Intuit Pushing AI To Simplify Tax Filing

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Quickbooks’s parent company Intuit (NASDAQ: INTU) recently reported its fiscal fourth quarter results that outpaced market expectations. The stock has climbed nearly 50% this year, and growth doesn’t appear to be slowing down.

Intuit’s Financials

Intuit’s fourth quarter revenues grew 15% over the year to $994 million, significantly ahead of the market’s expectations of $961 million. Adjusted loss was $0.09 per share, which was also better than the market’s estimated loss of $0.14 per share. A year ago, Intuit had reported revenues of $988 million and a loss of $0.01 per share.

By segment, Small Business and Self-Employed Group revenues grew 16% to $905 million driven by 33% growth in subscribers for QuickBooks Online. Intuit ended the quarter with more than 4.5 million subscribers for the service. Online ecosystem revenues grew 35% to $459 million with the US-based subscribers of QuickBooks Online growing 25% to more than 3.2 million and international subscribers growing 58% to more than 1.3 million. Within QuickBooks Online, Self-Employed subscribers increased to more than 1 million. Online Services revenues grew 28% over the year.

Intuit ended the year with revenues of $6.78 billion, up 13%. Adjusted EPS was $5.89, which was 16% higher than the previous year’s earnings.

For the current quarter, Intuit forecast revenues of $1.105-$1.125 billion with an adjusted net income of $0.23-$0.25 per share. The market was looking for revenues of $1.126 billion for the quarter with an EPS of $0.35. Intuit expects to end the year with revenues of $7.44-$7.54 billion and an EPS of $7.50-$7.60. The Street was expecting revenues of $7.42 billion for the year with an EPS of $7.55.

Intuit’s Product Focus

Intuit continues to drive growth by expanding its product offerings. Earlier this year, it launched a service for next business day payments, saving the the usual waiting period of 3-5 days. Within Payroll, it introduced next-day and same-day direct deposits that will allow customers to hold on to their money for longer and manage their cash flow better. The move has helped QuickBooks Online payroll service grow.

For the year, the payroll service revenue grew more than 35%. It is also seeing an increased adoption of its full-service payroll offering, which is growing more than 35 points faster that its self-service offering. The full-service payroll offering provides added support for its customers.

Within the time tracking service, it improved the mobile capability of the service and added new features, such as GPS time tracking to increase accuracy and flexibility for both employees and employers. Time tracking on its platform grew by more than 60% during the year to over 1 million employees.

Intuit remains focused on AI and is integrating AI capabilities into its financial software. During the year, it personalized the tax preparation process for its Turbo Tax offerings using AI. Besides customization, the service is helping customers get higher tax refunds. It uses AI to help customers get their maximum refund by recommending whether to go through the time-intensive itemized deduction process or not.

For those who do itemize, TurboTax uses data analysis and ML to identify and recommend deductions. Ultimately, Intuit wants to be able to power its engine so that every time a business files its return, the software evaluates the deductions used by its virtual peers to recommend appropriate approaches for the taxes. It wants to build a platform where users can just say yes or no verbally to the software’s suggestions.

The market is pleased with Intuit’s product focus. Its stock is trading at $276.57 with a market cap of $71.70 billion. It had soared to a record high of $295.77 earlier last month. Like other technology stocks, it too had fallen to a 52-week low of $182.61 in December last year.

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Photo credit: UCLA Anderson/Flickr.com.