Q3 2022
- Intuit the global technology platform that makes TurboTax, QuickBooks, Credit Karma and the recently acquired Mailchimp announced financial results for Q3 2022 earlier this week.
- Total revenue for the quarter was $5.6 billion, up 35% and $120 million ahead of expectations. Excluding Mailchimp, total revenue grew 29%. Operating profits climbed by 25% year-on-year to $2.4 billion with the related margin decreasing to 46% from 43%. Adjusted EPS reported was $7.65 ahead of both the company’s guidance range of $7.51 to $7.57 consensus of $7.58. The company paid a dividend of $0.68cps up 15% from $0.59 cps in Q3 2021.
- Intuit management said they observed a limited impact from the current macroeconomic headwinds and management expects the business to be resilient. Looking ahead, Intuit expects full year EPS of $11.68 to $11.74, up between 20% and 21%, and ahead of consensus of $11.66.
- Intuit is a high-quality business consistently generating operating margins of close to 30% and returns on invested capital in excess of 20%. Over the last decade revenues have increased by 130%, but perhaps more impressive is the growth in operating profits and free cash flow, which have increased by close to 200%. At $385, relative to guided full year EPS, Intuit trades at a PE of approximately 33x. Although the stock is expensive, we currently hold a small position in the Cratos Worldwide Flexible Fund.