Posted on Wednesday, Feb 26th 2020
Quickbooks’s parent company Intuit (NASDAQ: INTU) is the talk of the town these days. Not only did it deliver stellar second quarter results, but the company also recently announced a $7.1 billion acquisition – its biggest acquisition till date.
Revenues for the quarter grew 13% to $1.696 billion, ahead of the market’s expectations of $1.68 billion. Net income rose 27% to $240 million. On an adjusted basis, it reported quarterly earnings of $1.16 per share, up 16% and ahead of market estimate of $1.02.
By segment, Small Business and Self-Employed Group revenues grew 17% to $973 million. Online ecosystem revenues which include Quick Books and other online services grew 35% over the year. Consumer Group revenues grew 8% to $499 million.
Among other key metrics, QuickBooks online accounting revenue grew 43% driven by strong customer growth. The 23% growth in Online Services was driven by the continued adoption of QuickBooks Online payroll and QuickBooks Online payments. Its total international online revenue grew by more than 60%.
Within the Consumer and Strategic Partner Groups, DIY revenues grew by 3.5%. Professional tax revenue in the Strategic Partner Group grew 8% to $224 million.
Intuit expects to end the current year with revenues of $7.44-$7.54 billion
and an adjusted EPS of $7.50-$7.60. The market was looking for revenues of
$7.53 billion with an EPS of $7.57. Intuit forecast an EPS of $5.90-$5.95 for
the quarter with a revenue growth forecast of 10%-11%. The market was looking
for an EPS of $6.17 for the quarter.
Intuit’s Credit Karma Acquisition
Intuit’s result announcement was overshadowed by the $7.1 billion acquisition of Credit Karma. San Francisco-based Credit Karma was set up in 2007 as a tool to help consumers get deeper insight into their credit scores. Since
being set up, the company had diversified into other personal finance management tools such as tax filing assistance and help on vehicle purchase documentation and financing. The company claims to have over 37 million monthly active users.
Prior to the acquisition, Credit Karma had raised $645.3 million in funding from investors including Silver Lake Partners, Google Capital, Tiger Global Management, Susquehanna Growth Equity, Ribbit Capital, 500 Startups, Susquehanna Growth Equity, Angel LLC, QED Investors, SV Angel, Founders Fund, and Felicis Ventures. Its latest round of funding was held in March 2018 when it raised $500 million in a round led by Silver Lake Partners at a valuation of $4 billion.
Credit Karma offers its services for free to its customers, but earns revenues through advertisements. It
has been profitable since 2015. Reports suggest that it generated revenues of over $1 billion last year. Intuit plans to let Credit Karma run as a standalone entity for now. It will leverage the acquisition to grow its customer base and service offerings. Credit Karma’s marketplace of service offerings already has more than 100 financial services partners that provide credit cards, loans, and auto loan and insurance services. Consumers can apply to leading credit cards and also shop around for home loans, personal loans, auto loans, and refinance opportunities. Credit Karma’s online calculators help users calculate amortization, debt repayment and simple loan details. Users can also simulate their credit scores to see impacts of their transactions on the credit rating.
Overall, the acquisition is a good strategic fit. Credit Karma has a subscriber base of over 106 million customers and 37 million monthly active users. Combining this with data from Intuit’s own portfolio of 37 million Turbo users and more than 40 million TurboTax users will create an opportunity to build one of the largest consumer marketplaces that can connect these consumers to thousands of financial institutions.
Intuit will be looking to cross-sell and upsell its own services to Credit Karma’s user-base. Analysts expect that the acquisition will
help Intuit tap into Credit Karma’s younger client demographic. Together, the companies will be able to offer individuals the ability to access personal financial information such as income, spending, and credit history in a single place. They can use this knowledge and the right kind of tools to simplify personal financial planning and get access to the right financial products and insights that help them achieve their financial goals.
Its stock is trading at $297.57 with a market cap of $74.6 billion. It had
soared to a record high of $306.89 earlier this month. The stock has climbed
from the year low of $236.03 it was trading at in May last year.
This segment is a part in the series : Cloud Stocks . Smartsheet Acquiring Bootstrapped Startups to Drive Growth . Bootstrapped Unicorn Atlassian is Acquiring Capital Efficient Startups . Netflix Price Hike Ruffles Competition . How Will Carbon Black Differentiate? . ServiceNow Grows Through Addition of Capital-Efficient Startups . Zendesk and Freshworks Follow Different Acquisition Strategies . Tableau Grows Through Small Acquisitions . Open Platform Strategy Stands Intuit in Good Stead . Will GoDaddy Follow the PaaS Route? . Adobe Delivers Via PaaS More »» . A Look at Oracle’s 2018 M&A Activity . What Apps Will Drive More Traction for Cloudera? . Slack's App Focus Will Be Key to Post-IPO Success . IBM Counts on its Cloud and Platform for the Turnaround . Atlassian Acquires From its PaaS Marketplace . What Should SAP Acquire to Triple its Value by 2023? . Expect ServiceNow to Acquire From App Marketplace . Should Alarm.com Follow a PaaS Strategy? . How Upwork Can Leverage the Virtual Company Trend . Qualys Scouting For Acquisitions . Should SAP Acquire Zendesk or Freshworks? . HubSpot Counts on its API Strategy . SurveyMonkey Eyes Acquisitions for Growth . Workday Wants to Disrupt Cloud Computing Using Machine Learning . Einstein and Open-Source Platform Lead the Charge for Salesforce . DocuSign Prepares to Beat Rival Adobe . Veeva Soars, But Dassault Acquires Medidata for $5.8 Billion . Tableau Acquisition Signals Massive Analytics Push for Salesforce . Oracle Joins Hands with Microsoft to Take on Amazon . GoDaddy is Making Strategic Acquisitions for the Next Level of Growth . Alteryx Sees Strong Momentum . Adobe Leveraging Magento and Marketo to Deliver Blockbuster Performance . Is Slack Overvalued? . How Will Cloudera Address the Competition? . Zoom is Not Bothered by Cisco or Microsoft . Domo Counts on Enterprise Revenue for Growth . Netflix Plays with Pricing and Games to Attract Subscribers . CrowdStrike Has a Successful IPO . Atlassian Crosses the Billion Dollar Revenue Milestone . ServiceNow Believes Strength Lies in Tie-ups . Partnerships are the Mantra for BlackLine . SurveyMonkey Counts on Enterprise Segment for Growth . HubSpot Soars to a New High . Intuit Pushes AI to Simplify Tax Filing . Splunk Sees Strong Cloud Momentum . Forescout Partners with Big Names . Smartsheet Tapping into the Government Sector . Salesforce Continues its Shopping Spree . Palo Alto Networks Targets the IoT Security Market . DocuSign Focuses on the Mortgage Sector . Oracle Brags About Autonomous Database . Blackbaud Acquires YourCause to Grow Addressable Market . The Market Expects a Lot More from Adobe . Anaplan Makes its First Acquisition Post IPO . Activist Investor Drives Market Interest in Box . MongoDB's Formula for Success . Coupa Aims for $1B Revenue . Dropbox on a Rocky Road . Medallia Banks on Acquisitions . IBM Banks on AI . Time For Skepticism with Netflix . SAP Riding High on the Cloud . Amazon's Faster Shipping Hurting its Earnings . ServiceNow CEO Change Signals Focus on Acquisitions . Will Google Acquire Fitbit? . HubSpot Focuses on Its Platform . BlackLine Partners with Google Cloud . Rapid7’s Focus on Cloud SIEM Pays Off . Splunk Bets Big on Data Streaming . Intuit's QBO Scores Big . VMware Builds Up With Acquisitions . Palo Alto Targets $5B Revenue by 2022 . Workday Targeting Procure-to-Pay Cycle . Will Salesforce Acquire DocuSign? . Okta Targets Enterprise Customers . MongoDB Eyeing China With Alibaba Partnership . Twilio Counts on API Upgrades for Growth . Adobe Revs up its Experience Platform . Top 20 for 2020 . Anaplan Sees Expanding Use Cases . Dropbox Gears Up to Regain Lost Valuation . Forescout Fails to Deliver . Enterprise Bet Pays Off for SurveyMonkey . SAP Bets Big on Experience Management . Twilio Steps up Investment in 2020 to Preserve Growth Momentum . Zendesk, Freshworks Focus on Marketplaces and Integrations . Proofpoint Targets Insider Threats Through Acquisition . RingCentral's Powerful Partner Strategy Would Augment with PaaS . Qualys Counts on Google and Microsoft for Growth . Shopify Soars on Improved Merchant Offerings . HubSpot Believes in the Importance of PaaS . BlackLine Remains Focused on SAP Integration . Recently Public Cloudflare has New Edge . GoDaddy is on a Shopping Spree . Intuit Targets Online User Base Through Acquisition . Should Palo Alto Networks Acquire ZScaler? . Why Salesforce Buying Vlocity Proves the Growing Importance of PaaS . Datadog Performing Well Post Recent IPO . Workday Should Open Up About its PaaS Success . Anaplan Focuses on API Connectors for its Platform . Veeva . Five9 Strengthens its PaaS Focus . RealPage Brings AI and SaaS to Real Estate . Splunk Should Open up About its PaaS Metrics . Okta Benefiting from App Diversity . Oracle Sees Growth Momentum . Xero Focuses on a PaaS Strategy . DocuSign Resilient to COVID-19 . Smartsheet Looking up to Enterprise Customers for Growth . Paylocity Delivers Solid Results . Q2 Holdings Expands TAM with Acquisitions . New Relic Focuses on PaaS . AppFolio Leverages AI for Product Enhancement . Will Adobe Open Up About its PaaS Statistics? . Change Healthcare Pushes APIs . Dropbox Needs to Share API Metrics . Upwork Improves Monetization . MongoDB has Miles to go . Nutanix Needs to Define a PaaS Strategy . Cloudera Focuses on Hybrid Cloud . Atlassian Gears Up for Growth, Unfazed by Covid-19 . Shopify Helps Merchants Pivot to Online Stores . ServiceNow Steady in Turbulent Seas . RingCentral Sees Strong Traction . Twilio Hits 52-Week High Amidst COVID Crisis . HubSpot Lowers Outlook Amidst Virus Concerns . Proofpoint Acquiring Even Amidst Crisis . BlackLine Looks Solid In The Face of Covid-19 . GoDaddy Continues to Acquire . Qualys Expands Cloud Offerings to Soar to New Highs . Zendesk Struggling Amidst the Downturn . Alteryx Bounces Back Despite Low Outlook . Palo Alto Networks Continues to Acquire . Workday Extends its PaaS Strategy . Splunk Rides High on Cloud Initiatives . Salesforce Partners with Workday to Address the New Normal . Veeva Scales New Highs . Is Smartsheet’s Pullback a Buying Opportunity? . MongoDB Soars Even in the Crisis . Okta Reiterates Outlook . Is Anaplan a Prospect for Oracle, SAP? . Oracle Relies on Autonomous Offerings . Adobe Shifts its Focus . Paycom Confident Under Current Conditions . DocuSign Soars to Record Highs . Paylocity Acquires Amid Crisis . Datadog's Integrations and Upgrades Help it Soar . AppFolio Improves Offerings for Current Conditions . SurveyMonkey Should Get Into PaaS . Model N Soars to a Record High . Appian Focuses on RPA for Growth . Slack Beefs up its Portfolio . Coupa Expands into Treasury Services . CrowdStrike Soars to Record Highs . Guidewire Expands Cloud Offerings . Dropbox Should Focus on PaaS . Talend Expands Data Offering Through Partners . IBM Expands Cloud Partners . One Medical Supports COVID-19 Care Digitally . Microsoft Rides High on Teams and Gaming . Investors Say Yes to nCino’s IPO . Nutanix Focuses on Government and Media Verticals . SAP Rethinks Qualtrics Acquisition . Tenable Expands Into Industrial Cyber-Security . ServiceNow Expands Ties with Zoom . Cloudera Powers its Data Platform with Partnerships . Atlassian Continues to Acquire from PaaS Ecosystem . Shopify Soars to an All-Time High . The PaaS Landscape . HubSpot Focuses on the Enterprise Segment . GoDaddy Restructures During COVID . Akamai's Security Solutions Thriving . BlackLine Needs a PaaS Strategy . Twilio - A Successful PaaS Story . Zendesk Invests in the Future . Qualys Continues to Acquire Indian Startups . ZoomInfo Lists Despite COVID-19 . Analysis of Alteryx PaaS Strategy . Fastly Needs to Diversify from TikTok . Way to Go, Salesforce . Intuit Continues to Acquire . VMware Continues Buying Spree . Analysis of Five9's PaaS Strategy . Okta Expands Alliances to Attract Enterprises . Palo Alto Continues to Acquire . Analysis of Splunk's PaaS Strategy . BigCommerce Goes Big with IPO . Analysis of Workday's PaaS Strategy . Analysis of Anaplan's PaaS Strategy . Bill.com Sees Strong Demand . Analysis of MongoDB's PaaS Strategy . Analysis of Wix's Platform Strategy . New Relic Product Upgrades Deliver Growth . What Should Proofpoint Acquire? . Smartsheet Should Follow Atlassian’s Example . Adobe's Relentless Growth Continues . SurveyMonkey's PaaS Prospects . DocuSign Acquires Amid COVID . Paylocity Counts on Video . The Unstoppable Veeva . Magic Software Acquires to Expand in Europe . What Can Cloud Startups Do To Raise Seed Capital in 2021? . Guardant Seeks to Disrupt Oncology Testing . Dropbox Adds Security Capabilities . Domo Growing Steadily . Nutanix Focuses on the Hybrid Cloud . IBM Fails to Impress . Microsoft’s Partnership with Tom Siebel’s C3 AI is Intriguing . ServiceNow Well-Positioned for Digital Transformation . Analysis of Shopify’s Long Term Strategy . HubSpot Rethinks Pricing Model to Support Businesses . Akamai Investing in 5G Security Solutions . Twilio Should Provide Developer Marketplace Revenue Metrics . How can Alteryx Improve its PaaS Strategy? . Partnerships Ringing in Growth for RingCentral . Five9 Focuses on AI-based Contact Centers . Nutanix Builds a Kubernetes PaaS . Workday and Anaplan Executing Well Amid Pandemic . BlackLine Expands in Order-to-Cash Market . Zoom Investing in Security . Splunk is on a Shopping Spree . Veeva Sees Customer Momentum . Palo Alto Networks Has Missed the Window to Buy Zscaler . Can Okta Keep the Momentum Going? . Adobe Acquires to Address Growing Market Opportunity . nCino's AI Products Help it Soar . Analysis of Pure Storage’s Portworx Acquisition . Analysis of Coupa's LLamasoft Acquisition . Analysis of ZoomInfo’s Everstring Acquisition . Q2 Holdings at a New High . Data Breach Drives Cloud Security Stocks to Record Highs . Should Zoom Acquire Smartsheet? . New Relic Needs to Accelerate PaaS Strategy . Proofpoint in the Cyber Attack Aftermath . Talend Focuses on Data Reliability . Medallia Continues to Acquire . Lemonade and Root Disrupting the Insurance Industry . The Key to PagerDuty's API Strategy . CrowdStrike Gears up to Tackle Security Breach Concerns . Everbridge Widens Products and Partnerships . Cornerstone OnDemand Expands Product Line-up . Alarm.com Expands Products to Address Competition . Sumo Logic's IPO Going Strong . Cloudera Grows Through Acquisition . IBM Trying and Failing to Reignite Growth . Box Knows it's All About PaaS . Bill.com Focuses on Mobile and AI . DocuSign Leverages AI in Product Innovation . Atlassian Makes over $100M in PaaS in 2020 . PaaS Strategy Makes Unity IPO Soar . ON24 Goes Public with $42B TAM as Covid Puts Webinars and Virtual Events Front and Center . Amazon After Jeff Bezos . ServiceNow Firing on All Cylinders But One . Snowflake Focuses on Developer Community for Growth . Is SAP Acquiring Alteryx? . Qualys Focuses on SaaS App Security . SurveyMonkey Remains Focused on APIs, ISV PaaS Still Missing . Domo Needs to Open up About PaaS Metrics . Like Wix, GoDaddy Needs to Focus on PaaS . Datadog on an Acquisition Spree . Twilio Soars, Focuses on Social Initiatives . HubSpot Expands Content Offering Through Acquisition . Zendesk Adds Products, While Freshdesk Keeps Acquiring . Shopify and BigCommerce Building API-based Ecosystems . RingCentral Acquires and Adds Partners, But PaaS is Still Missing . Acquisitions and Product Upgrades are the Mantra for Palo Alto Networks . Salesforce can Transform Slack PaaS, But Acquisition Still Pending . After Acquisitions, Five9 Focuses on Channel and Network Partnerships . Workday Drives Enterprise Use Cases Through PaaS, as Anaplan Taps Into Consultants . C3.ai Should Do ISV Focused PaaS . Splunk on the Right Track with Cloud and PaaS . Veeva Sets an Example, Transitions to a Public Benefit Corporation . BlackLine is Targeting A/R Automation Market . Okta Targets $25B Customer Identity Market with Acquisition . Teradata Trying to Reinvent Itself on the Cloud . Dropbox Acquires, But Competition Remains Stiff . Smartsheet Focuses on Partners, and not on ISVs . MongoDB has Huge Room to Grow in $97B Market . Cloud and Platform Expansion Continues at Nutanix . Rapid7 Targets $1B ARR by 2025 . DocuSign Exploring Unprecedented Digital Signature Offerings . Tenable Continues its Acquisition Spree . SolarWinds Attack Driving Zscaler's Stellar Performance . Zoom Should Report Developer Ecosystem Metrics . DigitalOcean Goes Public with a Strong ISV PaaS Strategy . Dynatrace Competing with Rivals by Simplifying DevOps . Talend Becomes a Private Firm, Once Again . Everbridge Focuses on the Government Sector . Analysis of Fastly’s Signal Sciences Acquisition . Cloudera Focuses on Machine Learning for Verticals . Medallia Acquires to Expand Digital Experience Analytics . PagerDuty Sees Market Expand Beyond ITOps . Bill.com Expanding Payment Offerings for Small Businesses . Alarm.com's Product and Partner Portfolio Helps Address Competition . Sumo Logic Counts on Acquisition and Product Upgrades . Analysis of Crowdstrike’s Humio Acquisition . IBM's Transition to a Hybrid Cloud and AI Company . Analysis of Box's Acquisition of SignRequest