Intuit Inc. (NASDAQ:INTU) announced
financial results for the first quarter of fiscal 2015, which ended Oct.
31.
“We began fiscal 2015 on a strong note. Our shift to the cloud continues
to accelerate customer growth, led by QuickBooks Online,” said Brad
Smith, Intuit’s president and chief executive officer. “We’re also
gearing up for tax season and are looking forward to our lineup of
innovative solutions coming to market.
“While it is early in our fiscal year, I’m energized by our results as
we continue to drive momentum in our online ecosystems,” Smith said.
Financial Highlights
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.
During the first quarter, Intuit:
-
Delivered total company revenue of $672 million, up 8 percent, driven
by the ongoing acceleration to the cloud.
-
Grew total QuickBooks Online subscribers by 43 percent to 739,000, up
from 40 percent growth in the previous quarter.
-
Increased QuickBooks Online subscribers outside of the U.S. by more
than 170 percent, to 103,000, further accelerating from last quarter.
-
Finished the fiscal quarter with cash and investments of $1.6 billion.
Business Segment Results
Small Business
Total Small Business revenue grew 5 percent.
-
Small business online ecosystem revenue grew 30 percent, with customer
acquisition continuing to drive growth. QuickBooks desktop ecosystem
revenue declined 2 percent, in line with expectations, as the focus
continues to shift to QuickBooks Online.
-
QuickBooks total paying customers grew 22 percent.
-
Online payments charge volume grew 22 percent, driven by an increase
in charge volume per customer.
-
Online payroll customers grew 24 percent, and full-service payroll
customers nearly doubled.
-
Demandforce customers grew 27 percent.
-
Intuit hosted its inaugural QuickBooks Connect event, a
first-of-its-kind event that reached more than 3,500 accounting
professionals, small businesses, entrepreneurs and developers.
Consumer and Professional Tax
Intuit’s tax businesses are highly seasonal, and the first fiscal
quarter represents a small percentage of annual revenue.
-
Within the Consumer segment, Consumer Tax revenue grew 36 percent.
-
Professional Tax revenue increased 46 percent.
CFO Remarks
“Our first priority is investing for customer growth,” said Neil
Williams, Intuit’s chief financial officer. “Our results this quarter
reflect the impact of previously announced changes to our future desktop
software offerings. Revenue for those offerings is now recognized as
services are delivered, rather than up front.”
Snapshot of First-quarter Results
|
|
GAAP
|
|
|
|
Non-GAAP
|
|
|
Q1 FY ’15
|
|
Q1 FY ’14
|
|
Change
|
|
|
|
Q1 FY ’15
|
|
Q1 FY ’14
|
|
Change
|
Revenue
|
|
$672
|
|
$622
|
|
8%
|
|
|
|
$672
|
|
$622
|
|
8%
|
Operating Loss
|
|
($114)
|
|
($77)
|
|
NM
|
|
|
|
($36)
|
|
($20)
|
|
NM
|
EPS
|
|
($0.29)
|
|
($0.04)
|
|
NM
|
|
|
|
($0.10)
|
|
($0.06)
|
|
NM
|
Dollars are in millions, except earnings per share (EPS). See “About
Non-GAAP Financial Measures” below for more information regarding
financial measures not prepared in accordance with Generally Accepted
Accounting Principles (GAAP). Q1 FY14 GAAP EPS figure includes a gain of
$0.16 on the sale of our Intuit Financial Services and Intuit Health
discontinued operations. This gain is excluded from non-GAAP EPS. Q1
FY15 results reflect the impact of changes to future desktop software
offerings; revenue for those offerings is now recognized as services are
delivered, rather than up front.
Capital Allocation Summary
-
Ended the first quarter with approximately $1.6 billion in cash and
investments.
-
Completed two acquisitions totaling approximately $10 million in the
first quarter.
-
Continued returning cash to shareholders via share repurchases and
dividends.
-
In the first quarter, repurchased $114 million of shares; about
$1.8 billion remains on the current authorization.
-
Intuit’s board approved a dividend of $0.25 per share for the
fiscal second quarter, payable on Jan. 20. This represents a 32
percent increase versus last year.
Forward-looking Guidance
Intuit provided guidance for the second quarter of fiscal year 2015. The
company reiterated full-year guidance.
This guidance factors in the company’s strategic decision to deliver
ongoing services and releases for its future desktop offerings in order
to encourage migration to online solutions. As a result, revenue for
future desktop software licenses will be recognized as services are
delivered, rather than up front.
For the second quarter of fiscal 2015, Intuit expects:
-
Revenue of $780 million to $800 million.
-
GAAP operating loss of $120 million to $125 million.
-
Non-GAAP operating loss of $45 million to $50 million.
-
GAAP loss per share of $0.29 to $0.31.
-
Non-GAAP loss per share of $0.11 to $0.13.
-
QuickBooks Online subscribers of approximately 800,000.
For the fiscal year 2015, Intuit still expects:
-
Revenue of $4.275 billion to $4.375 billion, a decline of 3 percent to
5 percent.
-
GAAP operating income of $800 million to $830 million.
-
Non-GAAP operating income of $1.11 billion to $1.14 billion.
-
GAAP diluted EPS of $1.70 to $1.75.
-
Non-GAAP diluted EPS of $2.45 to $2.50.
-
QuickBooks Online subscribers of 925,000 to 950,000.
Intuit will provide tax unit updates in February with second quarter
earnings, and in late April after the tax season ends.
Conference Call and Replay Information
Intuit executives will discuss the financial results on a conference
call today at 1:30 p.m. Pacific time. To hear the call, dial
866-764-6147 in the United States or 973-935-8698 from international
locations. No reservation or access code is needed. The conference call
can also be heard live at http://investors.intuit.com/events/default.aspx.
Prepared remarks for the call will be available on Intuit’s Investor
Relations website after the call ends.
Replay Information
A replay of the conference call will be available for one week by
calling 888-266-2081, or 703-925-2533 from international locations. The
access code for this call is 1647124.
The audio webcast will remain available on Intuit’s website for one week
after the conference call.
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 $4.5 billion in its fiscal year
2014. 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.
About Non-GAAP Financial Measures
This press release and the accompanying tables include non-GAAP
financial measures. For a description of these non-GAAP financial
measures, including the reasons management uses each measure, and
reconciliations of these non-GAAP financial measures to the most
directly comparable financial measures prepared in accordance with
Generally Accepted Accounting Principles, please see the section of the
accompanying tables titled "About Non-GAAP Financial Measures" as well
as the related Table B and Table E. A copy of the press release issued
by Intuit today can be found on the investor relations page of Intuit's
Web site.
Cautions About Forward-looking Statements
This press release contains forward-looking statements, including
forecasts of expected growth and future financial results of Intuit and
its reporting segments; Intuit’s prospects for the business in fiscal
2015 and beyond; expectations regarding growth opportunities from the
shift to the cloud; expectations regarding Intuit’s growth outside the
US; expectations regarding timing and growth of revenue for each of
Intuit’s reporting segments and from current or future products and
services; expectations regarding customer growth; expectations regarding
changes to our products and their impact on Intuit’s business;
expectations regarding the amount and timing of any future dividends or
share repurchases; expectations regarding acquisitions and their impact
on Intuit’s business; expectations regarding availability of our
offerings; 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. More details about the risks that may impact
our business are included in our Form 10-K for fiscal 2014 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 Nov. 20, 2014
and we do not undertake any duty to update any forward-looking statement
or other information in these materials.
|
|
|
TABLE A
|
INTUIT INC.
|
GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In millions, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
October 31, 2014
|
|
October 31, 2013
|
Net revenue:
|
|
|
|
|
|
|
Product
|
|
$
|
233
|
|
|
$
|
229
|
|
Service and other
|
|
439
|
|
|
393
|
|
Total net revenue
|
|
672
|
|
|
622
|
|
Costs and expenses:
|
|
|
|
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
Cost of product revenue
|
|
34
|
|
|
29
|
|
Cost of service and other revenue
|
|
131
|
|
|
108
|
|
Amortization of acquired technology
|
|
10
|
|
|
6
|
|
Selling and marketing
|
|
281
|
|
|
258
|
|
Research and development
|
|
200
|
|
|
176
|
|
General and administrative
|
|
124
|
|
|
118
|
|
Amortization of other acquired intangible assets
|
|
6
|
|
|
4
|
|
Total costs and expenses [A]
|
|
786
|
|
|
699
|
|
Operating loss from continuing operations
|
|
(114
|
)
|
|
(77
|
)
|
Interest expense
|
|
(7
|
)
|
|
(8
|
)
|
Interest and other income, net
|
|
—
|
|
|
5
|
|
Loss before income taxes
|
|
(121
|
)
|
|
(80
|
)
|
Income tax benefit [B]
|
|
(37
|
)
|
|
(23
|
)
|
Net loss from continuing operations
|
|
(84
|
)
|
|
(57
|
)
|
Net income from discontinued operations [C]
|
|
—
|
|
|
46
|
|
Net loss
|
|
$
|
(84
|
)
|
|
$
|
(11
|
)
|
|
|
|
|
|
|
|
Basic net loss per share from continuing operations
|
|
$
|
(0.29
|
)
|
|
$
|
(0.20
|
)
|
Basic net income per share from discontinued operations
|
|
—
|
|
|
0.16
|
|
Basic net loss per share
|
|
$
|
(0.29
|
)
|
|
$
|
(0.04
|
)
|
Shares used in basic per share calculations
|
|
286
|
|
|
288
|
|
|
|
|
|
|
|
|
Diluted net loss per share from continuing operations
|
|
$
|
(0.29
|
)
|
|
$
|
(0.20
|
)
|
Diluted net income per share from discontinued operations
|
|
—
|
|
|
0.16
|
|
Diluted net loss per share
|
|
$
|
(0.29
|
)
|
|
$
|
(0.04
|
)
|
Shares used in diluted per share calculations
|
|
286
|
|
|
288
|
|
|
|
|
|
|
|
|
Dividends declared per common share
|
|
$
|
0.25
|
|
|
$
|
0.19
|
|
|
See accompanying Notes.
|
INTUIT INC.
NOTES TO TABLE A
[A]
|
|
The following table summarizes the total share-based compensation
expense that we recorded in operating loss from continuing
operations for the periods shown.
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
(in millions)
|
|
|
|
|
|
|
|
|
|
October 31, 2014
|
|
October 31, 2013
|
Cost of revenue
|
|
|
|
|
|
|
|
|
|
$
|
2
|
|
|
$
|
2
|
Selling and marketing
|
|
|
|
|
|
|
|
|
|
18
|
|
|
15
|
Research and development
|
|
|
|
|
|
|
|
|
|
20
|
|
|
14
|
General and administrative
|
|
|
|
|
|
|
|
|
|
21
|
|
|
16
|
Total share-based compensation expense
|
|
|
|
|
|
|
|
|
|
$
|
61
|
|
|
$
|
47
|
[B]
|
|
We compute our provision for or benefit from income taxes by
applying the estimated annual effective tax rate to income or loss
from recurring operations and adding the effects of any discrete
income tax items specific to the period. Our effective tax rate for
the three months ended October 31, 2014 was approximately 31%.
Excluding discrete tax items primarily related to share-based
compensation and a state tax law change during the quarter as well
as including the effects of losses in certain jurisdictions where we
do not recognize a tax benefit, our effective tax rate for the
period was approximately 37% and did not differ significantly from
the federal statutory rate of 35%.
|
|
|
|
|
|
Our effective tax rate for the three months ended October 31, 2013
was approximately 29%. Excluding the impact of discrete tax items
primarily related to share-based compensation, our effective tax
rate for that period was approximately 34% and did not differ
significantly from the federal statutory rate of 35%.
|
[C]
|
|
On August 1, 2013 we completed the sale of our Intuit Financial
Services (IFS) business for approximately $1.025 billion in cash. We
recorded a gain on the disposal of IFS of approximately $36 million,
net of income taxes, in the first quarter of fiscal 2014.
|
|
|
|
|
|
On August 19, 2013 we completed the sale of our Intuit Health
business for cash consideration that was not significant and
recorded a loss on disposal that was offset by a related income tax
benefit of approximately $14 million, resulting in a net gain on
disposal of approximately $10 million in the first quarter of fiscal
2014.
|
|
|
|
|
|
We have reclassified our statements of operations for all periods
presented to reflect these two businesses as discontinued
operations. Because the cash flows of our IFS and Intuit Health
discontinued operations were not material for any period presented,
we have not segregated the cash flows of those businesses from
continuing operations on our statements of cash flows.
|
|
|
|
TABLE B
|
INTUIT INC.
|
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
|
TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES
|
(In millions, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
October 31, 2014
|
|
October 31, 2013
|
GAAP operating loss from continuing operations
|
|
$
|
(114
|
)
|
|
$
|
(77
|
)
|
Amortization of acquired technology
|
|
10
|
|
|
6
|
|
Amortization of other acquired intangible assets
|
|
6
|
|
|
4
|
|
Professional fees for business combinations
|
|
1
|
|
|
—
|
|
Share-based compensation expense
|
|
61
|
|
|
47
|
|
Non-GAAP operating loss from continuing operations
|
|
$
|
(36
|
)
|
|
$
|
(20
|
)
|
|
|
|
|
|
|
|
GAAP net loss
|
|
$
|
(84
|
)
|
|
$
|
(11
|
)
|
Amortization of acquired technology
|
|
10
|
|
|
6
|
|
Amortization of other acquired intangible assets
|
|
6
|
|
|
4
|
|
Professional fees for business combinations
|
|
1
|
|
|
—
|
|
Share-based compensation expense
|
|
61
|
|
|
47
|
|
Net gains on debt securities and other investments
|
|
1
|
|
|
(2
|
)
|
Income tax effects and adjustments
|
|
(23
|
)
|
|
(14
|
)
|
Net income from discontinued operations
|
|
—
|
|
|
(46
|
)
|
Non-GAAP net loss
|
|
$
|
(28
|
)
|
|
$
|
(16
|
)
|
|
|
|
|
|
|
|
GAAP diluted net loss per share
|
|
$
|
(0.29
|
)
|
|
$
|
(0.04
|
)
|
Amortization of acquired technology
|
|
0.04
|
|
|
0.02
|
|
Amortization of other acquired intangible assets
|
|
0.02
|
|
|
0.01
|
|
Professional fees for business combinations
|
|
—
|
|
|
—
|
|
Share-based compensation expense
|
|
0.21
|
|
|
0.16
|
|
Net gains on debt securities and other investments
|
|
—
|
|
|
—
|
|
Income tax effects and adjustments
|
|
(0.08
|
)
|
|
(0.05
|
)
|
Net income from discontinued operations
|
|
—
|
|
|
(0.16
|
)
|
Non-GAAP diluted net loss per share
|
|
$
|
(0.10
|
)
|
|
$
|
(0.06
|
)
|
|
|
|
|
|
|
|
Shares used in diluted per share calculation
|
|
286
|
|
|
288
|
|
See “About Non-GAAP Financial Measures” immediately following Table E
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.
|
|
|
|
|
TABLE C
|
INTUIT INC.
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In millions)
|
(Unaudited)
|
|
|
|
|
|
|
|
October 31, 2014
|
|
July 31, 2014
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
542
|
|
|
$
|
849
|
Investments
|
|
1,047
|
|
|
1,065
|
Accounts receivable, net
|
|
140
|
|
|
134
|
Income taxes receivable
|
|
91
|
|
|
35
|
Deferred income taxes
|
|
140
|
|
|
133
|
Prepaid expenses and other current assets
|
|
119
|
|
|
116
|
Current assets before funds held for customers
|
|
2,079
|
|
|
2,332
|
Funds held for customers
|
|
358
|
|
|
289
|
Total current assets
|
|
2,437
|
|
|
2,621
|
|
|
|
|
|
|
Long-term investments
|
|
31
|
|
|
31
|
Property and equipment, net
|
|
629
|
|
|
606
|
Goodwill
|
|
1,639
|
|
|
1,635
|
Acquired intangible assets, net
|
|
186
|
|
|
199
|
Other assets
|
|
116
|
|
|
109
|
Total assets
|
|
$
|
5,038
|
|
|
$
|
5,201
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
$
|
198
|
|
|
$
|
161
|
Accrued compensation and related liabilities
|
|
139
|
|
|
278
|
Deferred revenue
|
|
511
|
|
|
526
|
Other current liabilities
|
|
154
|
|
|
167
|
Current liabilities before customer fund deposits
|
|
1,002
|
|
|
1,132
|
Customer fund deposits
|
|
358
|
|
|
289
|
Total current liabilities
|
|
1,360
|
|
|
1,421
|
|
|
|
|
|
|
Long-term debt
|
|
499
|
|
|
499
|
Long-term deferred revenue
|
|
52
|
|
|
10
|
Other long-term obligations
|
|
200
|
|
|
193
|
Total liabilities
|
|
2,111
|
|
|
2,123
|
|
|
|
|
|
|
Stockholders’ equity
|
|
2,927
|
|
|
3,078
|
Total liabilities and stockholders’ equity
|
|
$
|
5,038
|
|
|
$
|
5,201
|
|
|
|
TABLE D
|
INTUIT INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In millions)
|
(Unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
October 31, 2014
|
|
October 31, 2013
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net loss
|
|
$
|
(84
|
)
|
|
$
|
(11
|
)
|
Adjustments to reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
Depreciation
|
|
36
|
|
|
39
|
|
Amortization of acquired intangible assets
|
|
18
|
|
|
11
|
|
Share-based compensation expense
|
|
61
|
|
|
47
|
|
Pre-tax gain on sale of discontinued operations
|
|
—
|
|
|
(40
|
)
|
Deferred income taxes
|
|
(6
|
)
|
|
77
|
|
Tax benefit from share-based compensation plans
|
|
18
|
|
|
33
|
|
Excess tax benefit from share-based compensation plans
|
|
(18
|
)
|
|
(33
|
)
|
Other
|
|
12
|
|
|
5
|
|
Total adjustments
|
|
121
|
|
|
139
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
Accounts receivable
|
|
(4
|
)
|
|
(11
|
)
|
Income taxes receivable
|
|
(56
|
)
|
|
(143
|
)
|
Prepaid expenses and other assets
|
|
(3
|
)
|
|
(44
|
)
|
Accounts payable
|
|
32
|
|
|
32
|
|
Accrued compensation and related liabilities
|
|
(139
|
)
|
|
(103
|
)
|
Deferred revenue
|
|
28
|
|
|
(29
|
)
|
Other liabilities
|
|
(13
|
)
|
|
(20
|
)
|
Total changes in operating assets and liabilities
|
|
(155
|
)
|
|
(318
|
)
|
Net cash used in operating activities
|
|
(118
|
)
|
|
(190
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Purchases of available-for-sale debt securities
|
|
(365
|
)
|
|
(163
|
)
|
Sales of available-for-sale debt securities
|
|
147
|
|
|
71
|
|
Maturities of available-for-sale debt securities
|
|
229
|
|
|
79
|
|
Net change in money market funds and other cash equivalents
held to satisfy customer fund obligations
|
|
(69
|
)
|
|
7
|
|
Net change in customer fund deposits
|
|
69
|
|
|
(7
|
)
|
Purchases of property and equipment
|
|
(55
|
)
|
|
(47
|
)
|
Acquisitions of businesses, net of cash acquired
|
|
(9
|
)
|
|
(9
|
)
|
Proceeds from divestiture of businesses
|
|
—
|
|
|
1,025
|
|
Other
|
|
(8
|
)
|
|
(7
|
)
|
Net cash provided by (used in) investing activities
|
|
(61
|
)
|
|
949
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Net proceeds from issuance of stock under employee stock plans
|
|
47
|
|
|
72
|
|
Purchases of treasury stock
|
|
(114
|
)
|
|
(1,400
|
)
|
Cash dividends paid to stockholders
|
|
(74
|
)
|
|
(55
|
)
|
Excess tax benefit from share-based compensation plans
|
|
18
|
|
|
33
|
|
Net cash used in financing activities
|
|
(123
|
)
|
|
(1,350
|
)
|
Effect of exchange rates on cash and cash equivalents
|
|
(5
|
)
|
|
(1
|
)
|
Net decrease in cash and cash equivalents
|
|
(307
|
)
|
|
(592
|
)
|
Cash and cash equivalents at beginning of period
|
|
849
|
|
|
1,009
|
|
Cash and cash equivalents at end of period
|
|
$
|
542
|
|
|
$
|
417
|
|
|
|
|
TABLE E
|
INTUIT INC.
|
RECONCILIATION OF FORWARD-LOOKING GUIDANCE FOR NON-GAAP FINANCIAL
MEASURES
|
TO PROJECTED GAAP REVENUE, OPERATING INCOME, 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 January 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
780
|
|
|
$
|
800
|
|
|
$
|
—
|
|
|
|
|
$
|
780
|
|
|
$
|
800
|
|
Operating income
|
|
$
|
(125
|
)
|
|
$
|
(120
|
)
|
|
$
|
75
|
|
|
[a]
|
|
$
|
(50
|
)
|
|
$
|
(45
|
)
|
Diluted earnings per share
|
|
$
|
(0.31
|
)
|
|
$
|
(0.29
|
)
|
|
$
|
0.18
|
|
|
[b]
|
|
$
|
(0.13
|
)
|
|
$
|
(0.11
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ending July 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
4,275
|
|
|
$
|
4,375
|
|
|
$
|
—
|
|
|
|
|
$
|
4,275
|
|
|
$
|
4,375
|
|
Operating income
|
|
$
|
800
|
|
|
$
|
830
|
|
|
$
|
310
|
|
|
[c]
|
|
$
|
1,110
|
|
|
$
|
1,140
|
|
Diluted earnings per share
|
|
$
|
1.70
|
|
|
$
|
1.75
|
|
|
$
|
0.75
|
|
|
[d]
|
|
$
|
2.45
|
|
|
$
|
2.50
|
|
See “About Non-GAAP Financial Measures” immediately following this Table
E 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 $60 million, amortization of acquired technology of
approximately $9 million, amortization of other acquired intangible
assets of approximately $6 million.
|
|
|
|
[b]
|
|
Reflects the estimated adjustments in item [a], income taxes related
to these adjustments, and other income tax effects related to the
use of the long-term non-GAAP tax rate.
|
|
|
|
[c]
|
|
Reflects estimated adjustments for share-based compensation expense
of approximately $251 million; amortization of acquired technology
of approximately $35 million; and amortization of other acquired
intangible assets of approximately $24 million.
|
|
|
|
[d]
|
|
Reflects the estimated adjustments in item [c], income taxes related
to these adjustments, and other income tax effects related to the
use of the long-term non-GAAP tax rate.
|
INTUIT INC.
ABOUT NON-GAAP FINANCIAL MEASURES
The accompanying press release dated November 20, 2014 contains non-GAAP
financial measures. Table B and Table E reconcile 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 and equity securities and other investments
-
Income tax effects and adjustments
-
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 and equity 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 and equity
securities and other investments.
Income tax effects and adjustments. During fiscal 2014, we
excluded from our non-GAAP financial measures the income tax effects of
the non-GAAP pre-tax adjustments 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 were reflected on a forecasted basis in our non-GAAP financial
measures. This was consistent with how we were evaluating our operating
results and planning, forecasting, and evaluating future periods during
that fiscal year.
During fiscal 2015, we began using a long-term non-GAAP tax rate for
evaluating operating results and for planning, forecasting, and
analyzing future periods. This long-term non-GAAP tax rate excludes the
income tax effects of the non-GAAP pre-tax adjustments described above,
assumes the federal research and experimentation credit is continuously
in effect, and eliminates the effects of non-recurring and period
specific items which can vary in size and frequency. Based on our
current long-term projections, we are using a long-term non-GAAP tax
rate of 34% which is consistent with the average of our normalized
fiscal year tax rate over a four year period that includes the past
three fiscal years plus the current fiscal year forecast. We will
evaluate this long-term non-GAAP tax rate on an annual basis and
whenever any significant events occur which may materially affect this
long-term rate. This long-term non-GAAP tax rate could be subject to
change for various reasons including significant changes in our
geographic earnings mix or fundamental tax law changes in major
jurisdictions in which we operate.
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 E
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.
![](http://cts.businesswire.com/ct/CT?id=bwnews&sty=20141120006338r1&sid=ntxv4&distro=nx&lang=en)
Copyright Business Wire 2014