Three quarters down, and one to go. In Q3, we delivered strong results across the board, capped off by an outstanding tax season. Results like this don’t happen on their own. They’re the product of a relentless focus on the customer, a commitment to innovation, and One Intuit teamwork.
Everyone played a part in delivering these results, from the hundreds of volunteers who pitched in on the Tax Lifeline the last few days of tax season, to the thousands of others who do what you do each and every day to perform the important work for your internal or external customers. This has been a team victory through three quarters, and I sincerely thank you!
With three quarters behind us, there’s still time on the clock and game to be played. Based on the strong results we announced today, we’ve raised our full-year revenue, operating income and earnings per share guidance. Now it’s up to us to sustain that momentum and finish strong. I’m confident we can and will do just that.
Q3: Strong Across the Board
As I’m telling investors today, we’re having a great year. Customer growth is as strong as ever in both small business and TurboTax, and our accountant-facing teams are driving adoption across the ecosystem. Here’s what’s behind that success:
We had a great tax season – the best I can remember – fueled by four key drivers.
- Total returns up: The total number of federal returns filed increased by 1.5 percent this year – a bit more than we expected – and giving us a modest tailwind.
- Do it yourself category is growing: About 37 percent of those returns were filed with do-it-yourself software, a 5.7 percent increase over the previous year. Meanwhile the number of returns filed through assisted tax prep methods grew just 0.5 percent.
- TurboTax share growing: TurboTax gained more than three points of share in the software category, bringing our total category share to roughly 65 percent.
- Monetizing returns: We’re turning those increased returns into revenue. We delivered revenue growth of over 9 percent for the segment, outpacing our original guidance of 5 to 7 percent.
These results were driven by awesome end-to-end innovation, from product experiences to customer care, in service to our vision of “Taxes Are Done.” This season, the team introduced more than 20 new product improvements, and increased mobile discovery and usage. Mobile app downloads were up 85 percent over a year ago, and customers snapped 5 million photos of tax documents this year, four times greater than a year ago. It all adds up to one great season.
The small business story is just as strong, driven by strong new-user growth in our online ecosystem.
- Total Small Business segment revenue grew by 12 percent, while our online ecosystem revenue grew about 24 percent.
- QuickBooks Online subscribers grew 45 percent. We added 140,000 subscribers in the quarter, bringing us just shy of 1.4 million worldwide. Some 255,000 of them are outside the U.S.
Powering both our “Do the Nation’s Taxes” and “Be the Operating System Behind Small Business Success” goals is our ProConnect Group. Yes, we’ve given our professional tax business a new name: ProConnect. It’s more than a name change or a branding decision - it reflects the critical role this business and the accountants they serve play in the Intuit ecosystem.
The Consumer Ecosystem Group is also making great progress toward its vision to ensure people “never worry about a bill.” This will help individuals and families decide which bills to pay, when to pay them and how much to pay through an integrated Mint Billpay experience.
Q4: Aligning for the future
Our mindset extends beyond delivering great products and product experiences. More than ever, I see team Intuit increasingly aligned behind our common mission, values and a One Intuit Strategy that transforms how we operate as a global, cloud-driven product and platform company.
This mindset and momentum were on full display during our Intuit Leadership Conference in March, and has been reinforced with increasing alignment and transparency in our monthly One Intuit Forum.
Great teams finish strong, so let’s stay focused and sprint to the finish line. I’m proud of what we’ve accomplished together, and I am incredibly optimistic about our future opportunities if we continue to execute well. Let’s do this!