10-QPeriod: Q2 FY2014

INTUIT INC. Quarterly Report for Q2 Ended Jan 31, 2014

Filed February 21, 2014For Securities:INTU

Summary

Intuit Inc. reported a net loss of $37 million for the third quarter of fiscal year 2014, a significant decline from a net income of $71 million in the same period last year. This was driven by a 12% year-over-year decrease in total net revenue, totaling $782 million. The company experienced revenue deferrals in its Consumer Tax and Professional Tax segments due to processing delays and product offering changes, impacting short-term financial performance. Despite the quarterly loss, the Small Business segment demonstrated resilience with an 8% increase in revenue, reflecting growth in its connected services like QuickBooks Online and payroll offerings. The company's long-term strategy remains focused on cloud-based solutions and mobile-first experiences. Intuit also continued its significant share repurchase program, spending $1.4 billion on buybacks in the first six months of fiscal year 2014, while maintaining a substantial cash and investment balance of $1.3 billion.

Financial Statements
Beta
Revenue$711.00M
Cost of Revenue$164.00M
Gross Profit$547.00M
R&D Expenses$186.00M
Operating Expenses$602.00M
Operating Income-$55.00M
Interest Expense$8.00M
Net Income-$37.00M
EPS (Basic)$-0.13
EPS (Diluted)$-0.13
Shares Outstanding (Basic)284.00M
Shares Outstanding (Diluted)284.00M

Key Highlights

  • 1Reported a net loss of $37 million for the quarter, compared to net income of $71 million in the prior year's comparable quarter.
  • 2Total net revenue decreased by 12% to $782 million year-over-year.
  • 3The Small Business segment showed strength with an 8% revenue increase, driven by QuickBooks Online and payroll services.
  • 4Significant revenue deferrals in Consumer Tax and Professional Tax segments impacted quarterly results.
  • 5The company repurchased $1.4 billion of its common stock in the first six months of the fiscal year.
  • 6Cash, cash equivalents, and investments totaled $1.3 billion as of January 31, 2014.

Frequently Asked Questions

The company reported a net loss of $37 million compared to a net income of $71 million in the prior year. This was primarily due to a 12% decrease in total net revenue, significantly impacted by revenue deferrals in the Consumer Tax and Professional Tax segments. These deferrals were caused by processing delays from the IRS and changes in TurboTax product offerings affecting the timing of revenue recognition.

The Small Business segment continues to be a strong performer, with total net revenue increasing by 8% year-over-year. This growth was driven by increasing adoption of connected services like QuickBooks Online, QuickBooks Enterprise Solutions, online payroll services, and payment processing services.

Intuit has an active stock repurchase program, having repurchased $1.4 billion of its common stock in the first six months of fiscal year 2014. The company also declared a quarterly cash dividend of $0.19 per share, indicating a commitment to returning capital through both buybacks and dividends.

As of January 31, 2014, Intuit maintained a strong liquidity position with $1.3 billion in cash, cash equivalents, and investments. The company believes this will be sufficient to meet its operating and strategic cash needs for the next 12 months.