Intuit (INTU) 22 Aug 192019 Q4 Earnings call transcript

Company Profile

Participants

Jerry Natoli	Vice President of Finance and Treasurer
Sasan Goodarzi	President and Chief Executive Officer
Michelle Clatterbuck	Executive Vice President and Chief Financial Officer
Kirk Materne	Evercore ISI
Brad Zelnick	Credit Suisse AG
Kasthuri Rangan	Bank of America Merrill Lynch
Rakesh Kumar	UBS Investment Bank
Brent Thill	Jefferies LLC
Kenneth Wong	Guggenheim Securities LLC
Michael Turrin	Deutsche Bank AG
Matthew Pfau	William Blair & Company LLC
Preetam Gadey	Barclays Bank PLC
Jackson Ader	JPMorgan Chase & Co.
Christopher Merwin	Goldman Sachs Group Inc.
Kartik Mehta	Northcoast Research
Josh Beck	KeyBanc Capital Markets Inc.
Scott Schneeberger	Oppenheimer & Co. Inc.

Call transcript

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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 Fourth Quarter and 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 period. Instructions] [Operator

now of over Natoli? Finance I'll Intuit's Jerry the President Vice and turn that, to call Natoli, With Treasurer. Mr.

Jerry Natoli

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

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

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

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

basis. in Some and rates the comparable versus of and comparable the press in today’s refer remarks metrics. period the numbers noted, period, worldwide to non-GAAP reconciled prior-year non-GAAP to We’ve GAAP these all numbers are business Unless a release. associated refer and otherwise the current growth growth rates metrics the on business presented

our website prepared our information be financial will remarks supplemental and on of ends. this available call after copy A

Vice of Before my so with I over I end Sasan, to leaving to this that a Intuit turn in the I’m call. promoted the at good will to share be It’s pleasure earnings teams last our retiring Kim of engaging working I'm has Intuit a wanted been it the January, privilege and been years. you leadership shareholders hands, at with Investor all over of Watkins Relations. as President

the call over With Sasan. to turn that, I’ll

Sasan Goodarzi

years. over incredible the Thanks, friendship impact Jerry and your had the you've for

of finish guidance off Thanks XX% quarter beginning grew the original XX%, at us X% for a We we are revenue very growth revenue XX%, year full-year strong quarter the excellent of going Fourth today. friend. capping to of grew all you that to to year. XXXX. joining provided We you and the miss had exceeding fourth an fiscal my to

We platform well our we strategy AI-driven Group, XX% company fueled momentum Consumer future. Group. expert the Total was positions results, out growth durable the and growth revenue us our in for continued and the Self-Employed XX% Business in play Small this and growth across saw XXXX. in are seeing in growth in the believe by We

QuickBooks TurboTax Online platform over Online $X.X in grew totaling fiscal and approximately XXXX. revenue billion year XX%,

to year for another guiding the XXXX. strong year are growth fiscal We company revenue of in

revenue in Business. quarter Now, we revenue it let’s Business XXXX. than dig $X.X and run-rate, Small into the our to of quarter a and continue to fourth growth XX% strong Ecosystem billion annualized in in results our We XX%. another at Self-Employed Online grow more and Small with starting XX% Online is Ecosystem with delivered year expect Group fiscal

our biggest value deliver continue for services prioritize more pain We online to by to their points. addressing customers

We’re achieve capital, vision our helping being customers center confidence. working get manage with our business the by fast, pay to employees of and growth of paid small

to our the instead we five having year, change to is days our business-day launched resonating a funds customers enables this two their get to service business-day This that Earlier wait next payments, money. of customers. their to receive with next

online the in for Online. XX% XXXX charge customers Our strong business year using volume remained payments fiscal with QuickBooks up

more QuickBooks and year fiscal overall direct Within customers deposit on better Online grew next-day longer their we to revenue hold than introduced money their same-day payroll in manage XX% payroll, and to enable flow. to cash XXXX.

them support points as growing for offering stay time, employees payroll full-service help adoption our our we seeing same than provides which our pay a has lifetime value. compliant. self-service offering, accurately even than customers XX the faster more higher payroll greater we’re Full-service At their and and of is more

time-tracking, GPS on and million month, offering the their time-tracking than nearly employees we time such front, and are More which platform employees up for increases flexibility mobile added X accuracy capability year. of from TSheets the our last this new each tracking improved and as On both features employers. XX%

offering our customers about with designed disrupt to of optimistic Online needs small online XXX business addressing the are the We by XX mid-market employees. QuickBooks Advanced, to

While like we still is see. it early we days, what

remain are We these for customer needs about longer lot a learning presents term. that opportunity us a and this offering encouraged significant

Now turning to tax.

last XX% and season shared the in great Group As fiscal tax we a year Consumer revenue quarter, for we grew XXXX. had

lead a transform finance our consumer meet preparation consumer category, the Our tax customers their tax service maximize strategy in all to expanding This is to the assisted build our platform. disrupt traditional tax helping in is Consumer Group to ends category, and expand and by do-it-yourself beyond make refund.

grew innovation preparation our us with it. a using both we share process XX% artificial total tax prep DIY personalized improved the methods, within of now significantly has leaving by our individual and and opportunity. all approximately experiences, further Across TurboTax intelligence. customer season, returns share we the tax This category Driven large

our most free with market to robust went We offering.

the drive Consumer growth expect help investment the as experience, made season, ends taxes. for We especially in durable our across going we to business, to ways customers make intelligence beyond decisions meet artificial strategic look in free including this our and we

compared feel connects tripling business, which fastest TurboTax confidence drive while for to to pros progress is to lines a experience platform. other Intuit delivered customers operating our We this also made transform the to the ever to is improving contributor our we to our Live, great revenue our efficiency now about on increased number platform. our and We product level. our the the for reach significant using on among assisted effort of people by meaningful Live experts in TurboTax category customers

decisions aimed them platform them helps customers by connecting products at financial is that Beyond consumer to unlock ends tax, smart helping meet. our make money

customers up X We have XX season. million over registered Turbo, from million last for

near a contribution value significant to identifying expect our we’re don’t to revenue to more the we ways deliver While in term, customers.

about to opportunities better wave lie that consumers. serve confident strategy Consumer this for innovation ahead season, to in look of business. and actively next the is we developing our As our team We're the excited next Group

To year fiscal XXXX. great wrap very energized in are our and up, results for we’re year fiscal pleased in with we XXXX, another

now hand Thank it walk the you, financial let through details. and to Michelle you to over me

Michelle Clatterbuck

Thanks, Sasan. afternoon, everyone. Good

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

to segments. in Turning fiscal Business and with Self-Employed, Small XXXX. fourth for and and grew revenue growth, Online revenue best the during of continue XX% the which We the the In we better Ecosystem the Ecosystem business quarter year. growth quarter the strong to to strategy measure than health Online of remained forward XX% is XX% of XX%. revenue and grow believe success XX% going in expect our

grew million XX% U.S. Online million Growth X.X across subscribers XX%, X.X subscribers multiple subscribers to geographies, over international to quarter ending with over growing X.X with XX% the and million. QuickBooks subscribers. growing strong remains

XXX,XXX subscribers grew to up one Self-Employed over Online, roughly QuickBooks year from million, ago. Within X

a focus as growth we We additional moderate place services. continue on expect to to greater total subscriber

for Desktop year, the roughly our Ecosystem in the X% in revenue fourth expectations. line was up quarter flat with and

Enterprise double-digit our in our needs at in QuickBooks Ecosystem, the This fourth QBO further revenue the small pace addressing of offering. continued interest customers with quarter. Within to the our mid-market a grow reinforces Desktop business Advanced

for original Consumer guidance. the of TurboTax our grew units X%. fiscal Online above increased the XXXX, this revenue Fiscal while of XX% in the end is high Group units Consumer revenue year X% second season, growth grew consecutive double-digit XXXX overall Group.

fastest a since the grew XXXX, DIY assisted once again category prep As the quarter, we pace shared point, last tax the category. share over outpacing

this our for DIY to the share Online We category, see increase point. were pleased Within our tax a we retention again estimate grew half online TurboTax year customers. also

We made The more TurboTax number tripled customers with year-over-year. offering progress year. Live TurboTax our of than great Live this

both enhanced platform. in This operating and of season, technology the on our attrition this resulted tools the pros lower our efficiencies We onboarding efficiency experience also and for pros season. improving throughout the better

an to Live of It's route maintain For complexity. type gives application technology-first attractive based confidence we margin and their Intuit on example, that of operating Live XXX% and utilized this artificial questions pro approach TurboTax natural language optimal us processing, offerings can we longer-term. our customer the intelligence, to expand

provided the at the Partner high-end the in And $XXX we of revenue of original X%, up professional tax Strategic Group, million XXXX, beginning we in that guidance of year. the reported the fiscal

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

an resources emphasis to the continue top build priorities reallocating at with on We to continuing AI-driven our to focus on expert company, platform.

we the the via growth fill dividends. can't is to cash generate investing accelerate for to the profitably that consider first out Our our priority in growth. customer business product return revenue excess we to and our drive map. both and and acquisitions We We road invest cash in business share shareholders repurchases

We and finished our million We balance during and fourth the billion million investments of in with fiscal on repurchased cash quarter $X.X in XXXX. sheet. stock quarter the $XXX $XXX

October quarterly each on to We our we market the have remaining approved authorization, share, Board payable represents year. billion dividend approximately increase XX, XX% XXXX. $X.XX a This versus a and per expect of in $X.X be The quarter. last

guidance. to Turning

$X.XX per revenue non-GAAP share Our XX%, of XX% to growth earnings $X.XX, to full-year $X.XX share guidance fiscal GAAP XXXX $X.XX. earnings of and per to includes of

GAAP of earnings $X.XX Our $X.XX, of $X.XX XX%, per growth X% QX loss XXXX $X.XX. guidance of fiscal share revenue includes per and to to non-GAAP to share

of We expect GAAP tax a XXXX. fiscal for XX% rate

details QX in fact XXXX press and You and fiscal find our can sheet. on guidance release our our

turn I’ll to over back that, With Sasan. it

Sasan Goodarzi

To head contributions. employees, fiscal Great. future want strategy great sharing more a I the our we at to our as with about thank and our and you the X. be partners of I we their XXXX. recap, look for evolution Thanks, more October on Investor year excited customers Michelle. couldn’t year to had about forward Day into

going As a preview me our what to Day, Investor to you at let experience of matters what most customers. remind you’re

All customers an money needs. decision pay common ends off of And maximize who've They and have find bold to right. refund, of made into their are additional save have make ensure go and to want themselves and and become tax capital trying to for to a set needs. their business all they paid, customers our access want They meet, of are those the keep debt. to get set customers, books entrepreneurs grow

Prosperity where we the the One evolution most experiences. expert our our of our deliver the strategy for Intuit platform It's World, the Ecosystem easy-to-build-on why it’s the AI-driven about an learns awesome of is Intelligence, on one. Artificial to power Power sets becoming is and and partners unlocking significantly focuses and The This an Around many mission problems the why of across That's and of data our is open, prosperity platform. accelerating trusted about which pressing from the customer platform. solve application our rich progressively become

to strategy Intelligence with of our solving platform. lack and experts. a benefit, confidence doing the Artificial to experiences. by To And decisions by our in Artificial we customers life, customers’ of financial make Intelligence problems time, leader accelerate we're same on applying the the to experts speed one industry. digitizing them smart bring them we're services face, to also so, this are We're money helping revolutionizing largest customers' connecting At in using connecting

small focused on to business our our are owners, the problems solve being For of we growth, with using can the we across platform Artificial center offerings. small expand Intelligence business

And and in our grows year with holds. We fiscal offering robust disrupt fiscal Online had customers. great XXXX, to year we're the QuickBooks a with aim last, excited what for we that year mid-market a XXXX

it what's questions your with let’s Now hear open up on that, mind. to for

Operator

Kirk first Materne the ISI. Instructions] comes from Our [Operator of line Evercore question of

open. is line Your

Kirk Materne

against Advanced the your thus Thanks and year. wanted for Sasan, feel Online I kind the expectations next in on for far XXXX, growth fiscal that I congrats and a in you actually how that's great XX% an Ecosystem expect to of update guess, year. very on Thanks. going get maybe and just much fiscal QBO juxtaposed you do

Sasan Goodarzi

Hi, Sure. Kirk.

revenue First define it we've of this Enterprise the years for up of one the reasons all, why about the new employees. XX serve desktop focusing Desktop company And platform, we to is to is one on of XXX not disrupting the held mid-market has. segment it which with for it's areas as us, way our and focus our the is

built permissions, we're literally batch deliberate we're we're that out We've basis, made what's iterating bit and We've progress on to with just rapid and a on what market Advanced and the offering, quite we about by of go built effective. most rules speed invoicing QuickBooks out priority actually focused allows monthly and at invoice a to being the we've see. plus customers our circle, encouraged

we So look is we promising us do down this like road. our opportunity the believe progress for and as a that we

Kirk Materne

Thanks Great. very much.

Looking at Day. the forward Analyst you to seeing

Sasan Goodarzi

you. Thank

Operator

you. Thank

next question Suisse. comes Credit Our from Zelnick Brad of

open. is line Your

Brad Zelnick

Great. Thank all much. a around you well. congrats and on great and a on as great congratulations run, so Congrats year, to Kim Jerry

continued So things question. the debriefing can confidence of talk you've XX% that growth thanks Sasan, And taking TurboTax you in were your X% learned next much adoption what Live? is about year, tax last to how for consumer the driven from and for season? perhaps from of some when

Sasan Goodarzi

your you Thank for Brad. question. Hi, Sure.

assisted our lead at transforming consumer the the category really I'll finance. And all, early very back very, of the assisted view category. category, traditional is disrupting take transforming that which to we our of and expanding First our about about are innings about in do-it-yourself strategy, the is you

category to to a be to we able smart and getting and decision we're benefits for financial our deliver customers. XX It’s million products really $XX started our just benefits, with money match platform billion unlock we and an believe customers can over where customers, agnostic

confidence And but really the category like our gives really in in XX%, to in the guidance deeper with that's combination not also our beginning about do-it-yourself have think only deliver X% beyond by lead expanding that we've the us the XX%. assisted guidance, to long-term holistically in X% of our we we benefit customers confidence expectations we category the and that provided feel to penetrating taxes around what the and as set of we do really that’s to

Brad Zelnick

if follow Michelle. I real much. quickly so one for could And up Thanks

point where balance Just is eventually been as in having expand? paying but we clearly the margins on see it relative consumer think to see margins, Live we your a out should margin TurboTax do going about to investments TurboTax on where the off, Live flat, are forward core we

Michelle Clatterbuck

Thanks your for question, Brad.

TurboTax have of next, big with at we with as a focus, the done say, approach. like focusing that First one TurboTax I'd Live, say we all, customers' And Live, it's there. first things is saying have the services look approach when then our solving really technology business come I we of our was would problems to a Sasan on really we

us AI be solve good are really a using able there. able we to those increasingly by so And to margin maintain problems and enables that to

going And TurboTax us when doing some with had early success we we've we're as about what confidence with gives this Live and think forward. that

For example, this keeping – base customer while year-over-year. Xx this just number the able of past season, same we were the you basically pros increase saw to

innovations to use look to better AI so, continue And at we'll that enable that space. in us

Brad Zelnick

the you questions. Thank taking much Excellent. so for

Sasan Goodarzi

Thank you, Brad.

Operator

you. Thank

Rangan of Our next Kash from question Bank comes America. of

please. question Your

Kasthuri Rangan

Yes, from Bank of America.

just I how help ASP business, Can through what growth? a us you help with I the think the second about that should row, digit. nicely in in of you think us in in the drivers that So, has are terms QBO business the And think we ASP long-term. the growth been that growing quarter mid-single the walk

Sasan Goodarzi

Kash. for Hi, Thank question. you Sure. your

to tracking, all, really QuickBooks payroll, has of all Capital. disrupting with XX experts I and our of the What the And you on we in whether after XXX $X,XXX. now, don't connecting would First non-consumption where have with and our we're customers ASP that the employees, QuickBooks payments, focus mid-market been focus on solve the focused we're generally problems time on upwards to where Live going on past to services people and with focusing it's that, is trying share potentials, the the really customer ARPC.

really provided in delivering the that that customers mix, our and the is want When all you put we’ve online that our we XX% revenue. for you of focus to guidance north all grow

would that's so just make. some focused we really is And we that really on and is, what result the I say of would decisions ASP are the a what of

us being our hold Online than to that strategically XX%. And I revenue in accountable marketplace So Ecosystem the for just manage to us for would customers. allows our deliver greater growth

Kasthuri Rangan

Got it.

there tax you drivers industry process to services. about many the what if various Obviously, products, How follow the a tax for drivers think the you a what’s it this be year. growth? the think growth, to are TurboTax the are in going tax Does your do But some same next Maybe have year? premium of growth about business. were of you share that, on color helpful. business, pre-filing, I have follow-up have So on we

Sasan Goodarzi

Sure.

Just category, our category, very of the know returns, and ARPC. growth expanding IRS at growth about IRS IRS communicated last will in quickly the the disrupting number category And growth again share that IRS consumer finance. in assume typically focus transforming grow. you – the of the the Day, year as Investor we our and we our is as And think ultimately assisted to then and the returns then continue returns, lead do-it-yourself we

our As have is our category category growing that focus making we the confidence sure share. champions, can we increase in and

And Online. deliver then of the we higher significant TurboTax huge office at opportunity deliver Live, benefit is with a TurboTax the place to that for price or customers their normal disruptive home at customers, a have than price, ARPC disruptive for but

have So we've and last confidence last the drivers it's better are about that we're we’re in just consistent one-year than the guidance year talked this we year what time and with we provided.

Kasthuri Rangan

guys. you, Thank

Operator

you. Thank

question comes Jennifer from next UBS. Lowe of Our

please. question Your

Rakesh Kumar

for this Hi, Kumar in sitting Jen Lowe. Rakesh is

last growth see sub coming growth you moderate? that meaningful any growth QBO this in have XXX revenue moderation areas been slightly has guide to for ASC Small U.S. years. as guidance this some Your in revenue better of at is starts in Business time it recent we driver year. there QBO growth subs seen XX% to than XX% as meaningful But more year that driver other a U.S. Are

Sasan Goodarzi

question. Hi, Thank you Rakesh. for your

First our higher that of with the now that's on QBO would Live, ARPC line we the all, reason important QuickBooks has is you greater they're acquiring want XX%. being than Self-Employed on Online we're QBO, and Ecosystem focus I which with goal And say focused Advanced. one, growth revenue customers, to whether is, with

And then goal why payroll, stay on access of have to is which the get that been access capital, of than we teams wanting improving our have greater online based a have to wanting paid, to XX%. on services to our important customer year-over-year, breadth so points, line pain significantly it's to focused wanting revenue

said, fourth quarter you that time with did it this would our QBO, when moderate it look And year, I growth. actually we at last say that not versus accelerated actually

So we XX% good around growth both QBO, we for providing services fact the customer grow in north that us believe will we're continue of and more online revenue. feel that that it the to allow but our to importantly the

Rakesh Kumar

then a could And if follow-up. Great. I add

the companies Australia in Some environment international macro where wondering you exposure. could on was comment UK noted if some in weakness and have I region. you have

Sasan Goodarzi

There's We amounts the spending We in areas any our look data. mentioned, of a at to Sure. declining any employees look that at. in our with the of number they in look you strength those growing our one look Businesses, then in one impact and/or that data weakness the that of any we we same we that see And seen and hire. we've countries of and because at Small base. not don't in our buy the couple macroeconomic charge or the consumer at in at things are they any another that they is volume sell spending, same another,

Rakesh Kumar

Thanks.

Operator

you. Thank

Our Brent Jefferies. Thill next of question from comes

Your line is open.

Brent Thill

that is fifth the the go particularly perspective? this'll about just time point you areas lowest next you that how broader XX% years, think Sasan, And row I in XX% you on do the to not that comment with range. back the think you're years if year. be ceiling do last focused believe a couple does going over become point, your There about wanted the Brad's will on you're And that margins I on ceiling four on a And topline, that the know now a SMB, the hanging in been for year a or are margin. that's five fall margin? at where Michelle, to forward? some excited the but fruit from Thanks. some roughly through Do at you

Sasan Goodarzi

for let it take question Brent, then on Hey me turn maybe over you and the to I'll me Michelle. pose

incredibly on I'm is which about Small First Business, of of areas translates what our the squarely proud that would into in I all, focused to I'm our because bucket. across several services they're team customers. excited matters most say one company

how and capital and get fast, accuracy the ensure ensure hold really pay And employees is that team onto need Our it. long time access when tracking is seamlessly can they they money which compliance. focused good to can their that the our how paid can get to they do customers for as ensuring also they on

Capital. So our payroll, the I'm into in of excited tracking, is work team which services, doing time about translates payments, QuickBooks bucket the and

And very although to able QuickBooks thing early about with the is non-consumption Live. being penetrate second innings, really excited

engage significant platform of our on penetration this pain they connect enrolled done where both Business our their agents, to get allows with taxes are experts and really to in biggest a out points confidence. that typically right. platform building non-consumption. the pros Small customers is we we can And One do-it-myself, Can accountants into is why I people is where face which

them about we a an that's very and I'm disruptive. excited look have overserved as customers with the So at long-term very the into then platform disrupting overpay mid-market, a very, we price opportunity opportunity they where are very to and to then that use we easy serve that of the have that's course and

this Business, those that in me several about years. coming only not look the ahead Small the areas as year, but So are key next we in excite

Michelle Clatterbuck

really with do on feeling. very XX in that line the We've to have. in margin what not op our as we've issue we’ve bps that in we're It and double-digits, intentional XX see XXs doing. growing any with at structural And strong guidance of we on said revenue question is got financial the principles is got your have, margins. expansion, we Hi, or you that Brent. Thanks for any we confidence got

platform. investing, where are AI-driven next where the for to at really as And across we looking margins put we of on at say And there allocating place expert highest in being continue to drive that to and and we on portfolio because yielding our we the investment building revenue why dollar we're our that's that's dollars where we're the strategy across think company, an opportunities the areas can the us be company manage on. continue we enables level customer and growth, what it focused best

Brent Thill

Thanks. Good luck Jerry.

Jerry Natoli

Thank you.

Sasan Goodarzi

Thank you.

Operator

Thank you.

comes Securities. Our of Ken from next question Wong Guggenheim

Your line is open.

Kenneth Wong

Great. really Thanks free last pursuing were first for Sasan, Maybe for question. taking you you year market. my the aggressive guys

on your Just your professionals? leverage wondering number more mentioned should the investments those Live here of some in you should as same we to with we into delivered TurboTax you from harvesting look or can we more to focus should you think how to as adding do about continue has then the And incremental as business, AI think franchise? customers far or expect we Michelle, reps XXXX, guys again guys units bringing you

Sasan Goodarzi

Great. all their Ken, back Live, for launched would get joined with TurboTax years and share to with focus the on thanks get you we have would TurboTax paying I for been assertive by that –simple especially my where free, Absolute you in filers even at Zero, seven to customer our ago, taxes done nothing. take can years the we our delivering customers and simple I very filers your question.

better on loans, products very us loans, financial and category better expanding lead which on that assisted right the and card for because them. Turbo. Whether we're do-it-yourself better focused savings for dealing personal focus is for customers accounts, these in really connect our we're then that's better what a the category credit been years it's home helping focused are with rates, transforming And ultimately strategic the

on and very is a what but continue a future, benefits, our So this of just of years, not guidance focus look XX% this matters to focusing as for year. free that about account customer of it's think most X% matters as the expect to important element for our take to to to case expectation we provided we we on the continuation XX% most ahead. customers, for been it's really that, what will we've specifically it's the to into business long-term customers think And of new, we – that next we when about and the of be X% all

Michelle Clatterbuck

as add you a I experts the we Yes. I for What a innovations to drive then is more question. mentioned asked and the Thanks fashion think more AI to the need about and would about Ken. there on that What continuing will more need help? so adding is agents isn't I AI we at If efficiency, to productivity use are focused to and say Live reps. really to Hi, add TurboTax units. in linear as look we

types of our optimizing for manage We've also been and modernizing the past other that call productivity as platform year the This it to TurboTax Live, and the there's a pros up some better of really things specifically did doing set on our for we I so mentioned, scheduling using I'm experience volume. operations.

to in I us really add innovations first those like do digitize agents there, that a standpoint needing said, services and able conjunction And so all artificial of we being in see technology have, not our linear we fashion. to a with intelligence

Kenneth Wong

lot Thanks Great. a guys.

Sasan Goodarzi

Thank you.

Operator

Thank you.

next Our Michael Turrin question of Bank. comes from Deutsche

is Your line open.

Michael Turrin

opportunity plus there. go back I some you Hey afternoon. of and provided XX% rate Ecosystem the that Online to anything but to scale, as continued hoping is growth on in and is then maybe of in layer can additional there add all else at to you there services useful payroll, secondarily, there And contribution? terms of terms view metrics time? services. mix specifically continues was in we confidence over the on the Good Sasan, a run Thanks. focusing could house

Sasan Goodarzi

Michael. Hi, question. Thank your Yes. you for

would the possible as at an say with of use payments I just are services. innings I'll early what's We example.

there's XX% over send like example of enabled. XXX customers e-payment one that's demonstrating just plus the opportunity. Our invoices and million And

being so we to customers, pain to with as, the on paying think capital, the and tracking about the when in employees money our And field. to long out able employees their time points being hold access for getting paid especially

a more truth said, one with see mid-market, just employees. for for shifting the deliver is your serve Business areas I we to segment significant with your even to XX is of center With And the source really customers, being which the becomes of the offerings focus books, customers. Small We we for way had XXX the from our business. opportunity our growth being around four by earlier when the that source those of that of framed truth important that for

transforming additional more of we inventory. different Live really That's That's are XX% can customers understand focused sell area sales product-based another an leg omni-channel but the that to businesses customers being their ensure are ensuring channels, on of are do with And we How commerce. that and their products in there that QuickBooks connecting earlier their on. they we profitability even that about than on innings focused to the multiple out is able importantly that QuickBooks the that Advanced.

to and But more other having things opportunity the around benefits customers. growth. the to that on that don't have lose deeper we to of us significant services focus your actually into already are, penetrate question all base we gives the revenue to opportunities, want have there XX% the that but ability deliver And deliver that than being Online those our we for Ecosystem to are us – confidence have the

Michael Turrin

in in just out increase? specific call Anything step a Maybe of guiding that on a up for for terms Michelle CapEx you’re fairly XXXX. great. there what's significant That's fiscal driving to quick follow-up

Michelle Clatterbuck

of same. that X% did see No, our slipped Thanks typically little we've in question about be of you the said the would FYXXXX, about saw wouldn't revenue bit CapEx I a – that year. the that FYXXXX and in you out In CapEx of Michael. we have FYXXXX X% to for

on, work. We are sometimes actually our of sites Some construction had some some projects was that making moved improvements that that the how we just had and FYXXXX. of timing into it

Michael Turrin

Got it. Thanks.

Operator

Thank you.

Our from William line of the comes Matt of next Pfau question Blair.

is open. Your line

Matthew Pfau

for Hey my guys. Thanks taking question.

terms are follow-up an $XXX seeing pricing going just the the and us $XXX level Thanks. side forward a that between Is and it Maybe ask update to to a seems on interest that there on QuickBooks product, of you're wanted on supply it. you this for model the demand the month. Just still the of you're of on Or both terms in leverage? it's currently sort pricing And are options the table? then give can like what other go Live. in of

Sasan Goodarzi

Hi, Matt. Great.

the Sheets, potential confidence. a want Live. innings. unsaid we're we The huge feel remind of this is about about and QuickBooks the excited we're themselves the the us all Accountant. there's And are stick of which really versus like problem, with can just to it is Excel, I they're about Google do in just by way, doing around So and excited dealing the notion very customer early Bookkeeper they customers what their with Dropbox, do reason confidence is

after experiences that confidence is give through very can that able run business. a they the bookkeeper a them a to we're set digital a may problem or really entire they live be going of their that conversation chat have And the so to button, access use a to problem of click through confidence need. box solving And a here the to at platform through

this of come bookkeeper, week in multiple you here's calls give all up me an how particular our just in that of in listening that customers past listening digitally, and my in team we've have our example, bookkeepers said then actually you I'll the some tell and everything our you hours TSheets XX my I in And actually on hey, got documents set check was can with sat for you visiting is hours because doing? I'll essence, to Live into can set were, was up and business Boise. Boise So several QuickBooks experiences I in

understand And understand for time, then it but actually first and they're the where same on time. their net money really run the was spending their income QuickBooks getting how really watch customer to at business, expenses, our a learning their to a by incredible educated bookkeeper

because to as know a And don't small example so an what our do customers plumber, technicians are it's a really opportunity a I actually run after of the to and – become to used they truly businesses well, they how salon, welder, advisor that hair go large business. to non-consumption

experiences have And but the with bookkeeper experience use increase inventory? you the to so based about. And hey I we're do money? different my different or shared either engage delivering if we along needs a way. opportunity Should deliver enough borrow yourself, then questions to on just have that QuickBooks Like, that QuickBooks are money the are I that I the the actually those Live gives learning us

A the expert comes that of area strategy TurboTax into experiences solve Live AI-driven easier platform we're capability customers this pros the the play. because an that be that have QuickBooks biggest the for to hire where And we demand. part need. the Supply deliver focused actually on is our lot to is how also will

pros. on way at that the knocking by wanting for And our the promoter, to very They're actually net be fact because have platform. we're the creating high income of door we

supply least side areas. really the focus the of is our So

how it Although really we're solve through solving customer technology, it's problems. to nailing the

question a fact lot something pricing, based website you'll bunch weeks a testing your we're around in around that our see on we've then doing of in on different done. Specifically and testing three of

pricing. seeing wouldn't TurboTax forward on your experiences question. as I ago, based kind answers X.X that in exactly We're you're where So for the years go demand Hopefully of what were our we customers. Live testing different take

Operator

you. Thank

next Our Raimo from of Barclays. Lenschow question comes

Your line is open.

Preetam Gadey

FYXXXX? terms XX% wanted for where much finally, to more help an in we Lenschow. year? is terms get color TSheets growth And bit This idea penetration can in get a And expect we we the Gadey self-serve? Pree of are of Raimo of payroll. in I type growth for this how Hey. Can another on little

Sasan Goodarzi

actually full in ARPC we're view of is for and context in that to more actually with growth. your our payroll really company. want us, We interest the move continuing And continued where question. TSheets payroll it's everything revenue it to payroll you ahead XX% biggest the higher for actually to a online because better the of than is Thank to customers deliver service as and outsource a looking seeing and opportunity combination more compliance, accurate,

yourself starts that automatically And devices need on job, the dumped customer, employee GPS a field. they put the getting Coupled if integrating because they a and you really them job they starts that payroll. when a to when what working an been on payroll TSheets or employees with is TSheets, on job we've into mobile with in out on a track allows end the in shoes have of customer

for of you only us And significant combination and that but value not and compliance customers, our delivers when payroll revenue at opportunity TSheets. look accuracy monetary also for it’s a the

believe We continue liked the innings. penetration we So in that what to this the but XX% we the numbers seeing at are, growth don't early we're be we in share area, payroll.

Preetam Gadey

Thank I And if you. in. quick get another one could

bit being guide You guided year process to Can consumer this the X% year? thought involved. this more was of surprised through of kind a we're which little guys year a I last and little X% to go Live TurboTax time you around XX% lower, starting a for bit into XX% the with off that

Sasan Goodarzi

Sure.

did the secondly, got expanding clear we all, our We've of last guide XX% consistent confidence year do-it-yourself in year. First lot and is strategy a I progress crystal with in last of X% around this to the year guide business. very And category. the had

finance. at early and innings XX innings, market disrupting even of size earlier are transforming category customers, at over We very with the and assisted XX consumer billion million the

a growth what double-digit our feel the our so about is feel in And we doing the guidance. year in the second team Group love good great delivered progress. I It's and about and row Consumer

Preetam Gadey

on All numbers. right. the great Thank you and congrats

Sasan Goodarzi

you. Thank

Operator

you. Thank

of comes JPMorgan. Sterling question from next Auty Our

please. question Your

Jackson Ader

Ader Great. on Thanks. Hi for Jackson guys. tonight. It’s Sterling

changes the Our for into XXXX. tax effect question is went law that about

to season So going of full with coming the the changes. this second tax is tax the up, year it's some be –

this this you so maybe So lower with year? comfortable their maybe or unit are that And a maybe return little expect bit could around? packages faster go but simpler on we people more see second growth, price packages

Sasan Goodarzi

you question. for your Yes. Thank

huge that themselves. gives them consumers for be taxes do so simplify to their done anything we're all, fans it to of of can taxes ability the First

changes The of changes. reform product is up the of also last new, were some means which lineups year thing with second map was some tax new the in the to

will year the because assumptions. easier we've our the more not But baked our customers And into second and – will always that any confidence. have of better be

and that are most are that you focused can that easy all matter guidance done what provided the making the on taxes has has of reform come in. informed when for you your done but drop-dead where We taxes And implemented, get so the we've doesn't experience place a in are of that it to tax we been year.

Jackson Ader

had. we Thank all you. That's Okay.

Sasan Goodarzi

you. Thank

Operator

you. Thank

comes Please question of next Merwin from ahead. Chris Sachs. Our Goldman go

Christopher Merwin

Also but question. Small as guidance, and my Thanks Self-Employed. about relates Okay. Business very question much taking it more to for my

year, the combination? Advanced, a what's year relative if you’re Is Live? it just think XX%, curious you X% last think QuickBooks don't as Just mind Maybe at this driving more sit start that talking this and Online just year about see doing bit the ended some Thanks. to to XX% Is you of optimism main XX% drivers? you terms now international, year. year. I last you maybe it guided up in to XX% I guiding and right where so of what

Sasan Goodarzi

– the Sure, It's of as it's Chris. above, result great really team. the question. all your Thanks work the for a the of

we a years, use experience. back how to come how about over great several we the customers and really time Just then convinced to clear last deliver looking us being first

the the employees, by than serve have be to So to the an employees. Self-Employed to able a platform XX but disrupt serve where the businesses have that small ability that able combination XX having between the then we to to customers be it's QuickBooks have could of less offering mid-market having that serving now to platform can XXX had

bank we have the time typically, to capital? comes payroll we businesses, And same next experience, been days do an when that paid can it and able earning to longest. with get and then to it's And it the we day their payroll, tracking? How fast? out on Ensuring only ensure Because, ensure they customers account we to have the focused money access do we how being really automate is day ensure but do not How now services. also We've advance. on easier money small process of their seven hold payroll. goes in our

all to really the experts. to go able non-consumption, to high X XXX we able we connect coming serve combination to improving the after have in that from QuickBooks able our customers employees, be provide. it's really of customers, the hopes to So and our to to being services what's years customers for And being Live our really understanding important

of really that gives business. the it's in potential combination of the all that of So the us comfort

Christopher Merwin

services. your see it follow remind maybe about products other? automation one great. or or to start mean, do strategy of up on your And a ever curious own? think invoice us doing just That's Okay. pay you there? you I the your about on do developing own Just Can bit labeling tax you verse to just how white

Sasan Goodarzi

the get of payments first. expert platform an Sure. customer they important we're our want back because strategy to customer platform, truly what's paid customers way want our I'll to an being I'll take And back as to you and example, their and – about want open AI-driven is platform customers and pay them. being an to the use is, we

to customers own whether payments PayPal, they platform provide ensure offerings, app options, we more we whether provide that's run made we Because been their use or created can by run Square, our business. we so it's it's those use one that it's And our our the options Intuit business, to customers about whether to customers. our whether their to the to or care platform it's benefit ultimately partners, of by get app for our can an an

on the them. over have of one in on platform, core ones, Square I've been of payment but apps our we have area XXX payments, we providers multiple more the and mentioning even platform. our PayPal So being

So of our decisions on back. open apps an our as and ultimately, customer around platform the is all being around platform

Christopher Merwin

you. Great. Okay. Thank

Operator

Thank you.

of line Research. the Mehta from comes question of next Our Kartik Northcoast

is line open. Your

Kartik Mehta

market. little ask of traditional numbers a percentage wondering you tax Obviously, what the look season. digital as at Hi, to other the success had either Live. TurboTax this TurboTax Live, customers wanted you in assisted players Sasan. come about I I'm from TurboTax bit versus or

Live assisted much figure to TurboTax out is to and on the encroaching how are getting trying much Just assisted having customers success you how convert?

Sasan Goodarzi

Hey, question. and, Kartik. the all for kind It's an above. and Thanks your of

and reported between assisted customers the Investor category. a those those do-it-themselves, go what within we come of there from forth and kind Day is As you assisted that churn the million of XX that even know, at the category year, lot category of to back last

does So several things. TurboTax really Live

come you One, if and you had TurboTax question. a into

your into on get And is home, TurboTax you little sleeping shape didn't questions now you're button, even bought got help Live, Live couch. drive you someone uncle way, on a actually in. your can you in can of which you now the go in baby, had Those your way, a and drive lack of confidence changed you a married, life, out TurboTax click you product any can Something a a of form, pick or from that if category. the

conversion, with by with helps one, really final helps it confidence. all retention, which So is driven

get about also for more more their We a of they to this and with to human coming they're time, folks button need. help and first that have because can a seen at these talk engaging side used the other can will Investor in the on are in, done click the and year taxes come assisted, again, coming now being Day, are the that prior with conversion they get they from

forth the between is and is and that really of categories So back above, the there's going what so categories go it's the within because it's end, this confidence. an matters heart much churn which most, all to the after

Kartik Mehta

been about perspective there's of get a that. your lot know I Michelle, wanted discussion to margins. I on

the better, QuickBooks TurboTax products the all make to Live. and technologies other and AI using obviously You're but especially

really result, is this few will these same? stay think level, where Or a investing then right start is you a benefits will years, the will margins. more impacting And the you something So And maybe accruing? there technologies? investment it's as the maybe in in where now situation a

Michelle Clatterbuck

Hi, for Kartik. Thanks the question.

are We AI/ML. investing in

was last of Investor for at us big Live TurboTax and FYXXXX. Day, to Cloud, our said example of actually forth. I one year, AI/ML five the gave As as investment for the was and the so areas them migration

would more I more one it's is of prioritization. It say, of,

a Small in absolutely customer to are the Group in in TurboTax from we're and seeing we products, Live productivity experience benefits standpoint on both seeing Consumer abusing customer, our impacts AI, the the So Business.

to of afterward But financial the flow years cash line. every therefore will be as drive leveling so with a it's want we that if off to a it invest and then we I standpoint, best of couple have, the what going anymore. think bottom investing to follow way some our to growth. you're therefore principles of thinking year in really to and our we best we wouldn't where revenue be or at of is done we're the in and then are and From that looking single just can those dollars we going done invest customer it and use of much

Kartik Mehta

Michelle. Thank appreciate it. you, Sasan and I

Sasan Goodarzi

you. Thank

Operator

you. Thank

KeyBanc. comes Our next from Josh of question Beck

line Your open. is

Josh Beck

XXs in wanted be you last I inflecting in of that the Yes. ask there? to for of XXs So the It accelerated subs having from the high International. terms like the quarters? there or QuickBooks out Online mid may Thank anything question. to the success seems couple you'd about call the you're

Sasan Goodarzi

I same are services, two in that which matter is Josh. pain on focused on Hi, thing Yes, our playbook. customers. that global way, the team progress most entirely the things, making our point applies that just members would services and touch talent really to to and our adding the also we're By great

that delivering ensure proper case, such to our biggest proper customer structured of growth, the the after allocate have for resources, owns biggest going and international ensure we and owns the countries to international the that customers the that across this able that, portfolio In opportunity. leader means growth we we which that focus impacts have international he's we're

talent really made people in investment just the has difference. So a and

global our back that didn't studied made, several we The step where are that in we what other what worked, and space. our we decisions the studied others own have mistakes we a made, now that history, ago years we is, playbook work, the we've

studied others will our are playbook their a them, are inform not we interviewed space, that that now we understood in also players We following. are playbook that that that and global have,

couple a of of of rate the playbook, systematic very maintain were even than ago. very when a being talent of deliberate years that, it's kind far having just base about we a to resource a think ability and the at giving this combination I allocation growth larger us

Josh Beck

I on ask if consumer. And one Great. could Okay. follow-up

number opportunity You tripled and, about obviously, of Turbo talked almost beyond the a tax users. the bit

just maybe is to understand what could be help you're So you other that we services add to with think us imagine users? Turbo when it's going

Sasan Goodarzi

sure United States, are just to How do the tax is as The problem And the most customers biggest ends in on which do do about debt my Sure. U.S. I'll the pay get, food year, money. back? of making use example, the especially, of they I This bills? beyond off under duress and an got being largest that kids it that and face ensure is making I've is pay meet. check able the our comes my refund, I close table? I folks, that when how to How put off savings

focus is an customers ends our really meet are really platform matches agnostic being products that so our to to for help And that make customers our by right them.

highest where the savings yield not the what helping find pushing account, imagine is, best a the financial paint looks them time just product. I of if we're like product, helping understand So customers picture we're our a this tax financial

score. auto, their connecting loan versus one by the before credit save because best institution understand take only at get that them can so an they loan actually a actions score and to to can understand credit the them that It's helping personal how rate. rate improve money. providing financial best go to they It's helping they auto their the to the It's

can, and those use data us world. to them prosperity the prosper really could them are help – mission letting our for really them, powering just it's consents, to of match customer that deliver based the examples. But in on benefits their essence around benefits So back we illustrative the

about what on for benefit the have what a that perspective, we're from our innings. with now, So our the that of excited the most possibilities. revenue excited make where is And in matters terms XX that's focus. early focus to our about which From customers, is we're testing sense very right we're most them. million customers fact we focusing a But

like. of picture would that's it what look So kind the of

Josh Beck

Sasan. Thanks helpful. Very

Sasan Goodarzi

Sure. Thank you.

Operator

you. Thank

Oppenheimer. next Schneeberger Scott from of Our comes

Your open. line is

Scott Schneeberger

online either Kim. put some around And far Thanks some to in And color categorization Thanks first one improved. My work if what if touch retention you. Live? as you very don't congratulations, retention of good on that? much. upon could question retention, maybe and delve share If all. heard I Michelle, some you just could into so want as much. anecdotes you and you some And Jerry maybe saw over TurboTax actually numbers, tax

Michelle Clatterbuck

question. the for Thanks Scott. Hi,

through, you to As we when complete confidence. the had going know, of they looked think return this when they're they're one overall, at just customers their with through about we've going we year, leave that is, issues TurboTax

so why been the it And reasons assisted market someone opens is, confidence about one we've the of Live return provide can who an very expert an that's to of their to that gives excited and so us. provide level they opportunity for complete TurboTax can us up really

had, overall. to people from two, as the so, number hope keep one, in assisted, number hope category to people And in said, we I pull

this we And retention we year. said, so, Online our seen for have TurboTax as in increases

on haven't that. We given additional any details

we October now, that information in our some more right any information. around Day might but additional Investor on You haven't get X, given

Scott Schneeberger

Thanks. Fair enough.

to smaller looks cash have you in I buyback next looks going though to of right then up lot you're cash generate a of CapEx. do have next the tweaked now going a obviously, saw just follow-up, it flow very a quarter like pace. lot a you you're sheet more at this mean, like increase, right and lot just dividend now, free year, end balance a on nice the at but acquisition the even still cash It the you of curious, As of slightly kind it year,

returning it, or want of spending of what what And you your step-up see might Just curious, of have amount what's cash but I or view you? know or approach carry? Thanks. we to typical type what in your a cash to

Michelle Clatterbuck

hasn't our Thanks have year, changed, do changed. we cash Scott. M&A none of have but say, financial would principles I more our than yes, strategy

at And then we and we sense back, makes step our us. see look our is to approach so financial really, what principles we

financial look to invest and cash products absolutely we and look customers. will return those. and out will principles can that use in excuse to we are those have investments, at then And we we mean, in maps will me, place we And When our fill the then cash growth. drive road continue that at acquisitions to follow want business. to shareholders in to business profitably our to revenue customer I we the that we

changed not have We those.

Scott Schneeberger

Thanks very much.

Operator

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

Sasan Goodarzi

Yes.

thank for then, all Investor We're an And again, very you our forward to much seeing all, you joining. to XXXX, year you so First thank amazing employees a excited thank of Day. we for at of fiscal Until look huge about you. XXXX. and

Operator

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

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