On August 21, Intuit (Nasdaq: INTU) reported fiscal year 2008 and fourth quarter earnings that beat Street estimates. Q4 revenue grew 11% to $478 million, beating the Street estimate of $470 million. In the seasonally slow quarter, net loss was $61.9 million or $0.19 per share, more than four times last year’s loss of $13.64 million. The increase was mainly due to the $23 million charge for severance and closure of facilities. Excluding charges, loss per share was $0.08, in line with analyst estimates.
For the full year 2008, revenue grew 15% to $3.1 billion driven by the acquisition of Digital Insight, an online banking services provider for mid-market banks and credit unions, and strong performance in Intuit’s tax business. Net income was $476.76 million, up from $440 million last year. Excluding the contribution from acquisitions, net income grew 11% organically.
By segment, annual revenue from Consumer Tax grew 14% y-o-y to $929 million; the QuickBooks segment, which now includes QuickBase, was up 6% y-o-y to $622 million; and Accounting Professionals (formerly Professional Tax) grew 4% y-o-y to $327 million. Payroll and Payments revenue grew 9% y-o-y to $561 million. Financial Institutions revenue (including Digital Insight) was $299 million. The Homestead (provider of web site and web store solutions for small businesses) and ECHO (credit card processor) acquisitions contributed revenue of $30 million.
I earlier argued that Intuit needs an aggressive SaaS strategy and needs to shift to the subscription business model. The company is finally making some progress on that front with the recent announcement of its Small Business Connected Strategy. In the next 18-24 months, they can acquire a fantastic portfolio of SaaS businesses because the sector has received enormous entrepreneurial energy and venture capital investment, and there are many to pick from.
The company’s focus, however, is on the blend of software and connected services, as stressed by CEO Brad Smith in the earnings call. In consumer tax, for example, driven by 37% growth in online units, Intuit increased both its online share and its retail share.
For 2009, Intuit expects revenue between $3.35 and $3.43 billion and non-GAAP EPS between $1.86 and $1.90. Analysts were expecting earnings of $1.86 on revenue of $3.34 billion. For the seasonally slow Q1, it expects revenue of $480 to $492 million and non-GAAP net loss per share of $0.14 to $0.11. It is currently trading around $30, picking up well from its 52-week low of $25.08 on March 17. Market cap is about $10 billion, and it is still a great company with lots of headroom.