The operator welcomes everyone to Intuit's conference call and introduces the company's CEO and CFO. The speakers remind listeners that there are risks involved and some numbers will be presented on a non-GAAP basis. Intuit had a strong quarter with 12% revenue growth and is focused on being a global AI-driven expert platform for consumers and small businesses.

Intuit's Small Business and Self-Employed Group revenue grew 18% despite a challenging market, demonstrating the importance of their platform for small businesses. Their Consumer Group and Credit Karma revenue also saw growth, driven by innovation and product integration. In the tax division, Intuit is focused on revolutionizing the tax preparation experience for consumers and small businesses, with a $35 billion TAM in the US. They have made progress in their multi-year strategy to transform the assisted experience, with TurboTax Live being their largest opportunity for growth. They expect TurboTax Live customers and revenue to grow significantly in fiscal 2024, giving them confidence in their ability to digitize the assisted tax category. The TurboTax Live full service offering is resonating with customers and is expected to double in customers and triple in new users this fiscal year, with a high product recommendation score.

Intuit's recent learnings and insights from the tax season have increased their confidence in disrupting the assisted tax category. They expect TurboTax to gain share with higher ARPR filers and credit their success to their GenAI powered financial assistant, Intuit Assist. The integration between TurboTax and Credit Karma has also yielded positive results, with a significant increase in customers and tax refunds deposited in Credit Karma Money accounts. This integration has also driven new members to Credit Karma, aligning with Intuit's goal of improving financial health for consumers. Overall, Intuit sees many opportunities to continue innovating and delivering customer benefits in the future.

Intuit is aligning TurboTax and Credit Karma under one leader to improve consumer experiences, with the current President of Credit Karma taking over as leader. The company is also preparing for the era of AI and investing in their Big Bets to drive growth and solve customer problems. This includes investing in AI-powered experts, TurboTax Live and QuickBooks Live, money solutions, mid-market, and international growth.

The company plans to increase investments in their focus areas and reallocate resources to accelerate growth while maintaining operating margin expansion. In the third quarter of fiscal 2024, the company saw solid results with revenue and operating income increasing by 12%. The consumer group revenue grew by 9%, driven by the success of their assisted experience for consumers and small businesses. The company expects TurboTax Live revenue to grow by 17% in fiscal 2024, with a focus on higher ARPR filers. Overall retention is expected to be up 3 points year-over-year, indicating the strength of their offerings to customers.

In the third quarter, Intuit expects TurboTax Live customers to grow 12% and total online paying units to grow 2%, while their share of total consumer returns is expected to decline. They have raised their full year revenue growth guidance to the top end of their previous guidance and are confident in the future. In the ProTax Group, revenue grew 3% and is expected to grow 6-7% for the full year. The Small Business and Self-Employed Group saw 18% revenue growth, driven by online ecosystem revenue. Their focus is on growing the core, connecting the ecosystem, and expanding globally, with a 19% growth in QuickBooks Online accounting revenue. They are also prioritizing disrupting the small business mid-market through go-to-market motions and product innovations.

Mid-market customers, who have more complex needs and use more services on our platform, drive higher ARPC over time. We are focusing on selling more of our ecosystem offerings to existing customers and connecting the ecosystem. Online services revenue grew 20% in Q3, driven by payments, payroll, and Mailchimp. We continue to expand globally and have a refreshed international strategy. In the Desktop Ecosystem, revenue grew 14% and QuickBooks Desktop Enterprise revenue grew in the high-teens. We are transitioning customers on our license-based desktop offering to a recurring subscription model.

In the upcoming fiscal year, the company expects their Desktop Enterprise offering to experience high-single digit growth and will encourage remaining Desktop Plus subscribers to migrate to QBO or Desktop Enterprise. They also plan to continue pricing the product for value. The online ecosystem is expected to be a growth catalyst in the long-term. The Small Business and Self-Employed Group revenue growth guidance has been raised to 18%. Credit Karma saw 8% revenue growth in Q3, with Credit Karma Money, credit cards, auto insurance, and personal loans contributing to the growth. However, there is uncertainty due to conservative credit extension from partners in personal loans and credit cards. The company is updating their full year Credit Karma revenue growth guidance to 2%. The company remains committed to their financial principles and there are no changes to their balance sheet and capital allocation plans.

The company ended the quarter with $4.7 billion in cash and $6 billion in debt. They repurchased $584 million of stock and announced a quarterly dividend increase of 15%. They also increased their fiscal 2024 guidance for revenue, operating income, and earnings per share. They plan to continue investing in their five Big Bets and are reallocating investments to accelerate progress. The company remains committed to their financial principles and aims for double-digit revenue growth and expanding operating margins in fiscal 2025 and beyond.

The Intuit CEO discusses the company's strong position in the tech industry, their focus on AI, and the recent return of a world-class leader. He also addresses a question about the company's shift towards higher ARPC customers in the tax business and explains that they are focused on both attracting these customers and pricing for the low end.

The speaker discusses the success of TurboTax Live in the assisted segment, which has led to a 17% growth in the $1.4 billion business. They also mention taking share in the assisted segment and their focus on quality customers rather than those who bounce between platforms. This, combined with their Credit Karma and TurboTax platform, gives them confidence in future growth.

The speaker discusses the success of integrating TurboTax into Credit Karma and the potential for growth in this area. However, they also mention two issues that arose this year, including difficulty with seamless log in for some users and app performance. They are already working to address these issues.

Sasan Goodarzi, CEO of Credit Karma, discusses the challenges they faced in embedding the TurboTax experience within their app. They saw a drop off in usage due to slow app performance, but are working to improve it. Despite these challenges, Goodarzi is confident in their focus on turning every Credit Karma member into a TurboTax customer. The company is also investing more in their money platform, expanding into invoice to bill pay and making strategic hires and acquisitions. Goodarzi is excited about the potential of this area and is increasing their investments in it.

The speaker discusses the progress made in digitizing the process of estimating, invoicing, and getting paid, as well as the multiple payment options and bill pay capabilities now available to customers. They note that in a tough macro environment, total payments volume was up 22% and investments in this area will continue. The speaker also mentions the success of the TurboTax Credit Karma platform, with a 28% increase in customers choosing to put their refund on a Credit Karma Money account. They believe this could be even bigger and are focused on removing friction and providing earlier access to tax refunds. The company also recently made a small technology acquisition to enhance money movement and risk management capabilities.

The speaker discusses the total share of IRS returns for TurboTax and mentions that they believe it will grow by 1%, mostly in the do-it-yourself category. They also mention their goal of increasing their share of total IRS returns, which will be aided by the growth of TurboTax Live. They compare this to the online desktop mix in small business, where a similar shift resulted in accelerated growth.

Sandeep Aujla and Sasan Goodarzi discuss the customer segmentation in the simple filers market and their focus on retaining customers. Goodarzi also talks about the Mailchimp business and its decelerated revenue due to lapping a big price increase. The company's focus remains on integrating Mailchimp and QuickBooks, targeting mid-market and international markets.

The speaker, Sasan Goodarzi, recently visited London and met with the new leader of Mailchimp's EMEA team. They are being aggressive in their approach to the platform, pricing, and marketing investments. Goodarzi mentions five areas where they are accelerating their investments, one of which is small business. He is confident in their ability to execute and mentions their philosophy of testing and experimentation. They are seeing green shoots with their learnings and insights from Intuit Assist and are accelerating their investments in GenAI.

Sasan Goodarzi, CEO of Intuit, spoke about the company's recent growth and investments in the assisted segment, specifically TurboTax Live and QuickBooks Live. He mentioned the company's assertive efforts in building capabilities for the mid-market and seeing positive results. Goodarzi also addressed a question about the economic environment and the moderate growth in the payroll business. He emphasized the health of small businesses on the platform.

The profitability of small businesses on the platform has improved in the last three to four months compared to the last couple of years. However, the performance varies depending on the sector, with manufacturing and professional services seeing a 20% increase in profits while real estate lending has seen a 15% decrease. Overall, cash reserves are down 8% compared to last year but up 16% compared to pre-COVID levels. Small businesses on the platform have higher cash reserves compared to those who have only been with them for a year. Hours worked have also increased in the last quarter. In regards to payroll, the company has seen growth in their higher-end offerings and their payments business has seen a 22% growth in charge volume compared to 20% in the previous quarter.

Sasan Goodarzi discusses the strong performance of full service this season, with consistent results across all states and demographics. The company saw a significant increase in new customers, particularly among millennials. However, they are dissatisfied with the shopping experience and are working to improve it.

The speaker, Sasan Goodarzi, expresses confidence in the demand and performance of their products, but acknowledges the need to improve the shopping experience. He mentions the use of AI to personalize the experience for customers and shares proof points of its success, including 24 million customers using Intuit Assist in TurboTax and improved efficiency for experts. He also notes that they are still in the early stages of using AI.

Credit Karma has over 40 million monthly active users and has rolled out Intuit Assist capabilities to nearly half of them. These capabilities include helping users make decisions, understand their finances, and make personalized marketing campaigns. They have also rolled out these capabilities to small businesses and QuickBooks customers, with the goal of turning unstructured data into personalized financial advice. This has been beneficial for monetization and has been rolled out to a large number of users.

The speaker discusses the success of their company's Full Service program, which helps users with their taxes. They have learned that they can create a lot of demand for this service and have seen success in promoting the ability to complete taxes quickly and provide early access to money. They are optimistic about the future of this program and have made a lot of progress in the last 90 days.

The lack of price transparency in the assisted tax preparation segment has led to a focus on improving the shopping experience and increasing demand. Through testing, it was found that price is a crucial factor for customers and that local experts and recommendations can significantly increase conversion rates. Next year, the company plans to roll out these improvements to all customers. Additionally, they are working on revamping the shopping experience to prioritize the expertise of the tax preparers rather than just presenting a list of prices. These insights give the company confidence for the future.

Sasan Goodarzi, CEO of Intuit, responds to a question about the company's performance in the do-it-yourself and paid customer categories, specifically in TurboTax. He notes that overall, they have seen growth in total paying customers and retention, which indicates that they are doing well in terms of paid share. However, they have intentionally focused on losing share in the simple filers category to prioritize other areas, such as assisted filing. Overall, Goodarzi is satisfied with their performance in the paid category.

Sandeep Aujla and Sasan Goodarzi discuss their focus on attracting both assisted and DIY customers to their platform and improving the product experience for these customers. They also mention their plans to disrupt the $31 billion market for consumer and small business customers and take share from paying DIY customers. Goodarzi also talks about the business model shift to move all desktop customers to subscription and the eventual goal of having all desktop customers on the online platform. They highlight the capabilities of QuickBooks Advanced in this transition.

The company is aggressively building capabilities to target larger customers and is confident in its ability to attract more customers to its online platform. They are also seeing progress with their mid-market products, including QuickBooks Online Advanced and desktop enterprise. In the previous quarter, growth in Small Business & Self-Employed was driven by stable accounting and an acceleration in the stock. It is unclear how much of the projected 17% growth in the next quarter will be driven by desktop versus online.

The strength of the small business franchise at the software company is driven by online performance, with an 18% growth in overall online and 20% growth in services. The company is well positioned in the current uncertain macro environment, with strong engagement and usage by customers. 80% of the small business group's revenue is subscription-based, with a 22% increase in payments charge volume and good adoption of payroll offerings.

The speaker, Sasan Goodarzi, feels confident about the growth of their online ecosystem going into the fourth quarter, which they see as a major growth catalyst for the future. They are also focusing on international growth, with Mailchimp being a key player. Goodarzi mentions that Mailchimp's international revenue was impacted by lapping price increases from last year and lineup changes, but they are still seeing positive growth and plan to invest more in international markets. The call ends with Goodarzi thanking the attendees.

The speaker thanks the audience for their questions and invites them to the next earnings call. The operator then ends the call and thanks everyone for participating.

This summary was generated with AI and may contain some inaccuracies.