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August 26, 1999 1
FY 1999: The Year in ReviewAugust 26, 1999
This slide presentation, including any oral presentation that may accompany it, includes “forward-looking” statements about future financial results, future products and other events that have not yet occurred. For example, statements with words like “expect”,”anticipate” or “believe” and statements about fiscal 2000 are forward-looking statements. Investors should be aware that actual results may differ materially from our expressed expectations because of risks and uncertainties about the future. We will not update the information in the presentation if any forward-looking statement later turns out to be inaccurate. Details about risks and uncertainties affecting various aspects of our business are discussed throughout this presentation. Investors should consider all of these risks carefully, and should pay particular attention to risks described on slides 15 and 16.
August 26, 1999 2
Review of FY 1999
� OverviewOverview� FY 1999 Financial Performance� Investments & Balance Sheet� Core Businesses� New (Internet) Businesses� Employee Metrics� Electronic Finance
August 26, 1999 3
Fiscal 1999 Highlights
Strong Financial Performance
Fiscal 1999 GAAP Pro Forma GAAP Pro Forma
Revenue 149.9 149.9 847.6 847.6
EPS $4.04 ($0.26) $5.91 $1.39
Fourth Quarter Full Year
See slide 13 for more details on Pro Forma adjustments and slides 15-16 for risks and uncertainties relating to future results.
NOTE: Pro Forma financial information excludes acquisition-related costs, discontinued operations, restructuring charges, material non-recurring marketing charges, and income/loss for sales of investments and marketable securities.
NOTE: GAAP comparisons are favorably impacted by realized gain on the sales and revaluation of marketable securities and unfavorably impacted by acquisition-related charges for Lacerte and CRI. Without these items, EPS would have been a negative $0.39 for Q499, and a positive $1.26 for the full year.
August 26, 1999 4
Core Businesses
Quicken Continued growth: active users to over 11 million
QuickBooks Revenue up 57% and profits doubled
Supplies Consistent growth & profitability
International Changing business model in Europe
Pro Tax High renewal rates and high profitability Personal Tax Revenue up 36% and profits up 39%
Please see slides 15-16 for risks and uncertainties relating to future results.
Businesses Has Never Been StrongerBusinesses Has Never Been StrongerThe Total Earning Power of Our CoreThe Total Earning Power of Our Core
August 26, 1999 5
0
25
50
75
100
FY 97 FY 98 FY 99
New (Internet) Businesses
$48.7
$125.3
Internet Revenue ($ Millions)
$21.0
157%Growth In
FY99
157%Growth In
FY99
Please see slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999 6
Electronic Finance
ConnectivityConnectivity(The Internet)
ComputersComputers(The PC) RevolutionizeRevolutionize
How People DoHow People DoFinancial WorkFinancial Work
Intuit is the Intuit is the leaderleader in eFinance in eFinance … … on the PC and on the Webon the PC and on the Web
August 26, 1999 7
Total Pro Forma Revenue
300
400
500
600
700
800
FY 97 FY 98 FY 99
$593
$848
$ Millions
$526
Incl. CRI& Lacerte
Please see slide 13 for a description of Pro Forma adjustments and slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999 8
Internal Revenue Growth Rate
0
5
10
15
20
25
30
35
40
FY 97 FY 98 FY 99
13.7% 12.5%
27.1%Excl. CRI& Lacerte
Pro Forma Revenue, Excluding Revenue from Acquisitions (Lacerte & CRI)
Internal GrowthRate DoubledIn One Year
Internal GrowthRate DoubledIn One Year
Please see slide 13 for a description of Pro Forma adjustments and slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999 9
Total Revenue Growth Rate
0
5
10
15
20
25
30
35
40
FY 97 FY 98 FY 99
13.7% 12.5%
27.1%Excl. CRI& Lacerte
Pro Forma Revenue, Including Revenue from Acquisitions (Lacerte & CRI)
Internal GrowthRate DoubledIn One Year
Internal GrowthRate DoubledIn One Year
43.0%Incl. CRI
& Lacerte
Please see slide 13 for a description of Pro Forma adjustments and slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
10
Pro Forma Op Income Percent
4
6
8
10
12
14
FY 97 FY 98 FY 99
8.2%
10.2%
14.2%
As a Percent of Pro Forma Revenue
Incl. CRI& Lacerte
Please see slide 13 for a description of Pro Forma adjustments and slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
11
Pro Forma Operating Income
0
20
40
60
80
100
FY 97 FY 98 FY 99
$43.2
$60.5
$120.6Op IncomeDoubled
In One Year
Op IncomeDoubled
In One Year
$ millions
Incl. CRI& Lacerte
Please see slide 13 for a description of Pro Forma adjustments and slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
12
Review of FY 1999
� Overview� FY 1999 Financial PerformanceFY 1999 Financial Performance� Investments & Balance Sheet� Core Businesses� New (Internet) Businesses� Employee Metrics� Electronic Finance
August 26, 1999
13
Notes Forward-Looking Statements This slide presentation, including any oral presentation that may accompany it, includes
“forward-looking” statements about future financial results, future products and other events that have not yet occurred. For example, statements with words like “expect”, “anticipate” or “believe” and statements about fiscal 2000 are forward-looking statements. Investors should be aware that actual results may differ materially from our expressed expectations because of risks and uncertainties about the future. We will not update the information in the presentation if any forward-looking statement later turns out to be inaccurate. Details about risks affecting various aspects of our business are discussed throughout this presentation. Investors should consider all of these risks carefully, and should pay particular attention to risks described on slides 15 and 16.
Pro Forma Accounting Intuit looks at its financial performance in two ways: GAAP, and Company Pro Forma.
Pro Forma financial information excludes acquisition-related costs, discontinued operations, restructuring charges, material non-recurring marketing charges, and income/loss for sales of investments and marketable securities. Please note that there are significant differences between our GAAP and Pro Forma results. See our August 26, 1999 press release for details.
August 26, 1999
14
Notes Cyclical Business Cycle The seasonal nature of our desktop software products, especially our tax products,
typically causes the Company to experience higher revenue in the January and April fiscal quarters. Costs to develop, market and support these products are incurred at relatively consistent levels throughout the year. Consequently, the Company generally reports a loss, or lower profits, in the October and July fiscal quarters.
Period-to-Period Comparisons In performing year over year comparisons, please note the following: FY98 includes
only six weeks of results for our Lacerte professional tax software subsidiary, which we acquired in June 1998. FY99 includes a full year of Lacerte results. FY98 does not reflect any results for CRI, our payroll processing subsidiary, which we acquired in May 1999. FY99 includes three months of CRI results. Year over year comparisons are also impacted by the timing of major product launches. Specifically, we had QuickBooks launches in June 1998 and January 1999, which had a positive impact on FY99 results. Prior to these QuickBooks releases, we had not launched a new version of QuickBooks since December 1996.
August 26, 1999
15
Risks & UncertaintiesRisks and Uncertainties Relating to Future Performance and
ResultsAnyone who may be considering an investment in Intuit Common Stock should carefully consider the following risksand uncertainties that may affect Intuit’s future performance and financial results. More details about these issuesare included in Intuit’s fiscal 1998 for Form 10k, its fiscal 1999 Form 10Qs and its other recent SEC filings. Our revenue and earnings are highly seasonal. Our quarterly and annual financial results fluctuate significantly. We face intense competition from many companies in all of our business areas, both domestically and
internationally. We expect Microsoft to enter the personal tax preparation market in the 1999 tax year, and we may also face
competition from the Internal Revenue Service and state tax agencies. Our Internet-based products and services require us to successfully adopt, refine and operationally support a
new business model. We must continue to maintain important distribution and other contractual relationships for our Internet-based
products and services and successfully market and promote these products and services. Our Internet businesses face risks relating to customer privacy and security and increasing regulation. Our Internet businesses require significant research and development and marketing expenditures. The expansion of our Internet-based products and services has had a significant impact on our development
process. Expansion of our desktop product Internet connectivity initiatives depends to some extent on industry adoption
of OFX as a connectivity standard. In order to succeed in the payroll business, we must continue to improve the integration of the operations of
our payroll processing service provider and expand availability for our online payroll processing service. Our tax products must follow a demanding and rigid annual development and release cycle. Our web-based tax preparation and electronic filing services must handle extremely heavy customer demand
during the peak tax season.
August 26, 1999
16
Risks & Uncertainties, cont. Product bugs can be expensive to fix and can cause Intuit to lose customers. Product returns might exceed reserves. We face increasing competition for access to retail distribution channels. Businesses that we acquire must be integrated into our business. Our recent acquisitions have resulted in significant acquisition-related expenses. Our recent acquisitions of Lacerte and CRI pose a number of risks that could affect our ability to achieve the
anticipated benefits of those acquisitions. We must provide responsive customer service and technical support. Business conditions in international markets can negatively impact our financial performance. We depend on a single source supplier of checks. We face intense competition for qualified employees. Our ability to protect our proprietary technology is limited. We rely on third party licenses for some of our products and services. Some of our products and services are regulated businesses under federal or state laws that do not apply to
most software companies. Regulation of encryption technology could adversely affect our international sales and services. Problems related to the Year 2000 could have a significant adverse effect on our operations. We hold significant investments that have been very volatile. The market price of our common stock has been volatile. We have implemented a number of anti-takeover provisions that may adversely affect the market price of our
common stock.
August 26, 1999
17
Business Divisions
Internat’l 10%
Internat’l 10%
Consumer16%
Consumer16%
Small Business34%
Small Business34%Tax
40%Tax40%
$ Millions Revenue Income
Tax 337.7 155.2Small Business 292.7 96.7Consumer 137.8 (7.2)International 79.4 4.9
847.6 249.6
Common Exp* (129.0)847.6 120.6
* General & Administrative, and other common costs not allocated to specific business divisions.
August 26, 1999
18
4Q 4Q Quarter Ended 7/31 1998 1999
Revenue 117.3 149.9Net Income (39.0) 263.3
Earnings Per Share ($0.70) $4.04
GAAP - Fourth Quarter $ Millions, except EPS
NOTE: Q499 comparison is favorably impacted by realized gain from the sale of Excite stock and revaluation of remaining holdings in Excite@Home, and unfavorably impacted by additional amortization of acquisition-related items. Without the impact of these items, Net Loss would have been $26 million and a negative EPS of $0.39.
Please see slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
19
4Q 4Q Quarter Ended 7/31 1998 1999
Revenue 117.3 149.9Operating Income (2.6) (31.1)
Op Income / Revenue -2.2% -20.7%
Earnings Per Share $0.03 ($0.26)
Pro Forma - Fourth Quarter $ Millions, except EPS
Please see slide 13 for a description of Pro Forma adjustments and slides 15-16 for risks and uncertainties relating to future results.
NOTE: Q498 includes benefit from QuickBooks 6.0 launch in June 1998.
August 26, 1999
20
Fourth Quarter Comments
28% Revenue Growth vs Prior Year• Stronger-than-expected QuickBooks sales in U.S.• Strong Quicken & QuickBooks launches in Europe• Higher growth in Internet-based businesses
One-Time European Expense • Transition of German operations to licensing model
CRI Results Included in 4Q99• Neutral impact on Pro Forma operating income
Please see slide 13 for a description of Pro Forma adjustments and slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
21
Fiscal Fiscal Year Ended 7/31 1998 1999
Revenue 592.7 847.6Net Income (12.2) 376.5
Earnings Per Share ($0.24) $5.91
GAAP - Full Year $ Millions, except EPS
NOTE: FY99 comparison is favorably impacted by realized gain on sales and revaluation of marketable securities, offset somewhat by higher amortization of acquisition related costs from Lacerte & CRI. Without the impact of these items, FY99 Net Income would have been $80 million and EPS $1.26.
Please see slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
22
Fiscal Fiscal Year Ended 7/31 1998 1999
Revenue 592.7 847.6Operating Income 60.5 120.6
Op Income / Revenue 10.2% 14.2%
Earnings Per Share $0.90 $1.39
Pro Forma - Full Year $ Millions, except EPS
Please see slide 13 for a description of Pro Forma adjustments and slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
23
Full Year FY99 Comments 27% Internal Growth Rate (excl. Lacerte & CRI)
• Strong season for personal tax -- PC, Web and e-filing• QuickBooks and related revenue up 57% (two launches)• Internet-based revenues up 157% vs prior year• 43.0% total growth rate (including Lacerte and CRI)
Pro Forma Operating Income Doubled• QuickBooks and related profit contribution doubled• Personal tax profit contribution increased nearly 40%• Includes strong profitability from Lacerte (not included in FY98)
FY99 Challenges• Quicken: profit / Europe: business model / Insurance: slow ramp
Please see slide 13 for a description of Pro Forma adjustments and slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
24
Review of FY 1999
� Overview� FY 1999 Financial Performance� Investments & Balance SheetInvestments & Balance Sheet� Core Businesses� New (Internet) Businesses� Employee Metrics� Electronic Finance
August 26, 1999
25
Strategic InvestmentsExcluding Investments Without a Public or Third-Party Valuation ($ Millions)
Please see slides 15-16 for risks and uncertainties relating to future results.
Original Investments 295.1 Excite, CheckFree, Verisign, Concentric, Security First, Mortgage.com, Home Store, Quotesmith and two non-public companies with third-party valuations
Cash Proceeds (Pre-Tax) 569.9Remaining Market Value* 495.8Total Value 1,065.7
Increase in Value 261%* as of 7/31/99
All but oneup at least 70%
All but oneup at least 70%
August 26, 1999
26
Balance Sheet
0
200
400
600
800
1000
1200
FY 97 FY 98 FY 99
$431
$882
$1,255*
Value of Cash and Marketable Securities at Fiscal Year-End ($ millions)
* Does NOT include $131 million of cash held as “float” in payroll business
Please see slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
27
Review of FY 1999
� Overview� FY 1999 Financial Performance� Investments & Balance Sheet� Core BusinessesCore Businesses� New (Internet) Businesses� Employee Metrics� Electronic Finance
August 26, 1999
28
QuickenCustomer Base Continues to Grow ...
0
2
4
6
8
10
FY 97 FY 98 FY 99
Millions of Active Users*
9.4
10.411.2
2.52.9 3.0
Quicken
Money
* Based on survey of PC-owning US households done by Genesis Research in January and August of 1999, 1998 and 1997.
Moderate Growth• Units: 7% vs prior year• Revenue: 5% vs prior year• Retail share down slightly
Connectivity• Over 150 FI connections• Over 700 including QIF import• Access to 50% of U.S.accounts
Profitability• Declined in FY99, but still one of Quicken’s most profitable years
Strategic Role• Customer acquisition• Less than 10% of total revenue
Please see slide 15-16 for risks and uncertainties relating to future results.
August 26, 1999
29
Quicken 2000 Six weeks early Back on the Mac ! And connected ...
Palm Pilot
The Web
“very powerful Internet-enabled
version”
-Jupiter Communication
August 26, 1999
30
QuickBooks
Robust Growth … and Doubling Profits
1½ Launches Benefit of 6-month release cycle (Will not get this benefit in FY00)
Retail Unit Share From 75% to 81% to 85%
(PC Data)
Revenue Up 57%
Profits Doubled
70
75
80
85
FY 97 FY 98 FY 9970
75
80
85
FY 97 FY 98 FY 99
0
1
2
FY 97 FY 98 FY 99
2.7Unique Registered Users*(Millions at year-end)
2.1
1.6
* Based on cumulative number of product registrations.
Please see slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
31
Financial Supplies Group
Revenue ($ Millions)
60
65
70
75
80
85
90
95
FY 97 FY 98 FY 99
$97.6
$87.0
$79.6
Consistent GrowthFY 99:FY 99:
SystemsSystems Direct-To-
Plate: 50% to 90%
Turn-around time cut in half
ProcessesProcesses Status Calls:
25% to 8% Web Ordering:
5% to 19%
… … ProfitsProfits
Please see slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
32
Small but leadingretail salesin its category
International
Focusing Efforts on Small Business Revenue up 12% in FY99
• Swung from small loss to small profit
Canada• Strong Across the Board: Quicken, QuickBooks & QuickTax
Japan• Revenue flat: traditional businesses mature• QuickBooks-J launched
Europe• Uneconomic business models: transitioning to partnerships• Established relationship with Haufe in Germany
August 26, 1999
33
Tax Division
0
20
40
60
80
100
120
140
FY 97 FY 98 FY 99
$81.0
$155.2
$61.1
Please see slide 13 for a description of Pro Forma adjustments and slides 15-16 for risks and uncertainties relating to future results.
Pro Forma Contribution ($ Millions)
Pers.53%Pers.53%
Pro47%Pro47%
FY99 Pro FormaContribution Mix
by Personal and Professional Groups
August 26, 1999
34
TurboTax
0
1
2
3
4
FY94 FY95 FY96 FY97 FY98 FY99
TurboTax & MacInTax Federal Units (Millions)
4.1million
Record Sales Volumes
NOTE: Microsoft EnteringPersonal Tax Market in FY 2000
NOTE: Microsoft EnteringPersonal Tax Market in FY 2000
Please see slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
35
93%Lacerte
80
82
84
86
88
90
FY96 FY97 FY98 FY99
Pro TaxRenewal Rate (excluding pay-per-return customers)
92%
89%
85%
82%
Reliable Recurring Revenues
Reliable Recurring Revenues
PROTAX
ProSeries
ProSeries
ProSeries
ProSeries
Please see slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
36
America’s Choice
income tax returnsin the United States
is prepared onIntuit software*
* Based on company estimates: Unit sales times number of returns filed per unit sold, as reported by users on survey questionnaires.
11
55
OUT OUT OF OF
EVERYEVERY
August 26, 1999
37
Review of FY 1999
� Overview� FY 1999 Financial Performance� Investments & Balance Sheet� Core Businesses� New (Internet) BusinessesNew (Internet) Businesses� Employee Metrics� Electronic Finance
August 26, 1999
38
New (Internet) Businesses
Online Tax Filing Online Tax Prep Online Payroll Online Business Services Online Investments Online Mortgage Online Insurance Online Billing & Payment Online Orders & Downloads
TOTOTHETHEWEBWEB
Multiple New Internet-Based Businesses Are Ramping
15% of Intuit’s Revenue from the Internet in FY9915% of Intuit’s Revenue from the Internet in FY99“Internet Revenue” is the sum of “Internet Product and Service” revenue (products and services performed and delivered using the Internet) and “Internet Commerce” revenue (software or other products sold and/or downloaded via the Internet).
August 26, 1999
39
0
5
10
15
1H98 2H98 1H99 2H99
Internet Revenue as a Percent of Total RevenueInternet Revenue
20%
11%12%
6%
Please see slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
40
Internet Revenue
0
10
20
30
40
50
Advertising Transactions Distribution
2923
47
14
50
12
FY98 FY99 Growth
48.7 125.3 157%
$ Millions
0
10
20
30
40
50
Business Tax Consumer
21
11
46
33
59
4
FY99FY98
Internet businesses span all business divisions, and are not a separate division or segment.
Please see slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
41
Electronic FilingPersonal Federal Returns (000s)
Plus, Another Million+Plus, Another Million+ProPro Federal Returns Federal Returns
0
200
400
600
800
1000
1200
1400
1600
FY 95 FY 96 FY 97 FY 98 FY 99
2.4x
1.7x
2.9x
2.3x
DOUBLINGDOUBLINGEVERYEVERYYEARYEAR
Please see slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
42
WebTurboTax UsageWebTurboTax UsageUp Ten-Fold from FY98Up Ten-Fold from FY98
WebTurboTax
Full Desktop Capability …
On the Web!On the Web!
August 26, 1999
43
400,000subscribers
Payroll ServicesPayroll Tax Table Service Subscribers (000s)
0
100
200
300
400
FY95 FY96 FY97 FY98 FY99
STEP ONESTEP ONESTEP ONESTEP ONE Payroll Tax TablePayroll Tax Table ServiceService(NOT predominantly Internet-delivered)
Please see slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
44
$267 million
0
50
100
150
200
250
Q1 99 Q2 99 Q3 99 Q4 99
More customers in first yearthan Paychex got in first six years
Payroll ServicesGross Payroll Dollars Processed Through Online Payroll Service, Excl. CRI
STEP TWOSTEP TWOSTEP TWOSTEP TWO Online Payroll ServiceOnline Payroll Service
NOTE: Early-Stage Effort Fast Growth, But Small Base NOTE: Early-Stage Effort Fast Growth, But Small Base
$ Millions
Please see slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
45
Millions of Page Views Per MonthAlmost 4 Million UniqueAlmost 4 Million Unique
Visitors Per MonthVisitors Per Month
40
60
80
100
120
140
160
May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June
Quicken.com
Page Views Up 78% Ad Revenue Doubled
Please see slides 15-16 for risks and uncertainties relating to future results.
Page Views and Reach Soft in Late Spring
Page Views and Reach Soft in Late Spring
August 26, 1999
46
Insuremarket
0
200
400
600
800
1,000
1,200
Policy Applications
Life Insurance: 100% U.S. Coverage Rapid Application Growth
Small RevenueSmall Revenue
Please see slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
47
Insuremarket
0
10
20
30
40
50
60
JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL
Auto Insurance: 70% U.S. Coverage Rapid Quote Growth
Thousands of Quotes
0
200
400
600
800
1,000
1,200
Policy Applications
Life Insurance: 100% U.S. Coverage Rapid Application Growth
Small RevenueSmall Revenue Minimal RevenueMinimal Revenue
Please see slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
48
0.1%in 19980.1%in 1998
Online Mortgages
10%in 200310%in 2003
Forrester Research
Percentage of Total Mortgage Market Originated Online
Rapid Growth Projected for Online Mortgages
Please see slides 15-16 for risks and uncertainties relating to future results.
• Small Revenue But Fast Growth
• Over $1.2 Billion Loans Originated in FY 1999
August 26, 1999
49
40
60
80
100
120
2Q98 3Q98 4Q98 1Q99 2Q99
Number of Loans Closed*, as an Index versus E-Loan
Quicken Mortgage
CalendarQuarters
100100Index vs E-LoanIndex vs E-Loan
* Partially based on Intuit estimates
Please see slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
50
21% More21% MoreThan E-LoanThan E-Loan
40
60
80
100
120
2Q98 3Q98 4Q98 1Q99 2Q99
Number of Loans Closed*, as an Index versus E-Loan
Quicken Mortgage
CalendarQuarters
100100Index vs E-LoanIndex vs E-Loan
NOTE: • $ Loans & Revenues Lower than E-Loan• Interest Rate Increases Reduce Volumes
NOTE: • $ Loans & Revenues Lower than E-Loan• Interest Rate Increases Reduce Volumes
* Partially based on Intuit estimates
Please see slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
51
Review of FY 1999
� Overview� FY 1999 Financial Performance� Investments & Balance Sheet� Core Businesses� New (Internet) Businesses� Employee MetricsEmployee Metrics� Electronic Finance
August 26, 1999
52
Employee Survey Results
63
64
65
66
67
68
69
FY 97 FY 98 FY 99
Average of 46 “Quality of Work Environment” Questions - Top-Two-Box Scores
65%
67%
69%Employee Satisfaction:FY99 is Highest MeasuredEmployee Satisfaction:FY99 is Highest Measured
Average of All46 Questions
Please see slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
53
Total company turnover downfrom 22% to 19% to 18%(excluding recent acquisitions)
Turnover Rate
10
12
14
16
18
20
FY 97 FY 98 FY 99
Intuit’s Personnel in the Silicon Valley
22%
18%
13%
Radford reports average turnover for comparable Northern California
companies to be 27% for calendar year 1998.
Intuit’sSilicon Valleyturnover cut
by 60%
Intuit’sSilicon Valleyturnover cut
by 60%
Please see slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
54
Employee Productivity
100
120
140
160
180
200
FY 97 FY 98 FY 99
$154
$172
$209
Pro Forma Revenue per Employee ($ Thousands)
Please see slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
55
Summary of FY 1999
Internal revenue growth rate has doubled Pro Forma operating income up four points Cash & securities increased to $1.2 billion Core businesses are flourishing Multiple new Internet businesses ramping Employee satisfaction highest measured Retention rates & employee productivity up
Please see slide 13 for a description of Pro Forma adjustments and slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
56
Ongoing Challenges
Execution• Peak season capacity and customer service quality• Reliability and security in transactional businesses• Overseas business models
Competition• Loss-laden Internet start-ups, fueled by VCs and IPOs• Increasing pressure in personal tax business
Transition to the Internet• Human resources: hiring and retention• Financial balance: profitability versus Internet investment• Culture: speed and agility
Please see slides 15-16 for risks and uncertainties relating to future results.
August 26, 1999
57
Thoughts on FY 2000
Enter The Year in Strong Position• Products, customers, employees, financial resources
Revenue Growth Rate Likely to Slow• Europe moving to royalty-based business model• Microsoft entry into the personal tax market• No benefit from one-and-a-half QuickBooks launches• Internet businesses face intensifying competition
Financial Goals• Target: 15% revenue growth and 20% op income
growth*• Target: reinvest any upside in the Internet
* Pro Forma. See slide 13 for a description of Pro Forma adjustments.
August 26, 1999
58
Review of FY 1999
� Overview� FY 1999 Financial Performance� Investments & Balance Sheet� Core Businesses� New (Internet) Businesses� Employee Metrics� Electronic FinanceElectronic Finance
August 26, 1999
59
Small Business eFinance
GovernmentsGovernments AccountantsAccountants
SuppliersSuppliers
Web StoresWeb Stores
CustomersCustomers
BanksBanks
EmployeesEmployees
Data Store
Connecting Small Business Finances to the Net
QuickBooksQuickBooks
August 26, 1999
60
Electronic Finance is...
Immense in Size Sticky Recurring Revenue Competitive Advantage High Return on Investment
(With Scale)
Multiplicative
Please see slide 15 for a description of Pro Forma adjustments and slides 17-18 for risks and uncertainties relating to future financial results.
August 26, 1999
61
Intuit is Electronic Finance
Intu
it
Mic
roso
ft
H&
R B
lock
Peach
Tree
Yahoo!
Mark
etW
atc
h
E-L
oan
InsW
eb
Personal Finance SoftwareOnline BankingOnline Billing & PaymentOnline InvestingOnline MortgageOnline InsuranceAccounting SoftwarePayroll Tax TablesOnline PayrollBusiness Tax PrepOnline Business ServicesPersonal Tax Prep - DesktopPersonal Tax Prep - WebElectronic FilingPro Tax Prep SoftwarePro Fixed Asset Software
Examples of Companies Offering Electronic Finance Capabilities
August 26, 1999
62
Thanks for joining us.