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November 17, 2011 04:00 PM Eastern Time
Small Business Group Revenue Increased 13 Percent, Driven by Strength in Connected Services
MOUNTAIN VIEW, Calif.--()--Intuit Inc. (Nasdaq: INTU) today announced financial results for its first fiscal quarter, which ended Oct. 31, and reiterated guidance for the full fiscal year 2012.
First Quarter Highlights:Unless otherwise noted, all growth rates refer to the current fiscal quarter versus the comparable prior-year quarter.
- Increased revenue by 12 percent, to $594 million.
- Grew Small Business revenue by double-digits for the seventh consecutive quarter, driven by strong adoption of online and mobile services and improving revenue per customer.
- Generated strong revenue growth through connected services. QuickBooks Online increased subscribers 40 percent, to over 300,000.
- Reported first quarter fiscal 2012 operating loss narrowed significantly compared to the first quarter last year.
- Reiterated guidance for the full fiscal year 2012, including revenue growth of 9 to 11 percent, GAAP earnings per share growth of 19 to 24 percent, and Non-GAAP earnings per share growth of 14 to 17 percent.
- Launched Mint.com for the iPad to positive reviews; the current rating is 4.5 out of 5 stars in the Apple app store.
Snapshot of First Quarter Results
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GAAP
| Non-GAAP | |||||||||||
| Q1 FY12 | Q1 FY11 | Change | Q1 FY12 | Q1 FY11 | Change | |||||||
| Revenue | $594 | $532 | 12% | $594 | $532 | 12% | ||||||
| Operating Loss | $(94) | $(104) | NA | $(29) | $(53) | NA | ||||||
| EPS | $(0.21) | $(0.22) | NA | $(0.10) | $(0.12) | NA | ||||||
Dollars are in millions, except EPS.
Intuit typically posts a seasonal loss in its first fiscal quarter when there is little revenue from its tax businesses but expenses continue at relatively consistent levels.
CEO Perspective
“We’re off to another strong start in fiscal 2012, growing revenue double-digits. Growth was led by our Small Business Group, which has now posted double-digit growth for seven consecutive quarters,” said Brad Smith, president and chief executive officer. “Across the board our first-quarter results are in line with our expectations, so we are reiterating our guidance for fiscal 2012.
“Our business is growing despite a volatile macroeconomic environment, because we benefit from secular tailwinds. The long-term structural shift to connected services is overpowering the cyclical uncertainty weighing down the economy. Intuit also benefits from enriching the mix for our base of 50 million customers who are rapidly adopting connected services, which generate recurring revenue streams and favorable lifetime value economics for Intuit.
“Our results in the first quarter reinforce that our strategy is working and give us confidence as we head into the remainder of our fiscal year. We are in a digital jet stream, as consumers and small businesses increasingly demand access to applications anytime, anywhere and on any device. That demand will only get stronger as the proliferation of mobile devices continues. If we do our job well, and continue to innovate, we will benefit from these ongoing trends for a long time to come.”
Business Segment Results and Highlights
Total Small Business Group revenue increased 13 percent for the quarter. Within the Small Business Group:
- Financial Management Solutions segment revenue increased 9 percent. QuickBooks Online grew subscribers by 40 percent and QuickBooks Enterprise Solutions grew subscribers by 28 percent, contributing to a favorable revenue mix.
- Employee Management Solutions segment revenue grew 13 percent due to improved customer retention and favorable revenue mix. Total payroll customers were up 3 percent, while online payroll customers were up 20 percent. During the quarter Intuit expanded several partnerships to distribute Intuit Full Service Payroll.
- Payment Solutions segment revenue increased 19 percent, driven by 11 percent growth in the merchant customer base and 1 percent growth in transaction volume per merchant.
Consumer Tax
- Consumer Tax segment revenue increased to $41 million, a $12 million increase in a seasonally light quarter. More customers filed extended returns in the first quarter of fiscal 2012 compared with a year ago. TurboTax for 2011 will go on sale in retail stores on Nov. 25 and will be available online Dec. 1.
Accounting Professionals
- Accounting Professionals segment revenue increased 6 percent to $27 million in a seasonally light quarter.
Financial Services
- Financial Services revenue grew 9 percent due to adding financial institutions and end users along with incremental services and mobile adoption. Mobile banking users more than tripled over the last year to more than 1.2 million users, helping to improve revenue per user.
Other Businesses
- Other Businesses segment revenue declined 3 percent.
Quarterly Dividend
Intuit paid its first quarterly cash dividend of $0.15 per share, or $45 million, in the first quarter. In November the company’s board of directors approved a quarterly cash dividend of $0.15 per share to be paid on Jan. 18, 2012 to shareholders of record as of the close of business on Jan. 10.
Stock Repurchase Program
During the first quarter, Intuit repurchased $255 million of its shares. At the end of the quarter the company had authorization from its board of directors to use up to an additional $2.4 billion for stock repurchases through August 2014.
CFO Perspective
“We’ve consistently delivered strong total Small Business Group revenue results, which are benefiting from the ongoing shift from desktop to online services,” said Neil Williams, Intuit’s chief financial officer.
“Approximately 70 percent of small business customers now enter the Intuit franchise through a connected service, including QuickBooks Online and other services, up from 40 percent in 2008.
“We expect the rapid adoption of connected services to continue in small business and across all of our businesses. Today, we reported that our first quarter fiscal 2012 loss narrowed significantly compared to the first quarter of last year, which reinforces the benefit of the shift to more recurring, reliable connected services revenue.”
