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Intuit Grows First-quarter Revenue 12 Percent; Reiterates Full-year Guidance

Stocks in this article: INTU

Founded in 1983, Intuit had annual revenue of $4.15 billion in its fiscal year 2012. The company has approximately 8,500 employees with major offices in the United States, Canada, the United Kingdom, India, Singapore and other locations. More information can be found at www.intuit.com.

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.

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 B 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 Intuit’s future expected financial results; expectations regarding growth from connected services and from current or future products and services; expectations regarding the amount and timing of any future dividends and share repurchases; its prospects for the business in fiscal 2013; 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 factors include, without limitation, the following: inherent difficulty in predicting consumer behavior; difficulties in receiving, processing, or filing customer tax submissions; consumers may not respond as we expected to our advertising and promotional activities; product introductions and price competition from our competitors can have unpredictable negative effects on our revenue, profitability and market position; governmental encroachment in our tax businesses or other governmental activities or public policy affecting the preparation and filing of tax returns could negatively affect our operating results and market position; we may not be able to successfully innovate and introduce new offerings and business models to meet our growth and profitability objectives, and current and future offerings may not adequately address customer needs and may not achieve broad market acceptance, which could harm our operating results and financial condition; business interruption or failure of our information technology and communication systems may impair the availability of our products and services, which may damage our reputation and harm our future financial results; as we upgrade and consolidate our customer facing applications and supporting information technology infrastructure, any problems with these implementations could interfere with our ability to deliver our offerings; any failure to properly use and protect personal customer information and data could harm our revenue, earnings and reputation; if we are unable to develop, manage and maintain critical third party business relationships, our business may be adversely affected; increased government regulation of our businesses may harm our operating results; if we fail to process transactions effectively or fail to adequately protect against potential fraudulent activities, our revenue and earnings may be harmed; any significant offering quality problems or delays in our offerings could harm our revenue, earnings and reputation; our participation in the Free File Alliance may result in lost revenue opportunities and cannibalization of our traditional paid franchise; the continuing global economic downturn may continue to impact consumer and small business spending, financial institutions and tax filings, which could negatively affect our revenue and profitability; year-over-year changes in the total number of tax filings that are submitted to government agencies due to economic conditions or otherwise may result in lost revenue opportunities; our revenue and earnings are highly seasonal and the timing of our revenue between quarters is difficult to predict, which may cause significant quarterly fluctuations in our financial results; our financial position may not make repurchasing shares advisable or we may issue additional shares in an acquisition causing our number of outstanding shares to grow; our inability to adequately protect our intellectual property rights may weaken our competitive position and reduce our revenue and earnings; our acquisition and divestiture activities may disrupt our ongoing business, may involve increased expenses and may present risks not contemplated at the time of the transactions; our use of significant amounts of debt to finance acquisitions or other activities could harm our financial condition and results of operation; and litigation involving intellectual property, antitrust, shareholder and other matters may increase our costs. More details about these and other risks that may impact our business are included in our Form 10-K for fiscal 2012 and in our other SEC filings. You can locate these reports through our website at http://investors.intuit.com. Forward-looking statements are based on information as of November 15, 2012, and we do not undertake any duty to update any forward-looking statement or other information in these materials.

 

TABLE A

INTUIT INC.

GAAP CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share amounts)

(Unaudited)

 

Three Months Ended

October 31, 2012

     

October 31, 2011

Net revenue:
Product $ 227 $ 222
Service and other 420   353  
Total net revenue 647   575  
Costs and expenses:
Cost of revenue:
Cost of product revenue 32 32
Cost of service and other revenue 145 132
Amortization of acquired technology 5 3
Selling and marketing 251 216
Research and development 178 163
General and administrative 98 92
Amortization of other acquired intangible assets 7   21  
Total costs and expenses [A] 716   659  
Operating loss from continuing operations (69 ) (84 )
Interest expense (8 ) (15 )
Interest and other income, net 2   11  
Loss before income taxes (75 ) (88 )
Income tax benefit [B] (24 ) (30 )
Net loss from continuing operations (51 ) (58 )
Net income (loss) from discontinued operations [C] 32   (6 )
Net loss $ (19 ) $ (64 )
 
Basic net loss per share from continuing operations $ (0.17 ) $ (0.19 )
Basic net income (loss) per share from discontinued operations 0.11   (0.02 )
Basic net loss per share $ (0.06 ) $ (0.21 )
Shares used in basic per share calculations 296   300  
 
Diluted net loss per share from continuing operations $ (0.17 ) $ (0.19 )
Diluted net income (loss) per share from discontinued operations 0.11   (0.02 )
Diluted net loss per share $ (0.06 ) $ (0.21 )
Shares used in diluted per share calculations 296   300  
 
Dividends declared per common share $ 0.17   $ 0.15  
 

See accompanying Notes.

 

INTUIT INC.

NOTES TO TABLE A

 

[A] The following table summarizes the total share-based compensation expense that we recorded for the periods shown.

 
Three Months Ended
(in millions) October 31, 2012     October 31, 2011
Cost of revenue $ 2 $ 1
Selling and marketing

 

18

14
Research and development

 

14

12
General and administrative

 

15

  13
Total share-based compensation expense $ 49   $ 40
 

[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. Our effective tax benefit rate for the three months ended October 31, 2012 was approximately 32%. Excluding the impact of discrete tax items primarily related to share based compensation, our effective tax benefit rate for the three months ended October 31, 2012 was approximately 35% and did not differ significantly from the federal statutory rate of 35%. Our effective tax benefit rate for the three months ended October 31, 2011 was approximately 35% and did not differ significantly from the federal statutory rate of 35%.

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