Intuit Hosts Investor Day: Reaffirms First-quarter and Fiscal 2018 Guidance
Intuit Inc. (Nasdaq:INTU) reaffirmed its financial
guidance for the first quarter and full fiscal year 2018 in conjunction with Investor Day, being held today at the company’s Mountain View,
Calif., headquarters. The company's fiscal year runs from Aug. 1 to July 31.
Chairman and Chief Executive Officer Brad Smith, Chief Financial Officer Neil Williams and company
leaders will address Intuit’s priorities in support of its refreshed strategy. The meeting begins at 8:00 a.m. Pacific time.
“I’m looking forward to sharing our new refreshed company game plan with investors,” said Smith. “Our strong performance in
fiscal year 2017 exceeded expectations, and we are showing momentum early in fiscal 2018. We’ll discuss our focus on building one
Intuit ecosystem and our investments in artificial intelligence and machine learning; continuing our move to the public cloud;
investing in our engineering productivity; and building our brands.
“All of this supports our new mission to power prosperity around the world.”
Reiterates First-quarter and Fiscal 2018 Guidance
Intuit reiterated the first-quarter and full-year fiscal 2018 guidance that was previously announced on Aug. 22. For the first
quarter of fiscal year 2018, which ends Oct. 31, the company expects:
- Revenue of $840 million to $860 million, growth of 8 to 11 percent.
- GAAP operating loss of $75 million to $85 million.
- Non-GAAP operating income of $15 million to $25 million.
- GAAP loss per share of $0.17 to $0.19.
- Non-GAAP diluted earnings per share of $0.03 to $0.05.
For full fiscal year 2018. The company expects:
- Revenue of $5.640 billion to $5.740 billion, growth of 9 to 11 percent.
- GAAP operating income of $1.485 billion to $1.535 billion, growth of 6 to 10 percent.
- Non-GAAP operating income of $1.885 billion to $1.935 billion, growth of 9 to 12 percent.
- GAAP diluted earnings per share of $4.00 to $4.10, growth of 8 to 10 percent.
- Non-GAAP diluted earnings per share of $4.90 to $5.00, growth of 11 to 13 percent.
- QuickBooks Online subscribers of 3.275 million to 3.375 million.
Investor Day: How to Participate
The event will be broadcast live at 8:00 a.m. Pacific time and a webcast will be available on Intuit’s website at http://investors.intuit.com/events/default.aspx. A replay of
the video broadcast and webcast will be available on Intuit’s website two hours after the meeting ends.
About Intuit
Intuit Inc. is committed to powering prosperity around the world for consumers,
small businesses and the self-employed through its ecosystem of innovative financial management solutions.
Its flagship products and services include QuickBooks® and TurboTax®, which make it easier
to manage small businesses and tax preparation and filing. QuickBooks Self-Employed provides freelancers and independent
contractors with an easy and affordable way to manage their finances and save money at tax time, while Mint delivers financial tools and insights to help people make smart choices about their
money.
Intuit's ProConnect brand
portfolio includes ProConnect Tax
Online, ProSeries® and Lacerte®, the company's leading tax preparation offerings for
professional accountants.
Founded in 1983, Intuit serves 46 million customers in North America, Europe, Australia, Brazil and India, with revenue of $5.2
billion in its fiscal year 2017. The company has approximately 8,200 employees with major offices in the United States, Canada, the United Kingdom, India, Israel, Australia
and other locations. More information can be found at www.intuit.com.
About Non-GAAP Financial Measures
This press release includes 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 accompanying Table 1 and
the section titled "About Non-GAAP Financial Measures." 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 2018 and beyond; expectations regarding customer
growth; expectations regarding the impact of our strategic decisions on Intuit’s business; and all of the statements under the
heading “Reiterates First-Quarter and Fiscal 2018 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; product
introductions and price competition from our competitors can have unpredictable negative effects on our revenue, profitability and
market position; governmental encroachment in our tax businesses or other governmental activities or public policy affecting the
preparation and filing of tax returns could negatively affect our operating results and market position; we may not be able to
successfully innovate and introduce new offerings and business models to meet our growth and profitability objectives, and current
and future offerings may not adequately address customer needs and may not achieve broad market acceptance, which could harm our
operating results and financial condition; business interruption or failure of our information technology and communication systems
may impair the availability of our products and services, which may damage our reputation and harm our future financial results; as
we upgrade and consolidate our customer facing applications and supporting information technology infrastructure, any problems with
these implementations could interfere with our ability to deliver our offerings; any failure to properly use and protect personal
customer information and data could harm our revenue, earnings and reputation; if we are unable to develop, manage and maintain
critical third party business relationships, our business may be adversely affected; increased government regulation of our
businesses may harm our operating results; if we fail to process transactions effectively or fail to adequately protect against
potential fraudulent activities, our revenue and earnings may be harmed; related publicity regarding such fraudulent activity could
cause customers to lose confidence in using our software and adversely impact our results; any significant offering quality
problems or delays in our offerings could harm our revenue, earnings and reputation; our participation in the Free File Alliance
may result in lost revenue opportunities and cannibalization of our traditional paid franchise; the continuing global economic
downturn may continue to impact consumer and small business spending, financial institutions and tax filings, which could
negatively affect our revenue and profitability; year-over-year changes in the total number of tax filings that are submitted to
government agencies due to economic conditions or otherwise may result in lost revenue opportunities; our revenue and earnings are
highly seasonal and the timing of our revenue between quarters is difficult to predict, which may cause significant quarterly
fluctuations in our financial results; our financial position may not make repurchasing shares advisable or 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 may weaken our competitive position and reduce our revenue and earnings; our acquisition and divestiture activities
may disrupt our ongoing business, may involve increased expenses and may present risks not contemplated at the time of the
transactions; our use of significant amounts of debt to finance acquisitions or other activities could harm our financial condition
and results of operation; and litigation involving intellectual property, antitrust, shareholder and other matters may increase our
costs. More details about the risks that may impact our business are included in our Form 10-K for fiscal 2017 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 October 3, 2017 and we do not
undertake any duty to update any forward-looking statement or other information in these materials.
|
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, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
840 |
|
|
$ |
860 |
|
|
$ |
— |
|
|
|
|
$ |
840 |
|
|
$ |
860 |
Operating income (loss) |
|
$ |
(85 |
) |
|
$ |
(75 |
) |
|
$ |
100 |
|
|
[a] |
|
$ |
15 |
|
|
$ |
25 |
Diluted earnings (loss) per share |
|
$ |
(0.19 |
) |
|
$ |
(0.17 |
) |
|
$ |
0.22 |
|
|
[b] |
|
$ |
0.03 |
|
|
$ |
0.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ending July 31, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
5,640 |
|
|
$ |
5,740 |
|
|
$ |
— |
|
|
|
|
$ |
5,640 |
|
|
$ |
5,740 |
Operating income |
|
$ |
1,485 |
|
|
$ |
1,535 |
|
|
$ |
400 |
|
|
[c] |
|
$ |
1,885 |
|
|
$ |
1,935 |
Diluted earnings per share |
|
$ |
4.00 |
|
|
$ |
4.10 |
|
|
$ |
0.90 |
|
|
[d] |
|
$ |
4.90 |
|
|
$ |
5.00 |
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
$98 million and amortization of acquired technology of approximately $2 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
$392 million and amortization of acquired technology of approximately $8 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 October 3, 2017 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
- Gains and losses on disposals of businesses and long-lived assets
- 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.
Gains and losses on disposals of businesses and long-lived assets. We exclude from our non-GAAP financial measures gains
and losses on disposals of businesses and long-lived assets because they are unrelated to our ongoing business operating
results.
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. We use 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% for fiscal 2016 and 33% for fiscal 2017 and 2018. These
rates are 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 1 include all information reasonably available to Intuit at the date of this press release. This table includes
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, sales of available-for-sale debt securities and other
investments, and disposals of businesses and long-lived assets.
Intuit Inc.
Investors
Kim Watkins, 650-944-3324
kim_watkins@intuit.com
or
Media
Diane Carlini, 650-944-6251
diane_carlini@intuit.com
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