01—Abstract
Summary
Summary of the 10-K filed August 30, 2019. Cited figures are marked; the original filing is the authoritative source.
Intuit Inc. demonstrated robust growth in fiscal year 2019, reporting total net revenue of $6.8 billiona, a 13% increase from the prior year.
This growth was driven by strong performance across its key segments, particularly the Small Business & Self-Employed segment, which saw a 15%b revenue increase, largely due to the expansion of its Online Ecosystem, including QuickBooks Online subscribers. The Consumer segment also posted a 11% revenue increase, benefiting from a favorable product mix and growth in TurboTax federal units. The company's strategic focus on an AI-driven expert platform, customer obsession, and building an open, trusted platform is clearly paying off.
Investments in product development and marketing, while increasing overall operating expenses, have supported this growth. Intuit continues to prioritize returning capital to shareholders through dividends and stock repurchases, reflecting a healthy financial position and confidence in future prospects. Key financial indicators such as operating income and diluted net income per share also showed significant year-over-year improvements.
02—Key points
Key Highlights
- Total net revenue reached $6.8 billion, a 13% increase year-over-year.
- Small Business & Self-Employed segment revenue grew 15% to $3.53 billion, driven by the Online Ecosystem and a 32% increase in QuickBooks Online subscribers.
- Consumer segment revenue increased 11% to $2.78 billion, attributed to a shift to higher-end products and growth in TurboTax federal units.
- Operating income saw a significant 19% increase, reaching $1.85 billion.
- Diluted net income per share rose by 16% to $5.89, indicating improved profitability.
- The company returned $500 million to shareholders through dividends in fiscal year 2019 and had $2.7 billion remaining authorization for stock repurchases.
- Intuit continues to invest heavily in Research and Development (18% of total net revenue) to support its AI-driven strategy and innovation.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2019filed August 30, 2019Financial Statements
FY2019 against FY2018
| Line item | FY2019FY2018 | Change |
|---|---|---|
| Revenue | $6.78B$6.03B | +12.6% |
| R&D Expenses | $1.23B$1.19B | +4.0% |
| Operating Expenses | $4.93B$4.46B | +10.4% |
| Operating Income | $1.85B$1.56B | +18.8% |
| Interest Expense | $15.00M$20.00M | −25.0% |
| Net Income | $1.56B$1.33B | +17.2% |
| EPS (Basic) | $5.99$5.18 | +15.6% |
| EPS (Diluted) | $5.89$5.09 | +15.7% |
| Shares Outstanding (Basic) | 260.00M256.00M | +1.6% |
| Shares Outstanding (Diluted) | 264.00M261.00M | +1.1% |
05—Questions
Frequently Asked Questions
What were Intuit's primary revenue drivers in fiscal year 2019?
Intuit's primary revenue drivers in fiscal year 2019 were its Small Business & Self-Employed segment, which includes QuickBooks offerings and payroll/payment processing, and its Consumer segment, primarily driven by TurboTax. The growth in the Small Business segment was significantly fueled by its Online Ecosystem, particularly the increasing number of QuickBooks Online subscribers. The Consumer segment saw growth due to a favorable product mix, including TurboTax Live, and an increase in TurboTax federal units.
How did Intuit's profitability change in fiscal year 2019?
Intuit experienced improved profitability in fiscal year 2019. Operating income increased by 19% to $1.85 billion, and net income grew by 17% to $1.56 billion. This growth in profitability translated to a 16% increase in diluted net income per share, which reached $5.89.
What is Intuit's growth strategy as outlined in the filing?
Intuit's growth strategy is centered on customer obsession and leveraging advanced technology, particularly Artificial Intelligence (AI), to solve customer problems. Key elements include building an open, trusted platform, accelerating AI application (machine learning, knowledge engineering, natural language processing), and connecting people with experts. They aim to transform into an AI-driven expert platform company by creating interconnected capabilities that respond to evolving customer needs and market trends like digitization and the growth of the self-employed workforce.
What are the main risks facing Intuit according to the 10-K?
Intuit faces several key risks, including intense competitive pressures in all its business segments, the need to adapt to rapid technological changes and global trends, reliance on third-party intellectual property, and the potential for negative impacts on its brand reputation from security incidents or adverse publicity. Specific to the Consumer segment, there's a risk related to government competition through free tax preparation services, and ongoing legal and regulatory inquiries concerning their IRS Free File program. Operational risks include cybersecurity threats, data privacy concerns, and potential disruptions from third-party dependencies.
06—Continue