures. Beginning in the first quarter of fiscal 2025, we exclude from our non-GAAP measures gains and losses from the revaluation of our executive deferred compensation plan liabilities, and the related gains and losses on our executive deferred compensation plan assets. Prior periods have not been reclassified as amounts are immaterial.
We exclude the following items from all of our non-GAAP financial measures:
- Amortization of acquired technology
- Amortization of other acquired intangible assets
- Restructuring charges
- Share-based compensation expense
- Gains and losses on executive deferred compensation plan liabilities
- Goodwill and intangible asset impairment charges
- Gains and losses on disposals of businesses and long-lived assets
- Professional fees and transaction costs for business combinations
We also exclude the following items from non-GAAP net income (loss) and diluted net income (loss) per share:
- Gains and losses on debt securities and other investments
- Gains and losses on executive deferred compensation plan assets
- Income tax effects and adjustments
- Discontinued operations
We believe these non-GAAP financial measures provide meaningful supplemental information regarding Intuit’s operating results primarily because they exclude amounts that we do not consider part of ongoing operating results when planning and forecasting and when assessing the performance of the organization, our individual operating segments, or our senior management. Segment managers are not held accountable for share-based compensation expense, amortization, restructuring, or the other excluded items and, accordingly, we exclude these amounts from our measures of segment performance. We believe our non-GAAP financial measures also facilitate the comparison by management and investors of results for current periods and guidance for future periods with results for past periods.
The following are descriptions of the items we exclude from our non-GAAP financial measures.
Amortization of acquired technology and amortization of other acquired intangible assets. When we acquire a business in a business combination, we are required by GAAP to record the fair values of the intangible assets of the business and amortize them over their useful lives. Amortization of acquired technology in cost of revenue includes amortization of software and other technology assets of acquired businesses. Amortization of other acquired intangible assets in operating expenses includes amortization of assets such as customer lists and trade names.
Restructuring charges. This consists of costs incurred as a direct result of discrete strategic restructuring actions, including, but not limited to severance and other one-time termination benefits, and other costs, which are different in terms of size, strategic nature, and frequency than ongoing productivity and business improvements.
Share-based compensation expense. This consists of non-cash expenses for stock options, restricted stock units, and our Employee Stock Purchase Plan. When considering the impact of equity awards, we place greater emphasis on overall shareholder dilution rather than the accounting charges associated with those awards.
Gains and losses on executive deferred compensation plan liabilities. We exclude from our non-GAAP financial measures gains and losses on the revaluation of our executive deferred compensation plan liabilities.
Goodwill and intangible asset impairment charges. We exclude from our non-GAAP financial measures non-cash charges to adjust the carrying values of goodwill and other acquired intangible assets to their estimated fair values.
Gains and losses on disposals of businesses and long-lived assets. We exclude from our non-GAAP financial measures gains and losses on disposals of businesses and long-lived assets because they are unrelated to our ongoing business operating results.
Professional fees and transaction costs for business combinations. We exclude from our non-GAAP financial measures the professional fees we incur to complete business combinations. These include investment banking, legal, and accounting fees.
Gains and losses on debt securities and other investments. We exclude from our non-GAAP financial measures credit losses on available-for-sale debt securities and gains and losses on other investments.
Gains and losses on executive deferred compensation plan assets. We exclude from our non-GAAP financial measures gains and losses on the revaluation of our executive deferred compensation plan assets.
Income tax effects and adjustments. We use a long-term non-GAAP tax rate for evaluating operating results and for planning, forecasting, and analyzing future periods. This long-term non-GAAP tax rate excludes the income tax effects of the non-GAAP pre-tax adjustments described above, and eliminates the effects of non-recurring and period specific items which can vary in size and frequency. Based on our long-term projections, we are using a long-term non-GAAP tax rate of 24% for fiscal 2024 and fiscal 2025. This long-term non-GAAP tax rate could be subject to change for various reasons including significant acquisitions, changes in our geographic earnings mix or fundamental tax law changes in major jurisdictions in which we operate. We will evaluate this long-term non-GAAP tax rate on an annual basis and whenever any significant events occur which may materially affect this rate.
Operating results and gains and losses on the sale of discontinued operations. From time to time, we sell or otherwise dispose of selected operations as we adjust our portfolio of businesses to meet our strategic goals. In accordance with GAAP, we segregate the operating results of discontinued operations as well as gains and losses on the sale of these discontinued operations from continuing operations on our GAAP statements of operations but continue to include them in GAAP net income or loss and net income or loss per share. We exclude these amounts from our non-GAAP financial measures.
The reconciliations of the forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures in Table E include all information reasonably available to Intuit at the date of this press release. These tables include adjustments that we can reasonably predict. Events that could cause the reconciliation to change include acquisitions and divestitures of businesses, goodwill and other asset impairments, sales of available-for-sale debt securities and other investments, and disposals of businesses and long-lived assets.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241121099002/en/
Investors
Kim Watkins
Intuit Inc.
650-944-3324
kim_watkins@intuit.com
Media
Kali Fry
Intuit Inc.
650-944-3036
kali_fry@intuit.com
Source: Intuit Inc.
