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 fourth quarter and fiscal year 2020 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 Kim Watkins, Intuit's Vice President of Investor Relations. Ms. Watkins.

Thanks, Lateef. Good afternoon and welcome to Intuit's fourth quarter fiscal 2020 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 2019, 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 statements. 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. And with that, I'll turn the call over to Sasan.

Thanks, Kim. Thanks to all of you for joining us today. I hope you're all safe and well. we had a very strong fourth quarter capping off a dynamic fiscal year 2020. Full year revenue grew 13% and operating margin expanded. Total revenue growth was fueled by 15% growth in the small business and self-employed group and 13% growth in the consumer group. QBO and TTO platform revenue totaled $4.8 billion in fiscal year 2020, growing 22% year over year. With our AI driven expert platform strategy and the focus on our five big bets, we're building momentum and accelerating innovation in the current environment, which we believe positions us well for durable growth in the future. Since we just finished tax season, let's start there. This tax season was like no other, and our team delivered a strong season in uncertain environment by executing on our strategy of expanding our lead in the do it yourself category, transforming the assisted category and disrupting consumer finance. Based on our estimates, excluding stimulus filings of approximately 7 to 8 million, the do-it-yourself category share grew over two points this season. We grew our share of total returns and posted 11% customer growth, the strongest in four years, while growing revenue double digits for the third year in a row. We grew the base of customers paying us nothing just over 20%. posted double-digit growth of new customers across under-penetrated segments, including Latinx, self-employed, and customers with investments, and grew TurboTax Live customers nearly 70%. Now, turning to small business, revenue for the small business and self-employed group grew 16% in the fourth quarter and 15% for the year. Online ecosystem revenue grew 29% in the fourth quarter and including four points of non-reoccurring revenue from the Paycheck Protection Program and 31% for the year. We are seeing the resiliency of our platform falling a dip in demand earlier this year when shelter-in-place shut down many small businesses. We're now seeing recovering trends across our platform, including improved retention rates, payments volume, and employees paid with our payroll offerings, as customers continue to rely on QuickBooks as the source of truth for their business. With that said, there remains a great deal of uncertainty in the market, particularly for small businesses, as the pandemic continues to run its course. Next, I'll turn to the progress of our AI-driven expert platform strategy and how we are executing against our five big bets. These big bets focus on the largest problems our customers face and represent durable growth opportunities for Intuit. I will cover big bet number one last as it accelerates innovation across our platform and is foundational to the other bets. Big bet number two is connect people to experts. One of the largest problems our customers face is lack of confidence to do their own taxes and to manage their business. We're connecting customers to experts on our platform to solve this problem with TurboTax Live and QuickBooks Live, allowing us to reach more customers, deepen our engagement, and grow ARPC. Within TurboTax Live, we had a terrific season. The number of TurboTax Live customers grew nearly 70%. We provided new ways for customers to access an expert throughout the filing process, contributing their first-year retention and conversion rates, increasing several points. And almost 70% of new TurboTax customers who used our live offering came from an assisted method the prior year, a higher percentage than TurboTax Online. For experts on our platform, we saw higher satisfaction scores and lower attrition as we focused on improving the expert experience. For QuickBooks Live, we're proud of the progress we've made this year, building on the virtual expert platform we created for TurboTax Live. With the rapid adoption of virtual solutions, we continue to see encouraging early signs for QuickBooks Live as we further develop the offering with a higher percentage than expected of customers upgrading to a monthly subscription from our setup offering we introduced in January. Our third big bet is to unlock smart money decisions by connecting customers with financial offerings that help put more money in their pockets. In its third season, we more than doubled monthly active use for Turbo and increased customer retention rates as we grew registered users by 8 million to 22 million. This suggests customers are finding value from our recently introduced innovation, such as refund tracking and goal setting. We expect our pending acquisition of Credit Karma to be more important than ever in this challenging environment as we work to help consumers save money, get out of debt, and have faster access to money. We continue to expect the transaction to close the second half of calendar year 2020. Our fourth big bet is to become the center of small business growth by helping our customers get paid fast, manage capital, pay employees with confidence, and grow in an omnichannel world. We recently launched Cookbooks Cash, a small business bank account that provides full visibility into small businesses' current and future financial picture with the ability to move money instantly and to ensure this money is working for them while leveraging the built-in accounting capabilities of Cookbooks. The cash account earns an attractive interest rate, enables small businesses to set aside funds for upcoming expenses and envelopes, and comes with a debit card. It's fully integrated with QuickBooks payment and payroll, enabling a small business to pay a worker or vendor the same day they receive the funds from a customer. It also includes an integrated cash flow planner to predict future cash needs. We're very excited to learn fast and scale this new innovation. We continue to support our small business customers by helping them access the Paycheck Protection Program, or PPP, through Cookbooks Capital. As of July 31st, Intuit helped make available just over $1.2 billion of approved small business loans to customers. We've helped approximately 37,000 small businesses access these loans with an average loan of nearly $38,000, keeping over 220,000 employees on payrolls. Finally, following the announced acquisition of Tradeco's robust inventory and order management system, we look forward to sharing more with you at Investor Day about how we will integrate these capabilities into Cookbooks to help small businesses manage and grow in an omnichannel environment. Our fifth big bet is to disrupt the small business mid-market with Cookbooks Online Advanced, designed to address the needs of small businesses with 10 to 100 employees. Throughout the last year, we introduced features to help customers individually tailor the offerings to their needs, including workflow automation, build your own dashboard, custom fields for expense transactions, and batch invoicing and payments. We also continue to work closely with partners to establish deeper integrations with premium apps with the goal to save our customers time by personalizing the offering and improving their experience. now more than ever a simple flexible cloud offering is needed by mid-market customers at a disruptive price let me wrap up our big bets by circling back to big bet number one which is our foundational bet to revolutionize speed to benefit for our customers our goal is to put more money in our customers pockets eliminate friction and deliver confidence at every touch point by using ai and customer insights here are a couple of examples of the progress that we're making First, we accelerated use of AI and increased the number of models deployed across our platform by over 50% this year. This increased use of AI drove a variety of customer benefits, including saving customers 25,000 hours with self-help and cutting expert review time in half, improving customer confidence. Second, we completed the migration of our data centers to the cloud while expanding our core technology capabilities. This enabled us to decrease downtime by 30%, triple the speed of delivery on our modern development platform, and increase mobile application deployments by 60%. We can now launch new features in a fraction of the time it once took and deliver customer benefits with even greater speed. As I shared earlier, we believe the current environment is acting as an accelerant to these bets. Most everyone is looking for virtual solutions Small businesses are accelerating their shift to online and omnichannel commerce, and both consumers and small businesses are looking for ways to put more money in their pockets. To wrap up, I am incredibly proud of our accomplishments this year. We remain focused on what matters most to our customers and what we can control during this time of uncertainty. Now let me hand it over to Michelle.