10-QPeriod: Q1 FY2011

INTUIT INC. Quarterly Report for Q1 Ended Oct 31, 2010

Filed December 6, 2010For Securities:INTU

Summary

Intuit Inc. reported its first quarter fiscal year 2011 results, showing a 12% increase in total net revenue to $532 million, driven primarily by growth in its Small Business Group segments, particularly Financial Management Solutions and Employee Management Solutions. Despite revenue growth, the company experienced an increase in its operating loss from continuing operations to $104 million and a net loss of $70 million ($0.22 per diluted share) for the quarter ended October 31, 2010, compared to the prior year's quarter. This widening loss is attributed to increased operating expenses, including those from recent acquisitions (Mint and Medfusion), higher staffing and marketing costs, and increased share-based compensation expenses. The company maintained a strong liquidity position with $1.2 billion in cash, cash equivalents, and investments. Intuit also continues to actively return capital to shareholders through its stock repurchase program, with approximately $1.67 billion remaining authorization. The company reiterated its belief that its current resources are sufficient to meet its operational needs for the next 12 months. Key segments like Consumer Tax and Accounting Professionals showed revenue growth, though this is largely due to the filing of extended tax returns and is not indicative of full-year trends due to the highly seasonal nature of these businesses.

Financial Highlights

51 data points
Beta

Revenue

$491.00M

74.9% Gross Margin

Net Income

-$64.00M

-13.0% Net Margin

EPS (Diluted)

$-0.21

Total Assets

$4.94B

Cash & Equivalents

$112.00M

Free Cash Flow

-$262.00M

Financial Statements
Beta
Revenue$491.00M
Cost of Revenue$123.00M
Gross Profit$368.00M
R&D Expenses$156.00M
Operating Expenses$448.00M
Operating Income-$80.00M
Interest Expense$15.00M
Net Income-$64.00M
EPS (Basic)$-0.21
EPS (Diluted)$-0.21
Shares Outstanding (Basic)316.00M
Shares Outstanding (Diluted)316.00M

Key Highlights

  • 1Total net revenue increased 12% year-over-year to $532 million for the first quarter of fiscal 2011.
  • 2Operating loss from continuing operations widened to $104 million from $100 million in the prior year's quarter.
  • 3Net loss from continuing operations was $70 million ($0.22 per diluted share), a slight increase from $69 million in the prior year's quarter.
  • 4The Small Business Group segments (Financial Management, Employee Management, and Payment Solutions) showed strong revenue growth, contributing significantly to the overall increase.
  • 5Acquisitions of Mint and Medfusion are impacting expenses, contributing to the higher operating loss.
  • 6The company ended the quarter with $1.2 billion in cash, cash equivalents, and investments, maintaining a healthy liquidity position.
  • 7Intuit continued its share repurchase program, authorizing up to an additional $1.67 billion for future repurchases.

Frequently Asked Questions

The primary driver of Intuit's 12% revenue growth to $532 million was the strong performance of its Small Business Group segments, particularly Financial Management Solutions and Employee Management Solutions, which benefited from increased customer adoption of their products and services.

The operating loss increased due to higher operating expenses. These included costs associated with recent acquisitions (Mint and Medfusion), increased staffing and marketing expenditures, and higher share-based compensation expenses. These factors, combined with the seasonal nature of some businesses, led to a wider operating loss despite the revenue increase.

Intuit maintained a strong liquidity position, ending the quarter with $1.2 billion in cash, cash equivalents, and investments. The company also continued its commitment to returning capital to shareholders through its stock repurchase program, with a substantial remaining authorization of $1.67 billion, indicating an ongoing strategy of capital return.

Intuit's business, particularly its Consumer Tax and Accounting Professionals segments, is highly seasonal. The first quarter (ending October 31) typically shows nominal revenue from these segments, primarily from extended tax return filings, and often results in operating losses. The company typically sees its highest revenue in the second and third fiscal quarters. Therefore, the results of the first quarter are not representative of the full fiscal year performance for these segments.