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Intuit (INTU) Beats Q3 Earnings Estimates, Revises Outlook
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Intuit Inc. (INTU - Free Report) delivered impressive third-quarter fiscal 2018 results. The company reported non-GAAP income (excluding stock-based compensation, amortization and other one-time items) from continuing operations of $4.82 per share, surpassing the Zacks Consensus Estimate of $4.67. The figure also increased 24% on a year-over-year basis.
Quarter in Detail
This tax-preparation related software maker reported revenues of $2.925 billion, up 15% from the year-ago quarter figure. The revenue figure was better than the guided range of $2.785-$2.835 billion and also outpaced the Zacks Consensus Estimate of $2.842 billion.
Services and Other revenues were up nearly 16.7% to $2.42 billion while product revenues increased 8.1% to $505 million.
Segment-wise, Small Business and Self-Employed Group witnessed 16% year-over-year growth, primarily driven by 45% subscriber growth rate for Quickbooks Online, which brought the count to 3.2 million at the end of the just reported quarter. Online ecosystem revenues surged 41%. Self-Employed subscribers increased to around 680,000 from 490,000 in the previous quarter and 360,000 in the year-ago quarter.
Geographically, U.S. based subscribers grew 40% to 2.5 million and international subscribers increased 66% on a year-over-year basis to 630,000.
Notably, revenues from Consumer Group were up 15% year over year. Revenues from Strategic Partners Group were up 4% on a year-to-date basis.
Management is particularly positive about a successful tax season backed by the performance of the DIY category and higher average revenue per return. The company also managed to gain some additional share in the DIY market. Additionally, the shift in the product mix toward the higher end of the company’s product line was also a positive.
TurboTax Live offering witnessed success in its first season and is likely to be accretive to the company’s Consumer business going ahead. The recently launched Turbo offering that provides a snapshot of a user’s financial health also witnessed healthy adoption, which is yet another positive for the expansion of the company’s business beyond tax.
The company posted non-GAAP operating income of $1.714 billion compared with $1.519 billion in the year-ago quarter. Operating margin contracted 120 basis points to 58.6% during the quarter.
Intuit posted non-GAAP net income from continuing operations of approximately $1.260 billion compared with third-quarter fiscal 2017 net income of $1.015 billion.
Balance Sheet and Cash Flow
Intuit exited fiscal third-quarter 2018 with cash and investments of $1.936 billion compared with $726 million in the prior quarter. Long-term debt was $400 million at quarter end compared with $413 million reported in the previous quarter.
Cash provided by operational activities during the first nine months of fiscal 2018 was $2.149 billion. During the quarter, the company repurchased $19 million worth of shares, with $1.2 billion still remaining under the share repurchase authorization.
The company received an authorization to pay a dividend of 39 cents per share on Jul 18, 2018.
For the fiscal fourth quarter, the company anticipates revenues in a range of $940-$960 million. The Zacks Consensus Estimate is pegged at $889.3 million.
Intuit expects fiscal fourth quarter non-GAAP operating income in the range of $75-$85 million. The company anticipates non-GAAP earnings in the band of 22–24 cents per share. The Zacks Consensus Estimate is pegged at 29 cents per share.
The company raised its guidance for fiscal 2018. Intuit now expects revenues of $5.915-$5.935 billion, representing an increase of 14-15% year over year. The previous guidance was $5.640-$5.740 billion, representing an increase of 9-11% year over year. The Zacks Consensus Estimate is pegged at $5.78 billion.
Non-GAAP earnings per share are now projected between $5.51 and $5.53, up 25%. The previous expectation was $5.30 and $5.40 per share, up 20-22%. The Zacks Consensus Estimate is pegged at $5.41 per share.
The non-GAAP tax rate used for calculating the guidance is 26.3%.
To Conclude
Intuit reported better-than-expected fiscal third-quarter 2018 results and also positively revised fiscal 2018 outlook. The tax season was extremely well executed as reflected in the company’s impressive financials.
We believe the company will continue to benefit from regular enhancements of the solutions portfolio via innovations and inorganic growth, which will eventually boost the top line.
However, stiff competition from payroll solution providers such as Paycom Software Inc. (PAYC - Free Report) and Automatic Data Processing (ADP - Free Report) remains a headwind.
NVIDIA has an expected long-term growth rate of 10.3%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Intuit (INTU) Beats Q3 Earnings Estimates, Revises Outlook
Intuit Inc. (INTU - Free Report) delivered impressive third-quarter fiscal 2018 results. The company reported non-GAAP income (excluding stock-based compensation, amortization and other one-time items) from continuing operations of $4.82 per share, surpassing the Zacks Consensus Estimate of $4.67. The figure also increased 24% on a year-over-year basis.
Quarter in Detail
This tax-preparation related software maker reported revenues of $2.925 billion, up 15% from the year-ago quarter figure. The revenue figure was better than the guided range of $2.785-$2.835 billion and also outpaced the Zacks Consensus Estimate of $2.842 billion.
Services and Other revenues were up nearly 16.7% to $2.42 billion while product revenues increased 8.1% to $505 million.
Segment-wise, Small Business and Self-Employed Group witnessed 16% year-over-year growth, primarily driven by 45% subscriber growth rate for Quickbooks Online, which brought the count to 3.2 million at the end of the just reported quarter. Online ecosystem revenues surged 41%. Self-Employed subscribers increased to around 680,000 from 490,000 in the previous quarter and 360,000 in the year-ago quarter.
Geographically, U.S. based subscribers grew 40% to 2.5 million and international subscribers increased 66% on a year-over-year basis to 630,000.
Notably, revenues from Consumer Group were up 15% year over year. Revenues from Strategic Partners Group were up 4% on a year-to-date basis.
Management is particularly positive about a successful tax season backed by the performance of the DIY category and higher average revenue per return. The company also managed to gain some additional share in the DIY market. Additionally, the shift in the product mix toward the higher end of the company’s product line was also a positive.
TurboTax Live offering witnessed success in its first season and is likely to be accretive to the company’s Consumer business going ahead. The recently launched Turbo offering that provides a snapshot of a user’s financial health also witnessed healthy adoption, which is yet another positive for the expansion of the company’s business beyond tax.
The company posted non-GAAP operating income of $1.714 billion compared with $1.519 billion in the year-ago quarter. Operating margin contracted 120 basis points to 58.6% during the quarter.
Intuit posted non-GAAP net income from continuing operations of approximately $1.260 billion compared with third-quarter fiscal 2017 net income of $1.015 billion.
Balance Sheet and Cash Flow
Intuit exited fiscal third-quarter 2018 with cash and investments of $1.936 billion compared with $726 million in the prior quarter. Long-term debt was $400 million at quarter end compared with $413 million reported in the previous quarter.
Cash provided by operational activities during the first nine months of fiscal 2018 was $2.149 billion. During the quarter, the company repurchased $19 million worth of shares, with $1.2 billion still remaining under the share repurchase authorization.
The company received an authorization to pay a dividend of 39 cents per share on Jul 18, 2018.
Intuit Inc. Price, Consensus and EPS Surprise
Intuit Inc. Price, Consensus and EPS Surprise | Intuit Inc. Quote
Outlook
For the fiscal fourth quarter, the company anticipates revenues in a range of $940-$960 million. The Zacks Consensus Estimate is pegged at $889.3 million.
Intuit expects fiscal fourth quarter non-GAAP operating income in the range of $75-$85 million. The company anticipates non-GAAP earnings in the band of 22–24 cents per share. The Zacks Consensus Estimate is pegged at 29 cents per share.
The company raised its guidance for fiscal 2018. Intuit now expects revenues of $5.915-$5.935 billion, representing an increase of 14-15% year over year. The previous guidance was $5.640-$5.740 billion, representing an increase of 9-11% year over year. The Zacks Consensus Estimate is pegged at $5.78 billion.
Non-GAAP earnings per share are now projected between $5.51 and $5.53, up 25%. The previous expectation was $5.30 and $5.40 per share, up 20-22%. The Zacks Consensus Estimate is pegged at $5.41 per share.
The non-GAAP tax rate used for calculating the guidance is 26.3%.
To Conclude
Intuit reported better-than-expected fiscal third-quarter 2018 results and also positively revised fiscal 2018 outlook. The tax season was extremely well executed as reflected in the company’s impressive financials.
We believe the company will continue to benefit from regular enhancements of the solutions portfolio via innovations and inorganic growth, which will eventually boost the top line.
However, stiff competition from payroll solution providers such as Paycom Software Inc. (PAYC - Free Report) and Automatic Data Processing (ADP - Free Report) remains a headwind.
Zacks Rank
Intuit currently has a Zacks Rank #2 (Buy).
Another top-ranked stock in the broader technology sector is NVIDIA (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 an expected long-term growth rate of 10.3%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>