01—Abstract
Summary
Summary of the 10-K filed September 12, 2014. Cited figures are marked; the original filing is the authoritative source.
Intuit Inc.'s 2014 10-K filing reveals a company firmly rooted in financial management solutions for small businesses and consumers.
The fiscal year ending July 31, 2014, saw total net revenue of $4.5 billiona, marking an 8% increase driven by robust growth in the Small Business and Consumer segments. The company continues its strategic shift towards connected services, which now represent 66% of total revenue, up from 50% six years prior. This transition is supported by significant investments in product development, a focus on mobile-first design, and the creation of network effect platforms.
Financially, Intuit demonstrated solid performance with operating income from continuing operations up 7% and net income from continuing operations up 5% year-over-year. The company maintained a strong liquidity position with $1.9 billionb in cash, cash equivalents, and investments, and continued to return value to shareholders through dividends and share repurchases. Despite facing intense competition and evolving technological landscapes, Intuit's diversified product portfolio, including QuickBooks, TurboTax, Quicken, and Mint, positions it to address a wide range of customer needs in the digital economy.
02—Key points
Key Highlights
- Total net revenue increased by 8% to $4.5 billion in fiscal year 2014, driven by growth in Small Business and Consumer segments.
- Connected services now constitute 66% of total revenue, indicating a successful strategic shift towards online and subscription-based offerings.
- Operating income from continuing operations grew by 7% to $1.314 billion, reflecting revenue growth partially offset by increased operating expenses.
- Net income from continuing operations rose by 5% to $861 million, with diluted earnings per share from continuing operations increasing by 9% to $2.96.
- The company ended the fiscal year with $1.9 billion in cash, cash equivalents, and investments, demonstrating strong liquidity.
- Intuit continued its commitment to shareholder returns, paying $220 million in dividends and actively repurchasing shares under its stock repurchase programs.
- Significant investment in R&D ($758 million, 17% of revenue) signals a focus on innovation and developing new products and services, particularly in mobile and connected services.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2014, Intuit kept $0.21.
- Revenue$4.24B100.0%
- Cost of revenue−$137.0M3.2%
- Gross profit$4.11B96.8%
- Operating costs−$2.81B66.1%
- Operating income$1.30B30.6%
- Interest, other & tax−$393.0M9.3%
- Net income$907.0M21.4%
Where FY2014 revenue went
$4.24B- Other operating costs: $2.09B, 49% of revenue
- Net income: $907.0M, 21% of revenue
- R&D: $714.0M, 17% of revenue
- Cost of revenue: $137.0M, 3.2% of revenue
- Interest, other & tax: $393.0M, 9.3% of revenue
Kept 21% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2014filed September 12, 2014Financial Statements
FY2014 against FY2013
| Line item | FY2014FY2013 | Change |
|---|---|---|
| Revenue | $4.24B$3.95B | +7.5% |
| Cost of Revenue | $137.00M$125.00M | +9.6% |
| Gross Profit | $4.11B$3.82B | +7.5% |
| R&D Expenses | $714.00M$647.00M | +10.4% |
| Operating Expenses | $2.94B$2.74B | +7.5% |
| Operating Income | $1.30B$1.21B | +7.6% |
| Interest Expense | $31.00M$30.00M | +3.3% |
| Net Income | $907.00M$858.00M | +5.7% |
| EPS (Basic) | $3.18$2.89 | +10.0% |
| EPS (Diluted) | $3.12$2.83 | +10.2% |
| Shares Outstanding (Basic) | 285.00M297.00M | −4.0% |
| Shares Outstanding (Diluted) | 291.00M303.00M | −4.0% |
05—Questions
Frequently Asked Questions
What were Intuit's primary sources of revenue in fiscal year 2014?
Intuit's primary revenue sources were its Small Business segment (50% of total revenue), which includes QuickBooks and payroll/payment services, and its Consumer segment (41% of total revenue), primarily driven by TurboTax. The Professional Tax segment contributed 9% of revenue.
How is Intuit adapting to the changing technological landscape?
Intuit is actively adapting by focusing on a 'mobile-first' strategy, developing network effect platforms with APIs, and leveraging customer data. The company is increasingly offering services online and through mobile devices, reflecting a global market shift from traditional paper-based services to connected, digital solutions.
What is Intuit's financial health and how is it managing its capital?
Intuit demonstrated healthy financial performance with revenue and profit growth. The company ended fiscal year 2014 with $1.9 billion in cash, cash equivalents, and investments, indicating strong liquidity. They are managing capital by investing in R&D, repurchasing shares, paying dividends, and making strategic acquisitions, such as Check Inc. during the fiscal year.
What are the key risks identified by Intuit in this filing?
Key risks include intense competition (including from public sector free tax services), the need to adapt to rapid technological change and successfully launch new products, potential disruptions to IT and communication systems, security breaches of customer data, managing third-party business relationships, increased government regulation, and business seasonality. The company also notes the volatility of its stock price and the importance of its brand reputation.
06—Continue