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Intuit Reports Strong First-Quarter Results; Quickbooks Online

The following excerpt is from the company's SEC filing.

Subscribers Grew 57 Percent

Raises Earnings per Share Guidance for Fiscal 2016

Intuit Inc

. (Nasdaq: INTU) announced financial results for the first quarter of fiscal 2016. The company’s fiscal first quarter ended Oct. 31.

“We started the fiscal year the same way we ended the last, with strong momentum across our businesses as our intense focus on our global cloud strategy takes shape,” said Brad Smith, Intuit’s president and chief executive officer.

“We exceeded our subscriber and financial targets in the first quarter and have rais ed our earnings per share guidance for the fiscal year based on these initial strong results and our acceleration of share repurchases in the quarter.”

Financial Highlights

In the first quarter Intuit:

Reported 17 percent revenue growth, which includes the impact of ratable revenue recognition for certain desktop software offerings.

Increased total QuickBooks Online subscribers by 57 percent.

More than doubled QuickBooks Online subscribers outside the U.S. to 215,000.

Repurchased $1.3 billion of its common shares.

Raised GAAP and non-GAAP earnings per share guidance for fiscal 2016.

Intuit Reports First Quarter Fiscal 2016 Earnings

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.

Business Segment Results

The segment results below reflect the treatment of assets held for sale as discontinued operations.

Small Business

Total Small Business segment revenue increased 5 percent.

The small business online ecosystem continues to build momentum, with revenue growth of approximately 28 percent, driven by strong customer acquisition.

Over 80 percent of QuickBooks Online customers were new to the Intuit franchise, raising total subscribers to 1,159,000.

More than doubled QuickBooks Online subscribers outside the U.S., reaching 215,000 customers.

Reached 35,000 QuickBooks Self-Employed subscribers, up from 25,000 in the last quarter.

Online payroll customers grew 17 percent.

Online payments customers grew 4 percent, and online payments charge volume grew 14 percent.

Consumer and Professional Tax

Consumer Tax revenue was flat in a seasonally light first quarter.

ProTax revenue grew more than 200 percent to $110 million, driven by changes to desktop offerings that affected the timing of revenue recognition.

Intuit will provide a tax unit update in late February, concurrent with its second-quarter earnings release, and a final update in late April after the tax season ends.

Snapshot of First-quarter Results


FY 16

FY 15



Operating Income (Loss)




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). Q1 FY16 results reflect the impact of changes to certain desktop software offerings; revenue for those offerings is recognized as services are delivered, rather than up front. Q1 FY16 results also reflect the treatment of assets held for sale as discontinued operations.

Capital Allocation Summary

“Our first priority is investing for customer growth,” said Neil Williams, chief financial officer. “This quarter we also increased our dividend by 20 percent and repurchased $1.3 billion in shares.”

In the first quarter the company:

Ended with $474 million in cash and investments.

Repurchased shares at an average price of $88.50 per share; about $1.4 billion remains on the authorization.

Received board approval for a $0.30 per share dividend for the fiscal second quarter, payable on Jan. 19. This represents a 20 percent increase versus last year.

Forward-looking Guidance

“Looking ahead, we remain focused on executing against a compelling long-term growth opportunity in both tax and small business,” Smith said. “We are expanding our categories and our geographies. The proof points are evident in the momentum we are building, as the QuickBooks Online ecosystem continues to grow at a very healthy rate.”

Intuit announced guidance for the second quarter of fiscal year 2016, which ends Jan. 31. The company expects:

Revenue of $880 million to $900 million, growth of 17 to 20 percent.

GAAP operating income of $15 million to $25 million, compared to an operating loss of $89 million in the year-ago quarter.

Non-GAAP operating income of $85 million to $95 million, compared to an operating loss of $22 million in the year-ago quarter.

GAAP earnings per share of $0.01 to $0.04, compared to a net loss per share of $0.23 in the year-ago quarter.

Non-GAAP earnings per share of $0.17 to $0.20, compared to a loss per share of $0.06 in the year-ago quarter.

QuickBooks Online subscribers of approximately 1.240 million.

For full fiscal 2016, the company now expects:

GAAP earnings per share of $2.55 to $2.60, versus previous guidance of $2.50 to $2.55.

Non-GAAP earnings per share of $3.45 to $3.50, versus previous guidance of $3.40 to $3.45.

Capital expenditures of $490 million to $510 million, versus previous guidance of $280 million to $300 million. The new guidance reflects the recently announced purchase of Intuit’s San Diego campus.

Intuit also reiterated its revenue and operating income guidance for fiscal 2016.

Intuit executives will discuss the company’s financial results on a conference call at 1:30 p.m. Pacific time on Nov. 19. To hear the call, dial 866-348-8108 in the United States or 908-982-4619 from international locations. No reservation or access code is needed. The conference call can also be heard live at

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 888-266-2081, or 703-925-2533 from international locations. The access code for this call is 1664405.

The audio webcast will remain available on Intuit’s website for one week after the conference call.

About Intuit

. creates business and financial management solutions that simplify the business of life for small businesses, consumers and accounting professionals.

Its flagship products and services include

® and


®, which make it easier to manage

tax preparation and filing

provides a fresh, easy and intelligent way for people to manage their money, while


® and


® are Intuit's leading tax preparation offerings for professional accountants.

Founded in 1983, Intuit had revenue of $4.2 billion in its fiscal year 2015. The company has approximately 7,700 employees with major offices in the


United Kingdom

and other locations. More information can be found at

Intuit and the Intuit logo, among others, are registered trademarks and/or registered service marks of Intuit Inc. in the United States and other countries.

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 Web site.

Cautions About Forward-looking Statements

This press release contains forward-looking statements, including forecasts of expected growth and future financial results of Intuit and its reporting segments; Intuit’s prospects for the business in fiscal 2016 and beyond; expectations regarding Intuit’s growth outside the US; expectations regarding timing and growth of revenue for each of Intuit’s reporting segments and from current or future products and services; expectations regarding customer growth; expectations regarding changes to our...