We’re midway through our fiscal year and our tax season is in full swing. In my 12 years here, I can’t remember a time when we’ve been busier, and presented with more opportunities. But with great opportunities come great challenges – both from competitors and from outsiders – as we’ve seen over the past few weeks.
In the midst of all this, we’ve delivered a strong quarter and are positioned to accelerate both customer and revenue growth. And to top it off, this morning we learned that we ranked No. 2 on Fortune magazine’s Most Admired Software Companies list, moving up one spot from a year ago. It’s the 12th consecutive year we’ve made the list, and we ranked first in three important attributes: quality of management, long-term investment value and quality of products and services.
In short, I’m proud of what we’ve accomplished, the way we’ve responded to concerns, and of everyone’s efforts to deliver these results in a challenging environment.
We’ve shared a lot of information about our decision to change our TurboTax Desktop product this year, and about the increasing, industrywide problem of identity theft and fraudulent income tax filings. I won’t rehash that here; you can find more information in the letters Sasan Goodarzi and I sent to employees and in my LinkedIn posts. We also held a live Q&A broadcast with all of you last week, and your response spoke volumes to me. You’ll have a chance to ask more questions in our live Q&A broadcast tomorrow when we discuss earnings results.
Products, Acquisitions and Innovation
Amid all this noise, there’s a lot to be excited about.
We’re launching new products: Mint introduced Mint Bills, a new way for people to see and pay their bills in one place. In Small Business, we released QuickBooks Self-Employed, making it easier for freelancers and contractors – think of people who drive for Uber or Lyft – to keep better track of their business expenses and deductions.
We’re acquiring more companies, from A to Z: Acrede provides payroll solutions in the U.K. Their easy-to-use cloud technology can be customized to deliver payroll globally. In Brazil, ZeroPaper, develops SaaS and mobile financial management tools for entrepreneurs and microbusinesses.
We’re innovating: Our entire TurboTax product lineup is now available on mobile devices, making it easier to file taxes anywhere on any device. On the ProTax side, we’ve provided tools and training to help accountants manage the Affordable Care Act and help their clients achieve the best possible outcomes.
Strong Second-quarter Results
Our financial results are strong through the first half of the year. Revenue for the second quarter grew 3 percent, even with our change to “ratable revenue,” a bookkeeping change which means we account for revenue later than we have in the past.
Consumer Tax revenue increased 54 percent, due in part to an earlier start to this year’s tax season. TurboTax Online units grew 19 percent through Feb. 14, with overall units up 11 percent.
Our Small Business momentum has taken a step-rate change in a positive direction. QuickBooks Online subscribers grew 50 percent in the second quarter, up from 43 percent growth last quarter. We added 100,000 QuickBooks subscribers in the second quarter, for a total of 841,000 paying subscribers worldwide.
I’m proud of these results, and moved by our “Win Together” attitude as we address the issues we’ve faced these past weeks. As I said last week, this will be our finest hour. It will require more work from teams that are working tirelessly to solve problems, and I want to thank them for their round-the-clock efforts.
Our success for FY ‘15 hinges on the results of our third quarter. I’m inspired by your commitment, and ask you to keep focused on the task at hand, no matter what your job. I’m confident that as One Intuit we can and will Win Together. It’s my privilege to work with you each and every day.