This summary is based on the second quarter fiscal 2008 earnings call conducted by Intuit Inc. (INTU: chart) on February 21, 2008.

Founder: Scott Cook
President and CEO: Brad Smith
CFO: Neil Williams
VP, Investor Relations and Financial Planning and Analysis: Bob Lawson

Key Investors Issues

- The GAAP earnings per share were 34 cents versus 40 cents in the prior year.
- Quarterly revenue of $835 million reflects an increase of 11% over previous year.
- The company used $250 million to repurchase $8.2 million shares during the quarter.
- For Q3, the firm projects EPS of $1.23 to $1.26, on revenue of $1.268 billion to $1.293 billion.

Second Quarter Fiscal 2008 Financial Highlights

Non-GAAP earnings were 40 cents per share, down 4 cents per share over the prior year.

This was driven mainly by the deferral of $23 million of Protax revenue from the second quarter to the third quarter. On a GAAP basis, the firm earned 34 cents per share versus 40 cents last year.

The second quarter 2008 results include revenue and earnings from Digital Insight which was acquired in February 2007, and excluded approximately $23 million of Protax revenue that is deferred to the third quarter. Results for 2007 include revenue and earnings related to certain assets sold to ADP in the third quarter of 2007. Adjusted for those items, non-GAAP EPS would have been 47 cents per share, up 7% from last year. That EPS growth rate is lower than the revenue growth rate, because revenue is shifting to later in the year but cost remained relatively evenly balanced throughout the year.

Revenue of $835 million was up 11% year-over-year.

- Consumer tax second quarter revenue of $248 million was up 11% over the period a year ago. Total consumer tax units were up 12% through February 16, driven by growth in TurboTax Online. As expected, all the growth in the category is coming from the web. The desktop market is still substantial. The firm is executing well and it has gained 3 points of share at retail compared with the second quarter last year as unit share retail is now 85%.

- Professional tax revenue of $105 million was in line with expectations. The results reflect deferral of $23 million of revenue from the second quarter to the third quarter compared with last year. The results also reflect a decision to discontinue ProSeries Express product, which generated $4 million of revenue in the second quarter of last year.

- Total small business revenue grew 3% in the second quarter and 5% for the first half. Adjusted for the sale of favorable assets to ADP small business growth it was 10% for the second quarter and 11% for the first half. Within small business, QuickBooks revenue of $175 million was up 5% over the year ago period. On a year-to-date basis, QuickBooks revenue was up 7%, 1 point more than first half 2007. Though the company is showing growth in the quarter and first half, it has seen a 4 point year-over-year decline in the financial accounting software category in the retail fiscal year-to-date. The firm’s share is up 2 points in retail and it is continuing to grow its online business. But unit growth has been less than expected, and it is adjusting guidance for the QuickBooks segment to reflect current market conditions.

The Payroll and Payment segment has continued to deliver excellent growth with revenue of $138 million for the quarter. Adjusted for the impact of the ADP sale, that''s up 16% year-over-year. The revenue growth was driven by 20% growth in payment customers and 4% growth in transaction volume per customer.

- Financial institution’s revenue for the second quarter was $72 million. The calculated growth rate for this segment is not meaningful because the acquisition of Digital Insight was completed in February 2007. DI''s core internet banking business grew slightly more than 9% in the second quarter. Internet banking end user grew 11% and bill pay end user grew 20%. The growth rate for DI''s core internet banking business is slightly lower than it has been due to lower growth and active end users through the first half. The firm’s projection of internet banking end user edge for the second half looks strong.

- The other businesses segment revenue of $96 million was up 12% over the year, driven by strong results in Quicken and Real Estate Solutions businesses.

Intuit ended the second quarter with $837 million in cash and investments.

- Cash flow from operations was $199 million.
- Capital expenditures were $57 million during the second quarter. This is up from $24 million in the same quarter a year ago. The increase is driven by investments in new data center and expansion of office capacity to support the growth.

The company used $250 million to repurchase $8.2 million shares of Intuit stock during the quarter.

As of February 01, the firm has $300 million in authority for future share repurchases and has a 10b5-1 plan in place to allow it to consistently repurchase stock throughout the year.

The acquisition of Homestead Technologies Inc. closed on December 18, 2007.