Summary
Intuit reported total revenue of $3,041 million for the second quarter of fiscal 2023, up 14 percent from the prior-year quarter. Operating income was $270 million, up 382 percent. Net income was $168 million, up 68 percent. Diluted earnings per share was $0.60, up 71 percent. Operating margin was 8.9 percent, up 6.8 percentage points. Operating cash flow was $284 million, up 234 percent. Capital expenditures were $55 million, down 15 percent. Deferred revenue was $852 million, up 3.6 percent. The quarter included a faster forming tax season, which lifted Consumer revenue, while Credit Karma faced headwinds.
Small Business & Self-Employed revenue grew 20 percent, with Online Ecosystem revenue up 24 percent. QuickBooks Online Accounting revenue rose 27 percent, and Online Services revenue rose 21 percent. Consumer Group revenue rose 26 percent. Credit Karma revenue fell 16 percent. ProTax Group revenue rose 7 percent. The Credit Karma decline came from personal loans, home loans, auto insurance, and auto loans, partially offset by growth in credit cards and Credit Karma Money. Online payroll revenue increased on customer growth and a mix shift to higher-end offerings. Mailchimp revenue increased on higher effective prices. Online payments revenue increased on customer growth and higher total payment volume per customer. Desktop Ecosystem revenue increased 10 percent, driven by QuickBooks Desktop and Enterprise subscriptions. Management said the Consumer and ProTax results reflect a faster forming tax season, and it cautioned that second-quarter results for those segments are not indicative of full-year trends because the tax season is not complete until the third quarter.
For the first six months of fiscal 2023, revenue was $5,638 million, up 20 percent. Operating income was $346 million, up 38 percent. Net income was $208 million, down 37 percent. Diluted earnings per share was $0.73, down 37 percent. Operating cash flow was $612 million, up 166 percent. Capital expenditures were $132 million, up 23 percent. Operating margin was 6.1 percent, up 0.8 percentage points. The year-to-date net income decline reflected higher tax expense and interest expense, partly offset by higher operating income. Intuit recorded tax shortfalls on share-based compensation of $9 million in the quarter and $2 million for the six months, compared with excess tax benefits of $62 million and $109 million in the prior-year periods. Effective tax rates were approximately 26 percent for the quarter and 20 percent for the six months.
Intuit reiterated full fiscal year 2023 revenue guidance of $14.035 billion to $14.250 billion, growth of approximately 10 to 12 percent. It guided non-GAAP operating income of $5.258 billion to $5.363 billion, growth of approximately 17 to 19 percent. Non-GAAP diluted earnings per share guidance was $13.59 to $13.89, growth of approximately 15 to 17 percent. For the third quarter of fiscal 2023, the company guided revenue growth of approximately 8 to 9 percent and non-GAAP diluted earnings per share of $8.42 to $8.49. Segment guidance for the full fiscal year included Small Business & Self-Employed growth of 19 to 20 percent, Consumer Group growth of 9 to 10 percent, ProTax Group growth of 3 percent, and Credit Karma a decline of 15 to 10 percent.
Intuit repurchased $500 million of shares in the quarter and had $2.5 billion remaining on its repurchase authorization. The board approved a quarterly dividend of $0.78 per share, payable April 18, 2023, a 15 percent increase from the same period last year. Cash and investments were approximately $2.1 billion and debt was $7.1 billion as of January 31, 2023. The company named Sandeep Singh Aujla as CFO effective August 1, 2023, with Michelle Clatterbuck retiring on July 31, 2023. Risks include macroeconomic uncertainty, inflation, rising interest rates, competition, cybersecurity incidents, fraud, reliance on third-party relationships, and tax law changes. The mandatory capitalization of research and experimental costs under the 2017 Tax Cuts and Jobs Act is expected to significantly increase cash tax payments for fiscal 2023 unless the provision is repealed or deferred.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2023 | Q1 FY2023 | QoQ | Q2 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $3.04B | $2.60B | +17.1% | $2.67B | +13.8% |
| Research & development | $630.0M | $625.0M | +0.8% | $590.0M | +6.8% |
| Sales & marketing | $924.0M | $795.0M | +16.2% | $942.0M | -1.9% |
| General & administrative | $323.0M | $304.0M | +6.3% | $399.0M | -19.0% |
| Total operating expenses | $2.77B | $2.52B | +9.9% | $2.62B | +5.9% |
| Operating income (loss) | $270.0M | $76.0M | +255.3% | $56.0M | +382.1% |
| Operating margin | 8.9% | 2.9% | +6.0 pp | 2.1% | +6.8 pp |
| Net income (loss) | $168.0M | $40.0M | +320.0% | $100.0M | +68.0% |
| Net margin | 5.5% | 1.5% | +4.0 pp | 3.7% | +1.8 pp |
| Diluted EPS | $0.60 | $0.14 | +$0.46 | $0.35 | +$0.25 |
Risks
MD&A reports Credit Karma segment revenue decreased in Q2 FY2023 and year to date, driven by decreases in personal loan, home loan, auto insurance, and auto loan verticals amid economic uncertainty and rising interest rates. Risk factors note financial institution partners have decreased or suspended activity on Credit Karma's platform and higher rates may make offers less attractive.
MD&A says AI is transforming financial technology and disruptive start-ups, emerging ecosystems, and mega-platforms are creating a more dynamic and highly competitive environment. Risk factors state Intuit must continue to innovate with emerging technologies such as AI and blockchain and may face new AI regulations.
Risk factors highlight potential competition from federal and state taxing authorities developing government tax software, and note the IRS Free File Program operates under an agreement scheduled to expire in October 2023. If terminated or if the IRS enters return preparation, the government could become a publicly funded direct competitor.
MD&A says Intuit operates in industries experiencing increasing fraudulent activity by malicious third parties and continues to invest in security and anti-fraud measures. Risk factors warn that a security incident across Intuit's single-identity ecosystem could expose increased customer data and that government authorities could refuse to allow electronic tax return processing.
MD&A attributes Consumer revenue growth to a faster forming tax season and ProTax revenue growth to earlier forms availability that shifts revenue from Q3 to Q2. Risk factors warn tax revenue is concentrated from November through April and quarterly results fluctuate significantly with tax season timing.
MD&A identifies attracting, retaining, and developing highly skilled employees in a highly competitive talent environment as a key challenge. Risk factors note competition is especially intense in California and India and that equity awards may become less effective if Intuit's stock price underperforms talent competitors.
MD&A states that under the 2017 Tax Cuts & Jobs Act, research and experimental costs must be capitalized and amortized for U.S. tax purposes effective August 1, 2022, which significantly increases deferred tax assets and cash tax payments for fiscal 2023 unless repealed or deferred. The Inflation Reduction Act also introduces a corporate alternative minimum tax effective for Intuit beginning in fiscal 2024.
MD&A reports interest expense increased due to higher interest rates on the term loan, and risk factors note $7.1 billion of indebtedness outstanding as of January 31, 2023. The debt requires cash flow dedication and credit facility covenants restrict subsidiary indebtedness and require financial ratios.
SaaS KPIs
All quarters →Total Customers
Summary, forecast, risks and KPIs are extracted from INTUIT INC.'s SEC filings for Q2 FY2023 (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.