Intuit reported 23 percent growth in the second quarter of 2016, with TurboTax Online units growing 12 percent through Feb. 20, outpacing both the company’s guidance and the e-filing season to-date.
With more than 14 million units sold, TurboTax Online’s growth over the prior-year period contributed to overall TurboTax unit growth of 9 percent, as desktop sales remained relatively flat. While self-prepared e-filings grew approximately 3 percent, according to Internal Revenue Service data through Feb. 19, TurboTax e-filing rose 9 percent, which, along with third-party data “indicate that we’ve gained significant share early in the season,” stated Sasan Goodarzi, executive vice president and general manager of Intuit’s Consumer Tax Group.
Intuit’s Q2 revenue was $923 million, with non-GAAP earnings of 25 cents per share and non-GAAP operating income of $114 million. The results were also driven by QuickBooks Online subscribers, which grew 49 percent in the second quarter, bringing total paid subscribers to 1.257 million at the end of January.
“QBO subscriber growth remained near 50 percent this quarter, and we remain confident in our outlook for the full year and fiscal 2017,” stated Intuit chief executive officer Brad Smith. “In fact, we saw record QBO subs growth during the last month of the quarter, which is the peak season for adding QBO subscribers. As a result, we’re raising the low end of our QBO subscriber outlook for the remainder of the fiscal year; the range is now 1.475 million to 1.500 million subscribers.”
QuickBooks desktop units also increased 14 percent in the second quarter, driven by Intuit’s pricing and promotion strategy, according to Inuit chief financial officer Neil Williams.
Intuit is also ahead of what the IRS is seeing in paid preparer results, according to CeCe Morken, executive vice president and general manager of Intuit’s Professional Tax Group, up two to three points. ProTax group revenue reached $84 million in Q2.
Along with product innovation and new marketing campaigns, Intuit credited its strong Q2 results to leadership in fighting cyberfraud.
“Collectively, as an industry, and with the government we are absolutely making an impact on fraud,” Smith said.
The ProTax group has been working very closely with the IRS and states, according to Morken, looking at the behavior of tax professionals to implement more robust modeling for Electronic Filing Identification Numbers.
“We are very focused on leading the industry best practices and standards, to address [fraud] holistically across the private and public sectors—it’s a big focus across the company,” Morken said.
Intuit also announced the decision to rotate the general managers of the Consumer Tax and Small Business units, with Sasan Goodarazi assuming the role as GM of the Small Business Group and Dan Wernikoff taking over as head of Consumer Tax, effective May 1.
Inuit’s guidance for the current quarter is revenue of $2.21 to 2.26 billion, up 4 to 6 percent.
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