INTU - Earnings call transcript Q2 2021

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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 Second Quarter Fiscal Year 2021 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. I'll Vice the President that, Kim over With Intuit's Watkins, of Instructions] now call turn to [Operator Investor Relations. Ms. Watkins?

Kim Watkins

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

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

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

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

We’ve worldwide today’s associated be period, Some metrics. the non-GAAP available and the GAAP will turn call business website numbers of remarks refer prepared copy on release. information growth the to press of are ends. comparable the prior-year business A our metrics over that, and these the after Sasan. basis. numbers reconciled growth and in and in non-GAAP otherwise financial the I��ll with period our versus to presented rates noted, this refer remarks Unless current supplemental And all comparable a rates call to on

Sasan Goodarzi

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

early double our results reflect by Karma Credit digits. performed grew this Business Small are very Group encouraged quarter Second and Self-Employed strong momentum company. tax across and well we season. the results

deliver growth. Intuit are We revenue on for another year double-digit to of track

pandemic. to digital our accelerated given confident the by plan game durable, is are We win tailwinds

a behavioral most, our positions and to innovation of acquisition us growth and us when at smart base solutions, and Credit need Intuit Xrd, reduce capabilities, these helping XXX customers in customer XX structural We advantage of Credit large time customers Credit million employees of Karma and on Intuit bring to X,XXX well and new is save a acceleration – The debt while unlock and new and changes. Intuit. money – closed through the welcomed of shift Credit of adding data million money. December and help members monetization offers benefitting light is personalized effects help platform accelerate to platform to creates a velocity financial they partners members Our virtual Karma engine together them omni-channel to a ways to the customers family. online to We powerful take decisions. positioned Karma’s to network our Karma

which will off Since We there. are roadmap I on shortly. of season, touch tax we’re innovation in on the and our middle start running executing let’s

We category are our segment. the our and Do-It-Yourself very and in transforming strategy confident lead extending momentum the assisted in

Latinx, are eligibility benefits. serve our underpenetrated great better progress and also investor We serving to making self-employed we free season, expanded growing This unemployment receiving customers segments. fast

transform aggressively progressing. by with to feel XX their segment We is get continue the season assisted great maximum refund reshaping confidence how the We how about can million filers virtually.

Let Big me now to shift Bets. our

Bets AI-driven accelerating innovation platform are and durable customers the innovation growth Bets. face, focused foundational strong accelerates strategy Big represent across are it the our covering our and and last one highlight our Big as I is We Big the with momentum Bet our Intuit. to five seeing These across business problems on progress, bets. number opportunities platform for will other largest and expert

Bet to experts. Big connect to second Our is people

the we TurboTax our opportunity experts tax problems by the $XX one lack to the access face, of QuickBooks Live. XX billion of assisted are TurboTax to by connecting largest million With virtually customers Live, with solving our platform. category on the transforming Live and people providing are experts We confidence filers,

and a new for way understand a they taxes returns marketing campaigns how customers shaping can offering very attract with expertise done helping with the the simple them get lead their into time, in to to to category. limited category, free in Live continue our We filers the way

Live have customers innovative the service TurboTax return now who them. improved We experience, and significantly can customers with to making an filing our access full will platform it the and hand-off offering, an file by it it our for their prepare to expert expert throughout easier for

retention We has continue Entering improving. peak customer rates the with is doubled QuickBooks ago built expert progress from our to with on make a platform. Live, base same season second which QuickBooks year Live, our and are

days penetrate it’s opportunity Live, the to QuickBooks we long-term early are confident for Although non-consumption. in

Our third unlock big bet is smart money decisions. to

a money financial in and find helps progress products, of pockets their right our making goal personal towards consumers and financial assistant advice. the that are access expertise creating more We puts financial

core, grow the expand auto savings Our emerging personal accounts. and to loans, including verticals, insurance; is strategic and on growth and credit loans; develop focused loans including cards and checking focus money including verticals, innovation, home

engine, As Credit we free our with both provides customers. We’ve our and success great platform. progress make wallet personalized initial Karma combined additional customers an monetization increasing Karma combining our to fuel the offers of made financial to platform, across share capabilities paying Credit

data a our for and enable driving Karma for This offers, we members, credit verticals Karma. combined us for and history combination us over customer mortgages. our personalize enables growth with from data for to financial with creating loans verticals Credit with time. insurance profile personal create income engagement in consent, grow and The XX returns to million win-win-win Credit First, credit complete existing will and prospective of better verified members, TurboTax core a and and to partners cards income

XX $XX million ability Credit Karma. no-fee checking of into experience, refunds a Second, Turbo migrating we to customers users tax billion up account. we integrated are Credit And third, the filing to Karma Money TurboTax deposit to approximately into TurboTax providing

We are the excited about of us. ahead journey

helping flow, with manage overcome is are for grow and center small employees paid our cash with bet challenge. pay big this innovating customers fourth an by XX% with Our create to and customers to world. to the small get of businesses we solutions of struggle fast, omnichannel business capital, confidence growth in become velocity

We immediately, volume. customers payments increasing even tools paid by customers making charge for it are to accept invoices, auto-enabling with to our payment-enabled fast easier get like new

We continue business into customers the money visibility small to helps manage move and full account their providing along money bank innovate ability working QuickBooks to our ensure financial that working with them. instantly Cash, their capital picture, a by for is with

of advantage QuickBooks, taking we the accounting offering Bill the of into Now built-in this Pay quarter. integrated

QuickBooks including in We growing are meaningful use increase rates. adoption active and of Cash, seeing activation a

on QuickBooks core and million last making order designed management product-based inventory businesses are with provides businesses and platform QuickBooks progress Commerce the world. businesses grow The small better We offering need serve tools an to Commerce, September. to product-based good X our X.X million our markets. businesses in in their is launched omnichannel

a streamlined We add to integrations, new continue enabling experience. partner

the our Commerce, both platforms. sources offering from what a acquisition view QuickBooks This bolstering further is help of of we’re by with encouraged complete in that February. OneSaas will Cash QuickBooks. OneSaas multiple early an infrastructure but early e-commerce We’re customers the data streams and integrates QuickBooks in platform we’re see for still It’s seeing.

business employees is small are features Our point. bet we fifth The businesses to tailor small at needs big offering individually disrupt to with Advanced. of with QuickBooks Online XXX introducing XX mid-market disruptive the the a to price the

keep finally, partners, by leveraging to and models touch put benefit, we’re our bet, QuickBooks deeply and serve out anomalies in Advanced, money eliminate TurboTax, price time and important them and build resend to customers retention. these on both And advanced In point invoices, at confidence first insights. us an time customer business to resources proactively the give to revolutionize by in to our quantity the our we’re AI customer using their acquisition adding to And engaged small file them mid-market to better customers’ having and and deliver more AI right to frustration the and customers, speed at innovate offering of using confidence taxes. enables the saving to customers right big offer continue detect in integrated invoice. We more pockets, to friction every

benefiting big we Live of and are opportunity of profitable about a innovation believe positions and bets, are common as from making all are for a excited momentum well ahead the I’m we efficiencies proud we Across have driving us, building growth us that progress creating which of AI into Our platform growth. our at scale, offerings is accelerating future. the the team. I’m durable we

let hand over Now to Michelle. me it

Michelle Clatterbuck

afternoon Good Sasan. everyone. Thanks,

year. earnings GAAP of of operating $XXX GAAP $XXX per receivable a quarter versus million from second that last Non-GAAP $X.XX operating a off GAAP revenue year, the share XXXX, and $X.XX, year income diluted of earnings we sale was million versus fiscal non-GAAP written previously include $XX income of operating billion, last $X.XX, of For share ago. last note of gain million $X.XX of versus $X.X versus million per of earnings diluted million $XX the The delivered a year. $XXX loss

Turning segments, QX, Consumer year. by the to the business IRS driven in revenue XX% Group later opening declined this

to to with continue of guidance our and to focus remain growth assisted lead Live. We in in fiscal on segment DIY plans TurboTax and our the in expand XXXX. confident X% transform our strategy We XX%

X% reflecting the up Group, Business XX% availability. ProConnect and Small In revenue the to Turning Self-Employed the grew was delay in Group, XX%. quarter, revenue revenue Online during Ecosystem QX, while declined a forms in

the Our the strategic to Self-Employed expand connect and focus grow within and globally. ecosystem Business core, the Small is

growth ecosystem XX% revenue expectation XX% customers longer-term by greater Our or in online remains XX% ARPC. both growth, and driven to

year-over-year on focus QuickBooks growing full in online last grew We fiscal and mainly a a price accounting lapped to the XX% driving increase slower mix-shift. by we core. last First, QX, of growth customer continue quarter. revenue driven year, versus growth quarter

customer. to customers. ecosystem. increase fiscal and an to the growth customer capital tailwinds the growth in continued continue on Within Online in full time Within charge reflects a revenue quarter payments, grew per focus includes our we continue Second, tracking payroll we revenue in with from XX% Services which during mix-shift along see payroll, payroll, connecting and growth, service revenue, QX. payments, volume to offering

businesses of quarter impact to ago, money the declined the Third, a slower quarter, this, Ecosystem revenue most. QuickBooks pandemic. lower retention acquisition Enterprise globally was continue X% driven the grew when Small expanding help they resilient, lingering to decline the Ecosystem to growth of progress digits. at The pockets growth mid-single and Desktop increases revenue put business last by Within XX%. from beginning we longer-term. customer Total expectations grew in for it during the international lapping second from and our with QX. need Online revenue fiscal online more inline them their added year and the in revenue are Desktop price our

back December are most the reinforces This or running to than in We levels. indicators payroll This on Xrd, and and of We QuickBooks in partial number charge $XXX earlier. customer acquisition, includes tailwinds our better the volume. Big pleased closed positioning growth revenue on of of the resulting touched companies to the for Karma digital quarter. are payments Sasan of see acquisition million platform pre-pandemic Bets and Credit

expand is accounts. insurance; with detail of savings to share core auto Our and and strategic loans; money loans focus focus on emerging develop checking cards verticals, on credit each personal of including verticals such Karma areas. growth focused as the and these home Credit loans, innovation grow more and I’ll strategic

core. First, growing the our is focus

onboarding We Karma new card tightly and substantially helps with for card transactions up are approximately Lightbox the to of recover. XX% Lightbox which Credit grow. to partners of and partner enables while the overall approximately activity right This products industry-first are seeing credit of Adoption its loan continues now match credit to XX% continues more year-over-year. personal personal financial integrate that members transactions, partners represents to them. loan

is verticals. growth expanding our Second, focus

X.X it's the seeing it's in revenue followed year-over-year, a insurance auto we're high times growth then vertical loans by Although in loans, auto days, is growth and over strong up January early watermark. home

an an the to Drive actual providing During for auto we insurance introduced quarter, Karma habits. qualify based discount driving members on easy opportunity

getting innovation, just Third, emerging with Karma money. started Credit particularly our is money focus developing verticals, and we're

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

is a margin the to cash I'm XX%. As time. disciplined making. greater an generate the management, I've team We for shared capital and progress expected of to expansion faster than And the before, see as yield investing we're starting strategy, our take opportunity we proud over opportunities platform return on that lean we into approach that investments

principles continue platform. driven reallocating to to priorities, on commitment. AI These with long-term focus our of an emphasis top resources We expert becoming remain an

growth balance billion investing the the approximately during the Our we $X.X sheet, is quarter. cash return in and dividends. We on of in product drive repurchases stock the business profitably via first accelerate both regenerate We and in investments customer our to acquisitions at priorities shareholders second share our growth. We out million and repurchased we quarter business with finished excess our revenue cash cash consider can't fill that to invest roadmap. to and $XXX

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

on guidance, business confident Moving remain in uncertainty to we how while environment. in is the continues, macro performing current our

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

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

Sasan Goodarzi

our very the I'm team and optimistic Michelle. about proud thanks all I'm very of future. Great, together and accomplished we've

questions. with said, now that open So your up to let's it

Operator

go comes from Schneeberger first of Please ahead. Oppenheimer. Our Instructions] [Operator Scott question

Scott Schneeberger

afternoon. from in seeing good pick higher you I'm very going seeing on, lot might that likely it's the or transactions you're in if I'm an tier the trigger any And much, all is something to season. come opened business reporting corresponding a just volume since Tops offering. ask to XXXX, will from thoughts return since such think Thanks. going up activity in on activity at of if in do new that brokerage tax that. trigger on more in a accounts you're we're that your And Sasan, increase tax per a very curious from Thanks revenue that, just few more of

Sasan Goodarzi

to the serve serves then helps I retail Latinx. what tools was Premier, need for Well, community other if of particularly Premier feel course about and segments. those all and course declared several your one, we back would you community. I there us or investment their for on investors taxes If good you, and tell we're Brazil, Self-Employed a do all Scott. transforming you the not they there investment was ago, what significant segments if community. increase that and are the us they offering, would question, the under-penetrated years we which take element but well that one stats, And experiencing so U.S. The which Thank different also same expected them. of is growth that and see element assistant to segment, that want positioned. we expertise of mentioned, very States, And, is really all the actually I probably, And Latinx of our Self-Employed just in in the kind in the out using are that we kick-up really our a India, I And United

them our the positioned we'll experiencing to delivering segment and season, for this the accelerated with declared, like, think it all the context really it and really for of to when very, years I had with it's how tally all serve out season live to do we And platform we So ago. plays are of if very sort yourself. we're what growth we want pleased we're and fact what have an up results, that in a you ourselves well but see positioned we few both looks

Scott Schneeberger

appreciate of then into that, staying on type because of into but a season. Texas, versus on I'm February and that get weeks I of year this the last kind recently And XX. taxes, throughout question, just saw way last Thanks. returns curious, to I you do this there we're year? What of the you expect in June the high-level now preseason, tax Sasan. couple gotten gone what's has

a industry the into year-over-year growth this season just just early you. States that tax you're and season that support condense you to the tax view? most what seeing in an season expecting with account, that year for for are anything and warm year, So then last Thank

Sasan Goodarzi

the needed. really share into Sure. A particularly million number to platforms, today grow that an taxes. and say, massive we expert filers fact this that somebody any to do And opportunity go I total of because our on we it's I live of and and opportunity our sort mentioned our us, assistance segments to they flattish our transforming is help assumptions segment a coming IRS couple season would fingertips entire that to would them we of able the growing returns that of else that the share to the one, as, expect things, $XX be their have time such with taxes about for category focus be the tax of their we under-penetrated made the at their that returns, the have of with with get with on and

in about role growing returns. IRS and of context our really is flattish category the So a

filing All just feel where finished, the good that date. – guidance very was good have disaster the progress, is The the there contemplated feel of we provided. the made season past behaviors the and been where potential really is of situations at we’re we assumption yesterday, made IRS this are really April that we looking very the we announcement our about extended about just a that our guidance, XX Taxes very we different momentum good and about net-net, our that context we has

Scott Schneeberger

Sasan. Thanks,

Sasan Goodarzi

you. Scott. Thank

Operator

you. Thank

from Guggenheim of question Our next comes Ken Securities. Wong

question, Your please.

Ken Wong

for you question. Thank Great. my taking

there, may you this you Sasan it sure is not kind The board? be starting are TurboTax if service, customers first would you're Is to you what of the fantastic. coming also some get color kind a of the that who new level product, net Any particular have greatest give Is filers it across can guys seeing, utilize from accountants? uncertainty? one of about full of guys tax, you but see to I’m sense we'd think good on traction love as for

Sasan Goodarzi

them, expert These can to they we're problem to have that know in are they we're Sure, – the very any Ken. that a competence. to question that ask would they ourselves assistant but help getting the million over Halo segment, good if to filers effect. of important or can the choice need it, so in they from give biggest choose that And me they choose. they you they know in hear we ask if to get just plays, for solving do choose want it say come to can full all It's a need say, ability choose upfront. and if their if and and turn is they digitally Good $XX here, from I somewhere we that even experience, really What just for it make to my customers remind an time that, service, with to the can to at return documents is that let traction you. that

So coming playing service in of effect, a we end that for test is is confidence full are the which service actual full that learned it from our filers number last the will what builds really results beyond customers using up Halo really year, category experienced assisted get came as going expert assisted my TurboTax a that actually XX%-plus category. growth of an can to we questions at there's always customers in a my from last those be I the Live, reminder year, answered, majority And and side.

playing would. had it's So we it that role exactly as the assumed

season traction so And this that we’re in getting. the so good far of terms

Ken Wong

one helpful. then great. for That's a Michelle. Great, super And quick you,

transaction, and seeing You personal think touched XX% of Lightbox XX% on I loans. of

Lightbox? of as Just to? has as improved kind you monetization, on wondering And color where utilizing customers think could that of how kind are monetization far numbers then for trend those do any up

Michelle Clatterbuck

to Lightbox a the for and institution financial frustrating question not to as partners, customer great and that get enables a our would. here. technology have in nothing they both partners, customer for our to There really is they to us. be that is thought – for experience a able financial product for thanks Ken, is more come Hey, as well winning the than access a us

to And the actually more so, able are financial that institutions the and to be it customers better then likely enables they products be to target approved. have much

Lightbox, we better and our we trends it, a those have said, experience see now, to transactions about we'll right with through to we more very to for experience how have customer more excited So go as metrics for continue have because it over that want we're the is a and it's also better time, the partners.

Ken Wong

Thanks, Great. Michelle.

Operator

Thank you.

Our go of Zelnick next Suisse. from Please question ahead. Credit Brad comes

Brad Zelnick

small bit so health payroll, you all positively. you business maybe acquisition, that for it comments recovery? perspective terms trending questions. Thank expand your terms looking that on little volumes, where heard and the more charge, payments, of that my are taking Great. they're a the customer from in kind from number in much Michelle's small business like indicators, many running of as things we of at we such business Can Sasan, are indicators small of of companies

Sasan Goodarzi

Yes, sure.

geography come but got to New we've is Florida, actually have of the the natural then industries States assume, and is that industries California have recovery, just It’s Washington, restaurants, in that York you Georgia, and have that would fitness, that travel. then it's Let me ones up United context places bring I’d on depending start the actual an nicely. haven't. another yet you every all UK way down And their back or XX% And nearly bank XX%. Arizona, customers, when versus points net States places in we And different dollars like the quite the see account which we geography Brad use Michigan recovered about point, lagging. a U.S., Texas, performing with their is of across like that, the that within our have you differently. look and within data that are example, data

just of we per companies company and our in employees businesses of that's retention, charge to lot the Michelle, to that or say where we important number working our number really acquisition, payments at platform where payroll happening they And volume, our COVID points the at we using way better platform, a et they're heard just to tells context And course time watch the small you how that trends the employees the and payroll, or tracking are to relative than come data about running actually what back is, And the levels those that are you the doing. not of indicators you all from doing watch innovation which watch of That's give I hard cetera. still at really prior So were, are power platform, to on back. small above are except businesses those fact of pre-COVID. businesses. small pre-COVID were number metrics worse our of are than times are all they actually

actually And really well us deliver not for so for customers, as to ahead. would growth but that rates expect we we bodes look only that the our

So good momentum and actually bullish about where future. we are in the opportunities for the

Brad Zelnick

just Thanks, start, is just Sasan. talked you're Karma And perhaps about remind helpful. Credit growth many That's remarks. just Can strong Michelle, you off us very maybe one a got in and for to migrating over, ahead to opportunities if now the for users that business, really you've we've your out and just you've to follow so I mind two getting months, a what the should relative year? think versus in seasonality little keep of the this all guiding annualizing we we seen what we'd because you're the of ahead start gate be of of full last bit Turbo what ourselves,

Michelle Clatterbuck

Yes. Brad. Thank Good you, question.

little progress start Credit pandemic the there. more making definitely than they're feel all from isn't there a would January, the is business, the in had seasonality in When about are to you February way But February but bit quickly expected, business We're about do period, see off I but levels, business. a good a bit say a the more January, strong Karma, to the bounce back we stronger little huge We progress in seasonality think making. pre-COVID they seeing of uptick. the back an time the that in not with

but expect. say so should year and the those resolutions people of some As new into are guys would what and that's I new forth, you coming

Brad Zelnick

so much. you Thank Excellent.

Operator

you. Thank

Our next go comes Stanley. of Morgan from ahead. Please question Keith Weiss

Keith Weiss

that how got the guys will on guys question kind for or now revenue longer-term it the those you a Can Thank a quarter. timeframe Excellent. of kind I into help think you for and should pre-crisis that and to when Zelnick’s we're levels, that how Brad indicators bit the to indicators mechanism growth we taking expand you the above those little at us like indicators rates question. nice of expecting. are of and about wanted the very have translate the understand

how sort the our to like income So in indicators on how of actuality the on do expectations we of see quickly we what should moderate become terms statement?

Sasan Goodarzi

business, experiencing of happening your a question, growth we're context Keith. lot now rate of slower for context things of starting subscription almost is thanks were acquisition, ago retention, time. the year of in the couple And And a in a a that points Yes, in being dropping this last of year. we customers upgrade huge have you we a for there have that QuickBooks sort of number are things And things line of for for Advanced March also, that we to benefit where payroll dropped while. paused, that a like to full-service, migration, line have a

pricing the or intentional had last of we're an decisions we year. to has that increases rates very retention that seeing all And now. that, we same time and migration So the lapping the impact price along around done made addition acquisition growth of combination it on with that was we're in had

to your now, the experiencing we're about so would that – it. we'll rates trends way lot of or almost now, the see So starting should expect in see growth because are what say impacted we year best answer But I the the to is, benefits question follow-on a metrics the be is to ahead, in to we the think think long way a is about and short the quarters ahead. year the out the

Keith Weiss

as good corporate a could see to equation, I faster balance part And it. margin Got that the side follow of of kind Great and the margin growth on philosophy. Michelle it. expansion really if to up over Got continued ask between appreciate of time. the the

kind not past board the about year-on-year come quarter year but of upset, of of SMB been crisis we margin upset sort basis. contribution on that one-time we've savings terms we expansion that up This us related companies talking sort not know of aware sort are in of should we to But the or nicely in sustained of that I of that on in or that a lot expense items expenses Anything the saw be seeing? particular temporarily a reverse year might forward. saw could margin might could the

Michelle Clatterbuck

Keith, Thanks first of all. question for the

For we've margin any as driven an platform. expert and is biggest of us AI been of margins becoming thinking that of about the more expansion, and driver more us really

you a basis margins points, around Karma. from say which and so little once seeing and to really I across last to platform But drive see year really obviously some of to expansion expanding see go to point. here, customer move expenses approximately expand XXX continuing our technology for us company focus you margins that Credit being And would quarter-to-quarter. This on to after there, margins guidance, expect bit we to the is more those may market. to company year areas And margin is you're everything success a excluding us a evolve,

is biggest of that so the the margin for expansion driver us And company. across

Keith Weiss

so That’s much it. guys. you Thank

Sasan Goodarzi

you. Thank

Operator

Our comes from JPMorgan. next question Sterling of Auty

line Your is open.

Sterling Auty

Yes, thanks. Hi guys.

could in TurboTax going season? tax the and Karma, think of of do you the and the are in remarks to what to TurboTax the of release, Karma was the but users cross-sell for cross-sell I expectations I'm for some press this of talk Credit there Credit marketing prepared that wondering terms

Sasan Goodarzi

Yes, sure, Sterling.

launched back a platform. as that if it Turbo with specifically come me migrating, TurboTax we up to Credit Let TurboTax launched. Credit I'll and of launching customers of question Karma And We've notch the then, I answer Karma are your that There have things could Credit just of being the of your the one deprecated Money to take question. end to at part Karma. course where Turbo experience number

think of the experimenting experience. number as things So testing them now that nail being I our to about really a all them and opportunities would focus there Sterling, long-term we're right doing with of are big and

really really So from I wouldn't expect a in deliver things because we expect but term, those launch the these growth and big scale. impacts in near do and experience to benefit just customer future, experimental and testing significant nailed before really the at we we're

hopefully your So question. answers that

Sterling Auty

does. It Thank you.

Sasan Goodarzi

you. Thank

Operator

Our next Kash from Goldman Rangan of Sachs. comes question

open. line Your is

Kash Rangan

much. things I'm need at And things introduce what you U.S. at full SMB a in are have the learned are the billion look terms much. that you make it Congratulations Hi. of market to that able the this product you with that what higher quarter. looking learned the the opportunity. live Analyst And talked you've to so address the wondering are capabilities, very end from be Thank breadth larger about add a on Day, Thank to same what to the scale. QBO to vein that what And And on that also you in in you've live? product $XX of the you address the to Sasan, out the advanced, TAM? you've in played as of you the in? things traditionally that tax

Sasan Goodarzi

Sure. Kash.

from me you. Let hear

to to customers in work and expertise XX the several a did Let start million we taxes and would one XX beyond research can get million learnings go Karma And method. where platform get these we are live that their today with that Credit actually years use long over as ago, XX they on million a willing me the in. health that is which as Based and assisted an comes of taxes, like to to help had to customers be file fact, with confidence. of able they digital is

can and And everything And your only educating hand XX platform, digital need reshaping at years our that's you there's in we million they where have an for more folks season see ahead category. launched year were Because to to different of TurboTax the live. expert that is opportunity what because we fact learned air than that have we've you digitally the we're of we them expert, executing four is us we which fact an to TV, works, with informing incredible so see about essence, our platform campaign an their the to shaping the multiple our we're how actually our fingertips. what with we channels doing this doing And this when off we're marketing but a consider customers beginning that and off the got we've learned what fourth in we're even on campaigns. live ago question may really bullish get one, help we're what in with digital what understand in

which about is education is our one investment where a lot So going. is of

to then the deliver really with full Instant in, there. easy come we use. is a they choose exchanging to the benefits. expert instant access full benefit launch when them in, an come and how that do how when is. with expert, if there's document now is help get service, service or how it seeing an of second the nailing you understand and way to Immediately by confidence to The first-time come in an choose full the upgrade engaging they expert, visually service, And you

they that expert improving the the knowledge, with able know-how the document expert we of by side where talking the love right Now, exchange, make that expert right the learning being to the of our comfort machine love investments customer. insights customer the really their the confidence income their get me advantage. that our to actually, we and our the mentioned, of A which making of we home. when our experts with is they creating customers around for platform. deliver That's have the fact our then haven't we're Ensuring we are lot in deliver that the or the our because which equation, it AI and and connect capabilities, gets culture and expert scheduling, that that input so their culture actually deliver that on platform the they platform to that I to, way to is to other sure expert have the

launching were but again personalized And we ahead. pay those and season that as assisted every and will adjust on. customer. because momentum we're our Live a platform. So as we'll the the the are opportunities TurboTax we'll we'll time of Credit the able And part off you the now. love in we're learn that to testing that and is the actually know those launching things experience we we what's areas that what Karma unique platform And a Karma be prior-year And frankly, deliver is over long-term, are day we focused are of that Credit in learned part in the

Advanced even beyond terms couple we your market go of XX of with In higher the Frankly, XXX in believe is a the learned. mid-market a things that to employees. that disrupting can QuickBooks around we've we question

Now, the yet after seeing that actually a a even And of to much the customers what without a our are even confidence is be that that right what franchise. every some we're Michelle to things your that as up disruptive to thought place workflow apps few now scale. at we market, we just management, and bigger XX new run we what which to we these ability can power higher customers we're need we're have our And now and focus of a mid-market that to the customers rate able things serve of like upgraders the to platform not the batch question, it of able it's faster XX% our around their just new to being but but go XXX getting very we to – actually the the for to to price. only growing employees, getting are believe actually need scale, the mentioned new is the add script example. continuing Salesforce see day automated we and in we're learning in business, around their a in the add to are business the at has grow go today, And franchise like integrations of approvals us critical And than saying, the invoice lot deep actually given DocuSign, be able franchise. much, to platform, but we're XX% HubSpot, do to focus to we

few So sharing worth are that elements the those I think Kash. are

Kash Rangan

Very Sasan. insightful. much, you Thank so

Sasan Goodarzi

Thank Yes. you.

Operator

Our Brent of Thill next question Jefferies. from comes

Your is open. line

Brent Thill

afternoon, Good of drill business. comments rate small wanted pipeline questions handful investor to there to and the small QX, on is around business. I QX your the decelerating yet back growth a related just were to

pipeline we're There's rate disconnect to differences the reported believe seeing growth any the better think number in aware should make sure anomalies there's that and the stabilize And what I from rates, that mean and number. a or the I bet, just this just build, be is much than the comment relative make of. if want just number that of showing understanding investors want reported they any to Thanks. indicating. a questions you're or I the things many and truly are would sure scenes comments, behind close that to color I

Sasan Goodarzi

Yes, sure, Brent.

paused time service that, is we a growth sequentially we up. want them because in up the migration, we both to are things It early I it's paused, in Advanced we bouncing One like communicating popped, a consistent our and been as months that move expected. COVID that start we We would very And starting experience QuickBooks what things QX. there lineup of that pretty to our we last March but few also our for mentioned didn't upgraders. them in couple consistent is attrition what saw And back the times. they consistent really year have slowed, decline in full that that ago ask but or addition because of we've with going several in before rates what didn't moments expected for fronts. on those with acquisition to One, this that's

experiencing of a what last didn't year. so we And are we're of some now increase just year is we reflection that in of lapping year. a key earlier top that experienced indicators And we this that on we price that the do those did

together. quite that rates the you've put that actually the with pleased of all quarter. growth we in experienced We're So

everything shared turning then start expectation. as into as lower be quarters And is ahead, our and last to per it but quarter. I of than the expected a I coming we indicators ahead, lot and we the growth, Michelle mentioned will in look Although that revenue year the

the I thought business is think pandemic than we're performing that's and what expectation the better thing we actually only bullish in the future. our not therefore the about is per

Brent Thill

Thanks, Sasan. Great.

Sasan Goodarzi

welcome, very You're Brent.

Operator

Our of next question from your please. comes Evercore question ISI, Materne Kirk

Kirk Materne

from of quarter – Yes. get the Brent's Sasan, Michelle, Actually points maybe I your to just last question, benefit PPP didn't for four you XX%. program much. in Thanks very to it’s wanted per actually

if quarter. we normalize right accelerated would if you actually you of have sort for So quarter, I XXXX math that, guess, you have doing this the and any from because this from normalize did

keep the just QBO talking program PPP helped this guess all the about at quarter? I So ecosystem

Sasan Goodarzi

please would Yes, I – Michelle, but ahead. say go headline, I would

Michelle Clatterbuck

we okay. that's just I PPP that to the actually that. got say, No, was saw in going revenue was QX actually we Kirk that

memory material to PPP did about And me but in in didn't Online so we then growth in we QX, actually four XX% dropped XX% serves which anything it, QX. my point have in that QX decline, Ecosystem if a have correctly, revenue a had and

Kirk Materne

was of at all a in kind all? curious I still regions very of on wanted would mid-XX%. to a that lockdown guess Okay. for growth. Sasan, sort be taking the that still, time of strong pretty that little quarter. bit business, question one you a severe lot UK I perhaps double under But Clearly the maybe just just check I that. longer on impact Did of another growth is the it fine small was this to just international But international was guess if That's Thanks. recover. the I the was

Sasan Goodarzi

innovation we that lockdown I I on Yes, it guidance States say it United or Australia, pre-COVID to would countries are France States. has hit. of really rate the specifically the and relative within has to that see seen has. the the The United really France have in point, we better the hit so of they to all just actually like context us impacted a still, bounced back indicators is allowing outside growth nicely, United platform. the in were that harder look all if the States, at across the much is UK we actually not back of a When levels. in But see UK, provided, what and than of has your platform to look Kirk resiliency just it but get globe, mean, I the the our at

Kirk Materne

Thank Okay. That’s helpful. you all.

Sasan Goodarzi

Yes. Thank you.

Operator

the question Fargo from And Turrin Michael Wells Securities. comes next of

please. question, Your

Michael Turrin

Thanks there. and good afternoon. Hey,

outperform it on segment partial Karma, quarter. were Credit to back what the that like expecting Going looks we

some could below it’s outperformance like at are for Looking It Can the XXXX. looks we of that to at drive implied the the rest year. that businesses what’s from go in the still factors back what’s for beyond just of good what block is that And billion thinking in that to outlook. us then the about or the number building a current referenced impacting is be on as the somewhat XX% there margin margin, Michelle well? your segment they’re seasonality assumed dollars

Sasan Goodarzi

to Good from hear Yes, you, Michael. sure.

actually revenue the home And ago, was loans. it the XX% a that personal your all question. coming and verticals, personal verticals, is, three in really improved is loans from coming around and would a in we cards of which as is which auto is have cards quick It’s and is are is from the is specifically, of and And refresher, personal there expanding a of Just where auto going really elements credit growth core, around XX-XX, and to XX% and is would at verticals, It’s is context cards really Karma. coming bucket. and answer loans and our from Credit growth then which which emerging loans. none the sort about loans second credit assets, XX% insurance. money about versus which point credit year insurance, to make I home which And third this the innovation. growth And

does and right see to seeing because more from them benefiting partners and with matching, customers partners on, are actually the it. connected come that get to more seeing higher LightBox for new innovation to partners products and getting on We’re are starting back better just the of we’re the come financial platform, we’re we’re spend

we for reason these just on could was see, when auto trajectory out, and the And the long-term to to cards, credit how liked the verticals just and over that that we’ll in seeing ahead, So comes specifically stronger around it performance the experienced based is – guidance to growth the your our that but to momentum, continue we vertical but play we question. quarter we we’re momentum we then be when performance for the insurance. personal the overall year, look this loans have assume see just

at note to around margins margin, one, manage really company level. the that important it Specifically we

The guidance – to attention pay as see Two, the we really Credit company provided is growth we investing we the in that It big so Karma. long-term still million it’s are these a the XXX a And in you the level. company. it members about that financial think the that the for Karma has Credit engine quite penetration, mentioned, different with low. products all penetration when I actually

penetration. we of increasing look ahead quite it’s as possibilities exciting, So actually the

we margin Credit all we within guidance provided. investing that have dollars guidelines So the are in and of the Karma, context expansion

and quarter get quarters. margin some thought the I because shifted was that it anchored we than margin So company investments rates focus and what wouldn’t on on It level we the that would between provided. better of we provided current performed I more income and more hiring operating rates. too

Michael Turrin

helpful. very Thank all That’s you.

Sasan Goodarzi

Yes. you. Thank

Operator

question Lowe comes next from of Jennifer UBS. Our

Your line is open.

Jennifer Lowe

Great. Thank you.

first clarification calendar clarified impacting relative from this an one. year, can But the was you’ve quick reopened, Kirk program me that that, to and question there given had just think QX that, one Just you the Michelle, that earlier. wasn’t earlier QX asked I confirm PPP impact by QX? in there whether

Michelle Clatterbuck

results. moving, have now and No, new Jen. moving slowly you – had have That the we been that material seen in that anticipated, process than anything much and program QX PPP has anyone it more in may on don’t the program

Jennifer Lowe

maybe back factors the of of effect of not, indicators business, first, the And the around navigated some a There’s everyone fact or this to different just sort then that there’s have improved, as And businesses pre-COVID levels. out. took time. pauses trajectory some that, some couple sort also that questions Perfect. the the subscription of you it lagging of uncertain small from on the in a everything then there’s pulling of called but is very economic you

want as to some ecosystem from XX%? aspirations it’s that to Thanks. support function you in small you Is XX%-plus online broader months. to just component. leftover of levels get well, think the to to of about continued Or a last for these And just that in of pre-pandemic do can six current sort environment? impacts the to back XX see you I if need clarify working the the type business to economy back something So the get through improvement

Sasan Goodarzi

more Jen. in which levels, for changed. tell at our back you that pre-COVID revenue and at And the we execution of bounces ago, about months based need relied is we long-term the levels. the growth We how above where XX% economy platform I bounced the back our of that upon because our platform. get back, Yes, on that It’s think and I the versus will say is, this business than keep indicators look and of it’s if the economic you six that pre-COVID below today many your own has question. performance Thanks we specifically, of and would don’t to game gets think that platform heavily What are talking still performance we are lot the is, a just our executing better cases in and our indicators on essence innovation we the performance are your question, not believe the would I has plan. online the goal our the

some people to just for anchor back end Now, back believe of that – get a we could that the is stimulus at we to economy this to not take stimulus need into jobs, fiscal time. get but the to the does us growth back the day, It’ll it. get rates

Jennifer Lowe

Thank you. Great.

Sasan Goodarzi

you. Thank Yes.

Operator

Next Kartik Mehta question of Research. from Northcoast comes

question, please. Your

Kartik Mehta

feel stopped at haven’t wondering Hey, what you pricing. QuickBooks price the look but obviously, at lapping innovation. adjust a metrics increase, Sasan. When business, comfortable you I’m to you’ll look to you’re

Sasan Goodarzi

Kartik, thank you for your question.

when our around we are with related actually and you as small which us we ARPU higher how go now the right businesses know, offering. up is given QuickBooks QuickBooks pandemic. that It performing allows to will be, the and both Our not to innovation main a it’s pricing market Live, have believe innovation, focus time but is Advanced given much

we We garner higher metrics have and indicators see increase more with challenges the at they’re what we they’re given, experiencing believe the own customers for from price raise less right prices price the experiencing from but it’s the that customers, our that when their platform, to and business. with time the is but perspective, a ability about

many two ways are in terms unrelated the way we the about in it. So of think

Kartik Mehta

customers, finally, seeing far please, And Credit you’re at as as tax early of mix using TurboTax is you customers the core the they’re the when then on. what just Karma customers different products the look than

Sasan Goodarzi

self-employed Karma that we’ve a portion What Credit actually what share I assisted as with an learned use And million about members, to of are Because they actually can those folks you customers base is that XXX big retail method. their U.S., now. us exciting ex, in would whether strong the have you investors. section the is a of that cross that imagine Latin

that we majority with customers assisted prior section those serve we’ve different got What a So is the in used TurboTax method. of the customers good generally cross consistent in year today. that is, an

Kartik Mehta

Appreciate you. it. Thank

Sasan Goodarzi

Yes.

You’re very welcome.

Operator

Thank you.

from Siti of next Our Mizuho. Panigrahi question comes

Your line is open.

Siti Panigrahi

of how you kind expand can Wanting question. you mainly Commerce order QuickBooks I’m acquisition got platform like, feedback that an Thanks few wondering, that’s inventory. like has this product feels businesses, from for the about back the you like can businesses. for from taking my that become back-office based TradeGecko months launched that it you offering, ask that mainly, seems far to

sort So opportunity you so of seeing far. sort are and got what what you of feedback

Sasan Goodarzi

Thank you, sure. Yes, Siti.

about us of Commerce. bring from OneSaas acquisition fulfillment data and into we’re QuickBooks we all, with very marketplaces, the early actually also to with And allows it’s apps. the providers, excited just from made QuickBooks very POS innings First platform very, Commerce from

it nail that doing top had we We to customer can experience. ensure of the they're so to their help restrict which is funnel – and us really what’s the helps customer the most understand how And customers. actually the to actually the important profitability,

our new was use we our that don't ensuring customers serve first focus And can inventory today. so that

if of QBO capabilities. focus QBO third reason don't actually do books that's our next numbers, to Our their that be important our inventory product easily existing catalogs we a any capabilities. the existing all sync that then keep be already And customers and product customers can the customer their inventory, clean. is to use that has that use we And want ensure and inventory will will

the the of We and had So terms the want indicators intentional was the capability. net-net, of there with on funnel bullish are growth, we're so we about think customers indicators. our out Commerce, building excitement demand because that top because far about about Cash will they as to early the these when deliver in the platform. QuickBooks be of in think started. that number we're to again, and But terms restrict just getting positive early very out Very the how of have long-term we QuickBooks but are plays of

Siti Panigrahi

That's great. Thank you, Sasan.

Sasan Goodarzi

All right. Thank you, Siti.

Operator

you. Thank

Our comes of Stifel. Brad next question Reback from

open. is line Your

Brad Reback

Great. Thanks that free operating mirror as cash about is very reason overtime, think shouldn't Michelle, there generation closely we any income much. flow growth?

Michelle Clatterbuck

repeat I'm the Brad? hear sorry. it. you last I Can didn't part that, of

Brad Reback

Sure.

As there overtime, shouldn't any operating reason mirror that is free generation income growth? we think flow about cash

Michelle Clatterbuck

why No. you shouldn't No. that. There real shouldn't reason No. see be any big

Brad Reback

Okay. That's maybe quick great. one, And then Sasan. one tactical

now? You that QuickBooks getting better. right talked about Live Is retention retention QuickBooks meaningfully different than Online

Sasan Goodarzi

thing, Yes. early first The days. it's all, very well, biggest of

mention And we're with focused QuickBooks really on retention are the needs and are there because you their customers come our on just reason cohorts. needs it the we the of looking their that deliver? for the customers QuickBooks are the want bookkeeping we QBO retention. are actually us versus sure on is lower numbers. in them. and set in. right very understanding aggregate at like to more customers getting get about cohort only really we're QuickBooks customer that There innovating the want to are look is to on we the intentional crazy a loves some that so come gaps experience, we really that customers to funnel, what looking them want now what Live different. like experience And customer look they're than me up is which on And is And the top team does being of customers biggest the that nailing and is focused their they're because make Live right different at focused is for up. to So advice. The of Live understanding what books before that run we're platform, us that from the them are for of taxes every now open in and heard provide experience to And – more just there need us advice close Retention what and they're why needs, cohorts we're do

So we're excited about the possibilities.

Brad Reback

Great. Thanks very much.

Sasan Goodarzi

Yes. Thank you.

Operator

Our Arvind comes of Sandler. Piper from question Ramnani next

Your line is open.

Arvind Ramnani

the lift filers, from around many would taking kind first certainly ask time be I asked my first-time question up follow was question. will to of the Thanks just these segment that any wanted added – be users? what on them I the in of of this be brokerage And of some accounts. users for kind will earlier – wanted a lift crypto potential users, this to increase gains losses. do to capital need Are will for of or seeing them kind product of but the from you adding

Sasan Goodarzi

they there millions in crypto their trading And their that able are the of Yes, be States. Arvind, just customers are come need the just particularly taxes. the outside not tax own U.S. United to doing do more just users, of and time, from we're it's to –

assistance, live, force use because [ph] so just use want our you'd if Premier And Do-It-Yourself, Premier if we're both with just our can product. you you And to increase live. seeing product, you need in Do-It-Yourself

investing. based on an we're in retail increase overall seeing an increase So

the call side. that's something think out I on material crypto

Arvind Ramnani

in not think for from Great. lift the I'm are revenues, looking but lift users? increased of directionally, about you kind a Great. And mean, the of a you when increased specific quantification, I or more ARPU expecting

Sasan Goodarzi

long-term Yes. is design, Live, community, with And ARPU. under-penetrated it higher designed self-employed way its investment segments, a we Latinx growth TurboTax just by rates and The our Live. and has TurboTax which is

our to for the we able in probably free early is the that X% create simple customers our ARPU end long-term And we're assistant is higher category which all raising campaigns, of our the on just now, so but that are about is to in in being tax have the being anchor the we and on to long-term, that now close of the largest you returns, shaping with but those just the intentional is side awareness Investor Day, XX%. right right providing acquire it's just the of for driver ARPU. shared category, – segment. Now that very the thing best at know to expertise expectations what And we're the very awareness because

Arvind Ramnani

Perfect. Thank you.

Sasan Goodarzi

welcome. You are

Operator

Michael Our of Millman next Research. question Millman comes from

open. is line Your

Michael Millman

Thank couple questions. you much. very A of

this – around you about business assisted. if You different getting mentioned if talked Credit switching a Karma you business Credit Karma-type between some is that methods that talk activity. from was normal or Can particularly

Secondly, this can up this, you let's from with RALs guess and speed I you to movement, whether and maybe some do kind can talk particularly assisted use those. of of you talk about

Sasan Goodarzi

not you your that of we that are comment this made I was Karma I point thing thank go But year segment. good deliver $XXX million for IRS as part use One the million Karma assisted segment, Michael, twofold. the to in it's before the question. is Credit the proportionality sure is of in we've number second that us big divulged when $XXX the Sure $XX a lot returns, at base. earlier million a or for can we're Yes. members And you running launching And same The the portion, is Credit within a experiments TurboTax just that fantastic out a platform. made there's we Karma much of to Credit learning assistant look the in make the that connected experience years. very

So that's their digital earlier. a driver second I use actually RALs, to money. not customer access to was really question getting a the point biggest the that early making platform of you, your To first which confidence, about of going. lot investments right And get done our They where really in. they confidence our where can a are have experts to expertise comes with is taxes have that's their and that is

your refund, really driver but to our that about We deliver big access is confidence experts. ensuring we also the provide to early

Michael Millman

money? RAL to eliminating Do over opportunity kind move to of confidence with see big you added money

Sasan Goodarzi

really come to we're that to getting by all, they access ensuring they focused on our can know platform of an first expert. customers to get that Yes, these

help very, can So methods get first early and consumer of confidence and access is friendly. our foremost, refund. that to customers these different the we That's course very

these but to is platform. the secondary providing So the to to yes, customers use it's answer expertise

Michael Millman

it. very appreciate much. you I Great. Thank

Sasan Goodarzi

All right, Michael.

Michael Millman

safe. And stay

Sasan Goodarzi

so much. Thank you you. Thank

You do the same.

Sasan Goodarzi

wish We'll ran we everyone's know to quarter. Thank I safe you, I everybody. next questions. everyone until talk over. you little appreciate everybody. stay thank I you a bit And well next time.

Operator

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

Intuit (INTU) 24 Feb 212021 Q2 Earnings call transcript