Intuit grows revenue for Q1, continues push into "connected services"

Intuit grows revenue for Q1, continues push into "connected services"

Summary: Intuit disappoints by missing earnings target but notes highlights as it transitions to a "connected services company."

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Intuit, the maker of TurboTax and Quicken software, beat Wall Street's estimates for its first quarter, reporting a 2 percent growth in revenue for the period. The company reported a net loss of $32 million, or 10 cents per share, on revenue of $493 million, which is a 2 percent increase from the year-ago quarter. Wall Street had been expecting a net loss of 16 cents per share on revenue of $487.7 million. (Statement)

The company reported 11 cents worth of charges in the quarter. Adjusted for that, it reported a loss of $68 million, or 21 cents per share.

The company highlighted strong customer growth across core businesses and the repurchasing of $300 million shares of stock during the quarter, as well as as a board approval of a new repurchase program if $600 million. It ended the quarter with more then $1 billion cash and investment.

During the quarter, it also acquired Mint.com and reaffirmed its full-year 2010 guidance inclusive of the transaction. In a statement, Intuit president and CEO Brad Smith said:

Intuit’s solid revenue and operating results give us a good start to the fiscal year, with our most important quarters ahead of us... We continue to see growth in our core businesses and are making progress in building out adjacent businesses. At the same time, we are accelerating our transition to a connected services company, with the recent acquisitions of online payroll provider PayCycle and the fast-growing online personal finance service Mint.com. We’ll also continue to invest in our products and in innovations that position us well for future growth.

Intuit has been pushing the adjacent segments and emerging technologies that moves it closer to the connected services company it wants to be, by leveraging strengths, such as being a brand name that's trusted with details of our finances, and moving strategically and cautiously into the cloud.

Last month, the company enhanced its Quickbooks accounting software by unveiling an app store and opening its API so developers can help companies free their financial data into custom apps. What was interesting about that was the hybrid approach - a button embedded into the desktop software that takes users to an apps marketplace in the cloud.

Earlier this month, the company launched Customer manager, a new online and mobile app software that brings CRM tools to Quickbooks, largely targeted at the small business market.

Looking forward, guidance for the second quarter is non-GAAP EPS of 29-32 cents on revenue of $800 million to $835 million, representing growth of 1-6 percent.

Shares of Intuit were down slightly in regular trading, closing at $30.27. Shares dipped slightly - about 1.5 percent - in after hours trading.

Correction: An earlier version of this post inadvertently contained results based on the adjusted GAAP basis, instead of non-GAAP, and said the company missed Wall Street estimates when it actually beat. I extend my apologies for any confusion.

Topics: Banking, CXO, Enterprise Software, Legal, IT Employment

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5 comments
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  • Bad news

    In Canada, there are basically two favoured accounting packages for small businesses: Quickbooks (by Intuit) and Simply Accounting (by Sage). There is no online version of Quickbooks in Canada. They don't even offer Canadian trials. Sage has no interest in offering cloud services either. Both are UI nightmares, but I prefer Quickbooks. If Intuit goes under, there is no competition for Sage, and I fear that day.

    Someone I talked to had once recommended NetSuite, but they wanted $99/user/month for the same functionality in Quickbooks and Simply Accounting that sell for $99 for the whole year (and you don't need to buy it every year either)! If that's the way cloud services are going to go, count me out.
    Joe_Raby
  • RE: Intuit misses for Q1, continues push into

    Does Intuit have a competitor to Quicken? I don't know of
    any. MS quit the business when they ditched Money.

    Quicken is a poor piece of software with more and more
    problems in the last few years. It seems that no serious
    effort is made to make that package robust. The software
    has noticeable been getting lamer with the last few
    releases. As of the 2009 release of Quicken, I started
    experiencing application crashes and data file corruptions.
    That never happened before. Recently, there was a serious
    issue installing a patch (release 7), where the patch could
    not be applied until the program and *all* its related files
    were first removed, the program re-installed, the patches
    added back in, and the data file was imported from
    backup. A lot of their users, including me, were affected.
    Pathetic.

    Another sign that Intuit is not paying attention to its Quicken customers is that dozens of annoyances and bugs
    have not been fixed from release to release. They rather
    waste their time thinking of ways to clutter their GUI with
    useless tabs, etc. Putting lipstick on a pig comes to mind.

    All this has not gone unnoticed by their unhappy users.
    Take a look at the rating users give Quicken on CNET
    (Intuit Quicken 2009 Premier = 1.5 stars ; Intuit Quicken
    2009 Home and Business = 1 star ; Amazon = 3 stars).
    Not a ringing endorsement of a product. Given that they
    don't have competition, they don't have to care.

    I've read somewhere that Intuit swallowed Mint.com and
    that company's CEO will have a lot to say in how Quicken
    develops. Good. I hope Quicken returns to being a solid
    product as it once was. I have 16 years of data to protect.
    TroutHound
  • RE: Intuit misses for Q1, continues push into

    I am done with Quicken, the 2007 version is just terrible and when the problems all began, the only thing they fixed was a calm down of the screen flickering, bill minder on start up doesn't work, data downloaded goes missing till you restart Quicken, if you have a ms mouse you can only scroll up. I can't believe the hours people put into trying all the suggestions to get it to work either - me being one of them. I have 11 yrs of data on the file.

    Suggestions are MoneyDance, Gnu Cash but really there isn't anything like Quicken 2006, the last known version with out common issues.

    To lock you into buying they sunset your version every 3 years so you can't download anything any more or use a version of their software that does work. I only use it to download for one credit card so I won't be upgrading when this version sunsets next year, I would rather go back to pen and paper.

    I can truly say I haven't ever purchased such a poorly working piece of software. I also think it's true with out the competition of MS Money there isn't any incentive to improve the product or even make it working.
    Northlite
    • We're in complete agreement

      I agree about the sunset bit. Intuit *forced* an upgrade on me. They
      even said that my Bill Pay will stop working if I don't upgrade. And I
      pay $9.95/month for that!! I know banks provide a similar service,
      but I prefer to use Bill Pay due to some of its features.

      Intuit has become another Microsoft. A monopoly that doesn't have to
      answer to users' gripes.

      I had no trouble with Quicken 2006. It never ever crashed on me. My
      OS (XP) remained the same. Following the upgrade to 2009, I had
      application crashes and data corruptions. The fault lies entirely with
      Intuit, which is basically the only application I run on my PC. I've
      switched to using a Mac. But I can't completely switch to the Mac
      because some genius (read "idiot") at Intuit decided not to allow the
      related programs to read each others' data, and they don't completely
      overlap functions. These are all very well known issues that people
      have griped about for years. Is Intuit listening? Absolutely not.
      TroutHound
  • RE: Intuit misses for Q1, continues push into

    vstdfd,good post!
    makrekdw73-24353635615163652143356448933213