10-KPeriod: FY2015

INTUIT INC. Annual Report, Year Ended Jul 31, 2015

Filed September 1, 2015For Securities:INTU

Summary

Intuit Inc.'s fiscal year 2015 10-K filing reveals a company strategically navigating a shift towards connected services, with revenue of $4.2 billion. While overall revenue saw a slight decrease of 1% 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% 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.

Financial Highlights

59 data points
Beta

Revenue

$4.19B

96.7% Gross Margin

Net Income

$365.00M

8.7% Net Margin

EPS (Diluted)

$1.28

Total Assets

$4.97B

Cash & Equivalents

$808.00M

Free Cash Flow

$1.45B

Financial Statements
Beta
Revenue$4.19B
Cost of Revenue$139.00M
Gross Profit$4.05B
R&D Expenses$798.00M
Operating Expenses$3.45B
Operating Income$738.00M
Interest Expense$27.00M
Net Income$365.00M
EPS (Basic)$1.30
EPS (Diluted)$1.28
Shares Outstanding (Basic)281.00M
Shares Outstanding (Diluted)286.00M

Key Highlights

  • 1Total net revenue for fiscal year 2015 was $4.2 billion, a 1% decrease from fiscal year 2014.
  • 2Consumer Tax segment revenue increased by 8%, driven by a 7% growth in U.S. federal TurboTax units.
  • 3Small Business segment revenue decreased by 2%, influenced by a change in revenue recognition for QuickBooks desktop offerings, though QuickBooks Online revenue grew by 25%.
  • 4Professional Tax segment revenue experienced a significant decline of 33%, also impacted by the desktop software revenue recognition changes.
  • 5Research and development expenses were $798 million, or 19% of total net revenue, underscoring a strong commitment to innovation.
  • 6The company actively divested three businesses (Demandforce, QuickBase, Quicken) to increase focus on core strategic outcomes.
  • 7Connected services revenue constituted 73% of total revenue, highlighting the ongoing shift to subscription and online models.

Frequently Asked Questions

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%.

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.

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.

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.

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.