Intuit Inc. (Nasdaq: INTU), maker of TurboTax, QuickBooks,
Credit Karma and Mint, announced financial results for the second
quarter of fiscal 2021, which ended Jan. 31.
"We continue to see strong momentum and accelerating innovation
across the company with our A.I.-driven expert platform strategy,"
said Sasan Goodarzi, Intuit’s chief executive officer. "Small
Business and Self-Employed Group delivered double-digit revenue
growth and Credit Karma performed very well since we completed the
acquisition in December. We are encouraged by our early results
this tax season, and we are confident in our game plan to win."
Financial Highlights
For the second quarter, Intuit reported:
- Total revenue of $1.6 billion, down 7 percent.
- Small Business and Self-Employed Group revenue up 11 percent to
$1.1 billion, while Online Ecosystem revenue grew 22 percent to
$644 million.
- Credit Karma revenue of $144 million since the acquisition
closed on Dec. 3.
- Consumer Group revenue declined 71 percent to $147 million,
driven by the later IRS opening this year. The IRS began accepting
and processing returns starting Feb. 12, compared to Jan. 27 last
year.
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 FY21
Q2 FY20
Change
Q2 FY21
Q2 FY20
Change
Revenue
$1,576
$1,696
(7)%
$1,576
$1,696
(7)%
Operating Income (Loss)
$(25)
$270
NM
$235
$384
(39)%
Earnings Per Share
$0.07
$0.91
(92)%
$0.68
$1.16
(41)%
NM = Not Meaningful
Dollars are in millions, except earnings
per share. Q2 FY'21 GAAP results include a $30 million gain from
the sale of a note receivable that was previously written
off. 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
- Grew QuickBooks Online Accounting revenue 22 percent in the
quarter, driven primarily by customer growth and mix-shift.
- Increased Online Services revenue 20 percent, driven by
QuickBooks Online payments and QuickBooks Online payroll.
- Grew total international online revenue 44 percent.
Credit Karma
- Combined income data from 26 million TurboTax returns with
Credit Karma, with customer consent. The combination of verified
income data with credit history will enable Credit Karma to better
personalize offers for members.
- Integrated Credit Karma Money into the TurboTax filing
experience.
Consumer and ProConnect
Groups
- Launched TurboTax Live Full-Service, offering customers the
ability to have an expert prepare and file their tax return for
them.
- Reported $207 million of professional tax revenue in the
ProConnect Group for the second quarter, down 8 percent, reflecting
delayed forms availability.
Capital Allocation Summary
In the second quarter the company:
- Recorded total cash and investments balance of approximately
$2.7 billion as of Jan. 31.
- Repurchased $175 million of shares, with $2.2 billion remaining
on the company's authorization.
- Received Board approval for a quarterly dividend of $0.59 per
share, payable April 19, 2021. This represents an 11 percent
increase compared to the same period last year.
Forward-looking Guidance
Intuit announced guidance for the third quarter of fiscal year
2021, which ends April 30. The company expects:
- Revenue growth of approximately 53 to 55 percent.
- GAAP earnings per share of $5.85 to $5.95.
- Non-GAAP diluted earnings per share of $6.75 to $6.85.
Intuit also reiterated guidance for full fiscal year 2021. The
company expects:
- Revenue of $8.810 billion to $8.995 billion, growth of
approximately 15 to 17 percent.
- GAAP operating income of $1.920 billion to $1.990 billion, a
decline of approximately 9 to 12 percent.
- Non-GAAP operating income of $2.975 billion to $3.045 billion,
growth of approximately 12 to 14 percent.
- GAAP diluted earnings per share of $5.30 to $5.50, a decline of
approximately 21 to 23 percent.
- Non-GAAP diluted earnings per share of $8.20 to $8.40, growth
of approximately 4 to 7 percent.
Conference Call Details
Intuit executives will discuss the financial results on a
conference call at 1:30 p.m. Pacific time on Feb. 23. To hear the
call, dial 866-417-5279 in the United States or 409-937-8904 from
international locations. No reservation or access code is needed.
The conference call can also be heard live at
http://investors.intuit.com/Events/default.aspx. Prepared remarks
for the call will be available on Intuit’s website after the call
ends.
Replay Information
A replay of the conference call will be available for one week
by calling 855-859-2056, or 404-537-3406 from international
locations. The access code for this call is 9559195. The audio
webcast will remain available on Intuit’s website for one week
after the conference call.
About Intuit
Intuit is a global technology platform that helps our customers
and communities overcome their most important financial challenges.
Serving millions of customers worldwide with TurboTax, QuickBooks,
Credit Karma and Mint, we believe that everyone should have the
opportunity to prosper and work tirelessly to find new, innovative
ways to deliver on this belief. Please visit us for the latest news
and information about Intuit and its brands and find us on
social.
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 contain forward-looking statements, including
the size of the market for tax preparation software and the timing
of when individuals will file their tax returns, forecasts and
timing of expected growth and future financial results of Intuit
and its reporting segments, including Credit Karma; Intuit’s
prospects for the business in fiscal 2021 and beyond; expectations
regarding timing and growth of revenue from current or future
products and services; expectations regarding customer growth;
expectations regarding Intuit's corporate tax rate; expectations
regarding changes to our products and their impact on Intuit’s
business; expectations regarding the amount and timing of any
future dividends or share repurchases; expectations regarding
availability of our offerings; expectations regarding the impact of
our strategic decisions on Intuit’s business; 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 risks and uncertainties
may be amplified by the COVID-19 pandemic, which has caused
significant global economic instability and uncertainty. These
factors include, without limitation, the following: our ability to
compete successfully; our participation in the Free File Alliance;
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 acquisition and
divestiture activity, including the acquisition and integration of
Credit Karma; the issuance of equity or incurrence of debt to fund
an acquisition; our 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 products (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;
changes to public policy, laws or regulations affecting our
businesses; litigation in which we are involved; the seasonal
nature of our tax business; changes in tax rates and tax reform
legislation; global economic changes; 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 2020 and in our other SEC filings. You can locate
these reports through our website at http://investors.intuit.com.
Fiscal 2021 full-year and Q3 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. 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, 2021
January 31, 2020
January 31, 2021
January 31, 2020
Net revenue:
Product
$
495
$
545
$
862
$
898
Service and other
1,081
1,151
2,037
1,963
Total net revenue
1,576
1,696
2,899
2,861
Costs and expenses:
Cost of revenue:
Cost of product revenue
22
24
37
41
Cost of service and other revenue
331
310
565
577
Amortization of acquired technology
14
6
21
12
Selling and marketing
580
593
942
976
Research and development
368
333
693
667
General and administrative
250
159
419
305
Amortization of other acquired intangible
assets
36
1
38
3
Total costs and expenses [A]
1,601
1,426
2,715
2,581
Operating income (loss)
(25
)
270
184
280
Interest expense
(7
)
(3
)
(15
)
(5
)
Interest and other income, net
54
15
63
29
Income before income taxes
22
282
232
304
Income tax provision [B]
2
42
14
7
Net income
$
20
$
240
$
218
$
297
Basic net income per share
$
0.07
$
0.92
$
0.82
$
1.14
Shares used in basic per share
calculations
270
261
266
261
Diluted net income per share
$
0.07
$
0.91
$
0.81
$
1.13
Shares used in diluted per share
calculations
273
264
269
264
Cash dividends declared per common
share
$
0.59
$
0.53
$
1.18
$
1.06
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 (loss) for the periods shown.
Three Months Ended
Six Months Ended
(in millions)
January 31, 2021
January 31, 2020
January 31, 2021
January 31, 2020
Cost of revenue
$
16
$
14
$
31
$
29
Selling and marketing
44
29
76
59
Research and development
67
37
105
75
General and administrative
53
27
79
55
Total share-based compensation expense
$
180
$
107
$
291
$
218
[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, 2021, we recognized excess tax benefits on
share-based compensation of $12 million and $64 million,
respectively, in our provision for income taxes. For the three and
six months ended January 31, 2020, we recognized excess tax
benefits on share-based compensation of $23 million and $52
million, respectively, in our provision for income taxes.
Our effective tax rates for the
three and six months ended January 31, 2021 were approximately 8%
and 6%, respectively. The acquisition of Credit Karma has resulted
in an increase in the annual effective tax rate from 25% at October
31, 2020 to 26% at January 31, 2021 primarily due to non-deductible
share-based compensation and transaction costs. Excluding the
effect of the change in annual effective tax rate for the quarter
and discrete tax items, primarily related to share-based
compensation tax benefits mentioned above, our effective tax rate
for the three and six months ended January 31, 2021 was
approximately 26%. The difference from the federal statutory rate
of 21% was primarily due to state income taxes, non-deductible
share-based compensation and non-deductible transaction costs
related to the Credit Karma acquisition, which were partially
offset by the tax benefit we received from the federal research and
experimentation credit.
Our effective tax rates for the
three and six months ended January 31, 2020 were approximately 15%
and 2%, respectively. Excluding discrete tax items primarily
related to share-based compensation tax benefits mentioned above,
our effective tax rate for both periods was 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.
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 2021
Q1
Q2
Q3
Q4
Year to Date
GAAP operating income (loss)
$
209
$
(25
)
$
—
$
—
$
184
Amortization of acquired technology
7
14
—
—
21
Amortization of other acquired intangible
assets
2
36
—
—
38
Professional fees and transaction costs
for business combinations
5
30
—
—
35
Share-based compensation expense
111
180
—
—
291
Non-GAAP operating income
(loss)
$
334
$
235
$
—
$
—
$
569
GAAP net income (loss)
$
198
$
20
$
—
$
—
$
218
Amortization of acquired technology
7
14
—
—
21
Amortization of other acquired intangible
assets
2
36
—
—
38
Professional fees and transaction costs
for business combinations
5
30
—
—
35
Share-based compensation expense
111
180
—
—
291
Net (gain) loss on debt securities and
other investments
(7
)
(8
)
—
—
(15
)
Gain from sale of note receivable [A]
—
(30
)
—
—
(30
)
Income tax effects and adjustments [B]
(66
)
(57
)
—
—
(123
)
Non-GAAP net income (loss)
$
250
$
185
$
—
$
—
$
435
GAAP diluted net income (loss) per
share
$
0.75
$
0.07
$
—
$
—
$
0.81
Amortization of acquired technology
0.03
0.05
—
—
0.08
Amortization of other acquired intangible
assets
—
0.14
—
—
0.14
Professional fees and transaction costs
for business combinations
0.02
0.11
—
—
0.13
Share-based compensation expense
0.42
0.66
—
—
1.08
Net (gain) loss on debt securities and
other investments
(0.03
)
(0.03
)
—
—
(0.05
)
Gain from sale of note receivable [A]
—
(0.11
)
—
—
(0.11
)
Income tax effects and adjustments [B]
(0.25
)
(0.21
)
—
—
(0.46
)
Non-GAAP diluted net income (loss) per
share
$
0.94
$
0.68
$
—
$
—
$
1.62
Shares used in GAAP diluted per share
calculation
265
273
—
—
269
Shares used in non-GAAP diluted per
share calculation
265
273
—
—
269
[A]
During the three months ended
January 31, 2021, we recorded a $30 million gain from the sale of a
note receivable that was previously written off.
[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 B2
INTUIT INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
TO MOST DIRECTLY COMPARABLE GAAP
FINANCIAL MEASURES
(In millions, except per share
amounts)
(Unaudited)
Fiscal 2020
Q1
Q2
Q3
Q4
Full Year
GAAP operating income (loss)
$
10
$
270
$
1,413
$
483
$
2,176
Amortization of acquired technology
6
6
5
5
22
Amortization of other acquired intangible
assets
2
1
2
1
6
Professional fees and transaction costs
for business combinations
—
—
16
13
29
Share-based compensation expense
111
107
103
114
435
Non-GAAP operating income
(loss)
$
129
$
384
$
1,539
$
616
$
2,668
GAAP net income (loss)
$
57
$
240
$
1,084
$
445
$
1,826
Amortization of acquired technology
6
6
5
5
22
Amortization of other acquired intangible
assets
2
1
2
1
6
Professional fees and transaction costs
for business combinations
—
—
16
13
29
Share-based compensation expense
111
107
103
114
435
Net (gain) loss on debt securities and
other investments
1
1
2
1
5
Income tax effects and adjustments [A]
(68
)
(49
)
(29
)
(102
)
(248
)
Non-GAAP net income (loss)
$
109
$
306
$
1,183
$
477
$
2,075
GAAP diluted net income (loss) per
share
$
0.22
$
0.91
$
4.11
$
1.68
$
6.92
Amortization of acquired technology
0.02
0.02
0.02
0.02
0.08
Amortization of other acquired intangible
assets
0.01
—
0.01
—
0.02
Professional fees and transaction costs
for business combinations
—
—
0.06
0.05
0.11
Share-based compensation expense
0.42
0.41
0.39
0.44
1.65
Net (gain) loss on debt securities and
other investments
—
—
0.01
—
0.02
Income tax effects and adjustments [A]
(0.26
)
(0.18
)
(0.11
)
(0.38
)
(0.94
)
Non-GAAP diluted net income (loss) per
share
$
0.41
$
1.16
$
4.49
$
1.81
$
7.86
Shares used in GAAP diluted per share
calculation
264
264
264
264
264
Shares used in non-GAAP diluted per
share calculation
264
264
264
264
264
[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 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, 2021
July 31, 2020
ASSETS
Current assets:
Cash and cash equivalents
$
1,952
$
6,442
Investments
786
608
Accounts receivable, net
465
149
Income taxes receivable
153
12
Prepaid expenses and other current
assets
312
314
Current assets before funds held for
customers
3,668
7,525
Funds held for customers
426
455
Total current assets
4,094
7,980
Long-term investments
41
19
Property and equipment, net
792
734
Operating lease right-of-use assets
392
226
Goodwill
5,598
1,654
Acquired intangible assets, net
3,384
28
Long-term deferred income taxes
6
65
Other assets
291
225
Total assets
$
14,598
$
10,931
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Short-term debt
$
325
$
1,338
Accounts payable
486
305
Accrued compensation and related
liabilities
326
482
Deferred revenue
752
652
Other current liabilities
362
297
Current liabilities before customer fund
deposits
2,251
3,074
Customer fund deposits
426
455
Total current liabilities
2,677
3,529
Long-term debt
2,033
2,031
Long-term deferred income tax
liabilities
580
2
Operating lease liabilities
391
221
Other long-term obligations
49
42
Total liabilities
5,730
5,825
Stockholders’ equity
8,868
5,106
Total liabilities and stockholders’
equity
$
14,598
$
10,931
TABLE D
INTUIT INC.
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
(In millions)
(Unaudited)
Six Months Ended
January 31,
January 31,
2021
2020
Cash flows from operating
activities:
Net income
$
218
$
297
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation
77
98
Amortization of acquired intangible
assets
60
16
Non-cash operating lease cost
28
32
Share-based compensation expense
291
218
Deferred income taxes
11
(30
)
Other
(48
)
4
Total adjustments
419
338
Originations of loans held for sale
(41
)
—
Sale and principal payments of loans held
for sale
143
—
Changes in operating assets and
liabilities:
Accounts receivable
(178
)
(516
)
Income taxes receivable
(82
)
13
Prepaid expenses and other assets
(63
)
(82
)
Accounts payable
87
175
Accrued compensation and related
liabilities
(269
)
(121
)
Deferred revenue
90
51
Operating lease liabilities
(27
)
(28
)
Other liabilities
27
63
Total changes in operating assets and
liabilities
(415
)
(445
)
Net cash provided by operating
activities
324
190
Cash flows from investing
activities:
Purchases of corporate and customer fund
investments
(535
)
(357
)
Sales of corporate and customer fund
investments
89
73
Maturities of corporate and customer fund
investments
265
287
Purchases of property and equipment
(71
)
(68
)
Acquisitions of businesses, net of cash
acquired
(3,045
)
—
Originations of term loans to small
businesses
(70
)
(166
)
Principal repayments of term loans from
small businesses
53
155
Other
48
(20
)
Net cash used in investing
activities
(3,266
)
(96
)
Cash flows from financing
activities:
Repayments on borrowings under unsecured
revolving credit facility
(1,000
)
—
Repayment of debt
(13
)
(25
)
Proceeds from issuance of stock under
employee stock plans
108
121
Payments for employee taxes withheld upon
vesting of restricted stock units
(168
)
(104
)
Cash paid for purchases of treasury
stock
(164
)
(278
)
Dividends and dividend rights paid
(321
)
(280
)
Net change in customer fund deposits
(29
)
25
Other
—
(1
)
Net cash used in financing
activities
(1,587
)
(542
)
Effect of exchange rates on cash, cash
equivalents, restricted cash, and restricted cash equivalents
10
(2
)
Net decrease in cash, cash equivalents,
restricted cash, and restricted cash equivalents
(4,519
)
(450
)
Cash, cash equivalents, restricted cash,
and restricted cash equivalents at beginning of period
6,697
2,352
Cash, cash equivalents, restricted
cash, and restricted cash equivalents at end of period
$
2,178
$
1,902
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
$
1,952
$
1,641
Restricted cash and restricted cash
equivalents included in funds held for customers [A]
226
261
Total cash, cash equivalents,
restricted cash, and restricted cash equivalents at end of
period
$
2,178
$
1,902
Supplemental schedule of non-cash
investing activities:
Issuance of common stock in a business
combination
$
3,798
$
—
[A]
See quarterly reports filed on
Form 10-Q for reconciliation of funds held for customers by
investment category.
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,
2021
Revenue
$
4,605
$
4,655
$
—
$
4,605
$
4,655
Operating income
$
2,180
$
2,220
$
295
[a]
$
2,475
$
2,515
Diluted earnings per share
$
5.85
$
5.95
$
0.90
[b]
$
6.75
$
6.85
Twelve Months Ending July 31,
2021
Revenue
$
8,810
$
8,995
$
—
$
8,810
$
8,995
Operating income
$
1,920
$
1,990
$
1,055
[c]
$
2,975
$
3,045
Diluted earnings per share
$
5.30
$
5.50
$
2.90
[d]
$
8.20
$
8.40
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 $224 million;
amortization of acquired technology of approximately $15 million;
and amortization of other acquired intangible assets of
approximately $56 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 $813 million;
professional fees and transaction costs primarily related to the
acquisition of Credit Karma of approximately $39 million;
amortization of acquired technology of approximately $51 million;
and amortization of other acquired intangibles of approximately
$152 million.
[d]
Reflects estimated adjustments in
item [c], income taxes related to these adjustments, a $30 million
gain from the sale of a note receivable that was previously written
off, and 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, 2021 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 and equity securities and other
investments. We exclude from our non-GAAP financial measures gains
and losses that we record when we 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, 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 23% for fiscal 2020 and 24% for
fiscal 2021. 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. 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210223006005/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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