Small Business and Self-Employed Group Revenue
Grew 20 Percent
Intuit Inc. (Nasdaq: INTU) the global financial technology
platform that makes TurboTax, Credit Karma, QuickBooks, and
Mailchimp, announced financial results for the second quarter of
fiscal 2023, which ended January 31.
“We had a strong second quarter as we executed on our strategy
to be the global AI-driven expert platform powering prosperity for
consumers and small businesses,” said Sasan Goodarzi, Intuit's
chief executive officer. “As we celebrate our 40th anniversary this
year we are proud of our history of thriving during various
economic cycles and we are confident that the benefits of the
Intuit platform are more mission-critical than ever to our
customers."
Financial Highlights
For the second quarter, Intuit:
- Grew total revenue to $3.0 billion, up 14 percent.
- Increased Small Business and Self-Employed Group revenue 20
percent to $1.9 billion.
- Grew Online Ecosystem revenue 24 percent to $1.4 billion.
- Increased Consumer Group revenue to $516 million, up 26
percent.
- Reported Credit Karma revenue of $375 million, down 16
percent.
- Grew ProTax Group revenue to $253 million, up 7 percent.
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.
Snapshot of Second-quarter Results
GAAP
Non-GAAP
Q2
FY23
Q2
FY22
Change
Q2
FY23
Q2
FY22
Change
Revenue
$3,041
$2,673
14%
$3,041
$2,673
14%
Operating Income
$270
$56
382%
$856
$612
40%
Earnings Per Share
$0.60
$0.35
71%
$2.20
$1.55
42%
Dollars are in millions, except earnings per share. See “About
Non-GAAP Financial Measures” below for more information regarding
financial measures not prepared in accordance with Generally
Accepted Accounting Principles (GAAP).
Business Segment Results
Small Business and Self-Employed
Group
- QuickBooks Online Accounting revenue grew 27 percent in the
quarter, driven primarily by customer growth, higher effective
prices, and mix-shift.
- Online Services revenue grew 21 percent, driven by growth in
QuickBooks Online payroll, Mailchimp, and QuickBooks Online
payments.
- Total international online revenue grew 17 percent on a
constant currency basis.
Credit Karma
- The decline in Credit Karma revenue in the quarter was driven
by headwinds in personal loans, home loans, auto insurance and auto
loans, partially offset by growth in credit cards and Credit Karma
Money.
Capital Allocation Summary
In the second quarter the company:
- Reported a total cash and investments balance of approximately
$2.1 billion and $7.1 billion in debt as of January 31, 2023.
- Repurchased $500 million of shares, with $2.5 billion remaining
on the company's share repurchase authorization.
- Received Board approval for a quarterly dividend of $0.78 per
share, payable April 18, 2023. This represents a 15 percent
increase compared to the same period last year.
Forward-looking Guidance
Intuit reiterated guidance for the full fiscal year 2023. The
company expects:
- Revenue of $14.035 billion to $14.250 billion, growth of
approximately 10 to 12 percent.
- GAAP operating income of $2.794 billion to $2.899 billion,
growth of approximately 9 to 13 percent.
- Non-GAAP operating income of $5.258 billion to $5.363 billion,
growth of approximately 17 to 19 percent.
- GAAP diluted earnings per share of $6.92 to $7.22, a decline of
approximately 5 to 1 percent.
- Non-GAAP diluted earnings per share of $13.59 to $13.89, growth
of approximately 15 to 17 percent.
The company also reiterated full fiscal year 2023 segment
revenue guidance:
- Small Business and Self-Employed Group: growth of 19 to 20
percent.
- Consumer Group: growth of 9 to 10 percent.
- ProTax Group: growth of 3 percent.
- Credit Karma: a decline of 15 to 10 percent.
Intuit announced guidance for the third quarter of fiscal year
2023, which ends April 30. The company expects:
- Revenue to grow approximately 8 to 9 percent.
- GAAP earnings per share of $6.82 to $6.89.
- Non-GAAP diluted earnings per share of $8.42 to $8.49.
Conference Call Details
Intuit executives will discuss the financial results on a
conference call at 1:30 p.m. PT on February 23. The conference call
can be heard live at
http://investors.intuit.com/Events/default.aspx. Prepared remarks
for the call will be available on Intuit’s website after the call
ends.
Replay Information
A replay of the conference call will be available for one week
by calling 800-770-2030, or 609-800-9909 from international
locations. The passcode is 6854059. The audio webcast will remain
available on Intuit’s website for one week after the conference
call.
About Intuit
Intuit is the global financial technology platform that powers
prosperity for the people and communities we serve. With more than
100 million customers worldwide using TurboTax, Credit Karma,
QuickBooks, and Mailchimp, we believe that everyone should have the
opportunity to prosper. We never stop working to find new,
innovative ways to make that possible. Please visit us at
Intuit.com and find us on social for the latest information about
Intuit and our products and services.
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 B1, Table B2, and Table E. A copy of
the press release issued by Intuit today can be found on the
investor relations page of Intuit's website.
Cautions About Forward-looking Statements
This press release contains forward-looking statements,
including expectations regarding: forecasts and timing of growth
and future financial results of Intuit and its reporting segments;
the impact of macroeconomic conditions on our business, segments
and products; Intuit’s prospects for the business in fiscal 2023;
timing and growth of revenue from current or future products and
services; Intuit's corporate tax rate; the amount and timing of any
future dividends or share repurchases; and the impact of
acquisitions and other strategic decisions on our business; as well
as 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 risks and uncertainties
may be amplified by the effects of global developments, conditions
or events like inflationary pressure, the Russia-Ukraine war and
the COVID-19 pandemic, which have caused significant global
economic instability and uncertainty. Given these risks and
uncertainties, persons regarding this communication are cautioned
not to place any undue reliance on such forward-looking statements.
These factors include, without limitation, the following: our
ability to compete successfully; potential governmental
encroachment in our tax businesses; our ability to adapt to
technological change; our ability to predict consumer behavior; our
reliance on third-party intellectual property; our ability to
protect our intellectual property rights; any harm to our
reputation; risks associated with our ESG and DEI practices; risks
associated with acquisition and divestiture activity, including the
integration of Credit Karma and Mailchimp; the issuance of equity
or incurrence of debt to fund an acquisition; cybersecurity
incidents (including those affecting the third parties we rely on);
customer concerns about privacy and cybersecurity incidents;
fraudulent activities by third parties using our offerings; our
failure to process transactions effectively; interruption or
failure of our information technology; our ability to maintain
critical third-party business relationships; our ability to attract
and retain talent; any deficiency in the quality or accuracy of our
offerings (including the advice given by experts on our platform);
any delays in product launches; difficulties in processing or
filing customer tax submissions; risks associated with
international operations; risks associated with climate change;
changes to public policy, laws or regulations affecting our
businesses; legal proceedings in which we are involved; the
seasonal nature of our tax business; changes in tax rates and tax
reform legislation; global economic conditions (including, without
limitation, inflation); exposure to credit, counterparty and other
risks in providing capital to businesses; amortization of acquired
intangible assets and impairment charges; our ability to repay or
otherwise comply with the terms of our outstanding debt; our
ability to repurchase shares or distribute dividends; volatility of
our stock price; and our ability to successfully market our
offerings.
More details about these and other risks that may impact our
business are included in our Form 10-K for fiscal 2022 and in our
other SEC filings. You can locate these reports through our website
at http://investors.intuit.com. Third-quarter and full-year fiscal
2023 guidance speaks only as of the date it was publicly issued by
Intuit. Other forward-looking statements represent the judgment of
the management of Intuit as of the date of this presentation.
Except as required by law, we do not undertake any duty to update
any forward-looking statement or other information in this
presentation.
TABLE A
INTUIT INC.
GAAP CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except per share
amounts)
(Unaudited)
Three Months Ended
Six Months Ended
January 31,
2023
January 31,
2022
January 31,
2023
January 31,
2022
Net revenue:
Product
$
607
$
525
$
1,034
$
922
Service and other
2,434
2,148
4,604
3,758
Total net revenue
3,041
2,673
5,638
4,680
Costs and expenses:
Cost of revenue:
Cost of product revenue
23
20
38
35
Cost of service and other revenue
709
503
1,329
890
Amortization of acquired technology
41
42
82
57
Selling and marketing
924
942
1,719
1,492
Research and development
630
590
1,255
1,120
General and administrative
323
399
627
661
Amortization of other acquired intangible
assets
121
121
242
174
Total costs and expenses [A]
2,771
2,617
5,292
4,429
Operating income
270
56
346
251
Interest expense
(65
)
(21
)
(114
)
(28
)
Interest and other income (loss), net
23
(5
)
28
45
Income before income taxes
228
30
260
268
Income tax provision (benefit) [B]
60
(70
)
52
(60
)
Net income
$
168
$
100
$
208
$
328
Basic net income per share
$
0.60
$
0.35
$
0.74
$
1.18
Shares used in basic per share
calculations
281
283
281
278
Diluted net income per share
$
0.60
$
0.35
$
0.73
$
1.16
Shares used in diluted per share
calculations
282
287
283
282
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
income for the periods shown.
Three Months Ended
Six Months Ended
(in millions)
January 31,
2023
January 31,
2022
January 31,
2023
January 31,
2022
Cost of revenue
$
91
$
38
$
177
$
65
Selling and marketing
108
83
214
147
Research and development
132
132
268
241
General and administrative
92
83
186
163
Total share-based compensation expense
$
423
$
336
$
845
$
616
[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.
For the three and six months ended January
31, 2023, we recognized tax shortfalls on share-based compensation
of $9 million and $2 million, respectively, in our provision for
income taxes. For the three and six months ended January 31, 2022,
we recognized excess tax benefits on share-based compensation of
$62 million and $109 million, respectively, in our provision for
income taxes.
Our effective tax rates for the three and
six months ended January 31, 2023 were approximately 26% and 20%,
respectively. Excluding discrete tax items primarily related to
share-based compensation, our effective tax rate for both periods
was approximately 24%. The difference from the federal statutory
rate of 21% was primarily due to state income taxes and
non-deductible share-based compensation, which were partially
offset by the tax benefit we received from the federal research and
experimentation credit.
We recorded a $70 million tax benefit on
pretax income of $30 million for the three months ended January 31,
2022. We recorded a $60 million tax benefit on pretax income of
$268 million for the six months ended January 31, 2022. Excluding
discrete tax items primarily related to share-based compensation
tax benefits mentioned above, our effective tax rate for both
periods was approximately 25%. The difference from the federal
statutory rate of 21% was primarily due to state income taxes and
non-deductible share-based compensation, which were partially
offset by the tax benefit we received from the federal research and
experimentation credit.
In the current global tax policy
environment, the U.S. and other domestic and foreign governments
continue to consider, and in some cases enact, changes in corporate
tax laws. As changes occur, we account for finalized legislation in
the period of enactment.
TABLE B1
INTUIT INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
TO MOST DIRECTLY COMPARABLE GAAP
FINANCIAL MEASURES
(In millions, except per share
amounts)
(Unaudited)
Fiscal 2023
Q1
Q2
Q3
Q4
Year to Date
GAAP operating income (loss)
$
76
$
270
$
—
$
—
$
346
Amortization of acquired technology
41
41
—
—
82
Amortization of other acquired intangible
assets
121
121
—
—
242
Professional fees for business
combinations
2
1
—
—
3
Share-based compensation expense
422
423
—
—
845
Non-GAAP operating income
(loss)
$
662
$
856
$
—
$
—
$
1,518
GAAP net income (loss)
$
40
$
168
$
—
$
—
$
208
Amortization of acquired technology
41
41
—
—
82
Amortization of other acquired intangible
assets
121
121
—
—
242
Professional fees for business
combinations
2
1
—
—
3
Share-based compensation expense
422
423
—
—
845
Net (gain) loss on debt securities and
other investments
—
2
—
—
2
Income tax effects and adjustments [A]
(156
)
(136
)
—
—
(292
)
Non-GAAP net income (loss)
$
470
$
620
$
—
$
—
$
1,090
GAAP diluted net income (loss) per
share
$
0.14
$
0.60
$
—
$
—
$
0.73
Amortization of acquired technology
0.14
0.14
—
—
0.28
Amortization of other acquired intangible
assets
0.43
0.43
—
—
0.86
Professional fees for business
combinations
0.01
—
—
—
0.01
Share-based compensation expense
1.49
1.50
—
—
2.99
Net (gain) loss on debt securities and
other investments
—
0.01
—
—
0.01
Income tax effects and adjustments [A]
(0.55
)
(0.48
)
—
—
(1.03
)
Non-GAAP diluted net income (loss) per
share
$
1.66
$
2.20
$
—
$
—
$
3.85
Shares used in GAAP diluted per share
calculation
284
282
—
—
283
Shares used in non-GAAP diluted per
share calculation
284
282
—
—
283
[A]
As discussed in “About Non-GAAP Financial
Measures - Income Tax Effects and Adjustments” following Table E,
our long-term non-GAAP tax rate eliminates the effects of
non-recurring and period-specific items. Income tax adjustments
consist primarily of the tax impact of the non-GAAP pre-tax
adjustments and period specific GAAP items related to share-based
compensation tax effects.
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 B2
INTUIT INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
TO MOST DIRECTLY COMPARABLE GAAP
FINANCIAL MEASURES
(In millions, except per share
amounts)
(Unaudited)
Fiscal 2022
Q1
Q2
Q3
Q4
Full Year
GAAP operating income (loss)
$
195
$
56
$
2,395
$
(75
)
$
2,571
Amortization of acquired technology
15
42
42
41
140
Amortization of other acquired intangible
assets
53
121
121
121
416
Professional fees for business
combinations
12
57
—
—
69
Share-based compensation expense
280
336
346
346
1,308
Non-GAAP operating income
(loss)
$
555
$
612
$
2,904
$
433
$
4,504
GAAP net income (loss)
$
228
$
100
$
1,794
$
(56
)
$
2,066
Amortization of acquired technology
15
42
42
41
140
Amortization of other acquired intangible
assets
53
121
121
121
416
Professional fees for business
combinations
12
57
—
—
69
Share-based compensation expense
280
336
346
346
1,308
Net (gain) loss on debt securities and
other investments [A]
(42
)
—
(7
)
—
(49
)
Income tax effects and adjustments [B]
(123
)
(210
)
(111
)
(141
)
(585
)
Non-GAAP net income (loss)
$
423
$
446
$
2,185
$
311
$
3,365
GAAP diluted net income (loss) per
share
$
0.82
$
0.35
$
6.28
$
(0.20
)
$
7.28
Amortization of acquired technology
0.06
0.14
0.15
0.15
0.49
Amortization of other acquired intangible
assets
0.19
0.42
0.42
0.43
1.46
Professional fees for business
combinations
0.04
0.20
—
—
0.24
Share-based compensation expense
1.01
1.17
1.21
1.22
4.61
Net (gain) loss on debt securities and
other investments [A]
(0.15
)
—
(0.02
)
—
(0.17
)
Income tax effects and adjustments [B]
(0.44
)
(0.73
)
(0.39
)
(0.50
)
(2.06
)
Non-GAAP diluted net income (loss) per
share
$
1.53
$
1.55
$
7.65
$
1.10
$
11.85
Shares used in GAAP diluted per share
calculation
277
287
286
282
284
Shares used in non-GAAP diluted per
share calculation
277
287
286
284
284
[A]
During the three months ended October 31,
2021, we recognized $39 million of net gains on other long-term
investments.
[B]
As discussed in "About Non-GAAP Financial
Measures - Income Tax Effects and Adjustments" following Table E,
our long-term non-GAAP tax rate eliminates the effects of
non-recurring and period-specific items. Income tax adjustments
consist primarily of the tax impact of the non-GAAP pre-tax
adjustments and the excess tax benefits on share-based
compensation.
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)
January 31,
2023
July 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
1,547
$
2,796
Investments
524
485
Accounts receivable, net
903
446
Notes receivable
948
509
Income taxes receivable
67
93
Prepaid expenses and other current
assets
391
287
Current assets before funds receivable and
amounts held for customers
4,380
4,616
Funds receivable and amounts held for
customers
376
431
Total current assets
4,756
5,047
Long-term investments
108
98
Property and equipment, net
931
888
Operating lease right-of-use assets
508
549
Goodwill
13,779
13,736
Acquired intangible assets, net
6,737
7,061
Long-term deferred income tax assets
12
11
Other assets
371
344
Total assets
$
27,202
$
27,734
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Short-term debt
$
501
$
499
Accounts payable
811
737
Accrued compensation and related
liabilities
502
576
Deferred revenue
852
808
Other current liabilities
820
579
Current liabilities before funds payable
and amounts due to customers
3,486
3,199
Funds payable and amounts due to
customers
376
431
Total current liabilities
3,862
3,630
Long-term debt
6,576
6,415
Long-term deferred income tax
liabilities
320
619
Operating lease liabilities
514
542
Other long-term obligations
88
87
Total liabilities
11,360
11,293
Stockholders’ equity
15,842
16,441
Total liabilities and stockholders’
equity
$
27,202
$
27,734
TABLE D
INTUIT INC.
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
(In millions)
(Unaudited)
Six Months Ended
January 31,
2023
January 31,
2022
Cash flows from operating
activities:
Net income
$
208
$
328
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation
94
96
Amortization of acquired intangible
assets
324
233
Non-cash operating lease cost
46
40
Share-based compensation expense
845
616
Deferred income taxes [A]
(290
)
(12
)
Other
42
(29
)
Total adjustments
1,061
944
Changes in operating assets and
liabilities:
Accounts receivable
(456
)
(472
)
Income taxes receivable
27
(117
)
Prepaid expenses and other assets
(108
)
(133
)
Accounts payable
60
84
Accrued compensation and related
liabilities
(75
)
(523
)
Deferred revenue
40
83
Operating lease liabilities
(38
)
(41
)
Other liabilities
(107
)
77
Total changes in operating assets and
liabilities
(657
)
(1,042
)
Net cash provided by operating
activities
612
230
Cash flows from investing
activities:
Purchases of corporate and customer fund
investments
(388
)
(318
)
Sales of corporate and customer fund
investments
125
1,429
Maturities of corporate and customer fund
investments
225
154
Purchases of property and equipment
(132
)
(107
)
Acquisitions of businesses, net of cash
acquired
(33
)
(5,682
)
Originations and purchases of loans
(1,015
)
(317
)
Principal repayments of loans
530
175
Other
(16
)
(16
)
Net cash used in investing
activities
(704
)
(4,682
)
Cash flows from financing
activities:
Proceeds from issuance of long-term
debt
—
4,700
Repayment of debt
(9
)
—
Proceeds from borrowings under secured
revolving credit facilities
175
2
Repayments on borrowings under secured
revolving credit facilities
(16
)
—
Proceeds from issuance of stock under
employee stock plans
81
75
Payments for employee taxes withheld upon
vesting of restricted stock units
(259
)
(355
)
Cash paid for purchases of treasury
stock
(1,017
)
(874
)
Dividends and dividend rights paid
(446
)
(385
)
Net change in funds receivable and funds
payable and amounts due to customers
(199
)
(82
)
Cash received from a bank partner
336
—
Other
(1
)
(9
)
Net cash provided by (used in)
financing activities
(1,355
)
3,072
Effect of exchange rates on cash, cash
equivalents, restricted cash, and restricted cash equivalents
(1
)
(6
)
Net decrease in cash, cash equivalents,
restricted cash, and restricted cash equivalents
(1,448
)
(1,386
)
Cash, cash equivalents, restricted cash,
and restricted cash equivalents at beginning of period
2,997
2,819
Cash, cash equivalents, restricted
cash, and restricted cash equivalents at end of period
$
1,549
$
1,433
Reconciliation of cash, cash equivalents,
restricted cash, and restricted cash equivalents reported within
the condensed consolidated balance sheets to the total amounts
reported on the condensed consolidated statements of cash flows
Cash and cash equivalents
$
1,547
$
1,257
Restricted cash and restricted cash
equivalents included in funds receivable and amounts held for
customers
2
176
Total cash, cash equivalents,
restricted cash, and restricted cash equivalents at end of
period
$
1,549
$
1,433
Supplemental schedule of non-cash
investing activities:
Issuance of common stock in business
combinations
$
—
$
6,316
[A]
Under the 2017 Tax Cuts & Jobs Act,
research and experimental costs are no longer fully deductible and
are required to be capitalized and amortized for U.S. tax purposes
effective August 1, 2022. Unless this provision of the act is
repealed or its effectiveness is deferred, the mandatory
capitalization requirement significantly increases our deferred tax
assets and cash tax payments for fiscal 2023.
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 April 30,
2023
Revenue
$
6,063
$
6,113
$
—
$
6,063
$
6,113
Operating income
$
2,595
$
2,620
$
580
[a]
$
3,175
$
3,200
Diluted net income per share
$
6.82
$
6.89
$
1.60
[b]
$
8.42
$
8.49
Twelve Months Ending July 31,
2023
Revenue
$
14,035
$
14,250
$
—
$
14,035
$
14,250
Operating income
$
2,794
$
2,899
$
2,464
[c]
$
5,258
$
5,363
Diluted net income per share
$
6.92
$
7.22
$
6.67
[d]
$
13.59
$
13.89
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.
[a]
Reflects estimated adjustments for
share-based compensation expense of approximately $420 million;
amortization of other acquired intangible assets of approximately
$120 million; and amortization of acquired technology of
approximately $40 million.
[b]
Reflects estimated adjustments in item
[a], income taxes related to these adjustments, and other income
tax effects related to the use of the non-GAAP tax rate.
[c]
Reflects estimated adjustments for
share-based compensation expense of approximately $1.8 billion;
amortization of other acquired intangibles of approximately $483
million; amortization of acquired technology of approximately $162
million; and professional fees for business combinations of
approximately $3 million.
[d]
Reflects estimated adjustments in item
[c], income taxes related to these adjustments, other income tax
effects related to the use of the non-GAAP tax rate.
INTUIT INC.
ABOUT NON-GAAP FINANCIAL MEASURES
The accompanying press release dated February 23, 2023 contains
non-GAAP financial measures. Table B1, Table B2, 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
- Gains and losses on disposals of businesses and long-lived
assets
- Professional fees and transaction costs 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 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 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 a business in a
business combination, we are required by GAAP to record the fair
values of the intangible assets of the business 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 businesses. 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 and transaction costs 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 credit losses on
available-for-sale debt securities and gains and losses on 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, 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 24% for fiscal 2022 and fiscal
2023. This long-term non-GAAP tax rate could be subject to change
for various reasons including significant acquisitions, changes in
our geographic earnings mix or fundamental tax law changes in major
jurisdictions in which we operate. 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 rate.
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
measure 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, sales of
available-for-sale debt securities and other investments, and
disposals of business and long-lived assets.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230223005037/en/
Investors Kim Watkins Intuit Inc. 650-944-3324
abby_smith@intuit.com
Media Abby Smith Intuit Inc. 408-839-6028
kim_watkins@intuit.com
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