Q4 2024 Intuit Inc Earnings Call

August 22, 2024

Fourth quarter and fiscal year 2024 conference call.

Speaker Change: 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 this time simply press Star then the number one on your telephone keypad. If you would like to withdraw your question. Please press star two.

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Speaker Change: With that I will now turn the call over to MS. Kim Watkins Intuit's, Vice President of Investor Relations. Please go ahead Miss Watkins.

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Kim Watkins: Thanks, Beth good afternoon, and welcome to Intuit's fourth quarter fiscal 2024 conference call.

Speaker Change: Here with Intuit CEO, Tom good R&D, and our CFO Sandy Agila.

Speaker Change: Before we start I'd like to remind everyone that our remarks will include forward looking statements.

Speaker Change: 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 2023, and our other SEC filings.

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Speaker Change: All of those documents are available on the Investor Relations page of Intuit's website at Intuit Dot com.

Speaker Change: We assume no obligation to update any forward looking statements.

Speaker Change: Some of the numbers in these remarks are presented on a non-GAAP basis.

Speaker Change: Reconciled the comparable GAAP and non-GAAP numbers in today's press release.

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Speaker Change: 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.

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Speaker Change: And with that I'll turn the call over to <unk>.

Speaker Change: Thank you Tim and thanks to all of you for joining US today, we delivered very strong results for the fourth quarter and full year and made meaningful progress with our AI driven expert platform strategy and big bets that position the company for durable growth in the future. Our full year revenue grew 13% and we delivered strong operating margin expansion.

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Speaker Change: Demonstrating the strength and momentum of our investments and innovation.

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Speaker Change: As we exited the year, we're confident in delivering another year of double digit revenue growth and margin expansion in fiscal year 2025.

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Speaker Change: Intuitive is a global AI driven expert platform that is powering prosperity for consumers small and mid market businesses.

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Speaker Change: Our strategy in five big bets position Intuit's mission critical platform that delivers end to end solutions driving sustained growth. We made our early bet on AI.

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Speaker Change: We have a significant advantage of the scale of our data investments in AI capabilities, such as knowledge engineering machine learning and Gen II and our large network of AI powered virtual experts.

Speaker Change: This is enabling us to disrupt the categories in which we operate.

Speaker Change: We are transforming how we serve our customers by delivering done for you experiences where we do the hard work for them connecting them with AI powered human expertise to feel their success with.

Speaker Change: With the introduction of Gen. AI, we're not delivering a re imagine customer experiences and bolstering businesses growth potential while driving efficiencies and how work gets done with an intuitive.

Speaker Change: This has enabled us to build a large AI driven expert platform to fuel the success of consumers small and mid market businesses.

Speaker Change: The progress we've made has bolstered our confidence leading us to accelerate investments in five key areas within our big bets to deliver greater impact in the future.

Speaker Change: Spend a moment unpacking the progress we've made and our investment plans for the future.

Speaker Change: First within Big bet, one we're delivering done for your experiences with Intuit assist.

Speaker Change: In fiscal year 2024, we made strong progress, making intuit assist our gen AI powered financial assistance available to millions of consumers and approximately 1 million small and mid market businesses.

Speaker Change: We're accelerating our investments to rollout intuit assist at scale in the coming year.

Speaker Change: Second within big that too we are accelerating platform and go to market investments for Turbotax live and Quickbooks live.

Speaker Change: Betting AI powered experts across our business offerings.

Speaker Change: In fiscal year 2020 for Turbotax live revenue grew 17% and full service customers doubled while these those customers need a turbotax triple.

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Speaker Change: Quickbooks live customers more than tripled.

Speaker Change: We expect our accelerated investment in these areas to deepen our penetration in a very manual high priced and disaggregated assisted categories.

Speaker Change: By digitizing how services are delivered and integral part of our done for you platform experiences we will become the AI powered financial assistant for consumers small and mid market businesses.

Speaker Change: Next within Big bet for our money solutions, we're making additional investments to accelerate digitizing. The experience end to end for consumers small and mid market businesses from estimate to invoicing to getting paid and paying bills.

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Speaker Change: In fiscal year 2020 for the total online payment volume, we facilitated on our platform grew 20%.

Speaker Change: We also help small businesses access to <unk> 4 billion in financings through cookbooks capital up 28% and we made significant progress digitizing BTB payments with our bill pay offering for which monthly payment volume process quite tripled over the last six months in fiscal year 2025, we expect these accelerate.

Speaker Change: Investments to deliver best in class seamless payments capital banking, Bill pay and invoicing solutions.

Speaker Change: Within Big bet, five we're doubling down on mid market with additional investments in the platform and go to market motion and.

Speaker Change: In fiscal year 2024, <unk> advanced customers grew 28% in fiscal year 2025, we're accelerating investments to better serve customers, who have more complex needs such as more sophisticated accounting and reporting requirements business intelligence money solutions human capital management professional services.

Speaker Change: On behalf of our client we would like to thank you for joining this concludes the program.

Speaker Change: Customer acquisition solutions with mail chimp, all assisted by AI powered human experts.

Speaker Change: And finally accelerating international growth with mail chimp and Quickbooks, we've translated the milk offering into five different languages for markets, where we see a large tam looking.

Speaker Change: Looking ahead, we're bringing quickbooks and melt them together to create a single growth platform differentiated in the markets, where we have product market fit including in Canada, The UK and Australia and other geographies were leading with <unk> strong international footprint to help small businesses get customers as we continue to localize the offering.

Speaker Change: Wrapping up with the progress and momentum we are delivering and the accelerated investment areas. I assured we are in a great position to win as an end to end platform with experiences that fuel the success of customers.

Speaker Change: Intuit is the AI driven expert platform that is powering prosperity for consumers small and mid market businesses.

Speaker Change: With that now let me turn it over to Sandeep. Thanks.

Sandeep: Thank you Tom we delivered very strong results in fiscal 2024 across the company, including total revenue growth of 13% GAAP and non-GAAP operating margin expansion of 40, and 100 basis points, respectively, and GAAP and non-GAAP EPS growth of 24% and 18% respectively.

Speaker Change: Our fourth quarter results include.

Speaker Change: Revenue of $3 2 billion up 17% GAAP operating loss of $151 billion versus GAAP operating income of $17 million last year, reflecting a restructuring charge of $223 million recognized in the quarter related to the organizational changes we announced in July.

Speaker Change: non-GAAP operating income of $730 million versus $627 million last year up 16% GAAP diluted loss per share of seven <unk>.

Speaker Change: Diluted earnings per share of <unk> 32 cents, a year ago also reflecting the restructuring charge and non-GAAP diluted earnings per share of $1 99.

It does get customers as we continue to localize the offering.

Wrapping up with our progress and momentum we are delivering and the accelerated investment areas. I've shared we are in a great position to win as an end to end platform with experiences that fuel the success of customers.

Speaker Change: Versus $1 65 since last year.

Speaker Change: 21%.

Speaker Change: Turning to the business segments.

Speaker Change: Business and self employed group revenue grew 20% during the quarter and 19% for the full year. This momentum demonstrates the power of our small and mid market business platform and the mission critical nature of our offerings as customers look to grow their business and improved cash flow in any economic environment.

Intuit is the AI driven expert platform that is powering prosperity for consumers small and mid market businesses with that now let me turn it over to Sandeep. Thanks.

Speaker Change: Thanks Hassan we delivered very strong results in fiscal 2024 across the company, including total revenue growth of 13% GAAP and non-GAAP operating margin expansion of 40, and 100 basis points, respectively, and GAAP and non-GAAP EPS growth of 24% and 18% respectively.

Speaker Change: Online ecosystem revenue grew 18% during the quarter and 20% for the full year driven by our progress serving customers with more complex needs and adoption of our ecosystem of services.

Speaker Change: The result online ecosystem RPC grew 11% in fiscal 2024.

Our fourth quarter results included.

Speaker Change: Revenue of $3 2 billion up 17% GAAP operating loss of 151 billion.

Speaker Change: With the goal of being the source of truth for small businesses, our strategic focus within the small business and self employed group with three fold grow the core connect the ecosystem and expand globally.

Speaker Change: GAAP operating income of $17 million last year, reflecting a restructuring charge of $223 million recognized in the quarter related to the organizational changes we announced in July.

Speaker Change: Firstly, we continue to focus on growing the core Quickbooks online accounting revenue grew 17% in Q4 and 19% in fiscal 2024.

Speaker Change: non-GAAP operating income of $730 million versus $627 million last year up 16% GAAP diluted loss per share of seven <unk> versus diluted earnings per share of 32 cents a year ago also reflecting the restructuring charge and non-GAAP diluted earnings per share of one.

Speaker Change: For the quarter and year was driven by customer growth higher effective prices and mix shift we delivered growth in our declared strategic areas. This year with our emphasis on serving customers with more complex needs. This focus drove U S. TV customers, excluding self employed up 11% advance.

Speaker Change: 99 <unk>.

Speaker Change: It is $1 65 since last year.

Speaker Change: 21%.

Speaker Change: Turning to the business segment and the <unk>.

Speaker Change: <unk> customers up 28%, while <unk> self employed customers declined 14%, resulting in total online paying customers up 6%.

Speaker Change: <unk> business and self employed group revenue grew 20% during the quarter and 19% for the full year. This momentum demonstrates the power of our small and mid market business platform and the mission critical nature of our offerings as customers look to grow their business and improved cash flow in any economic environment.

Speaker Change: Second we continue to focus on connecting the ecosystem online services revenue grew 19% in Q4, driven by payments payroll capital and merchant.

Speaker Change: For the full fiscal year 2024 online services revenue grew 21% driven by payroll payments and capital.

Speaker Change: <unk> ecosystem revenue grew 18% during the quarter and 20% for the full year driven by our progress serving customers with more complex needs and adoption of our ecosystem of services as a result online ecosystem RPC grew 11% in fiscal 2024.

Speaker Change: Within payment revenue growth in the quarter reflects higher effective prices ongoing customer growth as more customers adopt ACH payments offerings to manage their cash flow and an increase in total payment volume per customer.

Speaker Change: With the goal of being the source of crude for small businesses, our strategic focus within the small business and self employed group with three fold grow the core connect the ecosystem and expand globally.

Speaker Change: Total online payment volume growth in Q4 was 19% relatively consistent with the range <unk> seen over the last several quarters.

Speaker Change: But in the payroll revenue growth in the quarter reflects an increase in customers adopting our cloud solutions.

Speaker Change: Firstly, we continue to focus on growing the core Quickbooks online accounting revenue grew 17% in Q4 and 19% in fiscal 2020 for growth for the quarter and year was driven by customer growth higher effective prices and mix shift.

Speaker Change: <unk> prices and a mix shift towards higher end offerings.

Speaker Change: <unk> revenue growth was driven by higher effective prices and paid customer growth.

Speaker Change: Growth continues to be impacted by the lapping of a larger benefit from price and lineup changes that we made last year in Q2 and Q3.

Speaker Change: We delivered growth in our declared strategic areas. This year with our emphasis on serving customers with more complex needs. This focus drove U S. TV customers, excluding self employed up 11% <unk> advanced customers up 28%, while <unk> self employed customers declined 14%.

Speaker Change: Third we continued to make progress expanding globally by executing our refreshed international strategy, which includes leading with both quickbooks online in merchant and our established market and leading with merchant and all other markets as we continue to execute on our localized product and lighten up on a constant currency basis total international online.

Speaker Change: Resulting in total online paying customers up 6%.

Speaker Change: Second we continue to focus on connecting the ecosystem online services revenue grew 19% in Q4, driven by payments payroll capital and merchant.

Speaker Change: Ecosystem revenue grew 11% in Q4 and 13% in fiscal 2024.

Speaker Change: Turning to desktop.

Speaker Change: For the full fiscal year 2020 for O&M services revenue grew 21% driven by payroll payments merchant and capital.

Speaker Change: Essentially concluded the three year transition to a subscription model, which contributed to 25% desktop ecosystem revenue growth in Q4, and 16% revenue growth in fiscal 2024.

Speaker Change: Quickbooks desktop enterprise revenue grew in the low thirties in Q4 and in the high teens for fiscal 2024.

Speaker Change: Q4 desktop ecosystem revenue growth also reflects the offering changes we made in early fiscal 2024 to complete the transition to a recurring subscription model.

Speaker Change: <unk> seen over the last several quarters.

Speaker Change: These changes resulted in approximately $60 million of desktop revenue recognized in Q4 and approximately $50 million recognized in the first three quarters of fiscal 2024, all of which would have otherwise been recognized in Q1 of fiscal 2025.

Brittany payroll revenue growth in the quarter reflects an increase in customers adopting our cloud solutions.

Speaker Change: <unk> prices and a mix shift towards higher end offerings.

Merchant revenue growth was driven by higher effective prices and paid customer growth.

Speaker Change: Revenue growth continues to be impacted by the lapping of a larger benefit from price and lineup changes that we made last year in Q2 and Q3.

Speaker Change: We also expect approximately $15 million of desktop revenue that would've otherwise have been recognized in Q1 and fiscal 2020 five to shift to later quarters in fiscal 'twenty to 'twenty five in total these changes lower Q1 fiscal 2025 revenue by approximately $160 million and are largely related to.

Speaker Change: Third we continue to make progress expanding globally by executing our refreshed international strategy, which includes leading with both quickbooks online in merchant and our established market and leading with merchant and all other markets as we continue to execute on our localized product and lineup on a constant currency basis total international online.

Speaker Change: On a more frequent product uptake beginning in Q4 fiscal 2024 aligned to customer delivery experience to our subscription model. Accordingly, we expect Q1 desktop ecosystem revenue to decline approximately 20%.

Speaker Change: Ecosystem revenue grew 11% in Q4 and 13% in fiscal 2024.

Speaker Change: For Q1, but for desktop ecosystem revenue to return to growth in Q2 overall, we expect desktop ecosystem revenue to grow in the low single digits in fiscal 2025.

Speaker Change: Turning to desktop.

Speaker Change: Successfully concluded the three year transition to a subscription model, which contributed to 25% desktop ecosystem revenue growth in Q4, and 16% revenue growth in fiscal 2024.

Speaker Change: Turning to credit Karma.

Speaker Change: Credit Karma revenue growth improved each quarter during fiscal 2024 from a 5% decline in Q1, 2% to 14% growth in Q4 on a product basis in Q4.

Speaker Change: Quickbooks desktop enterprise revenue grew in the low thirties in Q4 and in the high teens for fiscal 2024.

A key for desktop ecosystem revenue growth also reflects the offering changes we made in early fiscal 2024 to complete the transition to a recurring subscription model.

Speaker Change: Insurance accounting for six console growth personal loans accounted for five credit.

Speaker Change: <unk> accounted for two points and credit Karma money accounted for one point full year revenue was $1 7 billion up 5%.

These changes resulted in approximately $60 million of desktop revenue recognized in Q4 and approximately $50 million recognized in the first three quarters of fiscal 2024, all of which would have otherwise been recognized in Q1 of fiscal 2025.

Speaker Change: We are pleased with the momentum driven by our relentless focus on what matters most to our members and partners. We made strong progress this year redesigning the credit Karma app to enable members to see much more of their financial life and find the product right for them. We also introduced intuitive to deliver personalized insights using data and AI.

Speaker Change: We also expect approximately $15 million of desktop revenue that would have otherwise been recognized in Q1 and fiscal 2025 to shift to later quarters in fiscal 2025 in total these changes lower Q1 fiscal 2025 revenue by approximately $160 million and are largely related.

Speaker Change: Increased monetization and the Underpenetrated Prime segment and made it easier than ever for consumers to benefit from the credit Karma and turbotax product integration.

But the progress teammate innovating on behalf of our members and partners.

Speaker Change: A more frequent product update beginning in Q4 fiscal 2024 to align the customer delivery experience to our subscription model. Accordingly, we expect Q1 desktop ecosystem revenue to decline approximately 20%.

Speaker Change: Switching to consumer and pro tax groups consumer group revenue of $4 4 billion grew 7% in fiscal 2024, as we continue to revolutionize our taxes get done for consumers and small businesses.

Speaker Change: For Q1, but for desktop ecosystem revenue to return to growth in Q2 overall, we expect desktop ecosystem revenue to grow in the low single digits in fiscal 2025.

Speaker Change: Turbotax live revenue grew 17% and customers grew 11%.

Speaker Change: Full service customers doubled while those new to turbotax tripled we are pleased with the momentum we saw with Turbotax live again this season.

Speaker Change: Turning to credit Karma.

Speaker Change: Credit Karma revenue growth improved each quarter during fiscal 2024 from a 5% decline in Q1, 2% to 14% growth in Q4 on a product basis in Q4 auto insurance accounted for 6% growth personal loans accounted for five credit.

Speaker Change: Turning to the protect equipment revenue was $599 million in fiscal 2024, 7% in summary, I'm pleased with our continued momentum this fiscal year and our opportunities ahead.

Speaker Change: Shifting to our balance sheet and capital allocation financial principles that guide our decisions to remain a long term commitment and are unchanged.

Speaker Change: <unk> accounted for two points and credit Karma money accounted for one point full.

Speaker Change: <unk> full year revenue was $1 7 billion up 5%.

Speaker Change: <unk> finished the quarter with $4 1 billion in cash and investments of 6 billion and debt on our balance sheet, we repurchased $255 million of stock during the fourth quarter and $2 billion during fiscal 2024, depending on market conditions and other factors. Our aim is to be in the market each quarter.

Speaker Change: Approved a quarterly dividend of $1 <unk> per share payable on October 18, 2024. This represents a 16% increase versus last year.

Speaker Change: Increased monetization and the Underpenetrated Prime segment and made it easier than ever for consumers to benefit from the credit Karma and turbotax product integration I am proud of the progress of teammate innovating on behalf of our members and partners.

Speaker Change: Moving on to guidance.

Speaker Change: Fiscal 2025 guidance include.

Speaker Change: Total company revenue of $18 $1 6 billion to $18 three $4 7 billion growth of 12% to 13%.

Speaker Change: Our guidance includes revenue growth of 16% to 17% for the small business and self employed group, including online ecosystem revenue growth of approximately 20% and desktop ecosystem revenue growth in the low single digits.

Speaker Change: Turbotax live revenue grew 17% and customers grew 11% full service customers doubled while those new to turbotax tripled. We are pleased with the momentum we saw with turbotax slides again this season.

Speaker Change: Our guidance also includes revenue growth of 7% to 8% for the consumer group and 5% to 8% for credit Karma.

Speaker Change: Turning to the pro tax group revenue was $599 million in fiscal 2024 up 7% in summary, I'm pleased with our continued momentum this fiscal year and our opportunities ahead.

Speaker Change: GAAP earnings per share of $12 34 to $12 50 for.

Speaker Change: Growth of 18% to 20% and non-GAAP diluted earnings per share of $19 16 to $19 36.

Speaker Change: Shifting to our balance sheet and capital allocation, our financial principles to guide our decisions to remain a long term commitment and are unchanged.

Speaker Change: Both of 13% to 14%.

Speaker Change: Finished the quarter with $4 1 billion in cash and investments and 6 billion debt on our balance sheet, we repurchased $255 million of stock during the fourth quarter and $2 billion during fiscal 2024, depending on market conditions and other factors. Our aim is to be in the market each quarter.

We expect a GAAP tax rate of approximately 23% in fiscal 2025, GAAP guidance reflects an expected $24 million restructuring charge related to the organization reorganization, we announced in July.

Speaker Change: Our guidance for first quarter of fiscal 2025 includes total company revenue growth of 5% to 6%, including small business and stuff input group revenue growth of 6% to 7%, reflecting the revenue shift in Q1, resulting from the desktop offering changes that I noted earlier.

Speaker Change: The board approved a quarterly dividend of $1 <unk> per share payable on October 18, 2024. This represents a 16% increase versus last year.

Speaker Change: Moving onto guidance.

Speaker Change: We expect desktop ecosystem revenue to decline approximately 20.

Speaker Change: Fiscal 2025 guidance include.

Total company revenue of $18 $1 6 billion to $18 three $4 7 billion growth of 12% to 13%.

Speaker Change: Percentage of Q1, and the online ecosystem.

Speaker Change: As a growth catalyst to accelerate to approximately 19% growth in Q1.

Speaker Change: Credit Karma, we expected revenue to grow in Q1 and for our consumer group and protect revenue to decline in Q1 as we are lapping the period a year ago included extended California tax filing deadline.

Speaker Change: Our guidance also includes revenue growth of 7% to 8% for the consumer group and 5% to 8% for credit Karma.

Speaker Change: GAAP earnings per share of <unk> 61 to 66.

Speaker Change: And non-GAAP earnings per share of $2 33 to $2.38.

Speaker Change: GAAP diluted earnings per share of $12 34 to $12 54.

Speaker Change: GAAP guidance reflects an expected $19 million restructuring charge that we expect to incur in Q1 related to the reorganization we announced in July.

Speaker Change: Of 18% to 20% and non-GAAP diluted earnings per share of $19 16 to $19, 36% growth of 13% to 14%.

Speaker Change: You can find our full fiscal 2025, and Q1 guidance details in our press release and on our fact sheet.

Speaker Change: We expect a GAAP tax rate of approximately 23% in fiscal 2025, GAAP guidance reflects an expected $24 million restructuring charge related to the organization reorganization, we announced in July.

Speaker Change: I will now shift to our long term growth expectations for each of our business segments.

Speaker Change: First small business with.

Speaker Change: With the momentum we see in online ecosystem growth, we are reiterating our long term revenue growth expectations for the small business and self employed group of 15% to 20%.

Speaker Change: Our guidance for first quarter of fiscal 2025 includes total company revenue growth of 5% to 6%, including small business and stuff input group revenue growth of 6% to 7%.

Speaker Change: As part of this we continue to expect online bank equity growth of 10% to 20% and we now expect online paying customer growth of 5% to 10%.

Speaker Change: Affecting the revenue shift in Q1, resulting from the desktop offering changes that I noted earlier, we expect desktop ecosystem revenue to decline approximately 20.

Speaker Change: This reflects our shift in emphasis towards ARCC as we scaled mid market drive growth in services and reshape how we go to market as one business platform to significant significantly increased adoption of all of our offerings.

Speaker Change: Percentage of Q1, and the online ecosystem.

Speaker Change: As a growth catalyst to accelerate to approximately 19% growth in Q1.

Speaker Change: For credit Karma, we expected revenue to grow in Q1 and for our consumer group and protect revenue to decline in Q1 as we are lapping the period a year ago included extended California tax filing deadline.

Speaker Change: While there are relatively fewer midmarket customers.

RPC of Midmarket Quickbooks online customers is nearly three times higher than other quickbooks online customers.

Speaker Change: GAAP earnings per share of <unk>, 61% to 66%.

Speaker Change: Turning to credit Karma.

Speaker Change: We are excited about the opportunity ahead, as we execute our strategy to more deeply penetrate our core vertical.

Speaker Change: And non-GAAP earnings per share of $2 33 to $2.38.

Speaker Change: And growth vehicle and execute our consumer ecosystem strategy.

Speaker Change: GAAP guidance reflects an expected $19 million restructuring charge that we expect to incur in Q1 related to the reorganization we announced in July.

Speaker Change: The learnings from upping in the current business cycle, we are updating our long term revenue growth expectations to 10% to 15%, reflecting the current size and scale of the business and as we focus on creating a seamless end to end experiences with turbotax that benefit consumers year.

Speaker Change: Can find our full fiscal 2025, and Q1 guidance details in our press release and on our fact sheet.

Speaker Change: I will now shift to our long term growth expectations for each of our business segments.

Speaker Change: Year round.

Speaker Change: Finally, the consumer group.

Speaker Change: First small business.

Speaker Change: Based on the momentum we saw at the season and the significant runway we have ahead to penetrate our Tam.

Speaker Change: With the momentum we see in online ecosystem growth, we are reiterating our long term revenue growth expectations for the small business and self employed group of 15% to 20%.

Speaker Change: Expect assisted penetration to be the key driver of future growth.

Speaker Change: Turbotax live revenue accounted for approximately 30% of consumer revenue in fiscal 2024, and we expect it to become the majority of consumer group revenue in the coming years with that context, while we are fielding assistant.

Speaker Change: As this as part of this we continue to expect online bank equity growth of 10% to 20% and we now expect online paying customer growth of 5% 10%.

Speaker Change: This reflects our shift in emphasis towards ARCC as you scale mid market drive growth in services and reshape how we go to market as one business platform to significant significantly increased adoption of all of our offerings.

Speaker Change: Adjusting the consumer group long term revenue growth to 6% to 10% in the interim period with Turbotax live revenue expected to grow 15% to 20%.

Speaker Change: One final note before I wrap up starting in Q1, we will will.

While there are relatively fewer midmarket customers.

Speaker Change: RPC of mid market Quickbooks online customers is nearly three times higher than other quickbooks online customers.

Speaker Change: We will be changing the name of our small business and self employed group global business solutions group. This new name better aligned with the global reach of the mill typical box platform and our focus on serving both small and mid market businesses and our vision to become the end to end platform the customer to use to grow and run their businesses.

Speaker Change: Turning to credit Karma.

Speaker Change: We are excited about the opportunity ahead, as we execute our strategy to more deeply penetrate our core vertical.

Speaker Change: In both vertical and execute our consumer ecosystem strategy.

Speaker Change: With that I'll turn it back over time.

Speaker Change: The learnings from operating in the current business cycle, we are updating our long term revenue growth expectations to 10% to 15%, reflecting the current size and scale of the business and as we focus on creating a seamless end to end experiences with turbotax that benefit consumers year.

Speaker Change: Great. Thank you Sandy we are confident in our long term growth strategy, including double digit revenue growth and operating income growing faster than revenue. We have the strategy to win given the green shoots, we're observing and with less than 5% penetration of our $300 billion in Tam we have a massive runway ahead, we look forward to seeing all of you at our investor.

Speaker Change: Year round.

Speaker Change: Finally, the consumer group.

Speaker Change: Next month, we will unpack all of this and more lets now open it up to your questions.

Speaker Change: Based on the momentum we saw at the season and the significant runway we have ahead to penetrate our Tam.

Speaker Change: Thank you Mr. Xie, ladies and gentlemen at this time, if you would like to ask a question. Please press Star then the number one on your telephone keypad. If you would like to withdraw your question. Please press Star. Two also please limit yourself to one question, we'd like to get to as many people as we can.

Speaker Change: Expect assisted penetration to be the key driver of future growth.

Speaker Change: <unk> revenue accounted for approximately 30% of consumer revenue in fiscal 2024, and we expect it to become the majority of consumer revenue in the coming years with that context. While we are scaling assisted we are adjusting the consumer group long term revenue growth to 6% to 10%.

Speaker Change: First this afternoon to city Panic Rohit Atmos you home.

Speaker Change: Great. Thank you if one question.

Speaker Change: I will focus on small business segment.

Speaker Change: 90% is pretty good in this environment, where we're getting about SMB weakness, but I want to focus on your growth and twenty-five fiscal 'twenty five and beyond now it looks like your focus is now driving go through targeting mid market, you've talked about that havent seen them back so.

Speaker Change: From period with Turbotax live revenue expected to grow 15% to 20%.

Speaker Change: One final note before I wrap up.

Speaker Change: In Q1, we will.

Speaker Change: We will be changing the name of our small business and self employed group to global business solutions group. This new name better aligned with the global reach of the mill typical box platform and are focused on serving small and mid market businesses and our vision to become the end to end platform the customer to use to grow and run their businesses.

Speaker Change: US understand how big is that opportunity to expand in the mid market and why is this the right time for Intuit to increase focus on mid market and is it mostly targeting your quickbooks customer base or are you planning to gain share from.

With that I'll turn it back over time great.

Speaker Change: Other vendors.

Speaker Change: Yes, Andy. Thank you for your question first of all I want to start with our focus will continue to be small businesses that are formed.

Speaker Change: And because we want to fundamentally continue to grow with them with that as context, we just simply double down on our focus on mid market and as you know it's not new this has been five years in the making its one of the five that we declared more than five years ago.

Speaker Change: Yesterday next month, where we'll unpack all of this and more lets now open it up to your questions.

Speaker Change: But I would just say five years later city. We are just building an incredible amount of momentum with that as context, Let me just now answering your question.

Speaker Change: We'll go first this afternoon to city Panic Rohit Atmos you hope.

Speaker Change: One the way to think about it is we now have a business suite and our business suite provide all the capabilities to for our business to be able to grow as our customers manage their customers be able to manage their cash flow get their accounting done all in one place and with our.

Speaker Change: Great. Thank you. If one question then Sunshine I'll focus on small business segment.

Speaker Change: 19% growth is pretty good in this environment, where we're getting about SMB weakness, but I want to focus on your growth and twenty-five fiscal 'twenty five and beyond.

Speaker Change: Really AI powered by innovation and an AI powered experts and we really have tilted the professional grade.

Speaker Change: Now it looks like your focus is now driving go through without targeting mid market, you've talked about that havent seen them back so help us understand how big is that opportunity to expand into mid market and why is this the right time for intuit to increase focus on mid market and is it mostly targeting this your clicker.

Speaker Change: And services.

Speaker Change: To all of our businesses and we are now at a place where we are really accelerating on two fronts one.

Speaker Change: We're going to go to market as one platform versus pieces and parts to really accelerate services penetration because thats. The one thing we continue to hear from businesses that they wanted to do everything in one place and now we have the business suite for them to do everything in one place secondarily is our acceleration in mid market were actually excited to announce that.

Speaker Change: Customer base or are you planning to gain share from.

Speaker Change: Other vendors.

Yes, Andy. Thank you for your question first of all I want to start with our focus will continue to be small businesses that are formed and because we want to fundamentally continue to grow with them with that as context, we just simply doubled down on our focus on mid market and as you know.

Speaker Change: Investor Day.

Speaker Change: A platform that will take us even further upmarket.

Speaker Change: And that really positions us to not only grow with our customers, but to really acquire new customers I would just remind us that the majority of mid market customers are non consumption.

Speaker Change: It's not new this has been five years in the making its one of the five that we declared more than five years ago.

Speaker Change: And they pay a lot of money. He has multiple different apps discrete apps that don't talk to each other excel spreadsheets as Google sheets, shoeboxes and paying for multiple different bookkeepers marketing agents and ultimately accountants and now we have package all of that.

Speaker Change: But I would just say five years later city. We are just building an incredible amount of momentum with that as context. Let me just now answering your question one the way to think about it is we now have a business suite and our business suite provide all the capabilities to for our business to be able.

Speaker Change: One enterprise suite to be able to pursue an accelerated pursuing mid market customers and our ultimate goal is to go far beyond.

Speaker Change: To grow their customers manage their customers be able to manage their cash flow get their accounting done all in one place and with our.

Speaker Change: 10 to 100 employees and so I think this is five years in the making and to round out the answer to your question. This is both focusing on the smaller customers, but we are really doubling down on the larger customers and really being able to penetrate services and that's really what gives us confidence.

Speaker Change: Really AI powered innovation and AI powered experts and we really have tilted.

Speaker Change: Professional grade health and services.

Speaker Change: To all of our businesses and we are now at a place where we are really accelerating on two fronts one.

In the 20% online ecosystem revenue growth at a far bigger scale that you heard from Sandeep, along with our acceleration in Q1.

Speaker Change: We're going to go to market as one platform versus pieces and parts to really accelerate services penetration because thats. The one thing we continue to hear from businesses that they want to do everything in one place and now we have the business suite for them to do everything in one place secondarily is our acceleration in mid market were actually excited to announce that.

Speaker Change: Thank you I look forward to hearing more at the Investor day.

Speaker Change: Yeah.

Speaker Change: Thank you for your question.

Speaker Change: Thank you well go next now to Alex Zukin at Wolfe Research.

Speaker Change: Hey, guys. Thanks for taking the question.

Speaker Change: Investor Day.

Speaker Change: A platform that will take us even further upmarket.

Speaker Change: I wanted to ask about consumer.

Speaker Change: The guide for the coming year. The updated midterm guide if you can just walk through a little bit of the puts and takes where why was that the right place to start the annual guide what could drive upside surprise of the tax season progresses, and maybe it's a sign just your view on kind of the macroeconomic back.

Speaker Change: And they pay a lot of money to use multiple different apps discrete apps that don't talk to each other excel spreadsheets as Google sheets, shoeboxes and paying for multiple different bookkeepers marketing agents and ultimately accountants and now we have package all of that as one enterprise suite to be able.

Speaker Change: Drop that that consumer guidance set against.

Speaker Change: Yeah, absolutely Alex. Thank you for your question, let me, let me start with the last part of your question, which is around the macro environment are we have not assumed anything other than the current environment.

Speaker Change: To pursue an accelerated pursuing mid market customers and our ultimate goal is to go far beyond.

Speaker Change: We're not assuming a.

Tailwind coming from the macro environment, So that's really been.

Speaker Change: One of the elements that's informed our guidance, it's really about our current trends that we're seeing our current momentum that we're seeing in really all I'll focus on our own execution. So that's.

Speaker Change: For really the first part of your question I would say the second part is just as a refresher. The total tax market is about $35 billion in Tam.

In the 20% online ecosystem revenue growth at a far bigger scale that you heard from Sandeep, our along with our acceleration in Q1.

Speaker Change: $5 billion of that is do it yourself and about $30 billion is both as all of the assistant but consumer and on the business side, we've got great momentum.

Speaker Change: Thank you I look forward to hearing more at the Investor day.

Speaker Change: Yeah.

Speaker Change: Thank you for your question.

Alex <unk>: Thank you well go next now to Alex <unk> at Wolfe Research.

Speaker Change: You know Turbotax live grew 17% this past year, but the number of full service customers that we got double that new to the franchise tripled and so we have a lot of momentum as we look ahead and that's why we have a lot of confidence in.

Alex <unk>: Hey, guys. Thanks for taking the question.

Alex <unk>: I wanted to ask about consumer.

Speaker Change: The guide for the coming year. The updated midterm guide if you can just walk through a little bit of the puts and takes where why was that the right place to start the annual guide what could drive upside surprise is the tax season progresses, and maybe it's a sign just your view on.

Really providing an expectation that we expect turbotax live to grow between 15% to 20% and that really leads to we wanted to just.

Our long term expectations to be really prudent because until turbotax live which today is 30% of our franchise are growing high double digits until that becomes a larger part of our franchise. We wanted to be prudent with our long term expectation I will just end with saying that DIY is actually.

Speaker Change: On kind of the macroeconomic backdrop that that consumer guidance.

Speaker Change: Yes.

Speaker Change: Very important.

Speaker Change: Parse it into Q1, we're actually growing quite rapidly.

Speaker Change: Not assuming a <unk>.

Speaker Change: <unk> is coming from the macro environment. So that's really been.

Speaker Change: I would say high single digits with complex customers with higher income and we're actually accelerating taking share and based on our learning this year and based on our tradeoffs that we made this year and our focus this year, we're going to be quite assertive and continuing to.

One of the elements that's informed our guidance, it's really about our current trends that we're seeing our current momentum that we're seeing in really all I'll focus on our own execution. So that's fair.

Speaker Change: For really the first part of your question I would say the second part is just as a refresher. The total tax market is about $35 billion in Tam.

Pursue a lower income customers. This year, because we had a lot of green shoots from this past year with our experiments.

Speaker Change: $5 billion of that is do it yourself and about $30 billion is both as all assisted by the consumer and on the business side, we've got great momentum.

Speaker Change: How to deliver benefits and monetize beyond tax with our credit Karma platform and so we're going to be leaning into that and I'll just end with.

Speaker Change: The final <unk>.

Speaker Change: The question that you asked we are they are upside to our guide which is I think a question you asked around turbotax comes from really two dimensions one are accelerating.

You know Turbotax live grew 17% this past year, but the number of full service customers that we got double that new to the franchise tripled and so we had a lot of momentum as we look ahead and that's why we have a lot of confidence in really providing an expectation that we expect turbotax live to grow between.

Speaker Change: In assisted tax beyond the 15% to 20% and to actually accelerating.

Speaker Change: We've seen a lot of green shoots which is the more complex higher income customers that our DIY, we have positioned ourselves for the innovation and the lineup that's required to win on both fronts in the coming years, So that's where our confidence comes from.

Speaker Change: 15% to 20% and that really leads to we wanted to just.

Speaker Change: Our long term expectations to be really prudent because until turbotax live which today is 30% of our franchise are growing high double digits until that becomes a larger part of our franchise. We wanted to be prudent with our long term expectation I will just end with saying that DIY is actually.

Perfect. Thank you guys.

Speaker Change: Yeah. Thank you Alex.

Speaker Change: Thank you we'll go next now to Brad Zelnick with Deutsche Bank.

Brad Zelnick: Great. Thanks, so much for taking the question. So John I wanted to ask about the restructuring, which I know you take very seriously. We appreciate it wasn't motivated by cost savings but.

Very important and I would parse it into Q1, we're actually growing quite rapidly.

Speaker Change: Rather to better position. The company ahead, how are you thinking about reinvesting any savings as it takes time to staff back up to prior levels or are there specific initiatives the dollars get allocated to any additional color would be great. Thanks.

Speaker Change: Yes, sure Brad first of all I, just wanted to start with acknowledging.

Speaker Change: Pursue a lower income customers. This year, because we had a lot of green shoots from this past year with our experiments.

Speaker Change: We our culture about talent and people and compassion and care and this was a very very tough decision and we took great care of our teams internally both those that are staying and getting them excited about why we're doing this and what's in the future and there remain extremely energized the second layer.

Speaker Change: How to deliver benefits and monetize beyond tax with our credit Karma platform and so we're going to be leaning into that and I'll just end with.

Speaker Change: The final aspect of the Washington that you asked we are they are upside to our guide which is I think a question you asked around turbotax comes from really two dimensions one are accelerating.

Taking great care of those that were impacted and I just wanted to start there because these things.

Speaker Change: Our hardcore us we take it very seriously. We also believe that it's critically important to position the company for the future.

Speaker Change: In assisted tax beyond the 15% to 20%.

Speaker Change: And to actually accelerating where we've seen a lot of green shoots which is the more complex higher income customers that our DIY.

And as we communicated which is really the plan that we're executing against them and.

Speaker Change: Positioning ourselves for the innovation and the lineup that's required to win on both fronts in the coming years, So that's where our confidence comes from.

Speaker Change: Like what my upfront comments were.

Speaker Change: We are really taking all of the dollars and reinvesting it in five areas, which I articulated earlier in my prepared remarks.

Perfect. Thank you guys.

Alex <unk>: Yes, Thank you Alex.

Speaker Change: And really our intent is to put all of those dollars back in the five areas that we've seen a lot of green shoots in this past several years they accelerated towards really the.

Speaker Change: Thank you we'll go next now to Brad Zelnick with Deutsche Bank.

Brad Zelnick: Great. Thanks, so much for taking the question just on I wanted to ask about the restructuring, which I know you take very seriously. We appreciate it wasn't motivated by cost savings but.

Speaker Change: A latter part of last fiscal year, which hence the decision to really double down in those five areas. Our intent is to allocate all of those dollars to those five areas.

Brad Zelnick: Rather to better position. The company ahead, how are you thinking about reinvesting any savings as it takes time to staff back up to prior levels or are there specific initiatives the dollars get allocated to any additional color would be great. Thanks.

Speaker Change: And of course.

Speaker Change: That across marketing customer success, and additional headcount engineering head count in the areas that I mentioned and then we expect by the way there's no expectation of any of these pay off in the coming year, none of our guidance that we've provided resides on the added head count back and this is really positioning us for the.

Brad Zelnick: Yes, sure Brad first of all I, just wanted to start with acknowledging.

Speaker Change: Two three years plus that's an important note for all of you can all because there is really no risk to our execution time as we think about.

Speaker Change: What's in the future and there remain extremely energized the.

Speaker Change: The coming year, but the latest positioning us in the future I'll just end with the following we have a lot of confidence with the margin expansion.

Speaker Change: The second layer currently taking great care of those that were impacted and I just wanted to start there because these things are hard for us and we take it very seriously. We also believe that it's critically important to position the company for the future.

Speaker Change: Deep articulated and not only from the platform leverage that we're getting but from all of our investments internally.

And as we communicated which is really the plan that we're executing against them.

Speaker Change: To drive a lot of efficiency and productivity.

Speaker Change: The only thing I would add is we didn't have a standing start.

Speaker Change: A lot of what my upfront comments were.

Speaker Change: We are really taking all of the dollars and reinvesting it in five areas, which I articulated earlier in my prepared remarks, and really our intent is to put all of those dollars back in the five areas that we've seen a lot of green shoots in this past several years they accelerated towards really be.

Made that announcement, we were already contemplating as you probably saw from our open job listings.

Speaker Change: Over the last quarter.

Speaker Change: Started building out our midmarket neurological function.

Speaker Change: As well as scaling our marketing activities, particularly as we go after the assisted tax category, which has a different marketing timing than the DIY category.

Speaker Change: Thanks, Sandeep look forward to seeing you guys at Investor Day.

<unk>.

Speaker Change: Later part of last fiscal year, which is hence the decision to really double down in those five areas. So our intent is to allocate all of those dollars to those five areas.

Speaker Change: Thank you and we do this we look forward to that as well.

Speaker Change #100: Thank you we'll go next now to Brent Thill at Jefferies.

Speaker Change: And of course.

Speaker Change: Spread across marketing customer success, and additional head count engineering head count in the areas that I mentioned and then we expect by the way there is no expectation of any of these paying off in the coming year, none of our guidance that we've provided resides on the added head count back and this is really positioning us for.

Speaker Change #100: Thanks.

Speaker Change #101: And we think about the mail chimp reacceleration.

Speaker Change #101: To put in place to enable that.

Speaker Change #101: To get to a level you'd like to see.

Speaker Change #102: Yes, there are really three areas that we've been executing that are worth calling out that we're excited about one is.

Speaker Change: The next two to three years plus that's an important note for all of you can all because there is really no risk to our execution plan as we think about.

Speaker Change #103: The integration with the Quickbooks platform as I mentioned earlier, one of the biggest areas why we're able to accelerate our customer growth with U S. <unk> customer growth of 11%. The <unk> advanced the 28% is really creating a suite where our platform is all in one place. So that's one area that we are.

Speaker Change: The coming year, but really this is about positioning us in the future I'll just end with the following we have a lot of confidence with the margin expansion that sandeep articulated and not only from the platform leverage that we're getting but from all of our AI investments internally to drive a lot of efficiency and productivity.

Speaker Change #103: Aggressively focused on data and tech integration.

Speaker Change #103: Of course.

Workflow integration and we're making great progress on that front. That's number one number two is mid market.

Speaker Change: The only thing I would add is we didn't have a standing start.

Speaker Change #104: That is an area where it was critical when we declared the acquisition of <unk>, we are building momentum.

Speaker Change: You made that announcement, we were already contemplating as you probably saw from our open job listings.

Speaker Change #105: Both by the way, what we're doing to integrate the offering but also our go to market capabilities.

Speaker Change: Over the last quarter.

Speaker Change: We started building out our mid market go to market function as well as scaling our marketing activities, particularly as we go after the assisted tax category, which has a different marketing timing than the DIY category.

Speaker Change #105: As we announced I think last quarter, Greg Johnson is now back with Intuit. He runs all of our go to market.

Speaker Change #106: For all of small business and we brought together, our sales and marketing and customer success across mail chimp and quickbooks to be able to be better positioned for mid market and then lastly, the international those are the three areas that we're very focused on and when we look at our Kpis, we're making solid progress against.

Speaker Change: Thanks, Sandeep look forward to seeing you guys at Investor Day.

Sandeep: Thank you and we do this we look forward to that as well.

Speaker Change: Thank you well go next now to Brent Thill at Jefferies.

Speaker Change: Thanks.

Speaker Change #106: Those three areas and and Thats one of the reasons why it leaves us excited about the coming year in the future.

Speaker Change: <unk>, we think about the mail chimp Reacceleration, what do you need to put in place to enable that.

Speaker Change: To get to a level you'd like to see.

Speaker Change: Yes, there are really three areas that we've been executing that are worth calling out that we're excited about one is.

Speaker Change #106: Thank you well go next now to Keith Weiss at Morgan Stanley.

Speaker Change #107: Excellent. Thank you guys for taking the questions and congratulations on a really solid quarter.

Speaker Change: The integration work.

Speaker Change: The Quickbooks platform as I mentioned earlier, one of the biggest area is why we're able to accelerate our customer growth with U S. <unk> customer growth of 11%. The <unk> advanced the 28% is really creating a suite where our platform is all in one place. So that's one area that we are aggressively focused on <unk>.

I wanted to add.

Speaker Change #108: Ask about the acceleration in Q to Q1.

Speaker Change #109: We see two quarters of deceleration, but.

Speaker Change #109: Online subscription and online services.

Speaker Change #110: The confidence in the acceleration is that based upon like price increases or is there something youre seeing units or other parts of the business that are giving you guys confidence in it.

Speaker Change: Data and tech integration and of course.

Speaker Change: Workflow integration and we're making great progress on that front. That's number one number two is mid market.

Speaker Change #111: Guiding towards an acceleration for Q1.

Speaker Change #111: And then as a follow up.

Speaker Change: That is an area where it was critical when we declared the acquisition of mail channel we're building momentum.

Speaker Change #112: Talked a lot about where the reinvestment of the of the dollars or the hits from the head count reduction again came from can you give us a little bit of visibility of where those heads came out off like what are the parts of the business.

Speaker Change: By the way, what we're doing to integrate the offering but also our go to market capabilities.

Speaker Change: As we announced I think last quarter, Greg Johnson is now back with Intuit. He runs all of our go to market offer all of small business and we brought together our sales and marketing and customer success across mail chimp and quickbooks to be able to be better positioned for mid market and then lastly, the international those are the three areas that we're very focused on and.

Speaker Change #111: That that you guys are.

Speaker Change #111: Paring back investments.

Speaker Change #113: Yeah, great. Thank you for your question Keith I'll start with your first question really our acceleration comes from three areas one acceleration in services and this is services across payments across payroll across our live platform and what we expect in Belgium. So thats.

Speaker Change: When we look at our Kpis, we're making solid progress against those three areas and and Thats one of the reasons why it leaves us excited about the coming year in the future.

Speaker Change #113: One key area the second key area of mid market.

Speaker Change #114: As we shared earlier, we're seeing very good traction with <unk> advanced and we really continue to build out our go to market efforts on our platform capabilities.

Speaker Change: Thank you we'll go next now to Keith Weiss at Morgan Stanley.

Speaker Change: Excellent. Thank you guys for taking the questions and congratulations on a really solid quarter.

Speaker Change #114: And that's informing by the way what we're seeing in Q1, but also the fact that we <unk>.

Keith Weiss: I wanted to.

Ask about the acceleration in <unk> into Q1.

Speaker Change #114: Shared earlier that we expect our online ecosystem revenue to be 20%, which is what it was this past year.

Speaker Change: We see two quarters of deceleration in both Quickbooks online subscription and online services.

Speaker Change #114: And the third is price those three plays.

Speaker Change #115: Play a big role in our acceleration and the thing I would just call out on price.

Keith Weiss: The confidence in the acceleration is that based upon like price increases or is there something youre seeing in units or other parts of the business that are giving you guys confidence in it.

Speaker Change #116: We everything that we really learn and hear from our customers is because we have the business suite in one place. They are actually saving time, they need less labor variable to drive customer growth based on our capabilities and better manage their cash flow because we're digitizing their cash flow and that plays a very big role in terms of just the pricing.

Keith Weiss: In guiding towards an acceleration for Q1.

Speaker Change: And then as a follow up.

Speaker Change: Talked a lot about where the reinvestment of the of the dollars or the hits from the head count reduction again came from can you give us a little bit of visibility of where those heads came out off like what are the parts of the business.

Speaker Change #116: Power that we have especially in our higher end skus, but those are the three things that give us a.

Speaker Change: That that you guys are.

Speaker Change #117: Confidence into Q1 and beyond and as you know the majority of this business is subscription based so it's very predictable.

Speaker Change: Paring back investments.

Speaker Change: Yeah, great. Thank you for your question Keith.

Speaker Change #118: In terms of your second question around what where does it have to come from in terms of the restructuring.

Speaker Change: Start with your first question really our acceleration comes from three areas one acceleration in services and this is services across payments across our payroll across our live platform and what we expect in Belgium, So thats one.

Speaker Change #118: There was really several key areas I would say that the largest area as we looked across the company.

Speaker Change #118: And we looked at talent that we felt.

Speaker Change: One key area the second key area of mid market.

Speaker Change #118: There was an opportunity for better performance. This was about 8% of our talent. These are by the way a very talented folks that.

Speaker Change: As we shared earlier, we have seen very good traction with <unk> advanced and we really are.

Speaker Change #118: We'll land great opportunities elsewhere, but there were.

Continuing to build out our go to market efforts on our platform capabilities.

Speaker Change #119: With across the company it was not from any particular area, which by the way why Theres really no execution risk from the action that we just because this wasn't from one area. This was from across the company.

Speaker Change: And that's informing by the way what we're seeing in Q1, but also the fact that we see.

Speaker Change: Shared earlier that we expect our online ecosystem revenue to be 20%, which is what it was this.

Speaker Change #118: Talent that was.

Speaker Change: Sure and the third is price are those three plays.

We believe we have an opportunity to upgrade talent. So that was really one area. The second is we really consolidated all of our technology talent across multiple sites closing down boys.

Speaker Change: Play a big role in our acceleration and the thing I would just call out on price.

Speaker Change: We everything that we really learn and hear from our customers is because we have the business suite in one place. They are actually saving time, they need less labor, they're able to drive customer growth based on our capabilities and better manage their cash flow because it we're digitizing their cash flow and that plays a very big role in terms of just the pricing.

Speaker Change #118: Boise in Edmonton, and consolidating our technology talent.

Speaker Change #120: Areas Tel Aviv, Bangalore, Atlanta, and Toronto, but those I would say were the main drivers of where the restructuring came from and then of course, we are allocating all of it to the five areas that I mentioned earlier.

Power that we have especially in our higher end skus, but those are the three things that give us a.

Speaker Change #118: The only thing I would add Keith.

Speaker Change: Confidence into Q1 and beyond and as you know the majority of this business is subscription based so it's very predictable.

Speaker Change #121: First part of the question. If you recall in my prepared remarks, I talked about <unk> growing at 11% advancement and 28%. These larger customers tend to adopt and use services at a higher rate and the self employed declined from that the important attribute to keep in mind set.

Speaker Change: In terms of your second question around what where does it have to come from in terms of the restructuring.

There was really several key areas I would say the largest area as we looked across the company and we looked at talent that we.

Secondly on pricing.

Speaker Change #121: Look at pricing very carefully our price volume mix and well over half of our growth comes from volume and mix.

Speaker Change: Felt.

Speaker Change: There was an opportunity for a better performance. This was about 8% of our talent. These are by the way a very talented folks that.

Speaker Change #122: And at the company level the contributions for price are relatively consistent year over year, while they are slightly higher than the small business group for the second component to keep in mind as you look at the trajectory heading into Q1.

Speaker Change: We will land great opportunities elsewhere, but there were it was across the company. It was not from any particular area, which by the way why Theres really no execution risk from the action that we just because this wasn't from one area. This was from across the company.

Speaker Change #122: Super helpful. Thank you guys.

Speaker Change #122: Thank you.

Speaker Change #122: We'll go next now to cash Rangan at Goldman Sachs.

Speaker Change: And talent that was.

Speaker Change: We believe we have an opportunity to upgrade talent. So that was really one area. The second is we really consolidated all of our technology talent across multiple sites closing down.

Speaker Change #123: Thank you very much came here a nice finish to the fiscal year end.

Cash Rangan: Quite positive on the guidance side I couldn't help but notice that.

Speaker Change #125: Small business simplified.

Speaker Change #126: Group is now running at the rate of 10 billion I think that's it.

Speaker Change: Z in Edmonton and consolidating our technology talent in our key areas Tel Aviv, Bangalore, Atlanta, and Toronto, but those I would say were the main drivers of where the restructuring came from and then of course, we are allocating all of it to the five areas that I mentioned earlier.

Cash Rangan: Most recent quarter 10 ish.

Very few companies in software in the enterprise software market 10 billion and congrats your ear there you've done it with.

Cash Rangan: Finance accounting for the most part and you got payments and payroll.

Cash Rangan: So this puts you on track with service and I believe also the same thing about that business growing faster.

The only thing I would add kind of Q2, so the first part of the question.

Speaker Change: You'll recall in my prepared remarks, I talked about <unk> growing at 11% advancement and 28%. This larger customers tend to adopt and use services at a higher rate than the self employed declined so thats a important attribute to keep in mind and secondly on pricing.

Speaker Change #127: And you're moving upmarket SKU mix is decidedly more beds.

Speaker Change #128: Lower value or units.

Speaker Change #129: So this has been at least from my perspective more successful pending revenue one of the largest software companies in the world.

Speaker Change #130: So having come this far where else could you go with this business and I'm glad I'm not asking you a tax question. Thank you so much.

Speaker Change: Look at pricing very carefully our price volume mix and well over half of our growth comes from volume and mix at the end at the company level. The contribution for price are relatively consistent year over year, while they are slightly higher than the small business groups with the SEC.

Speaker Change #129: Okay.

Speaker Change #131: Thank you for the question Gaston I'll also by the way the setup as you saw in our guide.

Speaker Change #132: We're guiding our global business solutions group to be north of $11 billion growing 16% to 17% in the coming year, and particularly with online growing at 20% and I would just pay all of that has been done without really much.

Component to keep in mind as you look at the trajectory heading into Q1.

Speaker Change: Super helpful. Thank you guys.

Speaker Change: Thank you.

We'll go next now to cash Rangan at Goldman Sachs.

Cash Rangan: Thank you very much came here a nice finish to the fiscal year end.

Speaker Change #133: I would say massive contribution from mid market. So the best is yet to come because we are going to continue if you look at where we are today versus three years ago. We truly have a business suite, where we have all of the heat capabilities for a business to be able to grow and run their business and we've been investing in the last five years.

Kash Rangan: Quite positive on the guidance side I couldn't help but notice that.

Cash Rangan: That.

Speaker Change: Mall business simplified group is now running at the rate of 10 billion I think that's the.

Most recent quarter 10 ish.

Speaker Change: Very few companies in software in the enterprise software market, the $10 billion and congrats your ear there you've done at the edge.

Speaker Change #133: Positioned to go after mid market and our ultimate goal is to have all of the big brand names a b.

Finance accounting for the most part and you got payments and payroll.

Speaker Change #134: On our mid market platform, and we will announce something I think youll find exciting at our Investor day that really positions us to be able to serve these larger customers and that's really when you look at the future. When we look at the future what where we get really excited is that we're actually at.

Speaker Change: So this puts you on track with service and I believe also the same thing that was all good business growing faster.

Speaker Change: And you're moving upmarket SKU mix is decidedly more beds.

Speaker Change: The lower boundary of units.

Speaker Change: So this has been at least from my perspective more successful pending revenue one of the largest software companies in the world.

Where we are with an incredible franchise without really having a significant contribution from mid market and that's what excites us about the future because we want to continue to serve smaller businesses, but we now have a real opportunity to win in mid market and I would remind us of the following and it's probably the most important point that I'll make.

Speaker Change: So having come this far where else could you go with this business and I'm glad I'm not asking you a tax question. Thank you so much.

Speaker Change: Okay.

Speaker Change: Thank you for the question Gaston I'll also by the way the setup as you saw in our guide.

Mid market when it comes to financial management platforms is actually not a crowded space and so we have an incredible right to win and in.

Speaker Change: We are guiding our global business solutions group to be north of $11 billion growing 16% to 17% in the coming year, and particularly with online growing at 20% and I would just pay all of that has been done without really much.

Speaker Change #134: This is really precisely what we hear from.

Speaker Change #135: Accountants and from mid market businesses I'm really excited about the next chapter of taking our business grew from $10 billion today to much larger as we look into the next three to five years.

Speaker Change: I would say massive contribution.

Speaker Change: <unk> from mid market. So the best is yet to come because we are going to continue to look at where we are today versus three years ago, which really have a business suite, where we have all of the heat capabilities for a business to be able to grow and run their business and we've been investing in the last five years to be positioned to go after mid market.

Speaker Change #135: Thank you.

Speaker Change #135: <unk> to 'twenty.

Speaker Change #135: Thank you.

Speaker Change #136: Yes, indeed see at Investor day.

Speaker Change #135: Yeah.

Speaker Change #135: Thank you. We'll go next now to Kirk <unk> at Evercore ISI.

Kirk <unk>: Yeah. Thanks, I'll Echo my congrats on the quarter.

Speaker Change: Our ultimate goal is to have all of the big brand names be on.

Speaker Change #138: Upbeat guidance into next year I guess, that's on my question comes around sort of the global business solutions group.

Speaker Change: Our mid market platform, and we will announce something I think youll find exciting at our Investor day that really positions us to be able to serve these larger customers.

Speaker Change #139: How are you thinking about intuit assists impact on that in the coming year, where is that sort of in the integration process. So I'd just be curious about how you see that.

Speaker Change: And that's really when you look at the future when we look at the future what where we get really excited is that we're actually at.

Speaker Change #139: Powering your customers, maybe growing helping in areas like mid market or attach rates in some of your other products in that area. So.

Speaker Change: Where we are with an incredible franchise without really having a significant contribution from mid market and that's what excites us about the future because we want to continue to serve smaller businesses, but we now have a real opportunity to win in mid market and I would remind us of the following its probably the most important point that I'll make.

Speaker Change #139: Just to answer that.

Speaker Change #139: Got it.

Speaker Change #140: Intuit assessed on the small business side. Thanks.

Speaker Change #141: Yeah, Kurt Thank you for the question first of all let me just start with we haven't accounted for or assumed anything in our guidance.

Speaker Change #141: Around intuitive.

Speaker Change: Mid market when it comes to financial management platforms is actually not a crowded space and so we have an incredible right to win and and this is really precisely what we hear from.

Speaker Change #142: For the coming year. So I just wanted to start there now let me get to your question.

Speaker Change #143: We actually have an incredible amount of momentum with intuit assessed and youre going to see it at Investor day, but let me start with the foundation of what I shared in the prepared remarks, which was we have about 1 million businesses that are engaging with intuit assessed and it is going to play a.

Speaker Change: And from mid market businesses I'm really excited about the next chapter of taking our business grew from $10 billion today to much larger as we look into the next three to five years.

Speaker Change: Thank you.

Speaker Change: <unk> to 'twenty.

Speaker Change #144: Significant role in the future because that is actually the foundation of what we bet. The company on six years ago, which was really around data and AI, but really the bank was about delivering experiences what we do the work for our customers and so a number of areas that our customers are using today as part of that.

Speaker Change: Thank you.

Speaker Change: Yes, indeed see at Investor day.

Speaker Change: Okay.

Speaker Change: Thank you. We'll go next now to Kirk <unk> at Evercore ISI.

Kirk: Yeah. Thanks, I'll Echo my congrats on the quarter and the.

Beat guidance into next year I guess my question comes around sort of the global business solutions group.

Speaker Change #143: That I mentioned.

Speaker Change #143: Long the lines of marketing campaigns with proposed.

Are you thinking about.

Speaker Change: Intuit assists impact on that in the coming year, where is that sort of in the integration process I'd just be curious about how you see that.

Speaker Change #143: Revenue that Argos customers could garner that we could then execute on the behalf of our customers.

Speaker Change #143: Things like taking by the way pictures.

Speaker Change: Powering your customers, maybe growing helping in areas like the mid market or attach rates in some of your other products in that area. So I wanted to just answer that.

Speaker Change #145: And estimate that you may have written on the goal that you can take a picture album, we will create a digitized estimate invoice payment schedule that you want all within the platform send it to your customer.

Speaker Change: Discuss.

Intuit assist on the small business side. Thanks.

Speaker Change: Yeah, Kurt Thank you for the question first of all let me just start with we haven't accounted for or assumed anything in our guidance.

Speaker Change #145: Remind you in the business feed off.

Speaker Change #146: In essence invoices that are overdue capital that we can give you access to and Thats. What I. Just mentioned are elements of what some of our customers are using today and so we're really right now focused on sort of money in money out because those are the most critical areas of our customers.

Round intuit assess for the coming year. So I just wanted to start there.

Speaker Change: Now let me get to your question.

Speaker Change: Actually have an incredible amount of momentum with intuit assessed and youre going to see it at Investor day, but let me start with the foundation of what I shared in the prepared remarks, which was we have about a million businesses that are engaging with intuit assessed and it is going to play a.

Speaker Change #146: And if I just take a step forward ultimately our entire goal because of our advantage which is data.

Speaker Change #147: Our goal is that we do all of the works for our customers. These examples I just illustrated is all on that path now what it means for for US as a company beyond the of course the benefit of.

Speaker Change: Significant role in the future because that is actually the foundation of what we bet. The company on six years ago, which was really around data and AI, but really the bank was about delivering experiences where we do the work for our customers and so on.

Speaker Change #148: Helping drive revenue growth and profitability growth for businesses, what it means for US is we believe it will have an impact in a couple of areas one new customer growth, particularly the smaller customers, but then to adoption of our services because the examples I just mentioned take a picture of a scribble note upload a PDF file.

Speaker Change: Number of areas that our customers are using today as part of the 1 million that I mentioned is.

Speaker Change: Along the lines of marketing campaigns with proposed.

Speaker Change: Revenue that our customers can garner that we could then execute on the behalf of our customers.

Speaker Change #149: We'll create estimates invoicing progress payments that alternatives into revenue for us and so and that by the way it doesn't even touch on the fact that embedded in our platform going forward is going to be AI powered live expertise, which is a monetize able that ultimately with the goal of we do everything for you and with you and so.

Speaker Change: Things like taking by the way pictures.

Speaker Change: An estimate that you may have written on the goal that you can take a picture album, we will create a digitized estimate invoice.

Speaker Change: Payment schedule that you want all within the platform send it to your customer.

Speaker Change: Mind, you in the business feed of and.

Speaker Change #149: It will be an enormous sort of part of our experience and growth in the future.

In essence invoices that are overdue capital that we can give you access to and Thats. What I. Just mentioned are elements of what some of our customers are using today and so we're really right now focused on sort of money in money out because those are the most critical areas for our customers.

And we're making really good progress all of which by the way will also show all of you at Investor Day, and I'll end with where I started none of this is contemplated in our in our guidance.

Speaker Change #149: But it's a big part of our future and we're excited about it.

Speaker Change #149: Super Thank you so much.

Speaker Change: And if I just take a step forward ultimately our entire goal because of our advantage which is data.

Speaker Change #149: Thank you.

Speaker Change #150: Thank you well go next now to Kartik Mehta at Northcoast research.

Speaker Change: And AI are.

Speaker Change: Our goal is that we do all of the work for our customers. These examples I just illustrated is all on that path now what it means for for US as a company beyond the of course the benefit of health.

Speaker Change #149: Okay.

Speaker Change #150: Good evening.

Speaker Change #150: Hum.

Speaker Change #150: Most of them.

It seems as though you are executing on our lives.

Speaker Change #152: To execute on the full service.

Speaker Change: Helping drive revenue growth and profitability growth for businesses, what it means for US is we believe it will have an impact in a couple of areas one new customer growth, particularly the smaller customers, but then to adoption of our services because the examples I just mentioned take a picture of a scribble note.

Speaker Change #152: I'm just wondering what was the thought.

Speaker Change #153: Lowering guidance now considering the momentum building in the business.

Speaker Change #154: Yes. Thank you for the question first of all I would start with it's actually one platform and that's the power of our scale.

Speaker Change #155: Customers ultimately can do it themselves that can do it with the assistant or we will do it for customers and it's all one turbotax platform and our experts our virtual experts all fit on the same platform, except though on the other side of the platform, which is leveraging the customers' data and AI capabilities to do their tax.

Speaker Change: Upload a PDF file will create estimates invoicing progress payments that alternatives into revenue for us and so and that by the way it doesn't even touch on the fact that embedded in our platform going forward is going to be AI powered live expertise, which is a monetize able that ultimately with the goal of we do everything for you.

Speaker Change #155: So its for them or with them, but I just wanted to start with that foundational point that it's not a lot of different products. It's actually one platform, which is what gives us the.

And with you and so it will be an enormous sort of part of our experience and growth in the future and we're making really good progress all of which by the way will also show all of you at Investor Day, and I'll end with where I started none of this is contemplated in our in our guidance.

Speaker Change #155: The scale that we're looking for when we make decisions.

Speaker Change #155: <unk> long term expectations, we don't make them lately in fact.

Speaker Change #155: It was five and a half years ago right when I became CEO we.

Speaker Change: But it's a big part of our future and we're excited about it.

<unk> updated.

Speaker Change: Super Thank you so much.

Speaker Change #155: The long term expectations.

Speaker Change: Thank you.

Speaker Change #155: And so we take these decisions very seriously and really what and so it's something we've been thinking about for some time and really it comes down to a very.

Speaker Change: Thank you for the next amount to Kartik Mehta at Northcoast research.

Okay.

With them.

Speaker Change #155: Simple math equation.

Speaker Change #156: When you look at the our Tam, which is 35 billion $5 billion do it yourself and $30 billion assisted both consumer and business, that's where the largest growth opportunity is and that's where we're really growing high double digits, 17% customers growing 11% and 30% of the franchise today.

Speaker Change: Of course.

It seems as though you're executing on the wide body starting to execute on the full service.

Speaker Change: I'm just wondering what was the thought maybe.

Maybe lowering guidance now considering the momentum we are building into Brazil.

Speaker Change: Yes. Thank you for the question first of all I would start with it's actually one platform and that's the power of our scale.

Speaker Change #155: Hey.

Speaker Change #157: And we also being very aggressive with DIY, both complex higher income customers, but based on some green shoots that we saw this year. We're also going to be very assertive with lower income.

Speaker Change: Customers ultimately can do it themselves that can do it with assistant or we will do it for customers and it's all one turbotax platform and our experts our virtual experts all sit on the same platform, except theyre on the other side of the platform, which is leveraging the customers' data and AI capabilities to do that.

Speaker Change #158: Folks that are in the do it yourself category and in that context, we just felt like the time was right to.

Speaker Change #159: To not only guide prudently for the coming year, but also adjust our long term expectations and I want to reiterate what you heard from Sandy it's an interim adjust and once we get to sustained growth double digit well then rethink the long term guidance, but until then that's what informed the decision that we made.

Speaker Change: <unk> for them or with them, but I just wanted to start with that foundational point that it's not a lot of different products. It's actually one platform, which is what gives us.

Speaker Change: The scale that we're looking for.

Speaker Change: Make decisions around long term expectations, we don't make them lately in fact.

And just one follow up.

Speaker Change #159: You look at the health of the small business any change.

Speaker Change: I think it was five and a half years ago right when I became CEO.

Speaker Change #159: And as you look throughout the quarter.

Speaker Change #160: Changes that maybe cause you concern.

Speaker Change: We had updated the long term.

Speaker Change: Expectations are.

Speaker Change #161: Or what's happening to your customers.

<unk>.

And so we take these decisions very seriously and really what and so it's something we've been thinking about for some time and really it comes down to a very simple.

Speaker Change #162: The headline I would give you kartik is stable.

Speaker Change #163: Across our small businesses, we generally different differs by the way by sector by state by country, but at an Uber level, we see revenue and profitability up in this fiscal year for businesses that we serve.

Speaker Change: Simple math equation.

Speaker Change: When you look at the our Tam, which is 35 billion $5 billion do it yourself and $30 billion assisted both consumer and business, because that's where the largest growth opportunity is and that's where we're really growing high double digits, 17% with customers growing 11% and 30% of the franchise today.

Speaker Change #163: We see cash reserves still down 6% to 7% compared to last year, but its way up compared to pre pandemic levels. We also see hours work higher so.

Speaker Change #163: Headline is it's stable and by the way we see the same thing on the consumer side, which is stable.

Speaker Change: And we're also being very aggressive with DIY, both complex higher income customers, but based on some green shoots that we saw this year. We're also going to be very assertive with lower income.

Speaker Change #163: Thank you very much appreciate it.

Speaker Change #163: Very welcome.

We'll go next now to Daniel Jester with BMO capital markets.

Speaker Change: Folks that are in the do it yourself category and in that context, we just felt like the time was right to.

Speaker Change #164: Great. Thanks for taking my question. It is great to hear about <unk> lives or number of clients more than tripling can you send a moment and talking about what's resonating there and as you move more into the middle market.

Speaker Change: To not only guide prudently for the coming year, but also adjust our long term expectations and I want to reiterate what you heard from Sandy it's an interim adjust.

Sandy: And once we get to sustained growth double digit well then we think the long term guidance, but until then that's what informed the decision that we make.

Speaker Change #164: The opportunity for <unk>.

Speaker Change #165: Alive to accelerate that more upmarket push backs.

Speaker Change: And just one follow up.

Speaker Change: You look at the health of the small business any change as you look throughout the quarter.

Speaker Change #166: Yes. Thank you for the question, let me let me start with your question of what's resonated with the smaller businesses for US, we've actually had product market fit meaning that our.

Speaker Change: Changes that maybe cause you concern for what's.

Speaker Change: What's happening to your customers.

Speaker Change #167: Experts on our platform can really help our businesses with bookkeeping accounting, providing advice really the biggest challenge that we've been working through in the last year.

Speaker Change: The headline I would give you kartik is stable.

Kartik Mehta: Across our small businesses, we generally this different differs by the way by sector by state by country, but at an Uber level, we think.

Kartik Mehta: New and profitability up in this fiscal year for businesses that we serve.

Speaker Change #167: How do I think about the benefit how do you think about the offering how do we actually go to market.

Kartik Mehta: We see cash reserves still down 6% to 7% compared to last year, but its way up compared to pre pandemic levels. We also see hour's worth highlighting.

Speaker Change #168: Because the great news is every business at some point in their life throughout a year very engaging a bookkeeper and an accountant. So we're not trying to create an opportunity the opportunity is there. It's just it's manual.

Kartik Mehta: Headline is it's stable and no matter, what we see the same thing on the consumer side, which is stable.

Speaker Change #169: Again, it is high priced and so really the biggest thing has been our focus on how do you really help the customer understand that this is now part of our platform and that we can help them with all the key problems that they have and I would say that that's a area where.

Speaker Change: Thank you very much appreciate it.

Speaker Change: Very welcome.

Speaker Change: We'll go next now to Daniel Jester with BMO capital markets.

Daniel Jester: Great. Thanks for taking my question. It is great to hear about <unk> lives or number of clients more than tripling can you.

Speaker Change #169: We've really uncovered how to do that and we're accelerating and I don't want to.

Speaker Change #170: Makes you feel like we've reached the destination I think we still have a lot of work to do in this area, but we really I would say cracked that nut.

Speaker Change: In a moment and talking about what's resonating there.

Speaker Change: And as you move more into the middle market, but what's the opportunity for <unk> to be alive to accelerate that more upmarket push backs.

Speaker Change #171: We're excited about particularly around our decision to embed AI powered experts into our offering as we look ahead.

Speaker Change #171: And lastly, this is a far bigger opportunity with larger customers because they expect that they expect our CFO for a higher on HR prefer a higher they expect and assistant to be able to help them with their books with their accounting.

Speaker Change: Yes. Thank you for the question, let me let me start with your question of what's resonated with the smaller businesses for US, we've actually had product market fit meaning that our.

Speaker Change #172: Employee inventory decisions and so part of what you'll hear us talk about at Investor day, as we are accelerating our focus with mid market with a business suite that has all the key capabilities that a business need a big element of it is the expertise that comes with I think the differentiator for US is these are AI powered experts that fit on the platform.

Experts on our platform can really help our businesses with bookkeeping accounting providing advice.

Speaker Change: The biggest challenge that we've been working through in the last year.

Speaker Change: Is how do I think about the benefit how do you think about the offering how do we actually go to market.

Speaker Change #172: And we can really provide a range of services for customers, but we believe it is a bigger opportunity as we move up market.

Speaker Change: Because the great news is every business at some point in their life throughout a year very engaging a bookkeeper and an accountant. So we're not trying to create an opportunity the opportunity is there. It's just it's manual.

Speaker Change #172: And last thing by the way I'll end with these are small sample sizes still but.

Speaker Change #173: Those that have live experts the attach and use of services like payments and payroll actually higher which really is a great benefit for customers and for us.

Speaker Change: Again, it is high priced and so really the biggest thing has been our focus on how do you really help the customer understand that this is now part of our platform and that we can help them with all the key problems that they have and I would say that that's a area, where we've really uncovered how to do that.

Speaker Change #173: Great. Thank you very much.

Speaker Change #173: Very welcome.

Speaker Change #173: We'll go next now to Arvin Romani at Piper Sandler.

Speaker Change #174: Hi, This is Tom.

Speaker Change: And we are accelerating and I don't want it.

Arvin Romani: Thanks for taking my question.

Speaker Change: Makes you feel like we've reached the destination I think we still have a lot of work to do in this area, but we've really crack that not that we're excited about particularly around our decision to embed AI powered experts into our offering as we look ahead.

Arvin Romani: Yes.

Speaker Change #176: Couple of questions.

Speaker Change #177: I'm on the prior calls ill provide some additional color on some of the kind of benefits, you're seeing with with AI and feeling good.

Speaker Change #177: Given the.

And lastly, this is a far bigger opportunity with larger customers because they expect that they expect our CFO for a higher on HR prefer a higher they expect and assistant to be able to help them with their books with their accounting with their employee inventory decisions and so part of what you'll hear us talk about at Investor day, as we are accelerating our focus with mid market.

Speaker Change #178: Sorry, you're cutting in and out.

Speaker Change #179: We can go ahead sir.

Speaker Change #179: Cynthia.

Speaker Change #180: Yeah, I'm, just trying to get to get some color on your.

Speaker Change #181: Some of the impact of AI.

Speaker Change #182: C N book, both from a revenue add but also from a cost perspective.

Speaker Change #183: Across the business is there any additional information you're able to kind of provide in terms of quantification of those benefits are starting to see.

Speaker Change: With a business suite that has all the key capabilities that a business need a big element of it is the expertise that it comes.

Speaker Change: I think the differentiator for US is these are AI powered experts that fit on the platform. We can really provide a range of services for customers, but we believe it is a bigger opportunity as we move up market.

Speaker Change #183: Yeah. Thank you for your question I think a couple of things I would say first of all we're seeing.

Speaker Change #184: The impact of our usage and innovation across all of our platforms across credit Karma, It's really driving a lot of the automation and do it for our customers within turbotax, even with Turbotax full service, where we're doing a lot of the work for experts so that way it can serve more customers and of course across the our business plan.

Speaker Change: And last thing by the way I'll end with these are small sample sizes still but.

Speaker Change: Those that have live experts the attach and use of services like payments and payroll actually higher which really is a great benefit for customers and for us.

Speaker Change: Great. Thank you very much.

Speaker Change #184: Form that I articulated the examples earlier, so I wanted to first be clear. This is broad based across our entire platform and.

Speaker Change: Very welcome.

Speaker Change: We'll go next now to Arvin Romani at Piper Sandler.

Speaker Change #184: We are really focused on how AI re imagines our internal work with them and to us as well.

Tom: Hi, This is Tom.

Tom: Thanks for taking my question.

Tom: Yes.

Speaker Change: Couple of questions.

Speaker Change #184: I would say the the.

Speaker Change: I'm on the prior calls ill provide some additional color on some of the kind of benefits, you're seeing with with AI and feeling good.

Speaker Change #185: Really the revenue is immaterial this year and we're getting it accounts for anything in the coming year, but we believe it will be a large driver of growth in the future years and the growth will be really usage of services better conversion better retention and these are the green shoots that we're seeing with for instance, R 1 million businesses that are using it.

Speaker Change: Given the.

Speaker Change: Sorry, you're cutting in and out.

Speaker Change #100: We can go ahead sir.

Speaker Change: Cynthia.

Speaker Change #186: Today and in terms of our cost structure remember data and AI has been core to our investment thesis and our bet over the last five six years and what we do is not capital intensive at the same time, we're very intentional about the investments that we've had to make in any investments we need to make to win in this world of AI it's been.

Cynthia: Yeah, I'm, just trying to get to get some color on your.

Cynthia: Some of the impact of AI.

C N: C N book, both from a revenue add but also from a cost perspective.

C N: Across the businesses.

Speaker Change #103: Additional information you're able to kind of provide in terms of quantification of the benefit is just starting to see.

Speaker Change #104: Yeah. Thank you for your question I think a couple of things I would say first of all we're seeing.

Speaker Change #186: Contemplated in the guidance that you heard from from Sandy I don't know Sandeep, if you'd add anything no I think that covers it is one thing to keep in mind as it compares to possibly other.

<unk>.

The impact of our usage and innovation across all of our platforms across credit Karma, It's really driving a lot of the automation and do it for our customers within turbotax, even with Turbotax full service, where we're doing a lot of the work for experts so that way it can serve more customers and of course across to our business.

Speaker Change #187: Companies in your portfolio.

Speaker Change #188: It's really been in our run rate so I wouldn't expect any.

Speaker Change #189: I mean, if we're changing our cost structure secondly views.

Speaker Change #190: Yes for a lot of the processing. So it's not like we're building up our own data centers. So that's also very asset light for us.

Speaker Change #104: What form that I articulated the examples earlier, so I wanted to first be clear. This is broad based across our entire platform and we.

And the other factor is the fun alluded to we have a quite frankly also seeing improvement on productivity improvements and a drop of productivity. We are seeing improvements in our overall G&A productivity. So just two factors to keep in mind that.

Speaker Change #104: We are really focused on how AI re imagines our internal work with it and enjoy it as well.

Speaker Change #190: Yeah.

Speaker Change #105: I would say the the.

Speaker Change #190: B E.

Speaker Change #106: Really the revenue is immaterial this year and we're getting accounts for anything in the coming year, but we believe it will be a large driver of growth in the future years and the growth will be really usage of services better conversion better retention and these are the green shoots that we're seeing with for instance, R 1 million businesses that are using it.

Speaker Change #190: Not in the way of our commitment to continue to find operating leverage and continue to scale our margin overtime.

Speaker Change #190: Perfect.

Speaker Change #190: One quick follow up.

Speaker Change #190: So what takes lives.

Speaker Change #190: As you're thinking of kind of directing question.

Speaker Change #190: The customer to having kind.

Speaker Change #190: Okay.

Today and in terms of our cost structure remember data and AI have been core to our investment thesis and our bet over the last five six years and what we do is not capital intensive at the same time, we're very intentional about the investments that we've had to make and any investments we need to make to win in this world of AI it's been.

Speaker Change #191: Sort of answered both with Quickbooks live.

Speaker Change #192: You know kind of the continental CPA, obviously, the year is going to be like a lower ARPA with.

Someone who who is basically like monarch service oriented.

Speaker Change #192: How do you want to balance it because one does come out like higher or lower margin.

Speaker Change #192: And of course, they are lower.

Andy: Contemplated in the guidance that you heard from from Sandy I don't know if Andy if you'd add anything no I think that covers it is one thing to keep in mind as it compares to parse together.

Speaker Change #192: Revenue, but Florida.

Speaker Change #193: But higher margins.

Speaker Change #192: All of them set out.

Speaker Change #192: Yeah.

Speaker Change #194: I think the premise of what Youre articulating is not what we're seeing we actually believe that based on all of our investments with data and AI, it's actually higher ARPA because it drives better attach of our services it actually drives.

Speaker Change #106: Companies in your portfolio.

Speaker Change #108: <unk> really been in our run rate so I wouldn't expect any.

Speaker Change #108: It's meaningful.

Speaker Change #108: Meaningfully changing our cost structure secondly be used.

Speaker Change #110: AWS for a lot of the processing. So it's not like we're building up our own data centers. So that's also very asset light for us and the other factor is a fun alluded to we are quite frankly also seeing improvement on productivity improvements and a drop of productivity. We are seeing improvements in our overall G&A productivity. So just two factors to keep in mind that.

Speaker Change #194: More attach of our human power expertise and by the way.

Speaker Change #195: Human powered experts or AI powered human experts get involved they're actually quite effective and productive because they are sitting on our data and AI platforms. So we're actually seeing two things one.

Speaker Change #196: Higher <unk> over time, because of what I articulated, but also more effective in efficiency on our platform. Because we are as aggressive as we are in applying AI externally, we're as aggressive internally based on what you just heard sandy talk about so it's actually the reverse of the premise that you talked about in terms of what we see and I don't know Sandeep if you would.

Speaker Change #108: Yeah.

Speaker Change #111: B E.

Speaker Change #111: Not getting the way of our commitment to continue to find operating leverage and continue to scale our margin overtime.

Speaker Change #112: Perfect and just one quick follow up just on Turbotax live.

Speaker Change #113: As you are thinking of kind of directing question.

Speaker Change #113: Your customers too.

Anything.

Speaker Change #114: Having kind.

Speaker Change #197: I think to keep in mind is AI is the name of the game is talk about confidence and the limited any fear uncertainty and doubt and by using AI by using a kind of an expert we are actually doing that at scale and the important thing to keep in mind is that helping us open up the aperture.

Speaker Change #113: Okay.

Speaker Change #113: Sort of answered both with Quickbooks live.

You know kind of the continental CPA, obviously, the a is going to be like a lower ARPA with.

Speaker Change #113: Someone who who is basically like monarch service oriented.

Speaker Change #113: How do you balance that because one does come out like higher article, but lower margin.

Speaker Change #197: Customers, we can serve and really go after penetrating a tam that's driving a lot of the success that you're seeing in the assisted category. So those are the fleet.

Speaker Change #115: And of course, they are lower.

Speaker Change #115: Revenue, but Florida.

Speaker Change #115: But higher margin or they have been set out.

Speaker Change #198: Our first to us some of the do it with me so just something to keep in mind as you look at the strategic opportunities that this opens up for us as well.

Speaker Change #115: Yeah.

Speaker Change #116: I think the premise of what Youre articulating is not what we're seeing we actually believe that based on all of our investments with data and AI.

Speaker Change #198: That's incredibly helpful. Thank you very much.

Speaker Change #198: Thank you.

Actually higher Arco, because it drives better attach of our services it actually drives.

Speaker Change #198: Thank you. We'll go next now to Brad Sills with Bank of America.

Speaker Change #116: More attach of our human power expertise and by the way.

Speaker Change #198: Okay wonderful I wanted to ask a question around the platform for AI the Gen OS in the <unk>.

Speaker Change #116: Human powered experts or AI powered human experts get involved they're actually quite effective and productive because they are sitting on our data and AI platforms. So we're actually seeing two things one.

Speaker Change #199: Studio that you've outlined in the past I know, it's a little further out to start thinking about separate skus.

Sounds like this is more of a conversion and retention play in the near term, but what were some of the learnings that you had over the course of the year at building out that platform for AI harnessing the data at some of the platform components that you've outlined at the analyst day last year that are underpinning that thank you so much.

Sandeep: Higher <unk> over time, because of what I articulated, but also more effective in efficiency on our platform. Because we are as aggressive as we are in applying AI externally, we're as aggressive internally based on what you just heard sandy talk about so it's actually the reverse of the premise that you're talking about in terms of what we see and I don't know Sandeep if you would.

Speaker Change #199: Sure first of all let me, let me start with your question around the.

Speaker Change #200: The Skus. This is a progression and this is a really important element to call out what you've heard US talk about is that we believe and we're seeing this in our proof points.

Speaker Change #116: Anything.

Sandeep: Things to keep in mind is AI is the name of the game is software confidence and the limited any fear uncertainty and doubt and by using AI by using a cover experts, we're actually doing that at scale and the important thing to keep in mind. This is actually helping us open up the aperture.

Speaker Change #201: And the Green shoots that we're seeing is that one this will drive new customer growth because it will just make it far easier and simpler for a new customer to use our digital platform that comes with AI powered experts to we believe that it's an opportunity for the adoption of our services, which also includes lives.

Sandeep: Customers, we can serve and really go after penetrating a tam that's driving a lot of the success that you're seeing in the assisted category. Some of those are fleet.

Sandeep: Our first to us some of those that do it with me so just something to keep in mind as you look at the strategic opportunities that this opens up for us as well.

Speaker Change #201: Services like payments payroll, Mel Champ, and and our live platform, which is our AI powered human experts and those are significant customer and growth drivers for us the progression is as we are.

Speaker Change #117: That's incredibly helpful. Thank you very much.

Speaker Change #117: Thank you.

Speaker Change #202: Focus on the innovation that we articulated earlier things such as literally a customer being able to take a picture of a scribble notes upload a PDF document for us to be able to put together an estimate all the way to getting them paid following up with their customers, putting marketing campaigns to get it for them.

Speaker Change #119: Thank you. We'll go next now to Brad Sills with Bank of America.

Brad Sills: Okay wonderful I wanted to ask a question around the platform for AI the Gen OS in the <unk>.

Brad Sills: The studio that you've outlined in the past I know, it's a little further out to start thinking about separate skus.

Speaker Change #121: Sounds like this is more of a conversion and retention play in the near term, but what were some of the learnings that you had over the course of the year building out that platform for AI harnessing the data and some of the platform components that you've outlined at the analyst day last year that are underpinning that thank you so much.

Speaker Change #203: <unk>, we will get to a place where we'll actually test standalone Skus, where the agent is doing everything for the customer and that could be a standalone SKU that we could test sometime in the future.

Speaker Change #203: But you have to progress your way to that and that's really what the elements of progression.

Speaker Change #122: Sure first of all let me let me start with your question around the <unk>.

Speaker Change #204: <unk> talked to that the last thing, which I think it was the other element of your question.

Speaker Change #123: The Skus. This is a progression and this is a really important element to call out what you've heard US talk about is that we believe and we're seeing this in our proof points.

Speaker Change #205: What we're doing is really harm, which we love because it's hard to replicate and what's hard about it is first you have to have the data and we have.

Speaker Change #123: And the Green shoots that we're seeing is that one this will drive new customer growth because it will just make it far easier and simpler for a new customer to use our digital platform that comes with AI powered experts to we believe that it's an opportunity for the adoption of our services, which also includes live services.

A lot of data is our customers' data, but when you look at for every business. We have 500000 data points that means we are uniquely positioned to be able to help them with managing their cash flow because it's about their cash flow without something generic because we see all of their money coming in and money going out either.

Speaker Change #205: The credit worthiness of their vendors the employees that they have and so the investments that we've made in the data.

Speaker Change #123: Services like payments payroll, Mel Champ, and and our live platform, which is our AI powered human experts and those are significant customer and growth drivers for us the progression is as we are.

Speaker Change #205: It has been more than ever a crucial because then it allows us to leverage our gen Oss platform, which is our gen AI capabilities.

Speaker Change #123: Focus on the innovation that we articulated earlier things such as literally a customer being able to take a picture of a scribble notes upload a PDF document for us to be able to put together an estimate all the way to getting them paid following up with their customers, putting marketing campaigns together for them.

Speaker Change #206: Train B Intuit llm's on the customer's data to be able to then deliver the experiences that I was just articulating and our Llm's half agency and authority to be able to use other allo labs that can enhance the experience. So the biggest thing that we've learned sort of punch line to answer. Your question is the combination of the <unk>.

Speaker Change #123: Ration is we will get to a place where we'll actually test standalone skus, where the agents is doing everything for the customer and that could be a standalone SKU that we could test sometime in the future.

Data investments the investments we've made of knowledge engineering machine learning into our Ala labs.

Speaker Change #206: That really delivers accuracy performance cost effectively.

Speaker Change #123: But you have to progress your way to that and that's really what the elements of progression.

Speaker Change #206: Extremely hard to copy.

Speaker Change #207: Because we live in a world of financial management, and that's really our biggest advantage going forward and really our biggest growth opportunity as we look ahead.

Talk to.

The last thing was I think it was the other element.

Speaker Change #208: That's exciting thanks Hassan.

Speaker Change #124: Your question.

What we're doing is really harm, which we love because it's hard to replicate and what's hard about it is first you have to have the data and we.

Speaker Change #207: Yes. Thank you.

Speaker Change #209: Thank you and ladies and gentlemen that is all the time, we have for questions. This afternoon at this times of good Archie I'd like to turn things back to you for any closing comments.

Speaker Change #125: Had a lot of data is our customers' data, but when you look at for every business. We have 500000 data points that means we are uniquely positioned to be able to help them with managing their cash flow because it's about their cash flow, it's not about something generic because we see all of their money coming in and money going out.

Speaker Change #210: Well listen everybody. Thank you for your time. Thank you for all of your questions and we hope to see all of you at Investor Day.

Speaker Change #211: Be safe, we'll see you soon bye bye.

Speaker Change #212: Thank you, ladies and gentlemen that does conclude into its fourth quarter and fiscal year 2024 conference call again. Thanks, so much for joining US everyone and we wish you all agreed evening Goodbye.

Speaker Change #125: Credit worthiness of their vendors the employees that they have and so the investments that we've made in the data.

Speaker Change #211: Uh huh.

Speaker Change #125: It has been more than ever a crucial because then it allows us to leverage our gen Oss platform, which is our gen AI capabilities.

Speaker Change #125: And train the Intuit llm's on the customer's data to be able to then deliver the experiences that I was just articulating and our Llm's half agency and authority to be able to use other allo labs that can enhance the experience. So the biggest thing that we've learned.

Speaker Change #125: Punchline answer your question is the combination of the data investments the investments we've made of knowledge engineering machine learning into our Ala labs.

Speaker Change #125: That really delivers accuracy performance cost effectively.

Speaker Change #125: It's extremely hard to copy.

Speaker Change #125: Because we live in a world of financial management, and that's really our biggest advantage going forward and really our biggest growth opportunity as we look at.

Hassan: That's exciting thanks Hassan.

Yes. Thank you.

Archie: Thank you and ladies and gentlemen that is all the time, we have for questions. This afternoon. At this time, it's a good Archie I'd like to turn things back to you for any closing comments.

Archie: Well listen everybody. Thank you for your time. Thank you for all of your questions and we hope to see all of you at Investor day be safe, we'll see you soon bye bye.

Archie: Thank you, ladies and gentlemen that does conclude into its fourth quarter and fiscal year 2024 conference call again. Thanks, so much for joining US everyone. We wish you all agreed evening Goodbye.

Archie: [music].

Mhm mhm.

Archie: Hum.

Archie: [laughter].

Archie: Yeah.

Archie: No no.

Archie: Hum.

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