With our first quarter in the books, I couldn’t be happier with our results and where we’re headed. During the quarter, we:
- Grew revenue by 17 percent and reported our first profitable first quarter.
- Exceeded our QuickBooks Online subscriber targets.
- And beat our overall financial targets.
As a result, we raised our earnings per share guidance for the year, due to both our performance and the sizeable number of shares we repurchased as part of our stock buyback program. What makes this especially satisfying is the way we accomplished these results. I’m proud of how you fought through the challenges we faced, and looked past the short-term noise in the stock market to deliver these very strong results.
On top of it all, we delivered a life-changing QuickBooks Connect conference, where we brought the Intuit ecosystem to life in a way that no one else can. Along the way, I had the chance to meet with many of you on our annual State of the Company tour – something that gives me the chance to learn first-hand what’s on your mind.
Strong First Quarter
We delivered strong first-quarter results. Our shift to operating income profitability shows that our strategy is working and that our business model is driving more predictable and stable revenue streams throughout the year.
Companywide revenue grew 17 percent, due in part to our shift to ratable revenue. Small business segment revenue was up 5 percent, and we added more than 80,000 new QuickBooks Online subscribers – a 57 percent increase – bringing our worldwide total to 1,159,000 at the end of the quarter. Roughly 35,000 of these subscribers are using QuickBooks Self-Employed, a new market for us with tremendous upside potential.
Revenue from the tax business is typically light this time of the year as we prepare for the upcoming filing season. We’re continuing to invest in the product experience, with a focus on driving customer growth and market share.
In addition, we remain vigilant when investing in security to safeguard our customers and our products. In doing so, we continue to work with the Internal Revenue Service, state tax agencies and others in the industry to thwart identity theft and tax refund fraud. As part of this effort, we participated in the launch of a consumer awareness campaign announced by the IRS this morning, and issued a press release that describes some of the steps we’re taking to support this effort.
QuickBooks Connect Inspires Hearts and Minds
It was a tall order to outdo last year’s inaugural QuickBooks Connect – but we did!
More than 4,500 small business owners, accountants and developers registered to attend the four-day event in San Jose, where we brought our ecosystem to life in a way that no one else can match.
Attendees are telling us it’s more than a conference. This life-changing event combines pragmatic learning, motivational speaking, inspiration, networking and fun. Topping it off was a truly powerful speech from Oprah Winfrey, who received a standing ovation from an appreciative audience. Congratulations to the entire team for creating an incredible and memorable show.
State of the Company
I’ve spent a lot of time on airplanes over the past couple of months, visiting 15 offices in five countries for our annual State of the Company tour. As Intuit becomes a more global company, it becomes even more important for us to remain connected, and for me to hear directly from you to learn what’s giving you confidence and where you’re concerned.
On the confidence side, our teams are inspired by our One Intuit strategy, love the sharpened focus of our business, and understand the rationale behind the planned divestitures of Quicken, QuickBase and DemandForce. Collectively, you believe that we remain committed to our people and treating our employees well. Our new parental leave policy is very popular.
On the concerns side, we could have done a better job of implementing the restructure this past summer. The strategy behind “what” we did is clear, but the “how” – extending the process over multiple announcements – shook the trust in some of us. I also heard that we need fewer, better tools for you to do your job effectively – especially our customer care agents who must often use multiple systems and legacy tools to answer a single question. Finally, we need to step on the gas in our move to the cloud, migrating to Amazon Web Services. You have my word that our leaders will take action on all of these.
The Road Ahead
I’m excited about our future, and our long-term growth opportunities as we focus on being the operating system behind small business success and doing the nations’ taxes in the United States and Canada. Thank you for your continued focus and execution. I’m proud of you, of our company, and of the results we are delivering together. You’ve shown what we can do when we work as One Intuit. Let’s keep it up.