INTUIT INC (INTU) Earnings Summary for Q4 FY2024

Key Metrics

• Revenue: $9,533 million (19% yoy)
• Small Business Revenue: $9,533 million
• Online Ecosystem Revenue: $6,892 million (20% yoy)
• Desktop Ecosystem Revenue: $2,641 million (16% yoy)
• Credit Karma Revenue: $1,708 million (5% yoy)
• ProTax Revenue: $599 million (7% yoy)
• Cash from Operations: $4,884 million

Forward guidance

1. Fiscal 2025 Revenue Guidance: Total company revenue projected at $18.16 billion to $18.347 billion, representing growth of 12% to 13%.
2. Small Business and Self-Employed Group Revenue Growth: Expected revenue growth of 16% to 17%, with online ecosystem revenue growth of approximately 20%.
3. Consumer Group Revenue Growth: Projected revenue growth of 7% to 8%.
4. Credit Karma Revenue Growth: Anticipated revenue growth of 5% to 8%.
5. GAAP EPS Guidance: Expected GAAP diluted earnings per share of $12.34 to $12.54, reflecting growth of 18% to 20%.
6. Non-GAAP EPS Guidance: Expected non-GAAP diluted earnings per share of $19.16 to $19.36, indicating growth of 13% to 14%.
7. GAAP Tax Rate: Expected GAAP tax rate of approximately 23% for fiscal 2025.

Key takeaways

• Positives:
  • Sasan Goodarzi emphasized the company's "AI-driven expert platform" strategy, stating, "We have a significant advantage with the scale of our data, investments in AI capabilities... enabling us to disrupt the categories in which we operate." This positions Intuit for sustained growth.
  • TurboTax Live revenue grew 17%, with full-service customers doubling and new customers tripling, indicating strong demand for assisted services.
  • The Small Business and Self-Employed Group saw 20% revenue growth, demonstrating resilience in customer demand despite broader economic concerns.
  • Intuit Assist, the GenAI-powered financial assistant, is being rolled out to millions, enhancing customer experience and operational efficiency.
  • The company is targeting mid-market growth, with Sasan stating, "We are really accelerating on two fronts... to really acquire new customers," indicating a strategic shift that could capture a larger market share.
• Negatives:
  • The restructuring charge of $223 million led to a GAAP operating loss of $151 million, raising concerns about short-term profitability.
  • Sandeep Aujla noted, "We expect desktop ecosystem revenue to decline approximately 20% in Q1," indicating potential challenges in transitioning to a subscription model.
  • The Consumer Group's long-term revenue growth expectations were adjusted to 6%-10%, reflecting caution in a competitive tax market.
  • Sasan acknowledged, "We have not assumed anything other than the current environment," suggesting a conservative outlook amid macroeconomic uncertainties.
  • Cash reserves for small businesses are down 6%-7% year-over-year, indicating potential liquidity challenges for customers.

Peer Summary

• Payroll Processing & HCM: ADP's Employer Services revenue growth guidance increased to 6%-7%, driven by strong demand, while Paychex anticipates 4%-5.5% growth, impacted by the expiration of the ERTC program. This indicates a competitive landscape with varying growth expectations.
• Consumer Tax Preparation: H&R Block expects overall industry growth of only 1% for FY '25, with DIY slightly outperforming Assisted services. This suggests a challenging environment for consumer tax services, where Intuit operates.
• Credit Reporting: Equifax projects 9% revenue growth, driven by strong demand in non-mortgage sectors, but faces challenges in employer services with a 19% revenue decline. This highlights potential volatility in credit-related services.
• Cloud-Based Financial Operations: BILL Holdings anticipates 15%-17% core revenue growth, but acknowledges economic uncertainty may slow customer spending. This reflects a cautious sentiment in the cloud financial operations sector.