Intuit (INTU -7%) shares fell despite reporting strong Q4 (Jul) results. The company, known for QuickBooks, TurboTax, Credit Karma, and Mailchimp, recently closed its Mint offering, directing users to Credit Karma instead. INTU beat EPS estimates for the tenth consecutive quarter, although the Q4 upside was smaller than in recent quarters. The Board approved a new $3 billion share repurchase authorization.
- Revenue grew 17.4% year-over-year to $3.18 billion, surpassing analyst expectations. Q4 is typically slower for Intuit, following the tax season-heavy Q3. Q1 (Oct) guidance showed lower EPS and revenue, but full-year guidance indicated upside for both. Non-GAAP operating margin dipped slightly to 22.9% from 23.1% a year ago.
- The Small Business and Self-Employed Group (SBSE), mainly QuickBooks, remained the top performer. SBSE revenue increased 20% year-over-year to $2.56 billion, showcasing the strength of Intuit's small and mid-market business platform. The Online Ecosystem revenue grew 18%, driven by customers with complex needs. Starting Q1, this segment will be renamed to Global Business Solutions Group (GBSG).
- Intuit's three key goals for SBSE are: grow the core, connect the ecosystem, and expand globally. QuickBooks Online accounting revenue grew 17% in Q4, driven by customer growth, higher prices, and a mix shift. Online services revenue increased 19%, powered by payments, payroll, capital, and Mailchimp. International Online Ecosystem revenue grew 11% in Q4 on a constant currency basis.
- The Credit Karma segment showed significant improvement in FY24, with revenue growth improving each quarter: -5% in Q1, flat in Q2, +8% in Q3, and +14% in Q4 to $485 million. FY24 segment revenue grew 5% to $1.71 billion, following a -9% decline in FY23. Auto insurance, personal loans, and credit cards contributed to the growth. The redesigned Credit Karma app and the launch of Intuit Assist also boosted performance.
- The Consumer Group segment (TurboTax) saw a 12% year-over-year revenue decline to $113 million. This segment typically peaks in Q3 during tax season, making Q4 less significant.
Overall, Intuit delivered a decent quarter, but the Q4 upside was less impressive than in recent quarters. The disappointing Q1 guidance also weighed on investor sentiment. However, the strong FY25 guidance suggests potential upside for Q2-Q4. Given the stock's 11% rise since early August, investors may be taking profits after the smaller upside and guidance.
