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Intuit's (INTU) Q1 Earnings and Sales Beat on Expectations

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Intuit (INTU - Free Report) reported fiscal first-quarter 2023 non-GAAP earnings of $1.66 per share, beating the Zacks Consensus Estimate of $1.19 per share. The bottom line surged 8% from the year-ago quarter’s earnings of $1.53 per share.

Revenues of $2.60 billion surpassed the consensus mark of $2.50 billion and surged 29% year over year.

Quarter Details

Segment-wise, Small Business and Self-Employed Group revenues grew 38% year over year to $2 billion. This rise was driven by the solid growth in customers for QuickBooks Online, a favorable mix-shift and the addition of Mailchimp.

Total Online Ecosystem revenues grew 60% year over year to $1.3 billion. QuickBooks Online Accounting revenues were up 29% year over year to $668 million, mainly driven by the mix-shift, higher pricing and customer growth.

Online Services revenues which include payroll, payments, time tracking and capital, soared 109% year over year to $681 million. This was driven by strong performances of the QuickBooks Online payroll and QuickBooks Online payments solutions, along with revenues from the new Mailchimp business.

Within QuickBooks Online payroll, a mix-shift to INTU’s full-service offering and the continued uptick in the customer base acted as tailwinds. Within QuickBooks Online payments, an increase in the charge volume per customer and ongoing customer growth drove revenues. Mailchimp contributed $264 million to total Online Services.

Total international Online Ecosystem revenues increased a whopping 172% year over year on a constant-currency basis and 19% on an organic basis, excluding contributions from Mailchimp.

Total Desktop ecosystem revenues grew 6.9% year over year during the reported quarter to $639 million.

In the fiscal first quarter, revenues from Consumer Group increased to $150 million from $120 million reported a year ago, mainly driven by a strong peak in new customers and extension filers in October. However, ProConnect Group's professional tax revenues increased to $34 million from $26 million in the year-ago quarter.

The Credit Karma business contributed $425 million to Intuit’s first-quarter total revenues, up from $418 million in the year-ago quarter. The robust year-over-year growth reflects high levels of monthly active users and revenues per monthly active user. It reflects strength in credit cards offset by headwinds in personal loans, home loans, auto insurance and auto loans.

Intuit’s non-GAAP operating income climbed 19% to $662 million.

Intuit Inc. Price, Consensus and EPS Surprise

 

Balance Sheet and Cash Flow

As of Oct 31, 2022, Intuit’s cash and investments were $2.72 billion compared with $3.28 billion as of Jul 31, 2022.

The company exited the fiscal first-quarter with long-term debt of $6.49 billion, up from the previous quarter’s $6.42 billion.

During first-quarter fiscal 2023, Intuit generated operating cash flow worth $328 million.

Intuit repurchased stocks worth $519 million during the fiscal first-quarter and had a remaining share-repurchase authorization of $3 billion at the end of the quarter. INTU announced that its board approved a quarterly cash dividend of 78 cents per share payable on Jan 18, 2023. The newly approved cash dividend represents a year-over-year increase of 15%.

Outlook

Intuit projects fiscal 2023 revenues in the band of $14.035-$14.250 billion, indicating 10-12% growth.

The company anticipates non-GAAP operating income between $5.258 billion and $5.363 billion, indicating approximate year-over-year growth of 17-19%.

Intuit’s fiscal 2023 non-GAAP earnings per share forecast stands between $13.59 and $13.89, suggesting  year-over-year increase of 15-17%.

For the fiscal second quarter, INTU expects revenues to grow between 8% and 9% on a year-over-year basis. Adjusted earnings for the quarter are estimated in the range of $1.41-$1.45 per share.

Zacks Rank & Key Picks

Intuit currently carries a Zacks Rank #3 (Hold). Shares of INTU have lost 41.8% in the past year.

Some better-ranked stocks from the broader Computer and Technology sector are Celestica (CLS - Free Report) , Fabrinet (FN - Free Report) and Zscaler (ZS - Free Report) . While Celestica flaunts a Zacks Rank #1 (Strong Buy), Fabrinet and Zscaler carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Celestica’s fourth-quarter 2022 earnings has increased by 9 cents to 53 cents per share over the past 60 days. For 2022, earnings estimates have moved 16 cents up to $1.86 per share in the past 60 days.

CLS' earnings beat the Zacks Consensus Estimate in all the preceding four quarters, the average surprise being 11.8%. Shares of the company have moved up 6.1% in the past year.

The Zacks Consensus Estimate for Fabrinet's second-quarter fiscal 2023 earnings has been revised 16 cents northward to $1.89 per share over the past 30 days. For fiscal 2023, earnings estimates have improved 7.6% to $7.48 per share in the past 30 days.

FN’s earnings beat the Zacks Consensus Estimate in three of the preceding four quarters, missing once, the average surprise being 5.4%. Shares of the company have gained 16.1% in the past year.

The Zacks Consensus Estimate for Zscaler's first-quarter fiscal 2023 earnings has been revised 7 cents north to 26 cents per share over the past 90 days. For fiscal 2023, earnings estimates have moved south by a penny to $1.17 per share in the past 30 days.

ZS' earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 28.6%. Shares of the company have declined 61.1% in the past year.


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