Three down and one to go. Our third quarter is in the books and with just 10 weeks left in our fiscal year, I’m proud of what we’ve accomplished and where we stand. We’ve delivered a strong quarter and our tax team met unprecedented challenges with unprecedented commitment.
None of this could have been accomplished without everyone’s hard work and a Win Together mindset. Perhaps more than ever before, this quarter showed the true spirit of One Intuit. For all you did, thank you.
In Consumer Tax, we remain the market leader, growing the category and expanding our market share. Our small business online ecosystem is accelerating its momentum, posting eight consecutive quarters of growth. Based on these solid results, we’ve raised our QuickBooks subscriber, consumer tax revenue and revenue guidance for the full year.
While success feels great, we cannot rest on our laurels. We must sustain that energy. Last week’s Create the Offering Forum continued our multi-year transformation journey to become a product and platform company. To succeed, our product teams must agree on what services they plan to produce, consume or contribute to. It’s the only way to move fast and be agile.
We have what it takes to win: a clear strategy and an evolved CDI model that builds durable advantage through products and platforms and sets us up to solve two-sided problems. Our clearly defined ecosystems, combined with improved transparency and operating mechanisms, all position ourselves for the next chapter of great.
Our financial results remained strong. Revenue totaled $2.2 billion, one of the best quarters in our history and exceeding our revenue expectations.
By any measure Consumer Tax was a success. Revenue grew 4 percent in the quarter, and 9 percent year to date. TurboTax Online units grew 13 percent. ProTax customers grew slightly, and we are on track with our expectations for the year.
In Small Business, our QuickBooks Online Ecosystem continues to build momentum. QuickBooks Online subscribers grew by 55 percent, adding 120,000 more in the quarter. With 965,000 subscribers, we’ll soon reach the 1 million subscriber milestone.
You may notice an unusual accounting item in this quarter’s earnings – an impairment charge. Here’s the story behind that. About a year ago, Intuit purchased a company called Check to accelerate the Consumer Ecosystem Group’s vision to “deliver hope through everyday financial triumphs.” Unfortunately, their revenue and operating income have trailed our expectations for the year.
As a result, we’re shifting our strategy and focusing on integrating Check’s bill pay solution into Mint and Quicken. Bill pay was the primary reason for purchasing Check, and we see value in this integration. As a result of the impact to our projected profits and the accounting assessment, Intuit is required to take a goodwill impairment charge of $263 million. The future success will come from the team’s hard work and dedication, and we still expect that bill pay will be a core component of CEG’s vision.
Planning for the Future
As we look to the fourth quarter and beyond, I’m excited about steps we’re taking to strengthen our position in the marketplace and accelerate our product and platform transformation.
Externally, we’ve announced three major small business initiatives:
- Resuming sponsorship of Small Business Big Game.
- Hosting our second annual QuickBooks Connect.
- Investing in a new $100 million fund to help small businesses get greater access to low-rate loans.
These are all part of our strategy to be the operating system behind small business success.
At the same time, we’re getting back to our roots and the approach that made Intuit great – sharpening our focus on delivering the customer benefit. We’re making our One Intuit Product and Platform strategy a reality, with product teams agreeing on the services they plan to produce, consume or contribute. Finally, we’re continuing our stepped up investment in security. Like high-availability, security is an essential part of every cloud-based offering we have.
As you know, True North requires us to manage for both the short and long-term, and our leaders have been doing just that – looking into the future and gaining clarity on our highest priorities.
We cannot do everything, or we’ll end up not doing anything particularly well. So we’re identifying the highest-impact priorities, de-prioritizing or stopping things that aren’t strategically aligned or lacking demonstrated reasons to believe, and investing our time and money on the fundamentals and game-changers that will position us for a stronger future in FY ’16 and beyond. It will require us to take off our local hats and wear our One Intuit hat. That’s what it takes to win.
Make no mistake. We’ve come through a challenging quarter with flying colors. We’re in a strong position now, and it’s up to all of us to give that final push to deliver a great year. Thank you for all you’ve done and will do. I’m proud of you, and proud of Intuit.