Intuit Inc INTU
Q2 2014 Earnings Call Transcript

Transcript Call Date 02/20/2014

Operator: Good afternoon. My name is Saeed, and I will be your conference facilitator. At this time, I would like to welcome everyone to Intuit's Second Quarter Fiscal 2014 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period.

With that, now I will turn the call over to Matt Rhodes, Intuit's Director of Investor Relations. Mr. Rhodes, you may begin.

Matthew Rhodes - IR: Thank you, Sir. Good afternoon and welcome to Intuit's second quarter fiscal 2014 conference call. I'm here with Brad Smith, our president and CEO; Neil Williams, our CFO; and Scott Cook, our founder.

Before we start, I'd like to remind everyone that our remarks will include forward-looking statements. There are a number of factors that could cause Intuit's results to differ materially from our expectations. You can learn more about these risks in the press release we issued earlier this afternoon, our Form 10-K for fiscal 2013 and our other SEC filings. All of those documents are available on the Investor Relations page of Intuit's website at We assume no obligation to update any forward-looking statement. Some of the numbers in this report are presented on a non-GAAP basis. We've reconciled the comparable GAAP and non-GAAP numbers in today's press release. Unless otherwise noted, all growth rates refer to the current period versus the comparable prior year period, and the business metrics and associated growth rates refer to worldwide business metrics.

As a reminder, all reported results exclude Intuit Financial Services and Intuit Health, which have been sold and reclassified to discontinued operations. A copy of our prepared remarks and supplemental financial information will be available on our website after this call ends.

With that, I'll turn the call over to Brad Smith.

Brad Smith - President and CEO: Thanks Matt, and thanks to all of you for joining us. Today we reported second quarter revenue of $782 million, down 12% from last year. This reflects a shift of tax revenue into the third quarter. As a result, we've raised our third quarter guidance, and we have reaffirmed our guidance for fiscal 2014.

Before I drill into the details, let me begin by talking more broadly about a secular theme. A theme that is driving growth across all of our businesses, the adoption of connected services with favorable lifetime value economics and predictable, recurring revenue streams.

The move to the cloud powers our connected services strategy. It enables us to deliver awesome product experiences, it allows us to leverage the contributions of others and it give us the opportunity to capitalize on the data to create real customer delight.

With our restructuring efforts that we executed this past summer, our teams are laser-focused and aligned against two strategic outcomes. First, to be the operating system behind small business success; and second, to do the nations' taxes, in the U.S. and Canada.

We're successfully leading this platform shift to the cloud, with our goal of adding 5 million small business customers and 20 million more tax filers over the next five years. We've made progress against these strategic goals since declaring them six months ago. Beginning with small business, our cloud solutions continue to build momentum.

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