Intuit Inc. (INTU) on Q2 2021 Results - Earnings Call Transcript
Operator: Good afternoon. My name is Latif and I will be your conference facilitator. At this time, I would like to welcome everyone to Intuit's Second Quarter Fiscal Year 2021 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. Kim Watkins: Thanks, Latif. Good afternoon and welcome to Intuit’s second quarter fiscal 2021 conference call. I’m here with Intuit's CEO Sasan Goodarzi and Michelle Clatterbuck, our CFO. Before we start, I’d like to remind everyone that our remarks will include forward-looking statements. There are a number of factors that could cause Intuit’s results to differ materially from our expectations. You can learn more about these risks in the press release we issued earlier this afternoon, our Form 10-K for fiscal 2020 and our other SEC filings. All of those documents are available on the Investor Relations page of Intuit’s website at intuit.com. We assume no obligation to update any forward-looking statement. Some of the numbers in these remarks are presented on a non-GAAP basis. We’ve reconciled the comparable GAAP and non-GAAP numbers in today’s press release. Unless otherwise noted, all growth rates refer to the current period versus the comparable prior-year period, and the business metrics and associated growth rates refer to worldwide business metrics. A copy of our prepared remarks and supplemental financial information will be available on our website after this call ends. And with that, I’ll turn the call over to Sasan. Sasan Goodarzi: Thanks, Kim and thanks to all of you for joining us today. Second quarter results reflect strong momentum across the company. Small Business and Self-Employed Group grew double digits. Credit Karma performed very well and we are encouraged by our early results this tax season. We are on track for Intuit to deliver another year of double-digit revenue growth. We are confident our game plan to win is durable, accelerated by digital tailwinds given the pandemic. Our platform is well positioned to help customers take advantage of a shift to virtual solutions, acceleration to online and omni-channel capabilities, and new ways to reduce debt and save money. The velocity of our innovation is helping our customers at a time when they need us most, and positions us to accelerate growth in light of these structural and behavioral changes. We closed the acquisition of Credit Karma on December 3rd, and welcomed 1,300 Credit Karma employees to the Intuit family. We bring together a large customer base of 110 million Credit Karma members and 57 million Intuit customers to help them unlock smart money decisions. Credit Karma’s data platform creates powerful network effects through personalized financial offers – benefitting members and partners – while adding a new monetization engine to Intuit. We are off and running executing on our innovation roadmap which I will touch on shortly. Since we’re in the middle of tax season, let’s start there. Michelle Clatterbuck: Thanks, Sasan. Good afternoon everyone. For the second quarter of fiscal 2021, we delivered revenue of $1.6 billion, GAAP operating loss of $25 million versus operating income of $270 million last year. Non-GAAP operating income of $235 million versus $384 million last year, GAAP diluted earnings per share of $0.07, versus $0.91 a year ago. The GAAP earnings include a $30 million gain from the sale of a note receivable that was previously written off and non-GAAP diluted earnings per share of $0.68, versus $1.16 last year. Turning to the business segments, Consumer Group revenue declined 71% in Q2, driven by the later IRS opening this year. We continue to focus on our strategy to expand our lead in DIY and transform the assisted segment with TurboTax Live. We remain confident in our plans and guidance of 9% to 10% growth in fiscal 2021. Turning to the ProConnect Group, revenue declined 8% in Q2, reflecting a delay in forms availability. In the Small Business and Self-Employed Group, revenue grew 11% during the quarter, while Online Ecosystem revenue was up 22%. Our strategic focus within the Small Business and Self-Employed is to grow the core, connect the ecosystem and expand globally. Our longer-term expectation remains 30% or greater online ecosystem revenue growth, driven by 10% to 20% growth in both customers and ARPC. Sasan Goodarzi: Great, thanks Michelle. I'm very proud of our team and all we've accomplished together and I'm very optimistic about the future. So with that said, let's now open it up to your questions. Operator: Our first question comes from Scott Schneeberger of Oppenheimer. Please go ahead. Scott Schneeberger: Thanks very much, good afternoon. I'm going to ask on tax since we're in that season. And I'm just very curious on, if you're seeing any activity pick up from all the new brokerage accounts opened in 2020, if you're seeing a lot of activity in your Tops business from corresponding tax reporting from that. And just Sasan, a few thoughts on that, is that going to trigger more volume or do you think it's more likely something that will trigger an increase in the revenue per return since such transactions might come in at a higher tier of offering. Thanks. Sasan Goodarzi: Thank you for your question, Scott. If I would take you back to what we declared several years ago, one element was under-penetrated segments. The investment community was one, of course Self-Employed and Latinx. And the other element of course is about transforming the assistant segment, which also helps us serve that community. Well, if they need expertise or if they want us to do their taxes for them. And what I would tell you, we all see the same stats, there is then really a significant increase in retail investors using all the different tools that are out there and not just in the United States, but particularly in Brazil, India, and the U.S. And, so I feel good that we're very well positioned. And all of those segments that I mentioned, Latinx Self-Employed and Premier, we are actually experiencing the kind of growth that we expected and probably, a kick-up on our Premier offering, which really serves our investment community. So we are experiencing an accelerated growth and it's really all sort of in context of what we had declared, and we'll have to see how the season plays out when we tally up our results, what it all looks like, but we're very, very pleased with the fact that we really positioned ourselves to serve the segment a few years ago. And I think we're positioned well for delivering for them this season, both with live platform and if you want to do it yourself. Scott Schneeberger: Thanks. I appreciate that, Sasan. And then staying on taxes, I'm just curious, kind of a high-level question, and you get this throughout the preseason, but now we're into the tax season. What type of February returns do you expect this year versus last year? I saw recently that Texas, because of what's gone on there in the last couple of weeks has gotten into way to June 25. So with that into account, and then just the warm tax season last year a condense for most States tax season this year, what are you expecting just for an industry growth year-over-year and anything that you're seeing in the early season to support that view? Thank you. Sasan Goodarzi: Sure. A couple of things, I would say, one, the assumptions that we made coming into this tax season is that IRS returns would be sort of flattish and we expect to be able to grow our share of the total number of returns, and particularly because of our focus on the under-penetrated segments that I mentioned and transforming the assistance segment with our live platforms, really for us, it's about growing our share of the entire category and as, we have such a massive opportunity with $86 million filers that today go to somebody else to do their taxes. And the fact that we have an opportunity to help them get their taxes on with the expert at their fingertips with any time that they needed. So really our role is about growing the category and in context of a flattish IRS returns. All of our guidance, just – we made the assumption that is April 15 finished, we contemplated the Taxes announcement that was made yesterday, we’re really just looking at past situations where there is been a disaster where IRS has extended the filing date. The behaviors are very different net-net, we feel very good about our progress, we feel very good about our momentum and really good about the potential that we have this season and the context of the guidance that we provided. Scott Schneeberger: Thanks, Sasan. Sasan Goodarzi: Thank you. Scott. Operator: Thank you. Our next question comes from Ken Wong of Guggenheim Securities. Your question, please. Ken Wong: Great. Thank you for taking my question. The first one for you Sasan also on tax, as you think about TurboTax full service, I’m not sure if you guys are starting to see some good traction there, but we'd love to get a sense of what kind of customers you're seeing, utilize that particular product, is it guys coming from accountants? Is it kind of net new filers who may have the greatest level of uncertainty? Is this across the board? Any color you can give would be fantastic. Sasan Goodarzi: Sure, Ken. Good to hear from you. It's important just to remind ourselves that we're – in the assistant segment, the biggest problem that we're solving is competence. These $86 million filers need to know that they can ask a question from an expert at any time that they need to and have the ability to turn over their return if they so choose. And we are getting very good traction with full service, but it really plays, I would say, a Halo effect. What customers want to know is that, they can come in and if they choose to ask for help that they can get it, and somewhere in the experience, if they choose to just say here, let me give you all of my documents digitally that we can do it for them, or even if they choose to make that choice upfront. So full service beyond the actual number of customers that will end up using full service really is playing a Halo effect, which is what we learned in our test results last year, it really builds confidence for filers that are coming from the assisted category that I can get my questions answered, there's always going to be an expert at my side. And as a reminder last year, we experienced 70%-plus growth in TurboTax Live, and a majority of those customers actually came from the assisted category. So it's playing the role exactly as we had assumed that it would. And so far so good this season in terms of the traction that we’re getting. Ken Wong: Great, great. That's super helpful. And then a quick one for you, Michelle. You touched on Lightbox and seeing I think 40% of transaction, 30% of personal loans. Just wondering kind of where do you think those numbers could trend up to? And then as far as monetization, any color on kind of how monetization has improved for customers that are utilizing Lightbox? Michelle Clatterbuck: Hey, Ken, thanks for the question here. Lightbox is a great technology that really is – enables us to have a winning experience for both the customer and for our partners, our financial institution partners, as well as us. There is nothing more frustrating than for a customer to come in and not be able to get access to a financial product that they thought they would. And so, it enables the financial institutions to be able to better target the products that they have and then customers are much more likely to actually be approved. So with the metrics that we have right now, we'll have to see how those trends over time, we're very excited about it, we want to continue to have more and more transactions go through Lightbox, because as we said, it's a better experience for the customer and it also is a better experience for our partners. Ken Wong: Great. Thanks, Michelle. Operator: Thank you. Our next question comes from Brad Zelnick of Credit Suisse. Please go ahead. Brad Zelnick: Great. Thank you so much for taking my questions. Sasan, we heard from Michelle's comments that many of the small business indicators, such as customer acquisition, number of companies running payroll, payments, charge, volumes, things like that are all trending positively. Can you maybe expand it a little bit more on the indicators that they're looking at in terms of small business health and from your perspective kind of where we are in terms of small business recovery? Sasan Goodarzi: Yes, sure. Let me start Brad with the actual recovery, depending on the geography United States versus UK or different States within the U.S., every geography is performing differently. And just to use an example, we've got places like Florida, Texas, Arizona, Georgia, but have actually recovered quite nicely. And then you have places like Michigan and Washington, California and New York that are lagging. And then within that, you have industries that have come back all the way and industries that haven't. It’s the natural ones that you would assume, it's fitness, restaurants, travel. I’d bring that up in context of yet another data point, which is when we look across the data points that we see about a 25% of our customers, their net dollars in their bank account is down nearly 50%. So I give you those data points just to say that small businesses are still working hard to come back to where they were, and they're not all the way back. That's really important context relative to how our trends are doing. And what you heard from Michelle, which is, we watch acquisition, we watch retention, of course we watch our payments charge volume, the number of companies running payroll, the number of employees per company using payroll time tracking et cetera. And all of those indicators are at or above pre-COVID levels except the number of employees at small businesses. And that really tells you a lot about just the innovation that's happening on our platform, the power of our platform, and the fact that in times where small businesses are actually doing worse than they were prior to COVID are actually platform metrics are at or better than pre-COVID. And so that actually really bodes well for us to not only deliver for our customers, but the growth rates that we would expect as we look ahead. So good momentum and actually bullish about where we are in the opportunities for the future. Brad Zelnick: Thanks, Sasan. That's very helpful. And maybe just to follow one for Michelle, Credit Karma is off to a really strong start, and you're now just migrating Turbo users over, and you've got so many growth opportunities ahead that you've talked about in your remarks. Can you just remind us perhaps of the seasonality of this business, because if we just start annualizing the last two months, I think we'd all be getting a little bit ahead of ourselves, what should we keep in mind relative to what we've seen out of the gate versus what you're guiding for the full year? Michelle Clatterbuck: Yes. Thank you, Brad. Good question. We are off to a strong start with Credit Karma, feel good about the progress that they're making. We're seeing the business bounce back more quickly from the pandemic than we had expected, not all the way back to pre-COVID levels, but definitely making progress there. When you think about seasonality in the business, they do see a little bit stronger in the January, February time period, but there isn't a huge seasonality in the business. But I would say in January, February is a little bit more of an uptick. As people are coming into the new year and some of those new resolutions and so forth, but that's what I would say you guys should expect. Brad Zelnick: Excellent. Thank you so much. Operator: Thank you. Our next question comes from Keith Weiss of Morgan Stanley. Please go ahead. Keith Weiss: Excellent. Thank you guys for taking the question and a very nice quarter. I wanted to expand a little bit on Brad Zelnick’s question. Can you help us understand now that the indicators are at or above kind of like the pre-crisis levels, how should we think about the mechanism of how those indicators and the timeframe for when those indicators will translate into kind of the revenue growth rates that you guys have got it to longer-term and that we're expecting. So like how should we moderate our expectations on to how quickly do indicators become sort of the actuality in terms of what we see on the income statement? Sasan Goodarzi: Yes, thanks for your question, Keith. And in context of being a subscription business, a lot of the growth rate we're experiencing now is the things that were happening almost a year ago this time. And in context of slower acquisition, retention, dropping a couple of points starting in March of last year. And also, there are a number of things that have huge benefit for customers that we paused, things like payroll full-service, migration, we have a line for where you have to upgrade to QuickBooks Advanced we sort of dropped that line for a while. So it was the combination of acquisition or retention along with very intentional decisions we made around pricing and migration that has had an impact on the growth rates that we're seeing now. And in addition to all of that, we're lapping price increases that we had done the same time last year. So the long answer to your short question is, what we are starting to see now, we should expect the growth rates to be impacted in the year ahead, because a lot of the metrics and the trends that we're experiencing now, we'll see the follow-on benefits in the quarters ahead. But I would say almost think about a year out or so is the way – is the best way to think about it. Keith Weiss: Got it. Got it. And if I could ask a follow up to Michelle on the margin side of the equation, really appreciate the continued kind of balance between good growth and faster margin expansion over time. Great to see that as part of the corporate philosophy. This quarter in particular we saw the SMB contribution margin up nicely on a year-on-year basis. But I know a lot of companies are talking to us about kind of one-time items or sort of crisis related expense savings that we saw in the year past that might not sustained the year forward. Anything we should be aware of in terms of sort of expenses that might come on board that could upset or not upset, but could temporarily sort of reverse the margin expansion that we've been seeing? Michelle Clatterbuck: Thanks for the question Keith, first of all. For us as we've been thinking about margins and margin expansion, really the biggest driver of any of that is us becoming more and more of an AI driven expert platform. And so you may see some expenses here, there, and obviously you see margins move around a little bit quarter-to-quarter. But I would say really focus on our guidance, which is after last year expanding margins a point. This year we expect margins to expand approximately 110 basis points, once you're excluding Credit Karma. And that is really us continuing to evolve, to being more of a platform company and seeing those areas for us to drive margin expansion across the company everything from technology to customer success to go to market. And so that is the biggest driver of margin expansion for us across the company. Keith Weiss: That’s it. Thank you so much guys. Sasan Goodarzi: Thank you. Operator: Our next question comes from Sterling Auty of JPMorgan. Your line is open. Sterling Auty: Yes, thanks. Hi guys. I think in some of the prepared remarks and press release, there was the talk of the cross-sell of TurboTax going to Credit Karma, but I'm wondering what the expectations are in terms of the cross-sell and marketing that you could do to Credit Karma users for TurboTax for this tax season? Sasan Goodarzi: Yes, sure, Sterling. Let me just if I could take it up one notch and I'll come back specifically to answer your question. There are a number of things that we have launched. We've launched Credit Karma Money at the end of the TurboTax experience where migrating, Turbo customers that with Turbo being deprecated to Credit Karma. And of course then, to your question launching TurboTax as part of the Credit Karma platform. So there are a number of big things that we're doing and all of them Sterling, I would think about them as long-term opportunities with our focus being testing and experimenting right now to really nail the experience. So I wouldn't expect a really big impacts from those in the near term, but we do expect these to deliver significant customer benefit and growth in the future, because we're really just testing and experimental and really nailed experience before we launch things at scale. So hopefully that answers your question. Sterling Auty: It does. Thank you. Sasan Goodarzi: Thank you. Operator: Our next question comes from Kash Rangan of Goldman Sachs. Your line is open. Kash Rangan: Hi. Thank you very much. Congratulations on the quarter. Sasan, on the Analyst Day, you talked about a $24 billion U.S. tax opportunity. And I'm wondering what have you learned from live? And what are the things that that you need to add to live in terms of capabilities, to be able to address this in a larger scale. And also in the same vein as you look at QBO advanced, what are the things that you've learned with that product out at the higher end of the SMB market that you've traditionally played in? And what are the things that you've looking to introduce in the product to make it address the full breadth of the TAM? Thank you so much. Sasan Goodarzi: Sure. Kash. Let me hear from you. Let me start with live and the 86 million customers that today go to an assisted method. Based on research and work that we did several years ago, one of the learnings that we had is over 70 million of these 86 million customers are actually willing to use a digital platform as long as they can get a health and expertise to be able to file their taxes with confidence. And in fact, they would like to get help beyond taxes, which is where Credit Karma comes in. And so to your question of what we have learned with our beginning our fourth year with the live platform, we're more bullish about the opportunity ahead of us than we were even four years ago when we launched TurboTax live. Because in essence, what we've learned and that's informing what we're executing this season is one, we have 86 million folks that we need to get to consider the fact that there's a digital platform with an expert at their fingertips. And the fact that they can actually hand everything off digitally for an expert, which is where you see what we're doing in our marketing campaigns. And you may only see what we're doing off air on TV, but we've got an incredible campaign in educating our customers in multiple different digital channels to help them understand how this works, because we're really shaping and reshaping the category. So one is about education which is where a lot of our investment is going. The second is when they come in, really nailing the first-time use. Immediately when they come in, to help them understand how to get access to an expert, engaging with an expert, exchanging a document visually and seeing how easy it is. And then with now the launch of full service, if you choose to upgrade the full service or you come in and choose full service, how do we deliver instant benefits. Instant benefit by the way is confidence that there's an expert there. Now, which gets me to the other side of the equation, which I haven't mentioned, and that is our expert platform. That's really where we have advantage. A lot of our AI investments are actually improving our expert platform around scheduling, document exchange, making sure that we connect the right expert to the right customer. Ensuring that we deliver insights to the expert because of our machine learning capabilities, so that when the expert is talking to the customer it actually, they deliver confidence with their know-how and their knowledge, and then being able to, by the way the culture we're creating with the experts that we have on our platform that love the input culture or the income that they make and love the fact that they get to deliver for our customers in the comfort of their home. So those are the areas that we are focused on. And frankly, every day in the season we learned and we adjust and we love our momentum and the opportunities ahead. And what we'll learn over time is we're launching TurboTax Live as part of the Credit Karma platform. And what's unique in launching that as part of the Credit Karma platform is we'll actually be able to deliver a personalized experience because we'll know that you were a prior-year assisted customer. And that again will pay off in the long-term, but those are the things that we're testing now. In terms of your question around disrupting the mid-market with QuickBooks Advanced is a couple of things that we've learned. Frankly, we believe that we can even go higher in the market beyond 10 to a 100 employees. Now, our focus right now is 10 to 100 employees, but as we see the power of our platform and the ability for it to scale, we believe that we can actually serve even bigger mid-market customers at a disruptive price. And to your question, the things that we're continuing to add are things around like workflow management, automated invoice approvals batch in the saying, getting very deep integrations of critical apps that these customers need to be able to grow their business and run their business, some of which Michelle actually mentioned in the script around like DocuSign, HubSpot, Salesforce just a few example. And every day we're learning what we need to add to the platform, but it's a lot of what we do today, just a much, much higher scale. And the confidence has given us is not only being able to go up market, but we're actually – we have now 70% of the customers that we're getting are upgraders and 30% that are new to the franchise. And we're actually seeing our new to the franchise growing even at a faster rate than what we thought without the focus yet in place to be able to go after new to the franchise. So those are the few elements that I think are worth sharing Kash. Kash Rangan: Very insightful. Thank you so much, Sasan. Sasan Goodarzi: Yes. Thank you. Operator: Our next question comes from Brent Thill of Jefferies. Your line is open. Brent Thill: Good afternoon, back on small business. I just wanted to drill and there were a handful of investor questions related to your comments around the pipeline yet Q1 to Q2, the growth rate is decelerating small business. I think many believe that they would stabilize or build, and I just want to make sure we're truly understanding this bet, I mean the comments, the color that you're seeing in the pipeline and close rates, and things behind the scenes are showing a much better growth rate than what that reported number is indicating. And I just want to make sure if there's any anomalies or any differences that investors should be aware of. There's a number of questions just disconnect from the comment relative to the reported number. Thanks. Sasan Goodarzi: Yes, sure, Brent. One of the things that we've been pretty consistent in communicating is that our growth rates would decline sequentially before they start bouncing and going back up. And that's really what we saw in Q2. It is very consistent with what we expected. And it's consistent with what we expected on a couple of fronts. One, because this time last year or starting in March for several months both acquisition slowed, but also our attrition popped, but in addition to that, there are things that as I mentioned a few moments ago that we paused, like full service migration, we paused our QuickBooks Advanced lineup for those upgraders. We didn't ask them to move up because we didn't want to have them experience that in the early COVID times. And so what we're experiencing now is just a reflection of some of those key indicators that we experienced earlier in the year. And we are on top of that lapping a price increase that we did last year that we didn't do this year. So you've put all of that together. We're actually quite pleased with the growth rates that we experienced in the quarter. Although we expected it to be lower than the last quarter. And then as we look ahead, as I mentioned in the coming quarters and year ahead, a lot of the indicators that Michelle and I shared will start turning into revenue growth, but everything is per our expectation. I think the only thing that's not per our expectation is the business is actually performing better than what we thought in the pandemic and therefore we're bullish about the future. Brent Thill: Great. Thanks, Sasan. Sasan Goodarzi: You're very welcome, Brent. Operator: Our next question comes from Kirk Materne of Evercore ISI, your question please. Kirk Materne: Yes. Thanks very much. Actually Sasan, I wanted to actually – maybe it’s for Michelle, just to per Brent's question, didn't you get four points of benefit from the PPP program last quarter in your 24%. So if we sort of normalize and I guess, did you have any this quarter, because if you normalize for that, you would actually have accelerated from doing the math right from 2022 this quarter. So I guess just keep talking about the PPP program helped the QBO ecosystem at all this quarter? Sasan Goodarzi: Yes, I would headline, but I would say – Michelle, please go ahead. Michelle Clatterbuck: No, that's okay. I was just going to say, Kirk actually the PPP revenue that we got that was actually in Q4 we saw that. And so we did have about a four point decline, if my memory serves me correctly, 28% Online Ecosystem revenue growth in Q4, which then dropped to 24% in Q1 and that actually had a PPP in it, but we didn't have anything material in Q1. Kirk Materne: Okay. That's fine I just wanted to double check that. But Sasan, I guess just sort of on the small business, another question would be on the international growth. Clearly the UK was under a pretty severe lockdown for a lot of this quarter. Did that impact you all at all? I guess international growth is still very strong in the mid-40%. But I was just kind of curious if that was one of the regions that perhaps it was still, maybe taking a little bit longer time to recover. Thanks. Sasan Goodarzi: Yes, Kirk it actually has. I mean, I would say if I look at it across the globe, the United States has really not just bounced back nicely, but just the resiliency of our platform. The innovation on the platform is really allowing us to see all the indicators get back to or better than pre-COVID levels. When we look at outside of the United States, countries like UK, Australia, France actually were hit much harder and to your point, they are still, specifically in UK and France in a lockdown so that has impacted the growth rate relative to what we see in the United States. But all of that is within the context of the guidance that we have provided, it has seen a hit. Kirk Materne: Okay. That’s helpful. Thank you all. Sasan Goodarzi: Yes. Thank you. Operator: And the next question comes from Michael Turrin of Wells Fargo Securities. Your question, please. Michael Turrin: Hey, there. Thanks and good afternoon. Going back to Credit Karma, it looks like that segment outperform what we were expecting on the partial quarter. Looking at what’s implied for the rest of the year. It looks like it’s still below the billion dollars that businesses at in 2019. Can we just go back to what some of the factors are that could drive outperformance from that beyond what’s assumed in your current outlook. And then on the margin there is the 26% segment margin, they’re a good building block for us to be thinking about or is the seasonality Michelle referenced somewhat impacting that number as well? Sasan Goodarzi: Yes, sure. Good to hear from you, Michael. Just as a quick refresher, there are three elements around growth in Credit Karma. It’s going to core, which is credit cards and personal loans. It’s expanding our growth verticals, which is auto and home loans and insurance. And then emerging verticals, which is really all around assets, which is money innovation. And none of this is really coming from the third bucket. And the second point I would make is, we sort of have a 75-25, about 75% of the revenue is coming from in the credit cards and personal loans and 25% coming from the growth verticals, which is auto and home loans and insurance, which is actually really improved versus about a year ago, where it was 95% at credit cards and personal loans. And specifically, would that context to answer your question. We’re seeing more partners come back on the platform, we’re seeing new partners come on, we’re starting to see higher spend and because of just the innovation with LightBox and does better matching, we’re getting more customers to actually get connected to the financial products that are right for them and partners are benefiting from it. So the performance we experienced this quarter is just we’re seeing stronger momentum, when it comes to credit cards, personal loans and then the growth vertical specifically around auto insurance. And when we – look ahead, our overall guidance was just based on the trajectory that we assume for the year, and we’ll just have to continue to see how these verticals play out, but we liked the momentum that we see, but that could be the reason in the long-term for over performance to your question. Specifically around margin, it really important to note that one, we manage margins at the company level. And so really pay attention to the guidance that we provided the company level. Two, we are investing in Credit Karma. It is a – we see it in the long-term as a big growth engine for the company. The penetration, when you think about the 110 million members that Credit Karma has the penetration with all these different financial products that I mentioned, it’s actually still quite low. So it’s actually quite exciting, as we look ahead the possibilities of increasing penetration. So we are investing dollars in Credit Karma, all within the context of the guidance and margin expansion guidelines that we have provided. So I wouldn’t get too anchored on the current quarter margin rates. It was more because it performed better than what we thought and some of the investments and hiring shifted between quarters. I would more focus on company level operating income that we provided and margin rates that we provided. Michael Turrin: That’s all very helpful. Thank you. Sasan Goodarzi: Yes. Thank you. Operator: Our next question comes from Jennifer Lowe of UBS. Your line is open. Jennifer Lowe: Great. Thank you. Just first one quick clarification from me relative to the question that Kirk asked earlier. Michelle, you’ve clarified that, Q4 had the PPP impact and by Q1 there wasn’t one. But given that, that program reopened, I think in earlier this calendar year, can you just confirm whether there was an impacting Q2? Michelle Clatterbuck: No, Jen. That program – the new PPP program has been moving, you may have seen it in the process and moving much more slowly than anyone had anticipated, and now we don’t have anything in that material on that Q2 results. Jennifer Lowe: Perfect. And then it just pulling on some of the questions around the trajectory in small business, there’s a couple of different factors that you called out. There’s first, the fact that, the economic indicators have improved, but maybe not, everything is back to pre-COVID levels. And then there’s also sort of this lagging effect from some of the subscription businesses or some of the pauses that you took as everyone sort of navigated a very uncertain time. So I just want to clarify if you think about the 30%-plus type aspirations for the online ecosystem component. Is that something you can get back to in the current environment? And it’s just a function of working through some of these sort of leftover impacts from the last six to 12 months. Or do you need to see continued improvement in the broader small business economy as well, to get back to pre-pandemic levels to support that 30%? Thanks. Sasan Goodarzi: Yes, Jen. Thanks for your question. What I would say is, the economic indicators are still below pre-COVID levels. It’s more our own indicators and the performance of our platform that has bounced back and in many cases better than the pre-COVID levels, which gets I think the essence of your question, and that is, our goal in the long-term has not changed. We believe that we will get this business specifically, the online revenue growth back above 30% and we just need to keep executing our game plan. And I would tell you that we don’t think it’s heavily relied upon how the economy bounces back, because if you look at where we are today versus six months ago, a lot of the performance that we are talking about is based on the performance of the platform at our execution and the innovation on our platform. Now, at the end of the day, this economy does need a stimulus – fiscal stimulus to get people back into jobs, but that is not the anchor for us to get back to the growth rates that we believe we could get back to it. It’ll just take some time. Jennifer Lowe: Great. Thank you. Sasan Goodarzi: Yes. Thank you. Operator: Next question comes from Kartik Mehta of Northcoast Research. Your question, please. Kartik Mehta: Hey, Sasan. When you look at the QuickBooks business, obviously, you’re lapping a price increase, but you haven’t stopped innovation. I’m wondering what metrics you’ll look at to feel comfortable to adjust pricing. Sasan Goodarzi: Kartik, thank you for your question. Our main focus around pricing will be, when we believe it’s the right time given how small businesses are performing and given the pandemic. It is actually not related to our innovation, but as you know, we now have innovation that allows us to go up market with both QuickBooks Advanced and QuickBooks Live, which is a much higher ARPU offering. We have the ability at the garner higher price from customers, but from a price increase perspective, it’s less about the metrics and indicators that we see with our own platform, but more when we believe is the right time to raise prices with customers given, what they’re experiencing and the challenges that they’re experiencing for their business. So the two are in many ways unrelated in terms of the way we think about it. Kartik Mehta: And then just finally, when you look at the Credit Karma customers as far as tax customers is the mix of the products they’re using different than the core TurboTax customers, please, what you’re seeing early on. Sasan Goodarzi: What I would share with you that we’ve learned about the Credit Karma base as a big portion of their customers actually use an assisted method. And that is actually what is exciting to us now. Because they have 110 million members, you can imagine that a strong cross section of folks in the U.S., whether Latin ex, self-employed those that are retail investors. So that cross section is generally consistent with the customers we serve in TurboTax today. What different is, we’ve got a good majority of those customers that in the prior year used an assisted method. Kartik Mehta: Thank you. Appreciate it. Sasan Goodarzi: Yes. You’re very welcome. Operator: Thank you. Our next question comes from Siti Panigrahi of Mizuho. Your line is open. Siti Panigrahi: Thanks for taking my question. Wanting to ask about the feedback you got from that product based businesses, mainly, QuickBooks Commerce that you launched few months back that seems like that’s an acquisition from TradeGecko mainly has order inventory. I’m wondering, like, how far you can expand that offering, it feels like you can become the back-office platform for this kind of businesses. So what sort of opportunity you are seeing and what sort of feedback you got so far. Sasan Goodarzi: Yes, sure. Thank you, Siti. First of all, we’re very excited about QuickBooks Commerce and it’s also very, very early innings with QuickBooks Commerce. And the acquisition we just made with OneSaas actually allows us to bring data into the platform from marketplaces, from POS providers, from fulfillment apps. And so it really actually helps us – help the customer understand how they're doing and their profitability, which is what’s most important to the customers. We actually had to restrict the top of the funnel to ensure that we can nail the customer experience. And so our focus first was ensuring that we can serve new customers that don't use our inventory today. Our next focus will be existing QBO customers that don't use any of our inventory capabilities. And then third will be existing QBO customers that actually do use our inventory capabilities. And the reason that's important is we want to ensure that if a customer already has inventory, that we can easily sync all the product catalogs and their product numbers, and to keep their books clean. So net-net, we're just getting started. We had to restrict the top of the funnel because of the demand and the excitement that was out there because we want to be very intentional in terms of building out the capability. Very early indicators are positive with the number of customers that we have on our platform. But again, think about QuickBooks Commerce, think about QuickBooks Cash as these are long-term plays in terms of when and how they will deliver growth, but so far we're bullish about the early indicators. Siti Panigrahi: That's great. Thank you, Sasan. Sasan Goodarzi: All right. Thank you, Siti. Operator: Thank you. Our next question comes from Brad Reback of Stifel. Your line is open. Brad Reback: Great. Thanks very much. Michelle, as we think about free cash flow generation overtime, is there any reason that shouldn't closely mirror operating income growth? Michelle Clatterbuck: I'm sorry. Can you repeat that, Brad? I didn't hear the last part of it. Brad Reback: Sure. As we think about free cash flow generation overtime, is there any reason that shouldn't mirror operating income growth? Michelle Clatterbuck: No. No. There shouldn't be any real big reason why you shouldn't see that. No. Brad Reback: Okay. That's great. And then maybe one quick tactical one, Sasan. You talked about QuickBooks Live retention getting better. Is that meaningfully different than QuickBooks Online retention right now? Sasan Goodarzi: Yes. The biggest thing, well, first of all, it's very early days. So we look at more cohort of customers versus the aggregate numbers. The biggest reason we're so focused on retention right now with QuickBooks Live is we're focused on understanding customer needs and really nailing the experience, because QuickBooks Live there are customers that come in to get set up. There are customers that come in that want us to provide them advice. And they're just – they're looking for bookkeeping advice and there are our customers actually want us to do their taxes for them and run their books for them. And what we're really being intentional about is understanding what are the needs, what are the experience that we need to deliver? And what does that look like on the platform, which is why you heard me mention retention. Retention right now is more focused on cohorts. And it is a lower than QBO only because we're looking at different cohorts of customers and their needs are very different. And before we really open up the top of the funnel, we want to make sure that every customer loves the experience that they're getting from us on QuickBooks Live and the team is just innovating like crazy to close some of the gaps in. So we're excited about the possibilities. Brad Reback: Great. Thanks very much. Sasan Goodarzi: Yes. Thank you. Operator: Our next question comes from Arvind Ramnani of Piper Sandler. Your line is open. Arvind Ramnani: Thanks for taking my question. I wanted to follow up on a question that was asked earlier around kind of the increase in brokerage accounts. And I just wanted to ask what potential lift from crypto users, this would be the first time these users will need to do some of them – will be first-time filers, but many of them will certainly be adding the – kind of the added product for capital gains or losses. Are you seeing any kind of lift from this segment of users? Sasan Goodarzi: Yes, Arvind, it's not particularly just from the crypto users, we're just – there are just millions more of customers that are doing their own trading in the U.S. and outside of the United States. And come tax time, they need to be able to do their taxes. And so we're just seeing increase in our Premier product, both with live, because if you need assistance, you can use live. And if you want to Do-It-Yourself, you'd just use force our Premier Do-It-Yourself product. So we're seeing an overall increase based on an increase in retail investing. I think call out something that's material on the crypto side. Arvind Ramnani: Great. Great. And when you think about the kind of the lift in revenues, I mean, I'm not looking for a specific quantification, but directionally, are you expecting more of a lift from increased ARPU or increased users? Sasan Goodarzi: Yes. The way we designed our long-term growth rates is under-penetrated segments, which is investment community, self-employed and Latinx and its TurboTax Live. And with TurboTax Live, just by design, it has a higher ARPU. Now – right now we are so early in the shaping of the category and being able to acquire our customers that the best thing for you all to anchor on is what we shared at Investor Day, which is our long-term expectations just on the tax side is 8% to 12%. And probably the largest driver of the higher end is ARPU. And just know that we're being very intentional about right now, raising awareness close with our campaigns, but the free expertise that we're providing for those that have very simple returns, just to create awareness in the category, but in the long-term, it's ARPU because of the assistant segment. Arvind Ramnani: Perfect. Thank you. Sasan Goodarzi: You are welcome. Operator: Our next question comes from Michael Millman of Millman Research. Your line is open. Michael Millman: Thank you very much. A couple of questions. You talked – you mentioned that Credit Karma was getting some business from assisted. Can you talk about if that normal switching around between different methods or if this is particularly a Credit Karma-type business activity. Secondly, can you talk about and maybe you do this, whether you can use RALs to kind of speed up some of this movement, particularly from assisted and I guess let's talk with those. Sasan Goodarzi: Yes. Sure Michael, thank you for your question. The point I made earlier was twofold. One that this is a learning year for us in launching TurboTax as part of the Credit Karma platform. And we're just running a lot of experiments to make sure that we can deliver a fantastic experience before we go big in the out years. But the second comment that I made is that that a good portion, we've not divulged the number of Credit Karma members use the assisted segment. And it's very much connected to when you look at there's $155 million or $160 million IRS returns, $86 million are in the assistant segment, proportionality is the same thing within the Credit Karma base. So that's the point that I was making earlier. To your second question about RALs, really the biggest driver of getting a customer to use a digital platform is actually confidence, not early access to their money. They have to first have confidence that they can get their taxes done right with you, which is where our experts and expertise comes in. And that's really where a lot of our investments are going. We also provide early access to your refund, but really the big driver is about ensuring that we deliver confidence to our experts. Michael Millman: Do you see big opportunity added money to move with confidence over to eliminating RAL kind of money? Sasan Goodarzi: Yes, first of all, we're really focused on getting these customers to come to our platform by ensuring that they know that they can get access to an expert. So confidence is first and foremost, and of course our different methods that we can help these customers get early access to the refund. That's very, very consumer friendly. So the answer is yes, but it's secondary to providing expertise to these customers to use the platform. Michael Millman: Great. I appreciate it. Thank you very much. Sasan Goodarzi: All right, Michael. Michael Millman: And stay safe. Sasan Goodarzi: Thank you so much. Thank you. You do the same. Sasan Goodarzi: And thank you everybody. I know we ran a little bit over. I appreciate everyone's questions. I wish everyone well stay safe until next time. We'll talk to you next quarter. Thank you, everybody. Operator: Ladies and gentlemen, thank you for participating. This concludes today's conference call.
Intuit Inc. (NASDAQ:INTU) Surpasses Earnings and Revenue Estimates
- Intuit Inc. (NASDAQ:INTU) reported an EPS of $2.50, beating the estimated $2.35 and showcasing a 5.93% surprise over expectations.
- The company's revenue reached $3.28 billion, surpassing estimates and indicating a 10.2% year-over-year growth.
- Despite strong financial performance, Intuit's stock fell by 6% in extended trading due to a disappointing forecast for the current quarter.
Intuit Inc. (NASDAQ:INTU) is a leading financial software company known for its flagship products like TurboTax, QuickBooks, and Credit Karma. These tools help individuals and businesses manage their finances efficiently. Intuit operates in a competitive market, with rivals such as H&R Block and Sage Group. Despite the competition, Intuit continues to demonstrate strong financial performance.
On November 21, 2024, Intuit reported earnings per share (EPS) of $2.50, surpassing the estimated $2.35. This marks a 5.93% surprise over the expected figures, as highlighted by Zacks. The EPS also showed a slight increase from $2.47 in the same quarter last year, indicating steady growth. This performance reflects Intuit's ability to consistently exceed market expectations.
Intuit's revenue for the quarter ending in October 2024 reached $3.28 billion, exceeding the estimated $3.14 billion by 4.58%. This represents a 10.2% increase compared to the same period last year. The company has consistently outperformed consensus revenue estimates over the past four quarters, showcasing its strong market position and effective business strategies.
Despite the positive earnings report, Intuit's stock fell by 6% in extended trading due to a disappointing forecast for the current quarter. The company expects revenue between $3.81 billion and $3.85 billion and EPS of 84 cents to 90 cents, falling short of the $1.50 EPS anticipated by analysts. This outlook has impacted investor sentiment, despite the company's strong past performance.
Intuit's financial metrics reveal a high market valuation, with a price-to-earnings (P/E) ratio of approximately 64.14 and a price-to-sales ratio of about 11.68. The enterprise value to sales ratio is around 11.86, reflecting the company's valuation in relation to its revenue. Despite a relatively low debt-to-equity ratio of 0.33, indicating a conservative capital structure, the company's stock is trading at a premium relative to its cash flow generation.
Intuit Inc. (NASDAQ:INTU) Quarterly Earnings Preview and Financial Analysis
- Earnings per share (EPS) is estimated at $2.35 for the upcoming quarterly earnings, with a slight upward revision of 0.1% over the past 30 days.
- Despite a projected 4.5% decline in EPS year-over-year, revenue is expected to rise by 5.4%, showcasing Intuit's strong market position.
- Intuit's price-to-earnings (P/E) ratio stands at approximately 60.87, indicating a high valuation by the market despite its robust 80% gross margins and 18% net profit margins.
Intuit Inc. (NASDAQ:INTU) is a leading financial software company known for its popular products like TurboTax, QuickBooks, Mailchimp, and Credit Karma. These products cater to both consumers and small businesses, driving significant growth in these segments. Intuit's integration of embedded fintech and artificial intelligence further enhances its offerings, positioning it well in the competitive financial software market.
As Intuit prepares to release its quarterly earnings on November 21, 2024, Wall Street analysts estimate an earnings per share (EPS) of $2.35, with projected revenue of approximately $3.14 billion. Despite a 4.5% decline in EPS compared to the same period last year, revenues are expected to rise by 5.4%, reflecting the company's strong market position and growth potential. Over the past 30 days, the consensus EPS estimate has been slightly revised upward by 0.1%, indicating a positive reassessment by analysts.
Intuit's financials are robust, with impressive 80% gross margins and 18% net profit margins. However, the stock is considered expensive, with a price-to-earnings (P/E) ratio of approximately 60.87. This high valuation suggests that investors are willing to pay over 60 times the company's earnings over the past twelve months. The price-to-sales ratio stands at about 11.09, indicating that the market values the company at over 11 times its annual sales.
Despite its quality and growth potential, Intuit's stock holds a 'hold' rating, as it is expected to perform in line with the broader market. Management's guidance for fiscal 2025 suggests continued growth, but analysts anticipate a decline in profits. An upgrade in the stock rating is unlikely unless the company's results significantly exceed expectations. Intuit's enterprise value to operating cash flow ratio is approximately 37.57, showing how the company's valuation compares to its cash flow from operations.
Intuit faces significant cybersecurity risks due to its handling of sensitive financial data, making it a prime target for cyberattacks. The company's debt-to-equity ratio is 0.33, suggesting a relatively low level of debt compared to equity, while the current ratio is approximately 1.29, indicating a good level of short-term liquidity to cover its current liabilities. These financial metrics highlight Intuit's strong financial position, despite the challenges it faces.
Intuit's Fiscal Fourth-Quarter Earnings Beat and Stock Market Reaction
- Intuit's adjusted earnings per share of $1.99 surpassed Wall Street predictions of $1.85.
- Despite positive earnings, Intuit became the S&P 500's worst performer on the announcement day.
- The stock market's reaction to earnings reports can be influenced by various factors beyond the earnings themselves.
Intuit, known for its financial software like Turbo Tax, recently announced its fiscal fourth-quarter adjusted earnings, which stood at $1.99 per share. This figure exceeded the expectations set by Wall Street, which had predicted earnings of $1.85 per share. Despite outperforming analysts' forecasts, Intuit's stock (NASDAQ:INTU) did not fare well in the market following the announcement. On the day the earnings were published, Intuit became the S&P 500's worst performer.
This scenario highlights a curious case where a company's financial performance does not directly translate to stock market success. Typically, when a company reports earnings that surpass Wall Street's expectations, its stock price is expected to rise. Investors often view such earnings beats as indicators of a company's strong financial health and future growth potential. However, Intuit's experience demonstrates that market reactions can be unpredictable and influenced by factors beyond just earnings figures.
Several reasons could explain why Intuit's stock underperformed despite the positive earnings report. Market expectations, broader economic conditions, and investor sentiment play crucial roles in determining how stock prices move after earnings announcements. It's possible that investors were anticipating even higher earnings from Intuit or had concerns about the company's future growth prospects. Additionally, external market conditions or shifts in investor priorities could have contributed to the stock's performance on that day.
Understanding the dynamics between earnings reports and stock market performance is essential for investors. While earnings beats like Intuit's are generally seen as positive, the stock market's reaction can vary based on a multitude of factors. This case serves as a reminder of the complex interplay between a company's financial results and its stock price movements.
Intuit Stock Started With Outperform Rating at RBC Capital
RBC Capital analysts initiated coverage on Intuit (NASDAQ:INTU) stock with an Outperform rating and a price target of $760.
The analysts highlighted Intuit's strong market leadership, successful transition to a subscription model, and potential growth from generative AI (GenAI) as key factors for the positive rating. Additionally, margin expansion is expected to further support the company's growth. Intuit, known for its tax and accounting software, serves over 100 million customers, including more than 10 million small and medium-sized businesses (SMBs) and over 90 million consumers.
Intuit Shares Drop 6% Despite Strong Q3 Results & Outlook
Intuit raised its full-year guidance after reporting fiscal third-quarter results that exceeded expectations. Despite this, Intuit (NASDAQ:INTU) saw its stock drop by over 6% in pre-market today.
The company reported earnings per share of $9.88 on revenue of $6.74 billion, significantly surpassing analyst estimates of $9.38 EPS on $6.65 billion in revenue.
CEO Sasan Goodarzi highlighted the transformative impact of AI, stating that Intuit's strategy to become a global AI-driven expert platform is delivering significant benefits for customers and strong company-wide results.
For the future, Intuit updated its guidance, expecting adjusted earnings between $16.79 and $16.84, representing about 17% growth, up from the previous forecast of 12% to 14% growth. Revenue is projected to range from $16.16 billion to $16.2 billion, indicating approximately 13% growth, up from the prior guidance of 11% to 12% growth.
Intuit Inc. Surpasses Market Expectations in Q3 Earnings
- Intuit Inc. reported a significant earnings beat with an EPS of $9.88 against the estimated $9.38 and revenue of $6.74 billion, surpassing forecasts.
- The company's strategic focus on AI technology has been pivotal in enhancing its product offerings and driving financial performance.
- Intuit's financial health is underscored by strong metrics, including a P/E ratio of approximately 60.36 and a P/S ratio of about 11.73.
Intuit Inc. (NASDAQ:INTU), a prominent player in the financial technology sector, recently reported its earnings for the third quarter of fiscal year 2024. The company, known for its comprehensive suite of products including TurboTax, QuickBooks, and Credit Karma, has consistently demonstrated its ability to exceed market expectations. On May 23, 2024, Intuit announced earnings per share (EPS) of $9.88, surpassing the estimated EPS of $9.38, and reported revenue of $6.74 billion, beating the forecasted revenue of approximately $6.65 billion. This performance underscores Intuit's strong financial health and its successful execution of strategic initiatives.
During the earnings call, as detailed by Seeking Alpha, Intuit's leadership, including CEO Sasan Goodarzi and CFO Sandeep Aujla, discussed the company's financial results and strategic direction. The call was attended by analysts from leading financial institutions, highlighting the significant interest in Intuit's performance. This interest is a testament to Intuit's market position and its potential for future growth. The company's focus on leveraging AI technology has been particularly noteworthy, with Goodarzi emphasizing its transformative impact on Intuit's offerings and its contribution to the company's robust financial outcomes.
Intuit's ability to consistently surpass consensus EPS estimates for the last four quarters is a clear indicator of its operational excellence and market foresight. The company reported a significant improvement in its quarterly earnings, with a 5.78% earnings surprise, and demonstrated revenue growth across its Consumer group, small business, and Small Business and Self-Employed Group. This growth is reflective of Intuit's effective implementation of its AI-driven strategy, which has not only enhanced its product offerings but also delivered substantial value to its customers.
The company's financial metrics further illustrate its strong market position and investor confidence. With a price-to-earnings (P/E) ratio of approximately 60.36 and a price-to-sales (P/S) ratio of about 11.73, Intuit is valued highly by the market, indicative of its premium offerings and expected future growth. The enterprise value to sales (EV/Sales) and enterprise value to operating cash flow (EV/OCF) ratios further highlight the market's optimistic outlook on Intuit's revenue stream and cash flow generation capabilities. Additionally, Intuit's balanced approach to financing, as shown by its debt-to-equity (D/E) ratio of about 0.35, and a healthy current ratio of 1.5, positions the company well for sustainable growth.
In conclusion, Intuit's recent earnings report and the insights shared during its earnings call reflect the company's strong financial performance and strategic direction. The interest from analysts and the company's focus on AI technology are indicative of Intuit's potential for continued success. With robust financial metrics and a clear strategic vision, Intuit is well-positioned to maintain its leadership in the financial technology sector and deliver value to its customers and investors alike.
Intuit Inc. Fiscal Q3 2024 Earnings Preview
- Intuit Inc. is set to release its fiscal third-quarter 2024 earnings with an EPS expectation of 9.34 and revenue estimates around $6.65 billion.
- The company projects year-over-year revenue growth of 10% to 11%, closely aligning with the Zacks Consensus Estimate for a 10.25% increase.
- Intuit has consistently outperformed the Zacks Consensus Estimate in the past four quarters, with an average earnings surprise of 16.18%.
Intuit Inc. (NASDAQ:INTU), a leading provider of financial management software for consumers, small businesses, and accountants, is gearing up to release its fiscal third-quarter 2024 earnings report on Thursday, May 23, 2024, after the market closes. The company, known for its flagship products, TurboTax and QuickBooks, plays a pivotal role in the financial software sector, competing with other tech giants in providing innovative financial solutions. Wall Street has set its sights on earnings per share (EPS) of 9.34, with revenue estimates for the quarter hovering around $6.65 billion.
The anticipation surrounding Intuit's earnings report is high, with expectations of showcasing the company's robust performance. Analysts predict significant year-over-year growth, largely driven by the strength in Online Ecosystem revenues, especially following the introduction of QuickBooks Solopreneur. Intuit has projected its revenues to increase by 10% to 11% year-over-year, aiming for a range between $6.605 billion and $6.655 billion. This projection closely matches the Zacks Consensus Estimate for revenues, which is pegged at $6.63 billion, indicating a year-over-year growth of 10.25%.
On a non-GAAP basis, Intuit's earnings per share are expected to fall within the range of $9.31 to $9.38, aligning with the consensus mark of $9.34 per share. This suggests a year-over-year rise of 4.71%. Notably, Intuit has a track record of exceeding the Zacks Consensus Estimate in its earnings over the last four quarters, with an average surprise of 16.18%. Such consistent performance highlights the company's operational efficiency and its ability to surpass market expectations.
The fiscal third-quarter performance is anticipated to benefit from a steady recovery in the Small Business segment, further bolstered by the strategic launch of QuickBooks Solopreneur. This period is crucial for Intuit, as it reflects the company's ability to adapt and thrive amidst evolving market demands. The focus will also be on the management's discussion of business conditions during the earnings call, as it will play a crucial role in shaping future earnings expectations and the stock's immediate price movement.
Analysts have revised their earnings estimates upwards by 0.2% over the past 30 days, indicating a positive reassessment of Intuit's financial outlook. This adjustment in earnings estimates is significant, as empirical research has shown a strong correlation between trends in earnings estimate revisions and the short-term price performance of a stock. Therefore, the recent upward revision in Intuit's earnings estimates could be a positive indicator for investors, suggesting potential favorable reactions in the stock's price following the earnings announcement.
