Intuit Inc.

Good afternoon. My name is Chelsea and I will be your conference operator today. At this time, I would like to welcome everyone to Intuit's fourth quarter and full fiscal year 2022 conference call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer period. If you would like to ask a question during that time, simply press star then the number one on your telephone keypad. If you would like to withdraw your question, press star Q. With that, I will now turn the call over to Kim Watkins, Intuit's Vice President of Investor Relations. Ms. Watkins, please begin.

Thanks, Chelsea. Good afternoon and welcome to Intuit's fourth quarter fiscal 2022 conference call. I'm here with Intuit CEO Sasan Godarzi 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 2021, 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. With that, I'll turn the call over to Sasan.

Great. Thank you, Kim, and thanks to all of you for joining us today. We had a very strong fourth quarter, ending the year with momentum, as we executed on our strategy to be the global AI-driven expert platform, powering prosperity for consumers and small businesses. We continue to be focused on solving our customers' biggest problems by putting more money in their pockets, eliminating work, and saving people time, and ensuring that they have complete confidence in every financial decision they make. Full-year revenue reached $12.7 billion, up 32%, including the addition of MailChimp and a full year of credit card money. Excluding MailChimp, revenue grew 24%. Total revenue growth was fueled by 38% growth for the small business and self-employed group, which includes 16 points from MailChimp. Consumer group revenue grew 10%, and Credit Karma had an outstanding year with revenue of $1.8 billion, up 58% on a pro forma basis year over year. I'm very proud of the team's performance delivering strong growth and strong margins, which very few companies at our scale are able to achieve. I'm optimistic about our strategy and opportunities for growth, especially considering an uncertain global macroeconomic environment. The Intuit platform remains mission critical for powering our customers' prosperity. I'm pleased we are guiding to another year of strong revenue growth and strong margins in fiscal year 2023. Our global AI driven expert platform strategy is accelerating innovation and our five big bets are solving the largest problems our customers face. We continue to deliver strong proof points that demonstrate the success and are well positioned for durable growth in the future. As a reminder, our five big bets are revolutionize speed to benefit, connect people to experts, unlock smart money decisions, be the center of small business growth, and disrupt the small business bid market. We will share more on our vision and the outcomes we're driving across each of these big bets next month at our investor day. Now let me turn to a topic that I know is top of mind for many of you, the resiliency of our business in a slowing macroeconomic environment. Our company is in a significantly different position than it was during the last recession more than a decade ago. Our platform and cloud-based offerings have significantly expanded to become the platform of choice for consumers and small businesses. Therefore, Intuit is even more mission critical for our customers we serve. We have highly predictable reoccurring revenue and much of our business is subscription-based. Additionally, the scale of our platform, along with our rich data, gives us the unique ability to see leading indicators such as growth in charge volume, number of hours employees are working, and number of workers paid, bank account balances of our small business customers, credit card utilization, and delinquency rates for members. This allows us to be forward-looking and adjust quickly. Let me share how we think about our business in context of a mild recession. To start, in fiscal year 2022, 51% of our revenue came from the small business and self-employed group, 35% from our consumer and pro-tax businesses, and 14% from Credit Karma. First on tax. Our tax businesses are very resilient, and we do not expect a mild recession to have any significant impact. Next, with small business and self-employed group, QuickBooks and MailChimp are mission critical for our customers whose livelihood depends on our platform. In fiscal year 2022, approximately 80% of the small business and self-employed group revenue was subscription-based. As a reminder, MailChimp is also primarily subscription-based, which adds to the scale of our subscription volume. The approximately 20% is transactional-based and includes revenue from QuickBooks payments, capital, and per-employee pricing for time tracking and payroll. In a mild recessionary environment, we may see an impact on these transactional businesses. In Q4, we did not see any impact. This demonstrates how mission critical our platform is, especially in this environment. Finally, turning to Credit Karma, this is the business that could be most impacted by weakening economic environment. As a reminder, this business represents 14% of Intuit's revenue in fiscal year 2022. While we expect member engagement to be strong in any economic environment, our financial institution partners could tighten access to credit. In Q4, we experienced increased volatility in personal loans. Many partners that securitize loans are facing a more challenging funding environment as interest rates rise. For context, personal loans represent just over a third of Credit Karma's revenue in fiscal year 2022. Although several personal loan partners tightened underwriting during the quarter, we were able to offset some of this with volume from other partners. This demonstrates the power of the platform. In credit cards, we've not seen any significant impact. We continue to monitor delinquency rates, which we view as a leading indicator for future credit card origination trends. While delinquency rates have increased slightly, they remain near historical lows. We expect credit cards to be less negatively impacted by a mild recession than personal loans. In the mild recession of 01-02, credit card originations declined only a few points. And for context, credit cards represent nearly half of credit cards revenue in fiscal year 2022. We do expect Lightbox to continue to be a differentiator for Credit Karma, as this technology allows lenders to deploy their targeting models in an encrypted environment and leverage thousands of anonymized financial attributes related to Credit Karma members and TurboTax customers. This provides more certainty to members and partners on the platform as recommendations are personalized. Currently, no one else can replicate this. Partners' usage of Lightbox at the end of fiscal year 2022 was at an all-time high, representing nearly 70% of credit card and personal-owned transactions on a combined basis. This was up nearly 15 points from the prior year. We expect Lightbox to help make credit card business more resilient in a recessionary environment. Now, with that as context, the guidance we are providing today assumes current demand trends continue. Wrapping up, we feel more confident than ever in our long-term business strategy. In an uncertain macro environment, the benefits of our platform are more important and mission critical than ever. As part of our three- and one-year plans that the Board just approved, we are investing heavily in innovation within each of our big bets to deliver benefits for our customers. while delivering top line growth and margin expansion given the strength of our operational playbook. Combined with our strong business fundamentals, including our balance sheet, Intuit remains in a position of strength. We're proud to be the platform of choice for over 100 million customers around the world who rely on Intuit to prosper. Now let me hand it over to Michelle.