- Intuit, the global technology platform that makes TurboTax, QuickBooks, Credit Karma and Mailchimp, announced financial results for Q1 2023.
- Total revenue for the year was $2.6 billion, up 29% and $100 million ahead of consensus. Adjusted operating profit increased 19% to $662 million with the operating margin declining to 25% from 28% in 2022. Adjusted EPS grew 8% to $1.66 per share, which was $0.46 above consensus. Intuit received Board approval for a quarterly dividend of $0.78 per share, representing a 15% increase versus last year.
- Looking at the breakdown, QuickBooks Online accounting revenue grew 29% for the year, driven primarily by higher effective prices and customer growth. Online services revenue grew 109% driven by the recent acquisition of Mailchimp. Excluding Mailchimp, Online Ecosystem revenue grew 28%.
- Disappointingly the company’s fintech app Credit Karma revenue grew only 2% to $425 million due to softness in personal loans, home loans, auto insurance and auto loans.
- Guiding for 2023, Intuit management expects revenue between $14.04 billion and $14.25 billion, or growth of 10% to 12%. This is down from previous guided growth of 14% to 16%. The adjusted EPS share forecast of $13.59 to $13.89, represents growth of 15% to 17%.
- Intuit is a high-quality business consistently generating operating margins of close to 25% and returns on invested capital of more than 20%. At $415, relative to guided full year EPS, Intuit trades at a PE of approximately 30x. Although the stock is expensive, we currently hold a small position in the Cratos Worldwide Flexible Fund.
By Desmond Esakov
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