Your SlideShare is downloading. ×
Intuit investor presentation march 2014 v2
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Introducing the official SlideShare app

Stunning, full-screen experience for iPhone and Android

Text the download link to your phone

Standard text messaging rates apply

Intuit investor presentation march 2014 v2

899
views

Published on

Published in: Investor Relations

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
899
On Slideshare
0
From Embeds
0
Number of Embeds
5
Actions
Shares
0
Downloads
15
Comments
0
Likes
1
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Investor Presentation March 2014 @IntuitInc
  • 2. Forward Looking Statements These presentation materials include forward-looking statements. There are a number of factors that could cause our results to differ materially from our expectations. Please see the section entitled “Cautions About Forward-Looking Statements” in the enclosed Appendix for information regarding forward-looking statements and related risks and uncertainties. You can also learn more about these risks in our Form 10-K for fiscal 2013 and our other SEC filings, which are available on the Investor Relations page of Intuit's website at www.intuit.com. We assume no obligation to update any forward-looking statement. The information in this presentation is intended to outline our general product direction, but represents no obligation and should not be relied on in making a purchasing decision. Non-GAAP Financial Measures These presentations include certain non-GAAP financial measures. Please see the section entitled “About Non-GAAP Financial Measures” in the enclosed Appendix for an explanation of management’s use of these measures and a reconciliation to the most directly comparable GAAP financial measures.
  • 3. Our Mission: why we exist as a company To improve our customers’ financial lives so profoundly… they can’t imagine going back to the old way Small Business Consumer We serve these end customers Financial Management Solutions Solutions Ecosystem Small Businesses Tax Consumers “Simplify the Business of Life” Financial… grow & profit making & saving money, Productivity… turning drudgery into time for what matters most Network Effect …and those who serve them Compliance… Accountants & 3rd Party Contributors Confidence… Accountants Advisors Pro Tax think about it without even having to from the wisdom & experience of others
  • 4. Intuit’s Strategy: how we accelerate results To be a premier innovative growth company… Accelerating to Connected Services Intuit’s Growth Strategies Delivering Awesome Product Experiences FY’14-16 Operational Priorities • Amazing 1st Use Experiences: delivering the customer benefit • Reimagining Mobile 1st/ Mobile Only: design and capabilities Enabling the Contributions of Othersg “Network Effect Platforms” • Solving Multi-Sided Problems Well: creating a virtuous circle • Expanding Globally: platforms localized by users and developers Using Data to Create Delight • Enabling Customer Data: better products & break-through benefits
  • 5. Intuit’s Strategy: in service to strategic goals Small Business Financial Management Solutions Consumer Solutions Ecosystem Network Effect Accountants Advisors Tax Tax
  • 6. Intuit’s Strategy: how we accelerate results Upside Opportunity Delivering Awesome Product Experiences Use Competitive Alternatives 29M U.S. Small Businesses Don’t have FMS Pain FY’14-16 Operational Priorities QB Prospects Accelerating to Connected Services Intuit’s Growth Strategies Use QuickBooks To be a premier innovative growth company… U.S. Small Businesses We serve 5M of the 29M • Amazing 1st Use Experiences: delivering the customer benefit Global Small Businesses • Reimagining Mobile 1st/ Mobile Only: design and capabilities We serve 1% of 600M Global the 600M Small Businesses Enabling the Contributions of Othersg “Network Effect Platforms” • Solving Multi-Sided Problems Well: creating a virtuous circle QB Commerce We process <1% of $2T of Globally: • Expanding Commerce platforms localized by users and developers QB Commerce thru QB Using Data to Create Delight • Enabling100M “pre-accounting” customers  Mobile • Customer Data: better products & break-through benefits • Two-party interaction model
  • 7. Intuit’s Strategy: how we accelerate results 5 Yr. Goal: From 5M to 10M Customers To be a premier innovative growth company… 10 Accelerating to Connected Services Intuit’s Growth Strategies 3 Delivering Awesome Product Experiences 1 1 5 1 -4% 5Y CAGR Enabling the Contributions of Othersg “Network Effect Platforms” 2 22% 93% From >100K 3 1 1 2 34% 3 Using Data to Create Delight FY13 QB Desktop QBO US QBO ROW Adjacencies PreFY18 Accounting
  • 8. Intuit’s Strategy: how we accelerate results Well positioned to do the nations’ taxes To be a premier innovative growth company… Accelerating to Connected Services Intuit’s Growth Strategies Delivering Awesome Product Experiences Total individual CAGR Intuit leads in returns FY09growth FY’14-16 Operational Priorities U.S./Canada (M) FY13 categories • Amazing Pros 1st 171 Use Experiences: delivering the customer benefit 79 1% #1 Position • 27M returns • 33% share • Reimagining Mobile 1st/ Mobile Only: design and capabilities Stores Enabling the Contributions of Othersg “Network Effect Platforms” Using Data to Create Delight 22 (1%) #1 Position • Solving Multi-Sided Problems Well: creating a virtuous circle Soft5% • 37M 60 ware returns • 62% share (13%) Manual 10 FY13 • Expanding Globally: platforms localized by users and developers • Accelerated shift to cloud and mobile experiences • Churn between assisted and do-it-yourself categories • Enabling Customer Data: better products & break-through benefits
  • 9. Intuit’s Strategy: how we accelerate results 5 Yr. Goal: From 64M to 84M Filers To be a premier innovative growth company… 8 Intuit’s Growth Strategies 7 Accelerating to Connected Services 84 64 5 IRS/CRA grows 1.5% annually Delivering Awesome Product Experiences DIY category grows from 35% to 43% IRS/CRA Category Share within DIY & Pro grows 5 pts Enabling the Contributions of Othersg “Network Effect Platforms” Using Data to Create Delight FY13 Returns Share within Category FY18 Returns
  • 10. Be the “Operating System” Behind Small Business Success @IntuitInc
  • 11. Big Opportunity in Small Business 600M Global Small Businesses $2T of Commerce thru QB We serve <1% of the 600M We process ~1% of QB Commerce Don’t have FMS Pain 29M U.S. Small Businesses QB Prospects QB Commerce Use Competitive Alternatives Global Small Businesses Use QuickBooks U.S. Small Businesses We serve 5M of the 29M The Opportunity 10 M Active Customers Worldwide 10 pt/yr increase in solutions per user > $1B incremental revenue
  • 12. Our Platform Shift Is Accelerating Customers are connecting to the Intuit Cloud QB Online 2M 5M SMBs 100K Developers ~1.5B Bills Paid 1M 250K Accountants >90% Retail Share FY14 FY13 FY12 FY11 FY10 FY09 FY08 133K FY15 QB Desktop 1.6B Vendors 1.3M Payroll SMBs 400K Payments SMBs ~1B Invoices 4.2B Customers 30M Employees $2T in Commerce
  • 13. The Move to the Cloud Is Positive Lifetime Value of QuickBooks Online Exceeds Desktop $1,503 $1,049 $439 $382 Ecosystem Attach Software 1 Yr 5 Yr QB Pro 1 Yr 5 Yr QB Online QB Online ecosystem revenue growing 49% over last 5 years
  • 14. Do the Nations’ Taxes @IntuitInc
  • 15. Well Positioned: #1 in growing categories Total individual returns U.S./Canada (M) CAGR FY09FY13 Intuit leads in growth categories 171 #1 Position Pros 79 1% Stores 22 (1%) • 27M returns • 33% share #1 Position Software 60 5% Manual 10 (13%) FY13 • 37M returns • 62% share
  • 16. New Simple Filer: big opportunity Simple Filers Across All Methods 73M U.S./Canada Online Software Category 60M 62% share 22% share
  • 17. Intuit Financial Overview @IntuitInc
  • 18. Financial Principles We are striving for one True North outcome for Intuit (best we can be) • Grow organic revenue double digits • Grow revenue faster than expenses • Deploy cash to highest-yield opportunities • Maintain a strong balance sheet
  • 19. Revenue Growth Drivers Customers, Price, and Mix 100% 90% 80% 70% 60% 50% 40% 30% Mix / Other 20% Price 10% Customers 0% FY'12 FY'13 FY'14 FY'15 FY'16
  • 20. Revenue: Connected Services vs. Product ($M’s) FY’12-’16 CAGR 6,000 5,000 SW. Adv. Svcs 11-13% SaaS 15-17% 4,000 3,000 2,000 1,000 Product 0-1% 0 FY’12 FY’13 FY’14 FY’15 FY’16 Connected services: from 64% of revenue in FY’13 to 73% in FY’16
  • 21. Historical Use of Cash ($B’s) $2.0 $2.0 $1.4 $1.5 $1.0 M&A Repay Debt Dividends Share Repurchase $1.1 $1.0 $0.5 $0.5 $0.5 $0 FY’08 FY’09 FY’10 FY’11 FY’12 FY’13 $5 billion in Free Cash Flow, 98% returned to shareholders
  • 22. FY’14 Guidance FY’14 Growth Revenue $4,440M - $4,525M 6-8% Operating Income $1,580M - $1,610M 7-10% EPS $3.52 - $3.60 10-13% Note: Operating Income and EPS are non-GAAP financial measures.
  • 23. FY’14 Segment Plans FY’14 Growth SBG $2,270M – $2,310M 10 - 12% Consumer Group $1,765M – $1,795M 3 - 5% ProTax Group $405M - $420M 0 - 4%
  • 24. Financial Overview Beyond FY’14 Expected Ranges • Growth of 8% to 12% Revenue Operating Income EPS − SaaS revenue growing 15-17% a year − Connected Services mix shift from 64% to 73% • Double-digit growth, faster than revenue • Mid-teens EPS growth
  • 25. Appendix @IntuitInc
  • 26. TABLE 1: RECONCILIATION OF SELECTED NON-GAAP FINANCIAL MEASURES TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES (Dollars in millions) GAAP Fiscal 2013 Total revenue Cost of revenue: Cost of product revenue Cost of service and other revenue Amortization of acquired technology Total cost of revenue Operating expenses: Selling and marketing Research and development General and administrative Amortization of other acquired intangible assets Total operating expenses Operating income NonGAAP Fiscal 2013 Adjmts % of Rev $ 4,171 $ - $ 4,171 100.0% $ 130 429 18 577 $ - $ 130 423 553 13.3% $ $ $ $ [a] (6) [a] (18) [b] (24) $ 1,219 685 422 35 2,361 $ (64) (55) (59) (35) (213) $ 1,233 $ 237 [a] [a] [a] [b] $ $ 27.7% 15.1% 8.7% $ 1,155 630 363 2,148 $ 1,470 35.2% [a] Adjustments to exclude share-based compensation expense from non-GAAP financial measures. [b] Adjustments to exclude amortization of acquired technology and amortization of other acquired intangible assets from non-GAAP financial measures. See "About Non-GAAP Financial Measures“ 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.
  • 27. TABLE 2: RECONCILIATIONS OF FORWARD-LOOKING GUIDANCE FOR NON-GAAP FINANCIAL MEASURES TO PROJECTED GAAP REVENUE, OPERATING INCOME AND EPS (Dollars in millions, except per share amounts) Forward-Looking Guidance   GAAP Range of Estimate   From   Non-GAAP Range of Estimate   To Adjustments From To Twelve Months Ending July 31, 2014 Revenue $ 4,440 $ 4,525 $ Operating income $ 1,345 $ 1,375 $ Diluted earnings per share $ 3.11 $ 3.19 $ — $ 4,440 $ 4,525 235 [a] $ 1,580 $ 1,610 0.41 [b] $ 3.52 $ 3.60 [a] Reflects estimated adjustments for share-based compensation expense of approximately $196 million; amortization of acquired technology of approximately $25 million; and amortization of other acquired intangible assets of approximately $14 million. [b] Reflects the estimated adjustments in item [a], income taxes related to these adjustments, and a net gain on discontinued operations of $46 million. See "About Non-GAAP Financial Measures“ 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.
  • 28. TABLE 3: CALCULATION OF FREE CASH FLOW (Dollars in millions) Fiscal 2013 Net cash provided by operating activities $ Less capital expenditures: Purchases of property and equipment Capitalization of internal use software Total capital expenditures Free cash flow 1,366 Fiscal 2012 $ (129) (66) (195) $ 1,171 1,246 Fiscal 2011 $ (135) (51) (186) $ 1,060 1,013 Fiscal 2010 $ (114) (99) (213) $ 800 998 Fiscal 2009 $ (74) (56) (130) $ 868 812 Fiscal 2008 $ (131) (51) (182) $ 630 830 (262) (44) (306) $ 524 To supplement our statements of cash flows prepared in accordance with GAAP, we use free cash flow to analyze cash flow generated from operations. We define free cash flow as net cash provided by operating activities less total capital expenditures. This non-GAAP financial measure should not be considered as a substitute for, or superior to, GAAP net income as an indicator of our operating performance or GAAP cash flows from operating activities as a measure of our liquidity. See "About Non-GAAP Financial Measures“ 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.
  • 29. Cautions About Forward-Looking Statements This presentation includes "forward-looking statements" which are subject to safe harbors created under the U.S. federal securities laws. All statements included in this presentation that address activities, events or developments that Intuit expects, believes or anticipates will or may occur in the future are forward looking statements, including: our expected market, customer and share growth; our goals, our ability to achieve them, and their impact on our business; our opportunities and strategies to grow our business; our expected revenue, operating income and earnings per share results and growth; our expectations regarding future dividends, share repurchases and ROIC improvements; our expectations for our product and service offerings and cross-sell opportunities; and future market trends. 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; the competitive environment; governmental encroachment in our tax businesses or other governmental activities or public policy affecting the preparation and filing of tax returns; our ability to innovate and adapt to technological change; business interruption or failure of our information technology and communication systems; problems with implementing upgrades to our customer facing applications and supporting information technology infrastructure; any failure to properly use and protect personal customer information and data; our ability to develop, manage and maintain critical third party business relationships; increased government regulation of our businesses; any failure to process transactions effectively or to adequately protect against potential fraudulent activities; any significant offering quality problems or delays; our participation in the Free File Alliance; the global economic environment; changes in the total number of tax filings that are submitted to government agencies due to economic conditions or otherwise; the highly seasonal and unpredictable nature of our revenue; our inability to attract, retain and develop highly skilled employees; increased risks associated with international operations; our ability to repurchase shares; 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; disruptions, expenses and risks associated with our acquisitions and divestitures; amortization of acquired intangible assets and impairment charges; our use of significant amounts of debt to finance acquisitions or other activities; and the cost of, and potential adverse results in, litigation involving intellectual property, antitrust, shareholder and other matters. More details about these and other risks that may impact our business are included in our Form 10-K for fiscal 2013 and in our other SEC filings. You can locate these reports through our website at http://investors.intuit.com. Fiscal 2014 guidance speaks only as of the date it was publicly issued by Intuit. Other forwardlooking statements represent the judgment of the management of Intuit as of the date of this presentation. We do not undertake any duty to update any forward-looking statement or other information in this presentation.
  • 30. About Non-GAAP Financial Measures INTUIT INC. ABOUT NON-GAAP FINANCIAL MEASURES The accompanying presentation dated March 2014 contains non-GAAP financial measures. Table 1, Table 2 and Table 3 reconcile the non-GAAP financial measures in that presentation 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), non-GAAP net income (loss) per share, and free cash flow. 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 Charges for historical use of technology licensing rights 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 of excluded items Discontinued operations
  • 31. About Non-GAAP Financial Measures (cont.) 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. Charges for historical use of technology licensing rights. We exclude from our non-GAAP financial measures the portion of technology licensing fees that relates to historical use of that technology. 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 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 other investments. Income tax effects of excluded items and certain discrete tax items. We exclude from our non-GAAP financial measures the income tax effects of the items described above, as well as income tax effects related to business combinations. In addition, the effects of one-time income tax adjustments recorded in a specific quarter for GAAP purposes are reflected on a forecasted basis in our non-GAAP financial measures. This is consistent with how we plan, forecast and evaluate our operating results. 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 2 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 other investments.