QuickBooks Online Grew 41% to Over 1.5
Million Subscribers; Company Sets Guidance for Fiscal 2017
Intuit Inc. (Nasdaq: INTU)
announced financial results for the fourth quarter and full fiscal
year 2016, which ended July 31.
“This was a strong year from start to finish,” said Brad Smith,
Intuit’s chairman and chief executive officer. “One of our
strategic goals is to be the operating system behind small business
success, and our small business ecosystem remains vibrant. Total
QuickBooks Online subscribers grew to more than 1.5 million, and
small business online ecosystem revenue grew 25 percent for the
year.
“Our tax businesses had another strong year, turning up the
innovation machine to compete effectively in the marketplace.
“We are looking forward to building on this success in fiscal
2017,” Smith said.
Financial Highlights
For fiscal 2016 Intuit:
- Reported revenue of $4.7 billion, up 12
percent.
- Increased total QuickBooks Online
subscribers 41 percent, to finish the year with 1,513,000 paid
subscribers.
- Grew Consumer Tax revenue 10 percent,
with TurboTax Online units growing 15 percent and total TurboTax
units growing 12 percent.
- Reported GAAP earnings per share of
$3.69, versus $1.28 in fiscal 2015.
- Reported non-GAAP earnings per share of
$3.78, up 46 percent.
Unless otherwise noted, all growth rates refer to the current
period versus the comparable prior-year period, and the business
metrics and associated growth rates refer to worldwide business
metrics.
Business Segment Results
Small Business
- Total Small Business segment revenue
increased 10 percent for the quarter and 9 percent for the
year.
- Small business online ecosystem revenue
grew 25 percent for the year, driven by online customer
acquisition.
- QuickBooks Self-Employed subscribers
ended the year at 85,000, versus 25,000 a year ago.
- Outside the U.S., QuickBooks Online
grew to 287,000 paying subscribers, up 45 percent.
- Online payroll customers grew 17
percent for the year.
- Online active payments customers
increased 6 percent, and online payments charge volume increased 15
percent.
Consumer Tax and
ProConnect
- Consumer Tax revenue was up 10 percent
for the year.
- ProConnect professional tax revenue was
$428 million for the year.
Snapshot of Fourth-quarter
Results
GAAP
Non-GAAP Q4
FY 16
Q4
FY 15
Change
Q4
FY 16
Q4
FY 15
Change Revenue
$ 754
$ 696 8 %
$ 754 $ 696
8 %
Operating Income
(Loss) ($56 )
($130 )
NM
$ 36
($16 ) NM
Earnings Per Share ($0.16
) $ 0.05
NM
$ 0.08
($0.05 )
NM
Dollars are in millions, except earnings per share. See “About
Non-GAAP Financial Measures” below for more information regarding
financial measures not prepared in accordance with Generally
Accepted Accounting Principles (GAAP). Q4 FY16 results reflect the
impact of changes to certain desktop software offerings; revenue
for those offerings is recognized as services are delivered, rather
than up front. Q4 FY15 GAAP earnings per share includes $0.42 net
income per share from discontinued operations.
Snapshot of FY ’16 Full-year
Results
GAAP
Non-GAAP
FY 16
FY 15
Change
FY
16 FY 15
Change Revenue
$ 4,694 $
4,192 12 %
$
4,694 $ 4,192
12 %
Operating Income
$ 1,242 $ 738
68 %
$ 1,555
$ 1,141
36 %
Earnings Per Share
$ 3.69 $ 1.28
288 %
$ 3.78
$ 2.59
46 %
Dollars are in millions, except earnings per share. See “About
Non-GAAP Financial Measures” below for more information regarding
financial measures not prepared in accordance with Generally
Accepted Accounting Principles (GAAP). FY16 results reflect the
impact of changes to certain desktop software offerings; revenue
for those offerings is recognized as services are delivered, rather
than up front. FY16 earnings per share includes $0.65 net income
per share from discontinued operations. FY15 GAAP earnings per
share includes $0.17 net loss per share from discontinued
operations.
Capital Allocation Summary
In fiscal 2016 the company:
- Repurchased $2.3 billion of shares at
an average price of $91.
- Received board approval for an
additional share repurchase authorization of $2 billion, bringing
the total authorization to $2.4 billion.
- Received board approval for a $0.34 per
share dividend for the first quarter of fiscal 2017, payable on
Oct. 18. This represents a 13 percent increase versus last
year.
Forward-looking Guidance
“We feel confident in our ability to deliver against our
financial principles and our long-term strategic goals,” said Neil
Williams, Intuit’s chief financial officer. “We look forward to
sharing our progress with you in September at our annual Investor
Day and throughout this fiscal year.”
Intuit announced guidance for the first quarter of fiscal year
2017, which ends Oct. 31. The company expects:
- Revenue of $740 million to $760
million, growth of 4 to 7 percent.
- GAAP operating loss of $65 million to
$75 million.
- Non-GAAP operating income of $10
million to $20 million.
- GAAP loss per share of $0.19 to
$0.21.
- Non-GAAP diluted earnings per share of
$0.01 to $0.03.
- Ending QuickBooks Online subscribers of
approximately 1.6 million
Intuit also announced guidance for full fiscal year 2017. The
company expects:
- Revenue of $5 billion to $5.1 billion,
growth of 7 to 9 percent.
- GAAP operating income of $1.33 billion
to $1.38 billion, growth of 7 to 11 percent.
- Non-GAAP operating income of $1.675
billion to $1.725 billion, growth of 8 to 11 percent.
- GAAP diluted earnings per share of
$3.35 to $3.45, versus $3.69 in fiscal 2016. Fiscal 2016 earnings
per share includes $0.65 net income per share from discontinued
operations.
- Non-GAAP diluted earnings per share of
$4.30 to $4.40, growth of 14 to 16 percent.
- QuickBooks Online subscribers of 2.0
million to 2.2 million.
The company expects the following segment revenue results for
fiscal year 2017:
- Small Business: growth of 9 to 11
percent.
- Consumer Tax: growth of 6 to 8
percent.
- ProConnect: decline of 1 to 3
percent.
Conference Call Details
Intuit executives will discuss the financial results on a
conference call at 1:30 p.m. Pacific time. To hear the call, dial
866-854-3163 in the United States or 973-935-8679 from
international locations. No reservation or access code is needed.
The conference call can also be heard live at
http://investors.intuit.com/events.cfm. Prepared remarks for the
call will be available on Intuit’s website after the call ends.
Replay Information
A replay of the conference call will be available for one week
by calling 888-266-2081, or 703-925-2533 from international
locations. The access code for this call is 1675029.
Annual Investor Day
Intuit will host its annual Investor Day at its Mountain View,
Calif., headquarters on Sept. 21 at 8 a.m. Pacific time. The
half-day event will include presentations from Smith, Williams and
other Intuit leaders.
About Intuit
Intuit Inc. creates business and financial management solutions
that simplify the business of life for small businesses, consumers
and accounting professionals.
Its flagship products and services include QuickBooks® and
TurboTax®, which make it easier to manage small businesses
and tax preparation and filing. Mint.com provides a fresh,
easy and intelligent way for people to manage their money, while
Intuit's ProConnect brand portfolio includes ProConnect
Online, ProSeries® and Lacerte®, the company's leading
tax preparation offerings for professional accountant.
Founded in 1983, Intuit had revenue of $4.7 billion in its
fiscal year 2016. The company has approximately 7,900 employees
with major offices in the United States, Canada, the United
Kingdom, India and other locations. More information can be found
at www.intuit.com.
About Non-GAAP Financial Measures
This press release and the accompanying tables include non-GAAP
financial measures. For a description of these non-GAAP financial
measures, including the reasons management uses each measure, and
reconciliations of these non-GAAP financial measures to the most
directly comparable financial measures prepared in accordance with
Generally Accepted Accounting Principles, please see the section of
the accompanying tables titled "About Non-GAAP Financial Measures"
as well as the related Table B1, Table B2, and Table E. A copy of
the press release issued by Intuit today can be found on the
investor relations page of Intuit's Web site.
Cautions About Forward-looking Statements
This press release contains forward-looking statements,
including forecasts of expected growth and future financial results
of Intuit and its reporting segments; Intuit’s prospects for the
business in fiscal 2017 and beyond; expectations regarding Intuit’s
growth outside the US; expectations regarding timing and growth of
revenue for each of Intuit’s reporting segments and from current or
future products and services; expectations regarding customer
growth; expectations regarding changes to our products and their
impact on Intuit’s business; expectations regarding the amount and
timing of any future dividends or share repurchases; expectations
regarding availability of our offerings; expectations regarding the
impact of our strategic decisions on Intuit’s business; and all of
the statements under the heading “Forward-looking Guidance”.
Because these forward-looking statements involve risks and
uncertainties, there are important factors that could cause our
actual results to differ materially from the expectations expressed
in the forward-looking statements. These factors include, without
limitation, the following: inherent difficulty in predicting
consumer behavior; difficulties in receiving, processing, or filing
customer tax submissions; consumers may not respond as we expected
to our advertising and promotional activities; product
introductions and price competition from our competitors can have
unpredictable negative effects on our revenue, profitability and
market position; governmental encroachment in our tax businesses or
other governmental activities or public policy affecting the
preparation and filing of tax returns could negatively affect our
operating results and market position; we may not be able to
successfully innovate and introduce new offerings and business
models to meet our growth and profitability objectives, and current
and future offerings may not adequately address customer needs and
may not achieve broad market acceptance, which could harm our
operating results and financial condition; business interruption or
failure of our information technology and communication systems may
impair the availability of our products and services, which may
damage our reputation and harm our future financial results; as we
upgrade and consolidate our customer facing applications and
supporting information technology infrastructure, any problems with
these implementations could interfere with our ability to deliver
our offerings; any failure to properly use and protect personal
customer information and data could harm our revenue, earnings and
reputation; if we are unable to develop, manage and maintain
critical third party business relationships, our business may be
adversely affected; increased government regulation of our
businesses may harm our operating results; if we fail to process
transactions effectively or fail to adequately protect against
potential fraudulent activities, our revenue and earnings may be
harmed; related publicity regarding such fraudulent activity could
cause customers to lose confidence in using our software and
adversely impact our results; any significant offering quality
problems or delays in our offerings could harm our revenue,
earnings and reputation; our participation in the Free File
Alliance may result in lost revenue opportunities and
cannibalization of our traditional paid franchise; the continuing
global economic downturn may continue to impact consumer and small
business spending, financial institutions and tax filings, which
could negatively affect our revenue and profitability;
year-over-year changes in the total number of tax filings that are
submitted to government agencies due to economic conditions or
otherwise may result in lost revenue opportunities; our revenue and
earnings are highly seasonal and the timing of our revenue between
quarters is difficult to predict, which may cause significant
quarterly fluctuations in our financial results; our financial
position may not make repurchasing shares advisable or we may issue
additional shares in an acquisition causing our number of
outstanding shares to grow; our inability to adequately protect our
intellectual property rights may weaken our competitive position
and reduce our revenue and earnings; our acquisition and
divestiture activities may disrupt our ongoing business, may
involve increased expenses and may present risks not contemplated
at the time of the transactions; our use of significant amounts of
debt to finance acquisitions or other activities could harm our
financial condition and results of operation; and litigation
involving intellectual property, antitrust, shareholder and other
matters may increase our costs. More details about the risks that
may impact our business are included in our Form 10-K for fiscal
2015 and in our other SEC filings. You can locate these reports
through our website at http://investors.intuit.com. Forward-looking
statements are based on information as of August 23, 2016 and we do
not undertake any duty to update any forward-looking statement or
other information in these materials.
TABLE A
INTUIT INC.
GAAP CONSOLIDATED STATEMENTS OF
OPERATIONS
(In millions, except per share
amounts)
(Unaudited)
Three Months Ended Twelve Months Ended July
31, 2016 July 31, 2015 July 31,
2016 July 31, 2015 Net revenue:
Product $ 295 $ 281 $ 1,289 $ 1,146 Service and other 459
415 3,405 3,046 Total net revenue 754
696 4,694 4,192 Costs and expenses: Cost of
revenue: Cost of product revenue 32 31 131 139 Cost of service and
other revenue 134 137 599 556 Amortization of acquired technology 5
8 22 30 Selling and marketing 266 280 1,289 1,288 Research and
development 235 215 881 798 General and administrative 132 118 518
483 Amortization of other acquired intangible assets 6 3 12 12
Goodwill and intangible asset impairment charges — 34
— 148 Total costs and expenses [A] 810 826
3,452 3,454 Operating income (loss) from
continuing operations (56 ) (130 ) 1,242 738 Interest expense (9 )
(6 ) (35 ) (27 ) Interest and other income (expense), net 3
(2 ) (4 ) 1 Income (loss) from continuing operations before
income taxes (62 ) (138 ) 1,203 712 Income tax provision (benefit)
[B] (22 ) (36 ) 397 299 Net income (loss) from
continuing operations (40 ) (102 ) 806 413 Net income (loss) from
discontinued operations [C] — 116 173 (48 )
Net income (loss) $ (40 ) $ 14 $ 979 $ 365
Basic net income (loss) per share from continuing operations
$ (0.16 ) $ (0.37 ) $ 3.08 $ 1.47 Basic net income (loss) per share
from discontinued operations — 0.42 0.65 (0.17
) Basic net income (loss) per share $ (0.16 ) $ 0.05 $ 3.73
$ 1.30 Shares used in basic per share calculations
257
277 262 281 Diluted net income (loss)
per share from continuing operations $ (0.16 ) $ (0.37 ) $ 3.04 $
1.45 Diluted net income (loss) per share from discontinued
operations — 0.42 0.65 (0.17 ) Diluted net
income (loss) per share $ (0.16 ) $ 0.05 $ 3.69 $
1.28 Shares used in diluted per share calculations
257
277
265
286
Cash dividends declared per common share $ 0.30 $
0.25 $ 1.20 $ 1.00
See accompanying Notes.
INTUIT INC.
NOTES TO TABLE A
[A] The following table summarizes the total share-based
compensation expense that we recorded in operating income (loss)
from continuing operations for the periods shown.
Three Months Ended
Twelve Months Ended (in
millions)
July 31, 2016 July 31,
2015 July 31, 2016 July 31,
2015 Cost of revenue $ 2 $ 2 $ 8 $ 6 Selling and marketing 22
19 77 69 Research and development 27 24 90 80 General and
administrative 30 25 103 87 Total share-based
compensation expense $ 81 $ 70 $ 278 $ 242
[B] We compute our annual provision for income taxes
by applying the annual effective tax rate to income from recurring
operations and adding the effects of any discrete income tax items
specific to the period. In December 2015 the Consolidated
Appropriations Act, 2016 was signed into law. The Act includes a
permanent reinstatement of the federal research and experimentation
credit that was retroactive to January 1, 2015. We recorded a
discrete tax benefit of approximately $12 million for the
retroactive effect during the second quarter of fiscal 2016.
Our effective tax rate for the twelve months ended July 31, 2016
was approximately 33% and did not differ significantly from the
statutory rate of 35%. Our effective tax rate for the twelve months
ended July 31, 2015 was approximately 42%. Excluding discrete tax
items related to the goodwill impairment charge, which was not tax
deductible, our effective tax rate was approximately 36% and did
not differ significantly from the federal statutory rate of 35%.
[C] In the third quarter of fiscal 2016 we completed the
sales of our Demandforce, QuickBase, and Quicken businesses for
$463 million in cash. We recorded a pre-tax gain of $354 million
and a net gain of $173 million on the disposal of these three
businesses in fiscal 2016. We classified our Demandforce,
QuickBase, and Quicken businesses as discontinued operations and
have therefore segregated their operating results from continuing
operations in our statements of operations for all periods
presented. Net revenue from these businesses totaled $137 million
for the twelve months ended July 31, 2016 and $236 million for the
twelve months ended July 31, 2015. Net income from the operations
of these discontinued operations for the twelve months ended July
31, 2016 was not significant. Net loss from discontinued operations
for the twelve months ended July 31, 2015 includes a net loss from
discontinued operations of $172 million partially offset by $124
million in tax benefits from the anticipated sale of these
businesses. We have also segregated the net assets of these
businesses from continuing operations on our balance sheet at July
31, 2015. Because the cash flows of these businesses were not
material for any period presented, we have not segregated them on
our statements of cash flows.
TABLE B1
INTUIT INC.
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL
MEASURES
(In millions, except per share
amounts)
(Unaudited)
Fiscal 2016
Q1 Q2
Q3 Q4 Full Year GAAP operating income
(loss) from continuing operations $ (29 ) $ 42 $ 1,285 $ (56 )
$ 1,242 Amortization of acquired technology 6 6 5 5 22 Amortization
of other acquired intangible assets 2 1 3 6 12 (Gain) loss on sale
of long-lived assets — — 1 — 1 Share-based compensation expense 67
65 65 81 278
Non-GAAP
operating income (loss) from continuing operations $ 46
$ 114 $ 1,359 $ 36 $ 1,555
GAAP net income (loss) $ (31 ) $ 24 $ 1,026 $ (40 ) $ 979
Amortization of acquired technology 6 6 5 5 22 Amortization of
other acquired intangible assets 2 1 3 6 12 (Gain) loss on sale of
long-lived assets — — 1 — 1 Share-based compensation expense 67 65
65 81 278 Net loss on debt securities and other investments 1 1 2 1
5 Income tax effects and adjustments [A] (21 ) (35 ) (31 ) (33 )
(120 ) Net (income) loss from discontinued operations $ — $
5 $ (178 ) $ — $ (173 )
Non-GAAP net income
(loss) $ 24 $ 67 $ 893 $ 20 $ 1,004
GAAP diluted net income (loss) per share $
(0.11 ) $ 0.09 $ 3.94 $ (0.16 ) $ 3.69 Amortization of acquired
technology 0.02 0.02 0.02 0.02 0.08 Amortization of other acquired
intangible assets 0.01 — 0.01 0.02 0.04 (Gain) loss on sale of
long-lived assets — — — — — Share-based compensation expense 0.25
0.25 0.25 0.32 1.05 Net loss on debt securities and other
investments — — 0.01 — 0.02 Income tax effects and adjustments [A]
(0.08 ) (0.13 ) (0.12 ) (0.12 ) (0.45 ) Net (income) loss from
discontinued operations — 0.02 (0.68 ) — (0.65
)
Non-GAAP diluted net income (loss) per share $ 0.09
$ 0.25 $ 3.43 $ 0.08 $ 3.78
Shares used in GAAP diluted per share calculation 272
266 260 257 265
Shares used
in non-GAAP diluted per share calculation 275 266
260 260 265 [A] As discussed in
“About Non-GAAP Financial Measures - Income Tax Effects and
Adjustments” following Table E, our long-term non- GAAP tax rate
assumes the federal research and experimentation credit is
continuously in effect and eliminates the effects of non- recurring
and period specific items. Consequently, our non-GAAP results for
the second quarter of fiscal 2016 have been adjusted to exclude the
$12 million discrete GAAP tax benefit that we recorded for the
retroactive reinstatement of the research and experimentation
credit. See note B to Table A for more information.
See “About Non-GAAP Financial Measures”
immediately following Table E for information on these measures,
the items excluded from the most directly comparable GAAP measures
in arriving at non-GAAP financial measures, and the reasons
management uses each measure and excludes the specified amounts in
arriving at each non-GAAP financial measure.
TABLE B2
INTUIT INC.
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES
TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL
MEASURES
(In millions, except per share
amounts)
(Unaudited)
Fiscal 2015 Q1
Q2 Q3
Q4 Full Year GAAP operating
income (loss) from continuing operations $ (109 ) $ (89 ) $
1,066 $ (130 ) $ 738 Amortization of acquired technology 7 7 8 8 30
Amortization of other acquired intangible assets 3 3 3 3 12
Professional fees for business combinations — 1 1 — 2 Goodwill and
intangible asset impairment charges — — 114 34 148 (Gain) loss on
sale of long-lived assets — — (30 ) (1 ) (31 ) Share-based
compensation expense 57 56 59 70 242
Non-GAAP operating income (loss) from continuing
operations $ (42 ) $ (22 ) $ 1,221 $ (16 ) $ 1,141
GAAP net income (loss) $ (84 ) $ (66 ) $ 501 $
14 $ 365 Amortization of acquired technology 7 7 8 8 30
Amortization of other acquired intangible assets 3 3 3 3 12
Professional fees for business combinations — 1 1 — 2 Goodwill and
intangible asset impairment charges — — 114 34 148 (Gain) loss on
sale of long-lived assets — — (30 ) (1 ) (31 ) Share-based
compensation expense 57 56 59 70 242 Net loss on debt securities
and other investments 1 — 3 2 6 Income tax effects and adjustments
(19 ) (25 ) (10 ) (29 ) (83 ) Net (income) loss from discontinued
operations 3 6 155 (116 ) 48
Non-GAAP net income (loss) $ (32 ) $ (18 ) $ 804 $
(15 ) $ 739
GAAP diluted net income (loss) per
share $ (0.29 ) $ (0.23 ) $ 1.78 $ 0.05 $ 1.28 Amortization of
acquired technology 0.02 0.02 0.03 0.03 0.10 Amortization of other
acquired intangible assets 0.01 0.01 0.01 0.01 0.04 Professional
fees for business combinations — — — — 0.01 Goodwill and intangible
asset impairment charges — — 0.40 0.12 0.52 (Gain) loss on sale of
long-lived assets — — (0.11 ) — (0.11 ) Share-based compensation
expense 0.20 0.20 0.21 0.25 0.85 Net loss on debt securities and
other investments — — 0.01 0.01 0.02 Income tax effects and
adjustments (0.06 ) (0.08 ) (0.03 ) (0.10 ) (0.29 ) Net (income)
loss from discontinued operations 0.01 0.02 0.55
(0.42 ) 0.17
Non-GAAP diluted net income (loss)
per share $ (0.11 ) $ (0.06 ) $ 2.85 $ (0.05 ) $ 2.59
Shares used in GAAP diluted per share
calculation 286 285 282 277 286
Shares used in non-GAAP diluted per share
calculation 286 285 282 277 286
See “About Non-GAAP Financial Measures” immediately following
Table E for information on these measures, the items excluded from
the most directly comparable GAAP measures in arriving at non-GAAP
financial measures, and the reasons management uses each measure
and excludes the specified amounts in arriving at each non-GAAP
financial measure.
TABLE C
INTUIT INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions)
(Unaudited)
July 31, 2016 July 31, 2015 ASSETS Current
assets: Cash and cash equivalents $ 638 $ 808 Investments
442 889 Accounts receivable, net 108 91 Income taxes receivable 20
84 Deferred income taxes — 231 Prepaid expenses and other current
assets 102 94 Current assets of discontinued operations — 26
Current assets before funds held for customers 1,310 2,223 Funds
held for customers
304
337 Total current assets 1,614 2,560 Long-term investments
28 27 Property and equipment, net 1,031 682 Goodwill 1,282 1,266
Acquired intangible assets, net 44 87 Long-term deferred income
taxes 139 5 Other assets 112 106 Long-term assets of discontinued
operations — 235 Total assets $ 4,250 $ 4,968 LIABILITIES
AND STOCKHOLDERS’ EQUITY Current liabilities: Short-term debt $ 512
$ — Accounts payable 184 190 Accrued compensation and related
liabilities 289 283 Deferred revenue 801 691 Other current
liabilities 161 150 Current liabilities of discontinued operations
— 93 Current liabilities before customer fund deposits 1,947 1,407
Customer fund deposits 304 337 Total current liabilities 2,251
1,744 Long-term debt 488 500 Long-term deferred revenue 204
152 Other long-term obligations 146 172 Long-term obligations of
discontinued operations — 68 Total liabilities 3,089 2,636
Stockholders’ equity 1,161 2,332 Total liabilities and
stockholders’ equity $ 4,250 $ 4,968
NOTE: In the second quarter of fiscal 2016, we elected to early
adopt ASU 2015-17, “Income Taxes (Topic 740): Balance Sheet
Classification of Deferred Taxes” on a prospective basis. This new
standard requires all deferred tax assets and liabilities, and any
related valuation allowance, to be classified as noncurrent on the
balance sheet. Prior periods were not adjusted.
TABLE D
INTUIT INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
(In millions)
(Unaudited)
Twelve Months Ended July 31, 2016
July 31, 2015 Cash flows from
operating activities: Net income $ 979 $ 365 Adjustments to
reconcile net income to net cash provided by operating activities:
Depreciation 195 157 Amortization of acquired intangible assets 43
74 Goodwill and intangible asset impairment charges — 297
Share-based compensation expense 281 257 Pre-tax gain on sale of
discontinued operations (1) (354 ) — Deferred income taxes 70 (100
) Tax benefit from share-based compensation plans 59 85 Excess tax
benefit from share-based compensation plans (59 ) (85 ) Other 17
4 Total adjustments 252 689 Changes in
operating assets and liabilities: Accounts receivable (20 ) 24
Income taxes receivable 64 (49 ) Prepaid expenses and other assets
(10 ) 22 Accounts payable (23 ) 35 Accrued compensation and related
liabilities (11 ) 24 Deferred revenue 192 398 Other liabilities (22
) (4 ) Total changes in operating assets and liabilities 170
450
Net cash provided by operating activities
1,401 1,504 Cash flows from
investing activities: Purchases of corporate and customer fund
investments (934 ) (939 ) Sales of corporate and customer fund
investments 1,165 620 Maturities of corporate and customer fund
investments 187 475 Net change in money market funds and other cash
equivalents
held to satisfy customer fund
obligations
58 (49 ) Net change in customer fund deposits (33 ) 49 Purchases of
property and equipment (522 ) (261 ) Acquisitions of businesses,
net of cash acquired — (95 ) Proceeds from divestiture of
businesses 463 — Other (13 ) 18
Net cash provided by
(used in) investing activities 371 (182
) Cash flows from financing activities: Proceeds from
borrowings under revolving credit facilities 995 — Repayments on
borrowings under revolving credit facilities (995 ) — Proceeds from
long-term debt 500 — Net proceeds from issuance of stock under
employee stock plans 89 107 Cash paid for purchases of treasury
stock (2,264 ) (1,245 ) Dividends and dividend rights paid (318 )
(283 ) Excess tax benefit from share-based compensation plans 59 85
Other (6 ) (1 )
Net cash used in financing activities
(1,940 ) (1,337 ) Effect of exchange
rates on cash and cash equivalents (2 ) (26 )
Net decrease in
cash and cash equivalents (170 ) (41
) Cash and cash equivalents at beginning of period 808
849
Cash and cash equivalents at end of period
$ 638 $ 808
(1) Because the cash flows of our discontinued operations were
not material for any period presented, we have not segregated the
cash flows of those businesses on these statements of cash flows.
We have presented the effect of the gains on disposals of
discontinued operations on these statements of cash flow.
TABLE E
INTUIT INC.
RECONCILIATION OF FORWARD-LOOKING GUIDANCE
FOR NON-GAAP FINANCIAL MEASURES
TO PROJECTED GAAP REVENUE, OPERATING
INCOME (LOSS), AND EPS
(In millions, except per share
amounts)
(Unaudited)
Forward-Looking Guidance GAAP
Range of Estimate
Non-GAAP
Range of Estimate
From To Adjmts
From To Three Months Ending October 31,
2016 Revenue $ 740 $ 760 $ —
$
740 $ 760 Operating income (loss) $ (75 ) $ (65 ) $ 85 [a] $ 10 $
20 Diluted income (loss) per share $ (0.21 ) $ (0.19 ) $ 0.22 [b] $
0.01 $ 0.03
Twelve Months Ending July 31, 2017
Revenue $ 5,000 $ 5,100 $ — $ 5,000 $ 5,100 Operating income $
1,330 $ 1,380 $ 345 [c] $ 1,675 $ 1,725 Diluted earnings per share
$ 3.35 $ 3.45 $ 0.95 [d] $ 4.30 $ 4.40
See “About Non-GAAP Financial Measures” immediately following
this Table E for information on these measures, the items excluded
from the most directly comparable GAAP measures in arriving at
non-GAAP financial measures, and the reasons management uses each
measure and excludes the specified amounts in arriving at each
non-GAAP financial measure.
[a] Reflects estimated adjustments for share-based
compensation expense of approximately $81 million; amortization of
acquired technology of approximately $3 million; and amortization
of other acquired intangible assets of approximately $1 million.
[b] Reflects the estimated adjustments in item [a], income
taxes related to these adjustments, and other income tax effects
related to the use of the long-term non-GAAP tax rate. [c]
Reflects estimated adjustments for share-based compensation expense
of approximately $332 million; amortization of acquired technology
of approximately $12 million; and amortization of other acquired
intangible assets of approximately $1 million. [d] Reflects
the estimated adjustments in item [c], income taxes related to
these adjustments, and other income tax effects related to the use
of the long-term non-GAAP tax rate.
INTUIT INC.ABOUT NON-GAAP FINANCIAL
MEASURES
The accompanying press release dated August 23, 2016 contains
non-GAAP financial measures. Table B1, Table B2 and Table E
reconcile the non-GAAP financial measures in that press release to
the most directly comparable financial measures prepared in
accordance with Generally Accepted Accounting Principles (GAAP).
These non-GAAP financial measures include non-GAAP operating income
(loss), non-GAAP net income (loss) and non-GAAP net income (loss)
per share.
Non-GAAP financial measures should not be considered as a
substitute for, or superior to, measures of financial performance
prepared in accordance with GAAP. These non-GAAP financial measures
do not reflect a comprehensive system of accounting, differ from
GAAP measures with the same names and may differ from non-GAAP
financial measures with the same or similar names that are used by
other companies.
We compute non-GAAP financial measures using the same consistent
method from quarter to quarter and year to year. We may consider
whether other significant items that arise in the future should be
excluded from our non-GAAP financial measures.
We exclude the following items from all of our non-GAAP
financial measures:
- Share-based compensation expense
- Amortization of acquired
technology
- Amortization of other acquired
intangible assets
- Goodwill and intangible asset
impairment charges
- Professional fees for business
combinations
We also exclude the following items from non-GAAP net income
(loss) and diluted net income (loss) per share:
- Gains and losses on debt and equity
securities and other investments
- Income tax effects and adjustments
- Discontinued operations
We believe that these non-GAAP financial measures provide
meaningful supplemental information regarding Intuit’s operating
results primarily because they exclude amounts that we do not
consider part of ongoing operating results when planning and
forecasting and when assessing the performance of the organization,
our individual operating segments or our senior management. Segment
managers are not held accountable for share-based compensation
expense, amortization, or the other excluded items and,
accordingly, we exclude these amounts from our measures of segment
performance. We believe that our non-GAAP financial measures also
facilitate the comparison by management and investors of results
for current periods and guidance for future periods with results
for past periods.
The following are descriptions of the items we exclude from our
non-GAAP financial measures.
Share-based compensation expenses. These consist of non-cash
expenses for stock options, restricted stock units and our Employee
Stock Purchase Plan. When considering the impact of equity awards,
we place greater emphasis on overall shareholder dilution rather
than the accounting charges associated with those awards.
Amortization of acquired technology and amortization of other
acquired intangible assets. When we acquire an entity, we are
required by GAAP to record the fair values of the intangible assets
of the entity and amortize them over their useful lives.
Amortization of acquired technology in cost of revenue includes
amortization of software and other technology assets of acquired
entities. Amortization of other acquired intangible assets in
operating expenses includes amortization of assets such as customer
lists, covenants not to compete and trade names.
Goodwill and intangible asset impairment charges. We exclude
from our non-GAAP financial measures non-cash charges to adjust the
carrying values of goodwill and other acquired intangible assets to
their estimated fair values.
Professional fees for business combinations. We exclude from our
non-GAAP financial measures the professional fees we incur to
complete business combinations. These include investment banking,
legal and accounting fees.
Gains and losses on debt and equity securities and other
investments. We exclude from our non-GAAP financial measures gains
and losses that we record when we sell or impair available-for-sale
debt and equity securities and other investments.
Income tax effects and adjustments. We use a long-term non-GAAP
tax rate for evaluating operating results and for planning,
forecasting, and analyzing future periods. This long-term
non-GAAP tax rate excludes the income tax effects of the non-GAAP
pre-tax adjustments described above, assumes the federal research
and experimentation credit is continuously in effect, and
eliminates the effects of non-recurring and period specific items
which can vary in size and frequency. Based on our current
long-term projections, we are using a long-term non-GAAP tax rate
of 34% for fiscal 2015 and 2016 and 33% for fiscal 2017. These
rates are consistent with the average of our normalized fiscal year
tax rate over a four year period that includes the past three
fiscal years plus the current fiscal year forecast. We will
evaluate this long-term non-GAAP tax rate on an annual basis and
whenever any significant events occur which may materially affect
this long-term rate. This long-term non-GAAP tax rate could be
subject to change for various reasons including significant changes
in our geographic earnings mix or fundamental tax law changes in
major jurisdictions in which we operate.
Operating results and gains and losses on the sale of
discontinued operations. From time to time, we sell or otherwise
dispose of selected operations as we adjust our portfolio of
businesses to meet our strategic goals. In accordance with GAAP, we
segregate the operating results of discontinued operations as well
as gains and losses on the sale of these discontinued operations
from continuing operations on our GAAP statements of operations but
continue to include them in GAAP net income or loss and net income
or loss per share. We exclude these amounts from our non-GAAP
financial measures.
The reconciliations of the forward-looking non-GAAP financial
measures to the most directly comparable GAAP financial measures in
Table E include all information reasonably available to Intuit at
the date of this press release. These tables include adjustments
that we can reasonably predict. Events that could cause the
reconciliation to change include acquisitions and divestitures of
businesses, goodwill and other asset impairments, and sales of
available-for-sale debt securities and other investments.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160823006195/en/
Intuit Inc.InvestorsMatt Rhodes,
650-944-2536matthew_rhodes@intuit.comorIntuit Inc.MediaDiane
Carlini, 650-944-6251diane_carlini@intuit.com
Intuit (NASDAQ:INTU)
Historical Stock Chart
From Mar 2024 to Apr 2024
Intuit (NASDAQ:INTU)
Historical Stock Chart
From Apr 2023 to Apr 2024