Intuit(US:INTU)2023-05-22 16:00Financial Assets and Liabilities - Net notes receivable balance increased to $759 million as of April 30, 2023, up from $540 million as of July 31, 2022[62] - Total available-for-sale debt securities were valued at $723 million as of April 30, 2023, up from $685 million as of July 31, 2022[59] - Cash equivalents primarily consisting of money market funds and time deposits increased to $3.051 billion as of April 30, 2023, up from $1.835 billion as of July 31, 2022[45] - Total assets measured at fair value on a recurring basis increased to $3.774 billion as of April 30, 2023, up from $2.520 billion as of July 31, 2022[45] - Senior unsecured notes measured at fair value decreased slightly to $1.817 billion as of April 30, 2023, from $1.838 billion as of July 31, 2022[45] - Corporate notes and U.S. agency securities, measured using Level 2 inputs, were valued at $723 million as of April 30, 2023, up from $685 million as of July 31, 2022[45] - Long-term investments carried value increased to $102 million as of April 30, 2023, up from $98 million as of July 31, 2022[50] - Cash and cash equivalents increased to $3.745 billion as of April 30, 2023, compared to $2.796 billion as of July 31, 2022[53] - Total cash, investments, and funds held for customers reached $4.656 billion as of April 30, 2023, up from $3.712 billion as of July 31, 2022[53] - Net notes receivable for term loans to small businesses increased to $752 million as of April 30, 2023, from $540 million as of July 31, 2022[63] - Total funds receivable and amounts held for customers decreased from $539 million in April 2022 to $388 million in April 2023[61] - Total cash, cash equivalents, restricted cash, and restricted cash equivalents increased from $3,691 million in July 2022 to $4,479 million in April 2023[55] Revenue and Deferred Revenue - Deferred revenue recognized during the nine months ended April 30, 2023 was $778 million, compared to $657 million for the same period in 2022[38] - The deferred revenue balance related to performance obligations to be satisfied after 12 months was $4 million as of April 30, 2023, down from $6 million as of July 31, 2022[39] - Revenue from Consumer and ProTax offerings is highly seasonal, with sales concentrated from November through April[28] - No single customer accounted for 10% or more of total net revenue in the three or nine months ended April 30, 2023 or April 30, 2022[40] - Total net revenue for Q3 fiscal 2023 increased by $386 million (7%) compared to Q3 fiscal 2022, driven by growth in the Small Business & Self-Employed and Consumer segments[152] - Small Business & Self-Employed segment revenue grew to $2,021 million in Q3 fiscal 2023, up 21% from $1,667 million in Q3 fiscal 2022, primarily due to growth in the Online Ecosystem[152] - Consumer segment revenue increased to $3,341 million in Q3 fiscal 2023, up 3% from $3,239 million in Q3 fiscal 2022, driven by higher-priced product offerings and effective pricing[152] - Credit Karma segment revenue decreased to $410 million in Q3 fiscal 2023, down 12% from $468 million in Q3 fiscal 2022, due to declines in personal loan, home loan, auto loan, and auto insurance verticals[152] - Total Online Ecosystem revenue grew to $1,468 million in Q3 fiscal 2023, up 23% from $1,192 million in Q3 fiscal 2022, driven by QuickBooks Online Accounting and Online Services[126] - Total Desktop Ecosystem revenue increased to $553 million in Q3 fiscal 2023, up 16% from $475 million in Q3 fiscal 2022, led by QuickBooks Desktop Accounting growth[126] - International net revenue accounted for 6% of consolidated net revenue for the three months ended April 30, 2023, consistent with the same period in fiscal 2022[121] - Total net revenue for Q3 FY23 increased by $386 million (7%) to $6,018 million compared to Q3 FY22[151] - QuickBooks Online Accounting revenue increased by 25% to $723 million in Q3 FY23 compared to Q3 FY22[164] - Total Online Ecosystem revenue increased by 23% to $1,468 million in Q3 FY23 compared to Q3 FY22[164] - Small Business & Self-Employed segment revenue increased by $354 million (21%) to $2,021 million in Q3 FY23 compared to Q3 FY22[164] - Consumer segment revenue increased by $237 million (6%) in the first nine months of FY23 compared to the same period in FY22[171] - Online Ecosystem revenue increased by 23% in Q3 fiscal 2023, with QuickBooks Online Accounting revenue up 25% and Online Services revenue up 21%[165] Debt and Financing - Total principal balance of debt decreased to $6.621 billion as of April 30, 2023, from $6.930 billion as of July 31, 2022[70] - Term loan outstanding decreased to $4.2 billion as of April 30, 2023, from $4.7 billion as of July 31, 2022[78] - Interest paid on term loan increased to $164 million for the nine months ended April 30, 2023, compared to $21 million for the same period in 2022[78] - No amounts were outstanding under the $1 billion unsecured revolving credit facility as of April 30, 2023[79] - The 2019 Secured Facility has a facility limit of $500 million, with $300 million committed and $200 million uncommitted, and a weighted-average interest rate of 6.41% as of April 30, 2023[80] - The 2022 Secured Facility has a facility limit of $500 million, with $150 million committed and $350 million uncommitted, and a weighted-average interest rate of 6.16% as of April 30, 2023[81] - Total future principal payments for debt amount to $6,621 million, with $4,700 million due in 2025[71] - The company issued senior unsecured notes totaling $1.98 billion in June 2020, with $12 million in interest paid during the nine months ended April 30, 2023[72][73] Operating Expenses and Income - Total operating expenses decreased by $154 million (6%) in Q3 FY23 compared to Q3 FY22[186] - Selling and marketing expenses were $1,203 million (20% of net revenue) in Q3 fiscal 2023, down from $1,227 million (22% of net revenue) in Q3 fiscal 2022[185] - Research and development expenses were $604 million (10% of net revenue) in Q3 fiscal 2023, slightly up from $600 million (11% of net revenue) in Q3 fiscal 2022[185] - General and administrative expenses decreased to $332 million (6% of net revenue) in Q3 fiscal 2023 from $465 million (8% of net revenue) in Q3 fiscal 2022[185] - Operating income for Q3 FY23 increased by $383 million (16%) to $2,778 million compared to Q3 FY22[153] - Net income for Q3 FY23 increased by $293 million (16%) to $2,087 million compared to Q3 FY22[154] - Operating income for the first nine months of fiscal 2023 increased by $478 million or 18% compared to the same period in fiscal 2022[156] - Small Business & Self-Employed segment operating income increased by $286 million or 34% in Q3 fiscal 2023 and $792 million or 31% in the first nine months of fiscal 2023[168] - Consumer segment operating income increased by $230 million or 9% in the first nine months of fiscal 2023[172] - ProTax segment operating income increased by 3% in the first nine months of fiscal 2023[180] - Total operating expenses as a percentage of total net revenue decreased in the first nine months of fiscal 2023, with total net revenue increasing by $1.3 billion or 13% and total operating expenses increasing by $242 million or 4%[187] Intangible Assets and Amortization - Acquired intangible assets net value decreased to $6.580 billion as of April 30, 2023, from $7.061 billion as of July 31, 2022[68] - Total expected future amortization expense for acquired intangible assets is $6.580 billion, with $161 million expected in the remaining three months of fiscal 2023[69] Leases and Lease Obligations - Total net lease cost for the nine months ended April 30, 2023, was $103 million, compared to $68 million for the same period in 2022[86] - Cash paid for operating lease liabilities was $73 million for the nine months ended April 30, 2023, compared to $77 million in the same period in 2022[88] - Right-of-use assets obtained in exchange for operating lease liabilities were $23 million for the nine months ended April 30, 2023, down from $81 million in 2022[88] - Total future minimum lease payments for operating leases as of April 30, 2023, amounted to $680 million, with a present value of $586 million after deducting imputed interest[88] Share Repurchases and Dividends - The company repurchased 3.7 million shares for $1.5 billion during the nine months ended April 30, 2023, with an additional $2.0 billion authorized for future repurchases[98] - Quarterly cash dividends declared during the nine months ended April 30, 2023, totaled $2.34 per share, amounting to $676 million[101] Share-Based Compensation - Share-based compensation expense for the nine months ended April 30, 2023, was $1.264 billion, up from $962 million in the same period in 2022[103] - Unrecognized compensation cost related to non-vested RSUs and restricted stock was approximately $3.5 billion as of April 30, 2023, with a weighted-average vesting period of 2.7 years[105] Legal and Tax Matters - The company settled legal proceedings with state attorneys general for $141 million, recorded as a one-time charge in the quarter ended April 30, 2022[110] - The company's effective tax rate for the nine months ended April 30, 2023, was approximately 23%, excluding discrete tax items[92] - Total other long-term obligations increased from $87 million in July 2022 to $116 million in April 2023, primarily due to higher income tax liabilities[83] Segment and Strategic Changes - The Mint offering moved from the Consumer segment to the Credit Karma segment on August 1, 2022, to better align the company's personal finance strategy[116] - The ProConnect segment was renamed the ProTax segment on August 1, 2022, continuing to serve professional accountants[116] - The company acquired Mailchimp on November 1, 2021, and its offerings are now part of the Small Business & Self-Employed segment[129] - Mailchimp was acquired on November 1, 2021, and its results are included in the Small Business & Self-Employed segment[159] - The company's AI-driven expert platform strategy focuses on revolutionizing speed to benefit, an open platform, application of AI, and incorporating experts to solve customer problems[137][138] - The Consumer and ProTax segments exhibit significant seasonality, with higher net revenues concentrated in the period from November through April[141] Interest and Other Income - Interest income increased to $28 million in Q3 FY23 compared to $2 million in Q3 FY22[191] Cost of Revenue - Cost of service and other revenue increased to 17% of related revenue in Q3 FY23 compared to 15% in Q3 FY22[182] Other Liabilities - Total other current liabilities decreased from $571 million in July 2022 to $498 million in April 2023, driven by reductions in reserves for returns, credits, and promotional discounts[82]