Intuit tops Q2 targets despite slow tax season

Citing statistics from the IRS, Intuit said that the slow-tax trend is industry wide, rather than a loss of market share.
Written by Natalie Gagliordi, Contributor

Intuit says sales of its consumer and business tax preparation software were down in the second quarter, but the company still managed to eek out above-target financial results.

The personal and small business financial software maker reported a Q2 net loss of $13 million million, or five cents per share.

Non-GAAP earnings were 26 cents per share on top of revenue of $1.02 billion, up 10 percent year over year.

Wall Street was expecting earnings of 25 cents per share with $1.01 billion in revenue.

As for the rest of Intuit's portfolio, the company said it increased QuickBooks Online subscribers by 49 percent to end the quarter with 1.87 million paid subscribers. Intuit's QuickBooks Self-Employed product also saw subscriber growth on the up, ending the quarter with 180,000 users. Intuit said sales from its consumer tax products totaled $285 million.

Intuit issued a profit warning two weeks ago due to a slow start to the tax season. Citing statistics from the Internal Revenue Service, Intuit said total e-filed returns are down 13 percent, self-prepared e-filings are down roughly 11 percent and assisted e-filings are down 16 percent.

As such, Intuit believes that the slow-tax trend is industry wide, rather than a loss of market share.

"As we previously shared, the tax season is forming more slowly this year across the industry," said Dan Wernikoff, EVP and GM of Intuit's TurboTax business. "TurboTax e-filed returns are down 10 percent vs. prior year, indicating we are maintaining share at this juncture in the tax season.

That said, Wall Street is still expecting big third quarter results from Intuit season with an earnings target of $3.89 per share and $2.44 billion in revenue.

Intuit responded at the high end of the guidance range with a revenue forecast of $2.50 billion to $2.55 billion, and earnings between $3.85 and $3.90 a share.

"Our tax performance as compared to Internal Revenue Service data through February gives us the confidence to maintain our expectations for the business and for the company," said Intuit CFO Neil Williams. "With small business product improvements and innovations coming to market we are on track to meet our QuickBooks Online subscriber growth expectations as well."

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