10-QPeriod: Q1 FY2019

INTUIT INC. Quarterly Report for Q1 Ended Oct 31, 2018

Filed November 20, 2018For Securities:INTU

Summary

Intuit Inc. reported its first quarter fiscal year 2019 results, showing a significant year-over-year revenue increase driven by strong growth in its Small Business & Self-Employed segment. Total net revenue rose by 12% to $1.016 billion, with the Small Business & Self-Employed segment experiencing an 11% increase to $908 million, primarily due to its Online Ecosystem. While the company moved from a net loss of $2 million in the prior year's first quarter to a net income of $34 million, this was significantly influenced by a substantial excess tax benefit on share-based compensation. The company continues to manage its operations efficiently, with operating expenses as a percentage of total net revenue decreasing. Intuit also returned capital to shareholders through dividends and stock repurchases, signaling continued confidence in its financial position and future prospects.

Financial Highlights

51 data points
Beta

Revenue

$1.02B

75.7% Gross Margin

Net Income

$34.00M

3.3% Net Margin

EPS (Diluted)

$0.13

Total Assets

$4.93B

Cash & Equivalents

$1.08B

Free Cash Flow

-$178.00M

Financial Statements
Beta
Revenue$1.02B
Cost of Revenue$247.00M
Gross Profit$769.00M
R&D Expenses$294.00M
Operating Expenses$779.00M
Operating Income-$10.00M
Interest Expense$4.00M
Net Income$34.00M
EPS (Basic)$0.13
EPS (Diluted)$0.13
Shares Outstanding (Basic)260.00M
Shares Outstanding (Diluted)264.00M

Key Highlights

  • 1Total net revenue increased by 12% to $1.016 billion for the first quarter of fiscal 2019.
  • 2Small Business & Self-Employed segment revenue grew by 11% to $908 million, driven by a 42% increase in its Online Ecosystem.
  • 3The company achieved net income of $34 million in Q1 FY19, a significant improvement from a net loss of $2 million in Q1 FY18.
  • 4Operating expenses as a percentage of total net revenue decreased from 82% to 77%.
  • 5Cash, cash equivalents, and investments decreased by $384 million to $1.3 billion, primarily due to operating activities, stock repurchases, and dividend payments.
  • 6Intuit declared a quarterly cash dividend of $0.47 per share, and continued its stock repurchase program with $3.1 billion authorized for future repurchases.
  • 7The company adopted new accounting standards for revenue recognition (Topic 606) and statement of cash flows (Topic 230), restating prior periods accordingly.

Frequently Asked Questions

The primary driver of Intuit's revenue growth is the Small Business & Self-Employed segment, particularly its Online Ecosystem, which saw a 42% increase in revenue. This segment's overall revenue grew by 11% year-over-year.

Intuit has moved from a net loss of $2 million in the first quarter of fiscal 2018 to a net income of $34 million in the first quarter of fiscal 2019. This improvement was significantly aided by an excess tax benefit on share-based compensation.

Intuit continues to return capital through regular quarterly cash dividends ($0.47 per share declared for the current quarter) and its ongoing stock repurchase program. As of October 31, 2018, the company had $3.1 billion authorized for future stock repurchases.

Intuit adopted ASC Topic 606 (Revenue from Contracts with Customers) and ASU 2016-18 (Restricted Cash). The adoption of Topic 606 led to restatements of prior periods, primarily affecting the timing of revenue recognition for QuickBooks Desktop and professional tax desktop solutions. This resulted in changes to deferred revenue, long-term deferred income taxes, and a reclassification of capitalized costs to obtain contracts.