What happened with INTU today?
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Intuit’s largest business helps small and mid-sized businesses and accountants manage their finances. Customers pay for QuickBooks accounting subscriptions and related services, such as running payroll and processing payments. Intuit Enterprise Suite serves more complex business needs, while Mailchimp provides marketing tools. Business offerings bring in most of the company’s revenue, with online software and services carrying more of that business than desktop products.
Consumers pay TurboTax to prepare and file tax returns themselves or with expert help; professional accountants buy ProTax software to prepare clients’ returns. Credit Karma takes a different route: it helps users find financial products, and banks and other partners pay for customer actions such as clicks, leads, issued credit cards or funded loans. That income depends on partners continuing to offer products through the platform.
Most revenue comes from the United States. The tax business depends on customers returning each year, and its sales cluster around tax-filing season. Lending and payments offerings require licenses, while tax services must meet revenue agencies’ electronic-filing requirements. Credit Karma’s use of user data is also subject to an FTC order requiring a comprehensive security program and independent security assessments.
The risk section is the longest, dullest part of the filing. This keeps only what can really hurt you: where it hits, how hard, when it plays out.
Every company claims an edge. Each one is checked against hard numbers like margins and returns: which hold, and which line gives way first.
Intuit’s largest business depends on small-business demand for accounting, payroll and payments, making Sage an important rival to watch beyond this list.
Automatic Data Processing (ADP) competes with Intuit’s QuickBooks Payroll and Workforce for small-business and mid-market employers’ payroll spending. Watch ADP’s RUN and Workforce Now offerings for signs of competition in the customer groups behind Intuit’s online payroll revenue.
Microsoft competes for the small and mid-sized companies that pay Intuit for accounting and business-management software: its Dynamics 365 Business Central goes up against QuickBooks and Intuit Enterprise Suite.
Thomson Reuters competes for accounting firms’ software spending, with professional tax-preparation and accounting tools that rival Intuit’s Lacerte, ProSeries and ProConnect.
HubSpot competes with Intuit’s Mailchimp for growing businesses’ spending on automated marketing and customer relationship tools. Its paid marketing and Smart CRM offerings are the part to watch for competition with Mailchimp, rather than its broader sales and service tools.
Klaviyo, Inc. competes with Intuit’s Mailchimp for businesses’ subscriptions to email marketing, customer-data tools and automated customer engagement. Watch its retail and eCommerce customers—the areas where Klaviyo has a strong presence—for competition facing Mailchimp.
Paylocity Holding Corporation competes with Intuit’s QuickBooks Payroll and Workforce for small and mid-sized employers’ payroll and employee-management spending. Its revenue depends on customers’ employee counts and the services they buy, making those useful signals of spending in this overlapping market.
Gen Digital competes with Intuit’s Credit Karma for consumers looking for loans and other financial products through its MoneyLion offerings and Engine marketplace.
Workday competes with Intuit Enterprise Suite and QuickBooks workforce tools as Intuit expands into mid-market businesses, selling employers subscriptions for financial and employee management. Watch Workday’s medium-sized business customers for competition in the market Intuit is pursuing.
Salesforce competes with Intuit’s Mailchimp for businesses’ spending on finding and engaging customers, through its marketing and small-business customer relationship tools.
Automatic Data Processing earningsADP
ADP’s report can show whether small and mid-sized employers are buying payroll services, a signal for Intuit’s QuickBooks Payroll and Workforce.
Watch ADP’s RUN and Workforce Now businesses alongside changes in employer customers and payroll-services revenue. Growth in both would show that small and mid-sized employers are still buying payroll services: a market Intuit can pursue, but one with active competition. Weakness in both would mean less evidence of rising demand or pressure from a stronger rival. The reader can judge whether Intuit’s payroll business faces a growing market or a tougher fight for customers.
Gen Digital Inc. earningsGEN
Gen Digital’s report can show whether consumers are using MoneyLion and Engine to find loans and other financial products, signaling competition for Intuit’s Credit Karma.
Look at customer activity and revenue tied to MoneyLion and Engine. Stronger use and revenue would point to a more active market for consumer-finance referrals—and more competition as Credit Karma seeks transactions involving loans, credit cards and other products. Weaker results would offer less evidence of rising competitive pressure, but would not prove Credit Karma is growing. The reader can judge whether the market around Credit Karma is getting more crowded.
Microsoft Corp earningsMSFT
Microsoft’s report can show whether Dynamics 365 Business Central is gaining ground with small and mid-sized businesses that Intuit serves with QuickBooks and Intuit Enterprise Suite.
Watch for what Microsoft says about Business Central adoption, and read it alongside Dynamics performance. Rising adoption with stronger Dynamics results would suggest Microsoft is pushing harder for these businesses’ software spending; weaker results or no sign of increased adoption would offer less evidence that the competitive threat is expanding. The reader can judge whether Intuit’s accounting and management software faces a stronger rival among small and mid-sized businesses.
Fed Interest Rate Decision
The Fed’s rate decision signals the cost of borrowing across the economy, which can affect how easily Intuit’s small-business and consumer borrowers repay loans and what Intuit pays to borrow.
Expected4.0%Last release4.0%
If it comes in above expectations
If rates rise more than expected, repayments may become harder for Intuit’s small-business and consumer borrowers, weakening loan collections; higher rates can also raise its borrowing costs.
If it comes in below expectations
If rates fall below expectations, borrowing may become cheaper and repayments easier for Intuit’s small-business and consumer borrowers, potentially supporting loan collections and lowering its borrowing costs.
Thomson Reuters Corporation earningsTRI
Thomson Reuters’ report can show whether accounting firms are spending on professional tax and accounting tools that compete with Intuit’s Lacerte, ProSeries and ProConnect.
Look at demand for Thomson Reuters’ tax and accounting software, along with any reported customer or subscription growth. Stronger demand and subscriptions would show that accounting firms are still investing in professional tools, making competition for that spending more active; weakness in both would offer less evidence that rivals are pressing harder. The reader can judge whether Intuit’s professional tax products face a fiercer contest for accounting firms.
HUBSPOT, INC. earningsHUBS
HubSpot’s report can show whether growing businesses are buying paid marketing and Smart CRM tools that compete with Intuit’s Mailchimp.
Focus on demand for HubSpot’s paid marketing and Smart CRM offerings, rather than treating its broader sales and service tools as competition for Mailchimp. Stronger demand would show that growing businesses are paying for marketing automation and customer-management tools, putting more pressure on Mailchimp to win that budget; weaker demand would offer less evidence that this part of the market is heating up. The reader can judge whether Mailchimp faces a harder fight for marketing-tool spending.
Intuit Inc earningsThis company
Intuit’s report will show whether QuickBooks-led online business services are still turning small-business demand into revenue and operating income.
Read Global Business Solutions revenue growth alongside its operating income, and note how the Online Ecosystem is doing. If revenue and operating income both grow, QuickBooks and related online services are attracting small businesses and turning that demand into profit. Slower revenue growth, or operating income falling behind revenue, would point to weaker momentum or profitability in the core business. That tells readers whether Intuit’s core small-business services are still expanding or starting to lose pace.
Workday, Inc. earningsWDAY
Workday’s report can show whether medium-sized businesses are buying financial and employee-management subscriptions in the market Intuit is pursuing with Intuit Enterprise Suite and workforce tools.
Watch changes in Workday’s medium-sized business customers and adoption of its financial and employee-management products. Growth in both would show Workday strengthening its position in a market Intuit wants to enter, making those businesses’ software spending harder for Intuit to win; weakness in both would offer less evidence that Workday is expanding with these customers. The reader can judge whether competition is intensifying as Intuit moves further into the mid-market.
