Intuit CEO Sasan Goodarzi joins Yahoo Finance Live to discuss the financial software company’s second-quarter earnings and outlook for small businesses in 2021.
AKIKO FUJITA: Let's turn our attention now to shares of Intuit, because we are seeing a big pop in the session. Off of its session highs, but still well above 2%. The company falling short of some Wall Street estimates in the most recent quarter, though. The company behind TurboTax and QuickBooks reporting net income of $235 million or $0.68 a share. Revenue was down 7% to $1.6 billion.
Let's bring in the CEO of Intuit, Sasan Goodarzi. We've also got Yahoo Finance's Brian Sozzi joining in on the conversation. Sasan, it's good to talk to you. Clearly, as a company, you're not where you want to be when you compare it to where things were pre-pandemic. But it does feel like you've got some momentum going, especially in the small business and self-employed group.
Walk me through how you would characterize this most recent quarter and the outlook ahead.
SASAN GOODARZI: Sure. Well, good morning, thank you so much for having me. I'm actually quite proud of the performance of the whole team. In the small business and self-employed group, we actually grew double digits, 11%. Our online ecosystem actually grew 22%. And Credit Karma is off to the races and performed very strong.
And within tax, we are seeing very encouraging early results. The reason we were down 7% for the quarter is because the IRS opening shifted to February the 12th. So a lot of our revenue shifted to the third quarter. It's actually why our revenue guidance for the third quarter is to grow between 53% to 55%.
And so when you normalize the quarters, and then when you look at our year, we've guided that we'll grow between 15% to 17%. So on the high end, about 9 billion by the end of the year. So we're excited about the possibilities. More importantly, we're excited about our innovation and delivering for customers.
BRIAN SOZZI: Sasan, take us through how you are seeing the state of small businesses. You really-- you said a stunning stat on the earnings call last night, about 25% of your business or your small business customers have 50% less cash in their bank accounts. Are you seeing any recovery in this customer base?
SASAN GOODARZI: Yeah. Thank you for giving me the opportunity just to talk about how much we collectively need to help small businesses. First of all, their performance is different depending on the state that they're in and the industry that they're in. If I just use United States as an example, so for instance, states like Florida, Texas, Arizona, Georgia are recovering much faster than states like California, New York, and Michigan.
And then if you double click on that, the industry matters. You know, the industries that-- I think it will sound obvious, that are just continuing to fall behind are education, fitness, restaurants are really struggling to get back to where they were. So we see that within our base. And then if you double click again, the stat that you just shared is very real.
And we represent the small businesses around the globe and the United States. And 25% of those in our base, their net deposits is down 50% year over year. So although there has been recovery, we're better off today than we were in March of last year, we're really nowhere near where we need to be to help small businesses be at the level of performance that they expect of themselves.
BRIAN SOZZI: Who is better off, Sasan? Last year, we had, what, 8 million people open brokerage accounts for the first time. Has that-- really the democratization of the markets. Are you seeing that play out in a lift in your tax business this year?
SASAN GOODARZI: Yeah, we are. Several years ago, we declared both transforming the assisted segment with our TurboTax Live, which is, in essence, enabling any customer at a click of a button to have an expert come to their phone to help them get their taxes done, or actually give us all their documents so we can get their taxes done for them.
Within that, the investment community, self-employed and Latinx, are under penetrated segments that we declared and focused on. And we're actually starting to see the benefit of that. So to your good question around the rise in retail investors, in fact, we are seeing a huge rise in the US, in India and Brazil.
Although we don't serve consumers in India and Brazil, we have small businesses that we serve. And we're seeing an incredible increase. And our offering within TurboTax Live is actually benefiting from the rise of retail investors. And so we'll see how the season plays out. But we're excited that it was a declaration for us a few years ago because now our offering is robust to help them get their taxes done.
ZACK GUZMAN: Yeah, and Sasan, I mean, it's a crown jewel of brands, really, in the financial software space. You got TurboTax, QuickBooks, Credit Karma, and Mint. Mint, the last one, in my opinion, doesn't really get talked about enough in terms of helping people manage their personal finances.
But when it comes to TurboTax and what you're going to see today, how big of a piece is that brand playing a role in guiding to 15% to 17% growth for the full year? Because how complicated tax season might be for Americans, or how important it is in this environment.
SASAN GOODARZI: Yeah, and it's playing a very important role. But I would share with you that all of our offerings and our platforms are playing a role. Credit Karma is out of the gate strong, and that contributes to the guidance that we provided. The QuickBooks platform is playing a very important role, and as is TurboTax.
And particularly TurboTax Live, you know, there's about 86 million out of the 160 million filers in the United States that have somebody else help them do their taxes. And it's about a $20 billion opportunity for us, which is why, with the TurboTax platform now in our fourth year, the expertise comes to you wherever you are, whenever you want it, and really helps you get your taxes done with confidence.
And I think the only thing I would add is now with Credit Karma, we can go beyond taxes to really help make ends meet, help you get out of debt, and help you save money with products like credit cards that are personalized for you, home and auto insurance and loans, and free checking and savings accounts that help you really manage your financial life. So we're really excited about bringing our platform together singularly focused on helping consumers with financial freedom.
AKIKO FUJITA: Adding to Zack's point there, no question you're going to see an uptick as we get closer to tax day. But we've been having a lot of conversations on the show around the complications of tax filings this year, whether it has to do with enhanced unemployment benefits, whether it's about gig workers and how much money they need to set aside for the filings themselves.
I wonder how you look at the education element of all of this? And does that provide some additional avenues for revenue when you look at the business model overall? And just how many people rely on your software?
SASAN GOODARZI: Sure. You know, I would touch on two aspects. One is we've been significantly investing in AI, particularly machine learning and knowledge engineering, to be able to turn all of these rules and nuances for each customers into very specific questions that they need to focus on. In addition to our technology investments, this is where our experts come in.
We have experts on our platform that ultimately can see the power of AI. It delivers insights to them, and then they can more accurately help consumers with, whether it's unemployment benefits, whether it's the investments that they've made in the last year, if they moved across states. All of those things, the combination of AI and the combination of expertise on our platform, really is helping consumers answer the tough questions that they have and feel confident that they're getting their taxes done right and getting their maximum refund.
BRIAN SOZZI: So Sasan, you actually just finished integrating Credit Karma into 26 million TurboTax returns. What type of products do you think will come out of that integration? Those are some pretty big numbers?
SASAN GOODARZI: Yeah. So our ultimate goal is we want every consumer to be able to have the power of data in their hands, which means that you can get access to credit cards that are right for you. And specifically what that means is everybody gets access to credit cards. But the question is, do you get approved or not?
And with all the data that we have, we want to make sure that you can hit a pre-approved button, and you're done, you get the access to the credit card. We want to make sure you can get access to personal loans that are right for you that you qualify. Same thing with auto and home loans and insurance.
And so the number that you cited is, there's a couple of things that we are doing. We're bringing the power of our data together to put it in the hands of the consumer. So we have about 3,000 tax attributes and financial attributes per consumer that we can leverage to, in essence, deliver personalized offerings that are right for them in their hands.
We have, like, 55 million W-2s, 28 million 1099s. So we're bringing income data together with the credit history and spending history that Credit Karma has. You know, they see $5.5 trillion of spend history over the data platform that they've created. So we're combining their data with our data, which is where that 26 million number that you mentioned comes in to be able to deliver personalized experiences.
And all that means is it's a win-win-win. It's a win for the consumer because they actually get access to what they need and they don't get declined. It's a win for the partners on our platform because they ultimately are able to offer their products and get the performance that they're looking for. And it's a win for us because, ultimately, we'll be able to monetize over time.
But we're really excited about moving beyond tax and having an app where you can truly help consumers achieve financial freedom by saving money and getting out of debt.
ZACK GUZMAN: All right. Intuit CEO, Sasan Goodarzi bringing us all that, alongside Yahoo Finance's Brian Sozzi. Appreciate you taking the time here to chat with us today. Be well.