"Not only is the subscriber base growing faster than we forecast but the attach rates are much healthier than they were six months ago," CEO Brad Smith said during the webcast.
The attach rate for new users, those who buy QB Online plus other Intuit products, surged for both payments and payroll, Smith said. For new users, the payment attach rate was 12 percent, up from 6 percent a year earlier; for payroll it was 31 percent, up from 20 percent for the same period. Intuit had 359,000 online payroll subscribers at the end of the quarter, a rise of 23.8 percent from 290,000 a year earlier.
Since the first quarter is outside of tax season, Intuit routinely loses money. For the recently ended quarter, the loss was $84 million, compared to $11 million in red ink in last year's corresponding period. Intuit reported quarterly revenue $672 million, an increase of 8 percent from $622 million a year ago.
New customers for QB Online are primarily new to Intuit—75 percent have not purchased QuickBooks before. Intuit says that about 30 percent of QuickBooks customers can make the migration, but features must be added to increase that level. These include advanced inventory, job costing and sales form customization.
Intuit was also happy with its relatively new Full Service Payroll.
The company recorded about 25,000 active customers, double a year ago and it is now being sold to QB Online customers. "It is priced about a third cheaper than payroll outsourcers, but provides the same service," Smith said.
