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Intuit (INTU) Crushes Q4 Earnings & Revenue Estimates, Guides Strong

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Intuit INTU ended fiscal 2021 with outstanding fourth-quarter results, wherein revenues and earnings surpassed the respective Zacks Consensus Estimate, as well as marked significant year-over-year improvement.

The company reported fiscal fourth-quarter non-GAAP earnings of $1.97 per share, which beat the Zacks Consensus Estimate of $1.59. Moreover, the bottom-line figure increased 9% from the year-ago quarter’s earnings of $1.81 per share.

Revenues of $2.56 billion surpassed the consensus mark of $2.32 billion and climbed 41% year on year as well.

The year-over-year surges in the top and bottom lines reflect strong growth in the do-it-yourself category as well as solid revenue contribution from the newly-acquired Credit Karma business. Credit Karma contributed $405 million to the company’s quarterly total revenues.

Solid contribution from TurboTax Live was a positive. Moreover, solid customer growth was a top-line driver.

Intuit Inc. Price, Consensus and EPS Surprise

Intuit Inc. Price, Consensus and EPS Surprise
Intuit Inc. Price, Consensus and EPS Surprise

Intuit Inc. price-consensus-eps-surprise-chart | Intuit Inc. Quote

Quarter in Detail

Segment wise, Small Business and Self-Employed Group revenues grew 19% year over year to $1.25 billion. This rise was primarily driven by solid growth in customers for QuickBooks Online and a favorable mix-shift. In addition, approximately $4 million of non-recurring revenues from the Paycheck Protection Program boosted this segment.

Total Online Ecosystem revenues climbed 30% year on year to $770 million. QuickBooks Online Accounting revenues were up 28% year over year. Online Services revenues, which include payroll, payments, time tracking and capital, grew 35% year over year.

Within QuickBooks Online payroll, a mix-shift to Intuit’s full-service offering was a tailwind. Also, within QuickBooks Online payments, continued uptick in the customer base drove revenues.

Total international online revenues increased 47%, year over year, on a constant-currency basis.

Total Desktop ecosystem revenues grew 5%, year on year, during the reported quarter.

In the fiscal fourth quarter, revenues from Consumer Group jumped 20% year on year to $852 million.

Intuit’s non-GAAP operating income increased 16% to $715million.

Fiscal 2021 Highlights

The company reported fiscal 2021 non-GAAP earnings of $9.74 per share, which beat the Zacks Consensus Estimate of $9.35. Moreover, the bottom-line figure increased 24% from the year-ago quarter’s earnings of $7.86 per share. Revenues of $9.63 billion surpassed the consensus mark of $9.39 billion and climbed 25% year on year as well.

Balance Sheet and Cash Flow

As of Jul 31, 2021, Intuit’s cash and investments were $3.87 billion compared with $4.1 billion as of Apr 30.

The company repurchased stocks worth $467 million during the reported quarter and $1 billion in fiscal 2021.

The company’s board of directors has approved a new $2-billion share-repurchase authorization, increasing the total authorization limit to $3.3 billion.

Additionally, the company announced that its board has approved a quarterly cash dividend of 68 cents per share to be payable on Oct 18, 2021. The newly-approved cash dividend represents a year-over-year increase of 15%.

First-Quarter and Fiscal 2022 Outlook

For the fiscal first quarter, Intuit expects revenues between 36% and 38% on a year-over-year basis. Adjusted earnings for the quarter are estimated in the range of 94-99 cents per share.

For fiscal 2022, the company projects revenues in the band of $11.05-$11.20 billion, calling for year-over-year growth of 15-16%. Adjusted earnings are projected between $11.05 and $11.25 per share, indicating a year-over-year increase of 13-16%.

Zacks Rank & Key Picks

Currently, Intuit carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include Microsoft MSFT, Cadence Design Systems CDNS and Texas Instruments TXN, all carrying a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The long-term earnings growth rate for Microsoft, Cadence Design and Texas Instruments is currently pegged at 11.1%, 11.7% and 9.3%, respectively.


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