Intuit 13% annual growth driven by strong TurboTax performance
Intuit’s revenue for fiscal year 2020 is up 13 percent year over year, which maintains the rate of growth from the previous year. The company brought in $7.7 billion, up from $6.8 billion in FY 2019, the growth mainly fueled by TurboTax Online and TurboTax products.
This year, the IRS extended the tax deadline from April 15 to July 15 to accommodate for the effects of the COVID-19 pandemic on taxpayers. This unusual tax season contributed to an 11 percent growth in revenue for both TurboTax Online and TurboTax, their strongest year-over-year performance in four years.
In 2019, Intuit was plagued by reports on deceptive pricing tactics for their TurboTax products. ProPublica reported that the company had deliberately hidden its legally mandated Free File option from taxpayers that were eligible to use it. Despite the negative publicity, TurboTax products came out on top this year, boosting the growth of Intuit’s overall consumer group revenue by 13 percent year over year.
The consumer group also canopies Intuit’s newly acquired Credit Karma business, which the company is in the midst of acquiring for $7.1 billion. The deal is currently under scrutiny by the Department of Justice for possible antitrust violations, but Intuit has a positive outlook. CEO Sasan Goodarzi called the deal one of Intuit’s “big bets” for the coming year, aiding the company in providing the ability to “unlock smart money decisions by connecting customers with financial offerings that help put more money in their pockets.”
“In its third season, we more than doubled monthly active use for Turbo and increased customer retention rates, as we grew registered users by 8 million to 22 million,” Goodarzi said during Intuit’s earnings call with investors. “This suggests customers are finding value from our recently introduced innovations such as refund tracking and goal setting. We expect our pending acquisition of Credit Karma to be more important than ever in this challenging environment, as we work to help consumers save money, get out of debt, and have faster access to money. We continue to expect the transaction to close in the second half of calendar year 2020.”
Other key takeaways:
- TurboTax Live, which allows taxpayers to connect with real CPAs live, grew its customer base by 70 percent in its second year of operation. Of TurboTax Live, Goodarzi said, “We believe that we are just at the beginning of really creating a platform that goes viral because the more people that do their taxes digitally with help coming to them in any frame that they need it, whether it's in their home or in their office, the more they're going to tell others”
- QuickBooks Online accounting revenue grew 38 percent for the year. Growth was driven primarily by customer growth and higher effective prices, Intuit reports.
- Online services revenue was up 21 percent for the year. Growth was driven by QuickBooks Online payments, QuickBooks Capital, QuickBooks Online payroll and TSheets. Excluding nonrecurring PPP revenue, growth was 12 percent for the quarter and 19 percent for the year.
- In FY 2020, QuickBooks Capital funded $683 million in cumulative loans (excluding Payment Protection Program loans) since launch. At the end of the fourth quarter, the net loans receivable balance for non-PPP loans was $40 million.