Summary
Intuit reported third quarter fiscal 2023 results for the period ended April 30, 2023. Total revenue was $6.02 billion, up 6.9% from the prior-year quarter. Operating income was $2.78 billion, up 16.0%. Net income was $2.09 billion, up 16.3%. Diluted earnings per share was $7.38, up $1.10 or 17.5%. Operating margin was 46.2%, up 3.6 percentage points. For the first nine months of fiscal 2023, revenue was $11.66 billion, up 13.0%. Operating income was $3.12 billion, up 18.1%. Net income was $2.30 billion, up 8.2%. Diluted earnings per share was $8.11, up $0.63 or 8.4%. Operating margin was 26.8%, up 1.1 percentage points.
Operational highlights were mixed by segment. Small Business & Self-Employed revenue grew 21 percent, with Online Ecosystem revenue up 23 percent and QuickBooks Online Accounting revenue up 25 percent. Consumer Group revenue grew 3 percent, reflecting a shift to higher-priced TurboTax Live and Premium offerings and higher effective prices, partly offset by lower total returns. Credit Karma revenue fell 12 percent on headwinds in personal loans, home loans, auto loans, and auto insurance, partly offset by growth in Credit Karma Money and credit cards. ProTax Group revenue fell 5 percent. The company said the Consumer results reflected its expectations for the full fiscal year, including a 2 percent decline in total IRS returns and a decline in DIY category share of nearly three quarters of a point.
Cash generation remained solid. Operating cash flow was $3.59 billion for the quarter, up 8.2%, and $4.20 billion for the first nine months, up 18.4%. Capital expenditures were $88 million for the quarter, up 44.3%, and $220 million for the first nine months, up 31.0%. Deferred revenue was $829 million, up 11.9% from the prior-year quarter. Intuit repurchased $483 million of shares in the quarter, leaving $2.0 billion on its share repurchase authorization. The board approved a quarterly dividend of $0.78 per share, payable July 18, 2023, a 15 percent increase from the same period last year.
Guidance was raised for the full fiscal year 2023. Intuit now expects revenue growth of approximately 12 to 13 percent, up from previous guidance of 10 to 12 percent. It expects non-GAAP operating income of $5.441 billion to $5.461 billion, growth of approximately 21 percent, and non-GAAP diluted earnings per share of $14.20 to $14.25, growth of approximately 20 percent. For the fourth quarter of fiscal 2023, the company expects revenue to grow approximately 9 to 10 percent and non-GAAP diluted earnings per share of $1.43 to $1.48. Segment guidance calls for Small Business & Self-Employed growth of 24 percent, Consumer Group growth of 5 to 6 percent, ProTax Group growth of 2 to 3 percent, and a Credit Karma decline of 11 percent.
Risks remain. Macroeconomic uncertainty and rising interest rates continue to influence the lending behaviors of Credit Karma partners. The Consumer tax season faced a 2 percent decline in total IRS returns, a decline in DIY category share of nearly three quarters of a point, and expected declines in TurboTax share of total IRS returns of approximately 80 basis points, total TurboTax units of 5 percent, and TurboTax Online paying units of 1 percent. Average revenue per return was expected to increase approximately 12 percent, with TurboTax Live revenue growth of approximately 19 percent and TurboTax Live customer growth of approximately 13 percent. Other risks include competition, technological change, cybersecurity and privacy incidents, fraud, reliance on third parties, international operations, tax seasonality, and changes in tax laws. The company also noted that mandatory capitalization of research and development costs will significantly increase cash tax payments in fiscal 2023, and it expects to pay approximately $700 million related to a deferral in the first quarter of fiscal 2024.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2023 | Q2 FY2023 | QoQ | Q3 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $6.02B | $3.04B | +97.9% | $5.63B | +6.9% |
| Research & development | $604.0M | $630.0M | -4.1% | $600.0M | +0.7% |
| Sales & marketing | $1.20B | $924.0M | +30.2% | $1.23B | -2.0% |
| General & administrative | $332.0M | $323.0M | +2.8% | $465.0M | -28.6% |
| Total operating expenses | $3.24B | $2.77B | +16.9% | $3.24B | +0.1% |
| Operating income (loss) | $2.78B | $270.0M | +928.9% | $2.40B | +16.0% |
| Operating margin | 46.2% | 8.9% | +37.3 pp | 42.5% | +3.6 pp |
| Net income (loss) | $2.09B | $168.0M | +1142.3% | $1.79B | +16.3% |
| Net margin | 34.7% | 5.5% | +29.2 pp | 31.9% | +2.8 pp |
| Diluted EPS | $7.38 | $0.60 | +$6.78 | $6.28 | +$1.10 |
Risks
The IRS announced in May 2023 a pilot project for the 2024 filing season to assess a direct online tax filing system, and the IRS Free File Program agreement is scheduled to expire in October 2025. A publicly funded direct competitor could materially reduce Intuit's Consumer tax revenue.
MD&A states AI is transforming financial technology and that disruptive start-ups, emerging ecosystems, and mega-platforms are creating a more dynamic and highly competitive environment. Intuit must continue developing AI and emerging technologies to attract customers and talent.
Credit Karma segment revenue decreased 12% in the third quarter of fiscal 2023 and 9% in the first nine months, primarily due to decreases in personal loan, home loan, auto loan, and auto insurance verticals. MD&A says economic uncertainty and rising interest rates continue to influence the lending behaviors of partners.
Under the 2017 Tax Cuts & Jobs Act, research and development costs must be capitalized and amortized for U.S. tax purposes effective August 1, 2022, which is expected to significantly increase fiscal 2023 cash tax payments. Intuit expects to pay approximately $700 million related to an IRS disaster-area deferral in the first quarter of fiscal 2024.
MD&A says future success depends on attracting, retaining, and developing highly skilled employees in a highly competitive talent environment. Risk factors note competition is especially intense in California and India and that equity awards may become less effective if the stock price decreases or increases slower than talent competitors'.
Risk factors state Intuit's technologies and networks are increasingly targeted by cyberattacks, and its single identity ecosystem across products could give a security incident access to increased amounts of customer data. Credit Karma is also subject to a 2014 FTC order requiring a comprehensive security program and biannual independent assessments for 20 years.
MD&A highlights increasing fraudulent activities by malicious third parties and ongoing work with state and federal governments on security and anti-fraud measures. Risk factors warn that failure to combat fraud could lead tax authorities to refuse electronic filing of customers' tax returns.
Interest expense increased in the first nine months of fiscal 2023 primarily due to higher interest rates on the term loan, which was outstanding for the entire period versus only six months in the prior-year period. Intuit had $6.6 billion of indebtedness outstanding as of April 30, 2023.
SaaS KPIs
All quarters →Total Customers
Summary, forecast, risks and KPIs are extracted from INTUIT INC.'s SEC filings for Q3 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.