We’re half way through our fiscal year, and I couldn’t be more pleased with the strong results you’ve delivered. We’ve just issued our earnings press release, announcing that we grew revenue by 23 percent, and exceeded our guidance across the board.
Your unwavering commitment to our customers and our mission makes these results possible, and I want to thank everyone for the awesome results you are delivering for all of our stakeholders in this pivotal second quarter.
I’ll share more details on our financial results in just a moment, but before I get to that, let me begin by sharing why this quarter is so important to our short- and long-term performance.
Q2: A Pivotal Quarter
Our second-quarter performance sets us up for our busiest season, and for the rest of the fiscal year. In the second quarter, tax season moves into high gear, and small businesses around the world lean in to key buying decisions as they continue to seek solutions that fuel their success in this new cloud-driven product and platform environment. We’ve built strong momentum in the second quarter, and now we must sustain it in the back half to finish strong.
The second quarter also gives us the chance to diagnose, prioritize and begin taking action on your responses to our Annual Employee Survey. As I previously shared, our engagement scores dropped a couple of points this year. While our overall engagement remains strong, the themes and patterns reminded us that it’s time to reorient our compass: The destination remains True North. The 23,000 write-in-comments, coupled with the opportunity to engage in face-to-face discussions with you during the State of the Company meetings and skip-level chats, helped illuminate the core areas where we’re making real progress, as well as areas where we need to improve.
I assure you that your leaders and I take these results seriously, and we are committed to building on our strong foundation to make Intuit an even better place to work. To start, we are taking on the systemic issues that impact all of our teams, from decision-making to work resources and tools, and have already begun to drive action.
In addition, I’ve asked every people manager with a team engagement score lower than 70 to send me an action plan outlining the steps they’ll take to improve the environment locally, and to let me know where they need help. Their leaders and I are already working with them to make those improvements.
The insights gained over the first half of the year have helped shape the agenda for our upcoming Intuit Leadership Conference and the functional group meetings that follow it. Over the course of the conference, we’ll sharpen our focus on boundaryless decision-making; diagnose how we focus on fewer, more high-impact initiatives; invest in critical enablers and strategic services that power our One Intuit ecosystem. We’ll also get back our roots of rapid prototyping with customers “in the kitchen” in our quest to improve the customer benefit. All under the theme of “Reorienting Our Compass: Destination True North.”
Financial Results Exceeded Expectations
While driving progress against our company strategy to unleash the One Intuit ecosystem, we’ve continued to deliver for customers and shareholders, posting solid customer and revenue growth that puts us on pace to deliver against our full year-guidance.
Consumer Tax revenue increased 29 percent in the quarter, and TurboTax online units were up 12 percent. The do-it-yourself software category has grown, while assisted tax prep methods have shrunk season-to-date, and TurboTax has once again seized significant share from competitive alternatives.
I’m excited about the innovation that is driving these share gains. TurboTax has a number of new features that make it easier for customers to import their W-2 information directly into their returns. In addition, our new SmartLook feature quickly connects customers with experts who can answer their questions about deductions in real time – for free.
In Small Business, we saw record QuickBooks Online subscriber growth this quarter, adding nearly 100,000 paying customers for a total of more than 1.2 million subscribers worldwide, with 230,000 outside the United States.
Our work with accountants continues to make step-rate improvements, with more than 85,000 accountants now having at least three QuickBooks Online clients, more than double last year’s number. We’re also driving progress against some exciting product and platform innovation that will strengthen the collaboration between accountants and their small business clients.
Outside the U.S., we’re continuing to focus on growing customers globally, with strong momentum in the United Kingdom, Australia and Brazil. At the same time, we’re pivoting to refine our models in the Canada and India markets to ensure that we’re driving healthy and profitable growth over the long term.
Entering the second half of the year, it’s important to maintain our focus and finish the year strong.
As we know all too well, the global economy is uncertain, and it’s likely we’ll see more choppy waters. While I can’t predict the future, I know how we’ve performed in the past. The fact is that Intuit performs well when times are tough. That’s when customers need our products the most, to help manage their finances and pay their bills and taxes. That has not only served our customers well through good times and the bad, but it has insulated our stock in the past, creating a safe haven for investors.
We’ve clearly said what we’re going to do. Now it’s up to us to deliver, and show that we can indeed improve customers’ lives. We remain a mission-based company powered by incredibly talented people. By harnessing that innovation and passion, we’ll continue to deliver durable, tangible and accelerating growth.
Let's stay focused and continue working together to make that happen!