SAN FRANCISCO -- Faced with the perception that its flagship accounting and tax software has tapped out the do-it-yourself market, Intuit (INTU) - Get Report has outlined ways it will expand its portfolio with new revenue-generating online services.
For over a year, the Mountain View, Calif.-based company has pushed the boundaries of its traditional software packages with corresponding online versions and acquisitions in allied businesses, such as electronic payments and online banking services. It recently acquired Web-site development software called Homestead, and links to the software are now embedded in QuickBooks.
Homestead is one of several new "front doors" to Intuit products, offering new cross-selling opportunities, said CEO Brad Smith at the company's annual financial meeting on Wednesday. The company now has an on-demand version of each product line.
For fiscal 2009, Intuit projects consumer tax revenue growth of 8% to 12% to a range of $1 billion to $1.04 billion.
The company also affirmed fiscal 2009 revenue guidance of $3.35 billion to $3.43 billion and EPS, excluding items, of $1.86 to $1.90.
Intuit has created far more links between individual product lines to generate cross-selling without incurring additional marketing expenses. And Intuit is making more products available in entry-level free versions.
Intuit views free software as an entry ramp to the company's franchise. One in five users of free QuickBooks immediately upgrades to a paid version, while more upgrade at a later date, executive Rick Jensen said.
In 2008, QuickBooks added 600,000 new users, bringing the total to 4 million. The company projects the product's revenue growth at 8% to 12% in fiscal 2009, to a range of $670 million to $695 million.
Intuit will spend 50% more on marketing QuickBooks during the fiscal year to create more demand for the product, executives said.
QuickBooks is successful, in part, due to referrals to small-business clients by their accountants. Intuit said QuickBooks 2009 will get even more traction with accountants due to a new feature that flags and fixes conflicting data-entries made by their clients. The feature is expected to reduce the time an accountant spends on reconciliation by 30%.
At least one new online, subscription-based service is now offered to QuickBooks users, with more to come during the year. And in 2009, an entry-level point-of-sale product called Cash Register will give startup businesses the ability to accept electronic payments.
Intuit has 240,000 payments customers and one million customers for its payroll software. To push the category, Intuit will offer an Assisted Payroll service for customers who need help but find outsourcing too pricey.
Intuit said it will charge about one-third the cost of a typical outsourcing payroll service provider. Intuit will handle inquiries from the IRS, a key selling point for small businesses, Smith said.
The company projects payroll and payments revenue growth of 14% to 18%, to a range of $639 million to $662 million.
A Billing Manager product will launch in October. Come December, the ability to accept electronic payments will also be embedded into Intuit's online banking platform, which is provided exclusively through bank customers. And a mobile payments service will go into pilot testing in the spring of 2009.
The online banking platform, which was a 2007 acquisition, has four financial institution clients. Another 60 have signed contracts and will be converted during the coming 12 months, Smith said.
Shares of Intuit were recently up 45 cents to $31.69.