Intuit Inc.

Good afternoon. My name is Lateef, and I will be your conference facilitator. At this time, I would like to welcome everyone to Intuit's second quarter fiscal year 2019 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. With that, I'll now turn the call over to Jerry Natoli, Intuit's Vice President of Finance and Treasurer. Mr. Natoli?

Thanks, Lateef. Good afternoon, and welcome to Intuit's second quarter fiscal 2019 conference call. I'm here with Intuit's CEO, Sasan Ghadarzi, and Michelle Clatterbuck, our CFO. Before we start, I'd like to remind everyone that our remarks will include forward-looking statements. There are a number of factors that could cause Intuit's results to differ materially from our expectations. You can learn more about these risks in the press release we issued earlier this afternoon, our Form 10-K for fiscal 2018, and our other SEC filings. All of those documents are available on the Investor Relations page of Intuit's website at intuit.com. We assume no obligation to update any forward-looking statement. Some of the numbers in these remarks are presented on a non-GAAP basis. We've reconciled the comparable GAAP and non-GAAP numbers in today's press release. Unless otherwise noted, all growth rates refer to the current period versus the comparable prior year period, and the business metrics and associated growth rates refer to worldwide business metrics. A copy of our prepared remarks and supplemental financial information will be available on our website after this call ends. With that, I'll turn the call over to Sasan.

Thanks, Jerry, and thanks to all of you for joining us. I will start by reviewing our results for the quarter and outlook for the year. I will then spend a few minutes sharing my thoughts about the future. Starting with the results, we're halfway through the fiscal year and continue to see good momentum across the company. Second quarter revenue grew 12% overall, fueled by 17% revenue growth in the small business and self-employed group and 11% revenue growth in the consumer group. Revenue for the strategic partner group was in line with our expectations. With this strong performance, we remain on pace to deliver against our full-year revenue and operating income outlook. With that context, let me start with tax. Every tax season is different, and this one is no exception. We believe the new tax legislation and the extended partial government closure impacted consumer behavior, resulting in a slower forming season. As a reminder, there are four key drivers for our consumer business. The first is total number of returns filed with the IRS. The second is the percentage of those returns filed using do-it-yourself software. The third is our share within DIY software category. And the fourth is the average revenue per return. Our consumer group strategy is to expand our lead in the do-it-yourself category, transform the assisted tax preparation category, and expand beyond tax to build a consumer platform. This is all in service of helping our customer make ends meet and get their largest tax refund. Based on the latest IRS data, the do-it-yourself category is performing better than the assisted. Through February 8th, IRS data shows self-prepared e-files declined 3.2%. In comparison, TurboTax e-files through the same period declined 3.5%. We are confident in our strategy, and I'm very proud of our team. Let me share a few specific examples of how we are delivering for our customers this season. Within Do-It-Yourself, we've invested in delivering the best experience for our customers who file simple returns by including year-over-year data transfer for no charge in our free edition. We're already seeing an improvement in product recommendation scores. TurboTax Self-Employed is again part of our lineup this season and comes with 12-month subscription to Cookbook Self-Employed, enabling customers to benefit by tracking their financials throughout the year. This product was one of our fastest growing offerings last season. In the assisted tax category, we are transforming the customer experience with TurboTax Live. We introduced a range of price points within the product lineup this season to offer access to an expert for even the simplest filers. For the first time, we're offering mobile access to these experts. We also improved the onboarding experience and tools for the approximately 2,000 pros on our platform, the majority of whom returning from last season. We're excited to see significant increases in net promoter scores from the pros. Beyond tax, our consumer platform is aimed at helping customers make ends meet. With their consent, Turbo provides customers a view of their overall financial health by combining a credit score, verified income data, and debt-to-income ratio showing customers where they truly stand. This platform gives us the ability to connect our customers with the best financial products to save them money. Turning to small business. we've delivered another strong quarter in our small business and self-employed group with online ecosystem revenue growth of 38%, again exceeding our target to grow better than 30%. We continue to place an increased emphasis on online services to deliver more value for our small business and self-employed customers. I would like to share a few proof points that demonstrates our progress. We are focused on solving the most important problems for our customers by helping them get paid fast, manage capital, and pay employees with confidence. Within payments, last fall, we launched next business day payments allowing our customers to receive their funds much faster than previously experienced. We've seen an eight-point higher product recommendation score for those customers who have access to this product. Within payroll, we introduce next day and same-day direct deposit to enable customers to hold on to their money longer and better manage their cash flow. We have already seen over one-third of our online payroll customers benefit from this feature. QuickBooks Capital has funded $277 million in cumulative loans since launching publicly a little over a year ago. QuickBooks Capital leverages QuickBooks online customers' data to provide loans to small businesses. nearly 60% of which not qualify for loans elsewhere. Our QuickBooks Capital business has a default rate half the industry average, and we remain excited about this opportunity. Finally, we are encouraged by initial results for QuickBooks Online Advanced as we take our game to the mid-market to serve those businesses with 10 to 100 employees. We continue to roll out new features, including custom user permissions and batch invoices. The team is using customer feedback to iterate fast and add functionality. Within our strategic partner group, our professional tax revenue was down 1% year over year. We continue to focus on multi-service accounting firms that do both books and taxes, enabling us to drive our accountant success while growing our small business ecosystem. To wrap up, we are pleased with the continued momentum of our small business and self-employed group and remain laser focused on executing as we head toward the tax filing deadline. With that overview, let me hand it over to Michelle to walk you through the financial details.