Intuit Inc. (Nasdaq: INTU), the global technology platform that
makes TurboTax, QuickBooks, Mint, Credit Karma and Mailchimp,
announced financial results for the first quarter of fiscal 2022,
which ended Oct. 31. Intuit grew total revenue to $2.0 billion, up
from $1.3 billion the prior year, including the addition of Credit
Karma. With the addition of Mailchimp starting Nov. 1 and the
company's strong momentum, Intuit raised its fiscal year 2022
revenue guidance to 26 to 28 percent growth. Excluding Mailchimp,
the company expects revenue growth of 18 to 20 percent, up from
prior guidance of 15 to 16 percent.
“We are off to a strong start in fiscal year 2022, delivering on
our strategy of becoming an AI-driven expert platform powering the
prosperity of consumers and small businesses," said Sasan Goodarzi,
Intuit's chief executive officer. "We continue to see strong
momentum and proof that our Big Bets are further positioning us for
durable growth in the future, and we're delighted that Mailchimp
has joined Intuit."
Financial Highlights
For the first quarter, Intuit:
- Grew total revenue to $2.0 billion, up from $1.3 billion the
prior year, including the addition of Credit Karma.
- Increased Small Business and Self-Employed Group revenue 22
percent to $1.4 billion.
- Grew Online Ecosystem revenue 36 percent to $845 million.
- Reported Credit Karma revenue of $418 million, a quarterly
record for the business.
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 FY22
Q1 FY21
Change
Q1 FY22
Q1 FY21
Change
Revenue
$2,007
$1,323
52%
$2,007
$1,323
52%
Operating Income
$195
$209
(7)%
$555
$334
66%
Earnings Per Share
$0.82
$0.75
9%
$1.53
$0.94
63%
Dollars are in millions, except earnings
per share. Note that GAAP results include a $39 million net gain on
other long-term investments. 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 32 percent in the
quarter, driven primarily by customer growth, higher effective
prices and mix-shift.
- Online Services revenue increased 42 percent, driven by
QuickBooks Online payroll and QuickBooks Online payments.
- Total international online revenue grew 39 percent on a
constant currency basis.
Credit Karma
- Within the core verticals, Credit Karma saw record revenue in
the quarter driven by strength in personal loans and credit cards
combined.
Consumer and ProConnect
Groups
- Consumer Group revenue grew to $120 million in the quarter, up
from $119 million the prior year.
- ProConnect Group professional tax revenue grew to $26 million
in the quarter, up from $23 million the prior year.
Capital Allocation Summary
In the first quarter the company:
- Reported a total cash and investments balance of approximately
$3.3 billion as of Oct. 31. On Nov. 1, the company entered into a
$4.7 billion term loan under a new credit agreement to partially
fund the Mailchimp acquisition.
- Repurchased $339 million of shares, with $3.0 billion remaining
on the company's share repurchase authorization.
- Received Board approval for a quarterly dividend of $0.68 per
share, payable January 18, 2022. This represents a 15 percent
increase compared to the same period last year.
Forward-looking Guidance
Intuit updated guidance for full fiscal year 2022. The company
expects:
- Revenue of $12.165 billion to $12.300 billion, growth of
approximately 26 to 28 percent, including Mailchimp as of Nov. 1
and a full year of Credit Karma.
- Excluding Mailchimp, revenue growth of 18 to 20 percent, up
from previous guidance for growth of 15 to 16 percent.
- GAAP operating income of $2.441 billion to $2.501 billion, a
decline of approximately 2 percent to flat, down from previous
guidance for growth of 4 to 7 percent.
- Non-GAAP operating income of $4.370 billion to $4.430 billion,
growth of approximately 25 to 27 percent, up from previous guidance
for growth of 16 to 18 percent.
- GAAP diluted earnings per share of $7.00 to $7.16, a decline of
approximately 7 to 5 percent, down from previous guidance of a
decline of 1 percent to growth of 1 percent.
- Non-GAAP diluted earnings per share of $11.48 to $11.64, growth
of approximately 18 to 20 percent, up from previous guidance for
growth of 13 to 16 percent.
The company also updated segment revenue guidance for the Small
business and Self-Employed Group and Credit Karma. The company now
expects the following segment revenue results for fiscal year
2022:
- Small Business and Self-Employed Group: growth of 32 to 33
percent, up from previous guidance for growth of 12 to 14 percent,
reflecting 16 to 17 percent organic growth and a $760 million to
$770 million contribution from the Mailchimp acquisition.
- Credit Karma: revenue of $1.540 billion to $1.565 billion, up
from previous guidance of $1.345 billion to $1.380 billion.
- Consumer Group: growth of 10 to 11 percent.
- ProConnect Group: growth of 1 to 2 percent.
Intuit announced guidance for the second quarter of fiscal year
2022, which ends Jan. 31. The company expects:
- Revenue growth of approximately 73 to 74 percent.
- GAAP earnings per share of $0.55 to $0.59.
- Non-GAAP diluted earnings per share of $1.84 to $1.88.
Conference Call Details
Intuit executives will discuss the financial results on a
conference call at 1:30 p.m. Pacific time on Nov. 18. 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 855-859-2056, or 404-537-3406 from international
locations. The access code for this call is 3688875. The audio
webcast will remain available on Intuit’s website for one week
after the conference call.
About Intuit
Intuit is the global technology platform that helps consumers
and small businesses overcome their most important financial
challenges. Serving more than 100 million customers worldwide with
TurboTax, QuickBooks, Mint, Credit Karma, 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 for the latest information about Intuit, our products and
services, 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 contains forward-looking statements,
expectations regarding: forecasts and timing of growth and future
financial results of Intuit and its reporting segments; Intuit’s
prospects for the business in fiscal 2022 and beyond; 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; the impact of acquisitions on our
business and strategic priorities; 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 COVID-19 pandemic, which has caused
significant global economic instability and uncertainty. 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
acquisition and divestiture activity, including the acquisition and
integration of Credit Karma and Mailchimp; 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 2021 and in our other SEC filings. You can
locate these reports through our website at
http://investors.intuit.com. Fiscal 2022 full-year and Q2 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
October 31, 2021
October 31, 2020
Net revenue:
Product
$
397
$
367
Service and other
1,610
956
Total net revenue
2,007
1,323
Costs and expenses:
Cost of revenue:
Cost of product revenue
15
15
Cost of service and other revenue
387
234
Amortization of acquired technology
15
7
Selling and marketing
550
362
Research and development
530
325
General and administrative
262
169
Amortization of other acquired intangible
assets
53
2
Total costs and expenses [A]
1,812
1,114
Operating income
195
209
Interest expense
(7
)
(8
)
Interest and other income, net
50
9
Income before income taxes
238
210
Income tax provision [B]
10
12
Net income
$
228
$
198
Basic net income per share
$
0.84
$
0.75
Shares used in basic per share
calculations
273
263
Diluted net income per share
$
0.82
$
0.75
Shares used in diluted per share
calculations
277
265
Cash dividends declared per common
share
$
0.68
$
0.59
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, 2021
October 31, 2020
Cost of revenue
$
27
$
15
Selling and marketing
64
32
Research and development
109
38
General and administrative
80
26
Total share-based compensation expense
$
280
$
111
[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 $47 million and $52 million in our
provision for income taxes for the three months ended October 31,
2021 and 2020, respectively.
Our effective tax rate for the three
months ended October 31, 2021 was approximately 4%. Excluding
discrete tax items primarily related to share-based compensation
tax benefits mentioned above, our effective tax rate was 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.
Our effective tax rate for the three
months ended October 31, 2020 was approximately 6%. Excluding
discrete tax items primarily related to share-based compensation
tax benefits mentioned above, our effective tax rate was 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 2022
Q1
Q2
Q3
Q4
Year to Date
GAAP operating income (loss)
$
195
$
—
$
—
$
—
$
195
Amortization of acquired technology
15
—
—
—
15
Amortization of other acquired intangible
assets
53
—
—
—
53
Professional fees and transaction costs
for business combinations
12
—
—
—
12
Share-based compensation expense
280
—
—
—
280
Non-GAAP operating income
(loss)
$
555
$
—
$
—
$
—
$
555
GAAP net income (loss)
$
228
$
—
$
—
$
—
$
228
Amortization of acquired technology
15
—
—
—
15
Amortization of other acquired intangible
assets
53
—
—
—
53
Professional fees and transaction costs
for business combinations
12
—
—
—
12
Share-based compensation expense
280
—
—
—
280
Net (gain) loss on debt securities and
other investments [A]
(42
)
—
—
—
(42
)
Income tax effects and adjustments [B]
(123
)
—
—
—
(123
)
Non-GAAP net income (loss)
$
423
$
—
$
—
$
—
$
423
GAAP diluted net income (loss) per
share
$
0.82
$
—
$
—
$
—
$
0.82
Amortization of acquired technology
0.06
—
—
—
0.06
Amortization of other acquired intangible
assets
0.19
—
—
—
0.19
Professional fees and transaction costs
for business combinations
0.04
—
—
—
0.04
Share-based compensation expense
1.01
—
—
—
1.01
Net (gain) loss on debt securities and
other investments [A]
(0.15
)
—
—
—
(0.15
)
Income tax effects and adjustments [B]
(0.44
)
—
—
—
(0.44
)
Non-GAAP diluted net income (loss) per
share
$
1.53
$
—
$
—
$
—
$
1.53
Shares used in GAAP diluted per share
calculation
277
—
—
—
277
Shares used in non-GAAP diluted per
share calculation
277
—
—
—
277
[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 B2
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
Full Year
GAAP operating income (loss)
$
209
$
(25
)
$
1,914
$
402
$
2,500
Amortization of acquired technology
7
14
14
15
50
Amortization of other acquired intangible
assets
2
36
54
54
146
Professional fees for business
combinations
5
30
1
—
36
Share-based compensation expense
111
180
218
244
753
Non-GAAP operating income
(loss)
$
334
$
235
$
2,201
$
715
$
3,485
GAAP net income (loss)
$
198
$
20
$
1,464
$
380
$
2,062
Amortization of acquired technology
7
14
14
15
50
Amortization of other acquired intangible
assets
2
36
54
54
146
Professional fees for business
combinations
5
30
1
—
36
Share-based compensation expense
111
180
218
244
753
Net (gain) loss on debt securities and
other investments
(7
)
(8
)
—
—
(15
)
Other income from divested businesses
[A]
—
(30
)
—
—
(30
)
Income tax effects and adjustments [B]
(66
)
(57
)
(73
)
(149
)
(345
)
Non-GAAP net income (loss)
$
250
$
185
$
1,678
$
544
$
2,657
GAAP diluted net income (loss) per
share
$
0.75
$
0.07
$
5.30
$
1.37
$
7.56
Amortization of acquired technology
0.03
0.05
0.05
0.06
0.18
Amortization of other acquired intangible
assets
—
0.14
0.19
0.20
0.53
Professional fees for business
combinations
0.02
0.11
—
—
0.13
Share-based compensation expense
0.42
0.66
0.79
0.88
2.76
Net (gain) loss on debt securities and
other investments
(0.03
)
(0.03
)
—
—
(0.05
)
Other income from divested businesses
[A]
—
(0.11
)
—
—
(0.11
)
Income tax effects and adjustments [B]
(0.25
)
(0.21
)
(0.26
)
(0.54
)
(1.26
)
Non-GAAP diluted net income (loss) per
share
$
0.94
$
0.68
$
6.07
$
1.97
$
9.74
Shares used in GAAP diluted per share
calculation
265
273
276
277
273
Shares used in non-GAAP diluted per
share calculation
265
273
276
277
273
[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 C
INTUIT INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In millions)
(Unaudited)
October 31, 2021
July 31, 2021
ASSETS
Current assets:
Cash and cash equivalents
$
2,864
$
2,562
Investments
386
1,308
Accounts receivable, net
411
391
Income taxes receivable
111
123
Prepaid expenses and other current
assets
409
316
Current assets before funds held for
customers
4,181
4,700
Funds held for customers
306
457
Total current assets
4,487
5,157
Long-term investments
84
43
Property and equipment, net
789
780
Operating lease right-of-use assets
405
380
Goodwill
5,613
5,613
Acquired intangible assets, net
3,195
3,252
Long-term deferred income taxes
8
8
Other assets
289
283
Total assets
$
14,870
$
15,516
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable
$
531
$
623
Accrued compensation and related
liabilities
316
530
Deferred revenue
600
684
Other current liabilities
385
361
Current liabilities before customer fund
deposits
1,832
2,198
Customer fund deposits
306
457
Total current liabilities
2,138
2,655
Long-term debt
2,037
2,034
Long-term deferred income tax
liabilities
508
525
Operating lease liabilities
403
380
Other long-term obligations
51
53
Total liabilities
5,137
5,647
Stockholders’ equity
9,733
9,869
Total liabilities and stockholders’
equity
$
14,870
$
15,516
TABLE D
INTUIT INC.
CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
(In millions)
(Unaudited)
Three Months Ended
October 31, 2021
October 31, 2020
Cash flows from operating
activities:
Net income
$
228
$
198
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation
45
37
Amortization of acquired intangible
assets
69
9
Non-cash operating lease cost
18
13
Share-based compensation expense
280
111
Deferred income taxes
(16
)
17
Other
(35
)
(16
)
Total adjustments
361
171
Originations of loans held for sale
—
(43
)
Sale and principal payments of loans held
for sale
—
147
Changes in operating assets and
liabilities:
Accounts receivable
(21
)
47
Income taxes receivable
11
(17
)
Prepaid expenses and other assets
(31
)
(38
)
Accounts payable
(107
)
(58
)
Accrued compensation and related
liabilities
(212
)
(248
)
Deferred revenue
(86
)
(85
)
Operating lease liabilities
(18
)
(12
)
Other liabilities
20
(17
)
Total changes in operating assets and
liabilities
(444
)
(428
)
Net cash provided by operating
activities
145
45
Cash flows from investing
activities:
Purchases of corporate and customer fund
investments
(257
)
(198
)
Sales of corporate and customer fund
investments
1,053
30
Maturities of corporate and customer fund
investments
123
156
Purchases of property and equipment
(42
)
(38
)
Acquisitions of businesses, net of cash
acquired
—
(85
)
Originations of term loans to small
businesses
(125
)
(11
)
Principal repayments of term loans from
small businesses
72
29
Other
(28
)
(13
)
Net cash provided by (used in)
investing activities
796
(130
)
Cash flows from financing
activities:
Repayments on borrowings under unsecured
revolving credit facility
—
(1,000
)
Proceeds from borrowings under secured
revolving credit facility
2
—
Repayment of debt
—
(13
)
Proceeds from issuance of stock under
employee stock plans
55
88
Payments for employee taxes withheld upon
vesting of restricted stock units
(167
)
(99
)
Cash paid for purchases of treasury
stock
(335
)
—
Dividends and dividend rights paid
(190
)
(158
)
Net change in customer fund deposits
(151
)
29
Net cash used in financing
activities
(786
)
(1,153
)
Effect of exchange rates on cash, cash
equivalents, restricted cash, and restricted cash equivalents
(2
)
(1
)
Net increase (decrease) in cash, cash
equivalents, restricted cash, and restricted cash
equivalents
153
(1,239
)
Cash, cash equivalents, restricted cash,
and restricted cash equivalents at beginning of period
2,819
6,697
Cash, cash equivalents, restricted
cash, and restricted cash equivalents at end of period
$
2,972
$
5,458
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
$
2,864
$
5,174
Restricted cash and restricted cash
equivalents included in funds held for customers [A]
108
284
Total cash, cash equivalents,
restricted cash, and restricted cash equivalents at end of
period
$
2,972
$
5,458
[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 January 31,
2022
Revenue
$
2,719
$
2,749
$
—
$
2,719
$
2,749
Operating income
$
173
$
188
$
544
[a]
$
717
$
732
Diluted earnings per share
$
0.55
$
0.59
$
1.29
[b]
$
1.84
$
1.88
Twelve Months Ending July 31,
2022
Revenue
$
12,165
$
12,300
$
—
$
12,165
$
12,300
Operating income
$
2,441
$
2,501
$
1,929
[c]
$
4,370
$
4,430
Diluted earnings per share
$
7.00
$
7.16
$
4.48
[d]
$
11.48
$
11.64
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 $336 million;
professional fees for business combinations of approximately $50
million; amortization of acquired technology of approximately $39
million; and amortization of other acquired intangible assets of
approximately $119 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 $1.3 billion;
professional fees for business combinations of approximately $62
million; amortization of acquired technology of approximately $131
million; and amortization of other acquired intangibles of
approximately $410 million. The estimated amortization adjustments
were calculated based on existing intangible assets as of October
31, 2021 and a preliminary valuation for the Mailchimp
acquisition.
[d]
Reflects estimated adjustments in item
[c], income taxes related to these adjustments, and other income
tax effects related to the use of the non-GAAP tax rate, and $39
million of net gains on other long-term investments.
INTUIT INC. ABOUT NON-GAAP FINANCIAL
MEASURES
The accompanying press release dated November 18, 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 24% for fiscal 2021 and fiscal
2022. 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211118006180/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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