Intuit (INTU) Q1 2025 Earnings Call Transcript

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Intuit (INTU 4.32%)
Q1 2025 Earnings Call
Nov 21, 2024, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon. My name is David, and I will be your conference operator. At this time, I’d like to welcome everyone to Intuit’s first quarter fiscal year 2025 conference call. All lines have been placed on mute to prevent any background noise.

After the speakers’ remarks, there will be a question-and-answer period. [Operator instructions] With that, I’ll now turn the call over to Kim Watkins, Intuit’s vice president of investor relations. Ms. Watkins?

Kim A. Watkins — Vice President, Investor Relations

Thanks, David. Good afternoon, and welcome to Intuit’s first quarter fiscal 2025 conference call. I’m here with Intuit’s CEO, Sasan Goodarzi; and our CFO, Sandeep Aujla. Before we start, I’d like to remind everyone that our remarks will include forward-looking statements.

There are a number of factors that could cause Intuit’s results to differ materially from our expectations. You can learn more about these risks in the press release we issued earlier this afternoon, our Form 10-K for fiscal 2024, and our other SEC filings. All of those documents are available on the investor relations page of Intuit’s website at intuit.com. We assume no obligation to update any forward-looking statement.

Some of the numbers in these remarks are presented on a non-GAAP basis. We’ve reconciled the comparable GAAP and non-GAAP numbers in today’s press release. 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. A copy of our prepared remarks and supplemental financial information will be available on our website after this call ends.

With that, I’ll turn the call over to Sasan.

Sasan K. Goodarzi — Chief Executive Officer and Director

Great. Thank you, Kim, and thanks to all of you for joining us today. It was wonderful to see many of you at investor day. We hope you are inspired by our momentum and innovation that demonstrates the power of our AI-driven expert platform strategy, which is delivering tangible benefits for our customers and fueling into its growth.

With that as context, let’s talk about the first quarter. We have strong start to the year, growing revenue 10% driven by our global business solutions group online ecosystem revenue growth of 20% and Credit Karma revenue growth of 29%. We’re confident in delivering double-digit revenue growth and margin expansion this year, and we’re reiterating our full year guidance. The future is here and it’s AI driven.

And it will fundamentally transform every part of our work and personal life. We’ve transformed the company from a tax and accounting platform to an AI-driven expert platform. We’re leading this transformation by creating done-for-you experiences where the customer is always in control. Enabled by AI, with access to AI powered human experts, our platform fuels the financial success of consumers and businesses.

We have a significant competitive advantage with our scale of data, data services, AI capabilities, ecosystem of applications, and our large network of AI-powered virtual experts. We’re disrupting the categories we operate in to drive better money outcomes for consumers and businesses. The progress we’ve delivered and the proof points we’re observing continue to bolster our confidence in our strategy. I will now share how our Big Bets are solving customer problems and powering our success as a platform.

Starting with our consumer platform, Big Bet 3 is focused on helping customers make smart money decisions, take steps to improve their financial health year round, achieve their best tax outcome, and accelerate the receipt of their refund. We’re focusing on winning as an AI-driven expert platform by leading with ease of use, speed to completion, and best price for our customers. Our strategy is to first win in the do-it-yourself tax category by improving value for low-income filers, accelerating growth with more complex filers, and offering fast refund access. Second, we’re disrupting the assisted tax category.

We’re showing how the new way of taxes done for you is superior in experience, speed, and price. We’ve expanded marketing to drive awareness ahead of tax season and are working on methods to surface our experts in local search and match customers with the best expert for them. Third, we’re driving year-round engagement with our consumer platform, accelerating money benefits, including refund access and growing Credit Karma across our verticals, such as prime and insurance, all of which accelerates monetization. Moving on to our business platform, our vision is to help customers run and grow their businesses end to end.

We made significant progress during the quarter across two of our Big Bets. Our first big bet is to revolutionize speed to benefit, delivering done-for-you experiences with Intuit Assist, our gen AI-powered financial assistant. After successfully piloting Intuit Assist with over 2 million customers, it is now generally available to all U.S. QuickBooks Online customers.

To help businesses manage cash flow, Intuit Assist uses AI agents to automatically turn emails, electronic documents, and hand-written notes into estimates, invoices, and bills. It spots potential cash flow shortages in real-time and suggests solutions like applying for a line of credit. It also generates invoice reminders to help customers get paid 45% faster, an average of five days sooner, and automates accounting by matching transactions to bills and invoices for review. This is the power of our AI-driven expert platform, delivering five tangible benefits to our customers, which we expect to drive increased adoption of our platform.

And we are just getting started. Shifting to Big Bet 5, disrupt the mid-market, which represents an $89 billion TAM. We already have 800,000 mid-market customers in our franchise who can grow into our QBO Advanced and Intuit Enterprise Suite offerings. In fiscal 2024, QBO Advanced customers grew 28%, online ecosystem revenue grew 36%, and ecosystem ARPC was 5x that of the rest of the QBO base.

We introduced Intuit Enterprise Suite, or IES, to expand further upmarket from where we are today with a configurable suite of integrated financial products for mid-market businesses. With IES, we’re focusing on addressing the needs of complex businesses, enabling multi-entity management, leveraging AI agents to boost productivity through powerful automation, and delivering actionable insights. While it’s early days, I’ll share two customer examples that highlight the opportunity ahead and give us confidence in our strategy. We signed an eight-entity RV park operator with approximately $10 million in annual revenue who was evaluating competitive solutions to streamline its workflow and consolidate reporting across entities.