Intuit knows that good accounting takes more than a pocket calculator. The company is a leading developer of software used for small business accounting (QuickBooks), and consumer tax preparation (TurboTax). It also helps manage personal finances and budgeting with its online Mint service. Customers include individual consumers, accountants, and small businesses; Intuit claims more than 61 million users for its products and services. Nearly all of the company's sales are made in the US, although it has taken steps toward international expansion. About 73% of revenue comes from connected services.
It generates half its sales from small business clients, with consumers representing another 42%. Professional accountants -- who use the company's Lacerte, ProSeries, and Intuit Tax Online products -- account for the remainder of revenue.
California-based Intuit has offices in the US, Australia, Canada, India, Singapore, and the UK. The company's software and services are available in the US, Canada, the UK, Australia, India, and Singapore. International sales consistently account for less than 5% of Intuit's sales.
Sales and Marketing
The company reported advertising expenses of about $229 million in both 2016 (ended July) and 2015 up from $175 million in 2014. The company relies on web marketing and targeted advertising, such as search engine optimization and purchasing key words from major search engine companies; placing its mobile application in proprietary online stores (including Google's Play Store and Apple's App Store), direct-response mail and email campaigns, telephone solicitations, TV, radio, and print advertisements, social media, and coordinated promotional offers with major retailers. Its TurboTax tax preparation software is displayed prominently in stores such as Office Depot, Best Buy, and Sam's Club through April 15 each year.
Intuit reported 2016 (ended July) sales of $4.7 billion, up 12% from the prior year. Net income rocketed 168% higher, to $979 million, over the same period. All of the company's segments posted revenue gains in 2016, with the ProConnect segment growing at an astonishing 51%. In 2015 Intuit began continually adding upgrades and connected service to the software, which the company credited for the revenue increase.
The seemingly high increase in profit was in comparison to 2015, when profit fell drastically. The 2016 net income was in line with growth from previous years. The company took a charge of $148 million in 2015 for goodwill impairment.
Cash flow from operations were $1.4 billion in 2016, compared to $1.5 billion in 2015.
Intuit has declared it intends to double its small business customer base by 2019 and it wants to make sure that its products are accessible online and can be accessed via desktops, laptops, and mobile devices. It also wants accessibility through social websites such as online forums and social media sites. The company generated 73% ($3.4 billion) of its revenue from connected services in 2016, up from 50% eight years ago.
The company seems to have recovered from its TurboTax problems during tax season 2015. Consumer found out that the new versions of software they used in previous years no longer contained some of the forms they needed. After a consumer outcry, TurboTax offered a $25 rebate. The episode provided an opening for competitors H&R Block and TaxAct to court TurboTax users.
Intuit has opened its products to third-party applications that users can integrate with Intuit software such as QuickBooks to more closely meet their specific needs.
Intuit sold the Demandforce, QuickBase, and Quicken businesses in 2016 for $354 million to focus on its core tax products.
With less than 5% of revenue coming from international markets, Intuit sees room for expansion. Acquisitions in South America are some of its first steps in that direction.
Mergers and Acquisitions
In 2015 Intuit acquired Zeropaper, a Brazilian tax software startup. Intuit sees the purchase as an entree into the Brazilian market and its 16 million small businesses. Around the world, Intuit bought KDK Softwares India, a professional tax filing software provider.