Small Business and Self-Employed Group Revenue
Grew 18 Percent
Intuit Inc. (Nasdaq: INTU), the global financial technology
platform that makes Intuit TurboTax, Credit Karma, QuickBooks, and
Mailchimp, announced financial results for the first quarter of
fiscal 2024, which ended October 31.
“We had a very strong first quarter, starting our fiscal year
with momentum,” said Sasan Goodarzi, Intuit’s chief executive
officer. “With data and AI core to our strategy, we're accelerating
innovation across our global financial technology platform to power
the prosperity of consumers and small businesses.”
Financial Highlights
For the first quarter, Intuit:
- Grew total revenue to $3.0 billion, up 15 percent.
- Increased Small Business and Self-Employed Group revenue to
$2.3 billion, up 18 percent; grew Online Ecosystem revenue to $1.6
billion, up 20 percent.
- Reported Credit Karma revenue of $405 million, down 5
percent.
- Grew Consumer Group revenue to $187 million, up 25
percent.
- Increased ProTax Group revenue to $42 million, up 24
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 First-quarter Results
GAAP
Non-GAAP
Q1
FY24
Q1
FY23
Change
Q1
FY24
Q1
FY23
Change
Revenue
$2,978
$2,597
15%
$2,978
$2,597
15%
Operating Income
$307
$76
304%
$960
$662
45%
Earnings Per Share
$0.85
$0.14
507%
$2.47
$1.66
49%
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 19 percent in the
quarter, driven primarily by customer growth, higher effective
prices, and mix-shift.
- Online Services revenue grew 20 percent, driven primarily by
growth in payroll, Mailchimp, and payments.
- Total international online ecosystem revenue grew 16 percent on
a constant currency basis.
Credit Karma
- The decline in Credit Karma revenue in the quarter was driven
by headwinds in personal loans, auto insurance, home loans, and
auto loans, partially offset by growth in credit cards and Credit
Karma Money.
Consumer Group
- The increase in Consumer Group revenue reflects a strong finish
to the tax extension season. The company saw stronger than expected
tax return volume from states both with and without extended tax
deadlines.
Capital Allocation Summary
In the first quarter the company:
- Reported a total cash and investments balance of approximately
$2.3 billion and $5.9 billion in debt as of October 31, 2023. This
includes proceeds from $4 billion senior notes issued on September
15 at a weighted average coupon rate of 5.29 percent. Intuit repaid
the $4.2 billion outstanding on its unsecured term loan on
September 15.
- Repurchased $603 million of shares, with $3.2 billion remaining
on the company's share repurchase authorization.
- Received Board approval for a quarterly dividend of $0.90 per
share, payable January 18, 2024. This represents a 15 percent
increase compared to the same period last year.
Forward-looking Guidance
Intuit reiterated guidance for the full fiscal year 2024. The
company expects:
- Revenue of $15.890 billion to $16.105 billion, growth of
approximately 11 to 12 percent.
- GAAP operating income of $3.615 billion to $3.720 billion,
growth of approximately 15 to 18 percent.
- Non-GAAP operating income of $6.155 billion to $6.260 billion,
growth of approximately 12 to 14 percent.
- GAAP diluted earnings per share of $9.37 to $9.67, growth of
approximately 11 to 15 percent.
- Non-GAAP diluted earnings per share of $16.17 to $16.47, growth
of approximately 12 to 14 percent.
The company also reiterated full fiscal year 2024 segment
revenue guidance:
- Small Business and Self-Employed Group: growth of 16 to 17
percent.
- Consumer Group: growth of 7 to 8 percent.
- ProTax Group: growth of 3 to 4 percent.
- Credit Karma: decline of 3 percent to growth of 3 percent.
Intuit announced guidance for the second quarter of fiscal year
2024, which ends January 31. The company expects:
- Revenue to grow approximately 11 to 12 percent.
- GAAP diluted earnings per share of $0.62 to $0.68.
- Non-GAAP diluted earnings per share of $2.25 to $2.31.
Conference Call Details
Intuit executives will discuss the financial results on a
conference call at 1:30 p.m. Pacific time on November 28. 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 800-938-2298, or 402-220-1124 from international
locations. There is no passcode required. The audio call 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 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 2024;
timing and growth of revenue from current or future products and
services; customer growth and average revenue per return; 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 and
conditions or events, including macroeconomic uncertainty and
geopolitical conditions, 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 develop, deploy,
and use artificial intelligence in our platform and products; our
ability to adapt to technological change and to successfully extend
our platform; our ability to predict consumer behavior; our
reliance on 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; the issuance of equity or
incurrence of debt to fund acquisitions or for general business
purposes; 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 and the
success of our hybrid work model; 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;
fluctuations in the results of our tax business due to seasonality
and other factors beyond our control; 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 2023 and in
our other SEC filings. You can locate these reports through our
website at http://investors.intuit.com. Second-quarter and
full-year fiscal 2024 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
October 31,
2023
October 31,
2022
Net revenue:
Service
$
2,450
$
2,155
Product and other
528
442
Total net revenue
2,978
2,597
Costs and expenses:
Cost of revenue:
Cost of service revenue
707
620
Cost of product and other revenue
15
15
Amortization of acquired technology
38
41
Selling and marketing
769
795
Research and development
680
625
General and administrative
342
304
Amortization of other acquired intangible
assets
120
121
Total costs and expenses [A]
2,671
2,521
Operating income
307
76
Interest expense
(65
)
(49
)
Interest and other income, net
22
5
Income before income taxes
264
32
Income tax provision (benefit) [B]
23
(8
)
Net income
$
241
$
40
Basic net income per share
$
0.86
$
0.14
Shares used in basic per share
calculations
280
281
Diluted net income per share
$
0.85
$
0.14
Shares used in diluted per share
calculations
283
284
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
(in millions)
October 31,
2023
October 31,
2022
Cost of revenue
$
101
$
86
Selling and marketing
123
106
Research and development
161
136
General and administrative
110
94
Total share-based compensation expense
$
495
$
422
[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.
We recognized excess tax benefits on
share-based compensation of $28 million and $7 million in our
provision for income taxes for the three months ended October 31,
2023 and 2022, respectively.
Our effective tax rate for the three
months ended October 31, 2023 was approximately 9%. Excluding
discrete tax items primarily related to share-based compensation,
our effective tax rate 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 an $8 million tax benefit on a
pretax income of $32 million for the three months ended October 31,
2022. Excluding discrete tax items primarily related to share-based
compensation tax benefits including those mentioned above, our
effective tax rate 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 2024
Q1
Q2
Q3
Q4
Year to Date
GAAP operating income (loss)
$
307
$
—
$
—
$
—
$
307
Amortization of acquired technology
38
—
—
—
38
Amortization of other acquired intangible
assets
120
—
—
—
120
Professional fees for business
combinations
—
—
—
—
—
Share-based compensation expense
495
—
—
—
495
Non-GAAP operating income
(loss)
$
960
$
—
$
—
$
—
$
960
GAAP net income (loss)
$
241
$
—
$
—
$
—
$
241
Amortization of acquired technology
38
—
—
—
38
Amortization of other acquired intangible
assets
120
—
—
—
120
Professional fees for business
combinations
—
—
—
—
—
Share-based compensation expense
495
—
—
—
495
Net (gain) loss on debt securities and
other investments
1
—
—
—
1
Loss on disposal of a business
1
—
—
—
1
Income tax effects and adjustments [A]
(198
)
—
—
—
(198
)
Non-GAAP net income (loss)
$
698
$
—
$
—
$
—
$
698
GAAP diluted net income (loss) per
share
$
0.85
$
—
$
—
$
—
$
0.85
Amortization of acquired technology
0.13
—
—
—
0.13
Amortization of other acquired intangible
assets
0.42
—
—
—
0.42
Professional fees for business
combinations
—
—
—
—
—
Share-based compensation expense
1.75
—
—
—
1.75
Net (gain) loss on debt securities and
other investments
0.01
—
—
—
0.01
Loss on disposal of a business
0.01
—
—
—
0.01
Income tax effects and adjustments [A]
(0.70
)
—
—
—
(0.70
)
Non-GAAP diluted net income (loss) per
share
$
2.47
$
—
$
—
$
—
$
2.47
Shares used in GAAP diluted per share
calculation
283
—
—
—
283
Shares used in non-GAAP diluted per
share calculation
283
—
—
—
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 tax benefits related to 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 B2 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
Full Year
GAAP operating income (loss)
$
76
$
270
$
2,778
$
17
$
3,141
Amortization of acquired technology
41
41
40
41
163
Amortization of other acquired intangible
assets
121
121
120
121
483
Professional fees for business
combinations
2
1
1
—
4
Share-based compensation expense
422
423
419
448
1,712
Non-GAAP operating income
(loss)
$
662
$
856
$
3,358
$
627
$
5,503
GAAP net income (loss)
$
40
$
168
$
2,087
$
89
$
2,384
Amortization of acquired technology
41
41
40
41
163
Amortization of other acquired intangible
assets
121
121
120
121
483
Professional fees for business
combinations
2
1
1
—
4
Share-based compensation expense
422
423
419
448
1,712
Net (gain) loss on debt securities and
other investments
—
2
6
1
9
Loss on disposal of a business
—
—
—
8
8
Income tax effects and adjustments [A]
(156
)
(136
)
(150
)
(241
)
(683
)
Non-GAAP net income (loss)
$
470
$
620
$
2,523
$
467
$
4,080
GAAP diluted net income (loss) per
share
$
0.14
$
0.60
$
7.38
$
0.32
$
8.42
Amortization of acquired technology
0.14
0.14
0.14
0.14
0.57
Amortization of other acquired intangible
assets
0.43
0.43
0.43
0.43
1.71
Professional fees for business
combinations
0.01
—
—
—
0.01
Share-based compensation expense
1.49
1.50
1.48
1.58
6.05
Net (gain) loss on debt securities and
other investments
—
0.01
0.02
—
0.03
Loss on disposal of a business
—
—
—
0.03
0.03
Income tax effects and adjustments [A]
(0.55
)
(0.48
)
(0.53
)
(0.85
)
(2.42
)
Non-GAAP diluted net income (loss) per
share
$
1.66
$
2.20
$
8.92
$
1.65
$
14.40
Shares used in GAAP diluted per share
calculation
284
282
283
283
283
Shares used in non-GAAP diluted per
share calculation
284
282
283
283
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 tax benefits related to 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)
October 31,
2023
July 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
1,734
$
2,848
Investments
537
814
Accounts receivable, net
372
405
Notes receivable held for investment,
net
649
687
Notes receivable held for sale
9
—
Income taxes receivable
17
29
Prepaid expenses and other current
assets
388
354
Current assets before funds receivable and
amounts held for customers
3,706
5,137
Funds receivable and amounts held for
customers
2,525
420
Total current assets
6,231
5,557
Long-term investments
107
105
Property and equipment, net
1,013
969
Operating lease right-of-use assets
457
469
Goodwill
13,776
13,780
Acquired intangible assets, net
6,261
6,419
Long-term deferred income tax assets
214
64
Other assets
429
417
Total assets
$
28,488
$
27,780
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
630
$
638
Accrued compensation and related
liabilities
439
665
Deferred revenue
763
921
Income taxes payable
133
698
Other current liabilities
506
448
Current liabilities before funds payable
and amounts due to customers
2,471
3,370
Funds payable and amounts due to
customers
2,525
420
Total current liabilities
4,996
3,790
Long-term debt
5,879
6,120
Long-term deferred income tax
liabilities
3
4
Operating lease liabilities
474
480
Other long-term obligations
144
117
Total liabilities
11,496
10,511
Stockholders’ equity
16,992
17,269
Total liabilities and stockholders’
equity
$
28,488
$
27,780
TABLE D INTUIT INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions)
(Unaudited)
Three Months Ended
October 31,
2023
October 31,
2022
Cash flows from operating
activities:
Net income
$
241
$
40
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation
33
47
Amortization of acquired intangible
assets
158
162
Non-cash operating lease cost
22
23
Share-based compensation expense
495
422
Deferred income taxes
(126
)
(28
)
Other
28
11
Total adjustments
610
637
Originations of loans held for sale
(44
)
—
Sale and principal payments of loans held
for sale
35
—
Changes in operating assets and
liabilities:
Accounts receivable
33
62
Income taxes receivable
12
6
Prepaid expenses and other assets
(33
)
(35
)
Accounts payable
(5
)
(71
)
Accrued compensation and related
liabilities
(232
)
(175
)
Deferred revenue
(159
)
(111
)
Income taxes payable
(565
)
(1
)
Operating lease liabilities
(20
)
(18
)
Other liabilities
30
(6
)
Total changes in operating assets and
liabilities
(939
)
(349
)
Net cash provided by (used in)
operating activities
(97
)
328
Cash flows from investing
activities:
Purchases of corporate and customer fund
investments
(92
)
(256
)
Sales of corporate and customer fund
investments
94
44
Maturities of corporate and customer fund
investments
301
90
Purchases of property and equipment
(84
)
(77
)
Originations and purchases of loans
(377
)
(314
)
Principal repayments of loans
358
244
Other
10
13
Net cash provided by (used in)
investing activities
210
(256
)
Cash flows from financing
activities:
Proceeds from issuance of long-term debt,
net of discount and issuance costs
3,956
—
Repayment of debt
(4,200
)
—
Proceeds from borrowings under secured
revolving credit facilities
—
70
Proceeds from issuance of stock under
employee stock plans
92
60
Payments for employee taxes withheld upon
vesting of restricted stock units
(212
)
(125
)
Cash paid for purchases of treasury
stock
(584
)
(510
)
Dividends and dividend rights paid
(260
)
(222
)
Net change in funds receivable and funds
payable and amounts due to customers
2,040
(186
)
Other
17
—
Net cash provided by (used in)
financing activities
849
(913
)
Effect of exchange rates on cash, cash
equivalents, restricted cash, and restricted cash equivalents
(17
)
(16
)
Net increase (decrease) in cash, cash
equivalents, restricted cash, and restricted cash
equivalents
945
(857
)
Cash, cash equivalents, restricted cash,
and restricted cash equivalents at beginning of period
2,852
2,997
Cash, cash equivalents, restricted
cash, and restricted cash equivalents at end of period
$
3,797
$
2,140
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
$
1,734
$
2,125
Restricted cash and restricted cash
equivalents included in funds receivable and amounts held for
customers
2,063
15
Total cash, cash equivalents,
restricted cash, and restricted cash equivalents at end of
period
$
3,797
$
2,140
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,
2024
Revenue
$
3,362
$
3,392
$
—
$
3,362
$
3,392
Operating income
$
262
$
282
$
611
[a]
$
873
$
893
Diluted net income per share
$
0.62
$
0.68
$
1.63
[b]
$
2.25
$
2.31
Twelve Months Ending July 31,
2024
Revenue
$
15,890
$
16,105
$
—
$
15,890
$
16,105
Operating income
$
3,615
$
3,720
$
2,540
[c]
$
6,155
$
6,260
Diluted net income per share
$
9.37
$
9.67
$
6.80
[d]
$
16.17
$
16.47
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 $454 million;
amortization of other acquired intangible assets of approximately
$121 million; and amortization of acquired technology of
approximately $36 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 $1.9 billion;
amortization of other acquired intangibles of approximately $482
million; and amortization of acquired technology of approximately
$144 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 November 28, 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 2023 and fiscal
2024. 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/20231128428550/en/
Investors Kim Watkins Intuit Inc. 650-944-3324
kim_watkins@intuit.com
Media Kali Fry Intuit Inc. 650-944-3036
kali_fry@intuit.com
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