INTU - Earnings call transcript Q1 2019

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Operator

Good afternoon. My name is Gigi and I will be your conference facilitator. At this time, I would like to welcome everyone to Intuit’s First Quarter Fiscal Year 2019 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session period. I Vice the Treasurer. President that, Jerry over With Intuit’s Natoli, of Instructions] will call turn to [Operator Finance and Mr. Natoli.

Jerry Natoli

Gigi. our am welcome XXXX and Michelle Clatterbuck, our Good first and CEO; Thanks, fiscal Sasan CFO; quarter Goodarzi, Chairman to and conference CEO. with here Intuit’s I our Brad incoming Smith, call. afternoon

to a we differ cause include forward-looking will start, our that remarks could expectations. our I Before from that There materially would number are everyone Intuit’s factors like results to remind of statements.

You release can XXXX afternoon, XX-K more the learn filings. about these fiscal we our in risks for and press SEC this our other issued earlier Form

update documents those of at assume of any Intuit’s All website to We forward-looking available Relations statement. on the Investor intuit.com. page obligation are no

on numbers these basis. of non-GAAP are presented Some remarks a in the

refer comparable period release. press refer We and and have Unless A to the growth to supplemental business the after I over and growth our turn reconciled business versus call available be ends. of the metrics. period comparable all otherwise our this on the will copy in worldwide information will non-GAAP year and With financial the rates numbers today’s current associated call remarks that, GAAP prepared noted, Brad. metrics rates to prior website

Brad Smith

you and joining Jerry, all us. of thanks for Thanks, to

Consumer group our in quarter. through Ecosystem Revenue Intuit As with and exceeded group quarter. revenue we the first Online and XX% in group One increased expectations. we’re the year strategy Ecosystem kicked revenue Self-Employed growing strong overall the Small our both Partner line off XX% fiscal implementing and Revenue was Strategic start and year to XXXX, second we Business financial targets. also entered We with of the our growth from off delivered XX% a

to share observations that largest tax business there’s let on start we overall me starting be with to played ahead Small year, of While some Business quarters backdrop, towards season. group. our the great With Self-Employed two with plenty our game a as this is move our and

placing online quarter, emphasis Sasan last our small month. deliver foreshadowed these our business increased earlier an greater we on of conference we Connect many this to at As advances shared are QuickBooks value for customers. our services

to payroll customers small process better in QuickBooks manage for First, businesses, Capital, capability nearly data to not for provide QuickBooks they to flow. leverages funded may five with first Online longer $XXX intent for so small allows since of QuickBooks on stating million payroll their Eastern XX% Customer their launching the pay advance, the Standard meaningful whom their customers. and loans which their XX months businesses hold quite been same two cumulative day introduced customers future. innovative the money customer AM to Traditionally, an with loans loan Time. QuickBooks within small days for onto payroll in also is have cash businesses enabling has publicly. This QuickBooks to day same fund required exceeded an payroll expectations these Capital Capital loans XX% qualify has receptivity We’ve apply second over elsewhere. our a of Online, to if XX:XX employees by their same-day in

discoverable allowing the QuickBooks for experience. business day, small-businesses In two next within as QuickBooks the period addition, more receive currently day easily they be Payments offering. within customers been have making also as critical waiting soon next payments day we’ll to funding customers the to funds three launching Payments, self-employed functionality their twice redesigned, and fast

significant offering profile, with is grow X.X designed existing fit opportunity customers time. XXX,XXX also of target employees. with of with million a Advanced. broader XXX We’re range introduction customers to the our customers a midmarket of them this QuickBooks Online with Approximately serving QBO the to XX recent for over providing This us

While quite we in about as additional positive is the QBO the we’re functionality optimistic early, it's Advanced opportunity on introduce and still months feedback customer ahead.

to Turning upcoming to developing the consumer tax group, customers innovation wave better of the season. the in our serve is team the actively next

remains and lead a assisted getting into with transforming better. trade-off confidence focused eliminates do-it-yourself of Live our filing Live. the increased last strategy innovative or expanding tax Our tax while This service solution one-on-one the on our it the do TurboTax segment it's advice category only traditional the customers between significantly season TurboTax tax from yourself pro.

tax the of to half tax October. some many demand, include which access upcoming the when in tax point an that mobile were device filing season the during mobile expert launching on online return. features season use new During These given at extension filers several tested we’re the of

We’re price simplest providing points to the introducing of an range expert a tax access most complex the to of wider from returns.

receive XX TurboTax for we're additional their Finally, a and to through providing expert Live ways users a an in access from submit hours. response experience TurboTax including expert question the a ability to prep tax

Beyond enhancements on management these customer to expand pros new as These the in all functionality include experience one TurboTax platform for enhancements tax we've the built facing several the well. a health in case innovations, place. Live and made the panel

We improve our experience for expect these the productivity tools on tax will platform. the pros overall and new operating

consumers. easier and long the good that to for to make we've shared to is believe we advocated quarter, taxes last As tax simplification external for understand with environment, regards anything

While for category growth grounded legislation in in free adopt to our and tax aggregate simplification choose assisted This our more both introduces be for customers tax increases from down solutions. of expectation down to risk believe people the will overall trade is qualify we TurboTax digital number it some will historical standard catalyst the offering, evidence. paid an risk which new as the deduction who do the for yourself

Care more that past prep the confusion towards Act major changes Over Affordable cause that happen. would tax legislative decade create didn't shift such and simply many the assisted a method hypothesise

of basis the tax tax growth secular pros points a compounded XXX the customers has than changes trends at In tailwind time annual rate and These major grew solutions X%. points, basis adopting IRS outpaced returns XXX fact, filings legislation. with by digital even over growth of reflect of less to over this TurboTax by period the stores

Moving Strategic revenue business beyond X% consumer grew to professional year-over-year. the our tax Partner our group,

extension have continue and overview, gives hand to ecosystem. to it sum multiservice the 'XX exited taxes, enabling with testing you successful it walk on We that success should increased both continues confidence financial we over To that our details. business that firms the let and do through filings the our Michelle, season. another tax us With to to we during us growing me momentum focus small books accounting drive fiscal year accounting while our up,

Michelle Clatterbuck

everyone. Brad, good afternoon Thanks, and

a million first $X.XX per fiscal For versus operating XX% $X.XX earnings $XX non-GAAP loss share NON-GAAP year GAAP a of revenue a delivered XX% year of share ago. up of last the million $XX per million XXXX, diluted loss a year. last $XX year-over-year. quarter A share $X.XX of of $XXX we billion, of loss income ago. of million GAAP per versus versus operating diluted versus earnings year. And up $X.XX, $X

million the tax Our on first GAAP earnings based share benefit share per the quarter excess includes a compensation. for $XX

ecosystem revenue revenue business the during quarter. Turning growth XX%. remains Self-Employed with XX% Business and grew segments, Online to Small the of total strong

to ecosystem measure the XX%. is continue the quarter, revenue last to health which expect better of we strategy grow we going success and of growth our best believe shared than we online As forward

XXX,XXX, continued revenue. both multiple growth ending grew nearly accounting with subscribers and growing XX% QuickBooks subscribers. million pleased subscribers U.S. to international We are approximately approximately growing the to XX% one self-employed across Growth million of with XXX,XXX. Online and over XXX,XXX remained the geographies subscribers X.X with year from XX%, Online up online roughly online quarter Within QuickBooks subscribers grew services ago. X.X to strong

growth begin down shift consistent we our business mid with Desktop to revenue moderate last expect in total X% digits in evolution. you indicated told first from next emphasis last we to chapter the ecosystem decline we the model was of subscriber As single quarter the we quarter. quarter, the as

enterprise digit quarter. the Within grow double pace to a customers at our QuickBooks desktop the in continue first ecosystem

to and Desktop smallest QuickBooks roughly revenue ecosystem revenue XX% decline Total During flat. fiscal year. continue unit of to desktop was expect our XXXX, of one single to the we be in quarters digits up consumer

tax needs opportunity franchise to attracted Live. a year, customers tax even into X to than of faster contributed offering more product retention, point a increase filers the and a TurboTax ahead our an rate. season Last the upcoming have filers online we at address at the higher the pace first brought to with Looking in time TurboTax

the reform be to Brad continue for catalyst category a to As this DIY season. expect we tax mentioned,

unit we a our Difficulty] release. As provide in quarter February update [Technical a earnings with reminder tax second concurrent late

the tax Strategic expectations. first a provide tax revenue We with the Partner line grew the X% in Group in in Professional within final will season late update April also quarter our after ends.

revenue. organic remain financial Turning revenue growing income double digits faster growing to we and our than operating principles, to committed dollars

disciplined take management We opportunities capital a continue in approach than we cash a XX%. greater on that return to investments yield generate investing to the

to Our investing revenue first growth. continues customer cash business to priority drive generate the the to in and we be

repurchases and each cash and out shareholders a our on Approximately both to product over balance Next, sheet. the we we a first business invest XXX in repurchased X.X with and X.X This be market payable XXXX. our consider fill The cash investments dividend XX, our million quarter. We share versus the excess billion quarter returned to accelerate the this share We $X.XX January per to year. quarter in can't We that XX% acquisitions our year. via increase authorization last in of growth of stock profitably in approved Board on quarterly remain the expect roadmap. and dividends. finished we billion represents

for $X.XX earnings growth fiscal share per diluted of revenue to $X.XX. of XX% of share GAAP $X.XX diluted non-GAAP $X.XX to guidance quarter to Second includes per XX%, and earnings XXXX

our fiscal last provided XXXX also We’re reiterating quarter. guidance

turn QX back our fiscal that, can release Brad to in You With fact on press and find guidance I our will our XXXX it to close. details sheet. and

Brad Smith

a year season. Putting are bow you, with accelerating this pleased XXXX fiscal performance to momentum look we into start forward around to strong Michelle. we head Thank and quarter, the as our our we peak

continues Ecosystem I Intuit the be our take One that the delivering. shape of not results strategy and could employees and more proud innovation Our to are

a Intuit's you Effective privilege next Sasan CEO will to It not in as Chairman, has the transition As the I as CEO. be reins. for January could team. call this the been takes Intuit's to Intuit's I XX role of my the as serve and more Goodarzi years. generation to Sasan Xst, leadership know, is earnings Executive confident past last

Gigi, mind. you I in As years next up support the better thank chapter. it on about ahead, future. I this I it Company want will continued to your the And for over I to look with have Intuit's look to open achieve you. what’s that, progress your turn we forward to hear back these and never many felt will let’s

Operator

first Suisse. [Operator from from Instructions] Zelnick And question our Brad Credit

Your line is now open.

Brad Zelnick

TurboTax, us that the of will insight reminding the risk I guidance just unit trade up tax but around that and of into and bit I on you're trade-off the overall you little to past the of feel be reform, follow given want you've able perhaps the something examples through tolerances benefit into you Brad, why about tax down versus in more us? category a should and you you’re this give appreciate the us you built and thinking comments model can how navigate and to ASP in

Brad Smith

also process. simpler, have to they'll solution they assistance, prep will TurboTax to the are taxes assisted an guidance factored comments for solution method, if think are potential the thanks the we in that. we side When and happy about Great, down as for the confidence about the going move qualify larger. standard Brad, into to do and number the people have When because we it of using like they innovative tax our talk the of up an opportunity is lose of Live quite as deduction will quarter where a point the trade they the much risk be well any get put we we which for now the in can yourself year, where on together frankly thanks any

you as for as a tax year’s this season guidance that So what lead higher provided last as outlook. than saw more well a we robust fundamentally year to long-term

being total they principles, the know growth that grow of in problems billion even because we a we TurboTax But going per our to to comes that across and performance that mix introduced can strive of able with pipeline to customers, Company a our average point, we And said as create you increased higher terms to $XX customer the so return, bases to market the return, opportunity as is from that fast right have serve. situation believe in the continue grow at we per a to an weren’t Live, the grow going we to as an long-term revenue serve addressable as to continue when launch revenue ultimately we over that overall to can which that this now drive as that segment. uplift that you’re Now get we of will which are we solve. is creating we unique effectively

So, be that it we that if to yourself share category. the this not because the successful share, going And season. don’t tax surprised I grow be grows to than want growing consider primary revenue would and in is do we’re not is goal faster our category of grow our a to But if we and mix. really be year, primarily to to clear, business be customers

Brad Zelnick

so on you total QuickBooks. quick know said I ask some and and reminded that moderate Thanks if you follow-up to expected much before us from sub-growth a again is just here. I it could

Just we be should and for our thinking modeling about? look wrap what to that might trajectory heads of like around kind any our parameters purposes

Brad Smith

is from Yes, revenue going XX%. Brad, we’re and greater reason be of Online step health overall Ecosystem of first being by category kind driven we think really that, the the being is the to really the than business that away

very standalone front we’re and The We’ve average view that’s chapter most And on is, focus doors, per they to to sub? have now problems, as are of what or QuickBooks Advanced, new reason a ecosystem it's all qualifies moving the other the on standalone returns, launching be introducing we’re solving into self-employed come QuickBooks revenue subscriber. with as we’re a different so why question look offering what the and ability SKU, a will we’ve revenue. payments is important Online and payroll apples Online, online those a offering our important a a oranges counts

While we performance be think if our last did to of provide don’t a not at as will about people us a we as least year. many subs factor of did for net little is we gating we bit proud add

think number that’s for think of of So added, when the qualifier, that about a that if we you out kind ourselves. there about subs goal as the put we that we

Operator

Thank you.

Our next question is Jefferies. from from Brent Thill

open. now Your line is

Brent Thill

what business we defensive I what’s a how curious, is am us I can look the business the economy can softer sustain you are It’s to feel you mind forward? on but if those but the that be, can into as everyone’s and sense on give components Brad, year, know giving in a early as that obviously about just small think all the tax way side next look into you economy that that’s confidence put you we call, you even too you go headwinds? were good

Brad Smith

be resilient are need economy. and regardless to filed our portfolio out, years to as to be called points the that you And taxes out, you pointed proven with over going has XX the of

of business more indices, small small not two years. one the things that’s look if business always businesses facing learnt to some us We're other that’s optimism out public for the surprise because the be side, first going in small past to the fail we’ve up, going person. because it’s of sure a five like On

we natural that’s why and small just optimists a business they’re owner. So, love an and entrepreneur

of that in softening we know we that and to in a should things business we Main that of time, ensure of indicators the grow workers? At need be market Are leading believe take as still commitments. in the they our lot like workers? wages the actually what for of and haven’t there deliver workers customers market indicators certainly look hours? this Investor so community to on but point their yet, in the longer seen both but Are the in we've actions contract employees? we we’ve help not imagine for Are market, Day, we shared seen they already terms we this and on plans hiring got we that noise any investment increasing and equity but weaken working those look there’s you place a those more up we game show Are they those might at hiring at So, real volume. health the Street charge also

Brent Thill

payroll just going here? the do quick like do forward improve impact to real attach, big seems And What see opportunity. need that to from a you meaningfully

Brad Smith

attached very get payroll to for Brent, offering, services, found the that opening payments online revenue to the path grew design, the online also data where we're services. blocking East about more are can to you’re business longer basically the payroll, get able same the competitive then Coast, and is money in to to most that compelling prop new on for the small if market, a other to attached so the or talked down still owners. a and it benefit tackling, opportunity hold a very on value us getting like decided big that can in from trying and XX’o clock that’s excited to we’ve you you day. execution on done you discover it opportunity payroll parallel to those as that possible do And pieces, XX%, acceleration allows quickly XX%, that time to what your the be actually grew in offerings with and file makes so get and day QBO. down online and you before the there’s get these ability innovation, get been services really people our about was more pre-populate able and an focused quarter to This into of we simple past easier We've a we’re inside to QBO comments, same things a your

easier think improving right pre-populate introducing doing in even data discover, compelling. is, market we're design, to we our our breakthrough much alternatives that more there, simpler makes what value don't have proposition execution, and renovation now also the So

Operator

you. Thank

question Pritchard Our is from next Walter from Citi.

line Your now open. is

Walter Pritchard

a main and One follow-up. question

on been if prior of than are you in to seeing services that. piece U.S. could attribute quite you Just drivers faster TSheets drivers, these online the versus QBO help some payments understand, growing online the and is side like used that to core fuel we QuickBooks continuing and what drivers and a like bit wonder services business other that new drivers How money payroll subs. much I of haven’t newer us to that sort of Capital some the past? the

Brad Smith

Walter, job And drivers, nice payment, in did bulk you payroll market to actually an bringing day it’s two driven we’re been or hit the you’re nice by the those key a nice it's a the The innovation new this playing going you of is of have like we so summarizing of payments. we it. more payroll our core really funding innovation that upside do that wider the but see of day is faster not improved that easier same coming and and to of simpler our us really on direction with things, came that execution, improvement that coming is TSheets bulk TSheets the top discoverability, time top shifting bulk is and next new to The from design, benefit of which spin in field in, future, the think improvement. more and from in that.

Walter Pritchard

year, you understand see this year? you impact tax always the Maybe help season understand into thing seasonality, and seasonality would we to what could tough tax that through factors it's January us maybe then, Michelle gauge. could And like things move you help in the us

Michelle Clatterbuck

single exactly and year, the is out. play question. Hi see thanks every we for the season to Walter look how to going have Yes,

given and to you the more. have of information website I which -- think this the that you biggest XXX first last we’ve some understand quarter so help little on Relations drivers a year, all, Investor One bit of

opening other thing day. into IRS comes The just play single every that is year the

that And to released we opening and will some make on how so assumptions they when plays that, so, so not the to IRS yet are has just see out. have we’ve

Operator

next Lynch. Our Bank of Subramanian America from Shankar from question is Merrill

open. Your now line is

Shankar Subramanian

about of sat you do seems I but play is faster unit kind first Kash. QBO on a future growing of This rest on on you behalf of off growth is right quarters. the rate and UK talk like the revenue the profile. question based QBO It what see have overall how just trajectory on U.S. the now, the international But see the than that for the Shankar the revenue year? drivers, the will maybe of in market just in not continue terms five

Brad Smith

this Shankar, thanks Yes, is Brad.

to this and that’s have a business we of the things. yes, going in indicator of of that best is really revenue continued an health forward. driving the What’s QBO we acceleration So, suggest see that combination

also payments be things services, as just able payroll or First about. and new subscribers getting TSheets but execute to we running, up foremost, both talking to continue online we and were and on

healthy as is once customers sometimes their per revenue nice anniversary trial period customer the and then month discount XXth a bump. period, bring then goes for second The a we in, introductory have an we average in that up promotional in trial of that off

And that so, of so get larger to revenues result ARPU in we continues base and a a you that. a as anniversary that of lift add, got

if retention to least, to see but the and have Investor we we customers then been compelling to revenue. third and opportunities we rate of promotions. about is, drive improved back that continues look going QBO And last go The Day, delivering as as smarter up. to And get propositions new so retention you’ll ahead can our not so well, our feature you functionality value we’ve rates more

attached services, come would it’s group that to And so, for the promotional much to on kinds combinations of put table. when they it’s things without the leaving promotions period. we anniversary off of And what us the you list, looking those we’re their too have have the ability together, unit offer accountants, like trial spot found for get been we the adjusting sweet of we

improved that keep our the to back retention continue want feature talking that’s the get do things points that to from revenue. Ecosystem then props on I functionality have XX%. to we we driving new will just value to go that our greater We opportunity and Online than revenue wiser have with promotions stronger and

see XX% our now We how are it on drive can pedal foot going see delighted continue at to we to keep to and and the we’re that.

Shankar Subramanian

As how about gauge that you front, equation, the yet the going tax seen? fact to the the is do turnout see on follow-up side indicator to seasonal be competitive early anything or a you into of season, is be

Brad Smith

Well, we each toes from best we talk the competitors end actually anticipate market. really We have always respect in consumer. they them, they about year we our for for the the have competitors often good the keep game our the and us improve on

So, got we season each really feel strong we competitive expect at Live. in tax got be match going compelling line year a We’ve TurboTax with time a very as to that’s up do same we’ve offering hard the a like place. to I

has team little introducing on Our to our tax be we’ll things about. to that product several season that got core bit going TurboTax they’re talk a closer

believe have and really to a in but best very chances like our we’ve have we season. expect we I forward foot case feel tax successful another competitive, the we got our So have to

Operator

Thank you.

UBS. next is Our from Lowe Jennifer from question

Your open. line is now

Jennifer Lowe

think Advanced move bit dig we of I I little into you I where and the but said to customers? you to if and in XXX,XXX in customer wanted How I have new functionality opportunity users. of to How and are curious should out base who talked that get go the it am outgrowing QBO best wanted people subset the our think about the dig desktop didn't versus currently, context? maybe fit cloud that a we versus that on much customers right the QBO has about product think is QuickBooks state

Brad Smith

QuickBooks look market we we all, desktop. of in the on already the desktop on of have can evidence First at Enterprise

they at there XXX,XXX We appreciate, revenue then mix QuickBooks and but call were being growing the XX% that or disruptive that and north customers a of add add customers with the about business it's QuickBooks as stretchers, XXX off where grow somewhere existing and continue XX% who digit the over market the in And competitive of customers units onto to on neighborhood we’ve to need able both ends to about we level and functionality years, in come that million Enterprise. have to up a of platform, of what employee. the product platforms get we’re and priced flinchers is double

is tend look be already in in course so switchers XX/XX to other that disruptive think cloud and ones introduce desktop a and we continue we functionality, think that So have about just simply that add we the XXX,XXX we break we target to have the this a it's profiles And to it now, family right them going are But our the proven a desktop like desktops, to those going in well. and our be would split. product alternatives that in down the those will some we QBO the as evidence than best as and we’ve players we for is as get of from assumption keep lot the be customer want we base and proxy the is XXX,XXX in stretchers.

Operator

from ISI. is Kirk question next from Our Materne Evercore

is open. line Your now

Kirk Materne

growth anything of internationally to particular any terms you Brad, lot QBO international. the sort obviously just regions, want callout in just of upon I in of touch to opportunity

quarter anything popped of the So just for sort screen might for I up wondered your on that been expecting good? if radar guess this now mostly you

Brad Smith

product competitive in at faster much advance the score are on a we Obviously, adding the customers bunch, promoter’s the net markets. our year-over-year be to now, Australia. scores Thank proud the We XX% than in recommendation market, they three escape the each the right rate growth a international UK alternatives and of and results continue of in of velocity to or markets our those markets. see you, darling UK Canada, continues core we’re Kirk. hit

product we As use, about India; and Brazil are yet positive trends France, monitoring closer. but scores countries, like those to the getting They seeing of and well. in hit next we as continue we’re recommendation velocity active we’re countries have they think haven’t and things group escape

ball the about we net core if three the being say of I UK net, in talk So that markets with belle group. often would the

Operator

Our Pfau next from Blair. from is William Matt question

open. now is line Your

Matt Pfau

Wanted is? to comments even mortar tax a dig your any having price bricks of into lowering their dig that that on year, And prices to Brad the points behind and sort purpose Live the of a range just stores what TurboTax this tax season? return for is wider about little and maybe upcoming potentially of some bit in competitive and response for filings of this

Brad Smith

you, Thank Matt.

our all, but tax season. will back coming first out So had Live upside insights for of to opportunity. last discovered some where big of year, hypotheses TurboTax I we We go last off actually two were

TurboTax was The areas returns we would that then benefit also don’t have expect. more simpler and people would people they who an have returns we that something in. But complex confidence demand be more had that they Live would from on where be understood interested with first service a anticipated quickly have would be

us as the lead up that not Live TurboTax just returns need for So all bundle actually simplest a returns. to, complex we add-on service but as have an to the more way to

appreciate does well. put to on second as season to it access an up more to market for in the there assumption a half we coming marketing we I go-to-market and we we the that to second as been more as robust later, the in half, applies plan so expert our advertising an the full early that just season had set people back having let’s so got of go said, is season, that have had The We've our returns come thing to second held discovered there. because complicated

because are in what some us season. also be our and competition come the of in opportunities to out had plans to just the be that we better talked about last place has things Now we think recently to happens they while learned me of address to year plan gets excited, the do already doing, take tax they advantage this able and I positions and

Operator

Our from question next RBC from Ross is Capital Markets. MacMillan

Your line is now open.

Ross MacMillan

the first standard what’s to in Just to million to doing and suggests are be math of season million cap things our of funnel. folks and could that’s to the make one What using plan be the making that What's percentage file guess higher shift, and going of many a those itemized think that of I could XX sort as we’re of filers -- an probably from as of the anywhere this around deductions, see alternative move educated if may to to you of see on X people deductions sort that between way come DIY to it happening standard the today? tax, potential are I part moving value capture that sure time they’re the possible? for is, those

Brad Smith

fit in categories it out, methods, way the been pointed yourself, are many going XX As into the spread for coming don’t in million across prep filed, they’ve you that time they multiple the just X because be do all source, to million the some maybe may and to area are with tax have are tax they those first are in a are have because some comfortable parents more historically that’s pros wanted tax to return or the some on certain way the just then of DIY. advise their

sure forms TurboTax to going there understand So is, all in our make and there’s where market be we’re the the thing out to campaign going first be which continue a we’re in to go happens message to doing that's of to market our media. better alternative have that we’ll they

the market in second these in used is And the taxes third they’ll and talk mouth a of that in but that kind nagging we’ve answered net this they’ll with the scores needs and have who it deduction, have then and are they about solution people is question family. get their would be tell our nervous introduction promoter still standardized word of that anyone for I the be able to don’t will favor and to our higher they done, The get our question my of I so solutions ability the to reason say when alternatives any come historically friends into TurboTax work Live, am may file. unanswered

network available it thought as capture of have of work answered strong So campaign, experts arbitrary the about feel just we in those a choice can many as place able to right you in case and still integrated get decide drive this we then we’ve think from think solution as that marketing and of and the got make can. our pretty about our and plan your getting a the word robust you to favor don't your nagging question, continuing have demand. to you mouth to we car through and on to in And somewhere, assumptions, good log in we question you be

Ross MacMillan

go season for about you up maybe how we you potential guess just tax puts I think margins. aggressively as year? that for the high one been? first QX, go business margin taken the the and incremental And we should across What’s will we stance What haven't margin but we for takes through through if for, on really this on year the surprises Michelle, has full are strong quarter the this very as given quarter the saw

Michelle Clatterbuck

Yes, can in feel have year we did about. happen or a that it shift this from QX, strong expenses little just so to to tell total do we the seeing a things I’d the sometimes bit we’re did for We some quarter-to-quarter, a of from margin guidance think year. and operating do see focus good that -- give you of We QX that into place that’s reiterated couple QX.

I would total what focus between we would year, wouldn’t really see that’s So I quarter-to-quarter. on the may that movements I more get as of some concerned on, with and overly the focus

Operator

Our next Deutsche question Michael from from is Turrin Bank.

Your line is open. now

Michael Turrin

you your sheet can Day, potentially macro wanted evaluating and back potentially the trade-offs tougher I you balance minute, a that to mentioned to Michelle those in take moment leaning to Going that into comment. you was of thought during at process the that walk managing for lean macro? could a any Analyst all to downturn. revisit allows a cycles through I hoping economic sustain the

Michelle Clatterbuck

Michael. of why been we might for a turn that’s us. the around Thanks for question a it has address what questions was like look and quite number There to important that potential down it thought

us that income our see operating back financial to growing as us enduring principles. For highest are, looking over the five XX% really deploy than faster We no and opportunities focusing organic we dollars and about go environment, target our and continue we growing are have economic that’s revenue. cash on our or to We us, we ROI for fundamentals which revenue years do do goes what when then think have. We matter think to the we a about to focus. really where you

Operator

is from from Scott next Our Oppenheimer. Schneeberger question

Your line is now open.

Scott Schneeberger

marketing offering the I how consultation some you’re have you a on I’m question, for three what impact on regards reform And curious. the to earlier curious would I’m relevant but about questions as in Live of tied tax well. In into that going at type seasonality season late is to of think all. early to least and but TurboTax have Michelle? timing expense it's free then learning in said the a address, about something I last about Michelle year reason of perhaps There also, consultations be it to that Brad one. season

year? shift this So what the these kind make of seen, and variations. how kind is of of the pattern and we've that, those was human of -- the be I answered tying the labor that will just just shift might that it all I quarterly on overall But might theme might some realized think where influence expense question there together, and marketing Ross you that where be

Michelle Clatterbuck

things, say the we of Thanks when the look things we different of were would all for question. marketing looking I at business, spend. at we Couple the first look one the TurboTax if, specifically of at,

them year. at this focused do to season QX decision what entire did that at for within Again, on, a season. in the specifically it around payback have now and payback late season, would called other this right we’re reform that does two or different sure reform in have might tax year and focus current best the overly mainly is going QX, consultation we to within impact opportunity it's positions to spent week we on more The the you making call there. from that out I that things As we when and the in XXth chance the its providing of we a year look only we Brad through occur, this look people November, reference tax XXth whether tax the period see making a time is last going give don’t believe year we that’s it that and the we forward. how month really for exactly, at say season the this current is to get

obviously the in be impact quarter. to current So that would this

Operator

Thank you.

JP from Our next question is Auty from Morgan. Sterling

now is open. line Your

Sterling Auty

of price grow as grow and this years a drive you We revenue, the low-end of Versus mix. that level. like? to any very complex of returns way strategy the the terms sense what looks curious think other they market kind more back capture years, kind look get years from to that simplistic high there in couple to into framework definite in going as you point that am I the to of targeted over were allow of of season to returns from using kind last about your as strategy terms to tax

Brad Smith

just Investor a the through at did you job Day. Sterling, I think Yes, nice it. went this of summarizing We

it part indicators on and extension free October and do We The but and assisted in category. sort plot position and our with going saw continue and with yourself that the we’re the is really leadership being yourself, to a or rings solar five core to filing conclude had competitive a of the category introducing excited takes we’re to excited digital the We tax it, year. in we strategy market TurboTax prep the is it faster we in on to our be do the to the here very strategy paid Live, offering next first grow of to the this page, have leading as strategy well it innovation about plan offering part transform that’s season. a of the system than as extend so

thing return three the ability to expert access including questions with hours, in to different examples. send expert a or the get you to to response you the on introduced just is And ability the that for could an so we in device, and use so returns, have price points, complex an XX the mobile simplest

this of prongs fundamental two the And strategy. are year’s those so

you Turbo two a it tax identity I the and like eventually look would into then approach. global; pronged the a beyond but Mint at exploring this and of and goes expanding being and you If strategy rest to it’s financial tell year things

go-to-market that is when them we both feel and we know which going up, new like and marketing Live offering, to -- make is campaign line introduce one even be with the our Our for will it will easier right customers for that model product clearer. we our think we it do and yourself be to TurboTax

So favorable the think we’re to shift the bit take do will a is probably to categories. very Live. excited and revenue we faster return little end get other seeing to I We think plan our mix of that share and category category than we’re what it yourself per continue going a grow because going with to you’re up pop TT

Operator

Thank you.

from next is First MacDonald Jim Our from Analysis. question

line Your open. is now

Jim MacDonald

what specifically. about How acquisitions? make just to these happy now types say just you and and to specifically about know do and for quarters want follow-up small TSheets business you’re wanted that ask I you’ve more more of maybe my of that? acquisition you And wanted is, can owned that several to that does with

Brad Smith

two all other we we down year broke Company's to our about I ago; great, They’ve ones We this Board of appreciate be about think single ability well. and a performance business our we’ve I presented It’s your well from -- increased financially. work as and the and with you lot you the meeting back be were hoping from us acquisition capability and three the has tell looked in just benefiting and of years we it our And Board every done talked your do years. in all against successes, answer these acquisitions And we don’t, and retrospect to. we differently the to this tissue go how are channels really to as We down to faster the which original the looking they memory. may question to kind measured our broke time then as to move and the weeks acquisition this our innovation years scar I all these of and and we years. XX strategically to at recent TSheets, the of as which able to as that how acquisitions every a them I’ve most last words back you it bring can it a we we then history, been TSheets aware had of XX successful do specifically have last And help is they inside in them help with well acquisitions the as to reach speed, and the get for that. and both that Company, audience learning think performed were our about case, helped went broader ones we successful be they

we to do and do ability strategy do any our for of what partner up in intellectually and question in a against to we we’re so honest it build, we going period our forward decision play each try know the what book were make of to got rate that year decision customers. in what need five But has that’s buy. terms improved return acquisitions execution if capability our about problems and a hope very you other our our year we in of ends getting board answer them performance gets us the ultimate I is approach, The better becomes remains up we success. are hear make then like and has helping go refined, unchanged and we our more our terms bring XX% buy, we And we or solve held buy over the and and

Operator

Thank you.

from question Millman next Research. Michael from is Millman Our

Your line is now open.

Michael Millman

$XX So its you shifting its causing some price, it talking of before hope was also following store then for of to when at wondering, least, comments. cutting people the talk block I think do to look on at about they and about yourself. prevent up at cutting price in

effect. is question it think this you is, much So have one going to do

Karma? about made XX The you strides. competitor to kind of want at years, is you Company the Credit related, concerned what my think What do more thank going block over has over the into happen industry, major you're do And see Secondly question our as to to years. that, stratosphere? is feet. as see with looking disruptive for device the terrific or what’s you’ve you five next following And to I is company the shoots be XX XX,XXX the done going you you at that Company from then look

Brad Smith

from where in performed of XX years will seat. I you with the over start expertise last on for Thank has in This you, team Michael, and kind and the benefited their their left and well XX the execution words. certainly I incredibly terms

a to it's with So, the in pleasure been work field. them

some with start virtualization Let and our recently of price their me been on decisions more approaches. and to first, their out block roll the transparent

and of period, percent. IRS X.X% go I grown Tax source the promotional declined trend, of that a will lot X.X%. a have the look year discounts a the tenth of back six loans tenth have I percent. think anticipation ten time year first grown returns and to we’re XX during because and refund foremost, if has of and tax period early seeing refunds you at growth a but have in Pros source, three TurboTax

it change and to do they decision get yourself it category path we’re solution. doesn’t So going is when necessary the the anyone’s what to lead prep promotional a to the and battles often if this is tax go between methods,

it is, in do to $XX thinking yourself. I incredibly free think think about to pales the when you second it store tax comparison store, competitive to that is challenge when you’re but tax

And first think the headline. that’s so, I

respect brings sincerely, does Credit and Each I one Karma our there. the them as block different Tax ton had of second to something for mean frankly, of players and category. is other for each the had We in quite Act for a a I out The respect all unique ton company. of our

be thinking and a the more the about and to market get compete there and to to will look can called which because and tell so used business. customers look it we all time make We game, it them spend earn So it's we at in learn now hard one plagiarism for have we benchmarking. to you me be of earn better out trust sure from customers want the that our and we competitors we called

to And As is team, manner, the is customers and down company major Sasan had the ecosystem. by frankly the possible. artificial is which things underneath the that continue what secured for they data get that? that And I going that you I thought the quite that, and path on, never this trusted thing leadership but for you to stewarded really is that been is unlocks do intelligence platform amazing Company in a we’re think that fundamentally learning tell this a we that then powering will future, we’re and with to to could’ve machine if match

could our so and the team power all if it over that I sign data to magical forward make And is the I that the customers anything, could breakthrough with data science it biggest will science continue of the our down which had think sense, and to up be to our things happen next we to the of match algorithms that’s a five they’ll single years. over boil drive

Operator

you. Thank

from Our Securities. is next Ken from Guggenheim Wong question

Your line is open. now

Ken Wong

QX much half and for This and looking just one's QX early Michelle. starts What hope than first guide for better at expected.

in due seasonality half thought notice your pockets to a to the Or year? did front anything strength as moderate purely across Just business? the to various was the of suggest shift of maybe you your

Michelle Clatterbuck

answered And strength we’ve the seen. as you your at actually, it in we look you is yes, question. really that It own

and a come for of You're of strength our to each QX. year coming was us it off continue see FY’XX business, really across into of strong the we pieces that

that in the with shift would change. And versus say I just see the is we’re strength shift business you’d outside more of normal the so, seeing the any of it XXX the other

So thank you.

Operator

Thank you.

from is from Our next question Reback Brad Stifel.

Your line is now open.

Brad Reback

beyond the transition and expect Maybe from Or could the should using quick early the of gains update in Maybe AI on part also on know stand data learning guys you get to machine process? getting you’re steep side. are more in AWS that we’re we a future? and the GCP that that? we And where how we on I the to

Brad Smith

Brad. It's that We’ll keep simple.

we to was. the It of facing its July of transition XXst, able the a year, long there our the be and and infrastructure Online of what cloud that’s completely end tail of the another sure of take as I last continue fiscal by you for some sure in And move facing second our the ran AWS year. consumer the in to follow, there. the the I repeating our of was data XX target. will but will is be we other and make in apps AWS, season Amazon of mind instance admit wasn’t to Services. on Web to QuickBooks internal apps in be will all to me? the tax end wasn’t is XX will that we’ve I Mint, So will Today, the that end months, quite secondary now I all have TurboTax question question there. will that this by have customer part of to so primary Do the Online heard by apps fiscal services cloud this both their in There

Brad Reback

apologize. I Yes,

early data using gains made in be for future? I of say you’re believe still and type very that big we’re we’ll the am assuming to your, work. on a I in lot GCP significant So process of

Brad Smith

Yes, Brad, that’s correct.

capabilities as working the early we’re of with our on and Google you’re right of and Yes, working Services. Amazon on have, most to some primarily data we the Services Services that the as Amazon So, data we’re the offerings. Web Google on with referring Web well our and days Cloud lake now

as of the very the share the learn end in we’re path continue and that are running but more. of parallel day a We we with some more a days regard, sort in Cloud, Google to experiments we’ll at early

Operator

showing Thank further no you. I’m questions.

Brad Smith

good Great, QX that performance. just me by thank feel very wrap we And with Gigi. our you up reiterating let

head We’re strong out the into we peak our of season. gate as

I with and team’s got ready. starts first we part game all We’re three strong soon. down and as these game we’re And as months. holiday some real We've the hope a product building with that you thank We I your know, plan. you has for It’s indicators came and wishes Take speak season, you want to questions, go-to-market lineup, through care. wonderful thank strong I we now of year. feel definitely for will a our momentum want you comes a the But favorite to leading kind positive execution. to everyone

Operator

concludes today’s your participating. gentlemen, thank conference call. you Ladies This and for

Intuit (INTU) 19 Nov 182019 Q1 Earnings call transcript