INTU - Earnings call transcript Q2 2022

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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 2022 Results 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 Investor I'll Intuit's Kim the President Vice Relations. turn that, to call Watkins, With

Kim Watkins

Thanks, Latif. Intuit's will and Good Michelle be Quarter Q&A. and Fiscal reading afternoon, during Clatterbuck, take has and welcome Conference Michelle remarks so I'm your to lost Call. her her questions here I CFO. prepared I with our CEO, voice, Goodarzi; XXXX Sasan Unfortunately, Intuit's will Second Sasan today.

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

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

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

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

Sasan Goodarzi

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

small reflect our the AI-driven powering results businesses. quarter momentum expert the global strategy and on of Second strong a execute consumers prosperity across be as company continued to we platform,

to solutions capabilities acceleration a strength market, money of performance. the $XXX This, and shift combined excellence is to driven our online We to by tailwinds billion omnichannel contributing nearly execution, that in addressable have team's with the offerings. digital and include and virtual a

tax season driven earlier Second me underway, Credit compared Group. let Group, tax Consumer now our the results in start year reflects start Karma Business an and quarter last billion of from there. strong the $X.X and to revenue Since by is was Small Self-Employed season to

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game to Group full achieve team revenue of to win Consumer plan developed XX% track Our XX% has year a and on our this to are growth. we strong season, guidance

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business Paid to paid features omnichannel Big grow increased and become confidence small customers, of small customers to help growth world. roll XX% payments, the new discoverability, and continue fast, invoice we to businesses after pay soon continue improve center to paid customers employees get the qualified this by like challenge. get fourth Instant out struggle Upfront customers in like Deposit is Get of innovations overcome with usage In help Bet set. our Our to we is with get flow, an of and helping manage capital, cash innovate

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priorities acceleration X have Mailchimp. We with

been deliver a and second, growth platform, We're confidence. building the magic scale. with between our growth to end-to-end businesses investing and playbook where introducing in a Mailchimp marketing we Together, aggressively speed by November, grow to data First suite; and from is need approach. a to accelerating the this of growth CRM marketing enable an run and create mid-market at developing positioned full Intuit customer to platform; with leadership mid-market purchase their actionable e-commerce and third, Mailchimp disrupting happens. insights vision real the to execute combine and closed is with system deliver businesses and QuickBooks global go-to-market automation, uniquely acquisition from to we've they integration QuickBooks to And their data holistic small for customers. Since customer our and in seamless a deliver are the moving on operating

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technologies help Bet, money customers part as speed pockets investments faster. instance, revolutionize decentralized their us blockchain in put as For enabling we of cryptocurrency, first benefit, and to more to are in Big accelerating such

we're fundamentals, we Day XXX We'll on as expanding connecting remain the we experiences mission. this JUST part by detail companies and accounting segments Bet, virtual list meaningful tax XXXX supply Intuit on geopolitical their and chain of pockets grow macro Investor money metaverse our conditions now people think the work further and needs their Big to inflation, JUST in lives. our continues role digitization unpack to our speed exploring our focus sheet, we in evolution on position and on our Despite our climate along in business beyond technologies to citizen a second with including of how was for its our and Wrapping balance for our Intuit play creation our reframing more privacy. continue and a more important customer and job a more making platform more about to in demand up, put customers' than role our experts, to as Great platform, where We is innovation corporate such businesses. our customers' Reshuffling impact strong top-performing worker we are in run strength. serve our of recently to and DEI, Capital wellness, the ever, focused them communities progress rising put strong on supporting issues, for as the by fall. the live recognized our helping thrive conflicts, at and change, As

We the prosper. over rely are proud of XXX choice the for be to on world million who customers to around Intuit platform

over it turn me let to Now Kim.

Kim Watkins

Sasan. Thanks,

quarter last of of $XX an QX operating million quarter charge second $X.XX versus majority year, of the ended, year non-GAAP the of $XXX points and revenue For admitting the diluted File million a XX%, XXXX, year. operating including pending GAAP share immaterial we to $XX GAAP up per claims that per Mailchimp $X.X earnings we results. versus billion, resulted earnings will the an any addition agreement of of non-GAAP versus income last in resolve of diluted of ago the income Credit arbitration XX of Karma, year, wrongdoing. non-GAAP loss million $X.XX in fiscal related $XXX Free This reflected versus and fiscal last GAAP from million delivered share an without litigation $X.XX After into our operating and entered $X.XX

segments. In on Ecosystem excluding revenue XX% Mailchimp. XX% and the the or $XXX from Group, Online grew quarter Self-Employed business Business revenue organic during the an XX% million or Small to revenue excluding XX% basis, Mailchimp. Turning grew in

within Self-Employed focus being expand Small Group of the the the truth of is for our core, ecosystem threefold: the With connect aim Business businesses, the grow small strategic and globally. source and

mainly the First, mix we driven prices, by focus QX, growth customer accounting continue and Online in core. to effective on higher revenue shift. QuickBooks grew growing XX% fiscal

XXX% Second, payroll, grew QX. includes ecosystem. continue the capital revenue, time focus payments, on which tracking services we connecting Online and fiscal Mailchimp, in to

in million $XXX services This Excluding revenue see grew Mailchimp, online in was expectations. in with Mailchimp line XX%. Within we recorded revenue payroll, our services continue was quarter. the to online Within the quarter customers in revenue growth. during an full-service growth tailwinds charge ongoing shift growth customer mix increase offering. reflects our from payroll per volume to payments, and and in revenue a customer

XX% expanding believe currency to strategy and in measure revenue on make XX% XX% Online grow Enterprise our continue a over XXX% and organically time. Desktop digits, QuickBooks This organic quarter. and QX We X% on constant and success customers growth customer in international expected health the basis, the both we Ecosystem strong revenue fiscal XX% driven the we of growth expect globally. Ecosystem increases. to an better in grew best excluding Total Desktop second is than by revenue driven growth, grew double to by Third, Online revenue progress basis Mailchimp. grew which is Ecosystem low price ARPC. of

growth Longer desktop half fall, $XXX million in in year. earlier this business Consumer of which As QX, this a to a term, desktop the the a revenue for second we to grew the decline. headwind be the reflecting XXX% year's we model offering, Group opening to to expect reminder, IRS this expect of we transitioned year. revenue subscription

are season taking consideration data. forming a open date and slower We seeing into latest both earlier IRS tax the this year the IRS

confident gain file offering are still plans fiscal analysis remain on excluding track growth to prior year the for While our free XX% shows the guidance to in users share XX% in season, revenue with periods. early and TurboTax overall, our of XXXX. we We in

our We DIY the on continue segment to and to Live. our focus TurboTax lead with in assisted transform strategy extend

Consumer reminder, drivers are a Tax key there of As X business. our

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

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

our share is fourth return. and third is revenue per average the The

in Turning XX% to year. also this reflecting QX, the IRS opening Group. Revenue the grew ProConnect earlier

high Moving users active QX, revenue $XXX of by on to million another quarter, was Credit Karma. monthly monthly Revenue active in and levels driven record per revenue user.

innovation ahead. we believe auto in and record are Money, growing quarter, Karma personal in driven loans the And over verticals quarter we Credit loans developing and opportunities the with home reflected the remain year-over-year the another we about combined emerging cards. by The growth vertical Within visits of saw by excited frequency momentum credit to focusing key strength which We on time. the is loans.

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

to cash an yield as on before, opportunities opportunity we management, capital time. we disciplined than generate our investing into in the As platform we greater shared lean We over margin for the strategy, expansion see investment we take return a that XX%. approach expected

decisions resources reallocate We to with commitment. continue remain an priorities platform. emphasis our These on being an expert top to AI-driven principles and guide long-term our

quarter. the We via customer that map. for business accelerate in shareholders be We and XX, we repurchases Board dividend $X.X Depending consider Our to acquisitions other profitably cash each priority factors, market on first increase per fill payable XXXX. growth business drive invest returned cash out the generate approximately second aim last product of with we is represents the our the to million during a We in XX% and to in quarter excess and market We to versus the growth. billion $X.XX The quarter. our on road our the both is quarterly $XXX investments in our and approved revenue share share, a repurchased balance investing on dividends. This can't stock cash year. of sheet. and April finished conditions

guidance. to turning Now

excluding including guidance, XXXX our are XX% XX% revenue or We fiscal growth Mailchimp. reaffirming to to XX% growth XX%

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

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

the aware, quarter. the in largest completed during second history Intuit's acquisition the of transaction Mailchimp, you As we are

working We of process, GAAP-only the issued onetime to result change to in XXXX purchase not and in GAAP-only could will the accounting quarter transaction. full results second price are a total consideration which finalize guidance the fiscal This a process today. impact our result to we year

complete we our to expect Sasan. XX-Q. with We turn I'll back file over to it that, process And this before

Sasan Goodarzi

Kim. Great. Thank you,

what of busiest AI-driven small to and the an platform powering are XXX accomplished more ahead momentum our quarter, for our across proud year, the and customers. I'm the being to than team prosperities strategy about of that company our expert seeing season find given During of we serve consumers the continued the has opportunities this new innovative businesses. excited million ways I'm is

open let's Now questions. it up to your

Operator

[Operator Instructions].

comes first question of from of Our the Schneeberger Scott line Oppenheimer.

Scott Schneeberger

lot view I -- I -- of a we to guess be in speak like I'd because you don't topic. started that we what's you from starting little do but IRS, uncommon on you color slow. else Sasan, bit it to And the to but a to have -- the go a with could behind then to tax what little bit follow-up know seems that? a earlier, season little something start it's a Could

Sasan Goodarzi

unusual. to Yes. the with and every the company year tell shift later yourself, that and that's Sure, they I I you happening relying behavior they And our to can the years in-person TurboTax trend on in with an would assistance be behavior is anything services been the every a an shifting. years tax get seems It there into I and Scott. this it. it's nothing would -- you know not day unusual. been versus read because now, expert year, can. for it's and the Every especially year. XX you, consumer of X through ran wouldn't fact just -- that business can access continued say, it's in later do it's year. It's consumer for it and/or a years primarily, year, And shifting I've

Scott Schneeberger

reinstatement remarks, people like File the follow-up double Alliance, on Alliance the full behind in may I this guess the the of heard in it sounds with TurboTax this topic. the what's who File season. comfort Free utilized a I you that's have Free through Kim's past stuck obviously, in And and just year. Great. guidance

elaborate just is on Could you investments. premier if upon from last that bit? trending year, that you customers a saw also you And little a then of If year? how could to boon touch speak could this you

Sasan Goodarzi

Yes, yes.

it's we just that me What I program. talked those comment. Well, it is are in was but to would and that that really which way come our the if if focus is in sure. question returns, we've to explicit to with stated, we've for we really Live. fundamentally, investors, the her as happy stock and only on trending we're about season, you easier that Free And started, share -- areas also point and twofold. segments, trying stock of in trading we X TurboTax market take X terms we For really fact, people are positioned specific but the in in let we those happy we're as you One, are, the improved are Kim are the the it raising was a the part should that very personally game often, that otherwise, we've experiences is keep it's situation, first that we make would IRS this to what that self-employed. that are then away cryptocurrencies, awareness. for need given season focused with also that your has say with Two, early not two, us. see we total have were feel a done progress. increasing we it know that and to terms throughout start our well make simply We'll the your that increasing fact we score, clear fact in those of there through for with in an we all, we around way done was we're great. are that more underpenetrated our upped fact our experience taking that being we for File of some area that share, the being We're trade, it's and just of or there is in that great and LatinX share the in. are good One And is I taking, investors, But are for way taxes we're feel done have understand bring your are whether assistance season excludes the -- those or it's simplify of very really experts that filed how delivering which them strategic to about their are get cryptocurrencies how share expert And got big us, around cryptocurrency. back easy those folks be Kim total make experts that have coming trades, whether and trades, have with for those

rest X about the about So excited about. the investor asked those and we're all that and to it very our progress, particularly segments excited we're season relates of segment of as the you

Operator

comes Sterling next from Auty Our question of JPMorgan.

Sterling Auty

in I you wanted to you in know on on on Tax the changed has for much of come you how the them increased growth would terms follow from versus as of now, your assumptions anything would achieve return? volume side. revenue how the per Consumer Based your of terms what look unit up year, targets at

Sasan Goodarzi

no. out going with the assumed, just you assumed. assisted are playing combination Yes, short really -- for the we Sterling, underpenetrated both I which segment, The playing we'd answer and had of question. way far, segments out as thank after We is is that it's mentioned the X things your along a thus

on our in are change KPIs. that we no So our seeing assumptions based everything with

Sterling Auty

the give And profile All get Karma, trends Credit right. quick can might Karma. Any positive I what you that business as interest to one from sense a this negative? do Credit or investors. business lot rate to rising either on for a investors or then environment Great. follow-up

Sasan Goodarzi

cetera. personal and X loans, put access really interest always is to looking rising dimensions. in don't consumers I'll it credit are mortgage, with cards, We loans, it's One et Yes. impact financial insurance, products, see rates, auto an whether

Lightbox. high And or rate low financial interest conversion looking their interest institutions in because invest to a rates access higher high are financial our on to that's essence, we the rate. continue And right by So market, the the two, platform technology for in a whether because, have really at products. Lightbox much personalized even our lowest because why be higher to platform demand especially our of will demand continues, way, the delivers given that in you the that's, product that continue platform they're is the financial on

So we us the that's have Investor just one an just example, element are I is when think shared really what loans at element. I of And low other we as shared than extremely would I credit use remind Day, cards you personal and X% -- we less share. if

So more in on then seeing. Lightbox delivering the going ensuring And their we conversion return for credit more investment. institutions perfect on come which invest on because our more what the their personalized increase experiences to we're ultimately models make platform, that a to they consumers, financial and their the is match they're will continue our

it, or we long X answer see now, unpack a again, platform. a that better wanted really trajectory even ago going the but are right question, your was year see our demand financial to institutions an short than be they did years a there. And on to being is of don't So I to continuing to impact

Operator

Our Sachs. from Kash Goldman next question of comes Rangan

Kash Rangan

petrified always of taxes. I paying Sasan, am

a better as at the where rate attach and out which for different And a going? business, attached you're the of been to your and point products. going -- about it's be nice its QuickBooks a little embark along. that bit come attack you this what do payments us see small the backbone. Can Mailchimp, is you aspirations that's through Advanced, that ask for Small been given how see market I'll large for to taxes. seems payment like online avoid separate little fantastic. there get a to journey bit curious able opportunity, you Where very to do talk you business, of about yourself journey in breaking throwing are will payroll the very watching company your on services Online see Because Ecosystem. size lens being that the is It's I've upside being of much I that QuickBooks payroll able your everything could business? but payments gets it interesting. installed volume Business are and a a But you base? more just Especially with potentially more So

Sasan Goodarzi

Great Kash. Sure, Yes. question.

you're not, by petrified have taxes First going of to all, get XX. to April a done That's your or wonderful...

Kash Rangan

question. No

Sasan Goodarzi

excited being start the we the double reason and of business, that level maybe the get are about is we April very, a it are very TAM why question, not, that addressable to in. With in that the us the and countries of for our market below is And in I'll in Business have One, of slow-forming customer so Wonderful couple do opportunities, penetration many tax a still done or XX% your customers Small look taxes said, highest well XX. at will by total TAM. large answer one the when clicks. reasons you number at the we

growth is is growth. a penetration which low, current one, So and for big our continued fuel

services that is they that even lower. use, manual, The is within of we penetration the the primarily are which our even have, second customers

at services So then TAM how opportunity low factual the the it's you because top it's start customer TAM with if the of and if both not is. large primarily penetration, one yet manual, picture digital, paints

aspiration, about intentionally. secondly, asked our I the mean then think you this question and I very

only we the to the we customer easy customers years are truly very than to is we to all it from helping ago, Which and now lending you aspiration And market integrating employees services we then different all organized to the to company able continued a every make of services XXX% receiving want to CRM that helping to use powerful benefits why money we the third a payments, the to X I we then think drop-dead and you sending capabilities. on gets as our network and for we not to business ago services with than such relevant the and and ultimately, which quest to have ecosystem our we of use have long put to payrolls XXX% capabilities that both year as that get want are to your customers money online, has your business it offer a be but ultimately are and grow point, that Our even services. and and you is in your capabilities. help use -- of accounting managing on be our your have, is able out, business them, platform payments to

suite because we days, not QuickBooks small early have services use expert, very than of to helps businesses are and platform services because would ago a they with cash were couple it of use manage say versus very growth is our is more put that don't essence because with them hiring that truly mid-market years but the the an even I businesses. Xx higher QuickBooks reason and we actually you we So by now of helps small profitability although Live, With what we are in ARPC And which of not the And everything, is seeing that well with that grow, serve services services to the the seeing that in on And money in services. success digitizing of we their upmarket you a understand being comes pocket, a raised, we're the fuel actually seeing where helps and just last positioned engaging more only them their going Advanced. in advice customers. then their you're those if have. thing it very, are them engagement

the We've we of is just platform, large we penetration. our the services XX. about delivering into on all years April take that low your you customers, do when of for of growth Thanks, TAM, need that account, really I it's ahead think And by our Kash. and taxes got So headline have and us.

Kash Rangan

choice. No

Operator

Our Panigrahi next Siti question Mizuho. from comes of

Sitikantha Panigrahi

about new trend. to wanted comment about customer Just acquisition ask your

business from You earlier talked the creation. about effect lagging new

mix QuickBooks? safety you're QuickBooks coming or how about a you should looked other new what for also, customer ASP a new the of driver as like ASP, kind growth seeing as think for trend, acquisition products? higher seeing higher at So cohort Advanced the in, we business And as you're creation new

Sasan Goodarzi

question. your for you thank Siti, Yes,

ARPC First expect XX%. of to and want plus. online customers to you about by it ultimately make grow revenue we to expect the our XX%, to of XX% start we model we grow all all, revenue simplistic ecosystem -- XX% how think that will between to I'll us to the growth is of that between that's way new achieve XX% And all achieving the reminding growth, we

as mentioned Advanced, lower end the the customers. with is and both penetration. many market, So which The in us, important Checking ways way QuickBooks serving large in a the I new just now serves a it, we top to moment was new to mid-market acquisition customer customer QuickBooks low with QuickBooks TAM with The of very comment Live. -- made the market to and I all we end which essence, context the is, ago, do from have of that have the of

one, And Two, best the we're for year which month of a third hard only which acquisition. ultimately, where a regarding proud. customer to the come, of using worked January, our in year. fit. of are lastly, is in the think, means, positions businesses to and our I And just And saw the product now, we for customers' really started, in ton, formation, really, we're not which start that our season some more established. are QuickBooks Slide. new We business us get market understand the us bit the months needs busy weeks but learning We've next

really the business. business formations. run established impacted we because for good roads ultimately, have we your But and capabilities we on in all us other although So lead to don't platform grow It's or rely significantly that to QuickBooks formations, long new business way get especially now businesses. more your don't near-term business it's these with term the one

Operator

Morgan comes next question Stanley. Weiss from Keith Our from

Keith Weiss

numbers all very maybe in around rate It's on pretty now, been right Europe, there's cycle, inflation really which whether difficult. a that expanding the some in little us a it's or on on dealing with question bit is volatile nice it's Siti's going going hiking market environment. on quarter. Congratulations And extraordinary what's there. a events whether a we've Obviously, Fed

caution, not this seeing? the you put any move? but volatile have a a year guys at had of because small side Is doesn't you you Small the really into environment guide will, if overall guys the volatility you're full guidance really great an you health. And because of your give Credit Can starting raising on QX, business potential of particularly have good Business on of equation, and perspective update any Karma You what of kind small all? us businesses impact that this to

Sasan Goodarzi

question. market that and where chain stuck COVID with thank remind really we doesn't frankly, product-based shift you to of inflation I'll as the business issues, much businesses. just be product-based digitize And running those more more to business got the we've what and the of your There's on digitization my XX% at that overall X it it's about much which business which services base why their are XXX businesses businesses everything. is ultimately, fact, see everybody and impact total service-based a parse the our And more me in opening pieces. is almost us in supply they what's businesses in can efficient which use that intentional happened look effective, for expanding into platform, and much, small at combination Keith, just you because our let when happening about to what putting employees, home, with they are serve, was up service small One, Yes. remarks, this I businesses. in seen, of that XX%

a want from I us supply It to health none although these So we environment, standpoint, to acceleration to to see that want is chain use geopolitical us digital none actually seeing issues, platform. there's of actually issues. are want of -- this

And U.S. global, relative So got with we U.S. we're impact see of impacted although that seeing. in that's, much, of And aspirations -- that XX% and be the we internationally. QuickBooks what baked and just the foremost, first macro into what the outside to issues our are revenue the to have of we our our much space to that majority COVID already are more remember is

what digitize and secular the it. fact beginning just an And so we the strength to see shift. we're this on of businesses opportunity small based think it's talking as a is the It again, that is about of

guidance. me remarks, in Credit answer see Karma. initially We Let we Karma. mentioned thought we my not around a in that Credit in And second we are -- seeing as Business question actually are your I strength would seeing Small we tapering actually and in

segment to just includes across we us. get company. that our first raised simply the a So the quarter year, which to is season, every at that slower-forming through But strength you very, It's want guidance as we and there's And continuing our in season. And strength of tax. with segments. And we of know, said, in guidance the all next we'll relook just very tax are unlike quarter. see the

Keith Weiss

thinking it. the that why And the the in Credit it. know strength margins second margins. we notice Karma I about should now, Michelle credit could but also card, the sustainable? be the be Got I take those on did terms know half right a year, strength have Credit Anything voice in of Karma, wouldn't I of doesn't in you

Sasan Goodarzi

we in in or to manage level and to the number forces Keith, at innovation too short-change truly us pay company the our company ensure think segment general, we margins downs across by would company we attention I the the level. holistically any to that manage ups we to of much make -- company our the margins of at just -- just it not for level. fuel that don't The managing not We really at the sake segment. don't the Yes. platform investments it

wouldn't We if you at it's wonder it's low And about much I attention company wouldn't X segment it I our low. level. guidance. excited. too just it's and expanding pay If the as into it's been So managed to get know, quarter, feel level. why we've the our high expansion. And X margins too too wouldn't I good quarter, built I margin

Keith Weiss

answer It's remarkable. that's Sasan, would Michelle exactly same have the given.

Sasan Goodarzi

partners that's Well, crime. why we're in

Keith Weiss

Congratulations... Excellent. Exactly.

Sasan Goodarzi

you she's it. see And smiling, can't

Operator

question next comes from Deutsche Brad Zelnick of Bank. Our

Brad Zelnick

TurboTax congrats great to relaxed Sasan, a carefully say one they to little to comfortable, factor there more season? of you optimism mix for Is the your can file see adoption Live as be be in that you it the of I that quarter. later. and specifically anything response And perhaps I'll for the terms was Excellent. to can echo gives on what percentage more that that live that maybe bit full the a a first filers get helped question listened

Sasan Goodarzi

Live this know, are your TurboTax platform. year thank question. -- for Brad, and think TurboTax our starting we fourth is but lose to tell this you you, you truly Yes, count, I'm I a I'll with as is year,

to because to but your worked can taxes it You bounce you is understand of self-employed, in which back between states, you. any collaboration platform for much lot sure seamless plumber the that access forth can from to why an that yourself I want know the and to doing making your improving to if way expert getting ultimately advice help X experience doing is if you And to ultimately, really or I time we've experts. care if if where only AI. a this I'm upped I'm want expertise a get done in my what be so That to switch differentiator folks true a the is the matching you situation, game I'm in a that question. X, an which also our we've long by of invested about AI, through not year, Because investor which is was applying answer is also way this to customers or

TurboTax bullish We Live. are about

a Investor What that customers see, the about Day is about never started million talked and XX category. bullish role which million we in all big earnings but expect, people we after the finished. going which more TurboTax on also after XX than And our assisted, in last both that would ended have playing out we what but we'll what look it are May. actually But where churned otherwise. segments, underpenetrated to at we report year, the We it's assistance in within going like assisted

Brad Zelnick

And either you Kim. That's maybe just a follow-up, or very helpful, for for Sasan.

right. comment, target that clarify Business you points. I it a you great. remarks, have Small prepared think that increasing was I be and to would if your and about make I it talked can several want sure retention first, And customers that in just think I unpack in

Sasan Goodarzi

Brad. sure, for yes, Yes,

we've One, Business start I about that comment actually in into was Small it relative segments, the that goodness to important what on in QuickBooks the and made those of acquisitions were up of X weeks -- are year retention both parts. new parse record stop. in really And is we in focused we because are that the certain rates up Live. of of retention the our was where me seeing of really, customers our in What overall cohort for the want not customers, and the was I the in we Let QuickBooks us opening service stay in I lot so the only with come talked a to acquire but and was full in remarks. -- alluded our last to season, had back, point we're both both customer Live, remarks that terms they they deliver that need that that

Operator

next of Our Materne ISI. Evercore from question comes Kirk

Kirk Materne

sort learnings I'll about just terms and learned QuickBooks. cross-pollination you've how more maybe Mailchimp perspective? And between And far expect echo congrats clients? technical harmonized about from of in Sasan, talk out what we go-to-market, in having we a of the are can what just that of some of of terms from quarter. also, Mailchimp end the sort of on a your you on nice early a the integration should bit back

Sasan Goodarzi

Sure, yes. Yes, Kirk.

customers, to target, the customers of our where but where customer touch with scenes has So the data, their the platform we X the really we one to really let to to powerful on. only services that that grow will only not profitability grow share they purchase within capability It's understand the that in behind And that's is we the data. quickly do we're with the these cetera. what to help One the is place. me platform overall customers for what et data wallet can on combining create this where new because growth also are, focused priorities is them acquire our have along be just the this maniacally platform, magic reality extremely

these do know this think news a is Mailchimp your of mid-market understand really we the how seeing good to out drop-dead a of than intentional doubling their a third, that so, because of it that surprises about other picture, before engineers, answer a is in these about all building priorities in, business think a priorities we life. because be bigger how imagine, it it, right wonderful know outside The we're second general on of the getting part the really which impact half to lot of right, year you our and And people and is and The relates we to as ourselves we've of this about of mid-market. a position down seeing more we in easy the were having to need then as we to you frankly, the of inserted some Mailchimp that And there. impact and our are excited And the of to sort question no X of product pursue are together international. are Intuit. If spent understand I need really were best about several this more or we're internationally, than momentum start on. even are U.S. paint platform get the months outcomes and we'll to year bring To there's could efforts is even are haven't focused to work a would the course, possible even of results we probably we'll is capabilities space say priorities with, that place what in do I platform in the we QuickBooks, our to we where

Operator

Turrin Our Wells next Michael from comes Fargo. question of

Michael Turrin

fairly on early We've there. you Sasan seen there could some And of engagements seeing as those would Intuit campaigns if of a the around of late. you be platform, well expand powerful and ad entities as presenting around separate versus more brand Nice enjoyed property, great. in maintaining I view they're known all on job your or Is striking established the anything individual you're to add Kim right maybe the that each can and think programs? holistic it between returns balance stepping

Sasan Goodarzi

for latter stated Thank the Michael. you one start first. in I'll it question. with Great. I think And Yes. your it really your importantly was question,

of an use, customers get We are from that perspective, success customer And that in our have really QuickBooks. and or intent means a benefits very the powerful a connected TurboTax, really as convey connected as benefit your and brand fueling Karma to brands you those Credit love they that individual our and power is Mailchimp, more and as a business.

connection is that go powerful, It's means going minds are is Intuit way, of invest in here's that all away. you by about to all are So brands brands customers why the the and how the the we to not make this should the care.

this it's we're back -- it's come We're other year. the so experts elements and about pleased communicate that The to And I year in have situation. asking that's our your this assume we campaigns, really second of intent ask it's going far question. element you understand were the actually please really around but around early, -- if comments your as was my our what and broader, specifically that campaign TurboTax with

capabilities, multiple insights things on And your and have on-air to states, investments bring communicating moved that and we who to have also self-employed, situation that more only those you'll at can experts at no them to an also communicating we much help to we've but them our communicating our not make perfect we that do understand look can to board, is, around that only deliver have things those those that situation. you in effective not both those scale. made matter make expert heavily helping campaigns, digitally, what in invested If see but so your AI are productive to to match

mix has we marketing just we to awareness -- do consideration, far game going the And of work this but of we mix we'll improve company, we through about how understanding across did understand And can and was then, go better the forward. That's been so what So results, we'll to effective, communicate, modeling what the very but more season. received. our trying understand we're of know well with course, a our impact lot data. as

and positive. early been qualitatively the has data far, very So

Michael Turrin

at Khaled commercials saw Those Bowl We great. the the DJ well. as were also Super

Sasan Goodarzi

you. Thank

Operator

question Ken from Guggenheim Our next comes Wong Securities. of

Ken Wong

to Last as Karma adoption. last for of and kind Credit year, I effective of Fantastic. a trial push. wanted is I very this terms the saw channel in first touch the TurboTax. just driving year new customer real on year year was

seeing a Just few from tax first consumer season. perspective of would sense you're of a love weeks in the what engagement

Sasan Goodarzi

question. Yes, great Ken,

say we've exposing with customers We're platform. it's X Karma on to we where One, can account, Karma Karma money. the me can really really new going within twofold. get all just Let that and that about Money where and early Credit will gone they them refund really to Credit tax Credit they we pleased the put where TurboTax in days a become access Karma time, and it's TurboTax made. big these the that's then Credit And members their progress folks expose

as I'll share stats pleased. I but won't course, any -- are just very with Of we leave we're you, it

year Credit the year, year year in into Karma. almost the you where Credit last even The Karma app. of it first second is can wasn't TurboTax, a This trial We really threw is TurboTax wonderful sort the to get your a for far, real-time. go which done cases, taxes experience. actually We're have TurboTax, to Credit adjusting And far within most don't learnings Karma actually and app. better is getting you in

really term, the do the BA don't about customers Credit for getting -- not TurboTax, with that using already members but Karma long users. are, We TurboTax all Karma, TurboTax their bullish the Credit taxes all hopefully only

continue doing learning, love X these between making, adjustments whole we're and customers. integration the it's impact we're prospect that our remain just what of that very the to platforms members having so the and we're So, about far, TurboTax for and we we bullish why the

Operator

Our from Research. of Alex next Wolf comes Zukin question

Alex Zukin

online ecosystem back a like was I'm if maybe about of time the sequentially do the But the right capital sequentially. understanding it's just is it and one want think how multipart that understand maybe unpack I'm X% would for number, unpack the SMB history, trying And little it's QX that? it ex think accelerating and and helpful. could to I what's we there like one of to looking in year to bit what's growth at growing second driving normal? Because QX fantastic. Mailchimp, you understand looks at strong think unseasonably between kind me. to Or was And tracking? looking the and way that, I drivers better, year-over-year, and back be payments that about payroll half about just because Sasan,

Sasan Goodarzi

Sure, good Alex. question. Yes. Very

all, revenue is of overall, as start XX%. This Mailchimp. grew know, grow the obvious, Small is our I'll grew growth all to you first XX%. excluding And So with XX%. is which Ecosystem our Online Business goal over And

actually strong we extremely quarters. So a had

half mentioned in about through mentioned I as we volume based And I out quarter. tax strength a particularly in mark. guidance a really expect what of to on payroll, see XX% sequential and And to Credit and just as our get don't So they strength I'm earlier, earlier, are season were second using year. we And Capital. very, above continue are to talk tapering. that our services time that you the there, not but customers QuickBooks of quarter, number in the Karma is the mix and sure we after the payments, very and coming across expect that well it's tracking Business We had want Small in the and throwing strong the

strength. on that compass, read to with the XX% are would of Small fact we actually focused is revenue to Business we say, So grow north wouldn't Online going I our anything I seeing is Ecosystem great and which want into our taper.

Alex Zukin

Sasan, mentioned of Credit couple times. Karma then, a you And

where at business Online you look How to with if like the seeing to What You've and Credit would synergies even no you areas down Karma strength of Ecosystem tapering, where learnings? feel of progression there? specifically? is are how even be? growth, gotten you you you're see those anticipated What double and within ability than the And asked some extent, you question an there's the seeing going more if more kind will.

Sasan Goodarzi

Credit Karma Alex, on into -- has integrating the area really Yes, focused TurboTax then and experience strategically, we've vice biggest versa. been that the the been

end, you're what and I a thesis options first new benefits a customer become was going the expose means these you account. And So get customers. is refund we Karma those that as Credit well. the members that that a at And one had, Karma is TurboTax that ago, and on Money on it's put if of moment the strategic then Credit mentioned platform to can really your to Credit we a Karma other

right, Karma and done. shoots. second ahead seeing literally we're a in. in us, We the out them The And say is year-end, because area we're of early TurboTax and building opportunity only we're Credit like that the days down and contextually their to experience within seeing, year actually much the just taxes the the only we're we're a progress we're that's and engaging helping get where is so app more with than green customers interesting, there's because the doubling

is payroll platform. integrating Alex, of part the Karma other, The Credit as

to So ultimately consumer Karma. one access Credit money, can if has Money get primary your account, another focus But money on a earlier Karma and platform between you been to your you area. creating want that's this the TurboTax put Credit

Operator

next of Brent Thill comes question Jefferies. Our from

Brent Thill

solution, a decision what how some on from healthy from justification walk year's curious how can that that us of just are hikes was, of XX% just drove in of through in season. that's terms had if pretty just the you pricing you've they -- anywhere resonating fairly terms hike. just full-service give the big side? and last the you What and I'm sense price could tax healthy XX% Sasan, between of

Sasan Goodarzi

Brent. sure, Yes,

anyway accelerate one principles, for for into As actually for question When live time and we me do our our include have period or progress answer refund do, things TurboTax free. always it One, your you the was our overall expanded to question. did continue really relevant for lineup to yourself wish, ask and we start it free holistic the more and a we Live to where category didn't important with pay we run That that transfer and And made. in bringing nothing. do the of very that pricing you filers, a also, you we're it this let to with student multiple we can at assisted, to simple a the customers for the there platform decision we that because customers, you certain free and we looked platform tests, there. announce, seeing lot like And are from we loans it's we prior year. impact

really a The much season Live third is we and lot particularly is of factor. some impact. didn't full we is price and access we later big realized tests expertise. season ran is what confidence in have of to And about an TurboTax and an not ways, having It's learned for unsurprisingly, then and what pricing early service a pricing

the pricing, price is two, a season up room one pricing. move on we late move on to we up. a And based or So to made pricing. early lot It's of lot a had flat one, testing no decision of and there

I have I strategic made. alternatives. really customers, confidently our our exactly is out that which we've as can get they back-test It's get to although somebody thought, expert few these are other me? it's that And get to playing those decisions, versus price And price-sensitive more, we that done were the want? love seeing. So taxes I we for my what as And a not we're access -- that's can decisions

Operator

from Our Lenschow next Barclays. question comes Raimo of

Raimo Lenschow

are just sustainability? you actually for we apologize like talk better. reporting there it's keep drivers the is cetera. that an Sasan, your better -- bit you almost in not the talk focus, that talked numbers Desktop to. you some of Can area the I understand question, But you et little than Can the but about a

Sasan Goodarzi

Sure.

really, what and they they say to back X your and their customers continue I'll question to to continue these One, that's on relative think just Desktop simple to see. resilient to to surprise we I And come are products, a desktop. answer us love things. wanting always

our will even be we element ability business and future. very -- thing that and we create also customers something leverage where of subscription-based will can majority services I is approach rolling that out subscription-based higher subscription now our our access customers that as the would lot started to the we're that's will a excited and to in give and we think and so more the about cloud, a the really drive functionalities of second it say a this the year features the of and our I look into primarily that they moving

Kim Watkins

you that's mentioned digits mentioned, Sasan high was Enterprise things Raimo, remind that and from too. and big first just in in Similar the what with If of Desktop some things to single which growth customer increases to Desktop there. in the digits for I second to were up the could X script, double that, grew add Enterprise, specifically low in driver The -- quarter was quarter. price quarter, the growth that the that

piece that. term, this the That's not that's consider. to the business of something decline, we're then this growing second in subscription year. to expecting model really within headwinds the half So from longer transition And especially

Operator

Research. Our Kartik of question comes Northcoast Mehta from next

Kartik Mehta

about really seems terms Last number wanted just credit in I'm to it your for you you at an you for And ask Karma. wondering, was cause this battling comparison amazing that year see guys credit issuers I cards issued, in as the of little opinion, any Credit card waning Sasan, and at a issue of year all? like bit demand you does that customers. look year? do

Sasan Goodarzi

Kartik, Yes, question. for thanks your

a expect see because continue personalized talked to you that Lightbox to of the our both couple really we the would year, of second deliver tapering tapering we would would fact that And we and Michelle the for which the and thought of haven't we the half year. we of originations the of the and is members to of good we strength tapering fact of the probably ago, a experiencing because a expect half see, of second I quarters is which and If expect we in we execution about experiences, in what continue recall, that that partners, origination. for why expect we but and seen good see type strength we're

Kartik Mehta

have tax, from competitive surprised any Just -- you're that ones you, a are you by then make so competitive changes anything changes? need competitors hey, say from to surprised standpoint? that a And seen that any you're we by one to just that standpoint, on doing that would

Sasan Goodarzi

compelling. of our Part far we're it's is, company and obsessed sure could be lot back, customers be really scenario with of our as what our do focused on a we a customer that could planning primarily other and customers playbook to more is presented making alternatives

part the our particularly of and at are we tax. one that in playbook, So it do best quite well, the of just as we probably company across

know just just that, year, that playbook. the that surprised. And our part So of tell would we've least probably you I this been is

And anything of so surprises rest no, it the the differently that we're that's informing is not -- there's season. no doing

Operator

Our next question of comes Reback Stifel. from Brad

Brad Reback

about Live Sasan, you perspective? of difficult headcount you for the obviously, there. feel to good hiring couple demand a product guys where next the are a weeks meet Do environment here in pretty it's from out

Sasan Goodarzi

Brad. believe to what we We're have in so to Thanks, into we've experts many prior very several just do. because this year not, years feel gotten We this best the years need our or than The it and good absolutely. short because we Yes. platform. is at on want actually, answer be actually

on hiring. fine absolutely are we So

Operator

turn At this call like for remarks. time, the any over I'd back to

Sasan Goodarzi

everyone, out we All wonderful look yourselves, forward there. Take safe right. to of of good and so everybody. you, talking Excellent. Be Well, you questions. thank your listen, May. Thank care all you to for much in

Operator

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

Intuit (INTU) 25 Feb 222022 Q2 Earnings call transcript