01—Abstract
Summary
Summary of the 10-K filed September 1, 2015. Cited figures are marked; the original filing is the authoritative source.
Intuit Inc.'s fiscal year 2015 10-K filing reveals a company strategically navigating a shift towards connected services, with revenue of $4.2 billiona.
While overall revenue saw a slight decrease of 1%b year-over-year, the company experienced strong growth in its Consumer Tax segment (up 8%), driven by increased TurboTax unit sales. The Small Business segment saw a 2% revenue dip, largely due to a strategic change in how desktop software revenue is recognized, impacting current-period comparisons. The company is actively managing its business portfolio, having divested several non-core businesses to sharpen its focus on key growth areas.
Intuit continues to invest heavily in product development, with R&D expenses representing 19%c of revenue. The company's strategy emphasizes delivering awesome product experiences, creating network effect platforms, and leveraging data for customer benefit, reflecting a commitment to innovation and customer-centricity.
Despite a challenging cybersecurity environment and increased fraud attempts impacting the tax industry, Intuit reported that its recent financial performance was not materially adversely affected. The company also continues its commitment to returning capital to shareholders through dividends and stock repurchases, maintaining a strong liquidity position.
02—Key points
Key Highlights
- Total net revenue for fiscal year 2015 was $4.2 billion, a 1% decrease from fiscal year 2014.
- Consumer Tax segment revenue increased by 8%, driven by a 7% growth in U.S. federal TurboTax units.
- Small Business segment revenue decreased by 2%, influenced by a change in revenue recognition for QuickBooks desktop offerings, though QuickBooks Online revenue grew by 25%.
- Professional Tax segment revenue experienced a significant decline of 33%, also impacted by the desktop software revenue recognition changes.
- Research and development expenses were $798 million, or 19% of total net revenue, underscoring a strong commitment to innovation.
- The company actively divested three businesses (Demandforce, QuickBase, Quicken) to increase focus on core strategic outcomes.
- Connected services revenue constituted 73% of total revenue, highlighting the ongoing shift to subscription and online models.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2015, Intuit kept $0.09.
- Revenue$4.19B100.0%
- Cost of revenue−$139.0M3.3%
- Gross profit$4.05B96.7%
- Operating costs−$3.31B79.1%
- Operating income$738.0M17.6%
- Interest, other & tax−$373.0M8.9%
- Net income$365.0M8.7%
Where FY2015 revenue went
$4.19B- Other operating costs: $2.52B, 60% of revenue
- R&D: $798.0M, 19% of revenue
- Net income: $365.0M, 8.7% of revenue
- Cost of revenue: $139.0M, 3.3% of revenue
- Interest, other & tax: $373.0M, 8.9% of revenue
Kept 8.7% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2015filed September 1, 2015Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $4.19B$4.24B | −1.2% |
| Cost of Revenue | $139.00M$137.00M | +1.5% |
| Gross Profit | $4.05B$4.11B | −1.3% |
| R&D Expenses | $798.00M$714.00M | +11.8% |
| Operating Expenses | $3.45B$2.94B | +17.4% |
| Operating Income | $738.00M$1.30B | −43.2% |
| Interest Expense | $27.00M$31.00M | −12.9% |
| Net Income | $365.00M$907.00M | −59.8% |
| EPS (Basic) | $1.30$3.18 | −59.1% |
| EPS (Diluted) | $1.28$3.12 | −59.0% |
| Shares Outstanding (Basic) | 281.00M285.00M | −1.4% |
| Shares Outstanding (Diluted) | 286.00M291.00M | −1.7% |
05—Questions
Frequently Asked Questions
What was Intuit's overall financial performance in fiscal year 2015?
In fiscal year 2015, Intuit reported total net revenue of $4.2 billion, a slight decrease of 1% compared to the prior year. Operating income from continuing operations decreased by 43%, largely due to the impact of changes in desktop software revenue recognition and increased operating expenses, including impairment charges. Net income from continuing operations saw a significant decrease of 52%.
How did Intuit's different business segments perform?
The Consumer Tax segment showed strong performance with an 8% revenue increase, driven by higher TurboTax unit sales. The Small Business segment experienced a 2% revenue decrease, primarily due to a strategic shift in revenue recognition for QuickBooks desktop products, which was partially offset by growth in QuickBooks Online. The Professional Tax segment saw a substantial 33% decline in revenue, also affected by the desktop software revenue recognition changes.
What is Intuit's strategy for future growth?
Intuit's strategy is focused on two key outcomes: 'To be the operating system behind small business success' and 'To do the nation's taxes in the United States and Canada.' This involves focusing on product innovation ('Delivering awesome product experiences'), building network effect platforms, and leveraging customer data. A significant part of this strategy is the ongoing transition to connected services, which now represent 73% of total revenue.
What impact did cybersecurity and fraud have on Intuit in fiscal year 2015?
Intuit, like others in the tax preparation industry, experienced an increase in fraudulent tax return attempts using stolen identity information during the 2015 tax season. The company implemented additional security measures and cooperated with regulatory authorities. Intuit stated that its recent financial performance was not materially adversely impacted by this industry-wide issue or by the actions taken to combat it.
How is Intuit returning capital to shareholders?
Intuit continued to pay quarterly cash dividends, totaling $1.00 per share in fiscal year 2015. The company also actively repurchased its common stock under its authorized stock repurchase programs, spending $1.2 billion on repurchases in fiscal year 2015. As of July 31, 2015, approximately $2.6 billion remained authorized for future stock repurchases.
06—Continue