Intuit
Inc. (Nasdaq: INTU) reaffirmed its financial guidance for the first
quarter and full fiscal year 2014, first provided on Aug. 20. The
company's fiscal year runs from Aug. 1 to July 31.
This announcement is in conjunction with Intuit’s annual Investor Day,
being held today at the company’s Mountain View, Calif., headquarters.
President and Chief Executive Officer Brad
Smith will provide an overview of Intuit’s connected services growth
strategy, powered by the company’s global ecosystem of offerings.
“After refreshing our strategy a year ago, we took bold,
transformational steps to realign the company around two strategic
outcomes: to be the operating system behind small business success, and
to do the nations’ taxes in the U.S. and Canada,” said Smith. “This
interdependent ecosystem creates the unique opportunity to achieve our
product visions in small business and tax.”
Three-point Growth Strategy
Intuit sees opportunities to drive future growth by continuing to solve
the unmet needs of small businesses, consumers and accounting
professionals. The growth strategy includes three elements:
-
Delivering awesome product experiences – Reimagining products
to deliver awesome products and an amazing first-use experience,
giving customers the value they expect from Intuit’s offerings as
quickly and easily as possible.
-
Enabling the contributions of others via network effect platforms –
Solving customers’ problems faster by moving to open platforms with
application programming interfaces that enable the contributions of
end users and third-party developers.
-
Using data to create delight – Delivering better products and
breakthrough benefits by appropriately using customer data to
eliminate the need to enter data, helping customers make better
decisions.
Next Generation of QuickBooks
Supporting this strategy, the company unveiled the next generation of
QuickBooks Online. Rebuilt to deliver a simple yet powerful platform,
the new QuickBooks Online goes beyond accounting and offers small
businesses an unprecedented business management solution. The new
QuickBooks Online is an open platform that sets the foundation for
future growth in the United States and globally.
Forward-looking Guidance
Intuit reiterated guidance for fiscal year 2014, which ends July 31:
-
Revenue of $4.440 billion to $4.525 billion, growth of 6 to 8 percent.
-
GAAP operating income of $1.347 billion to $1.377 billion, growth of 9
to 12 percent.
-
Non-GAAP operating income of $1.580 billion to $1.610 billion, growth
of 7 to 10 percent.
-
GAAP diluted earnings per share of $3.11 to $3.19, growth of 10 to 13
percent.
-
Non-GAAP diluted EPS of $3.52 to $3.60, growth of 10 to 13 percent.
With the recent restructuring to focus the company on two core outcomes,
Intuit has revised how it intends to report results in fiscal 2014. The
company will report revenue and segment contribution margin for these
three new segments and expects the following revenue growth for fiscal
year 2014:
-
Small Business Group: 10 to 12 percent.
-
Consumer Group, which includes TurboTax, Quicken, and Mint: 3 to 5
percent.
-
Within Consumer Group, Consumer Tax growth of 4 to 5 percent.
-
Professional Tax: 0 to 4 percent.
Intuit also reiterated its outlook for the first quarter of fiscal 2014:
-
Revenue of $595 million to $605 million, growth of 6 to 8 percent.
-
GAAP operating loss of $88 million to $93 million, compared to an
operating loss of $73 million in the year-ago quarter.
-
Non-GAAP operating loss of $30 million to $35 million, compared to an
operating loss of $16 million in the year-ago quarter.
-
GAAP net loss per share of $0.10 to $0.11, compared to a net loss per
share of $0.06 in the year-ago quarter.
-
Non-GAAP net loss per share of $0.10 to $0.11, compared to a net loss
per share of $0.05 in the year-ago quarter.
Investor Day will be broadcast live on Intuit’s website at http://investors.intuit.com/events/default.aspx.
A replay of the webcast will be available on Intuit’s website two hours
after the meeting ends.
About Intuit Inc.
Intuit Inc. creates business and
financial management solutions that simplify the business of life for
small businesses, consumers and accounting professionals.
Its flagship products and services include QuickBooks®, Quicken®
and TurboTax®, which make
it easier to manage small
businesses and payroll
processing, personal
finance, and tax
preparation and filing. Mint.com
provides a fresh, easy and intelligent way for people to manage their
money, while Demandforce®
offers marketing and communication tools for small businesses. ProSeries®
and Lacerte® are Intuit's
leading tax preparation offerings for professional accountants.
Founded in 1983, Intuit had revenue of $4.2 billion in its fiscal year
2013. The company has approximately 8,000 employees with major offices
in the United States, Canada,
the United Kingdom, India and
other locations. More information can be found at www.intuit.com.
Intuit and the Intuit logo, among others, are registered trademarks
and/or registered service marks of Intuit Inc. in the United States and
other countries.
|
TABLE 1
|
INTUIT INC.
|
RECONCILIATION OF FORWARD-LOOKING GUIDANCE FOR NON-GAAP FINANCIAL
MEASURES
|
TO PROJECTED GAAP REVENUE, OPERATING INCOME (LOSS), AND EPS
|
(In millions, except per share amounts)
|
(Unaudited)
|
|
|
|
Forward-Looking Guidance
|
|
|
GAAP Range of Estimate
|
|
|
|
|
|
Non-GAAP Range of Estimate
|
|
|
From
|
|
To
|
|
Adjmts
|
|
|
|
From
|
|
To
|
Three Months Ending October 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
595
|
|
|
$
|
605
|
|
|
$
|
—
|
|
|
|
|
$
|
595
|
|
|
$
|
605
|
|
Operating loss
|
|
$
|
(93
|
)
|
|
$
|
(88
|
)
|
|
$
|
58
|
|
|
[a]
|
|
$
|
(35
|
)
|
|
$
|
(30
|
)
|
Diluted loss per share
|
|
$
|
(0.11
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
—
|
|
|
[b]
|
|
$
|
(0.11
|
)
|
|
$
|
(0.10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ending July 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
4,440
|
|
|
$
|
4,525
|
|
|
$
|
—
|
|
|
|
|
$
|
4,440
|
|
|
$
|
4,525
|
|
Operating income
|
|
$
|
1,347
|
|
|
$
|
1,377
|
|
|
$
|
233
|
|
|
[c]
|
|
$
|
1,580
|
|
|
$
|
1,610
|
|
Diluted earnings per share
|
|
$
|
3.11
|
|
|
$
|
3.19
|
|
|
$
|
0.41
|
|
|
[d]
|
|
$
|
3.52
|
|
|
$
|
3.60
|
|
See “About Non-GAAP Financial Measures” immediately following this Table
1 for information on these measures, the items excluded from the most
directly comparable GAAP measures in arriving at non-GAAP financial
measures, and the reasons management uses each measure and excludes the
specified amounts in arriving at each non-GAAP financial measure.
[a] Reflects estimated adjustments for share-based compensation expense
of approximately $48 million; amortization of acquired technology of
approximately $5 million; and amortization of other acquired intangible
assets of approximately $5 million.
[b] Reflects the estimated adjustments in item [a], income taxes related
to these adjustments, and the estimated net gain on the disposal of
Intuit Financial Services.
[c] Reflects estimated adjustments for share-based compensation expense
of approximately $198 million; amortization of acquired technology of
approximately $18 million; and amortization of other acquired intangible
assets of approximately $17 million.
[d] Reflects the estimated adjustments in item [c], income taxes related
to these adjustments, and the estimated net gain on the disposal of
Intuit Financial Services.
INTUIT INC.
ABOUT NON-GAAP FINANCIAL MEASURES
The accompanying press release dated September 24, 2013 contains
non-GAAP financial measures. Table 1 reconciles the non-GAAP financial
measures in that press release to the most directly comparable financial
measures prepared in accordance with Generally Accepted Accounting
Principles (GAAP). These non-GAAP financial measures include non-GAAP
operating income (loss), non-GAAP net income (loss) and non-GAAP net
income (loss) per share.
Non-GAAP financial measures should not be considered as a substitute
for, or superior to, measures of financial performance prepared in
accordance with GAAP. These non-GAAP financial measures do not reflect a
comprehensive system of accounting, differ from GAAP measures with the
same names and may differ from non-GAAP financial measures with the same
or similar names that are used by other companies.
We compute non-GAAP financial measures using the same consistent method
from quarter to quarter and year to year. We may consider whether other
significant items that arise in the future should be excluded from our
non-GAAP financial measures.
We exclude the following items from all of our non-GAAP financial
measures:
-
Share-based compensation expense
-
Amortization of acquired technology
-
Amortization of other acquired intangible assets
-
Goodwill and intangible asset impairment charges
-
Professional fees for business combinations
We also exclude the following items from non-GAAP net income (loss) and
diluted net income (loss) per share:
-
Gains and losses on debt securities and other investments
-
Income tax effects of excluded items and related discrete tax items
-
Discontinued operations
We believe that these non-GAAP financial measures provide meaningful
supplemental information regarding Intuit’s operating results primarily
because they exclude amounts that we do not consider part of ongoing
operating results when planning and forecasting and when assessing the
performance of the organization, our individual operating segments or
our senior management. Segment managers are not held accountable for
share-based compensation expense, amortization, or the other excluded
items and, accordingly, we exclude these amounts from our measures of
segment performance. We believe that our non-GAAP financial measures
also facilitate the comparison by management and investors of results
for current periods and guidance for future periods with results for
past periods.
The following are descriptions of the items we exclude from our non-GAAP
financial measures.
Share-based compensation expenses. These consist of non-cash
expenses for stock options, restricted stock units and our Employee
Stock Purchase Plan. When considering the impact of equity awards, we
place greater emphasis on overall shareholder dilution rather than the
accounting charges associated with those awards.
Amortization of acquired technology and amortization of other
acquired intangible assets. When we acquire an entity, we are
required by GAAP to record the fair values of the intangible assets of
the entity and amortize them over their useful lives. Amortization of
acquired technology in cost of revenue includes amortization of software
and other technology assets of acquired entities. Amortization of other
acquired intangible assets in operating expenses includes amortization
of assets such as customer lists, covenants not to compete and trade
names.
Goodwill and intangible asset impairment charges. We exclude from
our non-GAAP financial measures non-cash charges to adjust the carrying
values of goodwill and other acquired intangible assets to their
estimated fair values.
Professional fees for business combinations. We exclude from our
non-GAAP financial measures the professional fees we incur to complete
business combinations. These include investment banking, legal and
accounting fees.
Gains and losses on debt securities and other investments. We
exclude from our non-GAAP financial measures gains and losses that we
record when we sell or impair available-for-sale debt securities and
other investments.
Income tax effects of excluded items and certain discrete tax items.
We exclude from our non-GAAP financial measures the income tax effects
of the items described above, as well as income tax effects related to
business combinations. In addition, the effects of one-time income tax
adjustments recorded in a specific quarter for GAAP purposes are
reflected on a forecasted basis in our non-GAAP financial measures. This
is consistent with how we plan, forecast and evaluate our operating
results.
Operating results and gains and losses on the sale of discontinued
operations. From time to time, we sell or otherwise dispose of
selected operations as we adjust our portfolio of businesses to meet our
strategic goals. In accordance with GAAP, we segregate the operating
results of discontinued operations as well as gains and losses on the
sale of these discontinued operations from continuing operations on our
GAAP statements of operations but continue to include them in GAAP net
income or loss and net income or loss per share. We exclude these
amounts from our non-GAAP financial measures.
The reconciliations of the forward-looking non-GAAP financial measures
to the most directly comparable GAAP financial measures in Table 1
include all information reasonably available to Intuit at the date of
this press release. These tables include adjustments that we can
reasonably predict. Events that could cause the reconciliation to change
include acquisitions and divestitures of businesses, goodwill and other
asset impairments, and sales of available-for-sale debt securities and
other investments.
Cautions About Forward-looking Statements
This press release contains forward-looking statements, including
forecasts of Intuit’s future expected financial results; forecasts of
expected results by segment; expectations regarding growth from current
or future products and services; expectations regarding Intuit’s growth
strategy and its impact on Intuit’s business; Intuit’s prospects for the
business in fiscal 2014; and all of the statements under the heading
“Forward-looking Guidance.”
Because these forward-looking statements involve risks and
uncertainties, there are important factors that could cause our actual
results to differ materially from the expectations expressed in the
forward-looking statements. These factors include, without limitation,
the following: inherent difficulty in predicting consumer behavior;
difficulties in receiving, processing, or filing customer tax
submissions; consumers may not respond as we expected to our advertising
and promotional activities; the competitive environment; governmental
encroachment in our tax businesses or other governmental activities or
public policy affecting the preparation and filing of tax returns; our
ability to innovate and adapt to technological change; business
interruption or failure of our information technology and communication
systems; problems with implementing upgrades to our customer facing
applications and supporting information technology infrastructure; any
failure to properly use and protect personal customer information and
data; our ability to develop, manage and maintain critical third party
business relationships; increased government regulation of our
businesses; any failure to process transactions effectively or to
adequately protect against potential fraudulent activities; any
significant offering quality problems or delays; our participation in
the Free File Alliance; the global economic environment; changes in the
total number of tax filings that are submitted to government agencies
due to economic conditions or otherwise; the highly seasonal and
unpredictable nature of our revenue; our inability to attract, retain
and develop highly skilled employees; increased risks associated with
international operations; our ability to repurchase shares; we may issue
additional shares in an acquisition causing our number of outstanding
shares to grow; our inability to adequately protect our intellectual
property rights; disruptions, expenses and risks associated with our
acquisitions and divestitures; amortization of acquired intangible
assets and impairment charges; our use of significant amounts of debt to
finance acquisitions or other activities; and the cost of, and potential
adverse results in, litigation involving intellectual property,
antitrust, shareholder and other matters. More details about these and
other risks that may impact our business are included in our Form 10-K
for fiscal 2013 and in our other SEC filings. You can locate these
reports through our website at http://investors.intuit.com.
Forward-looking statements are based on information as of September 24,
2013 and we do not undertake any duty to update any forward-looking
statement or other information in these materials.
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