Intuit Inc. Net Income surged on 24.7% and Revenue jumped on 15.2%
08/23/2018 • About Intuit Inc. (
$INTU) • By InTwits
Intuit Inc. reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Intuit Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 is 6.6%. Average EBITDA Margin for the same period was 30.2%
- Intuit Inc. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.7%. At the same time it's in pair with industry average of 7.6%
- CAPEX is quite volatile: $124m in FY2018, $230m in FY2017, $522m in FY2016, $261m in FY2015, $186m in FY2014
- The company has highly profitable business model: ROIC is 66.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 15.2%. Revenue growth showed acceleration in FY18Q4 - it increased 17.3% YoY. Revenue decline was slowing down on average by 3.8 pp per annum in the last 5 years. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 2.2 pp from 31.5% to 29.3% in FY2018.
Gross Margin decreased slightly on 0.75 pp from 84.4% to 83.6% in FY2018. SG&A as a % of Revenue showed almost no change in FY2018. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in FY2018.
Net Income margin increased slightly on 1.5 pp from 18.8% to 20.3% in FY2018. The efficient tax rate was 19.4% in FY2018 while the average for the last five years was 29.2%.
Investments (CAPEX, working capital and M&A)
In FY2018 Intuit Inc. had CAPEX/Revenue of 2.1%. Intuit Inc. showed decline in CAPEX/Revenue of 4.1 pp from 6.2% in FY2015 to 2.1% in FY2018. For the last three years the average CAPEX/Revenue was 5.9%. During FY2014-FY2018 CAPEX as a % of Revenue topped in FY2016 at 11.1% and was declining since that time.
Accounts receivable as a % of Revenue showed almost no change in FY2018. Accounts payable as a % of Revenue decreased slightly on 1.2 pp from 19.4% to 18.2% in FY2018.
Return on investment
The company operates at high and attractive ROIC (66.8%) and ROE (65.3%). ROIC decreased on 5.8 pp from 72.6% to 66.8% in FY2018. ROE dropped on 11.9 pp from 77.2% to 65.3% in FY2018.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.6x and Debt / EBITDA is 0.3x. Debt dropped on 10.2% while cash surged on 177%.
Intuit Inc. has good short term financial stability: Interest coverage ratio (ICR) is 74.9x. Intuit Inc. has no short term refinancing risk: cash is higher than short term debt (2,928.0%).
Average interest expence charged on company's debt was 4.6% in FY2018.
Valuation and dividends
The company's trades at EV/EBITDA 31.4x and P/E 46.2x.
The company paid 33.6% of Net Income as dividends in FY2018. Dividends grew on average at 13.1% per annum in the last 5 years).
Management team
CEO total compensation was
$21,071,738 in FY2018 which included
$1,000,000 salary. Michelle M Clatterbuck is a the company's CFO. Michelle M Clatterbuck has spent 1 year at the company.
Insider ownership is 3.7%. Insider ownership didn't change in 2018.
At the end of financial year the company had 8,200 employees. The number of employees didn't change in 2018. Average revenue per employee in FY2018 was
$727,317 and it jumped on 15.2%.
Financial and operational results
FY ended 07/31/2018
Intuit Inc. ($INTU) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 4,243 | 4,192 | 4,694 | 5,177 | 5,964 | 15.2% |
| Gross Profit | 3,640 | 3,467 | 3,942 | 4,368 | 4,987 | 14.2% |
| SG&A | 1,601 | 1,771 | 1,807 | 1,973 | 2,298 | 16.5% |
| EBITDA | 1,497 | 969 | 1,480 | 1,631 | 1,750 | 7.3% |
| EBIT | 1,300 | 738 | 1,242 | 1,395 | 1,497 | 7.3% |
| Interest expence | 31 | 27 | 35 | 31 | 20 | -35.5% |
| Tax | 447 | 299 | 397 | 396 | 292 | -26.3% |
| Net Income | 907 | 365 | 979 | 971 | 1,211 | 24.7% |
| Stock Based Compensation | 204 | 342 | 340 | 326 | 382 | 17.2% |
Balance Sheet
|
|---|
| Cash | 849 | 808 | 638 | 529 | 1,464 | 176.7% |
| Accounts Receivable | 115 | 91 | 108 | 103 | 98 | -4.9% |
| Accounts Payable | 145 | 190 | 184 | 157 | 178 | 13.4% |
| Short Term Debt | 0 | 0 | 512 | 50 | 50 | 0.0% |
| Long Term Debt | 499 | 500 | 488 | 438 | 388 | -11.4% |
Cash flow
|
|---|
| Capex | 186 | 261 | 522 | 230 | 124 | -46.1% |
| Dividends | 220 | 283 | 318 | 353 | 407 | 15.3% |
| Acquisitions | 471 | 95 | | | | |
Ratios
|
|---|
| Revenue growth | 1.7% | -1.2% | 12.0% | 10.3% | 15.2% | |
| EBITDA growth | 2.2% | -35.3% | 52.7% | 10.2% | 7.3% | |
|
|---|
| Gross Margin | 85.8% | 82.7% | 84.0% | 84.4% | 83.6% | -0.8% |
| EBITDA Margin | 35.3% | 23.1% | 31.5% | 31.5% | 29.3% | -2.2% |
| EBIT Margin | 30.6% | 17.6% | 26.5% | 26.9% | 25.1% | -1.8% |
| SG&A, % of revenue | 37.7% | 42.2% | 38.5% | 38.1% | 38.5% | 0.4% |
| SBC, % of revenue | 4.8% | 8.2% | 7.2% | 6.3% | 6.4% | 0.1% |
| Net Income Margin | 21.4% | 8.7% | 20.9% | 18.8% | 20.3% | 1.5% |
| CAPEX, % of revenue | 4.4% | 6.2% | 11.1% | 4.4% | 2.1% | -2.4% |
|
|---|
| ROIC | 34.2% | 23.7% | 52.1% | 72.6% | 66.8% | -5.8% |
| ROE | 27.4% | 13.5% | 56.1% | 77.2% | 65.3% | -11.9% |
| Net Debt/EBITDA | -0.2x | -0.3x | 0.2x | -0.0x | -0.6x | -0.6x |
| Interest expence / Average debt | 6.2% | 5.4% | 4.7% | 4.2% | 4.6% | 0.4% |
People
|
|---|
| Insider ownership | 3.7% | 3.7% | 3.7% | 3.7% | 3.7% | 0.0% |
| Employees | 8,000 | 7,700 | 7,900 | 8,200 | 8,200 | 0.0% |
| Revenue/Employee, th. $ | 530 | 544 | 594 | 631 | 727 | 15.2% |
Intuit Inc. ($INTU) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 910 | 1,339 | 2,912 | 988 | | 17.0% | 31.8% | 14.6% | 17.3% |
| EBITDA | 30 | 256 | 1,665 | -19 | | | 224.1% | 10.6% | -136.5% |
| Net Income | -2 | 183 | 1,186 | 49 | | | 1,307.7% | 23.0% | 104.2% |
Balance Sheet
|
|---|
| Cash | 529 | 478 | 1,614 | 1,464 | | 46.9% | 21.9% | 19.6% | 176.7% |
| Short Term Debt | 450 | 690 | 50 | 50 | | -28.0% | 0.4% | 0.0% | 0.0% |
| Long Term Debt | 425 | 413 | 400 | 388 | | -10.5% | -10.8% | -11.1% | -11.4% |
Ratios
|
|---|
| Gross Margin | 78.5% | 81.9% | 89.5% | 76.6% | | 2.0% | 1.8% | -1.1% | -1.6% |
| EBITDA Margin | 3.3% | 19.1% | 57.2% | -1.9% | | 4.1% | 11.3% | -2.1% | -8.1% |
| Net Income Margin | -0.2% | 13.7% | 40.7% | 5.0% | | 3.6% | 12.4% | 2.8% | 2.1% |
Peers in Application Software
Below you can find Intuit Inc. benchmarking vs. other companies in Application Software industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| nFusz Inc ($FUSZ) | | | | | 433.3% |
| CloudCommerce Inc ($CLWD) | | -38.1% | 247.6% | 40.9% | 301.1% |
| Seven Stars Cloud Group, Inc. ($SSC) | | 134.7% | 663.8% | 310.3% | 161.7% |
| Aurora Mobile Limited ($JG) | | | | 304.9% | 150.8% |
| Intelligent Systems Corporation ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (150 companies) | 27.9% | 14.0% | 14.3% | 15.7% | 15.2% |
|---|
| Intuit Inc. ($INTU) | | -1.2% | 12.0% | 10.3% | 15.2% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Skkynet Cloud Systems Inc ($SKKY) | 99.7% | 97.4% | 98.0% | 97.6% | 96.5% |
| hopTo Inc ($HPTO) | 91.8% | 87.8% | 95.9% | 98.2% | 95.4% |
| Aware, Inc. ($AWRE) | 75.4% | 87.2% | 90.3% | 94.6% | 92.3% |
| Alteryx, Inc. ($AYX) | 77.5% | 80.5% | 81.3% | 83.4% | 91.0% |
| Aspen Technology, Inc. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (149 companies) | 62.8% | 61.7% | 63.8% | 64.4% | 65.3% |
|---|
| Intuit Inc. ($INTU) | 85.8% | 82.7% | 84.0% | 84.4% | 83.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aspen Technology, Inc. ($AZPN) | 34.5% | 42.2% | 46.0% | 45.2% | 43.3% |
| ANSYS, Inc. ($ANSS) | 45.9% | 45.8% | 45.1% | 41.9% | 41.4% |
| Paycom Software, Inc. ($PAYC) | 15.1% | 19.5% | 35.1% | 34.4% | 35.9% |
| j2 Global, Inc. ($JCOM) | 41.6% | 40.6% | 41.7% | 36.5% | 35.7% |
| Adobe Inc. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (151 companies) | -10.3% | -10.7% | -5.3% | -4.2% | -3.3% |
|---|
| Intuit Inc. ($INTU) | 35.3% | 23.1% | 31.5% | 31.5% | 29.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| TimefireVR Inc ($TFVR) | 0.0% | 350.5% | 4.3% | | 1,021.9% |
| MGT Capital Investments Inc ($MGTI) | 0.0% | 36.5% | 221.4% | 129.8% | 344.5% |
| Integrated Ventures Inc ($INTV) | | | | | 199.9% |
| ShotSpotter, Inc. ($SSTI) | | 18.3% | 28.9% | 27.1% | 24.3% |
| Ellie Mae, Inc. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (152 companies) | 2.8% | 2.7% | 2.9% | 2.3% | 2.4% |
|---|
| Intuit Inc. ($INTU) | 4.4% | 6.2% | 11.1% | 4.4% | 2.1% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InsPro Technologies Corp ($ITCC) | -558.9% | | | | 127.4% |
| Manhattan Associates, Inc. ($MANH) | 64.8% | 78.7% | 99.3% | 102.5% | 80.9% |
| Aspen Technology, Inc. ($AZPN) | 133.4% | | | | 58.1% |
| Paycom Software, Inc. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| The Trade Desk, Inc. ($TTD) | | 63.3% | 42.1% | 30.0% | 32.2% |
| |
|---|
| Median (178 companies) | -14.4% | -13.1% | -9.8% | -11.8% | -9.8% |
|---|
| Intuit Inc. ($INTU) | 34.2% | 23.7% | 52.1% | 72.6% | 66.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Upland Software, Inc. ($UPLD) | | | 16.4x | 115.6x | 16.7x |
| Nuance Communications, Inc. ($NUAN) | 7.9x | 5.7x | 5.3x | 7.1x | 15.2x |
| Asure Software Inc ($ASUR) | 3.4x | 4.5x | 3.6x | 9.5x | 14.5x |
| SS&C Technologies Holdings, Inc. ($SSNC) | 1.7x | 7.3x | 4.6x | 3.1x | 8.5x |
| Avaya Holdings Corp. ($AVYA) | | | | | 7.4x |
| |
|---|
| Median (69 companies) | -1.4x | -1.0x | -0.9x | -0.9x | -0.7x |
|---|
| Intuit Inc. ($INTU) | -0.2x | -0.3x | 0.2x | -0.0x | -0.6x |
