Intuit (INTU 127.34, +6.64 +5.50%), after reporting a better than expected Q2 and giving favorable guidance for the coming period, trades to fresh all-time highs. INTU, the owner of brands like QuickBooks and TurboTax, stated that the tax season is off to a slow start for all preparation methods but you wouldn’t know it by the company’s results from Q2.
Specifically, for the Q2 period INTU reported earnings per share of $0.26 on revenues which rose about 10.1% compared to a year ago to $1.02 billion. Results were aided by a 49% increase in QuickBooks Online subscribers to a total of 1.87 million. Additionally, TurboTax e-filed returns were down 10% compared to last year as sales of TurboTax units were down about 5% through February 18 versus the prior year, illustrating the slow start to the tax season.
Additionally, the company’s online payroll and payments business remained healthy with online payroll subscribers growing 19% in Q2. Online active payment customers were up 13% and online payment charge volume grew 17%. INTU’s desktop ecosystem was also strong in Q2, growing revenues about 6% despite a unit decline of 5% year-over-year.
Looking ahead, INTU sees Q3 EPS and revenues ahead of market expectations at $3.85-3.90 and $2.50-2.55 billion, respectively.
Also, INTU gave guidance for FY17 unchanged from prior levels for EPS between $4.30-4.40 and revenues in the range of $5.00-5.10 billion. The company also gave expectations to exit the FY with 2.2 million subscribers for QuickBooks Online.
On the conference call, management touched on reasons the tax season has been off to such a slow start. Among their explanations was the release of the PATH Act, which is new legislation brought about to help prevent tax fraud.
Despite the aforementioned slow start to the tax season, investors seem to be rewarding shares in today’s session given the favorable outlook and decent Q2 report.