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Benjamin.Davis


Intuit's AI-driven growth strategy revolutionizes the financial industry

2023-09-08

Intuit, a leading financial software company, held its fourth quarter fiscal year 2023 conference call to discuss its strong performance, growth strategies, and plans for the future. The meeting highlighted the company's focus on scaling and marketing its AI-driven full service offering, which is set to revolutionize the industry.

One of the most interesting topics discussed during the meeting was Intuit's emphasis on data and artificial intelligence (AI) as core components of its strategy. The company has been investing in data and AI for over a decade and recent acquisitions of Credit Karma and Mailchimp have further enhanced its capabilities. CEO Sasan Goodarzi highlighted that their investments in AI have propelled them forward by about 10 years. Intuit has also developed its own Intuit financial large language models, trained on proprietary customer data, to personalize and humanize their services. The ultimate goal is to create a future where Intuit's platforms can do the work for customers, whether it be managing finances, running a business, or filing taxes.

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The market outlook for Intuit is positive, with opportunities for further adoption and growth. The midmarket segment is seen as a significant revenue opportunity, as these customers utilize many of the company's services and are willing to pay more. Intuit's strength lies in delivering a strong customer experience through data, AI, and midmarket penetration. The company remains committed to its growth algorithm of 10% to 20% Average Revenue Per Customer (ARPC) and customer growth. Cross-selling, upselling, and pricing for value are identified as strategies to drive growth. While small businesses face challenges in cash flow and certain sectors, the market outlook remains healthy compared to the pre-pandemic period.

The key drivers of Intuit's business are growth, customer adoption, mix of services, price, data and AI capabilities, midmarket penetration, cross-selling and upselling opportunities, and pricing for value. The company plans to improve its full service offering, focus on local marketing, integrate Mailchimp, and adopt and monetize its offerings. By evolving its marketing strategies, leveraging data and AI investments, and showcasing updates and features related to Mailchimp, Intuit aims to further enhance its product/service offerings.

During the meeting, the company highlighted key performance indicators (KPIs) related to growth, customer adoption, and ARPC. Intuit aims to drive further adoption of its services, including Mailchimp, payments, payroll, time tracking, and new innovations. The company sees significant ARPC opportunities in the midmarket segment. Intuit's experience with data and AI allows them to drive growth from customer growth and mix. The long-term growth algorithm remains unchanged at 10% to 20% ARPC and customer growth. The company believes that innovation across the platform opens up opportunities for cross-selling, upselling, and pricing for value.

Intuit's outlook for the quarter and year ahead is positive. The company expects annual consumer group revenue growth of 8% to 12% over the long term. For fiscal year 2024, they anticipate total company revenue of $15.89 billion to $16.105 billion, representing a growth of 11% to 12%. The guidance includes revenue growth projections for different segments, with the small business and self-employed group expected to grow by 16% to 17%, the consumer group by 7% to 8%, and Credit Karma experiencing a decline of 3% to a growth of 3%. Intuit also expects growth in earnings per share, with GAAP earnings per share projected to increase by 11% to 15% and non-GAAP earnings per share by 12% to 14%.

The participants of the Intuit Q4 2023 Earnings Call, including Kim Watkins, Vice President of Investor Relations; Sasan Goodarzi, Chief Executive Officer; and Sandeep Aujla, the new Chief Financial Officer, expressed confidence in the company's performance and future prospects. With a strong focus on data, AI, and customer-centric offerings, Intuit is well-positioned for continued growth and success in the financial industry.