Intuit First-quarter Revenue Increases 11 Percent

Intuit Inc. (INTU) today announced financial results for the first quarter of the 2014 fiscal year, which ended Oct. 31, and confirmed guidance for the remainder of the year.

“We are out of the gate strong in the first quarter, led by the rapid adoption of QuickBooks Online, which is accelerating our transition to the cloud and driving value for Intuit,” said Brad Smith, Intuit’s president and chief executive officer. “Cloud-based offerings provide superior benefits for small businesses, so we are making it as easy as possible for our QuickBooks customers, accountants and developers to move to the cloud.

“We’re also gearing up for tax season and looking forward to getting our new offerings out to market in the coming weeks,” Smith said.

Financial Highlights

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.

• Increased revenue 11 percent, to $622 million.
• Reiterated guidance for second-quarter revenue, with a range of $890 million to $910 million, and full fiscal year revenue guidance of $4.440 billion to $4.525 billion, with growth of 6 to 8 percent.
• Completed three talent and technology acquisitions for a total of approximately $65 million. These acquisitions are expected to add value across Intuit’s businesses.
• Entered into an accelerated share repurchase agreement to buy back $1.4 billion in shares.

Business Segment Highlights

Intuit also provided details of business segment performance, reflecting the internal reorganization announced in July.

Small Business

• Delivered 11 percent higher revenue in the Small Business segment, driven by increased adoption of cloud solutions.
• Reached 516,000 QuickBooks Online subscribers, growth of 29 percent, with subscribers outside the U.S. up more than 80 percent to over 37,000.
• Grew Small Business Management Solutions, or SBMS, revenue by 15 percent. Within SBMS, Demandforce grew subscriptions by 36 percent and online payroll grew customers 18 percent.

Consumer

• Grew Consumer Tax revenue by 11 percent in a seasonally light quarter.

Professional Tax

• Increased Professional Tax segment revenue by 16 percent.

Snapshot of First-quarter Results
GAAP								Non-GAAP
		Q1 FY14		Q1 FY13		Change		Q1 FY14		Q1 FY13		Change
Revenue		$622		$562		11%		$622		$562		11%
Operating Loss		($77)		($73)		NA		($20)		($16)		NA
EPS		($0.04)		($0.06)		NA		($0.06)		($0.05)		NA

Dollars are in millions, except earnings per share (EPS). See “About Non-GAAP Financial Measures” below for more information regarding financial measures not prepared in accordance with Generally Accepted Accounting Principles (GAAP). All figures in the table above have been reclassified to reflect Intuit Websites, Intuit Financial Services, and Intuit Health as discontinued operations and to exclude their results from non-GAAP EPS.

CFO Remarks

Intuit Chief Financial Officer Neil Williams commented on Intuit’s results for the quarter in prepared remarks for investors.

“We continue to take a disciplined approach to capital management,” he said. “In the first quarter we made three acquisitions adding valuable technology and talented scientists and engineers to the teams.”

Capital Allocation Summary

The company continued to return value to shareholders through its stock repurchase program and quarterly dividend.

• Entered into an accelerated share repurchase agreement to buy back $1.4 billion in shares; $2 billion remains on the current authorization, which Intuit’s board of directors approved in August.
• In October, Intuit’s board of directors approved a new quarterly cash dividend of $0.19 per share, payable on Jan. 21 to shareholders of record on Jan. 10, 2014.

Forward-looking Guidance

Intuit reiterated guidance for full fiscal year 2014, which ends July 31, and for the remaining quarters of fiscal 2014.

For the full fiscal year 2014 Intuit expects:

• Revenue of $4.440 billion to $4.525 billion, growth of 6 to 8 percent.
• GAAP operating income of $1.347 billion to $1.377 billion, growth of 9 to 12 percent.
• Non-GAAP operating income of $1.58 billion to $1.61 billion, growth of 7 to 10 percent.
• GAAP diluted earnings per share of $3.11 to $3.19, growth of 10 to 13 percent.
• Non-GAAP diluted EPS of $3.52 to $3.60, growth of 10 to 13 percent.

For the second quarter of fiscal 2014 Intuit expects:

• Revenue of $890 million to $910 million.
• GAAP operating income of $50 million to $60 million.
• Non-GAAP operating income of $110 million to $120 million.
• GAAP diluted EPS of $0.12 to $0.14.
• Non-GAAP diluted EPS of $0.25 to $0.27.

For the third quarter of fiscal 2014, Intuit expects:

• Revenue of $2.245 billion to $2.290 billion.
• GAAP diluted EPS of $3.12 to $3.17.
• Non-GAAP diluted EPS of $3.25 to $3.30.

For the fourth quarter of fiscal 2014, Intuit expects:

• Revenue of $710 million to $720 million.
• GAAP loss per share of $0.02 to $0.04.
• Non-GAAP diluted EPS of $0.11 to $0.13.