Intuit Reports Third Quarter Results and Raises Full Year Guidance; Grows Small Business Online Ecosystem Revenue 28 Percent in Third Quarter
Intuit Inc. (Nasdaq: INTU) reported robust financial results for Q3 FY21, ending April 30, with total revenue of $4.2 billion, up 39% year-over-year. Consumer Group revenue increased 34% to $2.4 billion, while Small Business revenue rose 20% to $1.2 billion. Credit Karma achieved record revenue of $316 million. Operating income was $1.9 billion, up 35%, and EPS reached $5.30, reflecting a 29% increase. The company plans to raise its full-year guidance following these results.
- Total revenue increased by 39% to $4.2 billion.
- Consumer Group revenue grew 34% to $2.4 billion.
- Small Business revenue grew 20% to $1.2 billion.
- Credit Karma achieved record revenue of $316 million.
- Operating income rose by 35% to $1.9 billion.
- Earnings Per Share (EPS) increased by 29% to $5.30.
- Share repurchase of $380 million with $1.8 billion remaining in authorization.
- None.
Intuit Inc. (Nasdaq: INTU), maker of TurboTax, QuickBooks, Mint and Credit Karma, announced financial results for the third quarter of fiscal 2021, which ended April 30.
“We had a strong quarter across the company, and as a result we are raising our full year guidance," said Sasan Goodarzi, Intuit's chief executive officer. "We had a great tax season growing our share of total tax returns and executing our strategy of expanding our lead in the DIY category and transforming the assisted category. Small Business and Self-Employed Group delivered strong double-digit revenue growth and Credit Karma revenue reached an all-time high in the quarter," said Goodarzi.
Financial Highlights
For the third quarter, Intuit reported:
-
Total revenue of
$4.2 billion , up from$3.0 billion the prior year. -
Consumer Group revenue grew 34 percent to
$2.4 billion . -
Small Business and Self-Employed Group revenue up 20 percent to
$1.2 billion , while Online Ecosystem revenue grew 28 percent to$715 million . Excluding$10 million of nonrecurring Paycheck Protection Program (PPP) revenue, growth was 19 percent and 26 percent, respectively. -
Credit Karma revenue of
$316 million , a quarterly record for the business.
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 Third-quarter Results
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Earnings Per Share |
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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).
Business Segment Results
Small Business and Self-Employed Group
- QuickBooks Online Accounting revenue grew 24 percent in the quarter, driven primarily by customer growth and mix-shift.
- Online Services revenue increased 34 percent, driven by QuickBooks Online payments and QuickBooks Online payroll. Excluding non-recurring PPP revenue, growth was 31 percent.
- Total international online revenue grew 38 percent on a constant currency basis.
Credit Karma
- Revenue growth reflects growing members, member engagement and expansion of new and existing partners across verticals.
- Member engagement reached a new record high watermark, with both monthly active users and frequency of member visits at all-time highs.
ProConnect Groups
-
Professional tax revenue in the ProConnect Group grew to
$235 million in the third quarter of fiscal 2021, up from$193 million the prior year.
Tax Season Update
Unless otherwise noted below, all growth rates refer to Intuit's expectations for the tax filing season through July 31, 2021 compared to the prior season through July 31, 2020. For that period, Intuit expects.
- Total TurboTax units to grow 6 percent.
- TurboTax Live customers to grow more than 90 percent and TurboTax Live customers new to Intuit to be up more than 100 percent for the season.
- TurboTax share of total returns to expand an estimated 1 point, excluding approximately 8 million stimulus-only filings last season.
- The growth of TurboTax Premier, designed for investors, to significantly accelerate, more than tripling over last year.
- Customers paying nothing to grow 6 percent to over 17 million filers. Intuit's commitment to offering free tax prep for those with simple tax returns and who need it most with a robust free offering has resulted in nearly 100 million TurboTax customers who paid nothing for their TurboTax experience over the last 8 years.
Intuit plans to provide a TurboTax federal tax unit comparison in its fourth quarter 2021 earnings release.
Capital Allocation Summary
In the third quarter the company:
-
Reported a total cash and investments balance of approximately
$4.1 billion as of April 30. -
Repurchased
$380 million of shares, with$1.8 billion remaining on the company's authorization. -
Received Board approval for a quarterly dividend of
$0.59 per share, payable July 19, 2021. This represents an 11 percent increase compared to the same period last year.
Forward-looking Guidance
Intuit announced guidance for the fourth quarter of fiscal year 2021, which ends July 31. The company expects:
- Revenue growth of approximately 26 to 28 percent.
-
GAAP earnings per share of
$0.78 t o$0.83 . -
Non-GAAP diluted earnings per share of
$1.55 t o$1.60 .
Intuit raised guidance for full fiscal year 2021. The company expects:
-
Revenue of
$9.36 2 billion to$9.40 0 billion, growth of approximately 22 percent, up from previous guidance for growth of 15 to 17 percent. -
GAAP operating income of
$2.35 0 billion to$2.37 0 billion, growth of approximately 8 to 9 percent. -
Non-GAAP operating income of
$3.34 0 billion to$3.36 0 billion, growth of approximately 25 to 26 percent. -
GAAP diluted earnings per share of
$6.96 t o$7.01 , an increase of approximately 1 percent. -
Non-GAAP diluted earnings per share of
$9.32 t o$9.37 , growth of approximately 19 percent.
The company also updated segment revenue results. For fiscal year 2021, the company now expects:
- Small Business and Self-Employed Group: growth of 14 percent.
- Consumer Group: growth of 11 to 12 percent.
- ProConnect Group: growth of 2 percent.
-
Credit Karma: revenue of
$775 million to$785 million .
Conference Call Details
Intuit executives will discuss the financial results on a conference call at 1:30 p.m. Pacific time on May 25. To hear the call, dial 866-417-5279 in the United States or 409-937-8904 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.
Replay Information
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 8977592. The audio webcast will remain available on Intuit’s website for one week after the conference call.
About Intuit
Intuit is a global technology platform that helps our customers and communities overcome their most important financial challenges. Serving approximately 100 million customers worldwide with TurboTax, QuickBooks, Mint and Credit Karma, 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 for the latest information about Intuit, our products and services, and find us on social.
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 contain forward-looking statements, including the size of the market for tax preparation software and the timing of when individuals will file their tax returns, forecasts and timing of expected growth and future financial results of Intuit and its reporting segments, including Credit Karma; Intuit’s prospects for the business in fiscal 2021 and beyond; expectations regarding timing and growth of revenue from current or future products and services; expectations regarding customer growth; expectations regarding Intuit's corporate tax rate; expectations regarding changes to our products and their impact on Intuit’s business; expectations regarding the amount and timing of any future dividends or share repurchases; expectations regarding availability of our offerings; expectations regarding the impact of our strategic decisions on Intuit’s business; 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 risks and uncertainties may be amplified by the COVID-19 pandemic, which has caused significant global economic instability and uncertainty. These factors include, without limitation, the following: our ability to compete successfully; our participation in the Free File Alliance; potential governmental encroachment in our tax businesses; our ability to adapt to technological change; our ability to predict consumer behavior; our reliance on third-party intellectual property; our ability to protect our intellectual property rights; any harm to our reputation; risks associated with acquisition and divestiture activity, including the acquisition and integration of Credit Karma; the issuance of equity or incurrence of debt to fund an acquisition; our cybersecurity incidents (including those affecting the third parties we rely on); customer 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; any deficiency in the quality or accuracy of our products (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; changes to public policy, laws or regulations affecting our businesses; litigation in which we are involved; the seasonal nature of our tax business; changes in tax rates and tax reform legislation; global economic changes; 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; and our ability to successfully market our offerings. More details about these and other risks that may impact our business are included in our Form 10-K for fiscal 2020 and in our other SEC filings. You can locate these reports through our website at http://investors.intuit.com. Fiscal 2021 full-year and Q4 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. We do not undertake any duty to update any forward-looking statement or other information in this presentation.
TABLE A |
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INTUIT INC. |
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GAAP CONSOLIDATED STATEMENTS OF OPERATIONS |
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(In millions, except per share amounts) |
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(Unaudited) |
||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||||
|
April 30, 2021 |
|
April 30, 2020 |
|
April 30, 2021 |
|
April 30, 2020 |
|||||||||
Net revenue: |
|
|
|
|
|
|
|
|||||||||
Product |
$ |
533 |
|
|
$ |
443 |
|
|
$ |
1,395 |
|
|
$ |
1,341 |
|
|
Service and other |
3,640 |
|
|
2,559 |
|
|
5,677 |
|
|
4,522 |
|
|||||
Total net revenue |
4,173 |
|
|
3,002 |
|
|
7,072 |
|
|
5,863 |
|
|||||
Costs and expenses: |
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|
|
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|
|
|
|||||||||
Cost of revenue: |
|
|
|
|
|
|
|
|||||||||
Cost of product revenue |
16 |
|
|
16 |
|
|
53 |
|
|
57 |
|
|||||
Cost of service and other revenue |
565 |
|
|
405 |
|
|
1,130 |
|
|
982 |
|
|||||
Amortization of acquired technology |
14 |
|
|
5 |
|
|
35 |
|
|
17 |
|
|||||
Selling and marketing |
857 |
|
|
648 |
|
|
1,799 |
|
|
1,624 |
|
|||||
Research and development |
464 |
|
|
332 |
|
|
1,157 |
|
|
999 |
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|||||
General and administrative |
289 |
|
|
181 |
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|
708 |
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|
486 |
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Amortization of other acquired intangible assets |
54 |
|
|
2 |
|
|
92 |
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|
5 |
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|||||
Total costs and expenses [A] |
2,259 |
|
|
1,589 |
|
|
4,974 |
|
|
4,170 |
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|||||
Operating income |
1,914 |
|
|
1,413 |
|
|
2,098 |
|
|
1,693 |
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|||||
Interest expense |
(7 |
) |
|
(2 |
) |
|
(22 |
) |
|
(7 |
) |
|||||
Interest and other income (loss), net |
14 |
|
|
(3 |
) |
|
77 |
|
|
26 |
|
|||||
Income before income taxes |
1,921 |
|
|
1,408 |
|
|
2,153 |
|
|
1,712 |
|
|||||
Income tax provision [B] |
457 |
|
|
324 |
|
|
471 |
|
|
331 |
|
|||||
Net income |
$ |
1,464 |
|
|
$ |
1,084 |
|
|
$ |
1,682 |
|
|
$ |
1,381 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic net income per share |
$ |
5.36 |
|
|
$ |
4.15 |
|
|
$ |
6.26 |
|
|
$ |
5.29 |
|
|
Shares used in basic per share calculations |
273 |
|
|
261 |
|
|
269 |
|
|
261 |
|
|||||
|
|
|
|
|
|
|
|
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Diluted net income per share |
$ |
5.30 |
|
|
$ |
4.11 |
|
|
$ |
6.20 |
|
|
$ |
5.24 |
|
|
Shares used in diluted per share calculations |
276 |
|
|
264 |
|
|
271 |
|
|
264 |
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|||||
|
|
|
|
|
|
|
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Cash dividends declared per common share |
$ |
0.59 |
|
|
$ |
0.53 |
|
|
$ |
1.77 |
|
|
$ |
1.59 |
|
|
See accompanying Notes. |
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INTUIT INC. |
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NOTES TO TABLE A |
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[A] |
The following table summarizes the total share-based compensation expense that we recorded in operating income for the periods shown. |
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|
Three Months Ended |
|
Nine Months Ended |
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(in millions) |
April 30, 2021 |
|
April 30, 2020 |
|
April 30, 2021 |
|
April 30, 2020 |
|||||||||||
Cost of revenue |
$ |
16 |
|
|
$ |
15 |
|
|
$ |
47 |
|
|
$ |
44 |
|
|||
Selling and marketing |
51 |
|
|
27 |
|
|
127 |
|
|
86 |
|
|||||||
Research and development |
82 |
|
|
36 |
|
|
187 |
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|
111 |
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|||||||
General and administrative |
69 |
|
|
25 |
|
|
148 |
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|
80 |
|
|||||||
Total share-based compensation expense |
$ |
218 |
|
|
$ |
103 |
|
|
$ |
509 |
|
|
$ |
321 |
|
|||
[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. |
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For the three and nine months ended April 30, 2021, we recognized excess tax benefits on share-based compensation of |
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Our effective tax rates for the three and nine months ended April 30, 2021 were approximately
The difference from the federal statutory rate of |
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Our effective tax rates for the three and nine months ended April 30, 2020 were approximately |
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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 |
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INTUIT INC. |
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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
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TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES |
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(In millions, except per share amounts) |
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(Unaudited) |
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Fiscal 2021 |
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|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
Year to Date |
|||||||||||
GAAP operating income (loss) |
$ |
209 |
|
|
$ |
(25 |
) |
|
$ |
1,914 |
|
|
$ |
— |
|
|
$ |
2,098 |
|
|
Amortization of acquired technology |
7 |
|
|
14 |
|
|
14 |
|
|
— |
|
|
35 |
|
||||||
Amortization of other acquired intangible assets |
2 |
|
|
36 |
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FAQ
What were Intuit's Q3 FY21 total revenues?
Intuit reported total revenues of $4.2 billion for Q3 FY21.
How much did Intuit's Consumer Group revenue grow in Q3 FY21?
The Consumer Group revenue grew 34% to $2.4 billion.
What was the EPS for Intuit in Q3 FY21?
Intuit's earnings per share (EPS) for Q3 FY21 was $5.30.
What record revenue did Credit Karma achieve in Q3 FY21?
Credit Karma achieved record revenue of $316 million in Q3 FY21.
How much did Intuit repurchase in shares during Q3 FY21?
Intuit repurchased $380 million in shares during Q3 FY21.
Intuit Inc
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