10-QPeriod: Q2 FY2021

INTUIT INC. Quarterly Report for Q2 Ended Jan 31, 2021

Filed February 23, 2021For Securities:INTU

Summary

Intuit Inc. (INTU) reported its second quarter fiscal year 2021 financial results for the period ending January 31, 2021. The company experienced a notable year-over-year decline in net revenue for the quarter, primarily due to a later tax season start, which impacted its Consumer segment. Total net revenue decreased by 7% to $1.58 billion. The operating loss for the quarter was $25 million, a significant change from the operating income of $270 million in the prior year's quarter. This was driven by a combination of lower revenue and increased expenses, including those related to the recent acquisition of Credit Karma, higher staffing costs, and increased amortization of acquired intangible assets. Despite the quarterly dip, year-to-date revenue showed a slight increase of 1% to $2.9 billion. The Small Business & Self-Employed segment continued to show strength, with revenue growth of 12% year-to-date, largely driven by its Online Ecosystem. The acquisition of Credit Karma, completed in December 2020, contributed $144 million in revenue in the current quarter and is expected to be a key driver for future growth, particularly in unlocking smart money decisions for consumers. The company's strategic focus on becoming an AI-driven expert platform and its five strategic priorities remain central to its long-term outlook.

Financial Highlights

52 data points
Beta

Revenue

$1.58B

Net Income

$20.00M

1.3% Net Margin

EPS (Diluted)

$0.07

Total Assets

$14.60B

Cash & Equivalents

$1.95B

Free Cash Flow

$246.00M

Financial Statements
Beta
Revenue$1.58B
R&D Expenses$368.00M
Operating Expenses$1.60B
Operating Income-$25.00M
Interest Expense$7.00M
Net Income$20.00M
EPS (Basic)$0.07
EPS (Diluted)$0.07
Shares Outstanding (Basic)270.00M
Shares Outstanding (Diluted)273.00M

Key Highlights

  • 1Total net revenue for Q2 FY2021 decreased 7% year-over-year to $1.58 billion, impacted by a later tax season start.
  • 2Operating loss of $25 million for Q2 FY2021, compared to an operating income of $270 million in Q2 FY2020, largely due to increased expenses.
  • 3Year-to-date net revenue increased 1% to $2.9 billion.
  • 4The Small Business & Self-Employed segment revenue grew 11% in Q2 FY2021 and 12% year-to-date, driven by the Online Ecosystem.
  • 5The acquisition of Credit Karma, completed in December 2020, contributed $144 million in revenue in Q2 FY2021 and is integrated as a new reportable segment.
  • 6Diluted net income per share decreased to $0.07 in Q2 FY2021 from $0.91 in the prior year's quarter, partly due to increased shares outstanding from the Credit Karma acquisition.
  • 7The company continues to prioritize AI development and strategic growth initiatives, including revolutionizing speed to benefit and unlocking smart money decisions.

Frequently Asked Questions

The decrease in net income and operating income was primarily due to a 7% decrease in total net revenue for the quarter, largely influenced by a later opening of the tax season which impacted the Consumer segment. Additionally, operating expenses increased due to the acquisition of Credit Karma, higher staffing costs, increased amortization of acquired intangible assets, and professional fees associated with the acquisition.

The acquisition of Credit Karma, completed in December 2020, contributed $144 million in revenue in the second quarter of fiscal year 2021. It has been recognized as a new reportable segment. The acquisition also led to an increase in operating expenses, including staffing and amortization costs, and contributed to the increase in shares outstanding, impacting diluted earnings per share.

Intuit's Consumer and ProConnect segments are highly seasonal, with revenue concentrated from November through April. In fiscal year 2021, the IRS began accepting tax returns later (February 12, 2021) compared to the prior year (January 27, 2020). This delayed tax season start negatively impacted revenue in the Consumer segment for the second quarter.

Intuit's strategy is to become an AI-driven expert platform. The acquisition of Credit Karma is a key part of their strategy to 'unlock smart money decisions' for consumers by combining their respective strengths in financial management and personalized financial offers. Key strategic priorities include revolutionizing speed to benefit, connecting people to experts, unlocking smart money decisions, being the center of small business growth, and disrupting the small business mid-market.