Intuit somewhat spent its way to success for the third quarter ended April 30 when it comes to the TurboTax market. While the number of TurboTax efiled returns was up 6 percent over the 2013 tax season, the results in the recently ended quarter showed unit growth, but a decrease in revenue per customer of about 3 percentage points.
"We spent 10-percent less on TurboTax marketing versus last year,yet traffic increased and both conversion and retention improved. In addition, support calls declined more than 20 percent, and NetPromoter scores improved," Smith said in the prepared part of his comments.
Overall, net income for the most recently ended quarter was $1.37 billion, a 6-percent increase from $1.29 billion in last year's corresponding period. Revenue was $3.79 billion in the recently ended period, up 7 percent from $3.54 billion a year earlier.
The delays in the tax season start meant that comparisons to the results in the year-earlier second quarter produce misleading statistics. However, the fiscal year-to-date figures show $394 million in revenue from the ProTax group, up 3.4 percent from $381 million in the first three quarters of fiscal 2013. Smith said the professional offerings stemmed from "strong new customer growth based on higher-value products".
On the consumer side, Intuit regained what Smith called "a good portion of the share we should have" in the market for simple returns. He attributed that to new features such as prior-year import and W-2 downloads, along with state pricing more in line with the market and stripping out unnecessary questions. The company also took forms from its mid-tier TurboTax offerings and moved them into the higher tier.
Asked about where revenue growth fit into priorities, CFO Neil Williams said Intuit will continue to trade revenue growth for capturing customers as the shift to cloud-based products accelerates as those who use QuickBooks Online end up using other Intuit cloud packages.
"Our goal remains to add customers and get deeper penetration into the people who don't use software today," he said "QuickBooks Online is a great way to do that." Both Smith and Williams said capturing customers now produces significant growth in revenue over the lifetime of the customer.
In sales, QuickBooks continues to lose desktop customers while QuickBooks Online is booming. Sales of QuickBooks fell to 371,000 desktop units in the most recently ended quarter, down 12.1 percent from 422,000 a year earlier. There were 219,000 QuickBooks desktop subscribers at the end of the third quarter up 22.3 percent from 179,000.
QuickBooks Online subscribers hit 624,000, which shot up 36 percent 459,000 in last year's third quarter.
