Intuit Reaffirms First Quarter and Fiscal 2017 Guidance; Hosts Investor Day
Wednesday, September 21, 2016 8:00:06 AM ET
(INTU ) reaffirmed its financial guidance for the first quarter
and full fiscal year 2017. The companys fiscal year runs from Aug. 1 to
Intuit reaffirmed its guidance in conjunction with Investor
Day, being held today at the companys Mountain View, Calif.,
headquarters. Chairman and Chief Executive Officer Brad
Smith and company leaders will address the companys priorities in
support of its strategy to be the operating system behind small business
success, and to do the nations taxes in the U.S. and Canada.
"With a strong finish to fiscal 2016, we have the wind at our backs,"
said Smith. "Our time is now - to capitalize on the customer and
technology trends we see in the market. Were working to take our
offerings to the next level, moving mobile beyond touch screens and
adding voice recognition. Creating indispensable connections across our
platforms. Applying machine learning to create personalized experience
for our customers, while continuously focusing on securing Intuit and
our customers data."
Reiterates First-quarter and Fiscal 2017 Guidance
Intuit reiterated the first-quarter and full-year fiscal 2017 guidance
that was previously announced on Aug. 23. For the first quarter, which
ends Oct. 31, the company is reiterating the guidance set and 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.
QuickBooks Online subscribers of approximately 1.6 million.
For fiscal year 2017, which ends July 31, the company is reiterating the
guidance set and 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
QuickBooks Online subscribers of 2.0 million to 2.2 million.
Investor Day: How to Participate
The event will be broadcast live from 8:00 a.m. to 11:30 a.m. Pacific
time and a webcast will be available on Intuits website at http://investors.intuit.com /events/event-details/2016/Intuits-Annual-Investor-Day-Video-Broadcast-2016/default.aspx">http://investors.intuit.com /events/event-details/2016/Intuits-Annual-Investor-Day-Video-Broadcast-2016/default.aspx .
A replay of the video broadcast and webcast will be available on
Intuits website two hours after the meeting ends.
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(R) and
TurboTax(R), 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 Intuits ProConnect
brand portfolio includes ProConnect
and Lacerte(R), the
companys leading tax preparation offerings for professional accountants.
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, Australia and
other locations. More information can be found at www.intuit.com.
About Non-GAAP Financial Measures
This press release includes 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 accompanying Table 1 and the section titled "About
Non-GAAP Financial Measures." A copy of the press release issued by
Intuit today can be found on the investor relations page of Intuits Web
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; Intuits prospects for the business in fiscal
2017 and beyond; expectations regarding timing and growth of revenue for
each of Intuits reporting segments and from current or future products
and services; expectations regarding customer growth; expectations
regarding changes to our products and their impact on Intuits business;
expectations regarding the impact of our strategic decisions on Intuits
business; and all of the statements under the heading "Forward-looking
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 2016 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 September 21,
2016 and we do not undertake any duty to update any forward-looking
statement or other information in these materials.
RECONCILIATIONS OF FORWARD-LOOKING GUIDANCE FOR NON-GAAP
TO PROJECTED GAAP REVENUE, OPERATING INCOME (LOSS) AND EPS
(In millions, except per share amounts)
Range of Estimate Range of Estimate
From To Adjustments From To
---------------------------------- -------------- -------------- ------------------------------ --------------------------------
Three Months Ending
October 31, 2016
Revenue $ 740 $ 760 $ - $ 740 $ 760
Operating income (loss) $ (75 ) $ (65 ) $ 85 [a] $ 10 $ 20
Diluted net 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
1 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.
ABOUT NON-GAAP FINANCIAL MEASURES
The accompanying press release dated September 21, 2016 contains
non-GAAP financial measures. Table 1 reconciles 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
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 securities and other investments
Income tax effects and adjustments
We believe that these non-GAAP financial measures provide meaningful
supplemental information regarding Intuits 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
The following are descriptions of the items we exclude from our non-GAAP
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
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
Gains and losses on debt 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 securities and
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 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 1
include all information reasonably available to Intuit at the date of
this presentation. 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
View source version on businesswire.com: http://www.businesswire.com/news/home/20160921005440/en/
SOURCE: Intuit Inc.
Jerry Natoli, 650-944-6181
Diane Carlini, 650-944-6251