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Intuit (INTU) Q3 Earnings Beat Estimates, Revenues Surge Y/Y

·4 min read

Intuit INTU reported third-quarter fiscal 2021 non-GAAP earnings of $6.07 per share, which beat the Zacks Consensus Estimate of $6.04. Moreover, the bottom-line figure surged 35% from the year-ago quarter.

In addition, revenues of $4.17 billion came in line with the consensus mark but climbed 39% year on year.

The year-over-year surges in the top and bottom lines reflect the strong growth in the do-it-yourself category. Solid contribution from TurboTax Live was a positive. Moreover, solid customer growth was also a top-line tailwind.

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 20% year over year to $1.2 billion. This rise was primarily driven by solid growth in customers for QuickBooks Online and a favorable mix-shift. Moreover, approximately $10 million of non-recurring revenues from the Paycheck Protection Program boosted this segment.

Total Online Ecosystem revenues climbed 28% year on year to $715 million. QuickBooks Online Accounting revenues were up 24% year over year. Online Services revenues, which include payroll, payments, time tracking and capital, grew 34% 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 38% year over year on a constant-currency basis.

Total Desktop ecosystem revenues grew 9% year on year in the reported quarter.

In the fiscal third quarter, revenues from Consumer Group jumped 34% year on year to $2.4 billion.

Intuit’s non-GAAP operating income increased 43% to $2.2 billion.

Balance Sheet and Cash Flow

As of Apr 30, 2021, Intuit’s cash and investments were $4.1 billion compared with $2.7 billion as of Jan 31.

The company repurchased stocks worth $380 million during the reported quarter. Intuit has $1.8 billion remaining under its authorization.

Additionally, the company announced that its board of directors has approved a quarterly cash dividend of 59 cents per share to be payable on Jul 19, 2021. The newly-approved cash dividend represents a year-over-year increase of 11%.

Outlook

For the fiscal fourth quarter, Intuit expects revenues between 26% and 28% on a year-over-year basis. Adjusted earnings for the quarter are estimated in the range of $1.55-$1.60 per share.

The company raised the outlook for fiscal 2021. It now projects revenues in a band of $9.36-$9.40 billion, up from the previous guided band of $8.810-$8.995 billion, calling for year-over-year growth of 22%, up from the previous guidance of 15-17% growth. Fiscal 2021 adjusted earnings are projected between $9.32 and $9.37 per share, higher than the previous guidance of $8.20-$8.40.

Zacks Rank & Stocks to Consider

Intuit currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include Silicon Motion Technology Corporation SIMO, Lam Research Corporation LRCX and LG Display Co., Ltd. LPL, all sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for Silicon Motion Technology Corporation, Lam Research and LG Display is currently pegged at 8%, 32.8% and 32.56%, respectively.

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