Intuit Reports First-quarter Revenue Up 9 Percent

Intuit Inc. (Nasdaq:INTU) announced financial results for the first quarter of fiscal 2017, which ended Oct. 31.

"We are off to a strong start to the fiscal year with QuickBooks Online continuing to build momentum as we pursue large global market opportunities," said Brad Smith, Intuit's chairman and chief executive officer. "Customer growth is expanding globally in Canada, the U.K., and Australia, and QuickBooks Self-Employed is contributing to category growth worldwide.

"It's also time to gear up for tax season, and we're investing in product innovation focused on driving customer growth and market share. In ProConnect we are focused on multiservice accountants who do both books and taxes for their customers so we can become the operating system behind accountant success. We also continue to promote a set of best practices and standards within the industry that help the Internal Revenue Service and the states to improve their ability to combat tax fraud.

"Overall we are off to a nice start across our businesses and are looking forward to building on this success through the year," Smith said.

Financial Highlights

For the first quarter, Intuit:
  • Reported revenue of $778 million, up 9 percent.
  • Grew total QuickBooks Online subscribers 41 percent to more than 1.6 million subscribers.
  • Grew QuickBooks Online subscribers outside the U.S. by 50 percent, to 323,000 subscribers, led by growth in the U.K., Australia and Canada; subscriber growth in the U.K. accelerated to 87 percent.
  • Increased QuickBooks Self-Employed customers to roughly 110,000 of QuickBooks Online subscribers, up from 85,000 last quarter.

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 First-quarter Results
GAAP       Non-GAAP

FY 17

FY 16
  Change       Q1

FY 17

FY 16
Revenue       $778   $713   9%       $778   $713   9%
Operating Income (Loss)       $(61)   $(29)   NM       $32   $46   (30)%
Earnings Per Share       $(0.12)   $(0.11)   NM       $0.06   $0.09   (33)%

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
  • Total Small Business segment revenue increased 11 percent.
  • Small business online ecosystem revenue grew 26 percent, driven by online customer acquisition.
  • Intuit's third annual QuickBooks Connect conference in late October reached record attendance, reinforcing the power of the ecosystem through creating indispensable connections between small business owners, accountants and developers.
  • There are approximately 1,285 apps on the QuickBooks Online platform; 435 are published in the QuickBooks Apps Store.
  • Intuit QuickBooks recently announced a number of new integrations with third-party partners, including Google, Apple Pay, PayPal and American Express and strategic partnerships with and TSheets.

Consumer Tax and ProConnect
  • Consumer Tax revenue for the first quarter totaled $60 million and ProConnect revenue was $112 million.

Capital Allocation Summary

In the first quarter the company:
  • Repurchased 1.8 million shares for $192 million, and $2.2 billion remains on the authorization.
  • Received board approval for a $0.34 per share dividend for the second quarter of fiscal 2017, payable on Jan. 18, 2017.

Accounting Standards Update

Intuit's fiscal 2017 GAAP earnings per share include the impact of the early adoption of the new accounting standard update for share-based compensation. This update requires excess tax benefits realized upon the settlement of a share-based compensation award to flow through the earnings statement instead of the balance sheet. We expect this accounting change to reduce the GAAP tax rate from approximately 34 percent to approximately 32 percent for full fiscal 2017. The impact on GAAP earnings per share is an increase of approximately 7 cents in the first quarter and 12 cents for the full year.

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