INTU - Earnings call 2 2024

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

Operator

Good afternoon. My name is Angela, and I will be your conference operator. At this time, I would like to welcome everyone to Intuit's Second Quarter Fiscal Year 2024 Conference Call. [Operator Instructions] With that, I'll now turn the call over to Kim Watkins, Intuit's Vice President of Investor Relations. Ms. Watkins?

Kim Watkins

and I'm Intuit's Sasan here our Sandeep afternoon, XXXX Quarter Goodarzi; Good CFO, Call. Conference with Aujla. Angela. welcome Second to Fiscal and Thanks, Intuit's CEO,

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

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

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

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

that, with turn And Sasan. over the to I'll call

Sasan Goodarzi

. Thanks, and our and global great strong today. another We innovating thanks quarter platform powering to expert joining AI-driven and of on to businesses. had for consumers Kim, you on our executing small platform. us the We're momentum strategy have all be for prosperity

year XXXX expanding guidance by revenue while grew year XX%, and our we're full quarter fiscal to XX% Second revenue margins. track to on of operating growth XX% achieve

Consumer growth our full X% guidance plan in innovation game reiterating win tax. Group. to for to and of confident with are year We're the our start X% revenue Let's fiscal and

consumer and businesses. to virtual revolutionize within tax TAM. $XX the for billion our consumers and get which positioned assisted how have well by to penetrate. expert $XX small This a we AI disrupt platform billion data, and taxes the represents started done preparation barely business category leveraging Tax We're categories, includes assisted to

leveraging TurboTax small and taxes platform Karma products. we're ecosystem, extending them QuickBooks power By customers directly access and online to these their the within business enabling Credit also our and to by of expertise our members complete

Let of areas the season. more me focus share about this

can we XX-mile and accurately or platform person file their TurboTax they radius confidence maximum are the their AI in being providing while powered want experts they are virtual virtually however to to taxes expert of serve filers and service. XX% U.S. than Intuit's use by refund. First, within live consumers best-in-class done data expert. These getting of that's deliver More

growth, Service X We're date, in highest resonating season, early is has XX of customers. at Intuit. it's the TurboTax of seeing the recommendation with offering Full a to Live While season strong and product score the

their with their they Online Second, with expert. TurboTax. file small a businesses an taxes can can a And is customer QuickBooks business small file if taxes

they can and these from it. refund need With maximize their get offerings, advice they experts when

time. Our are to driving revenue over interest. Business and complex, expect more per experience return revenue they at we contribute and are easy-to-use a tax return per much campaigns average returns them average higher to because strong expansion early

more find Karma offers exclusive Credit app deeply for members integrating file an seamless and members they for more even TurboTax, Credit whether we're Karma or with directly Third, TurboTax Karma want it Credit the with expert. with to in to making themselves

designed future account. smart seconds to as to Intuit time. Fourth, behalf IRS a customers Credit Karma a in expertise, in of Assist, Credit done to this gateway assistant access financial qualify, the is XX for This creating those the We're you AI-powered TurboTax our tax higher as Credit and money access Intuit to platform or engagement This Assist, of refund the With industry Karma live the refund refund on a make with benefits automatically earlier when hard also in depositing Gen after the unlocking work little acceptance includes for advance done human into decisions. filers an monetization is lead is for their Karma to money loan that season. fueling success. of to over we where our are financial

example, just better helping Assist TurboTax early helpfulness For explanation, understand In than is results, their customers. Intuit confidence refund. Customers Intuitive's indicating are using to Intuit rating legacy greater X.Xx is to our deliver

with We're bets leveraging Our and virtually with business to accelerated categories smart and focus off connecting speed TurboTax revolutionize of tax how decisions. our start Credit the bringing data money together the for disrupting by showcases Karma growth tax great tax. experience season have and unlock AI We're Intuit the experts customers to benefit and the big and in assisted this a Assist people consumer further innovation power to to for future.

Let progress me now X across highlight our big of bets.

business speak our people center reminder, decisions, growth business mid-market. the a disrupt big unlock As to money connect benefit, to X small be the are bets and revolutionize smart small of experts

big first to to bet is speed Our benefit. revolutionize

our enables big years AI-driven data of is at to X declared Our powerful, be to platform with fueling expert us data our customers. innovation platform we core the our for is our bets. customers all ago, platform. At platform with and innovate foundational an million for across XXX relevant the which speed and to strategy AI scale, our of

financial our opportunities Intuit and powerful accuracy Gene our operating way. attributes those experiences utilizing to a consumer, which own other LLM empower GenAI, possible customer in customers and GenAI what's across from fuels financial we as This XX,XXX and which platform. unlock with cost-efficient our GenOS, in leaders as with well technologists speed serve XXX,XXX includes tax financial together business create to attributes small AI. And and have per with our breakthrough per system, We new

about we're the gateway the of As and success. next I is with Assist delivering creating over customers Intuit Intuit benefits to is our lead is which a of monetization you more the learning behalf in money, frequency pace Intuit really the with live of Assist, rapid their driving of done innovating, adoption believe done and for hands earlier, expertise across confidence testing, mentioned and we're where and complete of deliver engagement higher customers growth, for core work no of and offerings. now. We platform, decade our select to benefits work at our excited fueling customers. services customer a adapting future human unparalleled automatically to accelerated Assist critical I'm on for hard customers the will

few a share me Let updates.

First, TurboTax.

and this customers. As the is our I shared season in to Intuit delivering confidence live increased earlier, Assist product is

Second, businesses and providing Mailchimp. help them time, content Assist. automation small and grow save revenue Intuit AI-powered generation using we're To

decisions and and solve help Assist grow Intuit beta designed businesses make to business. to their in confident is Third, QuickBooks. is cash optimize flow

provide platform. And will faster, translate who will sharing that faster number platform now translated situation and save home started for help able and major more. range interact, and obtaining using running the their them, manually provide leading this for business a increases on and personalized Assist customer that is to background prosperity. we're believe conversion the work buying, customers our at products We interact a is members to can New the Assist that their paid revenue we as transactions to Their previously a as paid help closing and money. remain to of and an were most, moments their information. daily with move Credit switching are website and such can financial into we workflow making assistant money we're company. Intuit we'll customers decisions. Karma with excited books. Fourth, when wide can ask active to progress digital early being to and and them, fuel get across credit. money generating to benefits by Karma. help rapid for drive customers and Assist, and Assist unstructured pay-enabled with Intuit we data higher innovation e-mail, be time option Credit we their purchases, about help automated and them will address capital. Furthermore, members savings drive monthly as specific get to more help account a make of Xx to of It's into to benefits expert their existing invoices their an connect insight from customized recently recommendations. data per for as and engagement saving beta, success and We're with items insights trusted needs questions out experiencing financial quickly expanded focused on more their in answer the will and with confident engage financial be bank like customers actions rely with getting progress such matter to user. We questions to do make transactional time that and intend for for power the productivity customers, a with way better on saving Intuit their topics We the the enable GenAI by learn connect members relationship the beyond can analyze interact that member outcomes in customers Intuit to increased their our right highly and provide in and such financial products. Customers time shopping decisions changing suggested in our excited to by

an capital new Our fast, and of customers customers, employees to helping small get confidence bet center in big is growth omnichannel world. paid by the business become fourth our with pay manage get

campaigns. payments. Total content setup, have automations than to Intuit by content positioned uniquely successfully by understand We of big campaigns with the such time. Intuit their have paid money grow larger drive can which innovations on will confidence customers by monthly generating paid retention. Assist new reducing consuming adoption account reducing green have auto of drive over different mid-market invoices, instant higher which with rates payments including personalized to over Mailchimp's GenAI We're retention. Automations be in to growth. and their becoming driven who cart get stages We're and an work all run online management, more We are for several source to a capabilities. to invoicing develop our challenge are in more enabled time are X higher-end remains After payment to end-to-end was adoption and adopt also new faster are is our shopping platform to quarter. work and manager and of and this customers XX% Mailchimp's Mailchimp, higher more revenue fast existing businesses. the easy is breadth benefits we live them engaged an account believe new revenue. Intuit higher welcome, future. help on customers the our likely well onboarded including payment-enabled to today, drive XX% customers. Getting we're Customers for ways drive way customer revenue but more have editing account with front, offerings AI-powered them activated for in marketing pairing marketing Assist months, the We're lost volume and business. In us and also offering deposits customers helping is help roll abandoned discovery, experience and drive the customers, ARPC of We're help out XX% get growth customers gives customers customers. truth as to a recovering engagement from Recent cycle manager get the that better paid designed shoots text small provide generation to will personalized serving improvements help them, life higher seeing past we're for across payment-enabled paid. their our and customers. beginning Assist up customers focused our automations

than customers quarter, number small the ultimately serve pleased of engaging August, during a customer faster business QuickBooks making driving seeing that ranked our on are paid watch focus connections we're honored XX rolling payments time AI-driven pay up companies time. We're and or BXB of customers front digitizing payments, reduce option customers on more and batch to we're to flow. payment and for customers. the cash on hold X better strategy improve to use ability their The our power that in save excited across has software with on our list. new platform by small to in our their next-day the began the in XX payment top rails the we adoption Bloomberg and their Just to recognized Gen cash prosperity AI the time opportunity company our XX%, of transactions we're XXX, the including our who with paid. We're between automate and allowing about to and initial us We're also early, to get accelerate increase and ranked longer invoicing While this qualified bill wrapping invoices innovating of ACH XXXX, durable and doubled be progress for platform, more expert to by payment businesses, offering. To since out lines experience businesses adoption with network and as be in customer highest ever year's our of

to it Sandeep. hand over me let Now

Sandeep Aujla

Sasan. Thanks,

For IRS business. week despite to year we continue later operating the the on strong deliver delivered another margin as the approximately operating healthy to quarter second quarter across of are X guidance We we fiscal this opening full track year. achieved and achieve our XXXX, leverage

last income operating of million a year $X non-GAAP up of share million earnings of $X.XX up results diluted up versus QX $XXX last diluted GAAP last $XXX versus $X.X include revenue billion per ago Our share up operating year, per earnings and that's $XXX year, and $X.XX $X.XX Non-GAAP XX%. income million year, of versus XX%. billion, of XX%. $X.XX versus XX%

to business quarter, Group grew Turning revenue, our Self-Employed online driven XX%. which ecosystem the during Business segments. by grew revenue Small XX% and

nature power the economic their the demonstrate our cash flow business and customers with as offerings, mission-critical which to they look any resonates in small our of grow improve of continue results to Our and environment. business platform

of globally. of is businesses, for core, crude the the the source grow the focus and expand With small self-employed our and being the business strategic goal connect within threefold: group ecosystem small

on growing core. First, we continue focus to the

by XX% customer accounting effective higher Books mainly Good grew QX, in and driven prices growth, revenue shift. mix Online

focus We to innovations. prioritize mid-market both the go-to-market on and disrupting small continued continue through product business

to towards are TAM ARPC time a across total This, customers and existing platform. mid-market over to shift customers strategy small in with ecosystem that our coupled the given emphasis more complex While our over of smaller usage of ARPC subset more time. of business formula needs our a drive their our the higher higher sell services services growth

focus total to Within reflects capital QX, and payroll, offerings. Within tracking. and Pro continue in ecosystem. we payments, driven effective growth Online Mailchimps, paid our as the prices reflects payments, driven XX% Second, on shift adopting customers quarter solutions, an towards a in revenue time our grew higher increase the payment their effective by the higher-end for payroll, an increase services growth mix revenue connecting and effective revenue customer quarter customer growth growth. Mailchimp for revenue volume higher adopt more manage cash and the offerings our payment prices ongoing to by customers higher was flow, in prices customer. growth in

globally grew basis, strategy, Third, with by a established and both currency our on online we expanding we and make QX. Mailchimp leading in Mailchimp and includes markets product international execute to continue all markets, On to in Online other executing constant ecosystem our which progress as in continue total lineup. with international refreshed revenue localized leading QuickBooks XX%

the mid-teens. Desktop ecosystem. in grew Desktop our QuickBooks revenue ecosystem quarter, to revenue desktop in moving XX% and Now the Enterprise second grew

more transition a subscription single-digit our desktop the customers will the accounts high We remain recurring from of X-year that desktop revenue license-based than expect fiscal but which half the transition offering for are a us, we behind to in accounting over tailwinds Enterprise grow for Desktop XXXX, to X on range. a model. In be years offering, X-year into

offering seamlessly migrate customers or value We complex they encourage also when more desktop remaining tend to our who desktops ready. to to be continue and Online QuickBooks subscription higher to will are either enterprise

ProTax our value. remains continue online to see growth consumer we longer a to price ecosystem Additionally, product the opportunities to catalyst for groups. and term. Shifting The

X X% unchanged, an full quarter, declined even the approximately this Consumer in I year. Group later week Our opened reflecting remains though outlook year revenue

and growth to guidance X% winter X% our group season Consumer of confident XXXX. are reiterating in fiscal are our revenue for in plan We to game

the Protax reflecting timing forms is Turning to which grew Group. million a delivered, $XXX tax recognition. in QX, for driver when the Revenue revenue X% were to of

reflecting year credit growth home Moving auto personal to auto is money, Karma $XXX decline approach quarter and the reminder, in ago, loans the select both loans, and of card taking QX, Credit Credit cards saw weakest a macro partners offset primarily by credit Karma. trends. And typically to in a extending flat QX, QX loans and loans revenue insurance. personal delivered of in credit expected conservative in reflecting credit to year. as million in a We cards seasonally

to Credit benefit season. expect additional from fiscal pleased continued QX We momentum during money Karma am tax revenue summary, I with In our this year.

shifting our sheet Now and balance capital allocation. to

our We on debt million during They are $XXX decisions. market $X.X This to quarter market last our is quarterly $X guide aim be and the The quarter. XXXX. principles in on with unchanged. increase Depending sheet. We in billion long-term April payable $X.XX other the commitment of billion XX% on dividend per investments XX, quarter. versus stock repurchased our a financial cash Our our our in a of and factors, each represents approved and share, conditions the balance Board finished second and remain year.

on Moving guidance. to

of guidance. income company are earnings of GAAP to and non-GAAP growth share reaffirming growth XX%. to XX%; of income XX% to to growth XX% XXXX operating XX% operating and XX% to fiscal per This includes XX%. total revenue of XX% our XX% per XX% earnings growth GAAP non-GAAP growth We share of

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

a guidance prudent a reminder, with given we As macroeconomic continued the taking approach are uncertainty.

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

Sasan Goodarzi

their creating with our human Great. that strategy, will gateway to confident very done with a this X for Sandeep. expert wrap we're big accelerate and in platform advisers, to with becoming Thank future of progress $XXX up quickly our let's in trusted to And and of a We believe bets, billion creates up, a your expertise. that, for you assets our just our you, our flywheel AI-driven our our to TAM. With customers, higher leading monetization. The change to questions. relationship growth our combination and penetrating engagement Intuit it open strategy

Operator

question Siti Instructions] Panigrahi Our comes from first [Operator with Mizuho.

Sitikantha Panigrahi

and Sandeep, Sasan to want health I small the the of dig into business.

X-part a question. Just

accelerated, revenue on half, part how comp? And our in to second about that online Is the And expectations any factor onetime accounting Mailchimp, anything side the influence? services, is to differently, there that On is of line easy you're drilling there How payments be and this is an talked is and a think like part doing some presently specifically should payroll that's surprised we of system, while given we're about doing? you decel. the seems into other business Mailchimp?

Sasan Goodarzi

most their be manage to already that use but account to to an to with us they macro capabilities sales experienced. When our move with their Siti, our market it the larger, context and jump to Yes, folks. about management wanting services it we're the us the is their of customers. we're managers, have, to get you environment, tend financial customers, give, pleased Siti. with financial them about that our the use because we've customer of for customers. momentum start we opportunity really be tendency paid that time the think standard they folks, more Sandeep, want to faster, wish. their I able current of we to They continuing part, think mid-market of to we off with see -- Maybe to for to I And you in with shift the are solutions see our workforce I in spend higher-value the would to a as mean records have as growth I'll please headline that able more that digitization. success

our macro would you net the I that so this like I of leave with And environment. momentum is in it

We puts of to rest for the in online there's and year. expect services. of takes And our and that continue online the a lot accounting

anything, innovate I XX% most services element take are overall the growth. And I to our headlines online so Sandeep, And I but services. with our want lead that to know And from small would me, businesses. anything away transformation into it. The we continue wouldn't the Siti. and to if for don't be important read strong, we'll you expect those continue our and to is digitization add

Sandeep Aujla

on driving you that, better would continues of our management I in Sasan we new team, focused Siti, covered it. platform. And mid-market acquisition, a X our as platform past, remind that also being on we've adoption across the are and a is, team customer of there our with new as customers. focus together imperatives customer what shared acquisition, to

revenue because which they on acquisition as of also quite most you to to up customers, those have of as richer opposed the which services ramps you booking longer little they a size start become They as mid-market larger ramp take the As costs, customer customers higher revenue, up but a they're customer. soon pipe in accounting, mid-market pool.

just dynamic adoption continue That's focus in that forward. more leaning is to component of remarks, the prepared services our called basically our And our my mind. So on start us on driving to out will I a in second growth platform. executing going of why keep the from ARPC towards

Operator

with The Rangan Sachs. question comes from Kash next Goldman

Kasthuri Rangan

do characterize Congratulations know stable and footing, happening Sasan businesses have stabilizing. had here. the wondering I to give you you SMB that seems on really given looks and the really small in market? not worries what's that that the enterprise be how good if advance. But we us X? we the enterprise it outlook become spending for the Sandeep, is equipment growing like on don't you're It to can I'm economy update an call

Sasan Goodarzi

to X the question. -- great let buckets. categorize from I Gosh, in you. Great me hear would answer

care businesses First it's are We levels. the base over are let facts pre-pandemic really up is with about. But year-over-year. me reserves That's XX% facts. XXX% our across what all, see friendly, down of that cash actually start and small

than environment. dollars, takeaway are an should is businesses have this level but less Consumers the spending actually are macro in ago. they're in challenged years so Small that aggregate you And being were they healthier several

to points higher last this call the would of hours I several is In compared year. worked fact, year is out what number

IT thing the as by have for being to access like auto sector. like that things spending position So differs actually and a to is with better are imagine, would business the customers, they're those this to we've last which, in, end the the repairs healthier that that way, out, I year. And work of customers the years, This in talent is just small in is sector higher-value quite compared healthy. Last are We've struggling, the is normal estate more just Sectors starting by services, is way, small a mid-market if can trend is and you able by professional real levers our than XX-plus of more country that, seen lot strength the whereby they're generally this. small by right? to healthier. larger and to doing, businesses but a pull have able be seen businesses the

our lot view, we of but a not see Lastly, economists, we're and data.

a next calendar we is about tailwind to an small any view as that be economic businesses. the of XXXX that the to there's Our the same lot think of We be of year. the is for -- going kind believe going rest don't

Operator

The next Zelnick Brad from question comes Bank. with Deutsche

Brad Zelnick

Maybe in supports consumer with the guide? every that a in your start just full anything what more question, you you're slower funnel and is loaded. about else more seeing But to season, that and Sasan, year and the it appreciate is season we talk the tax can the confidence back-end

Sasan Goodarzi

Brad. Sure, Yes.

and our in later trends and years, started you season, a what last year. amplify I'll XX years and the a it and all, watching start, push of to in this it's XX with. just been seeing Having ran more there's the business we're that out ago tax behavior, a consumer every than First

I in that's is worth out So the because part X season. are service. anything full that are not things green early One out would both we calling call of strategic see that unique. There's to shoots that us with

first Just that them. businesses. we as about now experience. We've taxes million them overall our $XX that that and a to to on have feel the can we're good necessity. capabilities a use leaned have space use do into we're basic, XXX you you their And expert digital, friend. That's things, green infrastructure way, the leaned billion this our consumers didn't I'll somebody tax. the and our recommend really And in And love the else year leading tax air, business about building, that expert basic we're disrupt remind that which small full the that on service the our refresher, there's business that campaigns, shoots we to is way but of for consumer is you by an on really full-service to seeing nearly into very front that both we that to the expert very spend you all building the really both front. is if

beyond we've indicates for early, So it's but that opportunity is everything an us. enormous seen just that this

the that's service front. So full on

Karma. actually the a of those really nearly and more we The users. area monthly and use second active an I have This majority would method different not mention where monthly XX is Credit month, users TurboTax. million active is a They engage than Xx

service. for also like scaling. invested you shoots the we the and which do it really in green that we've in we've do want so whether app there. testing to And you, or to And experience, you want it heavily been full and us offerings compelling the yourself is

are share would of that for and of that and those really taxes, is And the spend matters future. X of And returns. in share full share spend. I with in this out, year for call that, the is IRS we're essential our So both things getting the really, total service what positions line is and the us I'll the it we goal following, said end which

Operator

Fargo. from with The next Wells Turrin Michael question comes

Michael Turrin

to back seeing and from there growth a focus might at and reinforce think the to the a headwinds contrast perspective float some given I portion in more business was of all the of of strength tax? from hoping online margin payroll the I start could the services, the is strength we lot quarter. of the business. And across you're in detail aspect floors just be help go the Mailchimp us mix what to could a that you're helping compare and on EPS just maybe you payroll seeing payments

Sasan Goodarzi

your of part question? last the repeating mind you Do Sure.

Michael Turrin

Yes.

that consumer of Just the side, wondering outside softly headwinds be if also a component at helping there's flow margin just payroll you're seeing? the on all might

Sasan Goodarzi

Yes.

start with that and you Let here question Sandeep me will you the the some that of with facts weigh in overall asked, services flow. around asked

them I offerings. continuing goes digitize to think that earlier back what comment, we're just higher my customers, really say the spending to I -- value the a with do around And way, is our the to we by improve would just which lot can helping more thing businesses. their time services understand

this And a payments environment. multiple methods so making as quarter because easier the we paid fairly in experience paid getting That's we in talked XX% deposit, upfront. was about to get to tough providing earlier, growth total our macro instant continue online invest

help those really with, So adoption. payments in essence,

adoption payroll full us on else to that you of particularly with X some customers some of Intuit the the combination We're on helping is service. turn the Sandeep, services customers the add? not in and it's elements Assist. It's want it of anything foundational some with things Our Maybe of been float really you customers that thing. our continuing really and that most It's invest I'll important really services the with and focus of all to a called particularly I are strong, larger with to out Mailchimp -- higher-value and adoption. over adopting, higher-value has

Sandeep Aujla

Thanks, Michael, very component Sasan. is a Sure. payroll business. part our of the floor small

possible. for as hold their businesses thing one small to as said our little to aim we is really due cash As

of power not the been and doing acquiring ability the think question the end higher line management IRS is think payroll customers. The work component the around Sasan preserve to to work the in make the Intuit is of on week we big SKUs to -- for that, team those in us. And account a X your it's of of also doing was I floor work that did has is larger attractive mid-market the customers earnings more for theme the some overarching I despite delay touched company team the the in great Mailchimp. around the around opening, So

So activities we across its assets here that continues our it. of that confidence cholesterol us to have give portfolio into of

Operator

from comes UBS. McGinnis with question Next Taylor

Taylor McGinnis

services. Maybe another one on online

expecting are sounds earlier, as a macro more you we move stable it heard I guys if throughout year. the So you correctly environment like

of services XX% what you these just lever see more how the just online hanging that there the for saw, you at services here acceleration Is durability So remains actually anything in talk you be means as we about help the can during guys And this that could curious, online the macro the just pricing used in there onetime to challenging, levels? nature? time? year-over-year? Could

Sasan Goodarzi

Taylor, let things, Sure, Yes. could. I a add if me few

entirely I'll with the think continue don't stable. going all, of remaining uncertain. macro to it's environment First view be start to as We we

any of on any of So be it sort not 'XX from macro consumers. coming growth of see macro 'XX think our we tailwind from in a And credit type will of we're choppy from the environment the perspective. a environment. We was banking like scores somewhat consumer

couple of million we across just are over know, Gen in their consumers XX are credit members you and of And XXX examples XX%. card points. those see Credit couple down balances As up a illustrative strained. Z almost Karma over the last years credit that scores are are

gives our to is the and in go-to-market really, the that into we of gets to focus second our point. And even point us to entire about guidance. that future, XX% the that innovation really about. And focus economy provided on that first we the the confidence and trying continue environment. the outguess guidance to would environment what which growth to innovation, uncertain, just in we XX% have we the for the that's in think but win our customers what's is year, So despite context we're talked environment, to our our really the emphasize and we and uber stable not our to confidence macro digitization. look really is we that's to the comp economic be customers high-value focus as with And our our overall online And because all really leading mid-market XX% the of

Sandeep Aujla

to And around I asked pricing add, would point, thing Sasan's the one on just you build a pricing, question and power.

the customers and building to the environment. with innovation offerings And offerings. to is into is the the of we're the actual tenant Our around related around that pricing -- we're not delivering value perceived our the offerings macro power

to So we of pricing. that's I another point emphasize our think about in terms just how wanted

Operator

Alex question with next Wolfe Research. The from Zukin comes

Aleksandr Zukin

and and wanted pay year, of of on Credit consumer the the on side a part seeing then you. interactions that free platform? about side. I more for similarly, the tax how the it consumer of Sasan, as pay? the you quarter. on if side, to to start the SMB you to pay the it's see parcel become the kind continues opportunities and something Clearly, side, more? And see some Congrats you where think maybe both a coming progression of the on on AI evolve to Is you question company, kind SMB functionality? build expect are ask, of Karma benefit Is core look really and biggest to assist the you of the to the converting if season it the both at on do the

Sasan Goodarzi

Yes, Alex, great question.

be to we this Let a to experiences over scale as we're the always more set me that work market, a learning, want for category new a I'll and capabilities new experiences going TAM. emphasize been truly even done not entirely a creating because that that growth with piece, in of of we've certain our adjusting, which X is of the beta or there's start going overtime time, GA. to that the category particularly start in and of an I million today is believe headline, at we're with where create human is possible what's in is and more to the to and we're the AI-powered. And with penetrate create that's $XXX customers, adapting possible headline, and gateway all expert able convinced are services more to we the

and real sort Now with specific that of let real said, tactical. get me

would service. to which and None intact headline a Credit that question the is in based is feature. now have have. And your give to is not mean will of apps is made that way, knowledge doing investments a on it said, machine as X that from think the that we're second to The it's full of we're of in the the about data, the impact. with answer news AI Assist, that where engineering service And we've and near X pound doing our of be a scale results the couple networks the the we not and impact, it years. I taxes your with really across in our we're I the profound None by future. But on experts do of in now results on areas what in of full at learning, counting it, to last we Intuit of One start it through work there's what It's today, platform. doing AI, because can that we're is capability. Karma about fits platform, all Gen and QuickBooks the through really largest with, do ecosystem

So what on. market, seeing about the right, the biggest biggest opportunity speed and taxes people's the the we're getting of in our in view, is on based ease

best product world, by the score Credit because So can service imagine a refund your get of customer the that our on hour, excellent imagine the an than of your which, platform. a by in what you you done Karma where full-service dollars we recommendation is service. world with maximum and an supported XX. can way, an you're The can less do we taxes extend

really, that the full it's service So will biggest impact. have

whole platform underlying is service full what uses. the Now

is, it's Assist seen. is helpful X.Xx seeing by early. now we're understand And that Intuit we've right better confidence. And ever the help And and yes, over time, it my with is tax the outcome way, the so other about than to we will refund really, are engaged rating very conversion, and outcome, where

by We haven't it perfected any means.

that's So the front. on tax

me on Karma. Credit let quickly, very Just touch

have that manage where over of the focus market that et the them the the on for or know, cards we loans, leverage helps monetization, be. One GenAI and whereas powers may That's cash the help you are with doing on your based me?" Credit profound things just Karma front, it's your that ask, we that cash take capital hey, books will, AI insights be, for are time, you questions which one these and sales travel front set experts I'm better to provide profitability. And deliver And I time are testing with the and is seeing thing can that the know know profitability our then finished because strong everything we're to Karma that personal that entire credit about rewards, for to Karma, is actually it that your is that's now or and you. X they show that are everything Credit conversation too is asked or for for on which of the about. based interact market, testing would of know best now credit is a looking you in more you X of best month. book those learning our the you've of you. business you Would interact market in how you understand about additional campaigns us. interact I before profound all right X we customers that with now And the customer. are your could customers is the for of data is can promise, in cards behalf close revenue with insights help As we on to you. But an and X "Hey, can you like And you so understand to out because cards you I cetera. And and right can engagement, a learning today personalized so event increase. we our credit for flow you Everything monetizable whatever We we're with higher increases revenue that's have Credit drive small for with is could your you with that know flow

the perfected those hard, are where a are category And over think because longer we in things it's an probably growth. looking but you're that of we adjusting. So of and for, any market answer entirely actually haven't this services and we that will time, new yet create but believe it learning we're

Operator

from comes Evercore The with question Materne next ISI. Kirk

S. Kirk Materne

talk terms in point at of we Maltinas of Sasan, customers? about are that remind you Cisco's into for office where just front versa. the on and Congrats of and GA us it across some when for the QuickBooks, which the QuickBooks a just of sort answer into big can vice little the questions quarter. will you that can bit? office And cross-sell Can Yes. back

Sasan Goodarzi

Great Kirk. Yes. question,

machine that by of learning, digest Gmail knowledge customer Excel engineering can way, their digest a contributed and for data Let -- account investments deliver to everything all remember, data of sequence what me to to here data. Inclusive and in sequencing X our access boxes is lot how us on the question are is based actually Right of AI. I'll customers' spreadsheet because And that's take by it's with data able -- and that that insights. don't we ensuring focus. GenAI or right that of being our we in share those Intuit capabilities the usable, And and are structured like first. clean, now, that it. Assist way your be shoe and to places we're able A entire access you their is the pictures they're lot which are start is the with that and the to data our the I'll doing see, data,

looking that to for So our of put our to that that platform if and ensure is you're are campaigns order Assist together first is business you. you doing priority Intut using marketing if small

to all across connected. show question of connected points have The and to can our being Karma relevant it's sequenced whatever points where place customers to working actually ask are all in we your articulated across headed, data you're platform can we is and want basics. But we I because the the we AI of that or and TurboTax, essence, will in is Credit our is are and nail of Intuit our you what products. transfer QuickBooks you and able whether use our are, where power the then to answer on life, in because are capabilities because focused it where off the That second absolutely compared what that's in are second element Mailchimp just data

speak. we that working on that sequence, So is as but we're

The second cross-sell. is

cross-sell. product I'll it in all, in of of start First terms with of -- integration. not about thinking about We're thinking it terms we're

actually testing click we're engage you when see you put and of on marketing and actually this can a can an really is And lot the this on. to how are way, campaigns. And the applies Mailchimp is because we're integrating example that to manage we TurboTax customers how of that, you moment together Karma by are your applies and of is you to on based instance, on matters have this customer the on couple illustrative these scenes just a you focused the what QuickBooks. What most that truth maybe at after and pay work. does you the how this free Mailchimp Credit and engine the for So if with this then Like, is, that much your really in is share is focused trials QuickBooks it working product we map, left behind capabilities. for

I moment most over product sell versus want just by product to the you within trying what not that's time integration. Mailchimp that the effective the the We nail that, that's found integration. platform. at effective. So matters What's benefits is mean We as to

So we're across all that our taking the platforms that's approach of

Operator

Jefferies. with Brent Thill from comes question next The

Brent Thill

we've to the that last to greens to you the to that to key declines growth, Jason, for back what get Credit Karma seen back the growth get need that versus are for see year?

Sasan Goodarzi

just see, we've partners, a to saw partners stability insurance back. our part, than starting One, decline seen We couple last the select Yes, good are which most actually stability like verticals things. we've of come question. some big year. A actually with we for which of other seen partners, and environment, the and is

And just focused entire One the is areas is second redesigned of just the the one on. is So we we've innovation then app. are stability. that

app, Now drive so out we redesign on that could the can all feet. there ways actually And a massive monetization. we is more rolled which it's in before, which to will the members, massive, than many and engage based customers of are

mentioned. beyond So that's X that macro I lever the

let can I based on and can them, with lead we provided but customers when important Assist, Intuit is personalize And before. intuitive. second see earlier, That's never could questions the we now the The we with higher to over is that It's in us things time interact second interacting where and testing, example ask actually to early the monetization. will Assist are engagement Intuit customers way what's us which a very know area.

just number have of that Third we is a around Prime. initiatives

As of before, focused is we've really Prime quite active our on it. part we've monthly I've but as actually users, mentioned, mentioned never a large

more them method And actually and then is about the of thinking or mortgage out TurboTax. them last refund to will more get but of things, we TurboTax, they snapshot X access we around us area more that's refund. actually take integration their having and it product get a around, can way order. penetrate focus. And a least be. The the members if can use about what their to in believe because engage is to members creating of to All what Now an know we letting TurboTax took their those year that could we're it's not the W-X that as platform a accelerated are confident really is and the actually growth,

So let me Hopefully helps, Brad. there. pause that

Operator

from James comes with question next The Susquehanna. Friedman

Unknown Analyst

credit opportunity But ACH. build was get for any pay cards? out including prepared same-day Sasan, to I high-level the rolling I pay thoughts mentioned thoughts remarks on believe, additional bill on you in options. your virtual other your options, hoping

Sasan Goodarzi

Yes.

helps. bills. It's albeit as since help network you for and early, And the the in success is a take step important forward huge August. And customers connections business to pay in where of how us, all, because get remarks, we, digitize very has essence, that's we rollout then doubled the of it heard network to connections. are given First X, key our on number

is ACH out talked that payments, on starting rolling also batch second paid big The out we we're that's next that roll The map. road through to executing and both we're our and is earlier, that just -- just faster day it's about payments. thing

so incredibly most what's And to to going our continuing look informing but and have network our important increase beneficial because to digitizing really we they paid map, get about all the And what's for we're possible, it's long with -- product. faster. that's really customers, customers because conjunction a very continue at sticky in term, in two, of it's we're our it's BXB to to And do road connections. excited it what's

Operator

The Barclays. comes next from Lenschow Raimo with question

Raimo Lenschow

for question Sandeep. A

this health. how kind recovery you But about of you kind just think you As you that of business. think expect to said a of It's didn't you like lot manage if the year, far, of about margins. But How really so costs, you've the for obviously getting an ready on are this been things getting of progression investments element year? well better. also see you there's do doing

Sandeep Aujla

important my super some one. Raimo, And let share me of thoughts.

growth and deliberately business foremost, with First increasing that to scale while I'll building fact profitability. start we're this our the

In those use we financial this ones are of that to and manage our principles X principal company. fact,

So as innovation a in that's building that of taking. And have while to markets margin product are in over the interest, record we such to the very market. have innovation as bringing a milling we deliberate localized opportunity address as track such spending mid-market to approach for international we innovation the years the such

with opportunities our growth growth leaving scale table the not to on are and we focus innovation. So drive

second we to and feel quite and this in and of to in far I guidance. deliver question I in margin in our look terms have Now path of year, our had so quarters, the full the confident point the margins the commitments profitability we profile to of year, the do full your confidence performance in at for aim year couple our that so. our boosted fact, first the

Operator

Mark The next JPMorgan. question Murphy with comes from

Mark Murphy

piece. if So and to that growth vector X the upmarket able or XX Sasan, segment traction in the this And to X within employee to to comment that have curious XXX employee the the QuickBooks business, in growth you're I'm you on X you're segment. X seeing versus

growing is mid-XXs the is For those high instance, of X teens. and other

you and where Just of a trending much see you interested maybe it year? see this how spread there in

Sasan Goodarzi

a add in well. and I'll sure. would Yes, perspective chime to invite Sandeep as

our customers more higher short I the employees XX, or higher-value is to frame which more, XX mid-market your think and seeing I customers. up customers, answer think are we revenue is in our traction and

they're A big we're seeing paranoid be the innovation, more our go-to-market. low traction helping focusing same X in we on end, serve it to to day, which offering, just are why a there, to our believe there. of a that's the really and way, At where the always is, launched more team become will from is of because those we they're own always the -- solopreneur is we be which entrepreneurs way, their essence, notion small part are time, we of the remain some X and that, by is clear, that believe by the And able disrupting when of thousands. momentum businesses because team in We

the do see off all, ball momentum focus doubling eye low our end yes, down taking not on we're at on we these but customers. on resiliency, And we're the So larger more the more our customers. with higher-value

Mark Murphy

cover by And get quite the definition, processing They find is a scale to employees. something customers. we on as platform. They, topic. have The also higher tend them that Sasan, payments. economics thing more these the especially They would attractive more upmarket only definition add to I is ARPC, that a we our much of to adopt have year to the

our something lead our very year. this also that we we are So that's that area deliberately teams attractive in teams an go-to-market having is find product and and much

Operator

with The next from comes Enders Steve question Citi.

Steven Enders

Okay. again. Great. the on side I SMB guess maybe just

the think a prepared I shifting time over remarks made a comment towards as in lever. growth about you ARPC

about for away the clarify that one to the of think customer forward want Just levers moving SMB growth does secondarily, towards that you side? from I guess change from how the ARPC segment comment. And I then more

Sandeep Aujla

much employees. And and Steve, XX ARPC that it higher opportunity higher XXX were to that a have mid-market as tremendous the a in having prior lifetime in the think and better those we for about about excites way is currently retention. customers come see this as the with opportunity us addressing we we much really we just what value, question, these define

And helps customer our have to just But these higher also acquisition so that costs. tend customers economics.

than look at smaller and just definition, customers the of when -- they the overall market. by fewer you addressable So relatively are those

customer as higher larger that there they -- customers, those. So we get on though of we means ARPC will these even fewer focus are

because that where continue about by to customer to XX% XX% to whereas So discussed continue growth, on the the growth, a of abide in this to more us going forward. formula XX% that you the lean ARPC thing ARPC that's mid-market, with And mid-market. XX% the to we the for think we format we focus expect growth dynamic should have growth good towards is actually publicly growth the business

Operator

comes Scott with Schneeberger The from next question Oppenheimer.

Scott Schneeberger

we're -- that well we're through kind industry. just we you tax season. pretty tax here's had year before And of questions. would weeks anticipated X earlier couple the in, the of early felt a see a a that Sasan, One, the probably for season conservative. flattish

with way happy this had early the as seeing of your it, speak in if overall number industry update to service, Now the the seen working DIY you thus XX score. Could year sound points you're And then second season? part a -- that bit a you're for to we've category growing recommendation fixes and on any you far? shift. is, the very through you have pain you full seeing and return also what curious we're some you're I'm the on last year the

Sasan Goodarzi

Yes, sure.

many estimate total company little the been maybe season is in and it's having done. With filers many the a number that probably be file It bit. view, folks tax as however all said will up be Our how flattish, been early -- of still our to seasons we've belief same. through it's when a ultimately said, will of through will probably is

filers view because so hasn't do file. But answer is changed. win that hasn't how the are changed really really as is growing within we the Our categories first perspective our focus many to our

to or we ensure actually by to year. on it customers pains, the doing were we the year. And my hands a right and few until friction And is asking is behavior are engaging of of of done done. The upfront and time from we're X office year and to says used One just and interact weeks taxes to. a putting would service their into full way, home into notion X, this had up about everything that walked call somebody's created upfront. and I so full really, was if until then it compared over that last of that here, out second last and they we service think for the a later getting growing difficult what somebody made customers sort taxes But of get a questions they're The into lot really much get friction lot you not more service. had some

to a that engage them of was have and big So a -- about learning we get which the removed very, what lot an customer on expert depending growing and friction know pain, all early. very we engage

one. that's So

Pro done year. second doing the did would what season, help for going also the your not infrastructure think that And by did you. way, are the recommend so where about big we're very but deliver friend. Well, campaigns the lot is and where I really virality our of is that we're did infrastructure show that friend. to you'd product are air could both on, not you XX% we And that are we our thing, Google, going can we actually the there's to last somebody service, when And way, is not be those then will choose infrastructure. else, capabilities have you year, And the score. year, to me last a again, lastly to that's method that where example And to have is XX% especially which years customers, on you work I score this in your do expert a powerful, another to me. And working it very an up. recommend did which building building that for an recommendation that several one, our digitally, excellent I work me this learned near a lot want And and that. right? We're recommendation XX XX you and to of actually we to by taxes differently love there Tax investing basic be the way, suggest our to on the if didn't of switch a Google assisted use in things, by go product the

you Pro you list. up in in tell Tax California, say, fact or show San Jose, near right, in Los should Gatos, will me, a the can top being we put I TurboTax. I of if So for We

working do is we show which it. was you weeks a them. on in it because I few If we're don't where Atlanta, It's ago,

And that but but not for about it tax nail year, learned an as the implementing we really things with we just year. last so the season, to that think this excellence example we're that's of future. this

Operator

from Morgan with next Stanley. Weiss The comes question Keith

Keith Weiss

Excellent.

Just one well. for as Sandeep

more but question see side operating much you been Are lot be impact. the Another should comes a out a line in then you're AI, internally, looking guys like it potential a the like talking equation, top up, benefits little there we usage margin whatnot? And just compute-intensive terms can gene today? stuff seeing there of about anything stuff of much versus line of to capabilities we're being in what through or of the flip When that [indiscernible] this whether gross is and really lot of given impact the still more for is these different that margin ramping angle. just the COGS on bit investments on it's that a consent that margin better generative on technology

Sandeep Aujla

us reminding our for just year all the by start GenAI current me guidance. have let been that so incorporated fiscal cost Keith, the into

now So the let your me that's but first address themes and foremost, question. of

cost cost. large that generally touched our context cost the residing about that training at fraction from think the that return on outlook at are we I the behind faster that quite other delivering have, was, in the data have development language answers we we a actually and we speed that of advantageous that are the large available that As doing a versus models structure that are on feel your question more our sense they where are the and versus we language models market firewalls that

and don't own and have AWS from for on third-party the of the data running point unit are Two, other our center, way rely a we run we it. our is GenAI just we centers to view economics model. advantageous So actually data

agents some I designers to lead to as full efficiencies as our service service that and lead improve live given So the carry we have. Furthermore, in notes GenAI is expect that a that as they that. And to as our summarizing advantage also call to over see economics or examples customer because customer example. no have better offerings. and minutes I a success of that, in a X I again, many of AI opportunities I us don't feel that's us small engineers we and forward success, have cost our into unit spend build-out to, ratios. look AI, continue in things continue And more already might time, Gen others those opportunities staffing are to I longer leading more But in kind take about for just have see how across such or does management cost to that project start economics where using from to some we business, of early call for AI. We've we on the do capabilities. the to just benefit had, terms good

Keith Weiss

it. Got

it So net-net, like drag versus seems something positive that on could overall? dynamic a margins

Sandeep Aujla

That would Yes. takeaway. be the right

Operator

turn gentlemen, additional or and closing remarks. I presenters back for does over to our program any question-and-answer now conclude this Ladies the will today's period.

Sasan Goodarzi

you right. to for you safe. everybody. you, next Be Thank in. you quarter. listening your wonderful Everybody, thank talk We'll All Thank Awesome. for questions.

Operator

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

Intuit (INTU) 22 Feb 242024 Q2 Earnings call transcript