Intuit's (INTU) Q2 Earnings and Revenues Beat Estimates
Intuit INTU reported fiscal second-quarter 2023 non-GAAP earnings of $2.20 per share, beating the Zacks Consensus Estimate of $1.43 per share. The bottom line surged 42% from the year-ago quarter’s earnings of $1.55 per share.
Revenues of $3.04 billion surpassed the consensus mark of $2.9 billion and surged 13.8% year over year.
Quarter Details
Segment-wise, Small Business and Self-Employed Group revenues grew 20% year over year to $1.9 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 24% year over year to $1.4 billion. QuickBooks Online Accounting revenues were up 27% year over year to $696 million, mainly driven by the mix-shift, higher pricing and customer growth.
Intuit Inc. Price, Consensus and EPS Surprise
Intuit Inc. price-consensus-eps-surprise-chart | Intuit Inc. Quote
Online Services revenues which include payroll, payments, time tracking and capital, grew 21% year over year to $695 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’s contribution was in up low teens in the quarter.
Total international Online Ecosystem revenues increased 17% year over year on a constant-currency basis.
Total Desktop ecosystem revenues grew 10% year over year during the reported quarter to $506 million.
In the fiscal second quarter, revenues from Consumer Group increased to $516 million from $411 million reported a year ago, mainly driven by a strong peak in new customers and extension filers. Further, ProTax Group's professional tax revenues increased to $253 million from $237 million in the year-ago quarter.
The Credit Karma business contributed $375 million to Intuit’s second-quarter total revenues, down from $444 million in the year-ago quarter. The drastic year-over-year fall reflects headwinds in personal loans, home loans, auto insurance and auto loans, partially offset by strength in credit cards and Credit Karma Money.
Intuit’s non-GAAP operating income climbed 40% to $856 million.
Balance Sheet and Cash Flow
As of Jan 31, 2023, Intuit’s cash and investments were $2.07 billion compared with $2.72 billion as of Oct 31, 2022.
The company exited the fiscal second quarter with long-term debt of $6.58 billion, up from the previous quarter’s $6.49 billion.
During the first six months of fiscal 2023, the company generated $612 million worth of cash from operating activities.
Intuit repurchased stocks worth $500 million during the fiscal second quarter and had a remaining share-repurchase authorization of $2.5 billion at the end of the quarter. INTU announced that its board approved a quarterly cash dividend of 78 cents per share payable on Apr 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 a year-over-year increase of 15-17%.
For the fiscal third 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 $8.42-$8.49 per share.
Zacks Rank & Key Picks
Intuit carries a Zacks Rank #3 (Hold). Shares of INTU have lost 15.5% over the past year.
Some top-ranked stocks from the broader Computer and Technology sector are Airbnb ABNB, Baidu BIDU, and Fabrinet FN, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
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