Intuit Inc. (NASDAQ:INTU) Q1 2018 Earnings Conference Call Transcript

Nov 20, 2017 • 04:30 pm ET

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Intuit Inc. (NASDAQ:INTU) Q1 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good afternoon. My name is James, and I will be your conference facilitator. At this time, I would like to welcome everyone to Intuit's First Quarter Fiscal Year 2018 Conference Call. (Operator Instructions) With that, I'll now turn the call over to Jerry Natoli, Intuit's VP of Finance and Treasurer. Mr. Natoli?

Executive
Jerry Natoli

Thanks, James, and thanks to you all for joining us. James, we couldn't quite hear you. So hopefully, the line is open. If it's not, please work the communications line, and let us know.

Good afternoon, and welcome to Intuit's First Quarter Fiscal 2018 Conference Call. I'm here with Brad Smith, our Chairman and CEO; Neil Williams, our CFO; and Michelle Clatterbuck, our incoming CFO.

(Forward-Looking Cautionary Statements). Some of the numbers in these remarks are presented on a non-GAAP basis. We have 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 Brad.

Executive
Brad Smith

All right. Thanks, Jerry. And thanks all of you for joining us. We're off to a strong start in fiscal year 2018. In the first quarter, we grew revenue 14% and exceeded our overall financial targets. Small Business & Self-Employed Group revenue grew 17%, with QuickBooks Online subscribers growing 56% and the online ecosystem revenue growing 35%. Both the Consumer Group and the Strategic Partner Group revenues were also in-line with our expectations.

With that backdrop, let me share some observations on our business overall, starting with the Small Business and Self-Employed Group. QuickBooks Online subscriber growth continues at a rapid pace, with online ecosystem revenue accelerating.

We exited the quarter with over 2.5 million QuickBooks Online subscribers, surpassing the 2 million subscriber milestone during the quarter in the United States, while our non-U.S. base grew 70% year-over-year, to approximately 550,000 subscribers.

Within QuickBooks Online, Self-Employed subscribers grew to roughly 425,000, up from 390,000 last quarter, and 110,000 just one year ago. The strong growth in QBO customers and online ecosystem revenue reflects our focus on improving the customer experience and delivering what matters most in their lives when choosing our products, that is more money, no work, and complete confidence. Our teams are laser focused on delivering these customer benefits, and they produced a steady flow of new features and capabilities, many of which were showcased at our QuickBooks Connect conference last week.

Our QBO innovations are resonating with customers, with our most recent net promoter scores once again improving this time by more than 6 points, on top of the 22-point improvement we drove last year. These improvements are reflected in each geography around the globe, positioning us well versus local alternatives, and giving us confidence in continuing our expected QBO subscriber growth north