This summary is based on the fourth quarter fiscal 2008 earnings call conducted by Intuit Inc. (INTU) on August 21, 2008.
Management:
President, CEO and Director: Brad D. Smith
CFO and SVP: R. Neil Williams
VP, IR and Director: Jerry Natoli
Key Investor Issues:
- Q4 revenue gained $45 million from $433 million to $478 million.
- Full year GAAP EPS were $1.41 versus $1.21 in fiscal 2007.
- Full year 2009 revenue is forecast to be in the range of $3.35 billion to $3.43 billion.
Full Year Highlights:
- Revenue rose 15% to $3.1 billion versus fiscal 2007.
- Excluding M&As activity, revenue growth was 11%.
- GAAP operating income was $651 million, an increase of 2% from last year.
- GAAP EPS increased 14% to $1.41.
- Non-GAAP operating income of $856 million firmed 12% from 2007.
- Non-GAAP EPS were $1.60, an increase of 12% from fiscal 2007.
- QuickBooks revenue was $622 million, 6% higher versus the prior year.
- Payroll and Payments revenue was $561 million, a rise of 9% from the previous year.
- Consumer Tax revenue grew 14% to $929 million from fiscal 2007.
- Accounting Professionals (formerly Professional Tax) revenue gained 4% to $327 million.
- Financial Institutions revenue was $299 million and is inclusive of the Digital Insight results.
- Other Businesses revenue put on 14% to $334 million from the prior year.
Fourth-Quarter Financial Highlights:
The quarterly GAAP operating loss was $94 million.
- This compares with GAAP operating loss of $57 million in the year ago quarter.
- The GAAP loss per share of 19 cents compared with GAAP loss per share of 4 cents in the previous year quarter.
- The company reported non-GAAP operating loss of $41 million during the quarter.
- For the comparable period in 2007, non-GAAP operating loss was $17 million.
- The non-GAAP loss per share was 8 cents versus 2 cents in Q4 of 2007.
The company typically posts a seasonal loss in the fourth quarter when there is little revenue from its tax business but expenses remain relatively constant.
- The 2008 loss includes a $23 million pre-tax charge for severance and facilities closures.
- The 2007 loss includes a pre-tax gain of $31 million from the sale of outsourced payroll assets.
Segment Analysis:
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Small Business revenue grew 12% in the quarter.
- Excluding the effect of Homestead and ECHO, the growth was approximately 6%.
- The full year growth was 7%.
- Excluding the impact of the sale of payroll customers to ADP in 2007 and the acquisition of Homestead and ECHO, Small Business grew 8% for the year.
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QuickBooks finished the year with a solid Q4 with superior performance over the year ago period.
- QuickBooks units in the second half and full year matched a very strong 2007 in a tough spending environment.
- QuickBooks Online revenue continued to grow at a 50% rate.
- The management reported that Homestead is providing a new fast growing web hosting business that can be offered to the 4 million QuickBooks installed base.
- The management advised that QuickBase has moved from the Other Businesses to the QuickBooks segment.
- QuickBase revenue was $10.5 million in 2007 and $15.6 million in 2008.
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Payroll and Payments segment recorded 16% growth during the quarter.
- Excluding the impact of ECHO, growth was 9%.
- The Payroll customer base rose 4% in the year, a little slower than previous trends.
- The Payroll customer retention is reportedly still in the high 80s.
- The Payments customer growth was 18% for the year and total transaction volume grew 23% in the year.
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Accounting Professionals segment delivered 4% annual growth, inclusive the QuickBooks Accountant Edition and ProAdvisor revenue.
- Accountant Edition and ProAdvisor revenue was $22.5 million in 2007 and $31.5 million in 2008.
- Adjusting for the discontinuation of ProSeries Express in 2007, the growth would have been 9%.
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Consumer Tax finished the year with 17% units growth.
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Financial Institutions Q4 revenue was $78 million.
- This reflects 10% growth in Internet banking users and 16% growth in bill pay users for the full year.
- The company expects the first version of FinanceWorks to be available in October followed by the first small business services in December.
