Stockholders' Equity

3 Months Ended

Oct. 31, 2021

Equity [Abstract]

Stockholders' Equity

9. Stockholders’ Equity

Stock Repurchase Programs and Treasury Shares

Intuit’s Board of Directors has authorized a series of common stock repurchase programs. Shares of common stock repurchased under these programs become treasury shares. We repurchased 606,000 shares for $338 million under these programs during the three months ended October 31, 2021. Included in this amount were $20 million of repurchases which occurred in late October 2021 and settled in early November 2021. On August 20, 2021 our Board approved an increased authorization to purchase up to an additional $2 billion of our common stock under the existing stock repurchase program. At October 31, 2021, we had authorization from our Board of Directors to expend up to an additional $3.0 billion for stock repurchases, including the new $2 billion authorization noted above. Future stock repurchases under the current program is at the discretion of management, and authorization of future stock repurchase programs is subject to the final determination of our Board of Directors.

Our treasury shares are repurchased at the market price on the trade date; accordingly, all amounts paid to reacquire these shares have been recorded as treasury stock on our condensed consolidated balance sheets. Repurchased shares of our common stock are held as treasury shares until they are reissued or retired. When we reissue treasury stock, if the proceeds from the sale are more than the average price we paid to acquire the shares we record an increase in additional paid-in capital. Conversely, if the proceeds from the sale are less than the average price we paid to acquire the shares, we record a decrease in additional paid-in capital to the extent of increases previously recorded for similar transactions and a decrease in retained earnings for any remaining amount.

In the past we have satisfied option exercises and restricted stock unit vesting under our employee equity incentive plans by reissuing treasury shares, and we may do so again in the future. During the second quarter of fiscal 2014 we began issuing new shares of common stock to satisfy option exercises and RSU vesting under our 2005 Equity Incentive Plan. We have not yet determined the ultimate disposition of the shares that we have repurchased in the past, and consequently we continue to hold them as treasury shares.

Dividends on Common Stock

During the three months ended October 31, 2021 we declared quarterly cash dividends that totaled $0.68 per share of outstanding common stock for a total of $191 million. In November 2021 our Board of Directors declared a quarterly cash dividend of $0.68 per share of outstanding common stock payable on January 18, 2022 to stockholders of record at the close of business on January 10, 2022. Future declarations of dividends and the establishment of future record dates and payment dates are subject to the final determination of our Board of Directors.

Share-Based Compensation Expense

The following table summarizes the total share-based compensation expense that we recorded in operating income for the periods shown.

	Three Months Ended
(In millions)	October 31, 2021		October 31, 2020
Cost of revenue	$	27	$	15
Selling and marketing	64		32
Research and development	109		38
General and administrative	80		26
Total share-based compensation expense	$	280	$	111

We capitalized $1 million in share-based compensation related to internal-use software projects during the three months ended October 31, 2021 and $1 million during the three months ended October 31, 2020.

Share-Based Awards Available for Grant

A summary of share-based awards available for grant under our plans for the three months ended October 31, 2021 was as follows:

(Shares in thousands)	Shares Available for Grant
Balance at July 31, 2021	16,851
Restricted stock units granted (1)	(485)
Options granted	—
Share-based awards canceled/forfeited/expired (1) (2)	1,366
Balance at October 31, 2021	17,732

(1)RSUs granted from the pool of shares available for grant under our 2005 Equity Incentive Plan reduce the pool by 2.3 shares for each share granted. RSUs forfeited and returned to the pool of shares available for grant under the 2005 Equity Incentive Plan increase the pool by 2.3 shares for each share forfeited. Shares granted from the Credit Karma Plan reduce the pool by one share for each share granted. Shares forfeited and returned to the pool from the Credit Karma Plan increase the pool by one share for each share forfeited.

(2)Stock options and RSUs canceled, expired or forfeited under our 2005 Equity Incentive Plan and Credit Karma Plan are returned to the pool of shares available for grant. Under the 2005 Equity Incentive Plan, shares withheld for income taxes upon vesting of RSUs that were granted on or after July 21, 2016 are also returned to the pool of shares available for grant. Stock options and RSUs canceled, expired or forfeited under older expired plans are not returned to the pool of shares available for grant. Under the Credit Karma Plan, shares withheld for income taxes are also returned to the pool of shares available for grant.

Restricted Stock Unit and Restricted Stock Activity

A summary of restricted stock unit (RSU) and restricted stock activity for the three months ended October 31, 2021 was as follows:

(Shares in thousands)	Number of Shares	Weighted Average Grant Date Fair Value
Nonvested at July 31, 2021	9,038	$	345.86
Granted	271	555.65
Vested	(627)	275.10
Forfeited	(361)	270.71
Nonvested at October 31, 2021	8,321	$	361.30

At October 31, 2021, there was approximately $2.6 billion of unrecognized compensation cost related to non-vested RSUs and restricted stock with a weighted average vesting period of 2.9 years. We will adjust unrecognized compensation cost for actual forfeitures as they occur.

Stock Option Activity

A summary of stock option activity for the three months ended October 31, 2021 was as follows:

	Options Outstanding
(Shares in thousands)	Number of Shares	Weighted Average Exercise Price Per Share
Balance at July 31, 2021	2,204	$	251.48
Granted	—	—
Exercised	(58)	210.92
Canceled or expired	—	—
Balance at October 31, 2021	2,146	$	252.58
Exercisable at October 31, 2021	1,364	$	176.81

At October 31, 2021, there was approximately $68 million of unrecognized compensation cost related to non-vested stock options with a weighted average vesting period of 3.1 years. We will adjust unrecognized compensation cost for actual forfeitures as they occur.