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Intuit navigates mixed results with robust growth strategies

AInvestFriday, Feb 23, 2024 1:06 pm ET
1min read

Intuit, a frontrunner in financial software, unveiled its Q2 fiscal year 2024 earnings post-market on Monday, surpassing analysts' predictions for earnings per share (EPS) and aligning with revenue forecasts. The company announced an EPS of $2.63, outperforming the expected $2.30, and reported revenue of $3.39 billion, meeting projections. Additionally, Intuit provided Q3 guidance and reiterated its full-year outlook.

The Small Business and Self-Employed Group (SBSE) segment was a highlight, with a 18% year-over-year revenue increase to $2.2 billion, attributed to customer expansion, enhanced pricing, and a shift towards premium services. QuickBooks Online Accounting saw a 19% revenue increase, while Online Services enjoyed a 24% rise, fueled by payroll, payments, and Mailchimp. The international online ecosystem also recorded a 16% growth in constant currency terms.

Conversely, the Consumer Group, encompassing TurboTax, experienced a 5% revenue drop to $492 million, mainly due to the IRS's delayed opening this year. Despite this Q2 downturn, Intuit remains optimistic about the Consumer Group's FY24 revenue projection of a 7-8% increase. The company anticipates Q3 to benefit from added revenue from Credit Karma Money during the tax season.

Credit Karma's performance remained flat at $375 million in revenue year-over-year, marking an improvement from previous quarters. This stabilization, attributed to growth in Credit Karma Money, credit cards, and auto loans, offsets declines in home and personal loans and auto insurance. Intuit foresees Q3 gaining from increased Credit Karma Money revenue during tax season.

The ProTax Group, catering to professional accountants, reported an 8% revenue increase to $274 million, reflecting the delivery timing of tax forms.

Q3 guidance from Intuit was mixed, forecasting an EPS of $9.31-9.38, excluding non-recurring items, against an expected $9.70. The company anticipates 10-11% revenue growth for Q3, translating to $6.62-6.68 billion, slightly above the $6.61 billion estimate. Intuit reaffirmed its FY24 guidance, expecting an EPS of $16.17-16.47, against an anticipated $16.40, and maintained its revenue forecast of $15.890-16.105 billion, closely matching the $16.05 billion estimate.

Q2 presented a mix of triumphs and challenges for Intuit. While surpassing EPS and revenue expectations, the Q3 EPS guidance left investors wanting. The SBSE unit's robust performance, despite broader economic pressures, and Credit Karma's improved trajectory in Q2 were notable. Intuit's investment in AI for tax preparation and faster payment processing underscores its commitment to innovation and customer service. Intuit's diverse product suite, including QuickBooks, TurboTax, Mint, Credit Karma, and Mailchimp, continues to drive its market success, positioning the company for sustained growth amidst fluctuating market conditions.

INTU shares are up half a percent in mid-morning Friday trade following the release of results.

$INTU(INTU)

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