Summary
Intuit reported revenue of $2.67 billion for the second quarter of fiscal 2022, up 69.6% from the prior-year quarter. Operating income swung to a profit of $56 million from a loss of $25 million a year earlier, and operating margin improved to 2.1% from negative 1.6%. Net income rose 400% to $100 million, and diluted EPS reached $0.35 against $0.07. The period was the first to include a full quarter of Mailchimp, acquired on November 1, 2021 for total consideration of $12.0 billion, split between $5.7 billion of cash and 10.1 million Intuit shares valued at roughly $6.3 billion.
Growth came from every reporting segment. Small Business & Self-Employed revenue rose 47%, with Online Ecosystem revenue up 74% on higher QuickBooks Online Accounting revenue and a 139% jump in Online Services. Consumer segment revenue climbed 180% because the IRS began accepting and processing returns on January 24, 2022, compared with February 12, 2021 a year earlier. Credit Karma revenue increased 208%, helped by a full reporting period versus roughly two months in fiscal 2021 and by growth in credit card and personal loan verticals. ProConnect revenue rose 14% on the same earlier start to the tax season.
Expenses scaled with the business. Total operating expenses rose 66% in the quarter, driven by staffing, marketing, share-based compensation and amortization of acquired intangibles tied to Credit Karma and Mailchimp. Operating cash flow was $85 million, down 69.5% from $279 million, and capital expenditures were $65 million, up 97%. For the first six months of fiscal 2022, operating cash flow fell 29% to $230 million while capital expenditures rose 50.7% to $107 million. Deferred revenue, current portion only, stood at $822 million, up 9.3% from the prior-year quarter.
The first six months tell a similar story at the top line. Revenue of $4.68 billion rose 61.4% from the prior-year period. Operating income of $251 million was up 36.4%, net income of $328 million rose 50.5%, and diluted EPS of $1.16 was up 43.2%. Operating margin for the six months slipped to 5.4% from 6.3%, a decline of 1.0 percentage point, as costs grew faster than revenue over the longer stretch. The quarter also carried a $70 million tax benefit on pretax income of $30 million, including $62 million of excess tax benefits on share-based compensation.
The Mailchimp deal reshaped the balance sheet. Cash, cash equivalents and investments totaled $1.4 billion at January 31, 2022, down $2.5 billion from July 31, 2021. Long-term debt rose to $6,732 million from $2,034 million after Intuit borrowed the full $4.7 billion unsecured term loan. Working capital fell 79% to $522 million. Interest expense for the first six months was $28 million, up from $15 million. The company also committed $555 million through July 31, 2044 for naming rights to Intuit Dome and $1.2 billion over five years under an amended cloud services agreement.
Management flagged the usual seasonal caveat. Consumer and ProConnect results are concentrated from November through April, and substantially complete tax season results will not be available until the third quarter of fiscal 2022. The filing lists competitive pressure from disruptive start-ups and mega-platforms, dependence on third-party relationships, and the security and privacy risks that come with hosting customer financial data. The credit agreement carries covenants, including a total gross debt to EBITDA ratio no greater than 3.25 to 1.00. Intuit declared a quarterly dividend of $0.68 per share payable April 18, 2022, and had $2.5 billion of authorization remaining for stock repurchases.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2022 | Q1 FY2022 | QoQ | Q2 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $2.67B | $2.01B | +33.2% | $1.58B | +69.6% |
| Research & development | $590.0M | $530.0M | +11.3% | $368.0M | +60.3% |
| Sales & marketing | $942.0M | $550.0M | +71.3% | $580.0M | +62.4% |
| General & administrative | $399.0M | $262.0M | +52.3% | $250.0M | +59.6% |
| Total operating expenses | $2.62B | $1.81B | +44.4% | $1.60B | +63.5% |
| Operating income (loss) | $56.0M | $195.0M | -71.3% | -$25.0M | +324.0% |
| Operating margin | 2.1% | 9.7% | -7.6 pp | -1.6% | +3.7 pp |
| Net income (loss) | $100.0M | $228.0M | -56.1% | $20.0M | +400.0% |
| Net margin | 3.7% | 11.4% | -7.6 pp | 1.3% | +2.5 pp |
| Diluted EPS | $0.35 | $0.82 | -$0.47 | $0.07 | +$0.28 |
Risks
Intuit completed the Mailchimp acquisition on November 1, 2021 for $12.0 billion, including $5.7 billion in cash and 10.1 million shares, and continues integrating Credit Karma. Risk factors cite inability to realize synergies, retain key employees, align internal controls, and potential dilution to non-GAAP diluted EPS beyond the first fiscal year after close.
Intuit borrowed $4.7 billion under an unsecured term loan to fund a portion of the Mailchimp cash consideration, increasing leverage and interest expense. MD&A reports interest expense of $28 million for the first six months of fiscal 2022 versus $15 million in the prior-year period, and operating cash flow was $230 million for the first six months of fiscal 2022, down 29.0% from the prior-year period.
Intuit no longer participates in the IRS Free File Program, whose current agreement expires in October 2022. Risk factors state the departure may increase the likelihood the program is terminated or not extended, and if the IRS enters software development and return preparation, the federal government could become a publicly funded direct competitor.
Consumer and ProConnect revenue is heavily concentrated from November through April, and tax filing timing changes can significantly affect quarterly results. MD&A notes the IRS began accepting returns on January 24, 2022 versus February 12, 2021, and the fiscal 2021 deadline was extended to May 17, 2021, making revenue and operating results more difficult to predict.
Credit Karma is subject to a 2014 FTC order requiring a comprehensive security program and biannual independent security assessments for 20 years. If Credit Karma shares covered data with Intuit, the order may apply to Intuit, and failure to fulfill its requirements could result in fines, penalties, regulatory inquiries, and reputational harm.
Intuit's online tax, payroll, payments, lending, and personal financial management businesses face increasing and more sophisticated third-party fraud, heightened when the workforce works from home. Failure to combat fraud could cause government authorities to refuse electronic tax return processing, significantly harming revenue and earnings.
MD&A states AI is transforming financial technology and disruptive start-ups, emerging ecosystems, and mega-platforms are harnessing new technology, creating a more dynamic and highly competitive environment. Risk factors cite intense competition from large platforms and free offerings that may diminish revenue and profitability.
Adverse global economic conditions could cause financial institution partners to decrease or suspend activity on Credit Karma's platform, reduce members' creditworthiness, and lower the number of tax returns filed. MD&A notes Credit Karma revenue increased in Q2 FY2022 due to growth in credit card and personal loan verticals, making it sensitive to those conditions.
At January 31, 2022, Intuit had $13.7 billion in goodwill and $7.4 billion in net acquired intangible assets, both subject to future impairment charges. Amortization of other acquired intangible assets increased $85 million in Q2 FY2022 and $136 million year to date, primarily related to Credit Karma and Mailchimp.
Tax products have rigid development timetables and must incorporate unpredictable and potentially late tax law and form changes. Errors or launch delays could cause customer loss, refunds, accuracy guarantee payments, and reputational harm, and TurboTax Live or QuickBooks Live experts may provide erroneous advice.
Summary, forecast, risks and KPIs are extracted from INTUIT INC.'s SEC filings for Q2 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.