01—Abstract
Summary
Summary of the 10-K filed September 1, 2016. Cited figures are marked; the original filing is the authoritative source.
For the fiscal year ended July 31, 2016, Intuit Inc. reported total net revenue of $4.7 billiona, marking a 12% increase compared to the previous year.
The company experienced strong growth across its segments, with Consumer Tax revenue up 10%b, Small Business revenue up 9%, and ProConnect revenue seeing a significant 51% increase. This growth was driven by the shift to cloud-based services, increased unit sales in TurboTax, and a change in revenue recognition for desktop software products, which now recognize revenue over time. Intuit continues to invest heavily in product development, with R&D expenses representing 19% of total net revenue.
The company also demonstrated a strong commitment to returning capital to shareholders through dividends and substantial stock repurchases. Management expressed confidence in future growth, driven by its strategy to become the operating system for small business success and its ongoing transition to connected services.
02—Key points
Key Highlights
- Total net revenue grew 12% to $4.7 billion in fiscal year 2016.
- Consumer Tax segment revenue increased by 10%, driven by a 12% rise in TurboTax U.S. federal units.
- Small Business segment revenue grew 9%, with a 25% increase in the Online Ecosystem driven by a 41% rise in QuickBooks Online subscribers.
- ProConnect segment revenue surged by 51% due to the revised revenue recognition for desktop software products.
- Research and Development (R&D) expenses remained significant at 19% of total net revenue ($881 million), reflecting continued investment in innovation.
- The company returned $318 million to shareholders through dividends and actively repurchased shares, with $360 million authorized for future repurchases at fiscal year-end.
- Connected services now represent 73% of total revenue, up from 50% eight years prior, indicating a successful strategic shift to cloud-based offerings.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2016, Intuit kept $0.21.
- Revenue$4.69B100.0%
- Cost of revenue−$131.0M2.8%
- Gross profit$4.56B97.2%
- Operating costs−$3.32B70.7%
- Operating income$1.24B26.5%
- Interest, other & tax−$263.0M5.6%
- Net income$979.0M20.9%
Where FY2016 revenue went
$4.69B- Other operating costs: $2.44B, 52% of revenue
- Net income: $979.0M, 21% of revenue
- R&D: $881.0M, 19% of revenue
- Cost of revenue: $131.0M, 2.8% of revenue
- Interest, other & tax: $263.0M, 5.6% of revenue
Kept 21% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2016filed September 1, 2016Financial Statements
FY2016 against FY2015
| Line item | FY2016FY2015 | Change |
|---|---|---|
| Revenue | $4.69B$4.19B | +12.0% |
| Cost of Revenue | $131.00M$139.00M | −5.8% |
| Gross Profit | $4.56B$4.05B | +12.6% |
| R&D Expenses | $881.00M$798.00M | +10.4% |
| Operating Expenses | $3.45B$3.45B | −0.1% |
| Operating Income | $1.24B$738.00M | +68.3% |
| Interest Expense | $35.00M$27.00M | +29.6% |
| Net Income | $979.00M$365.00M | +168.2% |
| EPS (Basic) | $3.73$1.30 | +186.9% |
| EPS (Diluted) | $3.69$1.28 | +188.3% |
| Shares Outstanding (Basic) | 262.00M281.00M | −6.8% |
| Shares Outstanding (Diluted) | 265.00M286.00M | −7.3% |
05—Questions
Frequently Asked Questions
What was Intuit's overall financial performance in fiscal year 2016?
In fiscal year 2016, Intuit reported a total net revenue of $4.7 billion, a 12% increase from the prior year. The company saw growth across all its business segments, demonstrating a positive financial trajectory driven by its focus on connected services and strong performance in its core product offerings like TurboTax and QuickBooks.
How did Intuit's strategic shift to connected services impact its revenue?
Intuit's strategy to shift towards connected services has been successful, with these services accounting for 73% of total revenue in fiscal year 2016, up from 50% eight years prior. This indicates a strong customer adoption of cloud-based solutions and a more predictable recurring revenue stream for the company.
What is Intuit's approach to research and development (R&D) and capital allocation?
Intuit continues to prioritize R&D, investing 19% of its total net revenue ($881 million) in fiscal year 2016 to drive innovation and develop new products and services. The company also demonstrated a commitment to shareholder returns by paying $318 million in dividends and actively repurchasing its own stock.
What are the key drivers of growth in Intuit's main business segments?
The Consumer Tax segment grew due to increased TurboTax unit sales. The Small Business segment saw growth driven by its Online Ecosystem, particularly QuickBooks Online, and a positive impact from revised revenue recognition for QuickBooks Desktop. The ProConnect segment experienced substantial revenue growth, also influenced by the new revenue recognition model for its desktop tax software offerings.
06—Continue