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Intuit (INTU -7%) is lower despite reporting upside for its Q4 (Jul) report. INTU focuses on small businesses and consumers (QuickBooks, TurboTax, Credit Karma, Mailchimp). Note: INTU recently shut down its Mint offering and said users should migrate to Credit Karma. INTU beat on EPS, its tenth consecutive double-digit EPS beat although its Q4 upside was notably smaller than recent quarters. The Board approved a new $3 bln share repurchase authorization.

• Revenue grew a healthy 17.4% yr/yr to $3.18 bln, which was better than analyst expectations. Q4 tends to be seasonally slower quarter for Intuit. It follows Q3, which includes tax season and is huge for Intuit. The Q1 (Oct) guidance was more subdued with downside EPS and revs. However, its full year guidance showed upside for EPS and revs. Non-GAAP operating margin dipped slightly to 22.9% in Q4 vs 23.1% a year ago.
• The star of the show was again its Small Business and Self-Employed Group (SBSE), which is mostly QuickBooks and is by far Intuit's largest segment. SBSE revenue grew 20% yr/yr to $2.56 bln. Intuit said this momentum demonstrates the power of a small and mid-market business platform. Online Ecosystem revs grew 18%, driven by customers with more complex needs. As a housekeeping note, Intuit is changing the name of this segment to Global Business Solutions Group (GBSG) in Q1.
• Its three key goals for SBSE are: grow the core, connect the ecosystem, and expand globally. In terms of the core, QuickBooks Online accounting revenue grew 17% in Q4, driven by customer growth, higher prices and mix shift. INTU is focusing more on customers with more complex needs. In terms of the ecosystem, online services revenue grew 19% in Q4 driven by payments, payroll, capital, and Mailchimp. Intuit says it continues to make progress expanding globally by executing its refreshed international strategy. Total international Online Ecosystem revenue grew 11% CC in Q4.
• Its Credit Karma segment was a laggard in FY23, but recovered nicely in FY24 with progressively improving yr/yr revenue growth each quarter: -5% in Q1, flat in Q2, +8% in Q3 and now +14% growth in Q4 to $485 mln. For all of FY24, segment revs grew 5% to $1.71 bln, following a -9% decline in FY23. Auto insurance accounted for 6 points of growth in Q4, personal loans for 5 points, and credit cards for 2 points. Intuit benefitted from a redesigned Credit Karma app and it launched Intuit Assist.
• Consumer Group segment (TurboTax, both DIY and assisted) revenue declined 12% yr/yr to $113 mln. Not surprisingly, this segment sees a boom in sales in Q3 around tax season, so its Q4 period is not as meaningful.

Overall, this was a decent quarter for Intuit. However, its upside results for Q4 were not as impressive as recent quarters. Also, its downside Q1 guidance was a letdown. The silver lining is that the impressive FY25 guidance implies strong upside relative to analyst expectations for Q2-Q4. Another factor appears to be that sentiment was running high heading into this report given the +11% move since early August. As such, investors are using the smaller upside and guidance as reasons to book some profits.