Reaffirms Full-year Revenue and Operating
Income Guidance
Intuit Inc. (Nasdaq: INTU) today announced that revenue and
operating income for its second fiscal quarter were lower than
expected due to the tax season opening later this year. The company
expects tax revenue to shift to the third fiscal quarter, and
therefore reiterated full fiscal-year revenue and operating income
guidance.
Intuit also announced the impact of the 2017 Tax Cuts and Jobs
Act (the “Tax Act”) on its expected second fiscal quarter, which
ended Jan. 31, and full year net income and earnings per share
which ends July 31, 2018.
Tax Season Timing
Tax revenue is recognized as returns are filed. The tax
preparation market is forming later this year, as the IRS began
accepting returns on Jan. 29. The IRS is reporting total returns
processed through Feb. 2 are down 10 percent and self-prepared
e-files are down 7 percent compared with last year. Intuit’s
processed consumer tax returns for that same period are down 6
percent.
“Every tax year is different and this year is no exception with
the IRS opening its doors six calendar days later than last year,”
said Dan Wernikoff, executive vice president and general manager of
Intuit’s TurboTax business. “Beyond this timing creating a late
forming tax season, we are confident in our plan, combining our
intuitive DIY offer for those with simple returns and our TurboTax
Live offer for those that want some assistance.”
Impact of New U.S. Tax Law
In December the U.S. government enacted the Tax Act which
reduced the U.S. federal tax rate on U.S. earnings to 21 percent.
With Intuit’s fiscal year ending July 31, the change will result in
a blended lower U.S. statutory federal rate of 26.9 percent for
fiscal year 2018. Intuit will fully benefit from the change in its
fiscal year 2019.
Intuit is required to recognize the effect of the tax law
changes in the period of enactment, such as re-measuring U.S. net
deferred tax assets at the lower rates. Intuit expects its GAAP tax
rate to be approximately 26 percent and non-GAAP tax rate to be
approximately 27 percent for fiscal year 2018.
Updated Fiscal Second Quarter Guidance
Due to the revenue shift and the impact of the Tax Act, for the
second quarter, the company expects to report:
- Revenue of $1,160 million to $1,165
million, down from the prior range of $1,160 million to $1,180
million.
- GAAP operating income of $15 million to
$20 million, down from the prior range of $35 million to $45
million.
- Non-GAAP operating income of $115
million to $120 million, down from the prior range of $130 million
to $140 million.
- GAAP loss per share of $0.08 to $0.09,
including a tax charge of $39 million related to the re-measurement
of Intuit’s net deferred tax assets at the enacted lower tax rates.
The prior range was diluted earnings per share of $0.08 to
$0.11.
- Non-GAAP diluted earnings per share of
$0.34 to $0.35, up from the prior range of $0.31 to $0.34.
Since the Tax Act was passed in Intuit’s second quarter, the
deferred tax re-measurements and other items are considered
provisional due to the forthcoming guidance and ongoing analysis of
the final year-end data and tax positions. The analysis is expected
to be completed within the 12-month measurement period in
accordance with SAB 118.
Reaffirms Full-year Revenue and Operating Income
Guidance
The company expects full-year revenue and operating income for
Intuit and all business segments to be in line with guidance issued
on Nov. 20, 2017. For 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.
- QuickBooks Online subscribers of 3.275
million to 3.375 million.
Raised Full-year Earnings Per Share Guidance
Intuit also adjusted earnings expectations for the full year
earnings per share due to the impact of the Tax Act. The company
now expects:
- Fiscal 2018 GAAP diluted earnings per
share of $4.20 to $4.30, growth of 13 to 16 percent. This is up
from the prior range of $4.00 to $4.10.
- Fiscal 2018 Non-GAAP diluted earnings
per share of $5.30 to $5.40, growth of 20 to 22 percent. This is up
from the prior range of $4.90 to $5.00.
Intuit will announce second-quarter results and will issue the
first of two season-to-date unit updates for its consumer tax
products and services on Feb. 22. The second units update will be
provided at the end of the tax season.
About Intuit
Intuit’s mission is to Power Prosperity Around
the World. Our global products and platforms, including
TurboTax, QuickBooks, Mint and Turbo, are
designed to empower consumers, self-employed, and small
businesses to improve their financial lives, finding them more
money with the least amount of work, while giving them complete
confidence in their actions and decisions. Our innovative
ecosystem of financial management solutions serves 46 million
customers worldwide, unleashing the power of many for the
prosperity of one. Please visit us for the latest news and
in-depth information about Intuit and its brands and find us on
Facebook.
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 Table 1 titled "About Non-GAAP Financial
Measures."
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; the size of the market for
tax preparation software and the timing of when individuals will
file their tax returns; forecasts of total tax season results based
on preliminary IRS and other internal and external data points that
may, in certain cases, be based on small sample sizes; Intuit’s
prospects for the business in fiscal 2018 and beyond; expectations
regarding timing and growth of revenue for each of Intuit’s
reportable segments; expectations regarding customer growth;
expectations regarding the impact of newly passed US tax
legislation on Intuit’s business and its corporate tax rate; and
all of the statements under the heading “Forward-looking
Guidance”.
Because these forward-looking statements involve risks and
uncertainties, there are important factors that could cause our
actual results to differ materially from the expectations expressed
in the forward-looking statements. These factors include, without
limitation, the following: inherent difficulty in predicting
consumer behavior; difficulties in receiving, processing, or filing
customer tax submissions; consumers may not respond as we expected
to our advertising and promotional activities; 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 February 9, 2018 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, 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 Ended January 31, 2018 Revenue $
1,160 $ 1,165 $ 1,160 $ 1,165 Operating income $ 15 $ 20 $ 100 [a]
$ 115 $ 120 Earnings (loss) per share $ (0.09 ) $ (0.08 ) $ 0.43
[b] $ 0.34 $ 0.35
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 $ 4.20 $
4.30 $ 1.10 [d] $ 5.30 $ 5.40
See our press release dated November 20, 2017 for a
reconciliation of previously announced non-GAAP numbers.
[a] Reflects estimated adjustments for share-based
compensation expense of approximately $94 million; amortization of
acquired technology of approximately $3 million; amortization of
other acquired intangible assets of approximately $1 million; and
professional fees for business combinations 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 non-recurring and period specific items which
include (1) the excess tax benefits related to share based
compensation, and (2) the tax charge for the re-measurement of
Intuit’s net deferred tax assets at the enacted lower tax rates.
[c] Reflects estimated adjustments for share-based
compensation expense of approximately $388 million; amortization of
acquired technology of approximately $8 million; amortization of
other acquired intangible assets of approximately $2 million; and
professional fees for business combinations of approximately $2
million. [d] Reflects the estimated adjustments in item [c],
income taxes related to these adjustments, and other income tax
effects related to non-recurring and period specific items which
include (1) the excess tax benefits related to share based
compensation, and (2) the tax charge for the re-measurement of
Intuit’s net deferred tax assets at the enacted lower tax rates.
INTUIT INC.ABOUT NON-GAAP FINANCIAL
MEASURES
The accompanying press release dated February 9, 2018
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 and non-GAAP
net income 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 value 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. In the second quarter of our
fiscal 2018, we revised our estimated annual effective non-GAAP tax
rate to reflect a change in the U.S. federal statutory rate, as a
result of the 2017 Tax Cuts and Jobs Act (the “Tax Act”). The
federal statutory rate change to 21% is effective January 1, 2018,
and therefore, the change will result in a blended U.S. statutory
federal rate of 26.9% for our fiscal year 2018. We will fully
benefit from the U.S. federal statutory rate change in our fiscal
year 2019.
Through the first quarter of fiscal 2018, we used a projected
long-term non-GAAP tax rate of 33%. As a result of the Tax Act,
effective in the second quarter of fiscal 2018, we have applied an
effective non-GAAP tax rate of 27% to our year to date pre-tax
income, after the elimination of the effects of the non-GAAP
adjustments to our operating results described above. Because of
the transitional impact of the Tax Act provisions, the fiscal 2018
non-GAAP tax rate is based on our current year forecast only,
without reference to long-term forecasts. This 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. We expect to use the long-term non-GAAP tax
rate for fiscal 2019, once the Tax Act’s provisions are in full
effect and consistent for the periods included in the long-term
forecast.
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 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 businesses and long-lived assets.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20180209005198/en/
Intuit Inc.InvestorsKim Watkins,
650-944-3324kim_watkins@intuit.comorMediaDiane Carlini,
650-944-6251diane_carlini@intuit.com
Intuit (NASDAQ:INTU)
Historical Stock Chart
From Aug 2024 to Sep 2024
Intuit (NASDAQ:INTU)
Historical Stock Chart
From Sep 2023 to Sep 2024