--Connected services driving growth
--Small business revenue grew 18%
--Mobile services attracting customers to franchise
By Steven D. Jones and Ben Fox Rubin
Intuit Inc.'s (INTU) fiscal first-quarter loss narrowed as the financial software provider posted improvements in its small-business segment, aided by its Demandforce acquisition, and benefited from a recent asset sale.
The maker of TurboTax and QuickBooks software is moving its products online and to mobile devices and attracting new customers in the process despite the uncertainty weighing down the broader economy. Revenue was up 13%, to $647 million.
"The key driver of our performance continued to be the secular tailwind we're riding towards a connected services economy," President and Chief Executive Brad Smith said.
Mountain View, Calif.-based Intuit also is generating new revenue equipping small and medium-sized businesses with devices and services. Despite a volatile economic environment, people are attracted by services like Intuit's GoPayments, which allows businesses to handle transactions with a cell phone, or SnapTax, which lets them file tax forms from a mobile device.
Mobile transactions are adding to revenue, not replacing traditional desktop customers, he said.
"We're pretty confident that when we cite data like 70% of GoPayment customers are new to the franchise, they are truly coming to us for the first time," said Mr. Smith.
The company also is offering services through a partnership with Salesforce.com Inc. (CRM) that allows it to target small businesses with customer relationship management software and related services delivered online.
Like other tax preparers, Intuit typically reports losses in off-peak quarters.
For the current quarter, the company predicted a downbeat adjusted profit of 40 cents to 43 cents and revenue of $1.02 billion to $1.04 billion. Analysts surveyed by Thomson Reuters most recently expected 59 cents and $1.1 billion, respectively. Intuit also backed its full-year guidance.
The maker of TurboTax do-it-yourself tax software and QuickBooks small-business accounting software is changing its mix of services, spinning off some low-margin business services to focus on higher-margin online services such as managing customer relations.
Also, as Intuit expands globally, the company is developing online tools to give QuickBooks customers social media tools to manage relationships and increase repeat business. The company recently acquired Demandforce for $423.5 million to provide email, mobile and social tools to help small businesses automate marketing and customer communications.
For the quarter ended Oct. 31, Intuit reported a loss of $19 million, or six cents a share, from a year-earlier loss of $64 million, or 21 cents a share. The latest period included 11 cents a share in income from discontinued operations, stemming from the company's September sale of the Intuit Websites business, compared with a loss of two cents a year ago. Excluding stock-based compensation and other items, the loss from continuing operations was three cents a share, compared with eight cents last year.
Intuit in August forecast an adjusted loss of six to seven cents a share on revenue of $630 million to $640 million.
Revenue at its small-business segment rose 18%, led by 21% growth in its payments segment. Demandforce recorded over 60% growth in subscriptions and QuickBooks Online subscribers grew 29%, contributing to a 20% increase in the financial management solutions business.
Revenue from the company's consumer-tax unit fell to $36 million from $41 million a year ago, as customers filed fewer extended returns for the 2011 tax year compared with a year ago.
Shares closed Thursday at $58.77 and were up 18 cents after hours. The stock is up 12% so far this year.
Write to Steven D. Jones at email@example.com and Ben Fox Rubin at firstname.lastname@example.org
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