Delaware | 000-21180 | 77-0034661 | ||
(State or other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||
2700 Coast Avenue Mountain View, CA 94043 | ||||
(Address of Principal Executive Offices) (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
99.01 | Press release issued on August 23, 2018, reporting financial results for the quarter and year ended July 31, 2018 and announcing the cash dividend.* | |
99.02 | Press release issued on August 23, 2018, reporting leadership succession plans effective January 1, 2019.* |
* | This exhibit is intended to be furnished and shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended. |
Date: August 23, 2018 | INTUIT INC. | |||
By: | /s/ Michelle M. Clatterbuck | |||
Michelle M. Clatterbuck | ||||
Executive Vice President and Chief Financial Officer |
* | This exhibit is intended to be furnished and shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended. |
Contacts: | Investors | Media | ||
Kim Watkins | Diane Carlini | |||
Intuit Inc. | Intuit Inc. | |||
650-944-3324 | 650-944-6251 | |||
kim_watkins@intuit.com | diane_carlini@intuit.com |
• | Grew revenue to $988 million, up 17 percent year-over-year. |
• | Grew Online Ecosystem revenue by 43 percent. |
• | Grew revenue to nearly $6.0 billion, up 15 percent year-over-year. |
• | Grew Online Ecosystem revenue by 40 percent. |
• | Finished the year with over 3.4 million QuickBooks Online subscribers, growth of 43 percent. |
• | Grew Consumer Group revenue 14 percent. |
• | Increased GAAP operating income to $1.5 billion, up from $1.4 billion in the prior year. |
• | Increased non-GAAP operating income to $2.0 billion, up 14 percent. |
• | Increased GAAP and non-GAAP earnings per share by 25 percent and 27 percent respectively. |
GAAP | Non-GAAP | |||||
Q4 FY 18 | Q4 FY 17 | Change | Q4 FY 18 | Q4 FY 17 | Change | |
Revenue | $988 | $842 | 17% | $988 | $842 | 17% |
Operating Income (Loss) | $(81) | $(10) | NM | $104 | $78 | 33% |
Earnings Per Share | $0.18 | $0.09 | 100% | $0.32 | $0.20 | 60% |
GAAP | Non-GAAP | |||||
FY 18 | FY 17 | Change | FY 18 | FY 17 | Change | |
Revenue | $5,964 | $5,177 | 15% | $5,964 | $5,177 | 15% |
Operating Income | $1,497 | $1,395 | 7% | $1,981 | $1,735 | 14% |
Earnings Per Share | $4.64 | $3.72 | 25% | $5.61 | $4.41 | 27% |
• | Grew total Small Business and Self-Employed Group revenue 20 percent for the quarter and 18 percent for the year. |
• | Added over 1 million QuickBooks Online subscribers during fiscal year 2018. |
• | Increased the QuickBooks Online subscriber base in the U.S. 38 percent, to approximately 2.6 million, and outside the U.S. 62 percent to over 800,000 subscribers. |
• | Increased QuickBooks Self-Employed subscribers to nearly 720,000. |
• | Grew Consumer Group revenue by 14 percent for the year. |
• | Increased professional tax revenue in the Strategic Partner Group by 4 percent for the year. |
• | Repurchased over $270 million of stock during fiscal year 2018. |
• | Received board approval for a new $2 billion repurchase authorization, bringing the total authorization to $3.2 billion to repurchase shares, including the remaining amount on the prior authorization. |
• | The board approved a quarterly dividend of $0.47 per share, payable October 18, 2018. This represents a 21 percent increase versus last year. |
• | Small Business and Self-Employed Group: growth of 9 to 11 percent. |
• | Consumer Group: growth of 9 to 10 percent. |
• | Strategic Partner Group: growth of 2 to 4 percent. |
• | Total company revenue growth range of 10 to 12 percent, |
• | GAAP diluted earnings per share of $5.35 to $5.45, and |
• | Non-GAAP diluted earnings per share of $6.50 to $6.60. |
Three Months Ended | Twelve Months Ended | ||||||||||||||
July 31, 2018 | July 31, 2017 | July 31, 2018 | July 31, 2017 | ||||||||||||
Net revenue: | |||||||||||||||
Product | $ | 322 | $ | 313 | $ | 1,462 | $ | 1,376 | |||||||
Service and other | 666 | 529 | 4,502 | 3,801 | |||||||||||
Total net revenue | 988 | 842 | 5,964 | 5,177 | |||||||||||
Costs and expenses: | |||||||||||||||
Cost of revenue: | |||||||||||||||
Cost of product revenue | 25 | 25 | 112 | 120 | |||||||||||
Cost of service and other revenue | 201 | 155 | 850 | 677 | |||||||||||
Amortization of acquired technology | 5 | 3 | 15 | 12 | |||||||||||
Selling and marketing | 308 | 265 | 1,634 | 1,420 | |||||||||||
Research and development | 311 | 263 | 1,186 | 998 | |||||||||||
General and administrative | 217 | 141 | 664 | 553 | |||||||||||
Amortization of other acquired intangible assets | 2 | — | 6 | 2 | |||||||||||
Total costs and expenses [A] | 1,069 | 852 | 4,467 | 3,782 | |||||||||||
Operating income (loss) | (81 | ) | (10 | ) | 1,497 | 1,395 | |||||||||
Interest expense | (4 | ) | (3 | ) | (20 | ) | (31 | ) | |||||||
Interest and other income (expense), net | 11 | 3 | 26 | 3 | |||||||||||
Income (loss) before income taxes | (74 | ) | (10 | ) | 1,503 | 1,367 | |||||||||
Income tax provision (benefit) [B] | (123 | ) | (34 | ) | 292 | 396 | |||||||||
Net income | $ | 49 | $ | 24 | $ | 1,211 | $ | 971 | |||||||
Basic net income per share | $ | 0.19 | $ | 0.09 | $ | 4.72 | $ | 3.78 | |||||||
Shares used in basic per share calculations | 258 | 257 | 256 | 257 | |||||||||||
Diluted net income per share | $ | 0.18 | $ | 0.09 | $ | 4.64 | $ | 3.72 | |||||||
Shares used in diluted per share calculations | 263 | 261 | 261 | 261 | |||||||||||
Cash dividends declared per common share | $ | 0.39 | $ | 0.34 | $ | 1.56 | $ | 1.36 |
[A] | The following table summarizes the total share-based compensation expense that we recorded in operating income (loss) for the periods shown. |
Three Months Ended | Twelve Months Ended | ||||||||||||||
(in millions) | July 31, 2018 | July 31, 2017 | July 31, 2018 | July 31, 2017 | |||||||||||
Cost of revenue | $ | 13 | $ | 2 | $ | 43 | $ | 8 | |||||||
Selling and marketing | 26 | 22 | 101 | 88 | |||||||||||
Research and development | 34 | 33 | 133 | 122 | |||||||||||
General and administrative | 26 | 28 | 105 | 108 | |||||||||||
Total share-based compensation expense | $ | 99 | $ | 85 | $ | 382 | $ | 326 |
[B] | We compute our provision for or benefit from income taxes by applying the estimated annual effective tax rate to income or loss from recurring operations and adding the effects of any discrete income tax items specific to the period. |
Fiscal 2018 | |||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Full Year | |||||||||||||||
GAAP operating income (loss) | $ | (57 | ) | $ | 20 | $ | 1,615 | $ | (81 | ) | $ | 1,497 | |||||||
Amortization of acquired technology | 2 | 3 | 5 | 5 | 15 | ||||||||||||||
Amortization of other acquired intangible assets | 1 | 1 | 2 | 2 | 6 | ||||||||||||||
Professional fees for business combinations | — | 2 | — | — | 2 | ||||||||||||||
Loss on sale of long-lived assets | — | — | — | 79 | 79 | ||||||||||||||
Share-based compensation expense | 97 | 94 | 92 | 99 | 382 | ||||||||||||||
Non-GAAP operating income (loss) | $ | 43 | $ | 120 | $ | 1,714 | $ | 104 | $ | 1,981 | |||||||||
GAAP net income (loss) | $ | (17 | ) | $ | (21 | ) | $ | 1,200 | $ | 49 | $ | 1,211 | |||||||
Amortization of acquired technology | 2 | 3 | 5 | 5 | 15 | ||||||||||||||
Amortization of other acquired intangible assets | 1 | 1 | 2 | 2 | 6 | ||||||||||||||
Professional fees for business combinations | — | 2 | — | — | 2 | ||||||||||||||
Loss on sale of long-lived assets | — | — | — | 79 | 79 | ||||||||||||||
Share-based compensation expense | 97 | 94 | 92 | 99 | 382 | ||||||||||||||
Net (gain) loss on debt securities and other investments | 2 | 2 | — | 2 | 6 | ||||||||||||||
Other income from divested businesses [A] | — | — | (8 | ) | — | (8 | ) | ||||||||||||
2017 Tax Act [B] | — | 39 | 5 | (1 | ) | 43 | |||||||||||||
Other income tax effects and adjustments [C] | $ | (56 | ) | $ | (29 | ) | $ | (36 | ) | $ | (150 | ) | $ | (271 | ) | ||||
Non-GAAP net income (loss) | $ | 29 | $ | 91 | $ | 1,260 | $ | 85 | $ | 1,465 | |||||||||
GAAP diluted net income (loss) per share | $ | (0.07 | ) | $ | (0.08 | ) | $ | 4.59 | $ | 0.18 | $ | 4.64 | |||||||
Amortization of acquired technology | 0.01 | 0.01 | 0.02 | 0.02 | 0.06 | ||||||||||||||
Amortization of other acquired intangible assets | — | — | 0.01 | 0.01 | 0.02 | ||||||||||||||
Professional fees for business combinations | — | 0.01 | — | — | 0.01 | ||||||||||||||
Loss on sale of long-lived assets | — | — | — | 0.30 | 0.30 | ||||||||||||||
Share-based compensation expense | 0.38 | 0.36 | 0.35 | 0.38 | 1.46 | ||||||||||||||
Net (gain) loss on debt securities and other investments | 0.01 | 0.01 | — | 0.01 | 0.02 | ||||||||||||||
Other income from divested businesses [A] | — | — | (0.03 | ) | — | (0.03 | ) | ||||||||||||
2017 Tax Act [B] | — | 0.15 | 0.02 | — | 0.17 | ||||||||||||||
Other income tax effects and adjustments [C] | (0.22 | ) | (0.11 | ) | (0.14 | ) | (0.58 | ) | (1.04 | ) | |||||||||
Non-GAAP diluted net income (loss) per share | $ | 0.11 | $ | 0.35 | $ | 4.82 | $ | 0.32 | $ | 5.61 | |||||||||
Shares used in GAAP diluted per share calculation | 256 | 256 | 262 | 263 | 261 | ||||||||||||||
Shares used in non-GAAP diluted per share calculation | 259 | 260 | 262 | 263 | 261 |
[A] | During the three months ended April 30, 2018, we received payments from contingent earn out provisions related to businesses we previously divested. |
[B] | The 2017 Tax Act adjustments relate to the provisional tax expense for the re-measurement of deferred tax balances at the enacted lower tax rates. |
[C] | As discussed in “About Non-GAAP Financial Measures - Income Tax Effects and Adjustments” following Table J, our non-GAAP tax rate eliminates the effects of non-recurring and period specific items. Other income tax adjustments consist primarily of the tax impact of the non-GAAP pre-tax adjustments, which includes the loss on the sale of long-lived assets; the excess tax benefits on share-based compensation; and the tax benefits on a loss from a subsidiary reorganization. |
Fiscal 2017 | |||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Full Year | |||||||||||||||
GAAP operating income (loss) | $ | (61 | ) | $ | 22 | $ | 1,444 | $ | (10 | ) | $ | 1,395 | |||||||
Amortization of acquired technology | 3 | 3 | 3 | 3 | 12 | ||||||||||||||
Amortization of other acquired intangible assets | 1 | — | 1 | — | 2 | ||||||||||||||
Share-based compensation expense | 89 | 81 | 71 | 85 | 326 | ||||||||||||||
Non-GAAP operating income (loss) | $ | 32 | $ | 106 | $ | 1,519 | $ | 78 | $ | 1,735 | |||||||||
GAAP net income (loss) | $ | (30 | ) | $ | 13 | $ | 964 | $ | 24 | $ | 971 | ||||||||
Amortization of acquired technology | 3 | 3 | 3 | 3 | 12 | ||||||||||||||
Amortization of other acquired intangible assets | 1 | — | 1 | — | 2 | ||||||||||||||
Share-based compensation expense | 89 | 81 | 71 | 85 | 326 | ||||||||||||||
Net (gain) loss on debt securities and other investments | 1 | 6 | 1 | 1 | 9 | ||||||||||||||
Income tax effects and adjustments [A] | (49 | ) | (36 | ) | (25 | ) | (60 | ) | (170 | ) | |||||||||
Non-GAAP net income (loss) | $ | 15 | $ | 67 | $ | 1,015 | $ | 53 | $ | 1,150 | |||||||||
GAAP diluted net income (loss) per share | $ | (0.12 | ) | $ | 0.05 | $ | 3.70 | $ | 0.09 | $ | 3.72 | ||||||||
Amortization of acquired technology | 0.01 | 0.01 | 0.01 | 0.01 | 0.05 | ||||||||||||||
Amortization of other acquired intangible assets | 0.01 | — | 0.01 | — | 0.01 | ||||||||||||||
Share-based compensation expense | 0.34 | 0.31 | 0.27 | 0.33 | 1.25 | ||||||||||||||
Net (gain) loss on debt securities and other investments | 0.01 | 0.03 | 0.01 | — | 0.03 | ||||||||||||||
Income tax effects and adjustments [A] | (0.19 | ) | (0.14 | ) | (0.10 | ) | (0.23 | ) | (0.65 | ) | |||||||||
Non-GAAP diluted net income (loss) per share | $ | 0.06 | $ | 0.26 | $ | 3.90 | $ | 0.20 | $ | 4.41 | |||||||||
Shares used in GAAP diluted per share calculation | 258 | 260 | 260 | 261 | 261 | ||||||||||||||
Shares used in non-GAAP diluted per share calculation | 261 | 260 | 260 | 261 | 261 |
[A] | As discussed in “About Non-GAAP Financial Measures - Income Tax Effects and Adjustments” following Table J, our long-term non-GAAP tax rate eliminates the effects of non-recurring and period specific items. Consequently, our non-GAAP results have been adjusted to exclude the the excess tax benefits related to share-based compensation. See note B to Table A for more information. |
July 31, 2018 | July 31, 2017 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,464 | $ | 529 | |||
Investments | 252 | 248 | |||||
Accounts receivable, net | 98 | 103 | |||||
Income taxes receivable | 39 | 63 | |||||
Prepaid expenses and other current assets | 184 | 100 | |||||
Current assets before funds held for customers | 2,037 | 1,043 | |||||
Funds held for customers | 367 | 372 | |||||
Total current assets | 2,404 | 1,415 | |||||
Long-term investments | 13 | 31 | |||||
Property and equipment, net | 812 | 1,030 | |||||
Goodwill | 1,611 | 1,295 | |||||
Acquired intangible assets, net | 61 | 22 | |||||
Long-term deferred income taxes | 87 | 132 | |||||
Other assets | 190 | 143 | |||||
Total assets | $ | 5,178 | $ | 4,068 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Short-term debt | $ | 50 | $ | 50 | |||
Accounts payable | 178 | 157 | |||||
Accrued compensation and related liabilities | 369 | 300 | |||||
Deferred revenue | 961 | 887 | |||||
Other current liabilities | 191 | 178 | |||||
Current liabilities before customer fund deposits | 1,749 | 1,572 | |||||
Customer fund deposits | 367 | 372 | |||||
Total current liabilities | 2,116 | 1,944 | |||||
Long-term debt | 388 | 438 | |||||
Long-term deferred revenue | 197 | 202 | |||||
Other long-term obligations | 123 | 130 | |||||
Total liabilities | 2,824 | 2,714 | |||||
Stockholders’ equity | 2,354 | 1,354 | |||||
Total liabilities and stockholders’ equity | $ | 5,178 | $ | 4,068 |
Twelve Months Ended | |||||||
July 31, 2018 | July 31, 2017 | ||||||
Cash flows from operating activities: | |||||||
Net income | $ | 1,211 | $ | 971 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | 228 | 214 | |||||
Amortization of acquired intangible assets | 25 | 22 | |||||
Share-based compensation expense | 382 | 326 | |||||
Loss on sale of long-lived assets | 79 | — | |||||
Deferred income taxes | 51 | 8 | |||||
Other | 6 | 13 | |||||
Total adjustments | 771 | 583 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 5 | 5 | |||||
Income taxes receivable | (1 | ) | (44 | ) | |||
Prepaid expenses and other assets | (31 | ) | (9 | ) | |||
Accounts payable | 12 | — | |||||
Accrued compensation and related liabilities | 75 | 10 | |||||
Deferred revenue | 66 | 83 | |||||
Other liabilities | 4 | — | |||||
Total changes in operating assets and liabilities | 130 | 45 | |||||
Net cash provided by operating activities | 2,112 | 1,599 | |||||
Cash flows from investing activities: | |||||||
Purchases of corporate and customer fund investments | (407 | ) | (352 | ) | |||
Sales of corporate and customer fund investments | 128 | 359 | |||||
Maturities of corporate and customer fund investments | 286 | 183 | |||||
Net change in cash and cash equivalents held to satisfy customer fund obligations | 5 | (68 | ) | ||||
Net change in customer fund deposits | (5 | ) | 68 | ||||
Purchases of property and equipment | (124 | ) | (230 | ) | |||
Acquisitions of businesses, net of cash acquired | (363 | ) | — | ||||
Originations of term loans to small businesses | (137 | ) | — | ||||
Principal repayments of term loans from small businesses | 82 | — | |||||
Other | 3 | (45 | ) | ||||
Net cash used in investing activities | (532 | ) | (85 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from borrowings under revolving credit facilities | 800 | 150 | |||||
Repayments on borrowings under revolving credit facilities | (800 | ) | (150 | ) | |||
Repayment of debt | (50 | ) | (512 | ) | |||
Proceeds from issuance of stock under employee stock plans | 295 | 226 | |||||
Payments for employee taxes withheld upon vesting of restricted stock units | (199 | ) | (153 | ) | |||
Cash paid for purchases of treasury stock | (272 | ) | (839 | ) | |||
Dividends and dividend rights paid | (407 | ) | (353 | ) | |||
Other | (1 | ) | (1 | ) | |||
Net cash used in financing activities | (634 | ) | (1,632 | ) | |||
Effect of exchange rates on cash and cash equivalents | (11 | ) | 9 | ||||
Net increase (decrease) in cash and cash equivalents | 935 | (109 | ) | ||||
Cash and cash equivalents at beginning of period | 529 | 638 | |||||
Cash and cash equivalents at end of period | $ | 1,464 | $ | 529 |
Restated for New Revenue Standard | As Reported | Change | |||||||||||||||||||||
Twelve Months Ended July 31, | Twelve Months Ended July 31, | Twelve Months Ended July 31, | |||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
Net revenue: | |||||||||||||||||||||||
Product | $ | 1,624 | $ | 1,483 | $ | 1,462 | $ | 1,376 | $ | 162 | $ | 107 | |||||||||||
Service and other | 4,401 | 3,713 | 4,502 | 3,801 | (101 | ) | (88 | ) | |||||||||||||||
Total net revenue | 6,025 | 5,196 | 5,964 | 5,177 | 61 | 19 | |||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Cost of revenue: | |||||||||||||||||||||||
Cost of product revenue | 82 | 89 | 112 | 120 | (30 | ) | (31 | ) | |||||||||||||||
Cost of service and other revenue | 881 | 709 | 850 | 677 | 31 | 32 | |||||||||||||||||
Amortization of acquired technology | 15 | 12 | 15 | 12 | — | — | |||||||||||||||||
Selling and marketing | 1,631 | 1,415 | 1,634 | 1,420 | (3 | ) | (5 | ) | |||||||||||||||
Research and development | 1,186 | 998 | 1,186 | 998 | — | — | |||||||||||||||||
General and administrative | 664 | 553 | 664 | 553 | — | — | |||||||||||||||||
Amortization of other acquired intangible assets | 6 | 2 | 6 | 2 | — | — | |||||||||||||||||
Total costs and expenses | 4,465 | 3,778 | 4,467 | 3,782 | (2 | ) | (4 | ) | |||||||||||||||
Operating income from continuing operations | 1,560 | 1,418 | 1,497 | 1,395 | 63 | 23 | |||||||||||||||||
Interest expense | (20 | ) | (31 | ) | (20 | ) | (31 | ) | — | — | |||||||||||||
Interest and other income (expense), net | 26 | 3 | 26 | 3 | — | — | |||||||||||||||||
Income before income taxes | 1,566 | 1,390 | 1,503 | 1,367 | 63 | 23 | |||||||||||||||||
Income tax provision | 237 | 405 | 292 | 396 | (55 | ) | 9 | ||||||||||||||||
Net income | $ | 1,329 | $ | 985 | $ | 1,211 | $ | 971 | $ | 118 | $ | 14 | |||||||||||
Basic net income per share | $ | 5.18 | $ | 3.83 | $ | 4.72 | $ | 3.78 | $ | 0.46 | $ | 0.05 | |||||||||||
Diluted net income per share | $ | 5.09 | $ | 3.78 | $ | 4.64 | $ | 3.72 | $ | 0.45 | $ | 0.06 |
Fiscal 2018 (ASC 606) | |||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Full Year | |||||||||||||||
GAAP operating income (loss) | $ | (35 | ) | $ | 194 | $ | 1,601 | $ | (200 | ) | $ | 1,560 | |||||||
Amortization of acquired technology | 2 | 3 | 5 | 5 | 15 | ||||||||||||||
Amortization of other acquired intangible assets | 1 | 1 | 2 | 2 | 6 | ||||||||||||||
Professional fees for business combinations | — | 2 | — | — | 2 | ||||||||||||||
Loss on sale of long-lived assets | — | — | — | 79 | 79 | ||||||||||||||
Share-based compensation expense | 97 | 94 | 92 | 99 | 382 | ||||||||||||||
Non-GAAP operating income (loss) | $ | 65 | $ | 294 | $ | 1,700 | $ | (15 | ) | $ | 2,044 | ||||||||
GAAP net income (loss) | $ | (2 | ) | $ | 183 | $ | 1,186 | $ | (38 | ) | $ | 1,329 | |||||||
Amortization of acquired technology | 2 | 3 | 5 | 5 | 15 | ||||||||||||||
Amortization of other acquired intangible assets | 1 | 1 | 2 | 2 | 6 | ||||||||||||||
Professional fees for business combinations | — | 2 | — | — | 2 | ||||||||||||||
Loss on sale of long-lived assets | — | — | — | 79 | 79 | ||||||||||||||
Share-based compensation expense | 97 | 94 | 92 | 99 | 382 | ||||||||||||||
Net (gain) loss on debt securities and other investments | 2 | 2 | — | 2 | 6 | ||||||||||||||
Other income from divested businesses [A] | — | — | (8 | ) | — | (8 | ) | ||||||||||||
2017 Tax Act [B] | — | (37 | ) | 10 | (2 | ) | (29 | ) | |||||||||||
Other income tax effects and adjustments [C] | (56 | ) | (29 | ) | (36 | ) | (150 | ) | (271 | ) | |||||||||
Non-GAAP net income (loss) | $ | 44 | $ | 219 | $ | 1,251 | $ | (3 | ) | $ | 1,511 | ||||||||
GAAP diluted net income (loss) per share | $ | (0.01 | ) | $ | 0.70 | $ | 4.53 | $ | (0.15 | ) | $ | 5.09 | |||||||
Amortization of acquired technology | 0.01 | 0.01 | 0.02 | 0.02 | 0.06 | ||||||||||||||
Amortization of other acquired intangible assets | — | — | 0.01 | 0.01 | 0.02 | ||||||||||||||
Professional fees for business combinations | — | 0.01 | — | — | 0.01 | ||||||||||||||
Loss on sale of long-lived assets | — | — | — | 0.31 | 0.30 | ||||||||||||||
Share-based compensation expense | 0.38 | 0.36 | 0.35 | 0.38 | 1.46 | ||||||||||||||
Net (gain) loss on debt securities and other investments | 0.01 | 0.01 | — | 0.01 | 0.02 | ||||||||||||||
Other income from divested businesses [A] | — | — | (0.03 | ) | — | (0.03 | ) | ||||||||||||
2017 Tax Act [B] | — | (0.14 | ) | 0.04 | (0.01 | ) | (0.11 | ) | |||||||||||
Other income tax effects and adjustments [C] | (0.22 | ) | (0.11 | ) | (0.14 | ) | (0.58 | ) | (1.04 | ) | |||||||||
Non-GAAP diluted net income (loss) per share | $ | 0.17 | $ | 0.84 | $ | 4.78 | $ | (0.01 | ) | $ | 5.78 | ||||||||
Shares used in GAAP diluted per share calculation | 256 | 260 | 262 | 258 | 261 | ||||||||||||||
Shares used in non-GAAP diluted per share calculation | 259 | 260 | 262 | 258 | 261 |
[A] | During the three months ended April 30, 2018, we received payments from contingent earn out provisions related to businesses we previously divested. |
[B] | The 2017 Tax Act adjustments relate to the provisional tax benefit for the re-measurement of our deferred tax balances at the enacted lower tax rate. Our deferred tax balance was a net deferred tax liability due to the acceleration of profits under the new revenue standard. |
[C] | As discussed in “About Non-GAAP Financial Measures - Income Tax Effects and Adjustments” following Table J, our non-GAAP tax rate eliminates the effects of non-recurring and period specific items. Other income tax adjustments consist primarily of the tax impact of the non-GAAP pre-tax adjustments, which includes the loss on the sale of long-lived assets; the excess tax benefits on share-based compensation; and the tax benefits on a loss from a subsidiary reorganization. |
Fiscal 2017 (ASC 606) | |||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Full Year | |||||||||||||||
GAAP operating income (loss) | $ | (29 | ) | $ | 201 | $ | 1,385 | $ | (139 | ) | $ | 1,418 | |||||||
Amortization of acquired technology | 3 | 3 | 3 | 3 | 12 | ||||||||||||||
Amortization of other acquired intangible assets | 1 | — | 1 | — | 2 | ||||||||||||||
Share-based compensation expense | 89 | 81 | 71 | 85 | 326 | ||||||||||||||
Non-GAAP operating income (loss) | $ | 64 | $ | 285 | $ | 1,460 | $ | (51 | ) | $ | 1,758 | ||||||||
GAAP net income (loss) | $ | (10 | ) | $ | 125 | $ | 927 | $ | (57 | ) | $ | 985 | |||||||
Amortization of acquired technology | 3 | 3 | 3 | 3 | 12 | ||||||||||||||
Amortization of other acquired intangible assets | 1 | — | 1 | — | 2 | ||||||||||||||
Share-based compensation expense | 89 | 81 | 71 | 85 | 326 | ||||||||||||||
Net (gain) loss on debt securities and other investments | 1 | 6 | 1 | 1 | 9 | ||||||||||||||
Income tax effects and adjustments [A] | (48 | ) | (28 | ) | (27 | ) | (65 | ) | (168 | ) | |||||||||
Non-GAAP net income (loss) | $ | 36 | $ | 187 | $ | 976 | $ | (33 | ) | $ | 1,166 | ||||||||
GAAP diluted net income (loss) per share | $ | (0.04 | ) | $ | 0.48 | $ | 3.56 | $ | (0.22 | ) | $ | 3.78 | |||||||
Amortization of acquired technology | 0.01 | 0.01 | 0.01 | 0.01 | 0.05 | ||||||||||||||
Amortization of other acquired intangible assets | 0.01 | — | 0.01 | — | 0.01 | ||||||||||||||
Share-based compensation expense | 0.34 | 0.31 | 0.27 | 0.33 | 1.25 | ||||||||||||||
Net (gain) loss on debt securities and other investments | 0.01 | 0.03 | 0.01 | — | 0.03 | ||||||||||||||
Income tax effects and adjustments [A] | (0.19 | ) | (0.11 | ) | (0.11 | ) | (0.25 | ) | (0.65 | ) | |||||||||
Non-GAAP diluted net income (loss) per share | $ | 0.14 | $ | 0.72 | $ | 3.75 | $ | (0.13 | ) | $ | 4.47 | ||||||||
Shares used in GAAP diluted per share calculation | 258 | 260 | 260 | 257 | 261 | ||||||||||||||
Shares used in non-GAAP diluted per share calculation | 261 | 260 | 260 | 257 | 261 |
Restated for New Revenue Standard | As Reported | Change | |||||||||||||||||||||
July 31, | July 31, | July 31, | |||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
ASSETS | |||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||
Cash and cash equivalents | $ | 1,464 | $ | 529 | $ | 1,464 | $ | 529 | $ | — | $ | — | |||||||||||
Investments | 252 | 248 | 252 | 248 | — | — | |||||||||||||||||
Accounts receivable, net | 98 | 103 | 98 | 103 | — | — | |||||||||||||||||
Income taxes receivable | 39 | 63 | 39 | 63 | — | — | |||||||||||||||||
Prepaid expenses and other current assets | 202 | 118 | 184 | 100 | 18 | 18 | |||||||||||||||||
Current assets before funds held for customers | 2,055 | 1,061 | 2,037 | 1,043 | 18 | 18 | |||||||||||||||||
Funds held for customers | 367 | 372 | 367 | 372 | — | — | |||||||||||||||||
Total current assets | 2,422 | 1,433 | 2,404 | 1,415 | 18 | 18 | |||||||||||||||||
Long-term investments | 13 | 31 | 13 | 31 | — | — | |||||||||||||||||
Property and equipment, net | 812 | 1,030 | 812 | 1,030 | — | — | |||||||||||||||||
Goodwill | 1,611 | 1,295 | 1,611 | 1,295 | — | — | |||||||||||||||||
Acquired intangible assets, net | 61 | 22 | 61 | 22 | — | — | |||||||||||||||||
Long-term deferred income taxes | 2 | 2 | 87 | 132 | (85 | ) | (130 | ) | |||||||||||||||
Other assets | 213 | 164 | 190 | 143 | 23 | 21 | |||||||||||||||||
Total assets | $ | 5,134 | $ | 3,977 | $ | 5,178 | $ | 4,068 | $ | (44 | ) | $ | (91 | ) | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||
Short-term debt | $ | 50 | $ | 50 | $ | 50 | $ | 50 | $ | — | $ | — | |||||||||||
Accounts payable | 178 | 157 | 178 | 157 | — | — | |||||||||||||||||
Accrued compensation and related liabilities | 369 | 300 | 369 | 300 | — | — | |||||||||||||||||
Deferred revenue | 581 | 574 | 961 | 887 | (380 | ) | (313 | ) | |||||||||||||||
Other current liabilities | 198 | 185 | 191 | 178 | 7 | 7 | |||||||||||||||||
Current liabilities before customer fund deposits | 1,376 | 1,266 | 1,749 | 1,572 | (373 | ) | (306 | ) | |||||||||||||||
Customer fund deposits | 367 | 372 | 367 | 372 | — | — | |||||||||||||||||
Total current liabilities | 1,743 | 1,638 | 2,116 | 1,944 | (373 | ) | (306 | ) | |||||||||||||||
Long-term debt | 388 | 438 | 388 | 438 | — | — | |||||||||||||||||
Long-term deferred revenue | 3 | 1 | 197 | 202 | (194 | ) | (201 | ) | |||||||||||||||
Other long-term obligations | 184 | 201 | 123 | 130 | 61 | 71 | |||||||||||||||||
Total liabilities | 2,318 | 2,278 | 2,824 | 2,714 | (506 | ) | (436 | ) | |||||||||||||||
Stockholders’ equity | 2,816 | 1,699 | 2,354 | 1,354 | 462 | 345 | |||||||||||||||||
Total liabilities and stockholders’ equity | $ | 5,134 | $ | 3,977 | $ | 5,178 | $ | 4,068 | $ | (44 | ) | $ | (91 | ) |
Restated for New Revenue Standard | As Reported | Change | |||||||||||||||||||||
Twelve Months Ended July 31, | Twelve Months Ended July 31, | Twelve Months Ended July 31, | |||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
Net revenue: | |||||||||||||||||||||||
Small Business & Self-Employed | $ | 3,061 | $ | 2,574 | $ | 2,994 | $ | 2,539 | $ | 67 | $ | 35 | |||||||||||
Consumer | 2,508 | 2,182 | 2,517 | 2,201 | (9 | ) | (19 | ) | |||||||||||||||
Strategic Partner | 456 | 440 | 453 | 437 | 3 | 3 | |||||||||||||||||
Total net revenue | $ | 6,025 | $ | 5,196 | $ | 5,964 | $ | 5,177 | $ | 61 | $ | 19 | |||||||||||
Operating income from continuing operations: | |||||||||||||||||||||||
Small Business & Self-Employed | $ | 1,326 | $ | 1,111 | $ | 1,257 | $ | 1,072 | $ | 69 | $ | 39 | |||||||||||
Consumer | 1,587 | 1,376 | 1,596 | 1,395 | (9 | ) | (19 | ) | |||||||||||||||
Strategic Partner | 284 | 266 | 281 | 263 | 3 | 3 | |||||||||||||||||
Total segment operating income | 3,197 | 2,753 | 3,134 | 2,730 | 63 | 23 | |||||||||||||||||
Unallocated corporate items: | |||||||||||||||||||||||
Share-based compensation expense | (382 | ) | (326 | ) | (382 | ) | (326 | ) | — | — | |||||||||||||
Other common expenses | (1,234 | ) | (995 | ) | (1,234 | ) | (995 | ) | — | — | |||||||||||||
Amortization of acquired technology | (15 | ) | (12 | ) | (15 | ) | (12 | ) | — | — | |||||||||||||
Amortization of other acquired intangible assets | (6 | ) | (2 | ) | (6 | ) | (2 | ) | — | — | |||||||||||||
Goodwill and intangible asset impairment charges | — | — | — | — | — | — | |||||||||||||||||
Total unallocated corporate items | (1,637 | ) | (1,335 | ) | (1,637 | ) | (1,335 | ) | — | — | |||||||||||||
Total operating income from continuing operations | $ | 1,560 | $ | 1,418 | $ | 1,497 | $ | 1,395 | $ | 63 | $ | 23 |
Fiscal 2018 Quarter Ended | |||||||||||||||||||||||||||||||
October 31 | January 31 | April 30 | July 31 | ||||||||||||||||||||||||||||
Restated for New Revenue Standard | As Reported | Restated for New Revenue Standard | As Reported | Restated for New Revenue Standard | As Reported | Restated for New Revenue Standard | As Reported | ||||||||||||||||||||||||
Total net revenue | $ | 910 | $ | 886 | $ | 1,339 | $ | 1,165 | $ | 2,912 | $ | 2,925 | $ | 864 | $ | 988 | |||||||||||||||
Cost of revenue | 198 | 196 | 246 | 246 | 305 | 304 | 229 | 231 | |||||||||||||||||||||||
All other costs and expenses | 747 | 747 | 899 | 899 | 1,006 | 1,006 | 835 | 838 | |||||||||||||||||||||||
Operating income (loss) | (35 | ) | (57 | ) | 194 | 20 | 1,601 | 1,615 | (200 | ) | (81 | ) | |||||||||||||||||||
Net income (loss) | (2 | ) | (17 | ) | 183 | (21 | ) | 1,186 | 1,200 | (38 | ) | 49 | |||||||||||||||||||
Basic net income (loss) per share | $ | (0.01 | ) | $ | (0.07 | ) | $ | 0.72 | $ | (0.08 | ) | $ | 4.62 | $ | 4.68 | $ | (0.15 | ) | $ | 0.19 | |||||||||||
Diluted net income (loss) per share | $ | (0.01 | ) | $ | (0.07 | ) | $ | 0.70 | $ | (0.08 | ) | $ | 4.53 | $ | 4.59 | $ | (0.15 | ) | $ | 0.18 |
Fiscal 2017 Quarter Ended | |||||||||||||||||||||||||||||||
October 31 | January 31 | April 30 | July 31 | ||||||||||||||||||||||||||||
Restated for New Revenue Standard | As Reported | Restated for New Revenue Standard | As Reported | Restated for New Revenue Standard | As Reported | Restated for New Revenue Standard | As Reported | ||||||||||||||||||||||||
Total net revenue | $ | 810 | $ | 778 | $ | 1,193 | $ | 1,016 | $ | 2,481 | $ | 2,541 | $ | 712 | $ | 842 | |||||||||||||||
Cost of revenue | 184 | 183 | 206 | 206 | 237 | 237 | 183 | 183 | |||||||||||||||||||||||
All other costs and expenses | 655 | 656 | 786 | 788 | 859 | 860 | 668 | 669 | |||||||||||||||||||||||
Operating income (loss) | (29 | ) | (61 | ) | 201 | 22 | 1,385 | 1,444 | (139 | ) | (10 | ) | |||||||||||||||||||
Net income (loss) | (10 | ) | (30 | ) | 125 | 13 | 927 | 964 | (57 | ) | 24 | ||||||||||||||||||||
Basic net income (loss) per share | $ | (0.04 | ) | $ | (0.12 | ) | $ | 0.49 | $ | 0.05 | $ | 3.61 | $ | 3.76 | $ | (0.22 | ) | $ | 0.09 | ||||||||||||
Diluted net income (loss) per share | $ | (0.04 | ) | $ | (0.12 | ) | $ | 0.48 | $ | 0.05 | $ | 3.56 | $ | 3.70 | $ | (0.22 | ) | $ | 0.09 |
Forward-Looking Guidance | ||||||||||||||||||||||
GAAP Range of Estimate | Non-GAAP Range of Estimate | |||||||||||||||||||||
From | To | Adjmts | From | To | ||||||||||||||||||
New Revenue Standard (ASC 606) | ||||||||||||||||||||||
Three Months Ending October 31, 2018 | ||||||||||||||||||||||
Revenue | $ | 955 | $ | 975 | $ | — | $ | 955 | $ | 975 | ||||||||||||
Operating income (loss) | $ | (80 | ) | $ | (70 | ) | $ | 110 | [a] | $ | 30 | $ | 40 | |||||||||
Diluted earnings (loss) per share | $ | (0.19 | ) | $ | (0.17 | ) | $ | 0.28 | [b] | $ | 0.09 | $ | 0.11 | |||||||||
Twelve Months Ending July 31, 2019 | ||||||||||||||||||||||
Revenue | $ | 6,530 | $ | 6,630 | $ | — | $ | 6,530 | $ | 6,630 | ||||||||||||
Operating income | $ | 1,725 | $ | 1,775 | $ | 440 | [c] | $ | 2,165 | $ | 2,215 | |||||||||||
Diluted earnings per share | $ | 5.25 | $ | 5.35 | $ | 1.15 | [d] | $ | 6.40 | $ | 6.50 | |||||||||||
Previous Revenue Standard (ASC 605) | ||||||||||||||||||||||
Twelve Months Ending July 31, 2019 | ||||||||||||||||||||||
Revenue | $ | 6,560 | $ | 6,660 | $ | — | $ | 6,560 | $ | 6,660 | ||||||||||||
Operating income | $ | 1,755 | $ | 1,805 | $ | 440 | [c] | $ | 2,195 | $ | 2,245 | |||||||||||
Diluted earnings per share | $ | 5.35 | $ | 5.45 | $ | 1.15 | [d] | $ | 6.50 | $ | 6.60 |
[a] | Reflects estimated adjustments for share-based compensation expense of approximately $104 million; amortization of acquired technology of approximately $4 million; and amortization of other acquired intangible assets of approximately $2 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 $416 million; amortization of acquired technology of approximately $19 million; and amortization of other acquired intangible assets of approximately $5 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. |
• | Share-based compensation expense |
• | Amortization of acquired technology |
• | Amortization of other acquired intangible assets |
• | Goodwill and intangible asset impairment charges |
• | Gains and losses on disposals of businesses and long-lived assets |
• | Professional fees for business combinations |
• | Gains and losses on debt and equity securities and other investments |
• | Income tax effects and adjustments |
• | Discontinued operations |
Contacts: | Investors | Media | ||
Kim Watkins | Diane Carlini | |||
Intuit Inc. | Intuit Inc. | |||
650-944-3324 | 650-944-6251 | |||
kim_watkins@intuit.com | diane_carlini@intuit.com |