The Mountain View, Calif., developer of TurboTax beat analysts' earnings estimates for its seasonally strongest quarter and issued in-line fourth-quarter guidance. CEO Brad Smith said the company gained three percentage points of market share for retail tax software, and one percentage point of share online.
recently reported that the number of clients using the digital tax products declined 2% during the season, while online clients increased an undisclosed amount. That company focuses on individualized tax preparation services.
Intuit said revenue grew 15% to $1.31 billion, from $1.14 billion in the same quarter of last year. Analysts were expecting $1.29 billion, according to Thomson Reuters.
Profits were up 21% to $444.2 million, or $1.33 a share, from $367.2 million, or $1.04 a share, one year ago.
Excluding special items, EPS was $1.39. Analysts were looking for $1.33.
The stock was up $1.49, or 5.5% to $28.70 in extended trading.
Consumer tax software was up 16% year over year to $657 million, while unit growth was 17%. Sales of professional tax software were also up, to $166 million, but comparisons were skewed by $23 million in deferred revenue from the second quarter. Growth was not due to the federal government's economic stimulus program, CFO Neil Williams said on the conference call. Products related to the government program were excluded from sales statistics, he added.
The company's hosted software, offered over the Web by subscription, now represents about half of Intuit's revenue, with "solid double-digit growth rates," Smith said in an interview. "Unlike a lot of software-as-a-service companies, those
services are very profitable for us."
Payroll and payments revenue grew 14% to $142 million.
QuickBooks accounting software revenue grew 5% year over year to $165 million. That may seem tepid compared to 22% growth for the same quarter a year ago. But Intuit had record QuickBooks revenue in the third quarter of 2007 due to a product upgrade and the software's first TV advertising campaign, Smith said.
Posting positive unit and revenue growth atop such tough comparisons "and in a challenging macroeconomic environment ... is a big win for us," Smith said.
The financial institutions segment grew 17% year over year to $76 million.
Intuit said full-year revenue would total $3.05 billion to $3.06 billion, implying fourth-quarter revenue ranging from $457 million to $467 million. Full-year EPS, excluding items, will be $1.61 to $1.63, implying a fourth-quarter loss of 3 cents to 5 cents a share. Analysts were projecting revenue of $471.7 million and a loss of 4 cents a share, excluding special items.
Also in the software sector,
reports earnings Wednesday after the bell.