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Yahoo Finance’s Julie Hyman and Brian Sozzi speak with Intuit CEO Sasan Goodarzi and Credit Karma CEO Kenneth Lin about Intuit’s recent acquisition, and future outlook.
JULIE HYMAN: All right, let's move on right now and talk about another one of the stocks that has done very well this year amidst the pandemic, like so many software focused companies have. I'm talking about Intuit. The shares are up some 40% this year. They're trading around a record, and the company just closed on its acquisition of Credit Karma last week. It gave new guidance as well yesterday, sort of taking into account the effect of that acquisition. Let's bring in now Kenneth Lin. He is the Credit Karma CEO. As well as Sasan Goodarzi. He is Intuit CEO.
Gentlemen, thank you so much for being here. Congratulations on the deal. Sasan, I want to start with you, because I want you to outline for us, if you could, how we should think about Credit Karma and how it fits into the Intuit universe, if you will, which includes, of course, TurboTax, but also products like QuickBooks.
SASAN GOODARZI: Good morning. First of all, thank you for having Ken and I. I couldn't be more excited to be with you. And as you said, this is a huge moment for our company. And you know, to answer your question, we are very focused on helping our customers make ends meet, finding ways to get out of debt and save money. And one of the goals that we've set for 2025, internally that we want to aspire to, is that anybody that's on our platform will want to double household savings rate.
And so, with that as context, the Credit Karma acquisition really gives us the ability to truly create and deliver on a vision for our consumers have one place where they can save money, get out of debt, and truly achieve financial freedom. And we just couldn't be more excited bringing the scale of Credit Karma, where they have 110 million customers, our 57 million customers together to truly create a consumer platform that can deliver benefits that we would never imagine possible or be able to do alone.
BRIAN SOZZI: And Ken, now that you're under the Intuit umbrella, what do you-- what will you pull from that company, and how might your business change now that you're under the Intuit umbrella?
KENNETH LIN: Absolutely. Well, you if you really think about it, finances are complicated, right? Historically, the system has been created by banks for banks, and I think we have a real interesting opportunity here to build that same platform for consumers. So to give you a little example, you know, I know that many consumers don't refinance their mortgage even though that they can save money. And oftentimes they don't refinance their mortgage because they know there's going to be a lot of work and tedium associated with it.
Because now consumers have the same data, the same, you know, machine-learning algorithms, the same infrastructure that the big banks do. And I think that levels the playing field for many, and that's why we're so excited about this opportunity.
JULIE HYMAN: Ken, I also want to ask you about consumer behavior during the pandemic, because we have spoken a lot here about how the household savings rate has gone up. Because people have been getting checks. They've been in many cases saving that money. Of course, some of them have also been spending that money trading, for example. That's another phenomenon we've talked about. But Ken, what are you seeing on your platform, and how do you think you can sort of build on the savings that people have had during this time, and hopefully extend it even when the pandemic's over?
KENNETH LIN: Sure, so I think that's exactly a trend that we are seeing. And you know, we see something like $5 trillion worth of consumer debt, and you know, the general trends of that debt. And as you noted, as the stimulus money hit, because, one, there wasn't so many areas for consumers to spend, you know, consumers were putting more of those dollars in payments, putting more of those in their savings account, investing more than ever.
The other thing that we saw during the pandemic is consumers are still frustrated. They still are overwhelmed when it comes to their finances. We see it in survey data, which sort of really understands the anxiety. 46% of consumers are overwhelmed by their-- their finances. We also see behavior on our site. You know, we saw an increase in that engagement, and most of those users were really looking for health advice as to how to navigate this pandemic.
And I think the key here for most consumers is plan for the worst. And I know that's a terrible thing to say-- I'm personally an optimist-- but just because we don't know what's around the corner, we don't know whether there's going to be a stimulus plan-- or a secondary stimulus plan, we don't know when vaccines will get fully distributed, that, you know, having a backup plan when it comes to your finances is probably the number one tip that I can provide our viewers.
BRIAN SOZZI: OK. Sasan, talk me through this. I would say that somewhat under the radar Intuit recently launched TurboTax Live. It's a new product for you that matches if I want to get my taxes done with a tax professional from inside my home. I was talking to some of my accounting friends and they think this product could be pretty disruptive. Do you have a revenue estimate for-- for how big that business can get over the next couple of years?
SASAN GOODARZI: Sure, you know, first of all, we're so excited about it because it solves a huge confidence problem. The reason folks get assistance is they want to make sure they get the maximum refund, they want to make sure they don't make mistakes on their taxes. And now, you know, in the palm of your hands on your mobile phone, you can have an expert come help answer any question that-- that you may have, guide you through the process. And now, we just launched a full service, which is you can just digitally exchange your documents and we'll have somebody do your taxes for you, and along the way send you notifications where they are in the process.
So delivers confidence in the comfort of your home or while you're on the road, and ultimately helping you achieve your-- your maximum refund. You know, it has been the largest product in terms of how fast it's achieved its growth rates in the history of the company. We don't break it out separately, but what I would tell you is we're not only bullish about what we've been able to achieve in the last three years, but we're just getting started. I think the-- really the opportunity is yet ahead of us to transform how taxes get done.
BRIAN SOZZI: You know, just staying on-- on taxes, Sasan. The change in the White House. You know, how might that impact 2021 tax season and tax season over the next three to four years?
SASAN GOODARZI: You know, we don't-- we don't view an impact of any, you know, significance. You know, we-- we've worked in a very bipartisan way. And it's a question I get often, which is, depending on the administration coming in what's your view on what the implications are on taxes? And then really, ultimately what we care about most is just over time tax simplification, because it just makes it easier for folks to get their taxes done. And with that as context, we don't really see any significant changes as we look ahead.
JULIE HYMAN: And sort of on a related note-- Ken, I want to start with you on this and then ask Sasan to answer the same question. Sasan, your predecessor came under some criticism for sort of actively lobbying against simplification of the tax code, because, you know, Intuit helps people navigate it. And so, Ken, first I would ask you-- you know, because now you sit inside this big tax company-- do you steer people to free tax navigation programs, for example? Of which there are some. And then Sasan, I would ask you how you're sort of navigating that issue as well.
KENNETH LIN: Yeah, I mean, I think from the get-go and given the history of Credit Karma, we always believe in competition, we've always believed in consumer choice. That doesn't change, and I know that's a philosophy that, you know, Intuit also has. You know, so-- so from our perspective, it's all about giving consumers the opportunity to understand who are the players in the space, and ultimately, you know, what is the best service.
And I think to what Sasan noted, you know, we know, for example, that there is a large contingent of users who don't file online because they don't understand or don't feel confident as to how they file their taxes online, and we think that is an opportunity. And at the same time, you know, I should note that, you know, this deal has always been about the greater vision about what we can do on behalf of consumers, and that's the primary reason that, you know, we're in this space in the first place.
SASAN GOODARZI: And, you know, just to build on what Ken just shared, first of all, when you look at the history of the company, we've always stood for and lobbied for voluntary tax. We believe that a consumer knows the story of their life better than anybody else, and, therefore, they have their data and know where all their deductions are, and ultimately be able to achieve maximum tax refund. And ultimately, we've always stood for the notion of tax simplification, because the simpler the tax system is, the easier it is for a consumer to actually get their taxes done.
And as Ken said, you know, the whole theory behind putting these two companies together is about what we can do to help customers make ends meet. We have a very, very successful and healthy tax franchise. And so, this was all about, how do we go beyond tax? How do we help a consumer truly achieve financial freedom? What can we offer them in terms of what they can do with their tax refund, how they can save, how they can find ways to get out of debt? And that's really the premise of what's exciting about Credit Karma and Intuit coming together.
JULIE HYMAN: Well, we look forward to checking back in with both of you as the integration progresses. Sasan Goodarzi, Intuit CEO, and Kenneth Lin, Credit Karma founder and CEO, thank you both very much.