Intuit knows that good accounting takes more than a pocket calculator. The company is a leading developer of software used to manage personal finances and budgeting (Quicken, Mint), small business accounting (QuickBooks), and consumer tax preparation (TurboTax). Customers include individual consumers, accountants, and small businesses; Intuit claims more than 45 million users for its products and services. Other offerings include payroll and payment software for small businesses, financial supplies (paper checks, invoices, deposit slips), and online marketing and communications products. It generates most of its sales in the US.
It generates half its sales from small business clients, with consumers representing another 40%. 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 account for about 5% of Intuit's total sales.
Sales and Marketing
The company reported advertising expenses of about $175 million in fiscal 2014 (ended July), compared with $186 million and $150 million in fiscal years 2013 and 2012, respectively. 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.
Intuit reported fiscal 2014 (ended July) sales of $4.5 billion, up 8% versus the prior year. Net income increased 6%, to $907 million, over the same period. The company, which has posted steady sales and profit growth in recent years, saw solid growth in its small business and consumer segments of 10% and 7%, respectively. Small business was powered by connected services offerings (such as QuickBooks Online, which had customer growth of 40%) while federal TurboTax units led the way for the consumer business.
Cash flow from operations has been following the same upward trajectory as revenue and net income. In 2014 it hit $1.45 billion, up 6% from the prior year.
Intuit believes the ease of use of its products give it a competitive edge over rivals, especially for its consumer-oriented offerings, such as TurboTax and QuickBooks. The ubiquity of its products in prominent retail locations also gives the company an edge in the consumer space that competitors such as H&R Block, Sage, and Microsoft struggle to match. To defend QuickBooks position as the global small business operating system, in 2013 Intuit introduced next-generation QuickBooks Online in more than 100 countries.
Intuit, which aims to double its small business customer base by 2019, is focused on ensuring that Intuit products and services are all accessible online and can be accessed via desktops, laptops, and mobile devices, as well as through social communities such as online forums and social media sites.
After diversifying beyond its core consumer finance and accounting markets, Intuit it returning to its roots. To this end, it sold two businesses in fiscal 2013 that were outside its core markets. It sold its health business Medfusion (acquired in 2010 for $91 million) back to its original owner in 2013. (Medfusion provides software tools and services that improve communication between patients and health care providers.) It also sold Intuit Financial Services in August 2013 to investment firm Thoma Bravo for about $1 billion.
Mergers and Acquisitions
Intuit has also been making acquisitions to expand into software-as-a-service (SaaS) products for small and midsized businesses to address demand among many companies for cloud-based software delivery. In mid-2014 it paid $360 million for mobile bill payment service Check Inc., which offers an app used by about 10 million people. In late 2013 it bought privately held Prestwick Services, which allows workers' compensation insurance premiums to be calculated in real time, based on actual payroll, via its TRUPAY platform. In May 2012 it paid $423.5 million for Demandforce, a provider of hosted software used to automate marketing and customer communications. Demandforce's e-mail, mobile, and social tools are used in such industries as automotive and health care.