Summary
Intuit closed the third quarter of fiscal 2021 with total net revenue of $4.17 billion, up 39% from the prior-year quarter. Year-to-date revenue reached $7.07 billion, up 20.6% from the same period of fiscal 2020. The company reported operating income of $1.91 billion for the quarter, up 35.5%, and $2.10 billion year to date, up 23.9%. Net income was $1.46 billion in the quarter, up 35.1%, and $1.68 billion year to date, up 21.8%. Diluted earnings per share came in at $5.30 for the quarter, up 29.0%, and $6.20 year to date, up 18.3%. Operating margin was 45.9% in the quarter, down 1.2 percentage points from the prior-year quarter, while year-to-date operating margin was 29.7%, up 0.8 percentage points.
The quarter benefited from a shift in the tax filing season. The IRS began accepting returns on February 12, 2021, and the tax filing deadline was May 17, 2021. In the prior year, the IRS began accepting returns on January 27, 2020, and the deadline was July 15, 2020. Because the fiscal 2021 deadline was earlier than the fiscal 2020 deadline, revenue increased during the fiscal 2021 period. However, the extension of the 2021 deadline to May 17 means Intuit will not have substantially complete results for the 2020 tax season until the fourth quarter of fiscal 2021.
Segment performance was broad. Small Business & Self-Employed revenue increased 20% in the quarter and 14% year to date. Within that segment, Online Ecosystem revenue increased 28% in the quarter and 24% year to date. Consumer segment revenue increased 34% in the quarter and 12% year to date. ProConnect revenue increased 22% in the quarter and 7% year to date. Credit Karma, acquired on December 3, 2020, operates as a separate reportable segment and contributed to total revenue. Credit Karma revenue is primarily generated from cost-per-action transactions related to credit card issuances and personal loan funding. Credit Karma segment operating income includes all direct expenses related to selling and marketing, product development, and general and administrative, which makes it not comparable to other segments.
Cash generation remained strong. Operating cash flow was $2.38 billion in the quarter, up 23.1%, and $2.71 billion year to date, up 27.3%. Capital expenditures were $30 million in the quarter, down 23.1%, and $101 million year to date, down 5.6%. Deferred revenue, current portion only, was $650 million, up 2.8% from the prior-year quarter. The company returned cash to stockholders through dividends and share repurchases. Management also reorganized certain technology and customer success functions in August 2020, moving some costs to corporate expenses, which affects segment comparability. The company believes its cash and cash equivalents, investments, and cash generated from operations will be sufficient to meet anticipated seasonal working capital needs, capital expenditure requirements, contractual obligations, commitments, debt service requirements, and other liquidity requirements for at least the next 12 months.
Risks remain. The COVID-19 pandemic continues to create uncertainty for demand, customer behavior, and government actions. Intuit faces competitive pressure as AI and fintech transform financial services. The company also carries risks around data privacy, security, and fraud, especially for tax offerings. Credit Karma adds goodwill impairment risk if credit markets weaken, lenders reduce marketing, or member creditworthiness declines. The company's growth strategy depends on third-party relationships and continued investment in product development, marketing, and sales. The filing notes that the Credit Karma acquisition closed on December 3, 2020, and that the company assumed certain contractual commitments and lease commitments as part of the deal. The company also faces risks related to the hosting, collection, use, and retention of personal customer information.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2021 | Q2 FY2021 | QoQ | Q3 FY2020 | YoY |
|---|---|---|---|---|---|
| Revenue | $4.17B | $1.58B | +164.8% | $3.00B | +39.0% |
| Research & development | $464.0M | $368.0M | +26.1% | $332.0M | +39.8% |
| Sales & marketing | $857.0M | $580.0M | +47.8% | $648.0M | +32.3% |
| General & administrative | $289.0M | $250.0M | +15.6% | $181.0M | +59.7% |
| Total operating expenses | $2.26B | $1.60B | +41.1% | $1.59B | +42.2% |
| Operating income (loss) | $1.91B | -$25.0M | +7756.0% | $1.41B | +35.5% |
| Operating margin | 45.9% | -1.6% | +47.5 pp | 47.1% | -1.2 pp |
| Net income (loss) | $1.46B | $20.0M | +7220.0% | $1.08B | +35.1% |
| Net margin | 35.1% | 1.3% | +33.8 pp | 36.1% | -1.0 pp |
| Diluted EPS | $5.30 | $0.07 | +$5.23 | $4.11 | +$1.19 |
Risks
The COVID-19 pandemic has caused significant economic instability and uncertainty and has had and may continue to have an adverse effect on Intuit's business, including negative impacts on small business results, reduced customer demand, lower financial institution partner participation on Credit Karma's platform, decreased consumer spending, reduced small business payment charge volumes and payrolls, and potential decreases in tax returns filed.
Extensions of federal and state tax filing deadlines for the 2019 and 2020 tax years changed the seasonality of Intuit's business, making revenue and operating results more difficult to predict; MD&A notes the IRS began accepting returns on February 12, 2021 and the tax filing deadline was May 17, 2021, and that substantially complete results for the 2020 tax season will not be available until Q4 fiscal 2021.
Intuit faces intense competition in all businesses, including from free offerings and potential public-sector tax software; the IRS Free File Program agreement is scheduled to expire in October 2021, and Intuit is subject to legal proceedings and regulatory inquiries relating to the product it offers under that program.
The Credit Karma acquisition involves significant integration risks, including inability to realize expected synergies, disruption of ongoing business, retention of key employees and partners, and possible dilution to operating earnings per share beyond the first fiscal year after close; MD&A reports Credit Karma contributed $316 million in revenue in Q3 fiscal 2021 and $460 million in the first nine months.
At April 30, 2021, Intuit had $5.6 billion in goodwill and $3.3 billion in net acquired intangible assets, and the Credit Karma reporting unit's estimated fair value approximated its carrying value of $7.2 billion; a prolonged credit market downturn or reduced financial institution partner activity on Credit Karma's platform could require future goodwill impairment charges.
Intuit hosts large amounts of sensitive customer and workforce data and has experienced, and expects to continue to experience, cyberattacks and fraudulent activity; the pandemic has increased email phishing and work-from-home security risks, and Credit Karma is subject to a 2014 FTC order requiring a comprehensive security program and biannual independent security assessments for 20 years.
Intuit relies on third-party partners, financial institutions, cloud providers, and app stores; Credit Karma generates revenue from financial institution partners, and the pandemic has led credit card companies and lenders to offer fewer credit cards and loans, reduce marketing activities, and in many cases decrease or suspend activity on Credit Karma's platform, impacting revenue.
Increased government regulation of Intuit's businesses, including tax preparation, privacy, and data protection, may harm operating results; the tax preparation industry continues to receive heightened attention, and President Biden's proposed U.S. tax law changes could raise rates on domestic and foreign income and impose a new alternative minimum tax on book income, negatively impacting Intuit's effective tax rate.
Competition for key employees is intense, especially in California and India where the majority of Intuit's employees are located; equity awards may become less effective as retention incentives, and failure to attract, retain, and develop key personnel could cause the business to suffer.
As of April 30, 2021, Intuit had $2.0 billion of indebtedness outstanding under credit facilities and senior unsecured notes, with covenants that restrict subsidiary indebtedness and require specified financial ratios; a breach could cause outstanding indebtedness to be declared immediately due and payable, and credit rating downgrades could increase interest costs.
Tax products have rigid development timetables and must incorporate late tax law and form changes, increasing risk of errors, launch delays, or product suspensions; TurboTax Live and QuickBooks Live experts may provide erroneous advice, which could harm customers, reputation, or financial results.
Summary, forecast, risks and KPIs are extracted from INTUIT INC.'s SEC filings for Q3 FY2021 (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 2, 2026.