Intuit (INTU) 21 Feb 192019 Q2 Earnings call transcript

Company Profile

Participants

Jerry Natoli	VP of Finance and Treasurer
Sasan Goodarzi	CEO
Michelle Clatterbuck	CFO
Keith Weiss	Morgan Stanley
Brad Zelnick	Credit Suisse
Ross MacMillan	RBC Capital Markets
Kirk Materne	Evercore ISI
Scott Schneeberger	Oppenheimer
Brent Thill	Jefferies
Kash Rangan	Bank of America Merrill Lynch
Jennifer Lowe	UBS
Josh Beck	KeyBanc Capital Markets
Chris Merwin	Goldman Sachs
Ken Wong	Guggenheim Partners
Raimo Lenschow	Barclays Capital
Michael Turrin	Deutsche Bank
Walter Pritchard	Citi
Sterling Auty	JPMorgan
Brad Reback	Stifel Nicolaus
Jim MacDonald	First Analysis
Michael Millman	Millman Research

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good afternoon. My name is Latif, and I will be your conference facilitator. At this time, I would like to welcome everyone to Intuit's Second 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

Latif. am welcome XXXX and Clatterbuck, our Sasan Good second Michelle Thanks, fiscal quarter Goodarzi; to and conference with here Intuit's I CFO. Intuit's CEO, call. afternoon

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

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

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

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

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

Sasan Goodarzi

momentum thanks through thoughts sharing start results, to the the the and year. minutes will the future. all by Jerry, I halfway the good few to joining and the and will for my for outlook fiscal Thanks, spend Starting continue reviewing of we're for company. us. I you see quarter our results about then year with across a

our Business the different, Self-Employed season tax. Strategic start deliver Consumer Revenue forming in revenue revenue and consumer against to resulting that we With closure grew growth and group, with was revenue new expectations. no XX% exception. context, the by our growth quarter season. overall, extended With me and this tax in operating and revenue is in Every performance, the let this pace We remain impacted the is partial group for slower strong line full-year with XX% on one legislation Small government a believe & income in Second the outlook. behavior, Partner tax group. XX% fueled

key a there consumer for our reminder, As are four drivers business.

The total first of with number filed IRS. is returns the

the The those second using software. is percentage filed do-it-yourself of returns

our within the share is fourth per software revenue third and average The is category, DIY return. the

Our e-files This build lead helping and tax Consumer the group and is do-it-yourself platform. assisted data, make in category, period get TurboTax strategy category, Based ends on in do-it-yourself the tax comparison, IRS latest a e-files our the preparation consumer performing service all refunds. February to meet declined expand tax Through beyond is self-prepared declined transform customer of X.X%. their better the In Xth, X.X%. IRS is to the the than shows data expand largest category same our assisted. through

We in are proud our our strategy, of I'm very and team. confident

tax are category, to simplest expert season, their best access experience financials we product even transfer a We data customers the subscription of including of we enabling seeing This Within our the with recommendation season do-it-yourself, by for transforming the Self-Employed the is customer TurboTax TurboTax growing experience product free the for filers. assisted this returns year-over-year a season. no of offer to lineup offerings for product improvement price me in invested benefit again year. range our introduced our in We're by who our Let we've customers are edition. in in our already scores. this a points comes the one charge part with lineup Live. of within and an customers to tracking the last In Self-Employed, season. simple this how delivering specific file share few throughout examples delivering XX-month for QuickBooks was fastest

these time, mobile to access For offering the we're first experts.

experience onboarding the season. significant Scores pros whom see the for from increases excited in improved the to We're also of Net and from approximately platform, tools We returning X,XXX last the on majority Promoter our pros.

our consumer meet. Beyond platform aimed at tax, make is customers helping ends

best With financial stand. their income a the them customers This ability customers to view money. us and credit gives debt-to-income platform financial consent, ratio score, they data, provides to by our of save with Turbo connect a truly showing customers combining overall their health verified the products where

again, revenue another to Business, in better our quarter Turning & with of XX%. target our XX%, exceeding to Small delivered grow Business growth ecosystem strong we've than group, online Small Self-Employed

online place to & for continue like our proof few progress. Self-Employed We customers. demonstrate value a share more would services an I Business that on deliver increased to to points our emphasis Small

experienced. are their day receive the problems customers for payments employees customers and next faster our capital, than pay on payroll, We've paid deposit introduced product. allowing day business to launched most hold on previously We focused Within our longer them to for by to an to last higher funds payments, helping important and we fall, seen cash flow. product score solving manage we customers fast, next customers to get same have much confidence. with their and who recommendation this Within better enable manage access their eight-point direct money those day

payroll loans Capital loans qualified of have customers' funded to over ago. provide data has QuickBooks XX% leverages feature. customers loans We online Nearly publicly, our to a year online launching Capital over already since which little this from businesses. elsewhere. a QuickBooks in benefit small for one-third QuickBooks' not million $XXX seen cumulative of

a has business Capital we opportunity. QuickBooks this And about default remain average. excited industry the rate half Our

encouraged to by take the we serve to game QuickBooks initial businesses for XXX Advanced as our are to results XX mid-market we Online Finally, with those employees.

batch including year-over-year. Partner new add is rollout Within invoices. to tax functionality. user and professional customer revenue The down X% was fast group, continue We iterate to our team using permissions features, feedback custom and Strategic our

books executing growing our To firms while success ecosystem. our focus business laser-focused we hand the pleased that with the over you Self-Employed on walk our through up, filing to and financial to of are it momentum me toward Small we to multi-service small on continued With as & and let both drive continue details. enabling to wrap We accountant deadline. that overview, Michelle the us do Business remain accounting head taxes, group tax

Michelle Clatterbuck

Thanks, Sasan. everyone. Good afternoon

$X.XX from increase, last $X.XX $XXX $XXX earnings diluted year-over-year, year. a quarter we diluted For $X.XX, a GAAP ago, year billion, $XXX XX% $X.XX revenue operating XX% delivered share million, fiscal the of last second a ago, versus of up non-GAAP of earnings up of $XXX operating XXXX, year million, million million of share increase, of XX% versus a income income $X.X and year, non-GAAP GAAP per per versus

second the business quarter. was to $XXX for million revenue group Turning the segments, Consumer

season IRS declined down XX% grow off revenue e-files through slow Xth XX.X%, in the got While overall XXXX. X% start, In TurboTax period. to comparison, February remain year, in same we fiscal and down our to confident plans for X.X%. e-files to the total the for Consumer through DIY and e-files are the declined e-files are assisted X.X%, X.X%

second a Partner season of after update tax late for million quarter. April, reminder, the reported Strategic group in a we'll As professional final $XXX ends. the revenue tax tax provide

XX% Online X.X XXXX. the up revenue to & approximately continue with QuickBooks' XX%. X% subscribers growth is and grew million, year XX%, fiscal of Ecosystem XXX,XXX We to XX%. strategy nearly remains Small roughly We this growing continue measure quarter to from expect our which growing Business ending believe Total to XXX,XXX, multiple grow revenue of of the the international across over U.S. strong grew with subscribers to online XXX,XXX. to Within revenue revenue to XX% X% subscribers best ago. expect the QuickBooks self-employed X.X grow million going in Self-Employed geographies, quarter. approximately to online ecosystem better strong, Growth and in remains forward we Online, health business during subscribers than growth, subscribers. grew XX% with one success

continue We customers. subscriber the focus broader X% of additional and expect penetrating as second place revenue growth was to quarter. a greater range ecosystem in services, Desktop to on a we moderate total up

mid-market Enterprise QuickBooks at second This to offering. customers in double-digit pace continue Advanced the Within grow reinforces with QBO ecosystem further the in customer a desktop quarter. interest our our the our

we and roughly flat. desktop Desktop be revenues XXXX, QuickBooks fiscal During to expect single ecosystem to digits, decline units to continue

growing take investment opportunities a We financial Turning remain double-digits, revenue investing we capital generate disciplined dollars XX%. revenue. that our to on to and in the committed organic approach management, a we growing principles, return than greater than to operating faster income cash yield

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

growth share to our product out consider fill that on the finished return stock remains shareholders approximately cash invest and second billion profitably to in $X repurchased with We balance million We and we both and can't $X.X investments quarter of Next, $XXX excess accelerate roadmap. the acquisitions repurchases cash in authorization. under the business our we via our We sheet. in quarter in billion dividends.

business. to represents We've This a about increase a quarterly expect questions year. a the last market XX% per XX, approved XXXX. of the any slowdown our our time, employees the paid number evidence trend. Charge in this volume in remain impact ecosystem of seeing each in of gotten We a The of dividend on this trends Board payable quarter of remains a potential and macro-inspired share be April being versus strong we're year. $X.XX At lot not downturn.

our to Now, let guidance. turn me

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

reiterated release turn in I'll You our can find our QX and on details back to and XXXX our With guidance Sasan. fiscal fact sheet. that, it press our

Sasan Goodarzi

customers. of step let take share Thanks, matters our back Michelle. I perspective to me Intuit's my most will what overview with With start on future. and that the a quarter,

additional set our needs. entrepreneurs of those the go decision made All become business and a for have themselves of customers have needs set who've to an common bold and into of

refund, All make off are meet, maximize pay save their money, tax debt. ends of and our trying customers to

XX-year global One from desktop Ecosystem, strategy of have books Intuit which the power prosperity a many grow is they the and North our Brad a of is For for by are American Intuit's right. on the keep strategy prosperity those around needs. customers of businesses, find focuses led and transformation to mission to unlocking power their This company. That's small cloud a company capital ensure access who and paid world why want They is additional get are continuation to the one. the and our

becoming platform. As we're taking we expert strategy, AI-driven steps advance our towards an

Intelligence, TurboTax solving platform about the unpack by solve awesome speed, significantly it's It's With examples the connecting platform. with platform, me to a provide others about from are largest this platform. to doing Live. problems customer across digitize businesses. what accelerating the customers the our benefits datasets expertise and customer's which Artificial today to large It's connecting to bring platform expand live small confidence, the with service to we of delivers experts life. the progressively problem to across opportunity by and the self-employed, we learns them application AI-driven have a face, on comes industry. seek our we few context, that and this and expert experts, pressing people Imagine deliver mean an it and let When experiences. serve me Let with chance It's to consumers, I our the where most

decisions and business we using we as channels. help faster of and an can our QBO are serve their customer's where least, are Turbo, use for platform. products and with mid-market see engagement accelerate connecting to Over capital. to on growth focused with disrupting money, find focused payments This the across with the ends to artificial opportunity businesses customers Last small increasing our not focused our but our we on financial to we small also offer product-based is smart by For to make active we across on center We're meet. funding value they tax better customers time, beyond platform customers are so owners, vision in helping access Advanced. business make our sell to being intelligence consumer

disruptive help mid-market a price. need provide what customers Our AI-driven at platform expert will

start on We opportunity in are are to journey. we a off us this the running of excited front and about

our would privilege I an want company and our years extraordinary thank to foundation through incredible for forward Co-Founder, customers, lead he I and Intuit. is honor quarter. results such left ago, a like the Cook, pleased the has to to employees, partners strong first-half and the with creating Before thank behind. I close, another Scott our and Brad look true XX for It future. We're to for

Now, open let's questions. for it up

Operator

Our Instructions] first Morgan Weiss [Operator you. line Stanley. from of comes question Thank of the Keith

Your open. line is

Keith Weiss

drawing the simplification more confidence and two, returns the law dig in to taking -- question one. in impact changes season, quarter, Nice the numbers the compared how want DIY, to on TurboTax thank Very specifically the you know you expectation? the over of gaining been, heavily. guys of more with of it whether expectation the TurboTax, of question. tax people tax and and indications to is it's early I of are they're like sort that? been And it is what uptake the is promoting all you early focus been your there to And guys have on maybe are enough nice has Live parts. any line the into actually of then on guys. I page. terms for some TurboTax the One, It's that user, your landing Has two in uptake sort seeing very on

Sasan Goodarzi

champions answer, your growth that one the believe with do-it-yourself, the category. simplification actually we're in our drawn more we we've And that is, category quite the seen Hi, actions, you pleased and two-part lineup, the to for first Great. folks category. Thank potentially it as with A question. our the has with for with your that Keith. tax

thus we good what feel So, see far. about we

experience as In terms of there's with TurboTax year. this improvements uptake that we you made multiple the know, Live,

it of we scores pros, our for One we've consumer available like we we are. all where PRS them are for and the both thus made and that far up, our we what of skews, see, like and being across

Keith Weiss

comfortable we're a that for if offering? like live Live, on other be thinking can Live, in margin impact I Got still because real you any side sneak Michelle, are gross is wont person it. guys I a And there mean from TurboTax TurboTax there of about maybe when that follow-up the real

Michelle Clatterbuck

TurboTax the right. for on and Thanks Live, you're Keith. Hi, question

pretty have what continue us opportunity We about and and pretty in. is opportunity you think which the big brining segment -- excited it to Live be when about the there, customers access and to assisted we those gives the

to look and gross we pretty mark, our feel the for continued around good margin, XX% will As that that we've at time. that, stay over

about we product. is core higher our quite that's TurboTax for the that, is great than ARPC the the a have of TurboTax things range with bit One Live normal for price that what

in even first it, so to was And we do though year the involved continuing have our we're Last there. year. people efficiency drive

be. weren't as so, efficient before we And said as you as know, we've we could

about about are we continue we We standpoint. we from it. on a so that, work And to margin but feel good good feel where

Keith Weiss

so you Thank much. Excellent.

Operator

Thank you.

Our comes Brad next Zelnick question of Suisse. Credit from

Your line is open.

Brad Zelnick

Thanks look congrats so nice much, a per spread and tax on revenue average What TurboTax of can and increase like looks growth the consumer the offering? at quarter. we driving growth, ASP you're the nice give are mix revenue And Sasan, return. on or you're it? that takes between in it sense skews unit a if you seeing of and puts spectrum that's mix us Live a across the now

Sasan Goodarzi

Hi, Brad. for question. you Thank the

like actually volume. As we And mix. we're got price, multiple we've of levers you what on and mix, know, seeing

and TurboTax is those skews. tax the uptake Our benefits we two fact seeing across more multiple we're confidence our in great, means Live our their which delivering available is that offering, in Self-Employed have confidence areas, for that we're higher areas. two, have seeing customers, customers refund. because they'll maximum both and in One of are it And

good feel it, So, drivers we the of are it. and those about

Brad Zelnick

early we to the either sitting follow-up, and that scores just customers and for along long into this meet should recommendation in could Michelle. and TurboTax hear with think season, doing that. How later your queues yourself as with I we profitably? ability go get It's add about the a demand avoid And success for great to strong Okay. Live the that product or season

Sasan Goodarzi

the multiple Yes, that great season. that's question, our we and for in and something scenario we're teams throughout prepare it's year, as a have different plans

And for is, pros, first think our I did we platform of with we last case terms our the we of the things. year, scheduling pros. this gave thing we in assessment them for start ability onboarding One, customers management. deliver I this that for were on ourselves year is inefficient multiple our the would but

our effective more far deliver and are they efficient so to And for customers.

we So, we feel usage and the season. ensure we capacity that good of different we're that multiple we the have, have, that have to for the prepared rate the scenarios rest about

Brad Zelnick

again, Sasan. Thanks Excellent.

Sasan Goodarzi

Thank you, Brad.

Operator

you. Thank

of the question next Ross Our MacMillan comes from RBC. line of

is line open. Your

Ross MacMillan

my Thanks I congratulations well. and as so much, two have questions.

Just first on tax.

what free-filers change is is, I the or And sort of and unit One shift paid? appears that category year there that assumption more a two might the share prior this free is become mix secondly, away may way things, is I think a Sasan, fair paid it DIY actually things we've towards was of wondering product year? to your for noticed if, fair mix given that the on opposed the that you then offerings potentially implications paid that. part as changed, the the assertion. some One of and that filers. And are guess And way the from free is as forums mean about

Sasan Goodarzi

share not to IRS it up one it's question, deliver customer. make able up -- Yes, lined business things want Ross. And free an the number growth offerings right that offering, the thank number of are customers you, then that would good we awesome just this day, what be per we some is, a about really offering, are to four we And we and actually to seeing least, it of about look year, Great the we we and champions included the number and we offering. But in in we're of our our about with good category. revenue the the the to defined so DIY best last And data season. XXXX, what the then benefit. category, We of but free customers transfer. the wanted IRS way returns, the by is end lined of of take of paid into growing as ultimately levers and feel the our in category. it's category And to a seeing. IRS -- reminder, year-over-year feel matters for uptake, are are for a what the there inclusive as At putting offerings the us and the driving early seeing products,

Ross MacMillan

like to test one maybe bookkeeping there. out And it's I guess, not was product some know follow-up, commentary one a other just product, that there Great. around, was And I the just yet, maybe of that, anything of kind there's around market in but was talk your I to in potential curious future? on thoughts just product that's the and if a about

Sasan Goodarzi

I Yes, asking QuickBooks think you're about Live.

customers take needs the just me some and confidence, think and enrolledagents self-employed, our so a connecting and customers areas what's small face one bookkeepers, across common step you When testing running earlier AI-driven to what's is about most context. focused back doing problems There of a are people of platform. that serve, shared an to connection. learn our the to platform. And of with and what are small that we've important on we I accountants, that is we around and important And make consumer, setup been some important businesses, on to experts that all expert one Let biggest businesses. test

and helping in seeing our so growth. test, so it's And far a in enrolled we reads. the what we early we because two-sided And platform. see see we're It's ultimately also businesses, bookkeepers -- what about CPAs, it's but small serving far, like agents, like we

Ross MacMillan

Great, thank Congrats you. again.

Sasan Goodarzi

Thank you.

Operator

Thank you.

of comes question ISI. next from Our Evercore Kirk Materne

please. question, Your

Kirk Materne

thanks Yes, much. very

about Online Advanced. just So, QBO want shift to really QuickBooks Sasan, quick, and talk over to maybe I

more turning expecting midsized is that? follow-up platform. of Could on thus who keep You good just expect to off to one an And you're customers just of the maybe to actually were as for for new be of the guess balance are to sort in there progress customers that, to about we talk mentioned on for you a the I meaning Thanks. expect initial that customers sort customers bring Michelle. near-term there about you well had as product then feel there's I far. that sort that a on opportunity you the

Sasan Goodarzi

Hi, me this the just space. we Kirk. let your start you Thank into question. And some for context think about way with

opportunity these First between us they these the small is of And overpay. all, XXX, with employees is customers generally this to customers. that the XX way for businesses and to that space serve in the line there's challenge really and are we over-served draw an

that's and be news Advanced ensuring to is, is look a we believe Enterprise, growing have the this Desktop And new, digits. the serve it's out it's we cloud. good we there ready because in and that made decision a XX% now to are we do at ultimately big opportunity that $XXX nurturers. over be mid-market, the been platform we we at our the XXX,XXX but customers. existing Desktop well with business want we it's build Now And for QBO customers, over today we've When disrupting double there really customers, XX% first can and these to look as Enterprise, we stretchers hunters million

it's deliver for we want that but platform need very not are sure we play early. only space. make the this to to so platform, after customers new we But building remind as the just we about they we're We sure not go the services cloud we that also us and how but want just know grow I to that to And would in in now deliver. begin acquisitions. existing we our to that also the make

with And early so results. very the but early, pleased we're

Kirk Materne

obviously, line on just bit nice Michelle, evolved that on a really tax result B, leverage operating a as there natural served was that showing quarter slower, you little flow Thanks. know, through the just Okay, that's but any given sort then that And this seem was second from shifted spend margins of of earnings into terms the of margin the the helpful. outside top of operating to that be the season bead in the model quarter? third -- may or quarter up the

Michelle Clatterbuck

operations We do forming our shift to do the really normal Thanks, of to tax one expenses we to question, the yes, business, that Kirk other. year see We with the season think the quarter tend total when and overly we on from on a margins. focused not about get tend just that. slow for focus

And the would too not quarterly and get up on given movements. focused stay the we've for caught the so I guide year in

Kirk Materne

thanks enough, quarter. and much the Fair very congrats on

Michelle Clatterbuck

you. Thank

Operator

you. Thank

of please. comes The question question, Schneeberger Scott next from Oppenheimer. Our

Scott Schneeberger

very and much. there're category tax of tiers Good one, if in how My robustness you about seeing afternoon trade Thanks. the in the call tiered lot changes Ross' the obviously, curious on to work. standard your TurboTax, -- similar that? nice Thanks deduction, it first end, but -- from a to I'm with it's handling to are but reform. just from the specifically down in we'll earlier itemized are and change changes you

Sasan Goodarzi

Scott, you question. thank for Hi, your

I in we're really tax a earlier, and yourselves good champions easy think, and to taxes the it fact is that the how with simplification growth us consumers said being to is seeing context the we I category category. the for do are in back promoting way

those it's different out of to Now, that realm with that to respect to free. in of, now across trade looking for. that but the and assumed customers exactly up where But also potentially one, they're the the we terms fit lineup, Live because playing used TurboTax of those may confidence pay, be kind within need

with line is very So what expected. in what we much seeing we're

Scott Schneeberger

have if complexity we February. seeing right. far changes obviously, year, from as lot everyone competitive I'm Sasan, for and All and don't behavior -- tier a of IRS just that, -- curious changes you're then this Thanks through of middle as rate a

You go had a on back to week that.

falling a -- in ahead midyear, tax the think think you having that do how in of any handicap, that So compare or -- competitive stepping do I behavior? or you the anyone not know through but is seen you Thanks. in just through out categories it's behind back the yet, base

Sasan Goodarzi

Yes, great question. you, thank

for this -- their know, foot what far. for one. our the just competitors, products, myself in our TurboTax and like would And respect good say forward. years, point putting they're lived like about is we we marketing up so other seasons. best as You having season good we reminder see all revenue three just Really a I land is IRS really every grows Everybody

we the point revenue very For and we focused category the and every category far. we see what X up are grows on is like growing so our

Scott Schneeberger

All right. Thanks much. very

Operator

you. Thank

from next Brent Thill Jefferies. comes of Our question

Your line is open.

Brent Thill

afternoon. the D that to and for to curious you the paying faced. for half attention year, the other I'm first differences Cell big just back that from Good the get you're should about a XX back factors that how Obviously, XX% of half. you year, the cognizant but comp half we yet from growth to last of? any be think you're guiding to eight

Sasan Goodarzi

for delivering we've of delivering both Hi, Brent, and XX% guide a guidance articulated we and for look year. in you you you and legit to to growth of as and QX in and our at our step very we'll for And deserved then the course year guidance customers question, we very rest we're the and just and that QX the on QX, and know, principle guide given quarter. course QX is guidance focused the all our the back of we delivered top line

our imagine we the doubled can more are laser third revenue we just to you want sure has delivered, at and focused we than that As quarter executing make that.

no there's -- the new guided nothing So other and year dynamic guided for than for we then we the quarter.

Brent Thill

capital of and the the give you're year here have a buyback's in sense the terms know down any change Michelle, us allocation you of going? about you're you thinking in just balance billion authorized, that first And how $X of can XX% where of the half I in still Okay.

Michelle Clatterbuck

QX, $XXX growth. our of drive Hi, stock Brent, which XXX, there planning we in know at thanks. was has We we financial not Thanks apply decisions. to investing for the so bought a our in $XXX the really million million back business question. as principles In been worth and up capital mentioned you change look we I in QX, from -- any and

As I then buying we mentioned dividend. and at the in shares -- back acquisitions paying and look at

to where billion last are I where feel pretty with pretty happy about We've we're $X good would years. so now. shareholders over And and are right we four about we so we the say returned

Brent Thill

thanks. Great,

Operator

you. Thank

Merrill Our line Rangan from of America next the Kash question Bank of comes of Lynch.

Your line is open.

Kash Rangan

very on Sasan Congrats to respect of that's the that thank to as over Hi, business? a from me. QBO I the Thank very you you with had it TurboTax Intuit. improve question business in also much. are Intuit retention much, CEO taking to available the and to tools

Sasan Goodarzi

question the hear your out? cut kind in didn't just mind Kash, whole words. you your Do question, thank repeating you question… and because for and your you I

Kash Rangan

a available are -- into Intuit going the We're available the TurboTax Intuit are rate to tunnel, to tools Absolutely. businesses. to that of to improve happy The in and tools strategy do QBO that. retention that

Sasan Goodarzi

it, it. I thank Very -- for Got are instrumented. repeating of it. just helpful, would that our start is our with got all products approach you

delivering roadmaps. the a have are So customers, and voice all we products, We what at the across longer actually are And we look roadmap we where that at separately term we of what us at at recommendation product for look where while look customers scores. improve using. customer, of our look informs is on to term in that near we in data hone strategic really need helps very the the we experience,

retention informs we look are tool ensure I that we observe voice look platform. say those to the recommendation And data, we is of is products combined what at look across the we at So would product what our customers improve do with that customer, we really our the how instrumented. uber We at scores.

Kash Rangan

How are you any there and past TurboTax, and Particularly and use it. light is to we for issue think upsellers had product lever? potentially out of that to the whatnot. more make competition about on That's the that people retention we've in better how a do dropping because Thanks. holistic is so experience, there way

Sasan Goodarzi

a bought we child actually house about Yes, Live, one customers, sold matters really the they why house or that reasons and had. can they is they this new a that to they got because of a They a return question can proved got the it so and they just exciting tool question. are what last not our because We've we're that after what's is nagging be one That's And helpful. or implications that or very it, so which they year. are the of married had can asynchronous goes answers. to answers to just real-time experience about so heart what Live, same a improved but that and get excited so investment TurboTax only of my or just ask they get the conversion retention seeing now a made had most tax the customers the year

Kash Rangan

much. you thank Wonderful, so

Sasan Goodarzi

apologize question I Thank Kash, first time. I you, hear didn't the and your

Operator

you. Thank

comes UBS. Lowe question next Our from of Jennifer

Your line is open.

Jennifer Lowe

you. thank Great,

in do have people more TurboTax talking to as extent press a this because the money expect than are we're shaping the I the know, Live, maybe trend and impacting things got Does season first. see you people they do think all we've reasons sensitivity, a to up may and in get or they opinion big how price the But this or your it people on seeing that of start it you phenomena. refund want is past like tax refunds about I'm I'm owing is that know, getting don't second potentially a behavior? smaller as be refund change just the big who's getting one year the refunds past, a you seen money to curious now takes where slower owing just file curious, are

Sasan Goodarzi

do customers the Jennifer, them If the that's product years through we've you I this a What for question. Did I see it so expected it why just through my because TurboTax hi reason right get where pick important data in our for and question rest Xth and refunds refund hey, to them. different. my product, our it Live we thank in how your refund, surprises for they question answered, that the pick learned the right have confidence Yes, for way, the plays the refund. taxes confidence through are it more will is all that's the is that becomes help. right, customer is of, nagging can the way season questions is February and have customers, just product, pick need per it I by right so my product is they on a and answer the of confidence which does ultimately the their share and question, they did I which back they out, more why once was don't and X.X% IRS sensitivity, but have shared that context, on impact, customers, down focused not to do our With but they customers we'll the year-over-year inclusive

Jennifer Lowe

question, it's Great. vein. And just similar of sort second a

whether complexity e-files, DIY this something to potential the new that about taking at do we longer reports and the season the that relative any same get couple about could how indicate to of Is share but pros for e-files because you durability professional persist the those you You just this the of we self-prepared there legislation you. are do delta year, filings think of as look the with certainly, even know, for between next guess, gains in, know, little grappling you a seems sense increased think I if that and talk gap. or move that's professionals the the Thank the through they're category, press months?

Sasan Goodarzi

are there things have it One want do do we for think to have them. More tailwinds. is two somebody more and I else versus big customers digital themselves levers.

want that they help, the there. to that is make need they expert when However, sure

So one, there are tailwinds.

is I say human to answer on as are essence folks there growth, thing to to category transforming the view in but is help Do confidence to drive more there's it side the know category, tailwinds we which second the be not focused think gives Yourself a the champions I is because their category addition to category, on the other lead assisted would which expanding It do going why our we question. the in they ourselves in only themselves, the

those to I persist. we will the as so And that say drivers over two would are believe that time

Jennifer Lowe

Thank Okay. you.

Operator

Thank you.

Beck Next KeyBanc. from question ahead. Please, go of comes Josh

Josh Beck

I you thus and registered turbo, a you wanted XX million had are how I in know taking initiatives can consumer the give you Day season across tracking those in sense users you ask mint early the Investor thank to that question. it's highlighted are the but -- of us segment Yes, far? and know I

Sasan Goodarzi

your for Hi, you question. Josh, thank Yes.

being First that in our to customers turbo consent make service And customers thrive. the are and focused we our to and ends this our -- XX back our we've introduced vision financial meet. that And make focus products. features. on, three of -- year customers our for four. ends match we go And to of the help with make are mortgage to partners I'll their new in we our got financial ensure we helping all, of offers is And just with XX fact, data best investing, the is to of matching products. meet we helping really have lending, four where the All customers ultimately verticals

far again, those the we Investor we're but with like seeing what data, the early what learning. So see, results coming share at we what Day and this like we're we up, we'll year

Josh Beck

And been, had around online nice, follow-up a I Great. I upside surprise. That's a services. positive think

that if nice that areas of becoming there your inroads You unpack are coming the you wondering about or and services in ahead front? make more payment capital excited I'm just are on expectation on you're more had some you updates as and certain payroll. maybe

Sasan Goodarzi

on money helping just to our helping money I customers payments to as the them and get faster they to but -- them we pay launched access we as paid very customers, our it's Yes, matters fast, them capital very actually laser-focused which faster think to employees and way a foresee longer and the are hold get this both being for on that is get proud our them our of is looking most hold team, day payroll are or on and because would all case of money helping much what in to what and ultimately their which get you and problem in their their or little the and innovation and pockets money customer whether those experience innovation they where as to and with teams to it share about next into time the in money their very comes to we tracking that to we can drives longer very something And talked that and our focused efforts how hold your have accuracy pay continuing. teams on on more been accelerating some employees. the you customers customers if focused the they matters just helping that's employees marketing service before and when same bit pay earlier improving much will I funding have day of on

Josh Beck

Great. Thank you color. for the

Operator

Thank you.

of Chris Sachs. comes question Merwin Goldman from next Our

line Your is open.

Chris Merwin

taking for Thanks questions. Okay. my

this XX% more strong it guess into I think continue up. tailwind might that or unless was - we coming of over Should Just in a I area U.K. you up international line that Thanks. I and terms And recently the legislation know about should the year-over-year a effect think strength in MCD April. all. have move follow growth expect for an is throughout continuing we really of we How sub I taper not with been to and off. something sort of quarter that has

Sasan Goodarzi

Chris, Hi, for your thank questions. you

create and by Canada. And team's about quarter tax with - change Australia digital to the XX% digital businesses actually and performance countries continue making for to we'll contributor to very will the this pleased it for invoicing. several driven in behaviors We international on are grew things believe a be it their growth a essence U.K., small like reason we and tailwind have

we view growth. maintain So to catalyst a that as potential the

Chris Merwin

they And and but XQ on in in you're thinking Okay, just what just follow season, little again a you more it the the tax at e-filers, how share about again great. is obviously like up very were looks bit contemplated curious down category guidance? TurboTax early

Sasan Goodarzi

the growing category look we out refresher, plan our quick growth a IRS parts. season, growing at as for shares, plan and do by the season just we in and as then Again it game we

the of that and we rest where we excited be are the about. we're game have we season expected to far for thus So plan a

Chris Merwin

Okay, perfect. Thank you.

Operator

Thank you.

next of Guggenheim. comes Wong Ken question from Our

open. is line Your

Ken Wong

on that goals at success top early Great. out terms you funnel customer big improve the conversion the wondering was one front. traffic. I'm of at that the the in Sasan if Day, of guys laid you in to share there have of could of any you trends Analyst terms guys

Sasan Goodarzi

hi, the multiple running that really as improve question a get the Ken. that. because us experiments. we different you for a have coming Thank opportunity is customers your to is company focus the we Yes, and for big are us And to we

continue in TurboTax same the thing to we're also QuickBooks. experiments in login We run to improve actually doing traffic and

and organized us we've example an reminder, different us that us they and rollout couple in many understand really their come for they're payroll, many having a come from come get reasons generic is they come QuickBooks, -- will we've user they to to for because size for been been for for right and the invoicing, just continue quickbooks.com -- QuickBooks Our us reasons. to just had to may they what customers, questions to different from fact to pages to intent multiple now right to running may looking asks them people from take may to and us come a that as landing in winners. a shifting We we tests

I opportunity be of we and because we never here a have like we for So you progress see in this room our satisfied that lot and will tell would improvement so much we area.

Ken Wong

plan Michelle, guys marketing guys if that that year. season Can the little on to been for mind the of you affected? on comment at that's little the earlier or you you start spending tax not mentioned maybe up fire and putting gas has more it's dollars than been how start was follow a then last a effective And it. a whether considering Got then

Michelle Clatterbuck

Sure.

for question, the thanks First, Ken.

advertising? First, have our you seen

Ken Wong

advertising, customer I customer. QuickBooks have your why -- that's seen am TurboTax I it's and

Michelle Clatterbuck

it? You liked

Ken Wong

at little truly this think Well, it, well, double-check. see -- which yes, site, the one remember It's I effective. it's but can't I saw moment, Web was

Michelle Clatterbuck

know thing. found same what we Well, good, Well good. you the good,

level customers is our to so that really push know, more is really at on tend different spend always on we or want outcomes. QuickBooks as us you're to that the be we able back not funds because side on and it whether best to and on we manage dollars research LTV our are, we we tend big marketing to our marketing to better at should paying marketing deliver outcomes side where so that's and so be there when get some and with TurboTax you to we look so driving to when focus important we play make we're around the looking enables the decision the how focus margins spend to So us and company want allocation

how so I with with we pleased And now, ads. we've far, selling. with the and right am so are TurboTax we're excited metrics with seen so to our have, QuickBooks

Ken Wong

Michelle. Thanks it. Got

Operator

Thank you.

Raimo Lenschow of question next Barclays. from Our line comes of the

Your line is open.

Raimo Lenschow

Hey, thanks questions, for QuickBooks two quick taking questions. international. my on I the on had first

there. the regions had how see doing? am mentioned aware follow-up. we success readiness, those of You I France talk bit and Can to wanted a situation just of markets had and maybe out India you you working where And about little about one were are on the strength I and Brazil U.K. but

Sasan Goodarzi

you questions. thank Raimo, for Hi your

of that really three were six In on about U.S. we outside I'll context of countries hit and Just Brazil, is there teams U.K., France, in we extremely the we is that the and and our use of other asked that Brazil, them the both the UK's a France, enough you it on India. very to early market. focused to course for and in Australia quickly. remind Canada, the each PRS progress it's the compliance that going like it's see almost large actually cloud. important active two market. It's It's is up. ourselves In shift the

on a And and where to few government active terms seeing are moving of cloud. and very of product Again, to fit India seeing but key States early digital least, there accountants with then involved, years it France very we tech the United significant the small being PRS, we're going things and shift markets document is was and focused one and is where capture. see on transformation through between savvy that XX ago like businesses, it's exchange getting focused businesses. cloud. the not and the a We use the but just just we're the are them in is in increased progress we the last We very problems

the France. making seeing and are Brazil in same is progress we're what rate it not in We but India, as

Raimo Lenschow

business just is one lot versus Can the the can Okay. you to and like scaling. I And are, can on going of remind its duplications where season meet remind follow-up, where moved you your expecting and us fully am where a AWS tax us Thank scale AWS already? you the then you -- what's to immediately you.

Sasan Goodarzi

better more our about with automation they it drive for be much better are helps shift excited more can productive innovation. AWS developers we a a Yes, and very the far at so tools,

services me expect other that but FY'XX expect of by the large of of take caps well, over more most AWS bridge. start -- There FY'XX will on for and first AWS. of most is we all, to to the time, on middle be will delivery let the already services be going be part by our for most always with We

Raimo Lenschow

Perfect. Congratulations. Thank you.

Sasan Goodarzi

Thank you.

Operator

Thank you.

of Turrin next Our Bank. question comes Michael of the from line Deutsche

line open. Your is

Michael Turrin

Hey, good afternoon, thanks.

business accelerate, can number Following products do for hoping you up more on the bit just expand some attached of the additional our services segment online time. a commentary proven in over that could continues small those what retention around to rates

Sasan Goodarzi

quick I Maybe Michael, of guess, just mentioned you repeat a earlier. what question. for I your thank

the getting see progress focused see. We around to contracting paid, very employees around capital and paying customers, that is like what which we are and most on we and we our matters what

to of XX%. all or committed on North don't customers most what's and goals business you revenue our focused what to being is we around but important ultimately you online deliver most ensuring set We for what's important all. the to ARPU, that think I we've remain manage our

XX% on growth, would the so focus And online revenue I revenue growth.

Michael Turrin

you during a by season, much whether helping us the of XXX,XXX was Self-Employed, there help might on how those that more added early subs some TurboTax that with are be quarter, the there drive then additional driven through parse just Thanks. in And Great. synergies could you factors bit synergies?

Sasan Goodarzi

absolutely. almost last all, the Well, compared year we're the of this and adding needs helping XXX,XXX time to about excited of first Yes, Self-Employed. really

going like directly and We what to from TurboTax that we're not making we will both the Day, channel. now at but break out but across Self-Employed out the seeing where across we're break we it Investor ecosystem came will that progress right the it's something

Michael Turrin

questions. the Thanks for taking it. Got

Sasan Goodarzi

Thank you.

Operator

Thank you.

Our Pritchard next Walter question of Citi. comes from

line Your open. is

Walter Pritchard

see how drive some Just at and Sasan a traffic, about in help some you're then of increase been for you, could hopeful you there understand point? traffic on talked have had what and early you're year TurboTax.com know traffic terms this follow-up. flat in Day at you you I last the the Analyst then I conversion, us And could season that seeing

Sasan Goodarzi

with actually confidence Absolutely, customers with Walter. help where is hi, our Live. less Yes, opportunity realize TurboTax about focus traffic, growing but more have actually an they that back we to bringing them

So really and And back there focused conversion mix about so that versus improve bringing see. we'd that improving looking we of even the what traffic are we're more on like folks the year-over-year. those to already of it's far so

Walter Pritchard

small bringing side, and highlighted update the in on had small ARPU groups might focus and business that just business success on TC. then the what with help the good maybe to you've of product And around you breadth to down Can of think businesses M&A the Great. you base? there as I thinking some you're look terms some issues in drive the like the us

Sasan Goodarzi

things on all did will what in but easy on button and are most. us stages. our that the push the to reiterated and matters to that ARPU a about for teams put driven or innovate capital, want through make all focus accelerate what's to that to pockets their time everything sure tracking more earlier, growth at in most being out still we're revenue continue online to I that that to employees to first areas to we their their on I on money early we is goes because they do money not help the bank like you talk longest focus Yes, of not our Sure, fact that more focus allows only by because we the XX% in above their our innovation hold important ultimately customers, and important is money Walter. customers allows we anything payments them allow it before in have innovate payrolls to

businesses as be will multiple I one to. channels. where accelerate look ahead, how externally to that the will look and internally we'll an across product our be of we we if would area manage areas accelerate we And that based do our different build focus look help think need

Walter Pritchard

you. Thank Great.

Sasan Goodarzi

Thank you, Walter.

Operator

Thank you.

Sterling of JPMorgan. line the from comes question next Auty Our of

open. is line Your

Sterling Auty

how uptake users TurboTax users Yes, would guys. curious I'm versus so first this far returning Live of out TurboTax time TurboTax thanks. Hi the characterize you season, coming users? of the those of users

Sasan Goodarzi

elsewhere. see way now dropoff ask an because reminder, We're release seeing later Hi, the shared some a may TurboTax data I as platform. mix but and tell can digital Day they to we'll lose confidence at less now didn't migration segment a will that they have seeing we're are Sterling. These customers a have that just assistant that for we're points accelerated go there's Investor And like ultimately that get we you expertise they get from it. those we've on seeing we help a X that would because as million and they question ultimately

to on so of and literally are we we important in a it's see. So Live we adjusting mix journey what we're also the basis. weekly like are TurboTax early and we like learning and that But remind seeing the we ourselves

Sterling Auty

then how and one characterize would promotional the and pricing you far the season? tax side follow-up, in activity through so the Great,

Sasan Goodarzi

that they terms product everybody with to we we've go deliberate the we're their being we compete to because what mentioned for game surprised strategy. innovation for value would and that do anything long-term. those extremely have say we pricing Well, we I those be their a earlier, can seen and us and ton create both all respect and keep customers every want and do I choice everyone's able where being as of after pricing customers in we of truly not in has upped that aggressive but with as just of year

Sterling Auty

thank you. Great,

Sasan Goodarzi

you, Sterling. Thank

Operator

Thank you.

from the Brad line of comes question Next Reback Stifel. of

open. is line Your

Brad Reback

much. very Thanks Great.

fan I'll quick House. I'm comment, with big of Michelle, So start the a Coffee a

Michelle Clatterbuck

that. to love hear I'd Awesome,

Brad Reback

Thanks. and process, Now are that and that? of mean that a last Brad a I talked to is the or about you big beginning are us promotional took Can quarter we the activity tailwind smarter part going QBO work, to that more where tell in Sasan side. to we believe I more see of forward in maybe

Sasan Goodarzi

country, have use in cycle different U.S. that and it exactly very we and where opportunity an believe he was Brad what but and it about strategic country we looks as just is of shared. Yes. let think we the right depends me example. And on are as we a pricing in really country big feels which by

of people believe You because self-employed are to opportunity to and all about way QBO line, know connecting right to we're doing is now have the have we tests running Advanced the a which serving now mid-market now is to think over we time similar different really is price and tasked for be very product us. us we across number our we really tailwind which giving Live, an test about experts And that that TurboTax Cookbooks points Live. will and with a

Brad Reback

Great. much. Thanks very

Operator

you. Thank

Analysis. MacDonald next question of from First Jim comes Our

open. is Your line

Jim MacDonald

year any TurboTax quick low I'll you're Live end on try end the I thoughts of Live. Yes, the Any season? a question. have you in low questions. Last surprised another at couple the mix of seeing thanks. on had interest what TurboTax were

Sasan Goodarzi

going and Yes. last has you is, team they you their articulated their to question after Hi able and point questions. some great the being no at Jim, tax answer customer year is focused that and on situation had know we're insight Greg really which will a matter just some every and confidence what

last that with the made which and all therefore so, we and available went to because them that's uptake that the why everybody had across we seeing it SKUs chance year all And we hypothesis the across uptake for the we taxes and gives And learning make season SKU. this SKUs, we has Live a confirmed into is the everyone are which every nagging seeing TurboTax this question complete available let's across are confidence. their ultimately

Jim MacDonald

conversion. Okay, which been increases pretty Any due the great. G&A guys you very this thoughts have that to efficient And we amazing? this Michelle on really any on have saw AWS R&D low is maybe year and year,

Michelle Clatterbuck

at What so back the the is it's it sure are to much. I make question. looking I would not want we're to but I that we also appropriate Jim, actually drive levels. Thanks, take investing we mean appreciate always to efficiency

that what an so say would to the We I look look spend, of XX% really quarter-to-quarter. to about it on in annual we may And specifically revenue. basis around stay R&D at when vary of at range XX%

and basis. that's to so we over we that on tend really at decline on, we focus of ways had add G&A, what XX% the of annual to look And revenue to that to see year but we do last get in at an look time, on end also be we

it overly to and continue think caught the would I get quarter-to-quarter So movement. holistically not in about up

Jim MacDonald

Thanks.

Operator

Thank you.

comes of question Millman Michael next Millman Our Research. from

is open. line Your

Michael Millman

to to in was what amounts what on clients Question varying year, that you. was you promoted and that it clients, years? in promote extent this SKUs have it increase coming RAs, or new you and to if Thank that more extent it them all brought to for existing

Sasan Goodarzi

thank questions. for Michael, you your Hi

not we anticipation to, business testing referring this loans. got that's first we no XX you're if interest now interest a a referring rates with And was you're refund of anticipation think are that ago out remind years level friendly. consumer of What were is because that us I'll what just to loans. I

ultimately serve very which in to we friendly ultimately that are it stands areas them the the consumer can for. is important in consumers company So what a and do way that most

getting and some the we and and inform we'll getting decisions make results do those of we're So what tests now year. next

Michael Millman

going Are you it market year up one limited XXXX to XXXX? think last another is I you and case competing for the which XXXX case to

Sasan Goodarzi

years, We're to And is we've a We're a reason is the one similar a now. not Yes. testing done previous in lot main method the switch from in testing $XXX reason between it to $XXXX. as of to ballpark another.

not it why and delivering it's is what a different limits. on very our not which we're And against we're testing a that is is so ensuring customers focused therefore not, grower to we're conversion driver really it because matters category

Michael Millman

at it all? promoting you Are

Sasan Goodarzi

No, we're just testing it right now.

Michael Millman

Okay. Thank you.

Sasan Goodarzi

you very Thank much.

Operator

close and remarks? questions. Thank you. showing like with additional Would any to Ladies further not I'm you any gentlemen,

Sasan Goodarzi

Yes. Thank much. very you

I momentum are all, the have and results our We're to very power Thank we next everybody's connecting forward inspired you that proud by And around we containing and the world. very of appreciate you. teams questions. the of the look very really thoughtful with and First prosperity quarter.

Operator

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

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.