Intuit Quarterly results:
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Intuit Reports First Quarter Results
Revenue Grew 46% Versus Year Ago
MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Nov. 23, 1999--Intuit Inc. (NASDAQ: INTU - news) today announced the financial results for its first fiscal quarter ended October 31,1999.
Bill Campbell, Chairman and acting President and CEO remarked, ``Intuit is executing on its e-finance strategy to use the power of the Internet and PC to revolutionize how people manage their financial lives. With a clear vision and solid operating plan, Intuit's fiscal year is off to a strong start. First quarter revenue was up 46% over the same quarter a year ago. This strength in our business will allow us to increase our investment in R&D and marketing over the coming quarters to expand our electronic finance initiatives.'
Intuit reported revenue of $163.1 million for its first quarter 2000, an increase of 46% over the same quarter a year ago. Revenue from CRI, the payroll processing company acquired in the fourth quarter of fiscal 1999, was included in these results but not in the first quarter of fiscal 1999. Excluding this revenue, Intuit posted a 38% increase compared to the same quarter a year ago. Strong market demand for QuickBooks, sales from the launches of new versions of Quicken and continued growth in Internet-based revenue were largely responsible for this growth.
On a GAAP basis, the Company reported a net loss for the quarter of $61.7 million, or $0.33 per share, consistent with Intuit's seasonal revenue pattern which produces lower revenue and profits outside of the tax season. This quarter included an unrealized loss on the Company's investment in Excite @Home of approximately $17.3 million resulting from the re-measurement of this marketable security. The results for the same fiscal quarter last year reflected a net loss of $49.2 million, or $0.28 per share. (See Table A.)
On a pro forma basis (explained below), the Company reported a net loss for the quarter of $22.6 million, or $0.12 per share. Pro forma net loss for the same fiscal quarter last year was $26.8 million, or $0.15 per share. Expenditures to expand Internet businesses, increase market penetration of current software products and support the early Quicken 2000 launch led to the increase in first quarter expenses versus the same quarter a year ago. (See Table B)
All per share figures reflect the 3-for-1 stock split effective September 30, 1999.
Intuit's financial results reflect the highly seasonal nature of its businesses, particularly its tax preparation products. Historically, revenue is highest in Intuit's January and April quarters when the Company generates most of its tax product revenue and produces more than 100% of its annual profits.
The Company experiences significantly lower revenue in the July and October quarters, while operating expenses to develop new products and services continue at relatively consistent levels during these periods. As a result, Intuit typically has losses in the July and October quarters. In addition, Intuit's quarterly revenue pattern is inconsistent from year to year based in part on the variable timing of product launches. Therefore, annual results may provide a more meaningful comparison of operating results than quarter-over-quarter comparisons.
The GAAP financial results are prepared in accordance with generally accepted accounting principles and are shown in Table A. Pro forma financial information shown in Table B excludes acquisition-related charges and gains and losses related to the sale and re-measurement of marketable securities.
Business Highlights
``Intuit is defining and leading the new world of e-finance - and that strategy is paying off,' said Scott D. Cook, Chairman of the Executive Committee. ``Internet revenue increased 119% over last year's first quarter, and accounted for 19% of total revenue during the first quarter of fiscal 2000. With newly announced Internet initiatives, we are laying the groundwork for additional recurring revenue streams in future quarters.'
Small Business Momentum Strong
QuickBooks, the market-leading small business accounting software, continued to experience strong demand, with first-quarter 2000 revenue up 78% over the prior year. QuickBooks accounts for more than 80% share of US accounting software dollars at retail, according to PC Data.
Intuit's Internet-based payroll service continued to ramp. During the first quarter, Intuit processed $342 million of online payrolls, up more than ten-fold from the first quarter a year ago and up 28% over the immediately prior quarter of fiscal 1999.
Intuit's is seizing a unique e-finance opportunity created by QuickBooks' large installed base. In November, Intuit announced the QuickBooks Internet Gateway and the commitments of nine business-to-business e-services firms to use it to deliver innovative electronic services through QuickBooks. Starting this winter, Intuit expects the gateway to provide QuickBooks users who purchase QuickBooks 2000 with one-click access to a range of e-products and services. It also opens up a one-of-a-kind gateway that e-services companies can use to reach the millions of QuickBooks businesses and to integrate their services into the workflow of small business at the point of need.
Quicken.com Advances E-Finance Offerings
Quicken.com is breaking new ground enabling more and more consumers to manage more of their finances online. In the process, Intuit is creating opportunities to achieve more revenue per customer.
October 1999 page views of 162 million were up 55 million from October 1998 levels. While page views have grown over the past year, traffic volumes can vary significantly from month to month due to seasonal trends, site performance, the timing of launches, competitors' activities and other factors. The increase in page views does not necessarily correlate to a similar increase in revenue earned, as impression rates can vary significantly.
On November 17,1999 Intuit introduced My Accounts by Quicken, which enables Internet users to perform a range of financial activities- all on a single Web page, including electronic bill presentment and payment.
The bill presentment/payment offering on Quicken.com enables consumers to pay their bills electronically and, soon, to receive their bills electronically, all on one Web page. The goal is simple: to free consumers from having to separately log on to multiple sites to do their bills and their finances.
In a separate release today, Intuit and America Online announced a five-year agreement to deliver Intuit's online bill presentment and payment service across AOL's multiple brands beginning in early 2000. The service will give a larger base of consumers the ability to view, track, and pay all of their bills, online. According to a recent AOL/Roper Starch Cyberstudy, 55% of online consumers would be interested in paying bills online.
Bill payment and presentment are being provided by Intuit through a license agreement with a joint venture in which Intuit is a participant.
Intuit also has continued to invest in software to deliver the best mortgage shopping experience on the Internet. Today, QuickenMortgage is unique in providing mortgage buyers the loan options for which they actually qualify, including sub-prime loans.
In October 1999, Intuit announced a definitive agreement to acquire Rock Financial Corporation, an Internet processor of mortgages. With this acquisition, Intuit will now be able to manage the entire mortgage process, end-to-end, and provide consumers a speedy and more reliable experience. By completing the mortgage process, Intuit also expects to generate higher revenue per loan. This transaction is valued at approximately $370 million and is expected to close during December 1999 (subject to customary closing conditions). This transaction is anticipated to be treated as a pooling of interests for accounting and accordingly, Intuit's historical financial statements will be restated to reflect the combined results.
While the Internet presents many opportunities, it is important that investors remember that potential Internet-related revenue and profits may be difficult to predict or achieve and may also be impacted by many factors including the highly competitive Internet finance environment and seasonal and interest rate trends.
Quicken Launch Sees Early Strength
Quicken continues to be the most popular personal finance software product, with over 70% share of dollars at US retail.
Quicken 2000, which was launched in August 1999, is seeing increased, early demand, with first quarter revenue up over the same period last year. The Quicken 2000 product family offers a broad range of powerful features, including asset allocation analysis tools, integrated tax planning features that enable consumers to evaluate the tax implications of their financial and investing decisions, financial planning capabilities, and streamlined navigation and user interface.
During the first quarter, Intuit launched 249 new financial institutions with electronic connectivity to Quicken through OFX-based Web technology. That brings the total to 995 financial institutions connecting to Quicken, up from 746 in August, continuing Quicken's leadership in electronic finance.
Although initial success has been solid, it is too early in the launch to assess the overall success of the entire Quicken 2000 season.
Tax Products On Track
With the tax season rapidly approaching, Intuit remains on track with its development efforts, both for Internet-based and desktop products. This season's TurboTax software products are scheduled to launch in December.
The Company anticipates increasing competition due to Microsoft's expected entry into the personal tax market.
Power Point Presentation and Conference Call
A PowerPoint presentation accompanying the Intuit earnings conference call is available at www.intuit.com/fy99 and will remain available for two weeks. Those planning to listen to the conference call should download the PowerPoint file before the call begins. |
