10-QPeriod: Q2 FY2022

INTUIT INC. Quarterly Report for Q2 Ended Jan 31, 2022

Filed March 2, 2022For Securities:INTU

Summary

Intuit Inc. reported strong revenue growth for the second quarter and first six months of fiscal year 2022, driven by significant increases across its Small Business & Self-Employed, Consumer, and Credit Karma segments. The acquisition of Mailchimp in November 2021 significantly contributed to the revenue growth in the Small Business & Self-Employed segment, adding $240 million in revenue during the reported periods. Despite substantial revenue increases, operating income saw a modest rise in the quarter and a more significant increase year-to-date, reflecting higher operating expenses including staffing, marketing, share-based compensation, and amortization related to acquisitions. Net income and diluted EPS showed substantial year-over-year growth, aided by a tax benefit from share-based compensation. The company also highlighted its strategic focus on becoming an AI-driven expert platform, emphasizing partnerships, AI application, and the integration of human experts to solve customer problems.

Financial Highlights

52 data points
Beta

Revenue

$2.67B

Net Income

$100.00M

3.7% Net Margin

EPS (Diluted)

$0.35

Total Assets

$26.30B

Cash & Equivalents

$1.26B

Free Cash Flow

$20.00M

Financial Statements
Beta
Revenue$2.67B
R&D Expenses$590.00M
Operating Expenses$2.62B
Operating Income$56.00M
Interest Expense$21.00M
Net Income$100.00M
EPS (Basic)$0.35
EPS (Diluted)$0.35
Shares Outstanding (Basic)283.00M
Shares Outstanding (Diluted)287.00M

Key Highlights

  • 1Total net revenue increased by 70% to $2.7 billion for the second quarter of fiscal 2022 and by 61% to $4.7 billion for the first six months, compared to the prior year periods.
  • 2The Small Business & Self-Employed segment revenue grew 47% in Q2 and 34% year-to-date, with the Online Ecosystem revenue up significantly due to the Mailchimp acquisition.
  • 3Consumer segment revenue more than doubled year-over-year for both the quarter and year-to-date, driven by an earlier tax season opening.
  • 4Credit Karma segment revenue increased by 208% in Q2 and 499% year-to-date, benefiting from growth in credit card and personal loan verticals and a full period of inclusion in fiscal 2022 results.
  • 5Net income for the quarter rose to $100 million from $20 million in the prior year, with diluted EPS increasing to $0.35 from $0.07.
  • 6The company reported $13.7 billion in Goodwill and $7.4 billion in net acquired intangible assets as of January 31, 2022, primarily resulting from recent acquisitions.
  • 7Intuit continues to return capital to shareholders through dividends and a significant stock repurchase program, with approximately $2.5 billion authorized for future repurchases.

Frequently Asked Questions

The primary driver of the significant revenue increase was the combined growth across Intuit's segments. Notably, the Small Business & Self-Employed segment saw substantial growth due to the recent acquisition of Mailchimp. The Consumer segment benefited from an earlier tax season, and the Credit Karma segment continued its strong performance.

The acquisition of Mailchimp, completed in November 2021, significantly boosted the Small Business & Self-Employed segment's revenue, contributing $240 million during the reported periods. This acquisition is also expected to accelerate Intuit's strategic priorities related to small business growth.

Intuit's strategy is centered on becoming an AI-driven expert platform. This involves leveraging AI for automation, prediction, and personalization, fostering an open platform for partnerships, and integrating human experts to provide confidence and support to customers. The company is prioritizing five strategic areas: 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.

Intuit financed a portion of the Mailchimp acquisition with a $4.7 billion unsecured term loan. As of January 31, 2022, the company had $6.7 billion in outstanding indebtedness. Intuit expects its cash flow from operations, combined with existing liquidity, to be sufficient to meet its obligations for at least the next 12 months. The company also plans to return excess cash to stockholders through dividends and ongoing stock repurchases.