Summary
Intuit reported third-quarter fiscal 2022 revenue of $5.63 billion, up 35 percent from the prior-year quarter. Operating income rose 25.1 percent to $2.40 billion. Net income increased 22.5 percent to $1.79 billion. Diluted earnings per share came in at $6.28, up 18.5 percent. Operating margin was 42.5%, down 3.3 percentage points from the prior-year quarter. The quarter included a $141 million one-time charge tied to the company's settlement with the attorneys general of 50 states and the District of Columbia. That charge reduced GAAP operating income growth by 7 points and GAAP earnings per share by $0.37.
The tax season timing drove much of the top-line strength. The IRS began accepting returns on January 24, 2022, and the filing deadline was April 18, 2022. In fiscal 2021, the IRS started on February 12, 2021, and the deadline was extended to May 17, 2021. That shift moved a significant amount of Consumer and ProConnect revenue into the third quarter of fiscal 2022 compared with the prior-year period. Consumer Group revenue grew 32 percent. Small Business and Self-Employed Group revenue grew 42 percent. Excluding Mailchimp, that segment grew 20 percent. Online Ecosystem revenue grew 67 percent. Excluding Mailchimp, Online Ecosystem revenue grew 31 percent. Credit Karma revenue grew 48 percent, a quarterly record for the business. ProConnect Group professional tax revenue grew 10 percent.
Cash generation remained strong. Operating cash flow for the quarter was $3.32 billion, up 39.3 percent from the prior-year quarter. Capital expenditures were $61 million, up 103.3 percent. Deferred revenue was $741 million, up 14.0 percent. For the first nine months of fiscal 2022, operating cash flow was $3.55 billion, up 31.1 percent. Capital expenditures for that period were $168 million, up 66.3 percent. The company repurchased $489 million of shares in the quarter and had $2.0 billion remaining on its share repurchase authorization. The board approved a quarterly dividend of $0.68 per share, a 15 percent increase from the same period last year.
Year-to-date results also showed broad growth. Revenue for the first nine months of fiscal 2022 was $10.31 billion, up 45.8 percent from the prior-year period. Operating income was $2.65 billion, up 26.1 percent. Net income was $2.12 billion, up 26.2 percent. Diluted earnings per share was $7.48, up 20.6 percent. Operating margin for the nine-month period was 25.7%, down 4.0 percentage points. These figures include the $141 million settlement charge.
Management raised full-year fiscal 2022 revenue guidance to $12.633 billion to $12.674 billion, which implies growth of approximately 31 to 32 percent. GAAP operating income guidance is $2.499 billion to $2.519 billion, growth of approximately flat to 1 percent. GAAP diluted earnings per share guidance is $6.95 to $7.01, a decline of approximately 8 to 7 percent. Non-GAAP operating income guidance is $4.451 billion to $4.471 billion, growth of approximately 28 percent. Non-GAAP diluted earnings per share guidance is $11.68 to $11.74, growth of approximately 20 to 21 percent. For the fourth quarter of fiscal 2022, the company expects revenue to decline approximately 8 to 9 percent. GAAP loss per share is expected to be $0.53 to $0.47. Non-GAAP diluted earnings per share is expected to be $0.94 to $1.00. The full-year guidance includes the $141 million settlement charge. Segment guidance calls for Small Business and Self-Employed Group growth of 36 to 37 percent, Consumer Group growth of 10 percent, ProConnect Group growth of 4 to 5 percent, and a raised Credit Karma revenue outlook.
The company faces ongoing uncertainty from the Russia-Ukraine war and the COVID-19 pandemic. Intuit does not have offices or material business in Russia or Ukraine, but management notes that the full impact on operations and future financial performance remains unpredictable. The tax business is highly seasonal, with Consumer and ProConnect revenue concentrated from November through April. Other named risks include competition, potential governmental encroachment in tax businesses, cybersecurity incidents, privacy concerns, reliance on third-party relationships, acquisition integration for Credit Karma and Mailchimp, changes in tax laws, inflation, and litigation. The company also announced a management succession plan. Greg Johnson will step down as general manager of the Consumer Group on May 31, 2022, and Varun Krishna will succeed him.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2022 | Q2 FY2022 | QoQ | Q3 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $5.63B | $2.67B | +110.7% | $4.17B | +35.0% |
| Research & development | $600.0M | $590.0M | +1.7% | $464.0M | +29.3% |
| Sales & marketing | $1.23B | $942.0M | +30.3% | $857.0M | +43.2% |
| General & administrative | $465.0M | $399.0M | +16.5% | $289.0M | +60.9% |
| Total operating expenses | $3.24B | $2.62B | +23.7% | $2.26B | +43.3% |
| Operating income (loss) | $2.40B | $56.0M | +4176.8% | $1.91B | +25.1% |
| Operating margin | 42.5% | 2.1% | +40.4 pp | 45.9% | -3.3 pp |
| Net income (loss) | $1.79B | $100.0M | +1694.0% | $1.46B | +22.5% |
| Net margin | 31.9% | 3.7% | +28.1 pp | 35.1% | -3.2 pp |
| Diluted EPS | $6.28 | $0.35 | +$5.93 | $5.30 | +$0.98 |
Risks
Intuit no longer participates in the IRS Free File Program and the current agreement is scheduled to expire in October 2022. If the program is terminated or the IRS enters the software development and return preparation space, the federal government could become a publicly funded direct competitor of the U.S. tax services industry and of Intuit, with material adverse revenue implications.
Adverse macroeconomic developments including inflation, slowing growth, rising interest rates or recession, plus the Russia-Ukraine war, could reduce consumer and small business spending, cause financial institution partners to decrease activity on Credit Karma's platform, and reduce tax returns filed. The majority of revenue is derived from U.S. sales, amplifying U.S. economic conditions.
Intuit faces intense competition from large established platforms, emerging start-ups, and free offerings in its tax, accounting, payments and personal finance businesses. Competitors may introduce superior products, reduce prices, or beat Intuit to market, and customers who formerly paid may switch to competitors' free offerings, diminishing revenue and profitability.
Credit Karma generates revenue from relationships with financial institution partners that are subject to adverse economic conditions and increasing regulatory complexity. Credit Karma segment operating income decreased $13 million in the third quarter of fiscal 2022 compared to the same period of fiscal 2021, and partners could again reduce or suspend activity on the platform.
As of April 30, 2022 Intuit had $6.9 billion of aggregate indebtedness outstanding, including a $4.7 billion unsecured term loan borrowed to fund the Mailchimp acquisition. Interest expense of $49 million for the first nine months of fiscal 2022 rose from $22 million in the prior-year period, and the credit agreement requires maintaining specified financial ratios.
The $12.0 billion Mailchimp acquisition and the Credit Karma acquisition involve significant integration risks, including inability to realize expected synergies, disruption of ongoing business, retention of key employees and customers, and possible dilution to non-GAAP diluted earnings per share beyond the first fiscal year after close.
Intuit hosts large amounts of sensitive customer data and its systems are increasingly targeted by cyberattacks, ransomware, social engineering and fraud, with risks elevated by the Russia-Ukraine war and the shift to a hybrid work model. A security incident could give access to increased customer data because customers have one identity across multiple Intuit products.
Intuit's tax business is highly seasonal, with revenue heavily concentrated from November through April, and results fluctuate with changes to tax filing deadlines. In fiscal 2022 the IRS began accepting returns on January 24, 2022 with an April 18, 2022 deadline, versus a May 17, 2021 extension in fiscal 2021, shifting revenue between quarters.
Competition for skilled personnel in software, mobile technologies, data science and data security is intense, especially in California and India where a significant number of employees are located. Equity-based incentives may become less effective, and evolving post-pandemic expectations on compensation, benefits and flexibility may make attraction and retention more difficult.
At April 30, 2022 Intuit had $13.7 billion in goodwill and $7.2 billion in net acquired intangible assets on its condensed consolidated balance sheet, both of which may be subject to impairment charges. Amortization of acquired intangible assets and impairment charges may cause significant fluctuation in net income.
Intuit incurred a $141 million one-time charge related to the company's settlement with the 50 state attorneys general and the District of Columbia entered into on May 4, 2022. The tax preparation industry continues to receive heightened attention from federal and state governments, and new laws or interpretations could restrict products, pricing or operations.
SaaS KPIs
All quarters →Total Customers
Online Ecosystem revenue
Online Services revenue
Non-GAAP operating income
Summary, forecast, risks and KPIs are extracted from INTUIT INC.'s SEC filings for Q3 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.