Intuit (INTU) 30 Nov 222023 Q1 Earnings call transcript

Good afternoon. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to Intuit's First Quarter Fiscal Year 2023 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 session. I'll President call of that, Watkins, to With Vice Intuit's Investor Instructions] turn over the Kim [Operator Relations. Ms. Watkins?

CEO, I'm Thanks, to Regina. with call. CFO. Intuit's welcome and Intuit's here first quarter Clatterbuck, Good fiscal XXXX afternoon our Sasan Goodarzi; and Michelle conference

Before could remind that cause our to materially will like Intuit's our a number expectations. to There from forward-looking results statements. are I'd of we remarks start, everyone include factors that differ

issued in You other afternoon, earlier can we more press learn fiscal SEC our this risks Form and the for these XX-K our release about XXXX filings.

documents on website statement. obligation All are of of assume update page to Investor Intuit's those intuit.com. no We available the forward-looking Relations any at

business comparable these are the ends. in business to non-GAAP numbers copy our numbers I'll and prior on rates prepared associated after of period otherwise the today's available growth and press the in of call release. to comparable turn the Some current metrics that, Sasan. and call financial all year to this be remarks the and information period, refer metrics. GAAP growth Unless website our on will versus A rates non-GAAP reconciled presented the With remarks supplemental noted, a over worldwide basis. refer We've

platform Great. us our on strategy Thank of today. prosperity all first you, joining consumers as Kim, global for businesses. we executed to expert and you We AI-driven strong for powering thanks and to the quarter had small a be

power platform modern about at deliver adoption. at high small and scale to innovating business on to our new a feel across and breakthrough bullish the using focusing tax. We momentum our capabilities offerings execution and continue technology velocity We're of

of financial saving our current helps on ever in they market putting the decision than over in confidence total to them make. uncertain every more in large continue pockets, and us economic money We is penetrate and $XXX important This ensuring billion. time more complete customers' addressable be our focused environment

of October worked measures on tax the the paid, of a cash our Business those number revenue employees transform platform of hours integrations. turn robust XX our peak and was a revenue remain our category, Total volume Mailchimp by on & strategy by with Mailchimp. the perspective XX% filers. innovations assisted season launched I'm excluding fueled Revenue These particularly excited per record TurboTax revenue quarter TurboTax and XX%, or XX% Group growth a the of The growth, rich October first number to Business let's results. XX% scale platform grew the growth business Credit the of Self-Employed extension small Group and new including small of peak. season, to platform, along our customers to growth strong upcoming Small Consumer for and inform Now addition of driven Tax the our strong points from to in and this launch the finish data, ability including health and the us with charge see reserves. and the about our in had businesses. with unique tested Karma the gives

impacted to that In turning shared verticals all all coming fourth in we historical Credit and balances cash into reflecting strong low remain quarter the earnings and standards, call uncertainty. few November, of saw the relatively Now call, verticals. been had Investor rates Consumer of last by our Karma. the default we pandemic. Day Credit weeks quarter further on negatively deterioration Karma the out At by macro consumer

the credit However, risk environment economic the of we extending continue reflecting see in the to deterioration partners back credit, from in performance. pull and uncertainty

Credit Karma revenue for the expected than quarter. Given came this context, lower in

versus income to guidance operating and of reiterating segments and guidance. our Karma XXXX We we reiterating At earnings revenue revenue to XX% XX% fiscal time, guidance all our and XX% XXXX to a of are year previous GAAP lowering fiscal our per Credit guidance non-GAAP XXXX for share for other year fiscal the XX% are growth. decline same our

strategy maintain Credit the Karma our power on and our commitments. innovation innovation platform Bets platform driven our become ability lower our customers long-term for how revenue balance expectations by expert prosperity our power self-driving while confident the Karma solving ability the accelerating volatility, face. future and AI-driven investments to of are platform consumers. we growth XX% XX% despite macro our how we all Regardless Our At our and guidance earnings the and revenue fueling of in shared the financial product to for the largest Big is to Day, for Credit vision to our platform Investor shows remain our diversified of X delivering near-term problems

are continue and success strong We deliver points growth to positioned demonstrate in proof well our the durable future. that for

speed decisions, small highlight experts, benefit, Big money people small to smart these As the to Today, the to mid-market. growth Big disrupt like X revolutionize are: of I'd Bets. progress our center recent of be a connect three unlock and reminder, business our examples of business Bets across

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to is technology platform well from leveraging stack a capabilities a underway. evolution Our shared siloed

resulting now Our have enables of Engineers Xx velocity XXXX. year compared innovation. code, deploying the development innovation accelerated in fiscal and speed environment to

XXX million that machine a solve Our payroll, fiscal our and over money during learning problems, customers' doing AI money over billion positioned Advance, billion AI across in Live, to QuickBooks innovations fintech $XXX million well XX And XXXX. today such moved production, predictions AI-driven QuickBooks and per payments to Live biggest and in as TurboTax advancements models X year, in per and day are our capabilities name year few. we're just customer interactions with

to Our experts solving people one connect connecting virtually. customer We're to of of second Big confidence, problems people the our is to by Bet experts. lack face, largest

learn. test peak, record launched During the team a October tax innovations our XX to and

serve our self-employed the revamp end-to-end for Latino help and the via investor, Live faster can the segment; segments. access assisted campaign experiences money Credit learnings TurboTax and better to platform go-to-market with us Karma; Our transform

are looking tax upcoming forward the We season. to

the grow helping them with Our fourth help our by Big get fast, our business. of their is pay way employees source in customers customers, and on and paid to confidence to become an omnichannel customers get small we're center of capital, With run our becoming business Bet the for grow truth manage well growth to world. Mailchimp,

third, first, acceleration holistic of e-commerce go-to-market and end-to-end approach. have a priorities global growth with three marketing full with second, by a and growth We CRM developing platform; our an delivering mid-market customer disrupting automation, the vision Mailchimp: accelerating suite;

find new first-time launched use that our This use a refreshed for that them launched their quarter, new and we campaign, with aligns website unique more feature brand needs. quickly an help experience business the and improved customers

Mailchimp goal We a awareness our to of virtual more to platform, guiding with launched components of usage. also expert record by the launched the and increase the of leveraging of four another process onboarding capabilities. them advanced This Intuit a high-value platform customers for in weeks our one-hour assisted features power was program example

we're to expansion impact and customers these of As a on pay. and lift converting result others, customer a in and seeing positive growth a enhancements

paid, to the Turning to their of and to tremendous pay over and investment money. offerings years our few made manage businesses capital money our others last help money expand suite We've get access a portfolio. small

in volume and by instant payments, discovery, continue getting We upfront. see driven charge paid to easier strength auto-enable our deposit

rolling access we a which customers. design, funnel send more easier and new more more quarter, quickly friction to to for increase that of workflow and improved out even driving This the by also We're the it made customers experience their removing a invoicing an invoices. with in percentage is cash payment-enabled companies opening streamlined

BXB More were challenge than managed fiscal tackling $X business small QuickBooks customers, year we're XXXX. for payments. in invoices trillion Looking our ahead, in another big of

future. small As QuickBooks launch Network, fiscal confident macro we this up, the do center more Day, growth. becoming this the our technology to the than In excited in business platform expect and and easier customers and platform. other, strategy more our own payments beta more about bill business Investor in functionality the year. Business plan It's building it to We're global and at broadly of benefits making are connects for launching feel long-term customers. launch small pay important are testing, environment, our Wrapping them business for the an each QuickBooks later business. uncertain our mission-critical We're we our to in growth of capability Mailchimp with also in financial power we and opportunities currently for of our we ever shared which

Big penetration, continue for Bets customers, a a benefits to in where rely innovation platform Intuit low across our be resulting for to proud have customers shifts to large-scale the We're expansion. our choice XXX heavily in over invest margin large and well deliver secular technology employer growth with on our prosper. X choice as financial we platform as line the favor, around top We in world diversified working who TAM an of million to of

Now let to Michelle. hand me it over

Thanks, Sasan.

versus GAAP the earnings non-GAAP we $X.X last billion, income million last GAAP per $X.XX ago, XXXX, diluted and of of operating diluted delivered operating a of share revenue year. $XX versus earnings million $X.XX of year million versus For versus quarter $XXX of $XXX first share per fiscal last of income year, million year, $X.XX $X.XX $XXX non-GAAP

organic XX% XX% during Small the $XXX excluding or and the business grew million basis, Mailchimp Online revenue Turning on Business to Mailchimp. quarter revenue. Group, segments. Ecosystem excluding XX% QX In in an XX% the revenue Self-Employed grew in &

Small core, goal and connect businesses, source small focus the within the globally. grow Self-Employed & the With threefold: for truth the is our Group of ecosystem the of expand being strategic Business

XX% mix on continue accounting we growth, Online QX effective grew QuickBooks core. driven higher the prices customer focus mainly in and First, by growing to shift. revenue

continue revenue, Time Mailchimp, focus in XXX% which we Capital includes Online ecosystem. Payments, to Second, QX. connecting services Payroll, Tracking, and the grew on

our revenue included grew growth mix Mailchimp charge Within million, revenue higher-end Excluding online customer Payments, growth. customers versus reflects in year expectations. the ongoing XX%. services reflects teens shift a Mailchimp, in offerings. volume ago, up with $XXX customer Payroll, revenue in per online quarter was an low services a revenue growth line in Within and increase to payroll an and increase in

revenue XX% excluding to we Mailchimp. On which we the a execute currency and with total revenue Ecosystem on first grew XXX% refreshed strategy, includes Online Ecosystem international in progress organic make and QX continue Third, Mailchimp. leading in expanding quarter. international began X% basis our an Desktop globally, basis, grew constant to

our we the for model mid-single As and Enterprise more during a digits reminder, closely with pricing. desktop in September the this to align revenue QBO more makes grew prices accounting for quarter. revenue predictable, raised desktop products our solution subscription QuickBooks Desktop several

Ecosystem Online going the expect be to continue to forward. growth catalyst We our

last Day Investor Revenue in X% at $XXX in Credit expectations our auto loans, was few mid-single-digit and due grew below On further Karma. of product credit to weeks quarter. deterioration revenue a to to home we cards, offset basis, by verticals insurance in auto was on the loans. loans, the growth growth by primarily million driven Moving all personal headwinds This QX. of shared

Sasan remain segments. verticals. loans, the but briefly further As seeing. environment impact an APRs. what macro partners touched have eligibility credit pressure seeing saw me eligibility, all to financial on riskier uncertain, unpack partners with we're this increasing continues many institution in while tightening we In cards, continued In across personal we're many tightened let particularly earlier,

in revenue to decline to very after XXXX. this strong We loan growth personal continue year expect fiscal

assistance seeing embeds result, the guidance of the new expected year rollout to decline of reducing fiscal our additional current their revenue tax the despite focused tax Credit finish XXXX the innovations. Karma in revenue a TurboTax a making assisted for quickly. we the taxes and was into Group to accurately we're This to As XX% the strong next as are a Consumer category reflecting conservatism head continued prep complete trends in $XXX compelling who several transforming season. filers of prefer season. We're focused remainder the the destination a XX%. We and on million, we tax market on remain to

line ProTax with of in million our the $XX expectations. Turning Revenue was Group. to

quarter and the remain in in principles guide and $XXX debt $X our billion $X.XX $X.X dividend a approximately other with million stock balance XXXX. share of unchanged. We is represents conditions This first in are our increase be financial Depending long-term decisions of billion versus a XX, approved market market on XX% year. each quarter. Board last aim to commitment Our We cash repurchased and and sheet. investments the our finished per during payable quarterly The factors, January our on the quarter.

both use operating As economic I in quarter, includes have an last good Company, system playbook for shared and the we a operating proven to difficult we and times. this run

thing along what The strong rich data, in right be the offerings that manage the term do for leading most. short to to our deliver most see ability the quickly. to the customers investing is need long while discretionary and for giving of for and us spend to indicators growth. priority tools first future Our platform, and is control scale them We access results us with our to forward-looking adjust important unique gives and allow they

earlier, income for earnings year per for spend despite As and we where expectations adjustments near financial Last against identified principles made a Credit revenue reiterating we in quarter, have can our in Sasan several example. and fiscal term. our expectations of Karma. able levers areas shared expect mentioned we our XXXX we deliver to see an I pull by lower We're to are scenarios, this variety the do reducing operating are we lower share returns to

power the power expectation and time, Given despite the Karma while and to maintain commitments. we long-term make the platform, the our Credit have to delivering offerings short- of the for of ability the our our revenue. same the future investments for diversified we and earnings have breadth platform on product ability necessary At lower our

We us that sheet also to offense. have play strong balance enables a

from to our macro innovation, a this of emerge Intuit our in continue for strength. will and accelerate goal remains We position period to uncertainty of

on Moving guidance. to

previous to XX% range lowering expect guidance few Karma growth. for to quarter For fiscal of into are our guidance revenue of versus to XX% verticals in in now XX% we further the as XX% We our the deteriorated trends XXXX, and revenue all weeks last revenue November. decline Credit

XX%. other We are all of for growth now to reiterating revenue versus company revenue to XX% our and expect previous the segments expectations of total XX% range XX%

expect to we Business XX% & from both the Group, of to to X% the continue In growth. Consumer this businesses, XX% to our mix. and revenue expect customer expect continue for majority revenue For year growth the we we Small Group, growth. XX% come growth Self-Employed to And

our non-GAAP We per guidance are demonstrates and of XXXX. GAAP fiscal platform business earnings and diversified reiterating This share income and operating our resiliency for model. the

So year earnings of XX%, income we income revenue to to per operating XX%, for diluted per to to share of XX%, of decline approximately XX% X%, earnings expect XX%. growth non-GAAP fiscal GAAP X% X% to growth total share recap, to of XX% XXXX, non-GAAP GAAP operating company growth diluted to growth and XX%

of of of XXXX $X.XX Our fiscal guidance for the earnings X%, second to GAAP $X.XX quarter share and share to loss non-GAAP growth includes $X.XX, per revenue of X% per $X.XX. to

our our fact find in XXXX guidance release fiscal also turn our Sasan. can full with You and to QX back over And on details I'll it sheet. and press that,

Great. Thank you, Michelle.

me global communities. that, financial it let turn of innovation people as Credit double being heard of with our As the and that a platform, for from result to AI-driven seeing leading continued your global expansion. of a prosperity margin questions. I, with you and powers are Intuit momentum growing we're and addition our Mailchimp, strategy the technology digits Michelle Karma And organic expert and all we accelerated platform With over

Our of will the Mizuho. Siti from first line ahead. question with Panigrahi go Please come

from Sasan, your you to Credit to lowered XX%. to growth now now Karma decline XX% growth XX% XX%

can be to that want your guarantee rolled stays will do year. in current assumption macro conservative the kind know remaining the level? later dig the a little upside Where And into sometime guidance? see this we this Just bit some surprise year. -- I is at you Karma of fiscal this how for quarters Where if out see

Siti. for Yes. your question, Thanks

But we also of sort seeing November further as trends to you conservatism, end of current couple be of intentionally October prudent. just of in the from deterioration into we a One, we very included into Michelle, that took heard So account. were sort things.

future we so delinquency are at And what assumption institutions unemployment, make look decisions, the at around when look things although going that financial and is really they historical lows, at rates they're deteriorate. which is to to

we make prudent assumptions that in lot said, wanted in Day. we will that they we we forward. that very the We made I sure that deteriorate, a and going would level, just Company our significantly at terms is of I in include our take make the we commitments about talked With the of go-forward with think guidance pride so innovation we're want that assumed we and guidance. Investor And to at the what to amplify that that

Beyond exposure around talked experiences three prime Big personal things to like launched, the giving have we're about expect was we and to we the we Guarantee, more our members. at Credit the and customers, sort Karma innovations at platform. cards and part future Credit of are sweet full to loans it's in scale, we our called have Karma, where additional Bet spot the actually which on Day, -- Marketplace, been integration now Mint -- of almost with for vision personalize And not which has that capabilities refreshed our Karma in of Investor our something

we and possibilities. leaning So those into our are innovation

rate that not the Michelle the thing believe I and counting simply right year, just that just you we on fiscal heard and are any of the growth do. that's to We impacting from for

Great. quarters, organically. have look pretty you it And for three the follow-up That's if remaining business your impressive then just XX% and to to a at side. quick your grew small hit I grow XX% guidance And on guidance. quarter,

price XX% to about You raised already XX%. shift or you already -- like and mix you talked -- pricing

remaining in side? the year? So your what business the the And seeing what of are are small you for assumptions

Yes. Sure. Absolutely.

number a And by spending, of We We we they're charge of number start going the a of whether I a have lot seeing around down. we also up retention, what worked. Mailchimp. course, consumer across which we're First volume acquisition, around is of and our board is volume. see see of what employees, and the continued payments payroll reserves. and things saying metrics hours see to And digitization. all, We flight would visibility there's across into cash see

payments use capability, is this environment. faster, If get flow and paid cash you you critical in our more

If our and account to moved employees day have capabilities, actually bank you weeks your to errors use two payroll pay their account reduce money you're in from your and able advance. same versus bank

With we're on to innovation customer that actually tick heard up. of starting from growth Mailchimp, you've us the see use

the in you momentum are strength we our we're based is so not about innovation illustrative our -- is expect quarters, to steadfast business. quarter. to And more business. just from about to first year. all heard examples we very of feel us on rest the on see And are which our the we until that but that And board continue in just small remain a flight across those digitization, we're what continuing the We it sentiment guidance about see small at seeing actually good the

Your line of come the with Bank Securities. Sills question America Please ahead. will next Brad from go of

question a reiterated Just guide. operating the on income

about to bit is some if adjustments like, just looks you're the adjustments which made, it could Michelle, a business? by, you sustain made model. flexibility it guidance, color yet your provide million, impressive were the alluded to line in of to those $XXX your that little income top lowered and in where were you operating You to able speaks as

Yes. Brad...

Michelle, Sorry, ahead. who was going ahead. please the question Michelle, to I was for. ask go But go

one Thank worries. you, feel things Yes, No it the worries. very good about. of we No Brad. that is

just are we could see R&D term; are areas take really get our making call, levers like in if planning things travel, the continuing marketing sure looking for environment spend. we going look we our we the that And could As year, and we expenses, action near discretionary off I we think on, a were going this are at innovation. did were areas had talked through on we worse. pay invest. when Those that to the to we pull identified about things But protecting other like we don't macro previous

a and hit in And down manage taken our the we head to we when revenue being to investments our we're count revenue we think look across the But have Company. continue areas Karma, as there. and innovation. it up expenses, Our the able Company holistically going Credit can at focus where really with term go across continue yes, drive we and on looking the longer that to focusing to the not so is see the short term much really return

a may, -- TurboTax you, this growth. Sasan, And saw Excellent. in ASP of one if year, Last for moderation little please. I bit we

the You talked bit a at Day. Analyst little about that

I think ARPU on prior was X% I think, X% versus, in years. it paid

you into acceleration went there. actually elaborate what TT on some with Now ARPU? a some we If service, might see more full in could we on see And experience here? Live and TurboTax acceleration getting bit should you're that

Sure. Absolutely.

it into opportunity a in of increase billion additional of where year, or really from we platform marketplace, think actually price which billion the do-it-yourself we in that the up. And TAM is our offerings. year, see in year. about is come see what may going from, across make primarily And long go perspective, growth in think opening is course, our may Live based where about our really front to look term TurboTax coming were last the of trajectory we good we feel the every on we adjustments platform, $XX where to decisions taxes. and the now up biggest is this biggest free comes And it's our where I an a which we with really, overtime, the seeing way is It's the us. strategically, those as accelerating should that and TAM in from the And offering with And leverage some assisted ARPU where our very $XX we expand terms is we're leverage from. business ARPU lineup. we of made

we're our year. to plan we're of against assisted will going lot the future, into a was coming come about part it of years. to last and ARPU versus is way think see the ARPU from really this the a probably little to I that growth slower continue that and logic And behind prior year growth the the segment. So bit was why intent executing And think it really that's

ahead. the question next Brad with Please will line from go come Bank. Zelnick Deutsche of Your

you me? Can hear guys

Yes. Perfect.

Great. a money live Sasan, developing little bigger up talk disclosure. expert own their always movement that about opportunity its transparent, guys is services, you the services question to making perhaps, and bit to apps third are the my maybe things you platform you are Can great and And functionality, for rich successful? very parties externalize so into picture. open with data

Yes. our, Absolutely. Great question. Investor Horizon in, ideas one call This that Day externalizing of at have was what which services. around we actually is we X invested

do a for firms virtual first foremost, developers and to have use capabilities. and need platform big So connect and or for fraud and our we see our a risk to and problem a services space identity out partners things use services access our experts there around to expert had for and like where look have people to

we services across talk heard is Mariana a that about a need lot there's of which platform have of that those our there services So you for externally.

we that's team for choose to little and as over to excited it of of when we and ones months we we Now terms not funded do want something But prospects exciting are to of have we you. it. it's and do externalize what a all have we problems choose choose actually be to very we time share which what X a that be share about believe mission-based and material bit to that we XX will to and choiceful intentionally about anything not be funded externalize be we is the idea Horizon solve And and it aware, you an working to that it. to over launches on an opportunity, ago, in think what see we'll solve. as intentional and But we choose been first we with the more

from will Your ahead. Raimo come the line of with go Please Barclays. next question Lenschow

ask to on wanted I Mailchimp.

So on last of you a little out working quarter, bit. go-to-market you that pointed kind were

bit journey, in This Mailchimp a -- there, sounded wanted speak You what please? you're that quarter, the like progress looks it using you like Can you broadly. and the go international making, better, to about sound you markets this to where attack lead you you're -- do are little more that. the adjust that to

Yes. Absolutely.

I'll to leadership lot where of last are of into that brand digital state communicate mentioned redesigned in air the I months and an leadership your really seeing team the that a how can both our in just innovation. all, we a campaign SMBs, through moment is Rania excited we that innovation First entirely of she there's is that of the business four been put accelerated I'm just It building and team benefit business in. result -- And just about website. as the new where assets. Mailchimp We've on three from the to sort we to on you grow ago,

to the focused now you we've internationally, to have shared the when we So just on we experience, for, customers the is larger of get why right onboarding about a implemented to as clear international one-hour customers would you're Mailchimp that and points platform the choices help the want language. along language context I very revamping Where assisted what have platform. and XX higher-value, we more offer, sort are with help we lead us, to new say, of benefits what the come of help the the which use you than we on variants. not, in have you fuel it then have understand of And and conversion first-time around localizing can that you benefits pursue, we the success Mailchimp that your to versus localized business to

largest one localized of along we're place having our with playbook that levers awareness. a of internationally so language putting And around in is course, go-to-market raise to

I excited I we're the And to as momentum what customer just expansion and on we we already have of languages mentioned is things what those starting localizing the speak. the working about and shared, launched that a possibilities we're leadership a see team So real And lot lot impact from that the we're of we revenue. a building. uptick, --

Your ahead. question Materne next Evercore. of will come the Please Kirk line with from go

of of as good to then you demand front-office right discussion give there on customers? demand in perspective front-office different? side now anything unique the look could at -- that side a to have back-office well other noticed in a of you on the they demand. as QuickBooks. Are I some position indicators you've Are wondering quarter. they part sort lot Mailchimp between insight that of when back-office similar? all and just you of got market perspective. you your was operating that a get of the the or the a see you any are somewhat into ecosystem -- sort back-office of there's Obviously, and of sort front-office Congrats the us a Is essentially Sasan, if both from now demand

I So of us, I if any with you on can that. wondering was guess, thoughts enlighten your

Yes. me Sure, generic. overly I'm descriptive it, about so to And be not try Kirk. let

customers be I think just manage They front businesses flow. we business think really to to zero to between their platform much to to cash back XXX office. able as serve, the look employees don't small our that their able be to about have a office, and grow

small money shared. paid jump And the to let you faster for customers, money which be and can about customers use capabilities. And to can employees' they're so cash instant is can coming you our access we're payments important They field, much tracking our to If have out flow comes to notion And All manage of why They everything -- the your is think organized. our get also just flow things banks from those capital. QuickBooks in can flow. using cash we your Really, if I'll way really can with money digitization. using helps enjoying me get is QuickBooks think bank the growth with payroll. that there, your cash are going out. about really their it that a by their digitization moment. in use get businesses actually them down time because the a start They those project flow, platform, all and their with they in capabilities, So helps we to QuickBooks about it all automated. is our

is out don't customers. from where think these small that effectively the value QuickBooks. Mailchimp. So being about able to real are to big their real their enterprise of able comes as sort add base. are grow customer that it their be but sort The that's value customers you existing smaller, businesses then lifeline Mailchimp manage to And and These reach also of of not

reason the distinct us based you -- -- uptick Mailchimp And to and sort I in our of use see a frame separate we're yet an And and the dollars. it's pay best to back on versus -- is just It's innovation based even of market your customers, advertising not from platform monthly actually Mailchimp money able spend that is reach that if do you we're manage on on customers. more think basis ahead advertising so your to spend is is a on And what to continuing good not demand spend to that dollars. with use customers is go office execution. in less our you the advertising choose new be ability a I to front equal advertising to able to When of to office, That way, is Mailchimp, be automated you a use I spending to seeing an is your have you out there slower dollars. back by money impacted dollars. I tools think if on and where declining subscription

use able customers. manage be to very effectively still can Mailchimp your to You

So QuickBooks, we that's is with across Mailchimp platform. why and what the demand and that's the strong see really

Please Morgan Weiss with come question Keith Your next ahead. will of line go from the Stanley.

quarter outlook QX. get the tomorrow we're going in to investors all that derisked. is Next The from question

the So of happened trends I When looked at us process. guys at guide. of in the your to -- about assume you're a told Karma, you you in those last -- of the get the go-forward couple sort that end like on conservative quarter thought dig you Credit basis Credit trends into Can weeks, and deteriorate a talking that kind wanted a bit further Credit of your to little Karma change didn't of the Mailchimp prior is there any them? All any a the way you derisking are in to any the QBO numbers? lines are talk expectations. you underlying with But you other -- about intact degradation you of other similar business of or sort for kind other of of Karma? kind any us Like business similar like are businesses or in the assuming that like

look to just that your future the of things of us just Mailchimp, then across KPIs Karma XX% and to allows which into that XX% share and guidance others And side when we that of When want answer your take like look acknowledge sort me able of top right business, sort small is you have investing then because sort Credit and Investor to not for seriously. what And thoughtful we've we're learned but we ensure about which the on let of tax, pushing the you so I we across we the Day. we and Company; see question. and level you things, XX% have how I'll thank to were very well our Keith, is what also we've to us at over the Yes. question. that's adjusted, tried which proven and guide at at Company, in all intentional of the Company, very be our only -- includes be start

the it, the the learned not we we it also we are we at in lows. at are if from of some rates. we look is Credit we did projecting our thing that projecting historical a are one I but year view our what it, and taking have adjusting not into be look factors KPIs we were just they're that And by And we at from looking two today, mean with what account is where that but account: there things learned take unemployment, into now at one is what of on where they sitting other delinquency are Karma and could of One as that, shoes that the process, the could is and partners they ultimately happen this adjusted platform.

So We have Credit guidance. in the tax, our you we both as is question, second rates, Karma actually out point made around guidance gets put account that I, you of which a a -- and have therefore, into half deterioration unemployment of we We to the and because absolutely Michelle is from heard conservatism shift, risk. delinquency in and at that derisked. built back we the very that uptick the XX% important the is resilient. have which a Company, is the year feel that is part your taken of believe To and go economically really it

remainder you the on account very year we that access can QX, and feel of based and took KPIs means we can it see certain the rich of answer focus like have to around Because the the Small me we into the in good how potentially let assumptions actually the out that and we our see and guidance Business guidance, do feel data make because the my will rest what Business, delivered still play guidance. about So we what set when see we on math we we what Small things year. Business. in within initial the Small our just derisked of we And is for

good in year. those the set hopefully, areas of very for feel guidance very Karma. about two made good rest around we Credit the businesses. about those We my feel we explanation So the sense the And in guidance way

little is impact we that's you I'm clarification assuming kind Mailchimp, it a -- there like how in basically could a question. of Yes, was number one see it. the Got like currency that flat, maybe sequentially. just like it currency is On looks revenues And super helpful. sequentially? constant there bit then Can there. down a

and business Michele, revenue that Yes. in for a you with cash our -- look remember, is it I currency. in And It's the see, at impact accelerating the expect it's the have very business. that you I running actually see, it is starting would our would flow chime But and much But chime quarters. expected of is maybe, innovation is we're in accelerate innovation I we're want we that to starting and and now mean actually Michelle, a think line when in you we're because growth we're to to you the for pleased when what do of quite to actually currency this what look growth. let that say now expansion in on -- with at we our here Because constant in place and customer in uptick moment. I'll run the profitability, actually would was version? the upcoming lot we

outside impact sold dollars, Mailchimp U.S. currency though so that Yes. U.S. The only isn't sales of there the the actually thing I XX% at and international, for there are even would a their clarify is

Kash will come Rangan line of next Your ahead. Please Sachs. go question Goldman the from with

It's Congrats a recessions, a to widely anticipated we this but curious your on is it's Michelle, most perspective, recession the results. Sasan one. been that recession, get and we've like don't maybe all anticipating.

come trajections. And bit? maybe just in about down in also, So expansion a what to are around get on go the current your rates the assumptions incorporated payments. you've soon what I'm attrition could your foreseeable of curious thoughts Sasan, little for with an talk future? dialed if you it uptick that have is or forecasting you you're the in your mean, I

demoed of your payments impressive. are term? expecting? your clearly got you term in expecting it's What potential. Clearly, in a to the medium goals? analyst we very event, lot at long the should be You What are very, What Congrats. business

Thanks for Kash. the question, Yes.

Just Credit in question on in just what terms moment that. a shared of hopefully, assumptions, Karma, ago I your around I think resonated

the and sort still assuming because remainder just I half coming is that back are we're year, or of say. further conservatism We market of the Despite of should of rates the one innovation they the conservative deterioration assumptions the delinquency a to terms making which we're their means in of investment last year getting levels. they that unemployment platforms be worse, institutions, pull of up, of we're off financial that in going will lot around -- although

year made just that folks for And Credit we've assumptions continuing we're to that the digitization of the the are a for fiscal Business, those strength it's are So the remainder our -- Karma. platform. from is see a that for already on Small to shift of lot

we So that on are a lot have customers of platform. our

million $XXX have And being over $XXX huge use there's well that we our means existing of platform, we that charge over and to the part on If our -- I which figure our opportunity is million $X trillion you our a part remember, base. we of payments managed as used of -- within have of illustrative on volume, invoices just year. is answer the because just your of the growth We're the as question, environment an of around get are we half those example, that will our Kash. not payments To a the that uptick from that are better lot seeing to second continuing platform. digitization any shift macro in making that assumptions assuming actually we're penetrate

We that in so context we assumptions how look of assumptions. forward. attrition make really around We'll And we payments the about going feel environment customer payroll are at and make assumptions. acquisition

it IRS of -- our resilient. in and economically And is the tax assumptions on resilient. where our pretty really seeing we and that's a about are those those SMB assumptions not within we're penetration for assuming -- level tax, both Small the that And And that segment. We is the segment, much are we make of come think assumptions And that's Business are Although the our total as we've Credit remainder from. economically year. based again, the conservatism assisted Karma. again, of made number returns

we guide as we about reiterated. the So think that's just going how forward

forward. future it's of one in we just even most it's there's our payments to those that BXB what a so And go around with Mailchimp, terms we attached five pay, forward all because around what's come are and years and going all not or do our lot with that with payments, believe spent payments we digitize payments, and penetration very that QuickBooks is possible four our team. room couple AI capabilities, fast the about. fraud of it's bill going -- just listen, with And to and a yet out the we're that we're excited capabilities, of the to areas what upmarket risk doing for If and mid-market. areas, I to In innovating had much Advanced of forecast can of pick and building of we're

been think say is our we of our has your hopefully, but to and us. ahead liking, yet best payments So

Please from next go ahead. Scott Schneeberger Oppenheimer. will line the Your with come question of

less? that's revenue. please curious, I'm me I'm what has I Credit which half done. But What Sasan, on consumer? What cards? the I cards, in is strengthening, at cards, seeing believe of on credit segment lot that perhaps weakening credit auto Just versus are the you credit not Karma personal from loans, looking and insurance. are of kind personal the honing maybe seeing just changed, loans a consumers specifically And was based in correct but are understand segment, you up, gone or of you honing auto specific it loans, -- that the strength loans, in with -- quarter the home in if is what on how there? strengthening that about

Yes. Sure, Scott.

capabilities about Karma shifted a innovation we out really experiences And why it Investor and our prime we excited -- for the or over, we're very context been look serve it's million you we all, members Mint And of is those sub-prime of start is that's focus And the of has that said, Karma part majority as also near-prime one that we're our customers. are combining and First platform. you Day of overall Credit with the customers I'll customers. we're cohorts. that when platform. the at lot things have that for on said, Credit that's building shared a and XXX Credit Mint at personalized Karma, With that large the of and

have that, with of as unemployment year. of In that and my future, up we're is hear cards, us lens really well built going as and and into revenue but the Michelle in growth up and business both where So of innovation in capabilities, the sub-prime the that have you deteriorate And we'll conservatism front in continuing see that you come from the that majority important of our we're prime ultimately, on of yes, the context hear from all because it we near-prime. the will the well, delinquency rest and answer, remainder said, I, up. assuming essence, to going really rates year heard also the comes marketplace. as credit just positions is which And based actually from will

-- result get growth declining credit time. growth X%, what QX that, there's was rate have rate. other that ultimately the And But over assumed in lot in we by will verticals the and so of will saw we a in offset cards. worse which the But of headwinds

Okay. more like the And year-over-year. season derisked are the sequential one be EPS regard we like tax infer But advertising following that side, to sounds differently -- that's it change. or that. uncommon on is of then pulling, just an on the past business side. with few doing a versus that most And them. But guidance seems levers sounded and for more may anything it Appreciate tax second down overall, but the Michelle quarter it's the kind small more I marketing it's was timing with side, have advertising now the the in curious overall? of tax to you normal the on

asked Yes. quarter guide Sure. about I'm second actually glad to of you X%. our X%

quarter. Small of X% that tax. momentum of in our always in assumptions continues guide drive into our two are second One we First all, make Business is for elements to revenue growth There QX. X%

that open, tax is business availability, decline we tax in forms IRS As we've assume elements we happen around some and assumptions actually our tricky in will second of we our the in the business. quarter quarter. may drive cases, make when And quarter. you know, assumptions those tax assumed what third And have and second will between

for then QX. month QX number Karma generally weakest the for our quarter. has So because And just the quarter Company December November, then overall holidays. Credit the guidance of at and of seasonally that drives of the January weakest seasonally the been level and It's

assumptions So when it combine Karma, answers with Credit tax that's question. And get you our your you hopefully, you is. combine that QX where where and our with assumptions

does. It

Your Please line with Wolfe next Alex Research. go of Zukin from question the will come ahead.

This Zukin. is for Alex on Allan Verkhovski

upselling growth talk macro. the quarter, you to today. you ARPC saw SMB in much cross-selling, better for the benefit to increases guide excluding into your how the effect? understand what how I hitting warming more in It'd get the be people around increase what your quarter and think at seeing about in growth I the your was are into as helpful macro, challenging if from from ability further in But SMB the dig went observed the all? segment and tailwind the growth, customer such want you're accounting up year impacted were despite Can you pricing the of QBO quarter to pricing that levers, a the for

what QuickBooks saw growth Absolutely. mix, services XX%, year And Payments, The Sure. and about of our excludes QX we're in Yes. of guide mix came the also from Advanced. course, and majority Mailchimp you that, And talk from for growth Time separately. we growth of and things Payroll, includes sort from of saw actually customer and Mailchimp, Tracking. good we really online our seeing like

look customer coming and is the we seeing want, important the which an plays but would price as mix what and So our year. answer but short balance element are it play question I of the your we saw -- an what element type the think only we that smaller to QX, we of not a at we for is growth remainder will from growth in expect element,

if follow-up, Got just it. may. a as I And quick

year, around want think full point On made a to conversion about more year? Could for could up the Keith's give full just rates? earlier relatively maybe the flat. follow-up potential us the growth that follow revenues to anything Mailchimp Mailchimp about maybe you more of I sequentially for Or through color on front, Mailchimp something you just share being the acceleration how comment we revenue

closed small in the Yes. with profitability. you for when in excitement QuickBooks, a we have we more fact the for our one a now growth of that of to Yes. deal run where we that growth business it of to times, that one and Mailchimp asset accelerates, really platform can and didn't year about, -- and we the business, clear company very things was was lot was source it Absolutely. this I run that mean almost addition of cash particularly for be one if things a really around flow you were even saw the COVID truth go flow. that the for back ago, run combined profitability the again, And because, and a front-office that cash of for the reiterated was was source can

growth growth. shift a year And context very shared priorities, we in from time last run cash And playbook that to for business first those actually starting demanding flow to they takes velocity see so put ourselves typically profitability we're And place worked to couple change of year. would for the the hard a of in see. we've to be the run we're a in the the like priorities and terms that take years. of to to trajectory business quite of accelerate within we a in And always being

profitability, last And what's ramping done. when start So again, not business year beginning position possible can with up after website that really, We've it's revamping we taking the the ourselves to to It's focus say to customers product. I internationally. go high-value not there to on of up reached revamp, to a mid-market the do we was, were what just new really what's destination. the flow happened cash is coming run campaign, revamping a for

improve. in these All what from comment Mailchimp around really are they are the our accelerate revenue, that to we We're indicators see the made starting of it starting that's sequentially these, up. these things, I We're seeing seeing now conversion in earlier starting and perspective, growth. And a seeing quarter, from become around, pay actually to made growth earlier Michelle is use. we're up. We're quarters to KPIs that these growth, revenue means expansion in to things seeing growth tick upgrading future growing retention, and because and why SKU expect flat we're expansion things free coming customer see of the which to customers the although was indicators customer they're we're the where

to question. helps that answer hopefully, So your

from go Enders Steve ahead. Please Your will come next with question Citi. line of the

Karma guess the clarify on what little bit a historically I front the what I on that want for and about you're what Credit here. expecting and guide seeing on to side talked just you you're

thinking expecting versus about guess, cross-sell combine where about half the you're talk and kind given of you here. cross-sell kind you with I you back is the how of macro before, kind that the now year acceleration what are think come could the of an opportunity in as here? the TurboTax that of assuming I potentially

Yes.

We thank have taken -- the question. for you

about talked Credit of forefront that that innovations at very in only earlier The And we've we the within approach have fact, We a launched is is at I about the we've -- them for scale Marketplace more marketplace it's all place for here. One in of additional a products that Investor Day. few shared an and tablet, excited is Karma. are cohort innovations are of sort of thing we're a right that's that brings where a them, one where added firewall taken that customers. one visibility full the changed that specific our almost products brings to and customers see the right more

-- of customer deliver and They're will it making Investor year. not members are monetization. to firewall, that few with and about the versa. not robust experience consistent with We're shared as integration in on going -- financial all about, we're excited macro of word a of Credit plus pickup. TurboTax innovations the the benefits, innovations then integrated unemployment be rates continues more about of that to to talked we remainder All more what at think conservatism talked in Back year TurboTax, innovations results rest what far more we're Karma institutions. terms a We're delinquency Day, assuming terms therefore, see and for have. the And around into track, a when these We're the those to were on the was in a this to you're to more we we they're just rollout going being counting So impact going the on current assumptions about on going assuming year. vice the Guarantee up, further and that our trends. up. reliant equally track we Credit very Karma with

therefore, our the rollout. on sort And distinct minus innovation excited that's for on XX% be And separate minus guide of to of focused continue and XX%. informed track that and that's the to from so are we and

know we there And more of rightsize kind that Like putting in this And that rightsize kind changes those of guess of at helpful. business. to this of place changes the quarter that business? build of and where kind of you're level of should Okay. think just Got you. the of kind about that structure how point? That's last I so making improve some on in to go Mailchimp. out to some kind clarify were I of rates kind you conversion again really or kind of are kind

Sure.

making are like -- joined about strengthen which I'm year, team. want we that mentioned in the very last mean I've I is is by all year in, to sure Mailchimp impact which of indicators impact place because feel One excited with year this really about think the that team the that put we foundational to impact. implement. to that place. a is a we put what that have on velocity, of team, the a continuing And we I very team I but key right the the second having the rightsize lot in with the in QuickBooks good we across see Radia's with actually particularly things are We're in, one. me sort in And it's levels. because earlier And Mailchimp and direction, accelerating almost I we've of two and you XX And platform. I very is Company that's addition team combined changes your about continue a investing male of Let to where innovative excited very really the the year we're have strengthening launched with there on earlier been the not the year the leadership in see hope growth say the performance answer are I days. Mailchimp mentioned that and that it's everything things have the not starting teams place quite And direct result -- what in of focused big a highest-velocity to to couple the additional point impact one that at I almost family we would a had I means about seen being of question. innovation, in -- make. to leaders that uptick a lastly,

ahead businesses, success We business into strong of a this work small lot trajectory of have last the seen, of days. XXX of sort the to like fueling I of on turning growth I've we work us. and in are is particularly the given a a about a and still what lot feel XX But that

line from Our final come Please go of BMO Markets. question ahead. Daniel will Jester the Capital with

year the stronger right in. overlaying progresses, anything ones. secondarily, there about consistency how Or international? and you're is Karma. talked geography track squeezing me some than economic love to the regards Sasan, as And lot you you Two Credit QuickBooks for you with given about the maybe one business. Thanks talk Capital hear and U.S. macro quick about seeing in now? for doing that differently small of A the of uncertainty. then on I'd Are indicators the the be to macro other you might

absolutely. Yes,

me Let QuickBooks Capital. start question and macro your with

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see -- Some really diversified. to down in overall XX%, results because our no very XX% We're our sector are we're their impact but revenues you results. that not of can one very, don't really

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Thank you very much.

was You're question. And very last think welcome. that the I

close you results. all quarter And to be safe, and seeing everybody. Bye-bye. questions. then, second wonderful look you, And bring you we for so for thank be to of earnings Until maybe all I Thank safe. by saying forward your of our us can

Goodbye.

Ladies and gentlemen, this for concludes all today's conference. Thank you joining.

may You now disconnect