Smith noted the number of QuickBooks Online subscribers grew at 28 percent, DemandForce subscribers 57 percent, Intuit Online Payroll customers 19 percent and payment customers 14 percent. That means 45 million out of Intuit's 60 million customers are now using what Intuit calls its connected services, Smith said.

The use of mobile products is also growing, although from a small base. Smith said that mobile apps are being downloaded at three times the rate of the tax season a year earlier and the category is growing at 300 percent. Also, the company can now reach 80 percent of those with simple returns so that "they can complete file and a return right on a smart phone," he continued Smith said Intuit has not quantified mobile numbers. The products it has for mobile devices include SnapTax which enables smartphone users to take photographs of W-2s and complete returns via phones and TurboTax for the iPad. Users can also start preparing a return via a phone and finish on a desktop computer.

While the quarter reflected the move to cloud and mobile applications, it also showed the delay in the acceptance of returns by the Internal Revenue Service with its revenue dropped to $968 million for the most recently ended quarter, down from $999 million a year earlier. At the same time, net income dropped to $71 million, up 40 percent from $118 million a year ago. Intuit expects the lost revenue simply has shifted into the April quarter.

In the QuickBooks arena, the number of subscribers for QuickBooks Online reached 430,000, up from 336,000 at the end of last year's corresponding period. However, while sales of desktop QB units dropped to 307,000, off 18 percent, desktop subscriptions were up 25 percent to 175,000. The company expects desktop unit sales to drop about 5 percent this year and revenue from that source about 1 percent as customers continue to move online.

Revenue for Financial Management Solutions, essentially QuickBooks, was $209 million for the quarter, up from $179 million, an increase of 16.7 percent. Consumer tax revenue fell to $215 million for the quarter, down 27.1 percent from $295 million a year ago. Accounting professional revenue, primarily the Lacerte and ProSeries operations, dropped to $123 million, a 6-percent drop from $131 million in the second quarter of fiscal 2012.

Bob Scott

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Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind