Intuit Investor Presentation
March 2013
Forward Looking Statements These presentation materials include forward-looking statements. There are a number of factors that could cause our results to differ materially from our expectations. Please see the section entitled “Cautions About Forward-Looking Statements” in the enclosed Appendix for information regarding forward-looking statements and related risks and uncertainties. You can also learn more about these risks in our Form 10-K for fiscal 2012 and our other SEC filings, which are available on the Investor Relations page of Intuit's website at www.intuit.com. We assume no obligation to update any forward-looking statement.
Non-GAAP Financial Measures These presentations include certain non-GAAP financial measures. Please see the section entitled “About Non-GAAP Financial Measures” in the enclosed Appendix for an explanation of management’s use of these measures and a reconciliation to the most directly comparable GAAP financial measures.
Our Mission: why we exist as a company
…and those who serve them
We serve these end customers
Consumers Small Businesses
Accountants Financial
Institutions Healthcare
Players
3rd Party Contributors
Financial… making & saving money,
grow & profit
Productivity… turning drudgery into time
for what matters most
Compliance… without even having to
think about it
Confidence… from the wisdom &
experience of others
“Better Money Outcomes”
To improve our customers’ financial lives so profoundly… they can’t imagine going back to the old way
What has resulted: strong, growing businesses
Customer Behavior by Market # of prospects/customers (units)
Manual/ Non-Cons.
Category Competitors
Non-Category Competitors
Mobile
Intuit NP vs. Closest Comp. (+/-)
Category Size, Growth & Position
Payroll 6M SMBs
Fin. Mgmt 29M SMBs
Payments 29M SMBs
ProTax 400K Accts
Cons. Tax 146M returns
Digital Bank 250M txn accts
Category Definitions
Online Desktop
+15 +19
Online
+24 +30
Desktop
+1
Online
+1
+17
Desktop
+6
End Customers
+18
Financial Institutions
• $2.5B • 7% CAGR • #1
• $4.4B • 2% CAGR • #1
• $12B • 5% CAGR • #6
• $1.9B • 4% CAGR • #1
• $1.8B • 5% CAGR • #1
• $9B • 5% CAGR • #2
+11
QBMAS
-13
Desktop
FY’13-15 Operational Priorities
g
Using Data to Create Delight
Delivering Awesome Product Experiences
Enabling the Contributions of Others-
“Network Effect Platforms”
Intuit’s Growth Strategies
Intuit’s Strategy: how we accelerate results
• Amazing 1st Use Experiences: delivering the customer benefit
• Reimagining Mobile 1st/ Mobile Only: design and capabilities
• Solving Multi-Sided Problems Well: creating a virtuous circle
• Expanding Globally: platforms localized by users and developers
• Enabling Customer Data: better products & break-through benefits
To be a premier innovative growth company…
Accele
rati
ng
to
Co
nn
ecte
d S
ervic
es
Small Business Group
We improve the bottom line of small businesses by >20%…
Get and keep customers
Manage finances
Make/Accept payments
Hire/Manage employees
Intuit Full Service Payroll
SBG Vision and Offerings
SMB Market is Big and Growing
• 29M SMBs in the US
• 500M SMBs Globally
• $60B in US SMB Spend in Target Markets
$3.3 $12.0
$21.0 $24.0
FMS Payments EMS Acquire
Customers
+7%
+5%
+12% +15%
• Acquire Customers segment growing fast
• Non-Consumption is biggest opportunity
Growth Rate Current SMB Spend ($B)
~2B Invoices
~1.5B Bills Paid
1.6B Vendors
4.2B Customers
30M Employees
$2T in Commerce
The New Opportunity
5M SMBs
100K Developers
250K Accountants
1.2M Payroll SMBs
>90% Retail Share
360K Payments SMBs
FY
08
FY
11
FY
12
FY
13
FY
14
FY
15
FY
09
FY
10
Our Emerging Assets
2M Company Files in the Intuit Cloud
Our Enduring Assets + =
133K
2M
Continue to grow attach
Penetrating QuickBooks ecosystem
remains key
Lifetime Value of QBO exceeds desktop
$5B attach opportunity
remains
1 Yr 5 Yr 1 Yr 5 Yr
QB Pro QB Online
$409
$978
$382
$1409 Software
Ecosystem Attach
Current Attach
Attach Opportunity
Desktop Online
Use data for in product discovery
29% 17%
$1.1B Payroll Attach Opportunity
Current Attach
Attach Opportunity
Desktop Online
Payments as a QB Feature
5% 6%
$4B Payments Attach Opportunity
Extending the Core: Demandforce
Effortless Communication Use email, text, social and search to grow your business and keep customers coming back
Online Reputation Build, maintain and leverage your most valuable asset – a good online reputation
Demandforce Network
Increase exposure to your local community and maximize results
Helping SMBs thrive in an evolving & increasingly complex, connected world
Automated marketing & communications solutions
Value proposition based on generating 3x ROI each month
What: We solve small business payments needs
QuickBooks Payments Mobile Payments Retail Payments
Get paid anywhere, with any payment type, on any device
Consumer Tax
Lots of room for long-term growth
Manual
Software
Tax Stores
Pros
Revenue (Intuit Estimate)
Est. FY12 Returns (Intuit Estimate)
TurboTax has just 21% of Total Tax Returns, 7% of Revenue
~146M ~$20B
* Software $ represents TurboTax estimated average revenue per return.
Source: Intuit estimates, surveys
Manual
Franchise/Tax Store
Pro / CPA
Software ~5M filers enter
~3.5M filers exit
$239
$203
$46*
$0
51
28
38
-44
1%
-1%
7%
-14%
Price Net
Promoter 5 yr
CAGR
FY08 FY09 FY10 FY11 FY12
Strategically positioned in the sweet spot
Manual is not our largest customer source
Sources of FY’09-’12 TurboTax customers
Retention of existing customers
Competitive prep methods
Manual
New filer
Opportunity: reacquire & retain customers
70M+ unique visitors to TT.com
~35M unique customers over last 3 years
Customer gains and losses
Acquisition Attrition
55 63
72
FY10 FY11 FY12
21
24 25
FY10 FY11 FY12
7.1 7.8 7.5
FY10 FY11 FY12
1 pt conversion = $40M and 720k customers 1 pt retention= $14M and 250k customers
Growth Rate Averages: FY’09-FY’12 Long Term View
Individual Federal Returns <1%/yr 1-2%
TurboTax Revenue Growth ~12%/yr 8-12%
SW Category ~6%/yr 4-6%
TurboTax SW Share ~3%/yr 1-2%
Long-term business model
Source: Intuit estimates
FY’13 Revenue Growth Guidance = 8% to 10%
Financial Overview
We are striving for one True North outcome for Intuit (best we can be)
• Grow organic revenue double digits
• Grow revenue faster than expenses
• Deploy cash to highest-yield opportunities
• Maintain a strong balance sheet
Financial Principles
Drive Growth In Our Core Products
Acquire New Users Retain Existing Users Increase Offerings/User
$1 Billion+ Opportunity
10M+ customers leave Intuit annually
Average 1.5 apps/user with low awareness
1st use experiences not as easy as expected
For every 100 we attract…
Between 2-14 convert!
Improve Conversion 50% = up to $1 Billion
Save 1 out of 10 = $75+ Million
Increase 0.5 apps/user = $500 Million
FY'10 FY'11 FY'12 FY‘13 Long-Term Expectations
Revenue 100 100 100 Double digit organic growth, supplemented by acquisitions
Gross Margin 82.9 83.3 82.2 % Increasing slightly with move to SaaS
S&M 25.6 26.4 25.5 % Flat to down as revenue increases
R&D 15.4 15.1 14.9 Target 15-17% of revenue
G&A 8.7 8.0 8.0 % Declines over time
Operating Income 33.2 33.8 33.8 Improve to mid 30’s
Net Income 20.8 21.6 21.8 Tax rate in the 35% range; improvements in OIE as interest rates increase
EPS Grow faster than operating income
Intuit Financial Model % of Revenue
Note: Figures represent non-GAAP measures
5-Year Operating Income CAGR 5-Year EPS CAGR
Strong Return on Investment
Stock Price Performance (%) 5-Year Revenue CAGR
$2,978 $3,073 $3,403 $3,772
$4,151
FY’08 FY’09 FY’10 FY’11 FY’12
+10%
GDP Growth
$858 $941 $1,130
$1,275 $1,404
FY’08 FY’09 FY’10 FY’11 FY’12
+13%
$1.60 $1.85
$2.18 $2.56
$2.97
FY’08 FY’09 FY’10 FY’11 FY’12
+16%
NASDAQ 15%
Intuit 105%
-100%
0%
100%
200%
July 201
2
Aug 2007
Note: Operating Income and EPS figures represent non-GAAP measures
FY’13 Segment Plans
SBG $1,865M – $1,900M 15 - 17%
Consumer Tax $1,550M – $1,585M 8 - 10%
Accounting Professionals
$445M - $455M 5 - 8%
Financial Services $385M – $395M 6 - 9%
Other Businesses $305M – $315M 0 - 4%
Growth FY’13
Guidance $ in Millions
FY’13 Guidance
Revenue $4,550M-$4,650M 10-12%
Op Income
• Non-GAAP $1,570M-$1,600M 12-14%
• GAAP $1,315M-$1,345M 12-14%
EPS
• Non-GAAP $3.40-$3.46 14-16%
• GAAP $2.96-$3.02 14-16%
Cap Ex $165M-$185M
Low-High Range
YoY Growth
Appendix
TABLE 1: RECONCILIATIONS OF HISTORICAL NON-GAAP FINANCIAL MEASURES TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES
Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
2012 2011 2010 2009 2008 2007
GAAP operating income from continuing operations $1,177 $1,037 $904 $703 $662 $630
Amortization of acquired technology 14 12 43 54 51 29
Amortization of other acquired intangible assets 39 43 42 41 34 20
Charge for historical use of technology licensing rights - - - 13 - -
Goodwill and intangible asset impairment charge - 30 - - - -
Professional fees for business combinations 5 - 7 - - -
Share-based compensation expense 169 153 134 130 111 76
Non-GAAP operating income $1,404 $1,275 $1,130 $941 $858 $755
GAAP net income $792 $634 $574 $447 $477 $440
Amortization of acquired technology 14 12 43 54 51 29
Amortization of other acquired intangible assets 39 43 42 41 34 20
Charge for historical use of technology licensing rights - - - 13 - -
Goodwill and intangible asset impairment charge - 30 - - - -
Professional fees for business combinations 5 - 7 - - -
Share-based compensation expense 169 153 134 130 111 76
Pre-tax (gain) loss on disposal of assets and businesses - - - - (52) (32)
Net gains on debt securities and other investments (16) (2) (1) (1) (1) (2)
Income tax effects of non-GAAP adjustments (72) (75) (81) (86) (56) (28)
Discontinued operations (25) 18 (10) 12 (20) (1)
Non-GAAP net income $906 $813 $708 $610 $544 $502
GAAP diluted net income per share $2.60 $2.00 $1.77 $1.35 $1.41 $1.24
Non-GAAP diluted net income per share $2.97 $2.56 $2.18 $1.85 $1.60 $1.41
Shares used in diluted per share amounts 305 317 325 330 339 356
Non-GAAP tax rate 34% 34% 35% 33% 36% 36%
See "About Non-GAAP Financial Measures" immediately following Table 3 for information on these measures, the items excluded from the most directly
comparable GAAP measures in arriving at non-GAAP financial measures, and the reasons management uses each measure and excludes the specified amounts
in arriving at each non-GAAP financial measure.
(Dollars in millions, except per share amounts)
TABLE 2: RECONCILIATION OF SELECTED NON-GAAP FINANCIAL MEASURES TO MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES
Non- Non- Non-
GAAP GAAP % GAAP GAAP % GAAP GAAP %
Fiscal Fiscal of Fiscal Fiscal of Fiscal Fiscal of
2010 Adjmts 2010 Rev 2011 Adjmts 2011 Rev 2012 Adjmts 2012 Rev
Total revenue $3,403 $- $3,403 100.0% $3,772 $- $3,772 100.0% $4,151 $- $4,151 100.0%
Cost of revenue:
Cost of product revenue $144 $(1) [a] $143 $143 $(1) [a] $142 $145 $(1) [a] $144
Cost of service and other revenue 447 (7) [a] 440 495 (6) [a] 489 601 (6) [a] 595
Amortization of acquired technology 43 (43) [b] - 12 (12) [b] - 14 (14) [b] -
Total cost of revenue $634 $(51) $583 17.1% $650 $(19) $631 16.7% $760 $(21) $739 17.8%
Operating expenses:
Selling and marketing $913 $(41) [a] $872 25.6% $1,040 $(46) [a] $994 26.4% $1,118 $(60) [a] $1,058 25.5%
Research and development 564 (41) [a] 523 15.4% 620 (51) [a] 569 15.1% 669 (52) [a] 617 14.9%
General and administrative 346 (51) [a][c] 295 8.7% 352 (49) [a] 303 8.0% 388 (55) [a][c] 333 8.0%
Amortization of other acquired intangible assets 42 (42) [b] - 43 (43) [b] - 39 (39) [b] -
Goodwill and intangible asset impairment charge - - - 30 (30) [d] - - - -
Total operating expenses $1,865 $(175) $1,690 $2,085 $(219) $1,866 $2,214 $(206) $2,008
Operating income $904 $226 $1,130 33.2% $1,037 $238 $1,275 33.8% $1,177 $227 $1,404 33.8%
Net income $574 $134 [e] $708 20.8% $634 $179 [e] $813 21.6% $792 $114 [e] $906 21.8%
[a] Adjustments to exclude share-based compensation expense from non-GAAP financial measures.
[b] Adjustments to exclude amortization of acquired technology and amortization of other acquired intangible assets from non-GAAP financial measures.
[c] Adjustment to exclude professional fees for business combinations of approximately $7 million from non-GAAP financial measures in fiscal 2010 and approximately $5 million from non-GAAP financial measures in fiscal 2012.
[d] Adjustment to exclude goodwill and intangible asset impairment charges from non-GAAP financial measures.
[e] Adjustment to exclude the effects of adjustments [a] through [d], the related income tax effects, and certain discrete income tax effects from non-GAAP financial measures.
See "About Non-GAAP Financial Measures" immediately following Table 3 for information on these measures, the items excluded from the most directly comparable GAAP measures in arriving at non-GAAP financial measures, and the reasons
management uses each measure and excludes the specified amounts in arriving at each non-GAAP financial measure.
(Dollars in millions)
TABLE 3: RECONCILIATIONS OF FORWARD-LOOKING GUIDANCE FOR NON-GAAP FINANCIAL MEASURES TO PROJECTED GAAP REVENUE, OPERATING INCOME AND EPS
Forward-Looking Guidance
GAAP Non-GAAP
Range of Estimate Range of Estimate
From To Adjustments From To
Twelve Months Ending
July 31, 2013
Revenue $4,550 $4,650 $- $4,550 $4,650
Operating income $1,315 $1,345 $255 [a] $1,570 $1,600
Diluted earnings per share $2.96 $3.02 $0.44 [b] $3.40 $3.46
[a] Reflects estimated adjustments for share-based compensation expense of approximately $208 million, amortization of acquired
technology of approximately $20 million, and amortization of other acquired intangible assets of approximately $27 million.
[b] Reflects the estimated adjustments in item [a] and income taxes related to these adjustments.
See "About Non-GAAP Financial Measures" immediately following Table 3 for information on these measures, the items excluded from
the most directly comparable GAAP measures in arriving at non-GAAP financial measures, and the reasons management uses each
measure and excludes the specified amounts in arriving at each non-GAAP financial measure.
(Dollars in millions, except per share amounts)
INTUIT INC. ABOUT NON-GAAP FINANCIAL MEASURES
The accompanying presentation dated March 5, 2013 contains non-GAAP financial measures. Table 1, Table 2, and Table 3 reconcile the non-GAAP financial measures in that presentation to the most directly comparable financial measures prepared in accordance with Generally Accepted Accounting Principles (GAAP). These non-GAAP financial measures include non-GAAP operating income (loss), non-GAAP net income (loss), non-GAAP net income (loss) per share, and free cash flow. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same names, and may differ from non-GAAP financial measures with the same or similar names that are used by other companies. We compute non-GAAP financial measures using the same consistent method from quarter to quarter and year to year. We may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures. We exclude the following items from all of our non-GAAP financial measures: • Share-based compensation expense • Amortization of acquired technology • Amortization of other acquired intangible assets • Goodwill and intangible asset impairment charges • Charges for historical use of technology licensing rights • Professional fees for business combinations We also exclude the following items from non-GAAP net income (loss) and diluted net income (loss) per share: • Gains and losses on debt securities and other investments • Income tax effects of excluded items and certain discrete tax items • Discontinued operations
About Non-GAAP Financial Measures
We believe that these non-GAAP financial measures provide meaningful supplemental information regarding Intuit’s operating results primarily because they exclude amounts that we do not consider part of ongoing operating results when planning and forecasting and when assessing the performance of the organization, our individual operating segments, or our senior management. Segment managers are not held accountable for share-based compensation expense, amortization, or the other excluded items and, accordingly, we exclude these amounts from our measures of segment performance. We believe that our non-GAAP financial measures also facilitate the comparison by management and investors of results for current periods and guidance for future periods with results for past periods. The following are descriptions of the items we exclude from our non-GAAP financial measures. Share-based compensation expenses. These consist of non-cash expenses for stock options, restricted stock units and our Employee Stock Purchase Plan. When considering the impact of equity awards, we place greater emphasis on overall shareholder dilution rather than the accounting charges associated with those awards. Amortization of acquired technology and amortization of other acquired intangible assets. When we acquire an entity, we are required by GAAP to record the fair values of the intangible assets of the entity and amortize them over their useful lives. Amortization of acquired technology in cost of revenue includes amortization of software and other technology assets of acquired entities. Amortization of other acquired intangible assets in operating expenses includes amortization of assets such as customer lists, covenants not to compete and trade names. Goodwill and intangible asset impairment charges. We exclude from our non-GAAP financial measures non-cash charges to adjust the carrying values of goodwill and other acquired intangible assets to their estimated fair values. Charges for historical use of technology licensing rights. We exclude from our non-GAAP financial measures the portion of technology licensing fees that relates to historical use of that technology. Professional fees for business combinations. We exclude from our non-GAAP financial measures the professional fees we incur to complete business combinations. These include investment banking, legal and accounting fees. Gains and losses on debt securities and other investments. We exclude from our non-GAAP financial measures gains and losses that we record when we sell or impair available-for-sale debt securities and other investments. Income tax effects of excluded items and certain discrete tax items. We exclude from our non-GAAP financial measures the income tax effects of the items described above, as well as income tax effects related to business combinations. In addition, the effects of one-time income tax adjustments recorded in a specific quarter for GAAP purposes are reflected on a forecasted basis in our non-GAAP financial measures. This is consistent with how we plan, forecast and evaluate our operating results. Operating results and gains and losses on the sale of discontinued operations. From time to time, we sell or otherwise dispose of selected operations as we adjust our portfolio of businesses to meet our strategic goals. In accordance with GAAP, we segregate the operating results of discontinued operations as well as gains and losses on the sale of these discontinued operations from continuing operations on our GAAP statements of operations but continue to include them in GAAP net income or loss and net income or loss per share. We exclude these amounts from our non-GAAP financial measures. The reconciliations of the forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures in Table 3 include all information reasonably available to Intuit at the date of this press release. These tables include adjustments that we can reasonably predict. Events that could cause the reconciliation to change include acquisitions and divestitures of businesses, goodwill and other asset impairments, and sales of available-for-sale debt securities and other investments.
About Non-GAAP Financial Measures (cont)
This presentation includes "forward-looking statements" which are subject to safe harbors created under the U.S. federal securities laws. All statements included in
this presentation that address activities, events or developments that Intuit expects, believes or anticipates will or may occur in the future are forward looking
statements, including: our expected market, customer and share growth; our opportunities and strategies to grow our business; our expected revenue, operating
income and earnings per share results and growth; our expectations regarding future dividends and ROIC improvements; our expectations for our product and service
offerings and cross-sell opportunities; and future market trends. Because these forward-looking statements involve risks and uncertainties, there are important
factors that could cause our actual results to differ materially from the expectations expressed in the forward-looking statements. These factors include, without
limitation, the following: inherent difficulty in predicting consumer behavior; difficulties in receiving, processing, or filing customer tax submissions; consumers may
not respond as we expected to our advertising and promotional activities; product introductions and price competition from our competitors can have unpredictable
negative effects on our revenue, profitability and market position; governmental encroachment in our tax businesses or other governmental activities or public policy
affecting the preparation and filing of tax returns could negatively affect our operating results and market position; we may not be able to successfully innovate and
introduce new offerings and business models to meet our growth and profitability objectives, and current and future products and services may not adequately
address customer needs and may not achieve broad market acceptance, which could harm our operating results and financial condition; business interruption or
failure of our information technology and communication systems may impair the availability of our products and services, which may damage our reputation and
harm our future financial results; as we upgrade and consolidate our customer facing applications and supporting information technology infrastructure, any problems
with these implementations could interfere with our ability to deliver our offerings; any failure to properly use and protect personal customer information and data
could harm our revenue, earnings and reputation; if we are unable to develop, manage and maintain critical third party business relationships, our business may be
adversely affected; increased government regulation of our businesses may harm our operating results; if we fail to process transactions effectively or fail to
adequately protect against potential fraudulent activities, our revenue and earnings may be harmed; any significant offering quality problems or delays in our
offerings could harm our revenue, earnings and reputation; our participation in the Free File Alliance may result in lost revenue opportunities and cannibalization of
our traditional paid franchise; the continuing global economic downturn may continue to impact consumer and small business spending, financial institutions and tax
filings, which could negatively affect our revenue and profitability; our businesses are highly seasonal and the timing of our revenue between quarters is difficult to
predict, which may cause significant quarterly fluctuations in our financial results; our financial position may not make repurchasing shares or declaring dividends
advisable; our inability to adequately protect our intellectual property rights may weaken our competitive position and reduce our revenue and earnings; our
acquisition and divestiture activities may disrupt our ongoing business, may involve increased expenses and may present risks not contemplated at the time of the
transactions; our use of significant amounts of debt to finance acquisitions or other activities could harm our financial condition and results of operation; and litigation
involving intellectual property, antitrust, shareholder and other matters may increase our costs. More details about these and other risks that may impact our
business are included in our Form 10-K for fiscal 2012 and in our other SEC filings, available through our website at www.intuit.com. Fiscal 2013 guidance speaks
only as of the date it was publicly issued by Intuit. Other forward-looking statements represent the judgment of the management of Intuit as of the date of this
presentation. We do not undertake any duty to update any forward-looking statement or other information in this presentation.
Cautions About Forward-Looking Statements
