☑ | Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
☐ | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | |||||||
For the transition period from ____________ to ____________ . |
Delaware | 77-0034661 | |||||||
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
Title of each class | Trading Symbol | Name of each exchange on which registered | |||||||||||||||
Common Stock, $0.01 par value | INTU | Nasdaq Global Select Market |
Large accelerated filer | ☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | ☐ | Emerging growth company | ☐ |
INTUIT INC. FORM 10-Q INDEX |
Page | |||||
Intuit Q2 Fiscal | 2 |
Intuit Q2 Fiscal | 3 |
PART I - FINANCIAL INFORMATION |
ITEM 1 - FINANCIAL STATEMENTS |
INTUIT INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | INTUIT INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | INTUIT INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) | ||||||||||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||
(In millions, except per share amounts) | January 31, 2020 | January 31, 2019 | January 31, 2020 | January 31, 2019 | (In millions, except per share amounts) | January 31, 2021 | January 31, 2020 | January 31, 2021 | January 31, 2020 | |||||||||||||||||||||||||||||
Net revenue: | Net revenue: | |||||||||||||||||||||||||||||||||||||
Product | $ | 545 | $ | 533 | $ | 898 | $ | 880 | Product | $ | 495 | $ | 545 | $ | 862 | $ | 898 | |||||||||||||||||||||
Service and other | 1,151 | 969 | 1,963 | 1,638 | Service and other | 1,081 | 1,151 | 2,037 | 1,963 | |||||||||||||||||||||||||||||
Total net revenue | 1,696 | 1,502 | 2,861 | 2,518 | Total net revenue | 1,576 | 1,696 | 2,899 | 2,861 | |||||||||||||||||||||||||||||
Costs and expenses: | Costs and expenses: | |||||||||||||||||||||||||||||||||||||
Cost of revenue: | Cost of revenue: | |||||||||||||||||||||||||||||||||||||
Cost of product revenue | 24 | 26 | 41 | 41 | Cost of product revenue | 22 | 24 | 37 | 41 | |||||||||||||||||||||||||||||
Cost of service and other revenue | 310 | 254 | 577 | 481 | Cost of service and other revenue | 331 | 310 | 565 | 577 | |||||||||||||||||||||||||||||
Amortization of acquired technology | 6 | 5 | 12 | 10 | Amortization of acquired technology | 14 | 6 | 21 | 12 | |||||||||||||||||||||||||||||
Selling and marketing | 593 | 548 | 976 | 894 | Selling and marketing | 580 | 593 | 942 | 976 | |||||||||||||||||||||||||||||
Research and development | 333 | 295 | 667 | 589 | Research and development | 368 | 333 | 693 | 667 | |||||||||||||||||||||||||||||
General and administrative | 159 | 140 | 305 | 277 | General and administrative | 250 | 159 | 419 | 305 | |||||||||||||||||||||||||||||
Amortization of other acquired intangible assets | 1 | 1 | 3 | 3 | Amortization of other acquired intangible assets | 36 | 1 | 38 | 3 | |||||||||||||||||||||||||||||
Total costs and expenses | 1,426 | 1,269 | 2,581 | 2,295 | Total costs and expenses | 1,601 | 1,426 | 2,715 | 2,581 | |||||||||||||||||||||||||||||
Operating income | 270 | 233 | 280 | 223 | ||||||||||||||||||||||||||||||||||
Operating income (loss) | Operating income (loss) | (25) | 270 | 184 | 280 | |||||||||||||||||||||||||||||||||
Interest expense | (3 | ) | (4 | ) | (5 | ) | (8 | ) | Interest expense | (7) | (3) | (15) | (5) | |||||||||||||||||||||||||
Interest and other income, net | 15 | 6 | 29 | 6 | Interest and other income, net | 54 | 15 | 63 | 29 | |||||||||||||||||||||||||||||
Income before income taxes | 282 | 235 | 304 | 221 | Income before income taxes | 22 | 282 | 232 | 304 | |||||||||||||||||||||||||||||
Income tax provision (benefit) | 42 | 46 | 7 | (2 | ) | |||||||||||||||||||||||||||||||||
Income tax provision | Income tax provision | 2 | 42 | 14 | 7 | |||||||||||||||||||||||||||||||||
Net income | $ | 240 | $ | 189 | $ | 297 | $ | 223 | Net income | $ | 20 | $ | 240 | $ | 218 | $ | 297 | |||||||||||||||||||||
Basic net income per share | $ | 0.92 | $ | 0.73 | $ | 1.14 | $ | 0.86 | Basic net income per share | $ | 0.07 | $ | 0.92 | $ | 0.82 | $ | 1.14 | |||||||||||||||||||||
Shares used in basic per share calculations | 261 | 260 | 261 | 260 | Shares used in basic per share calculations | 270 | 261 | 266 | 261 | |||||||||||||||||||||||||||||
Diluted net income per share | $ | 0.91 | $ | 0.72 | $ | 1.13 | $ | 0.84 | Diluted net income per share | $ | 0.07 | $ | 0.91 | $ | 0.81 | $ | 1.13 | |||||||||||||||||||||
Shares used in diluted per share calculations | 264 | 264 | 264 | 264 | Shares used in diluted per share calculations | 273 | 264 | 269 | 264 | |||||||||||||||||||||||||||||
Cash dividends declared per common share | $ | 0.53 | $ | 0.47 | $ | 1.06 | $ | 0.94 | Cash dividends declared per common share | $ | 0.59 | $ | 0.53 | $ | 1.18 | $ | 1.06 |
Intuit Q2 Fiscal | 4 |
INTUIT INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(In millions) | January 31, 2020 | January 31, 2019 | January 31, 2020 | January 31, 2019 | |||||||||||
Net income | $ | 240 | $ | 189 | $ | 297 | $ | 223 | |||||||
Other comprehensive income (loss), net of income taxes: | |||||||||||||||
Unrealized gain on available-for-sale debt securities | 1 | 1 | 2 | 1 | |||||||||||
Foreign currency translation gain (loss) | (1 | ) | 3 | (1 | ) | (1 | ) | ||||||||
Total other comprehensive income, net | — | 4 | 1 | — | |||||||||||
Comprehensive income | $ | 240 | $ | 193 | $ | 298 | $ | 223 |
INTUIT INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) | |||||||||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In millions) | January 31, 2021 | January 31, 2020 | January 31, 2021 | January 31, 2020 | |||||||||||||||||||
Net income | $ | 20 | $ | 240 | $ | 218 | $ | 297 | |||||||||||||||
Other comprehensive income (loss), net of income taxes: | |||||||||||||||||||||||
Unrealized gain (loss) on available-for-sale debt securities | 0 | 1 | (1) | 2 | |||||||||||||||||||
Foreign currency translation gain (loss) | 12 | (1) | 10 | (1) | |||||||||||||||||||
Total other comprehensive income, net | 12 | 0 | 9 | 1 | |||||||||||||||||||
Comprehensive income | $ | 32 | $ | 240 | $ | 227 | $ | 298 |
Intuit Q2 Fiscal | 5 |
INTUIT INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) | INTUIT INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) | INTUIT INC. CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) | ||||||||||||||||
(In millions) | January 31, 2020 | July 31, 2019 | (In millions) | January 31, 2021 | July 31, 2020 | |||||||||||||
ASSETS | ASSETS | |||||||||||||||||
Current assets: | Current assets: | |||||||||||||||||
Cash and cash equivalents | $ | 1,641 | $ | 2,116 | Cash and cash equivalents | $ | 1,952 | $ | 6,442 | |||||||||
Investments | 625 | 624 | Investments | 786 | 608 | |||||||||||||
Accounts receivable, net | 603 | 87 | Accounts receivable, net | 465 | 149 | |||||||||||||
Income taxes receivable | 52 | 65 | Income taxes receivable | 153 | 12 | |||||||||||||
Prepaid expenses and other current assets | 308 | 266 | Prepaid expenses and other current assets | 312 | 314 | |||||||||||||
Current assets before funds held for customers | 3,229 | 3,158 | Current assets before funds held for customers | 3,668 | 7,525 | |||||||||||||
Funds held for customers | 461 | 436 | Funds held for customers | 426 | 455 | |||||||||||||
Total current assets | 3,690 | 3,594 | Total current assets | 4,094 | 7,980 | |||||||||||||
Long-term investments | 13 | 13 | Long-term investments | 41 | 19 | |||||||||||||
Property and equipment, net | 758 | 780 | Property and equipment, net | 792 | 734 | |||||||||||||
Operating lease right-of-use assets | 297 | — | Operating lease right-of-use assets | 392 | 226 | |||||||||||||
Goodwill | 1,655 | 1,655 | Goodwill | 5,598 | 1,654 | |||||||||||||
Acquired intangible assets, net | 41 | 54 | Acquired intangible assets, net | 3,384 | 28 | |||||||||||||
Long-term deferred income taxes | Long-term deferred income taxes | 6 | 65 | |||||||||||||||
Other assets | 247 | 187 | Other assets | 291 | 225 | |||||||||||||
Total assets | $ | 6,701 | $ | 6,283 | Total assets | $ | 14,598 | $ | 10,931 | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||||||||
Current liabilities: | Current liabilities: | |||||||||||||||||
Short-term debt | $ | 38 | $ | 50 | Short-term debt | $ | 325 | $ | 1,338 | |||||||||
Accounts payable | 455 | 274 | Accounts payable | 486 | 305 | |||||||||||||
Accrued compensation and related liabilities | 261 | 385 | Accrued compensation and related liabilities | 326 | 482 | |||||||||||||
Deferred revenue | 671 | 619 | Deferred revenue | 752 | 652 | |||||||||||||
Other current liabilities | 318 | 202 | Other current liabilities | 362 | 297 | |||||||||||||
Current liabilities before customer fund deposits | 1,743 | 1,530 | Current liabilities before customer fund deposits | 2,251 | 3,074 | |||||||||||||
Customer fund deposits | 461 | 436 | Customer fund deposits | 426 | 455 | |||||||||||||
Total current liabilities | 2,204 | 1,966 | Total current liabilities | 2,677 | 3,529 | |||||||||||||
Long-term debt | 373 | 386 | Long-term debt | 2,033 | 2,031 | |||||||||||||
Long-term deferred income tax liabilities | 55 | 37 | Long-term deferred income tax liabilities | 580 | 2 | |||||||||||||
Operating lease liabilities | 286 | — | Operating lease liabilities | 391 | 221 | |||||||||||||
Other long-term obligations | 56 | 145 | Other long-term obligations | 49 | 42 | |||||||||||||
Total liabilities | 2,974 | 2,534 | Total liabilities | 5,730 | 5,825 | |||||||||||||
Commitments and contingencies | Commitments and contingencies | 0 | 0 | |||||||||||||||
Stockholders’ equity: | Stockholders’ equity: | |||||||||||||||||
Preferred stock | — | — | Preferred stock | 0 | 0 | |||||||||||||
Common stock and additional paid-in capital | 6,014 | 5,775 | Common stock and additional paid-in capital | 10,212 | 6,182 | |||||||||||||
Treasury stock, at cost | (11,889 | ) | (11,611 | ) | Treasury stock, at cost | (12,104) | (11,929) | |||||||||||
Accumulated other comprehensive loss | (35 | ) | (36 | ) | Accumulated other comprehensive loss | (23) | (32) | |||||||||||
Retained earnings | 9,637 | 9,621 | Retained earnings | 10,783 | 10,885 | |||||||||||||
Total stockholders’ equity | 3,727 | 3,749 | Total stockholders’ equity | 8,868 | 5,106 | |||||||||||||
Total liabilities and stockholders’ equity | $ | 6,701 | $ | 6,283 | Total liabilities and stockholders’ equity | $ | 14,598 | $ | 10,931 |
Intuit Q2 Fiscal | 6 |
INTUIT INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (unaudited) |
Three Months Ended January 31, 2021 | |||||||||||||||||||||||||||||||||||
(In millions, except shares in thousands) | Shares of Common Stock | Common Stock and Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Total Stockholders' Equity | |||||||||||||||||||||||||||||
Balance at October 31, 2020 | 262,707 | $ | 6,283 | $ | (11,929) | $ | (35) | $ | 10,926 | $ | 5,245 | ||||||||||||||||||||||||
Comprehensive income | — | — | — | 12 | 20 | 32 | |||||||||||||||||||||||||||||
Issuance of stock under employee stock plans, net of shares withheld for employee taxes | 400 | (49) | — | — | — | (49) | |||||||||||||||||||||||||||||
Stock repurchases under stock repurchase programs | (470) | — | (175) | — | — | (175) | |||||||||||||||||||||||||||||
Dividends and dividend rights declared ($0.59 per share) | — | — | — | — | (163) | (163) | |||||||||||||||||||||||||||||
Share-based compensation expense | — | 180 | — | — | — | 180 | |||||||||||||||||||||||||||||
Issuance of stock in business combination | 11,324 | 3,798 | — | — | — | 3,798 | |||||||||||||||||||||||||||||
Balance at January 31, 2021 | 273,961 | $ | 10,212 | $ | (12,104) | $ | (23) | $ | 10,783 | $ | 8,868 |
Three Months Ended January 31, 2020 | Six Months Ended January 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In millions, except shares in thousands) | Shares of Common Stock | Common Stock and Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Total Stockholders' Equity | (In millions, except shares in thousands) | Shares of Common Stock | Common Stock and Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||
Balance at October 31, 2019 | 260,355 | $ | 5,881 | $ | (11,750 | ) | $ | (35 | ) | $ | 9,537 | $ | 3,633 | ||||||||||||||||||||||||||||||||||||||||||||
Balance at July 31, 2020 | Balance at July 31, 2020 | 261,740 | $ | 6,182 | $ | (11,929) | $ | (32) | $ | 10,885 | $ | 5,106 | |||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income | — | — | — | — | 240 | 240 | Comprehensive income | — | — | — | 9 | 218 | 227 | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of stock under employee stock plans, net of shares withheld for employee taxes | 686 | 25 | — | — | 25 | Issuance of stock under employee stock plans, net of shares withheld for employee taxes | 1,367 | (60) | — | — | — | (60) | |||||||||||||||||||||||||||||||||||||||||||||
Stock repurchases under stock repurchase programs | (524 | ) | — | (139 | ) | — | — | (139 | ) | Stock repurchases under stock repurchase programs | (470) | — | (175) | — | — | (175) | |||||||||||||||||||||||||||||||||||||||||
Dividends and dividend rights declared ($0.53 per share) | — | — | — | — | (140 | ) | (140 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and dividend rights declared ($1.18 per share) | Dividends and dividend rights declared ($1.18 per share) | — | — | — | — | (320) | (320) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | 108 | — | — | — | 108 | Share-based compensation expense | — | 292 | — | — | — | 292 | ||||||||||||||||||||||||||||||||||||||||||||
Balance at January 31, 2020 | 260,517 | $ | 6,014 | $ | (11,889 | ) | $ | (35 | ) | $ | 9,637 | $ | 3,727 | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of stock in business combination | Issuance of stock in business combination | 11,324 | 3,798 | — | — | — | 3,798 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at January 31, 2021 | Balance at January 31, 2021 | 273,961 | $ | 10,212 | $ | (12,104) | $ | (23) | $ | 10,783 | $ | 8,868 |
Three Months Ended January 31, 2020 | |||||||||||||||||||||||||||||||||||
(In millions, except shares in thousands) | Shares of Common Stock | Common Stock and Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Total Stockholders' Equity | |||||||||||||||||||||||||||||
Balance at October 31, 2019 | 260,355 | $ | 5,881 | $ | (11,750) | $ | (35) | $ | 9,537 | $ | 3,633 | ||||||||||||||||||||||||
Comprehensive income | — | — | — | 0 | 240 | 240 | |||||||||||||||||||||||||||||
Issuance of stock under employee stock plans, net of shares withheld for employee taxes | 686 | 25 | — | — | — | 25 | |||||||||||||||||||||||||||||
Stock repurchases under stock repurchase programs | (524) | — | (139) | — | — | (139) | |||||||||||||||||||||||||||||
Dividends and dividend rights declared ($0.53 per share) | — | — | — | — | (140) | (140) | |||||||||||||||||||||||||||||
Share-based compensation expense | — | 108 | — | — | — | 108 | |||||||||||||||||||||||||||||
Balance at January 31, 2020 | 260,517 | $ | 6,014 | $ | (11,889) | $ | (35) | $ | 9,637 | $ | 3,727 |
Six Months Ended January 31, 2020 | ||||||||||||||||||||||
(In millions, except shares in thousands) | Shares of Common Stock | Common Stock and Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Total Stockholders' Equity | ||||||||||||||||
Balance at July 31, 2019 | 260,180 | $ | 5,775 | $ | (11,611 | ) | $ | (36 | ) | $ | 9,621 | $ | 3,749 | |||||||||
Comprehensive income | — | — | — | 1 | 297 | 298 | ||||||||||||||||
Issuance of stock under employee stock plans, net of shares withheld for employee taxes | 1,376 | 19 | — | — | 19 | |||||||||||||||||
Stock repurchases under stock repurchase programs | (1,039 | ) | — | (278 | ) | — | — | (278 | ) | |||||||||||||
Dividends and dividend rights declared ($1.06 per share) | — | — | — | — | (281 | ) | (281 | ) | ||||||||||||||
Share-based compensation expense | — | 220 | — | — | — | 220 | ||||||||||||||||
Balance at January 31, 2020 | 260,517 | $ | 6,014 | $ | (11,889 | ) | $ | (35 | ) | $ | 9,637 | $ | 3,727 |
Three Months Ended January 31, 2019 | ||||||||||||||||||||||
(In millions, except shares in thousands) | Shares of Common Stock | Common Stock and Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Total Stockholders' Equity | ||||||||||||||||
Balance at October 31, 2018 | 259,571 | $ | 5,501 | $ | (11,151 | ) | $ | (40 | ) | $ | 8,472 | $ | 2,782 | |||||||||
Comprehensive income | — | — | — | 4 | 189 | 193 | ||||||||||||||||
Issuance of stock under employee stock plans, net of shares withheld for employee taxes | 414 | 21 | — | — | — | 21 | ||||||||||||||||
Stock repurchases under stock repurchase programs | (875 | ) | — | (177 | ) | — | — | (177 | ) | |||||||||||||
Dividends and dividend rights declared ($0.47 per share) | — | — | — | — | (124 | ) | (124 | ) | ||||||||||||||
Share-based compensation expense | — | 101 | — | — | — | 101 | ||||||||||||||||
Balance at January 31, 2019 | 259,110 | $ | 5,623 | $ | (11,328 | ) | $ | (36 | ) | $ | 8,537 | $ | 2,796 |
Six Months Ended January 31, 2019 | Six Months Ended January 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(In millions, except shares in thousands) | Shares of Common Stock | Common Stock and Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Total Stockholders' Equity | (In millions, except shares in thousands) | Shares of Common Stock | Common Stock and Additional Paid-In Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Retained Earnings | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||
Balance at July 31, 2018 | 258,616 | $ | 5,338 | $ | (11,050 | ) | $ | (36 | ) | $ | 8,564 | $ | 2,816 | ||||||||||||||||||||||||||||||||||||||||||||
Balance at July 31, 2019 | Balance at July 31, 2019 | 260,180 | $ | 5,775 | $ | (11,611) | $ | (36) | $ | 9,621 | $ | 3,749 | |||||||||||||||||||||||||||||||||||||||||||||
Comprehensive income | — | — | — | — | 223 | 223 | Comprehensive income | — | — | — | 1 | 297 | 298 | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of stock under employee stock plans, net of shares withheld for employee taxes | 1,836 | 78 | — | — | — | 78 | Issuance of stock under employee stock plans, net of shares withheld for employee taxes | 1,376 | 19 | — | — | — | 19 | ||||||||||||||||||||||||||||||||||||||||||||
Stock repurchases under stock repurchase programs | (1,342 | ) | — | (278 | ) | — | — | (278 | ) | Stock repurchases under stock repurchase programs | (1,039) | — | (278) | — | — | (278) | |||||||||||||||||||||||||||||||||||||||||
Dividends and dividend rights declared ($0.94 per share) | — | — | — | — | (250 | ) | (250 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||
Dividends and dividend rights declared ($1.06 per share) | Dividends and dividend rights declared ($1.06 per share) | — | — | — | — | (281) | (281) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | — | 207 | — | — | — | 207 | Share-based compensation expense | — | 220 | — | — | — | 220 | ||||||||||||||||||||||||||||||||||||||||||||
Balance at January 31, 2019 | 259,110 | $ | 5,623 | $ | (11,328 | ) | $ | (36 | ) | $ | 8,537 | $ | 2,796 | ||||||||||||||||||||||||||||||||||||||||||||
Balance at January 31, 2020 | Balance at January 31, 2020 | 260,517 | $ | 6,014 | $ | (11,889) | $ | (35) | $ | 9,637 | $ | 3,727 |
Intuit Q2 Fiscal | 7 |
INTUIT INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) | |||||||
Six Months Ended | |||||||
(In millions) | January 31, 2020 | January 31, 2019 | |||||
Cash flows from operating activities: | |||||||
Net income | $ | 297 | $ | 223 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation | 98 | 99 | |||||
Amortization of acquired intangible assets | 16 | 13 | |||||
Non-cash operating lease cost | 32 | — | |||||
Share-based compensation expense | 218 | 205 | |||||
Deferred income taxes | (30 | ) | (21 | ) | |||
Other | 4 | 6 | |||||
Total adjustments | 338 | 302 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (516 | ) | (456 | ) | |||
Income taxes receivable | 13 | (1 | ) | ||||
Prepaid expenses and other assets | (82 | ) | (54 | ) | |||
Accounts payable | 175 | 210 | |||||
Accrued compensation and related liabilities | (121 | ) | (146 | ) | |||
Deferred revenue | 51 | 58 | |||||
Operating lease liabilities | (28 | ) | — | ||||
Other liabilities | 63 | 62 | |||||
Total changes in operating assets and liabilities | (445 | ) | (327 | ) | |||
Net cash provided by operating activities | 190 | 198 | |||||
Cash flows from investing activities: | |||||||
Purchases of corporate and customer fund investments | (357 | ) | (153 | ) | |||
Sales of corporate and customer fund investments | 73 | 42 | |||||
Maturities of corporate and customer fund investments | 287 | 106 | |||||
Purchases of property and equipment | (68 | ) | (80 | ) | |||
Originations of term loans to small businesses | (166 | ) | (152 | ) | |||
Principal repayments of term loans from small businesses | 155 | 116 | |||||
Other | (20 | ) | 13 | ||||
Net cash used in investing activities | (96 | ) | (108 | ) | |||
Cash flows from financing activities: | |||||||
Repayment of debt | (25 | ) | (25 | ) | |||
Proceeds from issuance of stock under employee stock plans | 121 | 154 | |||||
Payments for employee taxes withheld upon vesting of restricted stock units | (104 | ) | (76 | ) | |||
Cash paid for purchases of treasury stock | (278 | ) | (274 | ) | |||
Dividends and dividend rights paid | (280 | ) | (251 | ) | |||
Net change in customer fund deposits | 25 | 67 | |||||
Other | (1 | ) | (5 | ) | |||
Net cash used in financing activities | (542 | ) | (410 | ) | |||
Effect of exchange rates on cash, cash equivalents, restricted cash, and restricted cash equivalents | (2 | ) | (2 | ) | |||
Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents | (450 | ) | (322 | ) | |||
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period | 2,352 | 1,631 | |||||
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period | $ | 1,902 | $ | 1,309 | |||
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents reported within the condensed consolidated balance sheets to the total amounts reported on the condensed consolidated statements of cash flows | |||||||
Cash and cash equivalents | $ | 1,641 | $ | 1,075 | |||
Restricted cash and restricted cash equivalents included in funds held for customers | 261 | 234 | |||||
Total cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period | $ | 1,902 | $ | 1,309 |
INTUIT INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) | |||||||||||
Six Months Ended | |||||||||||
(In millions) | January 31, 2021 | January 31, 2020 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 218 | $ | 297 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation | 77 | 98 | |||||||||
Amortization of acquired intangible assets | 60 | 16 | |||||||||
Non-cash operating lease cost | 28 | 32 | |||||||||
Share-based compensation expense | 291 | 218 | |||||||||
Deferred income taxes | 11 | (30) | |||||||||
Other | (48) | 4 | |||||||||
Total adjustments | 419 | 338 | |||||||||
Originations of loans held for sale | (41) | 0 | |||||||||
Sale and principal payments of loans held for sale | 143 | 0 | |||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | (178) | (516) | |||||||||
Income taxes receivable | (82) | 13 | |||||||||
Prepaid expenses and other assets | (63) | (82) | |||||||||
Accounts payable | 87 | 175 | |||||||||
Accrued compensation and related liabilities | (269) | (121) | |||||||||
Deferred revenue | 90 | 51 | |||||||||
Operating lease liabilities | (27) | (28) | |||||||||
Other liabilities | 27 | 63 | |||||||||
Total changes in operating assets and liabilities | (415) | (445) | |||||||||
Net cash provided by operating activities | 324 | 190 | |||||||||
Cash flows from investing activities: | |||||||||||
Purchases of corporate and customer fund investments | (535) | (357) | |||||||||
Sales of corporate and customer fund investments | 89 | 73 | |||||||||
Maturities of corporate and customer fund investments | 265 | 287 | |||||||||
Purchases of property and equipment | (71) | (68) | |||||||||
Acquisitions of businesses, net of cash acquired | (3,045) | 0 | |||||||||
Originations of term loans to small businesses | (70) | (166) | |||||||||
Principal repayments of term loans from small businesses | 53 | 155 | |||||||||
Other | 48 | (20) | |||||||||
Net cash used in investing activities | (3,266) | (96) | |||||||||
Cash flows from financing activities: | |||||||||||
Repayments on borrowings under unsecured revolving credit facility | (1,000) | 0 | |||||||||
Repayment of debt | (13) | (25) | |||||||||
Proceeds from issuance of stock under employee stock plans | 108 | 121 | |||||||||
Payments for employee taxes withheld upon vesting of restricted stock units | (168) | (104) | |||||||||
Cash paid for purchases of treasury stock | (164) | (278) | |||||||||
Dividends and dividend rights paid | (321) | (280) | |||||||||
Net change in customer fund deposits | (29) | 25 | |||||||||
Other | 0 | (1) |
Intuit Q2 Fiscal | 8 |
Net cash used in financing activities | (1,587) | (542) | |||||||||
Effect of exchange rates on cash, cash equivalents, restricted cash, and restricted cash equivalents | 10 | (2) | |||||||||
Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents | (4,519) | (450) | |||||||||
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period | 6,697 | 2,352 | |||||||||
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period | $ | 2,178 | $ | 1,902 | |||||||
Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents reported within the condensed consolidated balance sheets to the total amounts reported on the condensed consolidated statements of cash flows | |||||||||||
Cash and cash equivalents | $ | 1,952 | $ | 1,641 | |||||||
Restricted cash and restricted cash equivalents included in funds held for customers | 226 | 261 | |||||||||
Total cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period | $ | 2,178 | $ | 1,902 | |||||||
Supplemental schedule of non-cash investing activities: | |||||||||||
Issuance of common stock in a business combination | $ | 3,798 | $ | 0 |
Intuit Q2 Fiscal 2021 Form 10-Q | 9 |
INTUIT INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) |
1. Description of Business and Summary of Significant Accounting Policies |
Description of Business |
Basis of Presentation |
Seasonality |
Significant Accounting Policies |
Intuit Q2 Fiscal 2021 Form 10-Q | 10 |
Use of Estimates |
Computation of Net Income (Loss) Per Share |
Intuit Q2 Fiscal |
Three Months Ended | Six Months Ended | ||||||||||||||
(In millions, except per share amounts) | January 31, 2020 | January 31, 2019 | January 31, 2020 | January 31, 2019 | |||||||||||
Numerator: | |||||||||||||||
Net income | $ | 240 | $ | 189 | $ | 297 | $ | 223 | |||||||
Denominator: | |||||||||||||||
Shares used in basic per share amounts: | |||||||||||||||
Weighted average common shares outstanding | 261 | 260 | 261 | 260 | |||||||||||
Shares used in diluted per share amounts: | |||||||||||||||
Weighted average common shares outstanding | 261 | 260 | 261 | 260 | |||||||||||
Dilutive common equivalent shares from stock options | |||||||||||||||
and restricted stock awards | 3 | 4 | 3 | 4 | |||||||||||
Dilutive weighted average common shares outstanding | 264 | 264 | 264 | 264 | |||||||||||
Basic and diluted net income per share: | |||||||||||||||
Basic net income per share | $ | 0.92 | $ | 0.73 | $ | 1.14 | $ | 0.86 | |||||||
Diluted net income per share | $ | 0.91 | $ | 0.72 | $ | 1.13 | $ | 0.84 | |||||||
Shares excluded from diluted net income per share: | |||||||||||||||
Weighted average stock options and restricted stock units that have been excluded from dilutive common equivalent shares outstanding due to their anti-dilutive effect | — | 1 | — | 1 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In millions, except per share amounts) | January 31, 2021 | January 31, 2020 | January 31, 2021 | January 31, 2020 | |||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net income | $ | 20 | $ | 240 | $ | 218 | $ | 297 | |||||||||||||||
Denominator: | |||||||||||||||||||||||
Shares used in basic per share amounts: | |||||||||||||||||||||||
Weighted average common shares outstanding | 270 | 261 | 266 | 261 | |||||||||||||||||||
Shares used in diluted per share amounts: | |||||||||||||||||||||||
Weighted average common shares outstanding | 270 | 261 | 266 | 261 | |||||||||||||||||||
Dilutive common equivalent shares from stock options | |||||||||||||||||||||||
and restricted stock awards | 3 | 3 | 3 | 3 | |||||||||||||||||||
Dilutive weighted average common shares outstanding | 273 | 264 | 269 | 264 | |||||||||||||||||||
Basic and diluted net income per share: | |||||||||||||||||||||||
Basic net income per share | $ | 0.07 | $ | 0.92 | $ | 0.82 | $ | 1.14 | |||||||||||||||
Diluted net income per share | $ | 0.07 | $ | 0.91 | $ | 0.81 | $ | 1.13 | |||||||||||||||
Shares excluded from diluted net income per share: | |||||||||||||||||||||||
Weighted average stock options and restricted stock units that have been excluded from dilutive common equivalent shares outstanding due to their anti-dilutive effect | 1 | 0 | 1 | 0 |
Deferred Revenue |
Notes Receivable and Allowances for Loan Losses |
Intuit Q2 Fiscal 2021 Form 10-Q | 12 |
Concentration of Credit Risk and Significant Customers |
Accounting Standards Recently Adopted |
2. Fair Value Measurements |
Fair Value Hierarchy |
13 | |||||
Assets and Liabilities Measured at Fair Value on a Recurring Basis |
January 31, 2021 | July 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
(In millions) | Level 1 | Level 2 | Total Fair Value | Level 1 | Level 2 | Total Fair Value | |||||||||||||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||||||||||||||
Cash equivalents, primarily money market funds and time deposits | $ | 327 | $ | 0 | $ | 327 | $ | 5,765 | $ | 0 | $ | 5,765 | |||||||||||||||||||||||||||||||||||
Available-for-sale debt securities: | |||||||||||||||||||||||||||||||||||||||||||||||
Municipal bonds | 0 | 34 | 34 | 0 | 9 | 9 | |||||||||||||||||||||||||||||||||||||||||
Corporate notes | 0 | 869 | 869 | 0 | 752 | 752 | |||||||||||||||||||||||||||||||||||||||||
U.S. agency securities | 0 | 83 | 83 | 0 | 47 | 47 | |||||||||||||||||||||||||||||||||||||||||
Total available-for-sale debt securities | 0 | 986 | 986 | 0 | 808 | 808 | |||||||||||||||||||||||||||||||||||||||||
Total assets measured at fair value on a recurring basis | $ | 327 | $ | 986 | $ | 1,313 | $ | 5,765 | $ | 808 | $ | 6,573 | |||||||||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||
Senior unsecured notes(1) | $ | 0 | $ | 2,017 | $ | 2,017 | $ | 0 | $ | 2,042 | $ | 2,042 | |||||||||||||||||||||||||||||||||||
January 31, 2020 | July 31, 2019 | ||||||||||||||||||||||
(In millions) | Level 1 | Level 2 | Total Fair Value | Level 1 | Level 2 | Total Fair Value | |||||||||||||||||
Assets: | |||||||||||||||||||||||
Cash equivalents, primarily time deposits, savings deposit accounts, and money market funds | $ | 1,222 | $ | — | $ | 1,222 | $ | 1,647 | $ | — | $ | 1,647 | |||||||||||
Available-for-sale debt securities: | |||||||||||||||||||||||
Municipal bonds | — | 1 | 1 | — | 5 | 5 | |||||||||||||||||
Corporate notes | — | 794 | 794 | — | 800 | 800 | |||||||||||||||||
U.S. agency securities | — | 30 | 30 | — | 19 | 19 | |||||||||||||||||
Total available-for-sale debt securities | — | 825 | 825 | — | 824 | 824 | |||||||||||||||||
Total assets measured at fair value on a recurring basis | $ | 1,222 | $ | 825 | $ | 2,047 | $ | 1,647 | $ | 824 | $ | 2,471 |
January 31, 2020 | July 31, 2019 | ||||||||||||||||||||||
(In millions) | Level 1 | Level 2 | Total Fair Value | Level 1 | Level 2 | Total Fair Value | |||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||
In cash and cash equivalents | $ | 1,173 | $ | — | $ | 1,173 | $ | 1,647 | $ | — | $ | 1,647 | |||||||||||
In funds held for customers | 49 | — | 49 | — | — | — | |||||||||||||||||
Total cash equivalents | $ | 1,222 | $ | — | $ | 1,222 | $ | 1,647 | $ | — | $ | 1,647 | |||||||||||
Available-for-sale debt securities: | |||||||||||||||||||||||
In investments | $ | — | $ | 625 | $ | 625 | $ | — | $ | 624 | $ | 624 | |||||||||||
In funds held for customers | — | 200 | 200 | — | 200 | 200 | |||||||||||||||||
Total available-for-sale debt securities | $ | — | $ | 825 | $ | 825 | $ | — | $ | 824 | $ | 824 |
January 31, 2021 | July 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
(In millions) | Level 1 | Level 2 | Total Fair Value | Level 1 | Level 2 | Total Fair Value | |||||||||||||||||||||||||||||||||||||||||
Cash equivalents: | |||||||||||||||||||||||||||||||||||||||||||||||
In cash and cash equivalents | $ | 327 | $ | 0 | $ | 327 | $ | 5,765 | $ | 0 | $ | 5,765 | |||||||||||||||||||||||||||||||||||
Available-for-sale debt securities: | |||||||||||||||||||||||||||||||||||||||||||||||
In investments | $ | 0 | $ | 786 | $ | 786 | $ | 0 | $ | 608 | $ | 608 | |||||||||||||||||||||||||||||||||||
In funds held for customers | 0 | 200 | 200 | 0 | 200 | 200 | |||||||||||||||||||||||||||||||||||||||||
Total available-for-sale debt securities | $ | 0 | $ | 986 | $ | 986 | $ | 0 | $ | 808 | $ | 808 |
3. Cash and Cash Equivalents, Investments, and Funds Held for Customers |
Intuit Q2 Fiscal 2021 Form 10-Q | 14 |
January 31, 2020 | July 31, 2019 | ||||||||||||||
(In millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||
Classification on condensed consolidated balance sheets: | |||||||||||||||
Cash and cash equivalents | $ | 1,641 | $ | 1,641 | $ | 2,116 | $ | 2,116 | |||||||
Investments | 621 | 625 | 622 | 624 | |||||||||||
Funds held for customers | 461 | 461 | 436 | 436 | |||||||||||
Long-term investments | 13 | 13 | 13 | 13 | |||||||||||
Total cash and cash equivalents, investments, and funds held for customers | $ | 2,736 | $ | 2,740 | $ | 3,187 | $ | 3,189 |
January 31, 2021 | July 31, 2020 | ||||||||||||||||||||||
(In millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||
Classification on condensed consolidated balance sheets: | |||||||||||||||||||||||
Cash and cash equivalents | $ | 1,952 | $ | 1,952 | $ | 6,442 | $ | 6,442 | |||||||||||||||
Investments | 781 | 786 | 600 | 608 | |||||||||||||||||||
Funds held for customers | 426 | 426 | 455 | 455 | |||||||||||||||||||
Total cash and cash equivalents, investments, and funds held for customers | $ | 3,159 | $ | 3,164 | $ | 7,497 | $ | 7,505 |
January 31, 2020 | July 31, 2019 | ||||||||||||||
(In millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||
Type of issue: | |||||||||||||||
Total cash, cash equivalents, restricted cash, and restricted cash equivalents | $ | 1,902 | $ | 1,902 | $ | 2,352 | $ | 2,352 | |||||||
Available-for-sale debt securities: | |||||||||||||||
Municipal bonds | 1 | 1 | 5 | 5 | |||||||||||
Corporate notes | 790 | 794 | 798 | 800 | |||||||||||
U.S. agency securities | 30 | 30 | 19 | 19 | |||||||||||
Total available-for-sale debt securities | 821 | 825 | 822 | 824 | |||||||||||
Other long-term investments | 13 | 13 | 13 | 13 | |||||||||||
Total cash, cash equivalents, restricted cash, restricted cash equivalents, and investments | $ | 2,736 | $ | 2,740 | $ | 3,187 | $ | 3,189 |
January 31, 2021 | July 31, 2020 | ||||||||||||||||||||||
(In millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||
Type of issue: | |||||||||||||||||||||||
Total cash, cash equivalents, restricted cash, and restricted cash equivalents | $ | 2,178 | $ | 2,178 | $ | 6,697 | $ | 6,697 | |||||||||||||||
Available-for-sale debt securities: | |||||||||||||||||||||||
Municipal bonds | 34 | 34 | 9 | 9 | |||||||||||||||||||
Corporate notes | 864 | 869 | 744 | 752 | |||||||||||||||||||
U.S. agency securities | 83 | 83 | 47 | 47 | |||||||||||||||||||
Total available-for-sale debt securities | 981 | 986 | 800 | 808 | |||||||||||||||||||
Total cash, cash equivalents, restricted cash, restricted cash equivalents, and investments | $ | 3,159 | $ | 3,164 | $ | 7,497 | $ | 7,505 |
Intuit Q2 Fiscal |
January 31, 2020 | July 31, 2019 | ||||||||||||||
(In millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||
Due within one year | $ | 397 | $ | 397 | $ | 415 | $ | 416 | |||||||
Due within two years | 216 | 218 | 208 | 208 | |||||||||||
Due within three years | 177 | 178 | 163 | 164 | |||||||||||
Due after three years | 31 | 32 | 36 | 36 | |||||||||||
Total available-for-sale debt securities | $ | 821 | $ | 825 | $ | 822 | $ | 824 |
January 31, 2021 | July 31, 2020 | ||||||||||||||||||||||
(In millions) | Amortized Cost | Fair Value | Amortized Cost | Fair Value | |||||||||||||||||||
Due within one year | $ | 414 | $ | 415 | $ | 389 | $ | 390 | |||||||||||||||
Due within two years | 284 | 287 | 256 | 261 | |||||||||||||||||||
Due within three years | 277 | 278 | 137 | 139 | |||||||||||||||||||
Due after three years | 6 | 6 | 18 | 18 | |||||||||||||||||||
Total available-for-sale debt securities | $ | 981 | $ | 986 | $ | 800 | $ | 808 |
(In millions) | January 31, 2021 | July 31, 2020 | ||||||||||||
Restricted cash and restricted cash equivalents | $ | 226 | $ | 255 | ||||||||||
Restricted available-for-sale debt securities | 200 | 200 | ||||||||||||
Total funds held for customers | $ | 426 | $ | 455 |
(In millions) | January 31, 2020 | July 31, 2019 | ||||||||||||
Restricted cash and restricted cash equivalents | $ | 261 | $ | 236 | ||||||||||
Restricted available-for-sale debt securities | 200 | 200 | ||||||||||||
Total funds held for customers | $ | 461 | $ | 436 |
4. Goodwill and Acquired Intangible Assets |
January 31, 2020 | July 31, 2019 | ||||||
(In millions) | |||||||
Restricted cash and restricted cash equivalents | $ | 261 | $ | 236 | |||
Restricted available-for-sale debt securities | 200 | 200 | |||||
Total funds held for customers | $ | 461 | $ | 436 |
Goodwill |
(In millions) | Balance July 31, 2020 | Goodwill Acquired | Foreign Currency Translation | Balance January 31, 2021 | |||||||||||||||||||||||||
Small Business & Self-Employed | $ | 1,518 | $ | 43 | $ | 1 | $ | 1,562 | |||||||||||||||||||||
Consumer | 42 | 0 | 0 | 42 | |||||||||||||||||||||||||
ProConnect | 94 | 0 | 1 | 95 | |||||||||||||||||||||||||
Credit Karma | 0 | 3,899 | 0 | 3,899 | |||||||||||||||||||||||||
Totals | $ | 1,654 | $ | 3,942 | $ | 2 | $ | 5,598 |
January 31, 2019 | July 31, 2018 | ||||||
(In millions) | |||||||
Restricted cash and restricted cash equivalents | $ | 234 | $ | 167 | |||
Restricted available-for-sale debt securities | 200 | 200 | |||||
Total funds held for customers | $ | 434 | $ | 367 |
Intuit Q2 Fiscal 2021 Form 10-Q | 16 |
Acquired Intangible Assets |
(Dollars in millions) | Customer Lists / User Relationships | Purchased Technology | Trade Names and Logos | Covenants Not to Compete or Sue | Total | ||||||||||||||||||||||||
At January 31, 2021: | |||||||||||||||||||||||||||||
Cost | $ | 3,038 | $ | 681 | $ | 400 | $ | 42 | $ | 4,161 | |||||||||||||||||||
Accumulated amortization | (282) | (426) | (29) | (40) | (777) | ||||||||||||||||||||||||
Acquired intangible assets, net | $ | 2,756 | $ | 255 | $ | 371 | $ | 2 | $ | 3,384 | |||||||||||||||||||
Weighted average life in years | 15 | 5 | 15 | 3 | 14 | ||||||||||||||||||||||||
At July 31, 2020: | |||||||||||||||||||||||||||||
Cost | $ | 256 | $ | 421 | $ | 25 | $ | 42 | $ | 744 | |||||||||||||||||||
Accumulated amortization | (248) | (404) | (25) | (39) | (716) | ||||||||||||||||||||||||
Acquired intangible assets, net | $ | 8 | $ | 17 | $ | 0 | $ | 3 | $ | 28 | |||||||||||||||||||
Weighted average life in years | 5 | 3 | 0 | 3 | 4 |
(In millions) | Expected Future Amortization Expense | ||||
Twelve months ending July 31, | |||||
2021 (excluding the six months ended January 31, 2021) | $ | 136 | |||
2022 | 271 | ||||
2023 | 263 | ||||
2024 | 248 | ||||
2025 | 247 | ||||
Thereafter | 2,219 | ||||
Total expected future amortization expense | $ | 3,384 |
5. Business Combinations |
Credit Karma |
Intuit Q2 Fiscal 2021 Form 10-Q | 17 |
(In millions) | Amount | ||||
Cash and cash equivalents | $ | 436 | |||
Accounts receivable, net | 141 | ||||
Income taxes receivable | 59 | ||||
Prepaid expenses and other current assets | 8 | ||||
Long-term investments | 3 | ||||
Property and equipment, net | 63 | ||||
Operating lease right-of-use assets | 167 | ||||
Goodwill | 3,899 | ||||
Intangible assets | 3,372 | ||||
Other assets | 83 | ||||
Accounts payable | (86) | ||||
Accrued compensation and related liabilities | (113) | ||||
Other current liabilities | (24) | ||||
Operating lease liabilities | (172) | ||||
Long-term deferred income tax liabilities | (632) | ||||
Other long-term obligations | (10) | ||||
Total preliminary purchase price allocation | $ | 7,194 |
(In millions, except years) | Estimated Useful Life | Amount | |||||||||
User relationships | 15 years | $ | 2,781 | ||||||||
Trade names/Trademarks | 15 years | 375 | |||||||||
Purchased technology | 6 years | 216 | |||||||||
Total identifiable intangible assets | $ | 3,372 |
Intuit Q2 Fiscal 2021 Form 10-Q | 18 |
(In millions) | Amount | ||||
Intangibles | $ | (847) | |||
Federal and state net operating loss carryforwards | 135 | ||||
Federal research and experimentation credit carryforwards | 45 | ||||
Other, net | 35 | ||||
Total long-term deferred income tax liabilities | $ | (632) |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In millions) | January 31, 2021 | January 31, 2020 | January 31, 2021 | January 31, 2020 | |||||||||||||||||||
Total revenue | $ | 1,647 | $ | 1,958 | $ | 3,142 | $ | 3,381 | |||||||||||||||
Net income | $ | 23 | $ | 120 | $ | 104 | $ | 78 | |||||||||||||||
Basic net income per share | $ | 0.08 | $ | 0.44 | $ | 0.38 | $ | 0.29 | |||||||||||||||
Diluted net income per share | $ | 0.08 | $ | 0.44 | $ | 0.38 | $ | 0.28 | |||||||||||||||
6. Current Liabilities |
Short-Term Debt |
Intuit Q2 Fiscal 2021 Form 10-Q | 19 |
Unsecured Revolving Credit Facility |
Other Current Liabilities |
(In millions) | January 31, 2020 | July 31, 2019 | |||||
Executive deferred compensation plan liabilities | $ | 121 | $ | 108 | |||
Current portion of operating lease liabilities | 57 | — | |||||
Reserve for promotional discounts and rebates | 29 | 11 | |||||
Reserve for returns and credits | 52 | 24 | |||||
Current portion of deferred rent | — | 6 | |||||
Current portion of dividend payable | 8 | 7 | |||||
Other | 51 | 46 | |||||
Total other current liabilities | $ | 318 | $ | 202 |
(In millions) | January 31, 2021 | July 31, 2020 | |||||||||
Executive deferred compensation plan liabilities | $ | 139 | $ | 123 | |||||||
Current portion of operating lease liabilities | 72 | 46 | |||||||||
Reserve for promotional discounts and rebates | 30 | 11 | |||||||||
Reserve for returns and credits | 50 | 24 | |||||||||
Current portion of dividend payable | 6 | 6 | |||||||||
Interest payable | 1 | 3 | |||||||||
Other | 64 | 84 | |||||||||
Total other current liabilities | $ | 362 | $ | 297 |
(In millions) | January 31, 2021 | July 31, 2020 | Effective Interest Rate | ||||||||||||||
Senior unsecured notes issued June 2020: | |||||||||||||||||
0.650% notes due July 2023 | $ | 500 | $ | 500 | 0.837% | ||||||||||||
0.950% notes due July 2025 | 500 | 500 | 1.127% | ||||||||||||||
1.350% notes due July 2027 | 500 | 500 | 1.486% | ||||||||||||||
1.650% notes due July 2030 | 500 | 500 | 1.767% | ||||||||||||||
Total senior unsecured notes | 2,000 | 2,000 | |||||||||||||||
Unamortized discount and debt issuance costs | (15) | (17) | |||||||||||||||
Net carrying value senior unsecured notes | $ | 1,985 | $ | 1,983 |
Intuit Q2 Fiscal 2021 Form 10-Q | 20 |
Secured Revolving Credit Facility |
Other Long-Term Obligations |
(In millions) | January 31, 2020 | July 31, 2019 | |||||
Long-term income tax liabilities | $ | 40 | $ | 89 | |||
Total deferred rent | — | 47 | |||||
Total dividend payable | 13 | 11 | |||||
Other | 12 | 12 | |||||
Total long-term obligations | 65 | 159 | |||||
Less current portion (included in other current liabilities) | (9 | ) | (14 | ) | |||
Long-term obligations due after one year | $ | 56 | $ | 145 |
(In millions) | January 31, 2021 | July 31, 2020 | |||||||||
Long-term income tax liabilities | $ | 26 | $ | 10 | |||||||
Total dividend payable | 11 | 12 | |||||||||
Long-term deferred revenue | 7 | 13 | |||||||||
Other | 11 | 17 | |||||||||
Total long-term obligations | 55 | 52 | |||||||||
Less current portion (included in other current liabilities) | (6) | (10) | |||||||||
Long-term obligations due after one year | $ | 49 | $ | 42 |
Unconditional Purchase Obligations |
Intuit Q2 Fiscal 2021 Form 10-Q | 21 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In millions) | January 31, 2021 | January 31, 2020 | January 31, 2021 | January 31, 2020 | |||||||||||||||||||
Operating lease cost (1) | $ | 18 | $ | 19 | $ | 33 | $ | 37 | |||||||||||||||
Variable lease cost | 3 | 3 | 6 | 6 | |||||||||||||||||||
Sublease income | (4) | (7) | (8) | (14) | |||||||||||||||||||
Total net lease cost | $ | 17 | $ | 15 | $ | 31 | $ | 29 |
Three Months Ended | Six Months Ended | ||||||
(In millions) | January 31, 2020 | January 31, 2020 | |||||
Operating lease cost (1) | $ | 19 | $ | 37 | |||
Variable lease cost | 3 | 6 | |||||
Sublease income | (7 | ) | (14 | ) | |||
Total net lease cost | $ | 15 | $ | 29 |
Six Months Ended | |||||||||||
(In millions) | January 31, 2021 | January 31, 2020 | |||||||||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | 31 | $ | 33 | |||||||
Right-of-use assets obtained in exchange for new operating lease liabilities (1) | $ | 27 | $ | 328 |
Six Months Ended | |||
January 31, 2020 | |||
(In millions) | |||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | 33 | |
Right-of-use assets obtained in exchange for new operating lease liabilities (1) | $ | 328 |
January 31, 2021 | July 31, 2020 | ||||||||||
Weighted-average remaining lease term for operating leases | 6.8 years | 5.5 years | |||||||||
Weighted-average discount rate for operating leases | 2.3 | % | 3.1 | % |
(In millions) | Operating Leases (1) | ||||
Fiscal year ending July 31, | |||||
2021 (excluding the six months ended January 31, 2021) | $ | 38 | |||
2022 | 88 | ||||
2023 | 81 | ||||
2024 | 77 | ||||
2025 | 60 | ||||
Thereafter | 156 | ||||
Total future minimum lease payments | 500 | ||||
Less imputed interest | (37) | ||||
Present value of lease liabilities | $ | 463 |
(In millions) | Operating Leases (1) | ||
Fiscal year ending July 31, | |||
2020 (excluding the six months ended January 31, 2020) | $ | 30 | |
2021 | 74 | ||
2022 | 69 | ||
2023 | 61 | ||
2024 | 59 | ||
Thereafter | 79 | ||
Total future minimum lease payments | 372 | ||
Less imputed interest | (29 | ) | |
Present value of lease liabilities | $ | 343 |
Intuit Q2 Fiscal 2021 | 22 |
2020 | |||
(In millions) | January 31, 2021 | July 31, 2020 | |||||||||
Operating lease right-of-use assets | $ | 392 | $ | 226 | |||||||
Other current liabilities | $ | 72 | $ | 46 | |||||||
Operating lease liabilities | 391 | 221 | |||||||||
Total operating lease liabilities | $ | 463 | $ | 267 |
Effective Tax Rate |
Unrecognized Tax Benefits and Other Considerations |
Intuit Q2 Fiscal 2021 Form 10-Q | 23 |
10. Stockholders’ Equity |
Stock Repurchase Programs and Treasury Shares |
Dividends on Common Stock |
Share-Based Compensation Expense |
Three Months Ended | Six Months Ended | ||||||||||||||
(In millions) | January 31, 2020 | January 31, 2019 | January 31, 2020 | January 31, 2019 | |||||||||||
Cost of revenue | $ | 14 | $ | 15 | $ | 29 | $ | 29 | |||||||
Selling and marketing | 29 | 25 | 59 | 55 | |||||||||||
Research and development | 37 | 34 | 75 | 69 | |||||||||||
General and administrative | 27 | 26 | 55 | 52 | |||||||||||
Total share-based compensation expense | $ | 107 | $ | 100 | $ | 218 | $ | 205 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In millions) | January 31, 2021 | January 31, 2020 | January 31, 2021 | January 31, 2020 | |||||||||||||||||||
Cost of revenue | $ | 16 | $ | 14 | $ | 31 | $ | 29 | |||||||||||||||
Selling and marketing | 44 | 29 | 76 | 59 | |||||||||||||||||||
Research and development | 67 | 37 | 105 | 75 | |||||||||||||||||||
General and administrative | 53 | 27 | 79 | 55 | |||||||||||||||||||
Total share-based compensation expense | $ | 180 | $ | 107 | $ | 291 | $ | 218 | |||||||||||||||
Intuit Q2 Fiscal 2021 Form 10-Q | 24 |
Assumed Share-Based Compensation Plans |
Share-Based Awards Available for Grant |
(Shares in thousands) | Shares Available for Grant | ||||
Balance at July 31, | |||||
Shares available for grant under an assumed plan | 4,298 | ||||
Restricted stock units granted (1) | |||||
Options granted | |||||
Share-based awards canceled/forfeited/expired (1) (2) | |||||
Balance at January 31, |
Restricted Stock Unit and Restricted Stock Activity and Related Share-Based Compensation Expense |
(Shares in thousands) | Number of Shares | Weighted Average Grant Date Fair Value | |||||||||
Nonvested at July 31, 2020 | 5,664 | $ | 231.97 | ||||||||
Assumed through acquisition | 1,998 | 355.49 | |||||||||
Granted (1) | 1,306 | 364.24 | |||||||||
Restricted stock subject to revest provisions issued in connection with acquisition | 775 | 355.49 | |||||||||
Vested | (967) | 224.10 | |||||||||
Forfeited | (644) | 222.92 | |||||||||
Nonvested at January 31, 2021 | 8,132 | $ | 296.98 |
Restricted Stock Units | ||||||
(Shares in thousands) | Number of Shares | Weighted Average Grant Date Fair Value | ||||
Nonvested at July 31, 2019 | 5,683 | $ | 186.22 | |||
Granted | 372 | 268.94 | ||||
Vested | (734 | ) | 157.39 | |||
Forfeited | (434 | ) | 132.98 | |||
Nonvested at January 31, 2020 | 4,887 | $ | 201.56 |
Intuit Q2 Fiscal |
Stock Option Activity and Related Share-Based Compensation Expense |
Options Outstanding | ||||||
(Shares in thousands) | Number of Shares | Weighted Average Exercise Price Per Share | ||||
Balance at July 31, 2019 | 3,374 | $ | 150.75 | |||
Granted | — | — | ||||
Exercised | (695 | ) | 104.31 | |||
Canceled or expired | (41 | ) | 154.69 | |||
Balance at January 31, 2020 | 2,638 | $ | 162.92 | |||
Exercisable at January 31, 2020 | 1,759 | $ | 129.31 |
Options Outstanding | |||||||||||
(Shares in thousands) | Number of Shares | Weighted Average Exercise Price Per Share | |||||||||
Balance at July 31, 2020 | 2,681 | $ | 185.83 | ||||||||
Granted | 0 | 0 | |||||||||
Exercised | (454) | 126.52 | |||||||||
Canceled or expired | (54) | 257.25 | |||||||||
Balance at January 31, 2021 | 2,173 | $ | 196.45 | ||||||||
Exercisable at January 31, 2021 | 1,446 | $ | 153.46 |
Intuit Q2 Fiscal 2021 Form 10-Q | 26 |
Small Business & Self-Employed: This segment serves small businesses and the self-employed around the world, and the accounting professionals who Consumer: This segment serves consumers and includes do-it-yourself and assisted TurboTax income tax preparation products and services sold in the U.S. and Canada. Our Mint Credit Karma:This segment serves consumers with a personal finance platform that provides personalized recommendations of credit card, home, auto and personal loan, and insurance products; online savings and checking accounts; and access to their credit scores and reports, credit and identity monitoring, credit report dispute, and data-driven resources. |
Intuit Q2 Fiscal 2021 Form 10-Q | 27 |
Three Months Ended | Six Months Ended | ||||||||||||||
(In millions) | January 31, 2020 | January 31, 2019 | January 31, 2020 | January 31, 2019 | |||||||||||
Net revenue: | |||||||||||||||
Small Business & Self-Employed | $ | 973 | $ | 833 | $ | 2,019 | $ | 1,741 | |||||||
Consumer | 499 | 461 | 599 | 551 | |||||||||||
Strategic Partner | 224 | 208 | 243 | 226 | |||||||||||
Total net revenue | $ | 1,696 | $ | 1,502 | $ | 2,861 | $ | 2,518 | |||||||
Operating income: | |||||||||||||||
Small Business & Self-Employed | $ | 402 | $ | 320 | $ | 952 | $ | 780 | |||||||
Consumer | 163 | 164 | 118 | 123 | |||||||||||
Strategic Partner | 182 | 166 | 161 | 146 | |||||||||||
Total segment operating income | 747 | 650 | 1,231 | 1,049 | |||||||||||
Unallocated corporate items: | |||||||||||||||
Share-based compensation expense | (107 | ) | (100 | ) | (218 | ) | (205 | ) | |||||||
Other common expenses | (363 | ) | (311 | ) | (718 | ) | (608 | ) | |||||||
Amortization of acquired technology | (6 | ) | (5 | ) | (12 | ) | (10 | ) | |||||||
Amortization of other acquired intangible assets | (1 | ) | (1 | ) | (3 | ) | (3 | ) | |||||||
Total unallocated corporate items | (477 | ) | (417 | ) | (951 | ) | (826 | ) | |||||||
Total operating income | $ | 270 | $ | 233 | $ | 280 | $ | 223 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In millions) | January 31, 2021 | January 31, 2020 | January 31, 2021 | January 31, 2020 | |||||||||||||||||||
Net revenue: | |||||||||||||||||||||||
Small Business & Self-Employed | $ | 1,078 | $ | 973 | $ | 2,259 | $ | 2,019 | |||||||||||||||
Consumer | 147 | 499 | 266 | 599 | |||||||||||||||||||
ProConnect | 207 | 224 | 230 | 243 | |||||||||||||||||||
Credit Karma | 144 | 0 | 144 | 0 | |||||||||||||||||||
Total net revenue | $ | 1,576 | $ | 1,696 | $ | 2,899 | $ | 2,861 | |||||||||||||||
Operating income (loss): | |||||||||||||||||||||||
Small Business & Self-Employed | $ | 592 | $ | 447 | $ | 1,359 | $ | 1,040 | |||||||||||||||
Consumer | (155) | 191 | (151) | 171 | |||||||||||||||||||
ProConnect | 172 | 186 | 162 | 168 | |||||||||||||||||||
Credit Karma | 38 | 0 | 38 | 0 | |||||||||||||||||||
Total segment operating income | 647 | 824 | 1,408 | 1,379 | |||||||||||||||||||
Unallocated corporate items: | |||||||||||||||||||||||
Share-based compensation expense | (180) | (107) | (291) | (218) | |||||||||||||||||||
Other corporate expenses | (442) | (440) | (874) | (866) | |||||||||||||||||||
Amortization of acquired technology | (14) | (6) | (21) | (12) | |||||||||||||||||||
Amortization of other acquired intangible assets | (36) | (1) | (38) | (3) | |||||||||||||||||||
Total unallocated corporate items | (672) | (554) | (1,224) | (1,099) | |||||||||||||||||||
Total operating income (loss) | $ | (25) | $ | 270 | $ | 184 | $ | 280 |
Three Months Ended | Six Months Ended | ||||||||||||||
(In millions) | January 31, 2020 | January 31, 2019 | January 31, 2020 | January 31, 2019 | |||||||||||
Net revenue: | |||||||||||||||
QuickBooks Online Accounting | $ | 330 | $ | 231 | $ | 636 | $ | 448 | |||||||
Online Services | 200 | 163 | 395 | 317 | |||||||||||
Total Online Ecosystem | 530 | 394 | 1,031 | 765 | |||||||||||
QuickBooks Desktop Accounting | 165 | 154 | 404 | 382 | |||||||||||
Desktop Services and Supplies | 278 | 285 | 584 | 594 | |||||||||||
Total Desktop Ecosystem | 443 | 439 | 988 | 976 | |||||||||||
Small Business & Self-Employed | 973 | 833 | 2,019 | 1,741 | |||||||||||
Consumer | 499 | 461 | 599 | 551 | |||||||||||
Strategic Partner | 224 | 208 | 243 | 226 | |||||||||||
Total net revenue | $ | 1,696 | $ | 1,502 | $ | 2,861 | $ | 2,518 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
(In millions) | January 31, 2021 | January 31, 2020 | January 31, 2021 | January 31, 2020 | |||||||||||||||||||
Net revenue: | |||||||||||||||||||||||
QuickBooks Online Accounting | $ | 404 | $ | 330 | $ | 796 | $ | 636 | |||||||||||||||
Online Services | 240 | 200 | 469 | 395 | |||||||||||||||||||
Total Online Ecosystem | 644 | 530 | 1,265 | 1,031 | |||||||||||||||||||
QuickBooks Desktop Accounting | 160 | 165 | 401 | 404 | |||||||||||||||||||
Desktop Services and Supplies | 274 | 278 | 593 | 584 | |||||||||||||||||||
Total Desktop Ecosystem | 434 | 443 | 994 | 988 | |||||||||||||||||||
Small Business & Self-Employed | 1,078 | 973 | 2,259 | 2,019 | |||||||||||||||||||
Consumer | 147 | 499 | 266 | 599 | |||||||||||||||||||
ProConnect | 207 | 224 | 230 | 243 | |||||||||||||||||||
Credit Karma | 144 | 0 | 144 | 0 | |||||||||||||||||||
Total net revenue | $ | 1,576 | $ | 1,696 | $ | 2,899 | $ | 2,861 |
Intuit Q2 Fiscal |
ITEM 2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
• Executive Overview: High level discussion of our operating results and some of the trends that affect our business. • Critical Accounting Policies and Estimates: Significant changes since our most recent Annual Report on Form 10-K that we believe are important to understanding the assumptions and judgments underlying our financial statements. • Results of Operations: A more detailed discussion of our revenue and expenses. • Liquidity and Capital Resources: Discussion of key aspects of our condensed consolidated statements of cash flows, changes in our condensed consolidated balance sheets, and our financial commitments. |
Intuit Q2 Fiscal 2021 Form 10-Q | 29 |
EXECUTIVE OVERVIEW |
About Intuit |
Small Business & Self-Employed: This segment serves small businesses and the self-employed around the world, and the accounting professionals who Consumer: This segment serves consumers and includes do-it-yourself and assisted TurboTax income tax preparation products and services sold in the U.S. and Canada. Our Mint |
Our Growth Strategy |
Intuit Q2 Fiscal |
Industry Trends and Seasonality |
Intuit Q2 Fiscal 2021 Form 10-Q | 31 |
Key Challenges and Risks |
Overview of Financial Results |
Revenue of | Small Business & Self-Employed revenue of | Cash, cash equivalents, and investments of | ||||||||||||||
$2.9 B | $2.3 B | $2.7 B | ||||||||||||||
up | up | |||||||||||||||
CRITICAL ACCOUNTING POLICIES AND ESTIMATES |
Intuit Q2 Fiscal |
RESULTS OF OPERATIONS |
Financial Overview | Financial Overview | Financial Overview | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions, except per share amounts) | Q2 FY20 | Q2 FY19 | $ Change | % Change | YTD Q2 FY20 | YTD Q2 FY19 | $ Change | % Change | (Dollars in millions, except per share amounts) | Q2 FY21 | Q2 FY20 | $ Change | % Change | YTD Q2 FY21 | YTD Q2 FY20 | $ Change | % Change | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total net revenue | $ | 1,696 | $ | 1,502 | $ | 194 | 13 | % | $ | 2,861 | $ | 2,518 | $ | 343 | 14 | % | Total net revenue | $ | 1,576 | $ | 1,696 | $ | (120) | (7) | % | $ | 2,899 | $ | 2,861 | $ | 38 | 1 | % | |||||||||||||||||||||||||||||||||||||||||||
Operating income | 270 | 233 | 37 | 16 | % | 280 | 223 | 57 | 26 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating income (loss) | Operating income (loss) | (25) | 270 | (295) | (109) | % | 184 | 280 | (96) | (34) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | 240 | 189 | 51 | 27 | % | 297 | 223 | 74 | 33 | % | Net income | 20 | 240 | (220) | (92) | % | 218 | 297 | (79) | (27) | % | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Diluted net income per share | $ | 0.91 | $ | 0.72 | $ | 0.19 | 26 | % | $ | 1.13 | $ | 0.84 | $ | 0.29 | 35 | % | Diluted net income per share | $ | 0.07 | $ | 0.91 | $ | (0.84) | (92) | % | $ | 0.81 | $ | 1.13 | $ | (0.32) | (28) | % |
Intuit Q2 Fiscal 2021 Form 10-Q | 33 |
Segment Results |
Intuit Q2 Fiscal |
Small Business & Self-Employed |
(Dollars in millions) | Q2 FY21 | Q2 FY20 | % Change | YTD Q2 FY21 | YTD Q2 FY20 | % Change | |||||||||||||||||||||||||||||
Product revenue | $ | 227 | $ | 235 | (3) | % | $ | 575 | $ | 571 | 1 | % | |||||||||||||||||||||||
Service and other revenue | 851 | 738 | 15 | % | 1,684 | 1,448 | 16 | % | |||||||||||||||||||||||||||
Total segment revenue | $ | 1,078 | $ | 973 | 11 | % | $ | 2,259 | $ | 2,019 | 12 | % | |||||||||||||||||||||||
% of total revenue | 69 | % | 57 | % | 78 | % | 71 | % | |||||||||||||||||||||||||||
Segment operating income | $ | 592 | $ | 447 | 32 | % | $ | 1,359 | $ | 1,040 | 31 | % | |||||||||||||||||||||||
% of related revenue | 55 | % | 46 | % | 60 | % | 52 | % |
(Dollars in millions) | Q2 FY20 | Q2 FY19 | % Change | YTD Q2 FY20 | YTD Q2 FY19 | % Change | |||||||||||||||
Product revenue | $ | 235 | $ | 231 | 2 | % | $ | 571 | $ | 560 | 2 | % | |||||||||
Service and other revenue | 738 | 602 | 23 | % | 1,448 | 1,181 | 23 | % | |||||||||||||
Total segment revenue | $ | 973 | $ | 833 | 17 | % | $ | 2,019 | $ | 1,741 | 16 | % | |||||||||
% of total revenue | 57 | % | 55 | % | 71 | % | 69 | % | |||||||||||||
Segment operating income | $ | 402 | $ | 320 | 26 | % | $ | 952 | $ | 780 | 22 | % | |||||||||
% of related revenue | 41 | % | 38 | % | 47 | % | 45 | % |
Intuit Q2 Fiscal 2021 Form 10-Q | 35 |
(Dollars in millions) | Q2 FY21 | Q2 FY20 | % Change | YTD Q2 FY21 | YTD Q2 FY20 | % Change | |||||||||||||||||||||||||||||
Net revenue: | |||||||||||||||||||||||||||||||||||
QuickBooks Online Accounting | $ | 404 | $ | 330 | 22 | % | $ | 796 | $ | 636 | 25 | % | |||||||||||||||||||||||
Online Services | 240 | 200 | 20 | % | 469 | 395 | 19 | % | |||||||||||||||||||||||||||
Total Online Ecosystem | 644 | 530 | 22 | % | 1,265 | 1,031 | 23 | % | |||||||||||||||||||||||||||
QuickBooks Desktop Accounting | 160 | 165 | (3) | % | 401 | 404 | (1) | % | |||||||||||||||||||||||||||
Desktop Services and Supplies | 274 | 278 | (1) | % | 593 | 584 | 2 | % | |||||||||||||||||||||||||||
Total Desktop Ecosystem | 434 | 443 | (2) | % | 994 | 988 | 1 | % | |||||||||||||||||||||||||||
Total Small Business & Self-Employed | $ | 1,078 | $ | 973 | 11 | % | $ | 2,259 | $ | 2,019 | 12 | % |
Intuit Q2 Fiscal |
Consumer |
(Dollars in millions) | Q2 FY20 | Q2 FY19 | % Change | YTD Q2 FY20 | YTD Q2 FY19 | % Change | (Dollars in millions) | Q2 FY21 | Q2 FY20 | % Change | YTD Q2 FY21 | YTD Q2 FY20 | % Change | |||||||||||||||||||||||||||||||||||||||||||
Product revenue | $ | 90 | $ | 98 | (8 | )% | $ | 96 | $ | 104 | (8 | )% | Product revenue | $ | 66 | $ | 90 | (27) | % | $ | 73 | $ | 96 | (24) | % | |||||||||||||||||||||||||||||||
Service and other revenue | 409 | 363 | 13 | % | 503 | 447 | 13 | % | Service and other revenue | 81 | 409 | (80) | % | 193 | 503 | (62) | % | |||||||||||||||||||||||||||||||||||||||
Total segment revenue | $ | 499 | $ | 461 | 8 | % | $ | 599 | $ | 551 | 9 | % | Total segment revenue | $ | 147 | $ | 499 | (71) | % | $ | 266 | $ | 599 | (56) | % | |||||||||||||||||||||||||||||||
% of total revenue | 30 | % | 31 | % | 21 | % | 22 | % | % of total revenue | 9 | % | 30 | % | 9 | % | 21 | % | |||||||||||||||||||||||||||||||||||||||
Segment operating income | $ | 163 | $ | 164 | (1 | )% | $ | 118 | $ | 123 | (4 | )% | ||||||||||||||||||||||||||||||||||||||||||||
Segment operating income (loss) | Segment operating income (loss) | $ | (155) | $ | 191 | (181) | % | $ | (151) | $ | 171 | (188) | % | |||||||||||||||||||||||||||||||||||||||||||
% of related revenue | 33 | % | 36 | % | 20 | % | 22 | % | % of related revenue | (105) | % | 38 | % | (57) | % | 29 | % |
Intuit Q2 Fiscal |
(Dollars in millions) | Q2 FY20 | Q2 FY19 | % Change | YTD Q2 FY20 | YTD Q2 FY19 | % Change | (Dollars in millions) | Q2 FY21 | Q2 FY20 | % Change | YTD Q2 FY21 | YTD Q2 FY20 | % Change | |||||||||||||||||||||||||||||||||||||||||||
Product revenue | $ | 220 | $ | 204 | 8 | % | $ | 231 | $ | 216 | 7 | % | Product revenue | $ | 202 | $ | 220 | (8) | % | $ | 214 | $ | 231 | (7) | % | |||||||||||||||||||||||||||||||
Service and other revenue | 4 | 4 | — | % | 12 | 10 | 20 | % | Service and other revenue | 5 | 4 | 25 | % | 16 | 12 | 33 | % | |||||||||||||||||||||||||||||||||||||||
Total segment revenue | $ | 224 | $ | 208 | 8 | % | $ | 243 | $ | 226 | 8 | % | Total segment revenue | $ | 207 | $ | 224 | (8) | % | $ | 230 | $ | 243 | (5) | % | |||||||||||||||||||||||||||||||
% of total revenue | 13 | % | 14 | % | 8 | % | 9 | % | % of total revenue | 13 | % | 13 | % | 8 | % | 8 | % | |||||||||||||||||||||||||||||||||||||||
Segment operating income | $ | 182 | $ | 166 | 10 | % | $ | 161 | $ | 146 | 10 | % | Segment operating income | $ | 172 | $ | 186 | (8) | % | $ | 162 | $ | 168 | (4) | % | |||||||||||||||||||||||||||||||
% of related revenue | 81 | % | 80 | % | 66 | % | 65 | % | % of related revenue | 83 | % | 83 | % | 70 | % | 69 | % |
Intuit Q2 Fiscal |
Credit Karma |
(Dollars in millions) | Q2 FY21 | Q2 FY20 | % Change | YTD Q2 FY21 | YTD Q2 FY20 | % Change | |||||||||||||||||||||||||||||
Product revenue | $ | — | $ | — | N/A | $ | — | $ | — | N/A | |||||||||||||||||||||||||
Service and other revenue | 144 | — | N/A | 144 | — | N/A | |||||||||||||||||||||||||||||
Total segment revenue | $ | 144 | $ | — | N/A | $ | 144 | $ | — | N/A | |||||||||||||||||||||||||
% of total revenue | 9 | % | — | % | 5 | % | — | % | |||||||||||||||||||||||||||
Segment operating income | $ | 38 | $ | — | N/A | $ | 38 | $ | — | N/A | |||||||||||||||||||||||||
% of related revenue | 26 | % | N/A | 26 | % | N/A |
Cost of Revenue | |||||||||||||||||||||||||||
(Dollars in millions) | Q2 FY20 | % of Related Revenue | Q2 FY19 | % of Related Revenue | YTD Q2 FY20 | % of Related Revenue | YTD Q2 FY19 | % of Related Revenue | |||||||||||||||||||
Cost of product revenue | $ | 24 | 4 | % | $ | 26 | 5 | % | $ | 41 | 5 | % | $ | 41 | 5 | % | |||||||||||
Cost of service and other revenue | 310 | 27 | % | 254 | 26 | % | 577 | 29 | % | 481 | 29 | % | |||||||||||||||
Amortization of acquired technology | 6 | n/a | 5 | n/a | 12 | n/a | 10 | n/a | |||||||||||||||||||
Total cost of revenue | $ | 340 | 20 | % | $ | 285 | 19 | % | $ | 630 | 22 | % | $ | 532 | 21 | % |
Intuit Q2 Fiscal 2021 Form 10-Q | 39 |
Cost of Revenue | |||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | Q2 FY21 | % of Related Revenue | Q2 FY20 | % of Related Revenue | YTD Q2 FY21 | % of Related Revenue | YTD Q2 FY20 | % of Related Revenue | |||||||||||||||||||||||||||||||||||||||
Cost of product revenue | $ | 22 | 4 | % | $ | 24 | 4 | % | $ | 37 | 4 | % | $ | 41 | 5 | % | |||||||||||||||||||||||||||||||
Cost of service and other revenue | 331 | 31 | % | 310 | 27 | % | 565 | 28 | % | 577 | 29 | % | |||||||||||||||||||||||||||||||||||
Amortization of acquired technology | 14 | n/a | 6 | n/a | 21 | n/a | 12 | n/a | |||||||||||||||||||||||||||||||||||||||
Total cost of revenue | $ | 367 | 23 | % | $ | 340 | 20 | % | $ | 623 | 21 | % | $ | 630 | 22 | % |
Operating Expenses | Operating Expenses | Operating Expenses | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions) | Q2 FY20 | % of Total Net Revenue | Q2 FY19 | % of Total Net Revenue | YTD Q2 FY20 | % of Total Net Revenue | YTD Q2 FY19 | % of Total Net Revenue | (Dollars in millions) | Q2 FY21 | % of Total Net Revenue | Q2 FY20 | % of Total Net Revenue | YTD Q2 FY21 | % of Total Net Revenue | YTD Q2 FY20 | % of Total Net Revenue | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selling and marketing | $ | 593 | 35 | % | $ | 548 | 37 | % | $ | 976 | 34 | % | $ | 894 | 36 | % | Selling and marketing | $ | 580 | 37 | % | $ | 593 | 35 | % | $ | 942 | 32 | % | $ | 976 | 34 | % | |||||||||||||||||||||||||||||||||||||||||
Research and development | 333 | 20 | % | 295 | 20 | % | 667 | 23 | % | 589 | 23 | % | Research and development | 368 | 23 | % | 333 | 20 | % | 693 | 24 | % | 667 | 23 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
General and administrative | 159 | 9 | % | 140 | 9 | % | 305 | 11 | % | 277 | 11 | % | General and administrative | 250 | 16 | % | 159 | 9 | % | 419 | 14 | % | 305 | 11 | % | |||||||||||||||||||||||||||||||||||||||||||||||||
Amortization of other acquired intangible assets | 1 | — | % | 1 | — | % | 3 | — | % | 3 | — | % | Amortization of other acquired intangible assets | 36 | 2 | % | 1 | — | % | 38 | 1 | % | 3 | — | % | |||||||||||||||||||||||||||||||||||||||||||||||||
Total operating expenses | $ | 1,086 | 64 | % | $ | 984 | 66 | % | $ | 1,951 | 68 | % | $ | 1,763 | 70 | % | Total operating expenses | $ | 1,234 | 78 | % | $ | 1,086 | 64 | % | $ | 2,092 | 72 | % | $ | 1,951 | 68 | % |
Intuit Q2 Fiscal 2021 Form 10-Q | 40 |
Non-Operating Income and Expenses |
(In millions) | Q2 FY21 | Q2 FY20 | YTD Q2 FY21 | YTD Q2 FY20 | |||||||||||||||||||
Interest income (1) | $ | 2 | $ | 11 | $ | 6 | $ | 23 | |||||||||||||||
Net gain on executive deferred compensation plan assets (2) | 14 | 4 | 13 | 7 | |||||||||||||||||||
Other (3) | 38 | — | 44 | (1) | |||||||||||||||||||
Total interest and other income, net | $ | 54 | $ | 15 | $ | 63 | $ | 29 |
(In millions) | Q2 FY20 | Q2 FY19 | YTD Q2 FY20 | YTD Q2 FY19 | |||||||||||
Interest income (1) | $ | 11 | $ | 6 | $ | 23 | $ | 13 | |||||||
Net gain (loss) on executive deferred compensation plan assets (2) | 4 | 1 | 7 | (3 | ) | ||||||||||
Other | — | (1 | ) | (1 | ) | (4 | ) | ||||||||
Total interest and other income, net | $ | 15 | $ | 6 | $ | 29 | $ | 6 |
LIQUIDITY AND CAPITAL RESOURCES |
Overview |
Intuit Q2 Fiscal 2021 Form 10-Q | 41 |
(Dollars in millions) | January 31, 2020 | July 31, 2019 | $ Change | % Change | ||||||||||
Cash, cash equivalents, and investments | $ | 2,266 | $ | 2,740 | $ | (474 | ) | (17 | )% | |||||
Long-term investments | 13 | 13 | — | — | % | |||||||||
Short-term debt | 38 | 50 | (12 | ) | (24 | )% | ||||||||
Long-term debt | 373 | 386 | (13 | ) | (3 | )% | ||||||||
Working capital | 1,486 | 1,628 | (142 | ) | (9 | )% | ||||||||
Ratio of current assets to current liabilities | 1.7 : 1 | 1.8 : 1 |
(Dollars in millions) | January 31, 2021 | July 31, 2020 | $ Change | % Change | |||||||||||||||||||
Cash, cash equivalents, and investments | $ | 2,738 | $ | 7,050 | $ | (4,312) | (61) | % | |||||||||||||||
Long-term investments | 41 | 19 | 22 | 116 | % | ||||||||||||||||||
Short-term debt | 325 | 1,338 | (1,013) | (76) | % | ||||||||||||||||||
Long-term debt | 2,033 | 2,031 | 2 | — | % | ||||||||||||||||||
Working capital | 1,417 | 4,451 | (3,034) | (68) | % | ||||||||||||||||||
Ratio of current assets to current liabilities | 1.5 : 1 | 2.3 : 1 |
Statements of Cash Flows |
Six Months Ended | Six Months Ended | |||||||||||||||||||||||||||
(Dollars in millions) | January 31, 2020 | January 31, 2019 | $ Change | (Dollars in millions) | January 31, 2021 | January 31, 2020 | $ Change | |||||||||||||||||||||
Net cash provided by (used in): | Net cash provided by (used in): | |||||||||||||||||||||||||||
Operating activities | $ | 190 | $ | 198 | $ | (8 | ) | Operating activities | $ | 324 | $ | 190 | $ | 134 | ||||||||||||||
Investing activities | (96 | ) | (108 | ) | 12 | Investing activities | (3,266) | (96) | (3,170) | |||||||||||||||||||
Financing activities | (542 | ) | (410 | ) | (132 | ) | Financing activities | (1,587) | (542) | (1,045) | ||||||||||||||||||
Effect of exchange rates on cash, cash equivalents, restricted cash, and restricted cash equivalents | (2 | ) | (2 | ) | — | Effect of exchange rates on cash, cash equivalents, restricted cash, and restricted cash equivalents | 10 | (2) | 12 | |||||||||||||||||||
Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents | $ | (450 | ) | $ | (322 | ) | $ | (128 | ) | Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents | $ | (4,519) | $ | (450) | $ | (4,069) |
Intuit Q2 Fiscal 2021 Form 10-Q | 42 |
Our primary sources and uses of cash were as follows: | ||||||||||
Six Months Ended | ||||||||||
January 31, 2021 | January 31, 2020 | |||||||||
Sources of cash: • Operations • Net sales of loans held for sale • Issuance of common stock under employee stock plans Uses of cash: • Acquisitions of businesses • Repayment of debt • Payment of accrued bonuses for fiscal • Payment of cash dividends and dividend rights • Capital expenditures • | Sources of cash: • Operations • Issuance of common stock under employee stock plans Uses of cash: • Payment of accrued bonuses for fiscal • Repurchases of shares of our common stock • Payment of cash dividends and dividend rights • Capital expenditures • Net originations of term loans to small businesses • Repayment of debt |
Stock Repurchase Programs, Treasury Shares, and Dividends on Common Stock |
Business Combinations |
Commitments for Senior Unsecured Notes |
Intuit Q2 Fiscal 2021 Form 10-Q | 43 |
Credit Facilities |
Cash Held by Foreign Subsidiaries |
Intuit Q2 Fiscal 2021 Form 10-Q | 44 |
Intuit Q2 Fiscal |
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
Intuit Q2 Fiscal |
ITEM 4 - CONTROLS AND PROCEDURES |
Intuit Q2 Fiscal |
PART II - OTHER INFORMATION |
ITEM 1 - LEGAL PROCEEDINGS |
ITEM 1A - RISK FACTORS |
Intuit Q2 Fiscal 2021 Form 10-Q | 48 |
Intuit Q2 Fiscal 2021 Form 10-Q | 49 |
Intuit Q2 Fiscal 2021 Form 10-Q | 50 |
Intuit Q2 Fiscal 2021 Form 10-Q | 51 |
Intuit Q2 Fiscal 2021 Form 10-Q | 52 |
Intuit Q2 Fiscal 2021 Form 10-Q | 53 |
Intuit Q2 Fiscal 2021 Form 10-Q | 54 |
Intuit Q2 Fiscal 2021 Form 10-Q | 55 |
Intuit Q2 Fiscal 2021 Form 10-Q | 56 |
Intuit Q2 Fiscal 2021 Form 10-Q | 57 |
Intuit Q2 Fiscal 2021 Form 10-Q | 58 |
Intuit Q2 Fiscal 2021 Form 10-Q | 59 |
Intuit Q2 Fiscal 2021 Form 10-Q | 60 |
Intuit Q2 Fiscal |
ITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans | ||||||||||
November 1, 2019 through November 30, 2019 | 187,910 | $ | 260.10 | 187,910 | $ | 2,500,401,285 | ||||||||
December 1, 2019 through December 31, 2019 | 184,800 | $ | 257.70 | 184,800 | $ | 2,452,777,731 | ||||||||
January 1, 2020 through January 31, 2020 | 151,200 | $ | 278.19 | 151,200 | $ | 2,410,715,700 | ||||||||
Total | 523,910 | $ | 264.47 | 523,910 |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans | ||||||||||||||||||||||
November 1, 2020 through November 30, 2020 | — | $ | — | — | $ | 2,370,765,174 | ||||||||||||||||||||
December 1, 2020 through December 31, 2020 | 242,400 | $ | 373.18 | 242,400 | $ | 2,280,306,969 | ||||||||||||||||||||
January 1, 2021 through January 31, 2021 | 227,250 | $ | 372.86 | 227,250 | $ | 2,195,575,213 | ||||||||||||||||||||
Total | 469,650 | $ | 373.02 | 469,650 |
ITEM 6 - EXHIBITS |
Intuit Q2 Fiscal |
SIGNATURES |
INTUIT INC. (Registrant) | |||||||||||||||||
Date: | February | By: | /s/ MICHELLE M. CLATTERBUCK | ||||||||||||||
Michelle M. Clatterbuck | |||||||||||||||||
Executive Vice President and Chief Financial Officer (Authorized Officer and Principal Financial Officer) |
Intuit Q2 Fiscal |
EXHIBIT INDEX |
Exhibit Number | Exhibit Description | Filed Herewith | Incorporated by Reference | |||||||||||||||||||
10.01+ | ||||||||||||||||||||||
10.02+ | S-8 filed 12/3/2020 File No. 333-251096 | |||||||||||||||||||||
10.03+ | S-8 filed 12/3/2020 File No. 333-251096 | |||||||||||||||||||||
10.04+ | S-8 filed 12/3/2020 File No. 333-251096 | |||||||||||||||||||||
31.01 | X | |||||||||||||||||||||
31.02 | X | |||||||||||||||||||||
32.01* | X | |||||||||||||||||||||
32.02* | X | |||||||||||||||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | X | ||||||||||||||||||||
101.SCH | XBRL Taxonomy Extension Schema | X | ||||||||||||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | X | ||||||||||||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase | X | ||||||||||||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase | X | ||||||||||||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase | X | ||||||||||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | X |
Indicates a management or compensatory agreement. | |||||
* | This exhibit is intended to be furnished and shall not be deemed “filed” for purposes of the Securities Exchange Act of 1934, as amended. |
Intuit Q2 Fiscal |