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Intuit (INTU) Q1 Earnings & Revenues Top, Keeps FY18 Outlook
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Intuit Inc. (INTU - Free Report) delivered stellar first-quarter fiscal 2018 results. The company reported non-GAAP income (excluding stock-based compensation, amortization and other one-time items) from continuing operations of 11 cents per share, surpassing the Zacks Consensus Estimate of 5 cents.
Intuit stock has gained 37% year over year, outperforming 36.2% rally of the industry it belongs to.
Quarter in Detail
This tax-preparation related software maker reported revenues of $886 million, which came ahead of management’s guided range of $840-$860 million and also outpaced the Zacks Consensus Estimate of $855 million. On a year-over-year basis, revenues were up 13.9% primarily owing to better-than-expected growth in QuickBooks Online and ecosystem along with new and improved products.
Services and Other revenues climbed nearly 17.9% to $567 million while product revenues were up 7.4% to $319 million.
Segment-wise, Small Business and Self-Employed Group witnessed 17% year-over-year growth driven mainly by strong customer acquisition. Continued subscriber growth for QuickBooks Online and QuickBooks Self-Employed also acted as a catalyst.
The company recorded an increase of 56% in QuickBooks Online subscribers for the year, bringing the total global count to 2.55 million. QuickBooks Self-Employed subscribers totaled 425,000 during the quarter. Revenues from the Small Business online ecosystem increased 35% on a year-over-year basis, primarily due to online customer acquisition.
Revenues from Consumer Group were up 7% year over year. Professional tax revenues within Strategic Partners Group improved 2%.
Coming to operational metrics, Intuit reported non-GAAP gross profit of $689 million, up 15.6% year over year, backed by higher revenues. Gross margin for the quarter came in at 77.8% as compared with 76.6% reported in the year-ago quarter.
The company posted non-GAAP operating income of $43 million compared with $$32 million in the year-ago quarter. Operating margins expanded 70 basis points to 4.8% during the quarter.
Intuit posted non-GAAP net income from continuing operations of approximately $29 million compared with first-quarter fiscal 2017 net income of $15 million.
Balance Sheet and Cash Flows
Intuit exited the fiscal first quarter with cash and investments of $777 million, flat quarter over quarter. Long-term debt was $425 million at quarter end as compared with $438 million reported in the previous quarter.
Cash used in operational activities during the quarter was $78 million. During the quarter, the company repurchased $170 million shares, with $1.4 billion still remaining under the share repurchase authorization.
The company received an authorization to pay a dividend of 39 cents per share on Jan 18, 2018.
Outlook
Intuit provided second-quarter guidance and reiterated fiscal 2018 guidance.
For the fiscal second quarter, the company anticipates revenues in a range of $1.160-$1.180 million. The Zacks Consensus Estimate is pegged at $1.12 billion.
Intuit expects fiscal second quarter non-GAAP operating income in the range of $130-$140 million. The company anticipates reporting non-GAAP earnings in the band of 31-34 cents per share. The Zacks Consensus Estimate is pegged at 31 cents per share.
For fiscal 2018, the company still anticipates revenues of $5.640-$5.740 billion, representing an increase of 9-11% year over year. The Zacks Consensus Estimate is pegged at $5.69 billion.
QuickBooks Online subscribers for fiscal 2018 are expected to be in the range of 3.275-3.375 million. Small Business online ecosystem is anticipated to grow more than 30%.
Non-GAAP operating income is now expected in a range of $1.885-$1.935 billion, representing growth of 9-12%. Non-GAAP earnings per share are projected between $4.90 and $5.00, up 11-13%. The Zacks Consensus Estimate currently is pegged at $4.96 per share.
Our Take
Intuit reported better-than-expected fiscal first-quarter 2018 results, and also provided an encouraging second-quarter and fiscal 2018 view. Its revenue performance improved on a year-over-year basis owing to strong growth in QuickBooks Online and success in Consumer Tax and ProConnect.
We are positive about Intuit’s growing SMB exposure and believe that its strategic acquisitions will boost the segment. Increased adoption of its cloud-based services and products is another positive.
The company has also restructured business to focus on the QuickBooks services. It expects to continue investing in this portfolio, which might hurt near-term profitability.
Stiff competition from payroll solution providers such as Paycom Software Inc. (PAYC - Free Report) and Automatic Data Processing (ADP - Free Report) is a concern, especially considering the seasonality of Intuit’s tax business and the ongoing economic uncertainty.
NVIDIA has a long-term expected EPS growth rate of 11.2%.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
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Intuit (INTU) Q1 Earnings & Revenues Top, Keeps FY18 Outlook
Intuit Inc. (INTU - Free Report) delivered stellar first-quarter fiscal 2018 results. The company reported non-GAAP income (excluding stock-based compensation, amortization and other one-time items) from continuing operations of 11 cents per share, surpassing the Zacks Consensus Estimate of 5 cents.
Intuit stock has gained 37% year over year, outperforming 36.2% rally of the industry it belongs to.
Quarter in Detail
This tax-preparation related software maker reported revenues of $886 million, which came ahead of management’s guided range of $840-$860 million and also outpaced the Zacks Consensus Estimate of $855 million. On a year-over-year basis, revenues were up 13.9% primarily owing to better-than-expected growth in QuickBooks Online and ecosystem along with new and improved products.
Services and Other revenues climbed nearly 17.9% to $567 million while product revenues were up 7.4% to $319 million.
Segment-wise, Small Business and Self-Employed Group witnessed 17% year-over-year growth driven mainly by strong customer acquisition. Continued subscriber growth for QuickBooks Online and QuickBooks Self-Employed also acted as a catalyst.
The company recorded an increase of 56% in QuickBooks Online subscribers for the year, bringing the total global count to 2.55 million. QuickBooks Self-Employed subscribers totaled 425,000 during the quarter. Revenues from the Small Business online ecosystem increased 35% on a year-over-year basis, primarily due to online customer acquisition.
Revenues from Consumer Group were up 7% year over year. Professional tax revenues within Strategic Partners Group improved 2%.
Coming to operational metrics, Intuit reported non-GAAP gross profit of $689 million, up 15.6% year over year, backed by higher revenues. Gross margin for the quarter came in at 77.8% as compared with 76.6% reported in the year-ago quarter.
The company posted non-GAAP operating income of $43 million compared with $$32 million in the year-ago quarter. Operating margins expanded 70 basis points to 4.8% during the quarter.
Intuit posted non-GAAP net income from continuing operations of approximately $29 million compared with first-quarter fiscal 2017 net income of $15 million.
Balance Sheet and Cash Flows
Intuit exited the fiscal first quarter with cash and investments of $777 million, flat quarter over quarter. Long-term debt was $425 million at quarter end as compared with $438 million reported in the previous quarter.
Cash used in operational activities during the quarter was $78 million. During the quarter, the company repurchased $170 million shares, with $1.4 billion still remaining under the share repurchase authorization.
The company received an authorization to pay a dividend of 39 cents per share on Jan 18, 2018.
Outlook
Intuit provided second-quarter guidance and reiterated fiscal 2018 guidance.
For the fiscal second quarter, the company anticipates revenues in a range of $1.160-$1.180 million. The Zacks Consensus Estimate is pegged at $1.12 billion.
Intuit expects fiscal second quarter non-GAAP operating income in the range of $130-$140 million. The company anticipates reporting non-GAAP earnings in the band of 31-34 cents per share. The Zacks Consensus Estimate is pegged at 31 cents per share.
For fiscal 2018, the company still anticipates revenues of $5.640-$5.740 billion, representing an increase of 9-11% year over year. The Zacks Consensus Estimate is pegged at $5.69 billion.
QuickBooks Online subscribers for fiscal 2018 are expected to be in the range of 3.275-3.375 million. Small Business online ecosystem is anticipated to grow more than 30%.
Non-GAAP operating income is now expected in a range of $1.885-$1.935 billion, representing growth of 9-12%. Non-GAAP earnings per share are projected between $4.90 and $5.00, up 11-13%. The Zacks Consensus Estimate currently is pegged at $4.96 per share.
Our Take
Intuit reported better-than-expected fiscal first-quarter 2018 results, and also provided an encouraging second-quarter and fiscal 2018 view. Its revenue performance improved on a year-over-year basis owing to strong growth in QuickBooks Online and success in Consumer Tax and ProConnect.
We are positive about Intuit’s growing SMB exposure and believe that its strategic acquisitions will boost the segment. Increased adoption of its cloud-based services and products is another positive.
The company has also restructured business to focus on the QuickBooks services. It expects to continue investing in this portfolio, which might hurt near-term profitability.
Stiff competition from payroll solution providers such as Paycom Software Inc. (PAYC - Free Report) and Automatic Data Processing (ADP - Free Report) is a concern, especially considering the seasonality of Intuit’s tax business and the ongoing economic uncertainty.
Currently, Intuit carries a Zacks Rank #3 (Hold). A better-ranked stock in the technology space is NVIDIA Corporation (NVDA - Free Report) , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
NVIDIA has a long-term expected EPS growth rate of 11.2%.
Zacks' Hidden Trades
While we share many recommendations and ideas with the public, certain moves are hidden from everyone but selected members of our portfolio services. Would you like to peek behind the curtain today and view them?
Starting now, for the next month, I invite you to follow all Zacks' private buys and sells in real time from value to momentum...from stocks under $10 to ETF to option movers...from insider trades to companies that are about to report positive earnings surprises (we've called them with 80%+ accuracy). You can even look inside portfolios so exclusive that they are normally closed to new investors.
Click here for Zacks' secret trade>>