Intuit Reports First Quarter Results; Revenue Grew 46% Versus Year Ago - 1st qtr 2000 - Company Financial Information

Edge: Work-Group Computing Report, Nov 29, 1999

Intuit Inc. (NASDAQ: INTU) Tuesday announced the financial results for its first fiscal quarter ended October 31,1999.

Bill Campbell, Chairman and acting President and CEO remarked, "Intuit is executing on its e-finance strategy to use the power of the Internet and PC to revolutionize how people manage their financial lives. With a clear vision and solid operating plan, Intuit's fiscal year is off to a strong start. First quarter revenue was up 46% over the same quarter a year ago. This strength in our business will allow us to increase our investment in R&D and marketing over the coming quarters to expand our electronic finance initiatives."

Intuit reported revenue of $163.1 million for its first quarter 2000, an increase of 46% over the same quarter a year ago. Revenue from CRI, the payroll processing company acquired in the fourth quarter of fiscal 1999, was included in these results but not in the first quarter of fiscal 1999. Excluding this revenue, Intuit posted a 38% increase compared to the same quarter a year ago. Strong market demand for QuickBooks, sales from the launches of new versions of Quicken and continued growth in Internet-based revenue were largely responsible for this growth.

On a GAAP basis, the Company reported a net loss for the quarter of $61.7 million, or $0.33 per share, consistent with Intuit's seasonal revenue pattern which produces lower revenue and profits outside of the tax season. This quarter included an unrealized loss on the Company's investment in Excite @Home of approximately $17.3 million resulting from the re-measurement of this marketable security. The results for the same fiscal quarter last year reflected a net loss of $49.2 million, or $0.28 per share. (See Table A.)

On a pro forma basis (explained below), the Company reported a net loss for the quarter of $22.6 million, or $0.12 per share. Pro forma net loss for the same fiscal quarter last year was $26.8 million, or $0.15 per share. Expenditures to expand Internet businesses, increase market penetration of current software products and support the early Quicken 2000 launch led to the increase in first quarter expenses versus the same quarter a year ago. (See Table B)

All per share figures reflect the 3-for-1 stock split effective September 30, 1999.

Intuit's financial results reflect the highly seasonal nature of its businesses, particularly its tax preparation products. Historically, revenue is highest in Intuit's January and April quarters when the Company generates most of its tax product revenue and produces more than 100% of its annual profits.

The Company experiences significantly lower revenue in the July and October quarters, while operating expenses to develop new products and services continue at relatively consistent levels during these periods. As a result, Intuit typically has losses in the July and October quarters. In addition, Intuit's quarterly revenue pattern is inconsistent from year to year based in part on the variable timing of product launches. Therefore, annual results may provide a more meaningful comparison of operating results than quarter-over-quarter comparisons.

The GAAP financial results are prepared in accordance with generally accepted accounting principles and are shown in Table A. Pro forma financial information shown in Table B excludes acquisition-related charges and gains and losses related to the sale and re-measurement of marketable securities.

Business Highlights

"Intuit is defining and leading the new world of e-finance - and that strategy is paying off," said Scott D. Cook, Chairman of the Executive Committee. "Internet revenue increased 119% over last year's first quarter, and accounted for 19% of total revenue during the first quarter of fiscal 2000. With newly announced Internet initiatives, we are laying the groundwork for additional recurring revenue streams in future quarters."

Small Business Momentum Strong

QuickBooks, the market-leading small business accounting software, continued to experience strong demand, with first-quarter 2000 revenue up 78% over the prior year. QuickBooks accounts for more than 80% share of US accounting software dollars at retail, according to PC Data.

Intuit's Internet-based payroll service continued to ramp. During the first quarter, Intuit processed $342 million of online payrolls, up more than ten-fold from the first quarter a year ago and up 28% over the immediately prior quarter of fiscal 1999.

Intuit's is seizing a unique e-finance opportunity created by QuickBooks' large installed base. In November, Intuit announced the QuickBooks Internet Gateway and the commitments of nine business-to-business e-services firms to use it to deliver innovative electronic services through QuickBooks. Starting this winter, Intuit expects the gateway to provide QuickBooks users who purchase QuickBooks 2000 with one-click access to a range of e-products and services. It also opens up a one-of-a-kind gateway that e-services companies can use to reach the millions of QuickBooks businesses and to integrate their services into the workflow of small business at the point of need.