Intuit Inc. (INTU)
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Stephen M. Bennett, CEO/President/Director
2700 Coast Avenue
Mountain View, CA 94043
US
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Phone: (650) 944-6000
Fax: (650) 944-3060
Portfolio.com Overview
WHERE THEY CAME FROM
In 1983, Scott Cook’s wife complained about paying the household bills, and Cook, a former Procter & Gamble executive, had a eureka moment. He thought the new personal computers everyone was buying might be able to make life easier by automating domestic tasks such as balancing the checkbook. He teamed up with Tom Proulx, a computer science student at Stanford, and they put together a product called Quicken, which they started selling in 1984. By 1988, the company claimed that Quicken was the bestselling personal financial software in the world.
WHAT THEY DO
Intuit still balances the books. Quicken, its flagship product, still helps users organize their personal finances (although it is a lot fancier now than it was in 1984), and the QuickBooks line, launched in 1992, helps small-business owners tackle accounting. After Intuit's $34.5 million public offering in 1993, the company bought tax preparation service ChipSoft, the maker of the popular TurboTax program. Intuit offers a variety of other professional services and niche products that help users manage payroll, business services, medical accounting, and real estate.
WHAT THEY GOT RIGHT
With a 70 percent market share, Intuit dominates the world of personal-finance software. In 1995, Intuit had planned to merge with Microsoft, its main competitor (which markets its own program, Microsoft Money), but citing antitrust concerns, the Department of Justice blocked the billion-dollar deal. Forced to stay independent, and therefore nimble, Intuit has maintained high operating margins, around 27 percent, and has experienced stable year-to-year revenue growth.
One of the keys to Intuit's success, especially with Quicken, is that the need for regular product upgrades keeps users hooked—many Intuit products have a sunset policy, which means they require users to buy a new version every few years. Customers grumble, but the complaints haven’t stopped them from buying, and as a result, the company is growing.
WHAT THEY GOT WRONG
Tax season is short, so Intuit's profits are seasonal and sometimes hard to track. In February, Intuit lowered its profit forecast for 2007 by about 8 cents a share, and its stock fell by about 50 cents a share. Even though profits are up, the cost of making acquisitions, such as the internet bank Digital, is exerting a drag on the company.
WHAT’S NEXT
Buying companies and creating new products is job one for Intuit. But purchases keep getting more expensive, up from the $225 million Intuit paid for ChipSoft in 1993 to the $1.35 billion it paid for Digital in 2006. The company is also expanding its product line by creating more niche versions of its software. At the same time, Intuit has raised cash by shedding some of its divisions. It sold its help-desk unit in 2006 and plans to put its professional-payroll division, Automatic Data Processing, on the market for $135 million in 2007.
In 1983, Scott Cook’s wife complained about paying the household bills, and Cook, a former Procter & Gamble executive, had a eureka moment. He thought the new personal computers everyone was buying might be able to make life easier by automating domestic tasks such as balancing the checkbook. He teamed up with Tom Proulx, a computer science student at Stanford, and they put together a product called Quicken, which they started selling in 1984. By 1988, the company claimed that Quicken was the bestselling personal financial software in the world.
WHAT THEY DO
Intuit still balances the books. Quicken, its flagship product, still helps users organize their personal finances (although it is a lot fancier now than it was in 1984), and the QuickBooks line, launched in 1992, helps small-business owners tackle accounting. After Intuit's $34.5 million public offering in 1993, the company bought tax preparation service ChipSoft, the maker of the popular TurboTax program. Intuit offers a variety of other professional services and niche products that help users manage payroll, business services, medical accounting, and real estate.
WHAT THEY GOT RIGHT
With a 70 percent market share, Intuit dominates the world of personal-finance software. In 1995, Intuit had planned to merge with Microsoft, its main competitor (which markets its own program, Microsoft Money), but citing antitrust concerns, the Department of Justice blocked the billion-dollar deal. Forced to stay independent, and therefore nimble, Intuit has maintained high operating margins, around 27 percent, and has experienced stable year-to-year revenue growth.
One of the keys to Intuit's success, especially with Quicken, is that the need for regular product upgrades keeps users hooked—many Intuit products have a sunset policy, which means they require users to buy a new version every few years. Customers grumble, but the complaints haven’t stopped them from buying, and as a result, the company is growing.
WHAT THEY GOT WRONG
Tax season is short, so Intuit's profits are seasonal and sometimes hard to track. In February, Intuit lowered its profit forecast for 2007 by about 8 cents a share, and its stock fell by about 50 cents a share. Even though profits are up, the cost of making acquisitions, such as the internet bank Digital, is exerting a drag on the company.
WHAT’S NEXT
Buying companies and creating new products is job one for Intuit. But purchases keep getting more expensive, up from the $225 million Intuit paid for ChipSoft in 1993 to the $1.35 billion it paid for Digital in 2006. The company is also expanding its product line by creating more niche versions of its software. At the same time, Intuit has raised cash by shedding some of its divisions. It sold its help-desk unit in 2006 and plans to put its professional-payroll division, Automatic Data Processing, on the market for $135 million in 2007.
Portfolio Articles
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Anger Management
Ticking off Intuit C.E.O. Steve Bennett used to be pretty easy. Not anymore. How he learned to identify his triggers, bite his tongue, and become a better executive.May 16 2007
News Feeds
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Premarket Movers: Alcoa up after beating estimates
AP
Jul 09 2008
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Intuit cuts 7 pct. of work force in reorganization
AP
Jun 26 2008
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Intuit cutting 575 jobs, 7 pct of workforce
Reuters
Jun 26 2008
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Intuit to cut 575 jobs, or 7 percent of workforce
Reuters
Jun 26 2008
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Intuit spent $337,500 to lobby in first quarter
AP
Jun 13 2008
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Intuit director exercises options
AP
Jun 09 2008
Portfolio Blogs
Press Releases
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Intuit Aligns Organization to Invest in Connected Services Strategy Jun-26-2008, 04:05PM EDT
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CUNA Strategic Services Names Digital Insight Preferred Online Banking Provider Jun-23-2008, 08:30AM EDT
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Accountants Experience Breakthrough Productivity with New Intuit Offerings Jun-19-2008, 04:05PM EDT
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Intuit CFO Neil Williams to Present at the William Blair Conference Jun-11-2008, 04:00PM EDT
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Personable Inc. Releases SourceLink(R) 5.1 Management Edition for QuickBooks(R) Jun-10-2008, 08:00AM EDT
News From Around the Web
News
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Wedbush Morgan Starts Intuit (INTU) at Buy
(StreetInsider)Jul 09 2008 -
Jul 09 2008
-
Digital River cut to sell at Goldman in software note
(MarketWatch)Jul 09 2008 -
Using Baby Carrots To Motivate Staff In Big Ways
(Information Week)Jul 08 2008 -
Verni out as Corrigo CEO
(Orlando Business Journal)Jul 08 2008 -
Intuit CEO Bennett to Step Down in December
(CIO Magazine)Jul 08 2008 -
Dynamics GP Aims At QuickBooks Users
(CIO Magazine)Jul 05 2008 -
TurboTax Servers Overwhelmed by Late Filers
(CIO Magazine)Jul 05 2008 -
Intuit to cut 575 jobs, or 7 percent of workforce
(Boston Globe)Jun 28 2008
Blogs
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Goldman Cuts INTU, DRIV To Sell; Cautious On Software [Voices]
(All Things Digital)Jul 09 2008 -
Early analyst calls (NOK) (WB) (QCOM)
(Blogging Stocks)Jul 09 2008
Employees
Number of Employees: 8,200
Revenue per Employee: $336,075
Top Executives
Jeffrey P. Hank, Vice President/Controller
Caroline F. Donahue, Divisional Senior VP
Brad D. Smith, Senior VP/Divisional General Manager
Alexander M. Lintner, Divisional Senior VP
Richard William Ihrie, Chief Technology Officer/Senior VP
Peter J. Karpas, Senior VP, Divisional
Sasan Goodarzi, Senior VP/General Manager, Divisional
R. Neil Williams, CFO/Senior VP
Kiran M. Patel, Senior VP/General Manager, Divisional
Laura A. Fennell, Secretary/General Counsel/Senior VP
Board of Directors
William V. Campbell, Chairman of the Board/Director
Dennis D. Powell, Director
Suzanne Nora Johnson, Director
Financials
Quarterly
Annual
| Income Statement | 05/2008 | 02/2008 | 11/2007 | 08/2007 |
|---|---|---|---|---|
| Sales | 105.39 Mil. | 128.99 Mil. | 102.3 Mil. | 65.85 Mil. |
| Gross Operating Profit | 1.21 Bil. | 705.89 Mil. | 342.64 Mil. | 327.32 Mil. |
| Operating Income before D & A (EBITDA) | 732.38 Mil. | 225.74 Mil. | -53.47 Mil. | -7.1 Mil. |
| Total Income Before Interest Expenses (EBIT) | 698.96 Mil. | 208.72 Mil. | -61.34 Mil. | -1.96 Mil. |
| Total Net Income | 444.18 Mil. | 115.25 Mil. | -20.8 Mil. | -13.64 Mil. |
| Basic EPS, Total | 1.37 | 0.35 | -0.06 | -0.04 |
| Diluted EPS, Total | 1.33 | 0.35 | -0.06 | -0.03 |
| BALANCE STATEMENT | 05/2008 | 02/2008 | 11/2007 | 08/2007 |
|---|---|---|---|---|
| Cash and Equivalents | 471.5 Mil. | 230.15 Mil. | 146.07 Mil. | 255.2 Mil. |
| Total Assets | 1.63 Bil. | 1.91 Bil. | 1.65 Bil. | 1.95 Bil. |
| Total Liabilities | 1.03 Bil. | 1.43 Bil. | 997.65 Mil. | 1.16 Bil. |
| Total Capitalization | 3.05 Bil. | 2.84 Bil. | 2.86 Bil. | 3.03 Bil. |
| Cash Flow | 05/2008 | 02/2008 | 11/2007 | 08/2007 |
|---|---|---|---|---|
| Net Cash From Continuing Operations | 869.49 Mil. | 37.54 Mil. | -161.36 Mil. | 725.62 Mil. |
| Net Cash From Investing Activities | -19.29 Mil. | 305.25 Mil. | 233.6 Mil. | -1.39 Bil. |
| Net Cash From Financing Activities | -636.06 Mil. | -370.2 Mil. | -187.15 Mil. | 733.86 Mil. |
| Net Change in Cash & Cash Equivalents | 216.3 Mil. | -25.05 Mil. | -109.13 Mil. | 75.6 Mil. |
| Income Statement | 2007 | 2006 | 2005 | 2004 |
|---|---|---|---|---|
| Sales | 370.72 Mil. | 319.08 Mil. | 248.44 Mil. | 259.33 Mil. |
| Gross Operating Profit | 2.3 Bil. | 2.02 Bil. | 1.79 Bil. | 1.61 Bil. |
| Operating Income before D & A (EBITDA) | 796.26 Mil. | 689.89 Mil. | 675.11 Mil. | 579.92 Mil. |
| Total Income Before Interest Expenses (EBIT) | 723.5 Mil. | 610.21 Mil. | 556.06 Mil. | 452.9 Mil. |
| Total Net Income | 440 Mil. | 416.96 Mil. | 381.63 Mil. | 317.03 Mil. |
| Basic EPS, Total | 1.28 | 1.2 | 1.04 | 0.81 |
| Diluted EPS, Total | 1.24 | 1.16 | 1.02 | 0.79 |
| BALANCE STATEMENT | 2007 | 2006 | 2005 | 2004 |
|---|---|---|---|---|
| Cash and Equivalents | 255.2 Mil. | 179.6 Mil. | 83.84 Mil. | 27.25 Mil. |
| Total Assets | 1.95 Bil. | 1.82 Bil. | 1.61 Bil. | 1.52 Bil. |
| Total Liabilities | 1.16 Bil. | 1.02 Bil. | 1 Bil. | 857.36 Mil. |
| Total Capitalization | 3.03 Bil. | 1.75 Bil. | 1.71 Bil. | 1.84 Bil. |
| Cash Flow | 2007 | 2006 | 2005 | 2004 |
|---|---|---|---|---|
| Net Cash From Continuing Operations | 725.62 Mil. | 595.46 Mil. | 590 Mil. | 574.58 Mil. |
| Net Cash From Investing Activities | -1.39 Bil. | -38.16 Mil. | 8.06 Mil. | -211 Mil. |
| Net Cash From Financing Activities | 733.86 Mil. | -478.82 Mil. | -548.1 Mil. | -506.54 Mil. |
| Net Change in Cash & Cash Equivalents | 75.6 Mil. | 95.76 Mil. | 57.85 Mil. | -142.79 Mil. |
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