Intuit's blow out quarter

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Intuit surprised everyone except Stock Market Beat with revenues and operating income up 21%. CEO Steve Bennett was in upbeat mood:

I’ve never felt better about a quarter or a year and more importantly what it bodes for the future.

Intuit upped its revenue guidance for the year by a handy $50 million. What’s interesting to me is the detail.

Like Sage, Intuit is looking for other forms of revenue outside core accounting to support its business model. For me the most interesting comments centred around growth in the tax business on the web which they reported at 17% with minimal cannibalization to the existing customer base. That would imply that Intuit is finding a new kind of customer. If true that in turn provides some evidence that the MySpace generation is starting to kick in.

Talking about the outlook for the future, CEO Steve Bennett said:

Most of the growth will be on the web…we just have to win on the web.

Chairman and director Scott Cook noted that:

Doing taxes is a somewhat scary thing. People don’t always believe a corporate or an advertiser but they believe their friend, so getting friends to tell their friends is one of our highest missions. It is why we work so hard on the product and the customer experience…we know it drives tax purchase and tax share.

That’s interesting because if you look at Intuit’s communities, there is comparatively little activity on their TurboTax forums and blogs, despite the fact the US tax season has just ended and the fact Intuit had servicing problems at the end of the season. But maybe not.

In prepared remarks, the company noted that 60% of small businesses still use pencil and paper or spreadsheets as their preferred method of accounting. I’d be surprised if many of these kinds of people make much use of web technologies.

Here is the link to the conference call transcript and one to the earnings release.

Technorati Tags: Intuit – Sage – tax season – TurboTax