10-QPeriod: Q1 FY2020

INTUIT INC. Quarterly Report for Q1 Ended Oct 31, 2019

Filed November 21, 2019For Securities:INTU

Summary

Intuit Inc. reported its first quarter fiscal year 2020 results, showcasing robust top-line growth and a significant improvement in profitability compared to the prior year's same quarter. Total net revenue increased by 15% to $1.165 billion, driven primarily by a 15% rise in revenue from the Small Business & Self-Employed segment, with its Online Ecosystem revenue growing by an impressive 35%. This growth was fueled by increased customer acquisition and higher effective prices for QuickBooks offerings. The company achieved positive operating income of $10 million, a substantial improvement from the $10 million operating loss in the prior year's quarter. Net income more than doubled to $57 million, or $0.22 per diluted share, up from $34 million, or $0.13 per diluted share, in the first quarter of fiscal 2019. This profitability surge was supported by revenue growth and a decrease in the impact of excess tax benefits on share-based compensation, despite increased operating expenses related to staffing and marketing. The company maintained a strong balance sheet with $2.3 billion in cash, cash equivalents, and investments, and continued its commitment to returning capital to shareholders through dividends and share repurchases.

Financial Highlights

52 data points
Beta

Revenue

$1.17B

75.1% Gross Margin

Net Income

$57.00M

4.9% Net Margin

EPS (Diluted)

$0.22

Total Assets

$6.18B

Cash & Equivalents

$1.63B

Free Cash Flow

-$165.00M

Financial Statements
Beta
Revenue$1.17B
Cost of Revenue$290.00M
Gross Profit$875.00M
R&D Expenses$334.00M
Operating Expenses$865.00M
Operating Income$10.00M
Interest Expense$2.00M
Net Income$57.00M
EPS (Basic)$0.22
EPS (Diluted)$0.22
Shares Outstanding (Basic)261.00M
Shares Outstanding (Diluted)264.00M

Key Highlights

  • 1Total net revenue increased 15% year-over-year to $1.165 billion.
  • 2Small Business & Self-Employed segment revenue grew 15%, with the Online Ecosystem revenue up 35%.
  • 3Operating income turned positive at $10 million, compared to a loss of $10 million in the prior year's quarter.
  • 4Net income increased 68% to $57 million.
  • 5Diluted earnings per share grew 69% to $0.22.
  • 6Cash, cash equivalents, and investments totaled $2.3 billion, providing strong liquidity.
  • 7The company declared a quarterly cash dividend of $0.53 per share and continued its share repurchase program.

Frequently Asked Questions

Intuit's revenue growth of 15% to $1.165 billion was primarily driven by its Small Business & Self-Employed segment, which saw a 15% increase in revenue. Within this segment, the Online Ecosystem revenue experienced a substantial 35% surge, attributed to higher customer numbers, increased effective prices for QuickBooks products, and a favorable shift in product mix towards higher-priced offerings.

Intuit demonstrated a significant improvement in profitability. Operating income turned positive, reaching $10 million compared to an operating loss of $10 million in the same quarter last year. Net income more than doubled, increasing by 68% to $57 million, with diluted earnings per share rising by 69% to $0.22 from $0.13 in the prior year's first quarter.

Intuit maintains a strong financial position with $2.3 billion in cash, cash equivalents, and investments as of October 31, 2019. The company continues to return capital to shareholders, having declared a quarterly cash dividend of $0.53 per share and actively repurchasing its common stock under an authorized program with $2.5 billion remaining. Management expects its liquidity to be sufficient to meet operational and strategic needs for the next 12 months.

Intuit's Consumer and Strategic Partner segments are highly seasonal, with revenue heavily concentrated between November and April due to income tax preparation products and services. Consequently, the first fiscal quarter (ending October 31) typically shows nominal revenue and operating losses for these segments as they are seasonally light, consistent with the prior year's results. The company expects this seasonality to continue impacting its quarterly financial performance.