True North Goals Mission Deliver best we can be results in the current period for each key stakeholder, while building the foundation for an even stronger future Values Employees Customers Partners Shareholders Create an environment where the Delight customers more than Delight partners who add value Inspire confidence in our long term True world’s top talent can do the best rivals in ways that matter most to the ecosystem growth, leading to a higher stock price work of their lives North Goals Grow 3 rd Party developers’ business Attract the world ’ s top talent Grow organic revenue double digits, Grow our active customer bases supplemented by acquisitions QBO Subs # Active Apps # Connections • FY’16 : Top 10 Best Places to Work • FY’16 : 1,450K-1,500K • FY’16: 2,000 325K • FY’16 : $4,525M-$4,600M, 8-10% Create an environment where they Delightful E2E customer experiences Help accountants work with their clients Grow revenue faster than expenses, Strategy can do the best work of their lives generating op. income leverage QBOA >3 QBO Acct. NPS • FY’16 : Net Promoter scores >10 pts • FY’16 Non-GAAP Op Income: • FY’16 : 85% engage; no group <70% better than best alternatives • FY’16 : 81K +20 $1,450M-$1,480M, 27-30% Eliminate industry tax fraud * • FY’16: No fraudulent refunds paid by Priorities IRS/States Metrics * As reported by the IRS and State Agencies
Strategy Mission Small Business Consumer Network Effect Values Accountant True Be the Operating System Behind SMB Success Do the Nations’ Taxes North Right for Every Right for Every Goals Small Business Small Business Grow My Grow Grow My Grow Get More Get More Get Every Get Every Grow My Grow Grow My Grow Business Business My Clients My Clients Clients Clients Penny I Penny I Business My Clients Business My Clients Deserve Deserve Grow Grow Grow The Grow The The Practice The Practice Business Business Make Make Taxes are Done Taxes are Done More More Manage Make My Make My Manage QBOA QBOA QBOA QBOA Manage Manage Manage Manage Pay QBOA QBOA Manage Manage Manage Manage Pay QBO QBO Strategy Pay Pay Tax Tax QBO QBO QBO QBO Money Pay Pay Tax Tax Money Manage Manage My My Money Money My My Employees Employees My Firm My Firm My Firm My Firm per per My Firm My Firm People People People People Go Go Client Client Further Further Transact Transact Collaborate Collaborate With With With Clients With Clients Customers Customers Help Me Help Me Manage Manage Offer More Offer More Manage My Manage My Manage Manage Predict My Predict My My Work My Work Business Business My Work My Work Tax Services Tax Services Finances Finances Priorities Achieved by… Delivering Awesome Contributions of Others- Using Data Metrics Product Experiences “Network Effect Platforms” to Create Delight
Be the Strategy “Operating Do the System” behind Nations’ Small Business Mission Taxes Success Values True North Goals Strategy Priorities Achieved by… Delivering Awesome Contributions of Others- Using Data Metrics Product Experiences “Network Effect Platforms” to Create Delight
Be the Strategy “Operating Do the System” behind Nations’ Small Business Mission Taxes Success Values True North Goals Strategy Priorities Achieved by… Delivering Awesome Contributions of Others- Using Data Metrics Product Experiences “Network Effect Platforms” to Create Delight
Be the Strategy “Operating Do the System” behind Nations’ Small Business Mission Taxes Success Values True North Goals Strategy Priorities Achieved by… Delivering Awesome Contributions of Others- Using Data Metrics Product Experiences “Network Effect Platforms” to Create Delight
Be the Strategy “Operating Do the System” behind Nations’ Small Business Mission Taxes Success Values True North Goals Strategy Priorities Achieved by… Delivering Awesome Contributions of Others- Using Data Metrics Product Experiences “Network Effect Platforms” to Create Delight
Be the Strategy “Operating Do the System” behind Nations’ Small Business Mission Taxes Success Values True North Goals Strategy Priorities Achieved by… Delivering Awesome Contributions of Others- Using Data Metrics Product Experiences “Network Effect Platforms” to Create Delight
Be the Strategy “Operating Do the System” behind Nations’ Small Business Mission Taxes Success Values True North Goals Strategy Priorities Achieved by… Delivering Awesome Contributions of Others- Using Data Metrics Product Experiences “Network Effect Platforms” to Create Delight
Be the Strategy “Operating Do the System” behind Nations’ Small Business Mission Taxes Success Values True North Goals Strategy Priorities Achieved by… Delivering Awesome Contributions of Others- Using Data Metrics Product Experiences “Network Effect Platforms” to Create Delight
Be the Strategy “Operating Do the System” behind Nations’ Small Business Mission Taxes Success Values True North Goals Strategy Priorities Achieved by… Delivering Awesome Contributions of Others- Using Data Metrics Product Experiences “Network Effect Platforms” to Create Delight
Be the Strategy “Operating Do the System” behind Nations’ Small Business Mission Taxes Success Values True North Goals Strategy Priorities Achieved by… Delivering Awesome Contributions of Others- Using Data Metrics Product Experiences “Network Effect Platforms” to Create Delight
Priorities Mission Win worldwide with QBO Ecosystem: grow subs faster than rivals with a clear path to profitability Values Win with accountants who fuel SMB success: unmatched collaboration and integration True North Goals Win with TurboTax Online and Mobile: grow DIY software category & share faster than rivals Technology to accelerate growth: everything as a service, high availability & quality, developer & agent tools Strategy Data-driven intelligent systems: break-through benefits, personalization & insights Priorities Industry-wide security leadership: practices & outcomes that earn customers’ trust Metrics
To improve our customers’ financial lives so profoundly… they can’t imagine going back to the old way Mission Integrity Without Compromise We Care & Give Back Be Bold Be Passionate Be Decisive Learn Fast Win Together Deliver Awesome Values Employees Customers Partners Shareholders True Create an environment where the Delight customers more than rivals Delight partners who add Inspire confidence in our long term North world’s top talent can do the best in ways that matter most value to the ecosystem growth, leading to a higher stock price Goals work of their lives Be the Operating System Behind SMB Success Do the Nations’ Taxes Delivering Awesome Enabling the Contributions of Others Using Data to Product Experiences - “Network Effect Platforms” Create Delight Strategy Win worldwide Win with Win with Data-driven Industry-wide Technology to with QBO accountants who TurboTax Online intelligent security accelerate growth Ecosystem fuel SMB success and Mobile systems leadership Priorities • Deliver the customer benefit • Deliver the customer benefit • Deliver the customer benefit • % ready-to-consume strategic • Deliver breakthrough • Reduced fraud …Intuit services benefits for customers (& customers & industry • QBO customer base growth relative • Share of accountants doing • Grow DIY category vs. partners, with permission) to our strongest local competition tax & accounting assisted methods • Reduce downtime minutes … • Intuit trust rating customers & agents • % customers utilizing data • Improve QBO LTV/CAC • Increase # of accountants doing • Grow online/mobile share tax & QBO+3 vs. rivals • Reduce % of customers needing help • Data coverage • QBO Ecosystem NPS relative to local rivals • Increase $ value of accountant • Improve Conversion • Improve customer effort score • Reduce user errors Metrics • NTTF QBO • NPS of accountants doing tax • TTO NPS vs. rivals • % of developers & agents on • Reduce time to insight • Accountants & acctg. vs. rivals common tools
Expanding TAM: The Opportunity Ahead Reasons to Believe Entering New Markets • Enter new markets with QuickBooks ecosystem • Enter new markets with QuickBooks Self-Employed Connecting the Ecosystem • Increase attach / solve additional problems • Facilitate new connections 1 Growing Our Categories • Accelerate shift to cloud • Convert non-consumption $17B - $20B $36B - $42B $47B - $54B Cumulative Total Addressable Market Opportunity
Expanding TAM: The Opportunity Ahead Reasons to Believe Entering New Markets New customers choosing cloud versions • Enter new markets with QuickBooks ecosystem • Enter new markets with QuickBooks Self-Employed 60% 90% Connecting the Ecosystem • Increase attach / solve additional problems QuickBooks TurboTax • Facilitate new connections Online Online Cloud & Mobile is expanding our categories 1 Growing Our Categories 84% 3-6X • Accelerate shift to cloud • Convert non-consumption QBO new users Tax SW category $17B - $20B $36B - $42B $47B - $54B new to franchise growth vs. assisted Cumulative Total Addressable Market Opportunity
Expanding TAM: The Opportunity Ahead Reasons to Believe Entering New Markets QuickBooks Self-Employed Expands Category • Enter new markets with QuickBooks ecosystem • Enter new markets with QuickBooks Self-Employed 38-50M Connecting the Ecosystem • Increase attach / solve additional problems U.S. self-employed & “gig” economy prospects • Facilitate new connections co-mingling personal & business finances % of QBSE selecting TurboTax Bundle 1 Growing Our Categories 30% • Accelerate shift to cloud • Convert non-consumption $17B - $20B $36B - $42B $47B - $54B Cumulative Total Addressable Market Opportunity
Expanding TAM: The Opportunity Ahead Reasons to Believe Entering New Markets • Enter new markets with QuickBooks ecosystem • Enter new markets with QuickBooks Self-Employed 2 Connecting the Ecosystem • Increase attach / solve additional problems • Facilitate new connections 1 Growing Our Categories • Accelerate shift to cloud • Convert non-consumption $17B - $20B $36B - $42B $47B - $54B Cumulative Total Addressable Market Opportunity
Expanding TAM: The Opportunity Ahead Reasons to Believe Entering New Markets Cloud solutions improve discoverability & attach • Enter new markets with QuickBooks ecosystem • Enter new markets with QuickBooks Self-Employed 23% 11% 2 Connecting the Ecosystem • Increase attach / solve additional problems U.S. QBO new users U.S. QBO new users • Facilitate new connections attaching payroll attaching payments Open cloud platform solving 2-sided problems 1 Growing Our Categories • Accelerate shift to cloud • Convert non-consumption Accountant – SMB Improve cash flow & collaboration never worry about a bill $17B - $20B $36B - $42B $47B - $54B Access to capital & Better mortgage rates & Cumulative Total Addressable Market Opportunity reduced SMB lending risk improved applicant conversion
Expanding TAM: The Opportunity Ahead Reasons to Believe 3 Entering New Markets • Enter new markets with QuickBooks ecosystem • Enter new markets with QuickBooks Self-Employed 2 Connecting the Ecosystem • Increase attach / solve additional problems • Facilitate new connections 1 Growing Our Categories • Accelerate shift to cloud • Convert non-consumption $17B - $20B $36B - $42B $47B - $54B Cumulative Total Addressable Market Opportunity
Expanding TAM: The Opportunity Ahead Reasons to Believe 3 Entering New Markets Six Focus Non-US Countries = 43M prospects • Enter new markets with QuickBooks ecosystem • Enter new markets with QuickBooks Self-Employed ~200,000 2 Connecting the Ecosystem • Increase attach / solve additional problems QBO Paid Subs Outside U.S. in FY15 • Facilitate new connections Growing +135% QBSE Outside US is Incremental Opportunity 1 Growing Our Categories 4M • Accelerate shift to cloud • Convert non-consumption Self-employed prospects $17B - $20B $36B - $42B $47B - $54B in the UK alone Cumulative Total Addressable Market Opportunity
Expanding TAM: The Opportunity Ahead Reasons to Believe 3 Entering New Markets • Expanded prospect pool … 6 priority countries = 43M additional prospects • Enter new markets with QuickBooks ecosystem - Converting to paid QBO subs … ~200,000 today growing 135+% • Enter new markets with QuickBooks Self-Employed • QBSE is incremental oppty … UK alone = 4M QBSE prospects 2 Connecting the Ecosystem • U.S. attach rates increasing by cohort - New QBO payroll attach is 23% … payments attach is 11% • Increase attach / solve additional problems • Facilitate new connections • One Intuit Product & Platform Strategy connections - SMB & accountant matchmaking … advice for SMB & new clients for acct - Improved cash flow … e-invoices w/ e-pay … paid <10 days with “2 taps” - Access to capital … $200M SMB loans … 70% approval in days - Home loans … TT fills 80% of questions … better rates … +10 pt. conv. lift 1 Growing Our Categories • New customers choosing cloud & mobile solutions, growing the categories • Accelerate shift to cloud 60% new SMB’s choose QBO … 80% new QBO users 1 st time users - • Convert non-consumption - 90% new tax filers choose TTO … Tax SW growth 3-6X faster than assisted • New QBSE a strong value prop. for 38-50M self-employed / gig economy - 30% of QBSE users also purchasing integrated solution with TurboTax $17B - $20B $36B - $42B $47B - $54B Cumulative Total Addressable Market Opportunity
FY’16 Look Forward Jumping the “S Curve” • Cloud, mobile • Ecosystem connections • Global expansion Now we’re here FY’15 FY’12 • Restructure • Divestitures • Ratable revenue
WIN WORLDWIDE WITH QBO ECOSYSTEM Dan Wernikoff GM, Small Business Group
To improve our customers’ financial lives so profoundly… they can’t imagine going back to the old way Mission Integrity Without Compromise We Care & Give Back Be Bold Be Passionate Be Decisive Learn Fast Win Together Deliver Awesome Values Employees Customers Partners Shareholders True Create an environment where the Delight customers more than rivals Delight partners who add Inspire confidence in our long term North world’s top talent can do the best in ways that matter most value to the ecosystem growth, leading to a higher stock price Goals work of their lives Be the Operating System Behind SMB Success Do the Nations’ Taxes Delivering Awesome Enabling the Contributions of Others Using Data to Product Experiences - “Network Effect Platforms” Create Delight Strategy Win worldwide Win with Win with Data-driven Industry-wide Technology to with QBO accountants who TurboTax Online intelligent security accelerate growth Ecosystem fuel SMB success and Mobile systems leadership Priorities • Deliver the customer benefit • Deliver the customer benefit • Deliver the customer benefit • % ready-to-consume strategic • Deliver breakthrough • Reduced fraud …Intuit services benefits for customers (& customers & industry • QBO customer base growth relative • Share of accountants doing • Grow DIY category vs. partners, with permission) to our strongest local competition tax & accounting assisted methods • Reduce downtime minutes … • Intuit trust rating customers & agents • % customers utilizing data • Improve QBO LTV/CAC • Increase # of accountants doing • Grow online/mobile share tax & QBO+3 vs. rivals • Reduce % of customers needing help • Data coverage • QBO Ecosystem NPS relative to local rivals • Increase $ value of accountant • Improve Conversion • Improve customer effort score • Reduce user errors Metrics • NTTF QBO • NPS of accountants doing tax • TTO NPS vs. rivals • % of developers & agents on • Reduce time to insight • Accountants & acctg. vs. rivals common tools
Our Business is Evolving Paid user base is growing, driven by QB Online Revenue mix is shifting, but QB Desktop is still core 100% 3,000 Desktop Ecosystem Online Ecosystem QB Desktop Units QBO Paid Subs % New Users to QBO 2,500 80% 2.3M 13% 2.1M 17% 20% 27% 2.0M 1.9M 2,000 60% 59% 1,500 40% 37% 87% 83% 80% 1,000 73% 28% 24% 20% 500 0% - FY'12 FY'13 FY'14 FY'15 FY'12 FY'13 FY'14 FY'15
Desktop Remains Strong and Important to Our Success Desktop Ecosystem Revenue (pre-ratable) Desktop ecosystem revenue remaining steady $1.7B FY’14 − QBO migration lower than expected, but growing >50% YOY − Active base remaining stable even with current year purchase down $1.7B FY’15 FY15 Desktop Revenue (pre-ratable) Business is predominantly subscription and services 20% 70% 10% − Unit repurchase cycle lengthening, shifting to QB subscriptions gradually Units Attach / services Subs − Bulk of revenue driven by attach services Enterprise/Plus Desktop Ecosystem ARPC (pre-ratable) ARPC rising as complex customers stay and grow with us FY’14 − Focusing on high value customer experience releases, not features − Growth in QB Enterprise further bolstering overall ARPC FY’15 +8% Desktop migration not driving online growth and that’s fine with us
But the Cloud is Our Future An Open Platform Everything Works Together Personalized • One Code Base • Accountant & SMB Collaboration • By/For Devs, Accts, & SMBs • Integrated 3 rd Party Apps • Built to Scale • For All Sizes and Industries • Open for All Developers • Flawless Embedded Service • For all Geographies
We are Expanding Our Addressable Base Addressing ~65M SMBs in Prioritized Countries… …and 40-50M+ Self-Employed in US and UK # QBO # QBOSE ` SMBs subs SEs subs US 38M-50M 25K US 21M 852K Canada 2M 63K Canada ~1.5M -- UK 4M -- UK 5M 40K India 10M 32K India >100M -- Australia 1.2M -- Australia 2M 33K Brazil 26M -- Brazil 20M 8K France 3M -- France 4M New Rest of world ~500M -- Rest of world 91M 22K Worldwide ~700M 25K Worldwide ~155M 1,050K 1,075K QBO subscribers and growing rapidly as we serve new geographies and customers
9 Quarters of Accelerating QBO Base Growth QBO Subs From Launch 1M QBO US QBO Non-US QBSE On June 2 nd , we reached our 1,000,000 th customer • − 7.5 Years to get our first 100,000 customers 1,075,000 − 3 Months to get our last 100,000 customers QBO Subscribers • Total QB new users (online + desktop) up 10% − 60% of new users now choosing QBO 100K 10K − 20% of new users through non-US and self-employed 1 Jul ’00 Jun ‘04 Jan ‘08 July ‘15 Navigating a complex platform shift. Serving our current base, while leaning forward
Strong Progress Outside US, Strong Interest in Self-Employed Global expansion on track Rapid growth since Self-Employed launch QBO Subs outside US Self-Employed Subs +135% 200K Full Launch 30K Jan ‘15 150K 25K 20K 100K 15K 10K 50K 5K - - Jul ’14 Jul ’15 Jul ’14 Jul ’15 • Rapid growth despite launching after competitors • Strong Net Promoter score (35) • Brazil and France coming online in FY’16 • 30% attaching to TurboTax bundle Non-US becoming a core part of our business, self-employed opportunity just being realized
QBO Tenure and Mix is Changing New to QB Migrators New QBO New to the franchise driving QBO growth 80% 20% Customer <1 Year 1-2 Years 2+ Years Worldwide QBO Accelerated new user growth changing average tenure 50% 20% 30% Tenure QBO US ARPC FY’14 Remained flat despite US ARPC steady in FY15 FY’15 42% US base growth QBO ARPC QBO US 4X Worldwide QBO ARPC lower with mix shift QBO non-US / SE QBO Worldwide ARPC Month 1 Strong track record of monetizing QBO over time Month 13 +50% Continue to solve for overall SBG customer and revenue growth
Opportunities for Stronger Conversion and Retention Acquisition funnel for QBO US FY14 FY15 • Strong top of funnel traffic, driven by more Traffic effective advertising and accountant channel 19M 22M • Earlier stage customers explore options; 5% 5% typically 4-5 touch points before purchase Trials • Trial conversion up due to ease of getting started, and data driven insights on conversion Subs 36% 45% • Cohorted retention steady despite acceleration 12 Month at top of funnel; Total base retention in the mid ~30% ~30% Cohorted 70s as base is aging Attriition Focus on conversion and retention with delightful first-time and ongoing experiences
With Scale, Increased Focus on Retention Improving Net Promoter Scores Drivers of Retention Retention rate improving, but opportunities FY’14 FY’15 • NPS / greater customer delight +4pts • App connected (+5 points) +7pts • Payments and payroll (+10 points) • Accountant link (+15 points) • Customer goes out of business • Features • Cost to value for smaller companies +21pts • Data import challenges New Sub Mature Sub QBO+QB Mobile <90 days >1 year Customer delight translating to strong retention even as we open up the top of the funnel
Strong QBO Results Enable Ecosystem Opportunities Attach Rate is just one indicator Drivers of Services Subs and ARPC Rising Attach Rates for QBO US Example: Payroll attach and penetration Online Payroll Online Payments • Eligible : ~40% of QBO customers have employees, Desktop Payroll Desktop Payments relative to 60% currently on the desktop 29% 27% 27% 27% • Attach : 26% of new QBO customers attach payroll 26% (~65% of eligible customers) 19% 17% • Retention : Ensuring active usage after initial attach 10% 9% • Penetration : Active payroll customers as portion of 7% 6% 9% entire QBO base and eligible QBO base 6% 5% 4% • ARPC : Mix of full service vs. do-it-yourself payroll, and FY'12 FY'13 FY'14 FY'15 number of employees per customer Good progress, but considerable opportunities to increase ARPC as we expand 54
Innovation for All Ecosystem Participants is Key Accountants Developers Small Businesses • New QBO Accountant Edition • Reimagined Developer Experience • Hundreds of Features Released − Client List and Accountant alerts − >100 Million API calls weekly by apps − QBO Self-Employed & Full Service Payroll − Wholesale billing, ProTax Integration − New Payments API - Ecommerce − Multi-Currency, Sales Form Customization − Management reports − New App Store & QBO Labs − Bank Feed Rules + Mobile Banking − Find a ProAdvisor − AppConnect (itduzzzit) integration − Mac and Windows QBO Clients … Material improvements for all ecosystem participants … Increasing development velocity
Enabling Our Partners to Thrive Along with Small Businesses 3 rd -Party developers optimizing QBO experience Accountants ensuring durable relationships App Connections and Total Developer Apps Number of Accountant-Linked QBO Users App Connections 140K 5K 132K Developer Apps 500K 120K 4K 382K 100K 400K 3K 80K 300K 60K 2K 200K 1.3K 144K 40K 1K 100K 20K 7K - - - Jul ’15 Jul ’15 Jul ’13 Jul ’13 • App platform successfully closes QBO product gaps • Accountant offering, education, and engagement leading to QBO recommendation and retention • Delivers ecosystem value (e.g. higher retention) • ~85% YoY growth in QBO accountants worldwide Developers and accountants are key to attracting and retaining QBO customers
FY’16 Will Have Significant Product Launches New Features New Offerings New Geographies • Product Based Businesses • Self-Employed Feature Launches • New Country & Services Launches − − − Inventory management Mobile only and mileage tracking Brazil − − − E-Commerce Integration Intuit Workforce for service platforms France − − − Tablet Point of Sale Integration Accountant Integration Payroll & Payments in UK, AU − − − Inventory API Payments Integration Self-Employed in UK Launches will bolster customer delight and expand our reach
Data Will Drive the Future of Our Ecosystem Experience 116M $540B Vendor Names Vendor Payments Order Products Track Inventory $240B 152M Invoices Created Customer Names Sell Products Create Invoices 6M $19B Employee Names Gross Payroll Payments Reports Pay Employees Data platform is core to delighting customers, partners and developers
Accelerating Customer Growth QB Customer Growth Paying QBO users and Desktop purchases QBDT QBO US QB SE QBO Non-US 2 to 2.2 million 2.3M QuickBooks 2.1M 2.0M Online 1.9M subscribers in FY’17 ~900k desktop units/subscribers FY'12 FY'13 FY'14 FY'15 FY'16 FY'17 Accelerating QBO customer growth through increased penetration, Accelerating QBO customer growth through increased penetration, Accelerating QBO customer growth with increased penetration, self-employed and non-US self-employed and new markets self-employed and new markets
Long-Term Small Business Growth Drivers One Point of Growth in These Key Drivers … Yields Revenue Growth of … Multiyear Range ~1% 1 - 2% Number of Addressable SMBs ~3.5% 4 - 6% Accounting Software Consumption ~2% 1 - 2% QuickBooks Share ~1% ~4 - 5% QuickBooks ARPC (Attach, Price, Mix) Implied Small Business Rev Growth: 10% - 15% Accelerating QBO customer growth through increased penetration, With operating margins in low 40%’s 10-15% growth with operating margins in the low 40% range self-employed and new markets
Small Business Summary • Seeing an acceleration in QB overall new user growth driven by QBO • QBO subs are exceeding our expectations • QB Online US ARPC is higher than QB Desktop and will likely increase, but our mix of Non-US and Self-Employed is changing mix along with the base tenure • Overall QBO subs growth of 40%+ and Online Ecosystem revenue growth will accelerate • Total QB customer growth and revenue growth in the double digits, with customers growing faster than revenue
WIN WITH ACCOUNTANTS WHO FUEL SMB SUCCESS CeCe Morken GM, Professional Tax Group
To improve our customers’ financial lives so profoundly… they can’t imagine going back to the old way Mission Integrity Without Compromise We Care & Give Back Be Bold Be Passionate Be Decisive Learn Fast Win Together Deliver Awesome Values Employees Customers Partners Shareholders True Create an environment where the Delight customers more than rivals Delight partners who add Inspire confidence in our long term North world’s top talent can do the best in ways that matter most value to the ecosystem growth, leading to a higher stock price Goals work of their lives Be the Operating System Behind SMB Success Do the Nations’ Taxes Delivering Awesome Enabling the Contributions of Others Using Data to Product Experiences - “Network Effect Platforms” Create Delight Strategy Win worldwide Win with Win with Data-driven Industry-wide Technology to with QBO accountants who TurboTax Online intelligent security accelerate growth Ecosystem fuel SMB success and Mobile systems leadership Priorities • Deliver the customer benefit • Deliver the customer benefit • Deliver the customer benefit • % ready-to-consume strategic • Deliver breakthrough • Reduced fraud …Intuit services benefits for customers (& customers & industry • QBO customer base growth relative • Share of accountants doing • Grow DIY category vs. partners, with permission) to our strongest local competition tax & accounting assisted methods • Reduce downtime minutes … • Intuit trust rating customers & agents • % customers utilizing data • Improve QBO LTV/CAC • Increase # of accountants doing • Grow online/mobile share tax & QBO+3 vs. rivals • Reduce % of customers needing help • Data coverage • QBO Ecosystem NPS relative to local rivals • Increase $ value of accountant • Improve Conversion • Improve customer effort score • Reduce user errors Metrics • NTTF QBO • NPS of accountants doing tax • TTO NPS vs. rivals • % of developers & agents on • Reduce time to insight • Accountants & acctg. vs. rivals common tools
Leadership Position With Opportunity to Capture Share Total individual returns CAGR Intuit leads in Intuit leads in U.S./Canada (M) FY'12-FY'15 Returns Accountants 175 #1 Position #1 Position 1% Pros 81 • 120K tax accountants • 26M returns • 200K total accountants • 32% share of returns • 45% total accountant share • +4M small business returns Stores 20 (3%) #1 Position 4% 66 Software • 42M returns • 63% share of returns (12%) Manual 8 FY’15
Professional Tax Is a Solid Business On Its Own… Growing Tax Return Volume High Net Promoter Scores Consistent Accountant Growth Net Promoter Million Consumer 30 +48 1 - 2% Avg. Across and Small 4 Core Offerings Business Per Year Highly Profitable Predictable Revenue High Retention Rates From Operating 95% 90’s 60%+ Mid Existing Margin Customers And even more valuable as a lever in growing the ecosystem
Small Businesses and Accountants Depend On Each Other % of US Small Business/Self- Value of Small Business/Self-Employed Employed Using Accountants to Accountants Total % Using % Using Tax Who accountants serve Number Bookkeeping Services Services Consumer Small Business 40% 60% Registered Employers 6M 70% 95% Where accountants make money 70% 79% Sole Proprietor QBO 15M 85% on Tax and Accounting 9% 79% Service Economy 38-50M Accounting Tax Other 30% 55% 15% 89% of small businesses say they are more successful with an accountant
Intuit’s Role is Central to Their Relationship
Intuit’s Role is Central to Their Relationship QuickBooks Ecosystem for Small Business 2.3M Paying QuickBooks Users • 1.4M Payroll Customers • 273K Payments Customers • 13M Invoices Per Month • 1.1M QBO Customers
Intuit’s Role is Central to Their Relationship QuickBooks Ecosystem for Small Business Connected to our Accountant Network 2.3M Paying QuickBooks Users > 200K Accountants Worldwide • 1.4M Payroll Customers • 120K Accountants • 273K Payments Customers • 30M Tax Returns • 13M Invoices Per Month • 130K ProAdvisors • 1.1M QBO Customers • 58K Accountants Referring 3+ QBO Users
Intuit’s Role is Central to Their Relationship QuickBooks Ecosystem for Small Business Connected to our Accountant Network 2.3M Paying QuickBooks Users > 200K Accountants Worldwide • 1.4M Payroll Customers • 120K Accountants • 273K Payments Customers • 30M Tax Returns • 13M Invoices Per Month • 130K ProAdvisors • 1.1M QBO Customers • 58K Accountants Referring 3+ QBO Users Intuit’s end-to-end solutions drive share across accounting and tax
And Everyone Benefits Value Intuit Accountants Bring Drive SMB Software Decisions Improve Small Business Retention Drive Online Adoption 30M Shared Consumer / Improve Small Business Success Small Business Clients Buy and Use our Products Accountant Value Accountants Receive 200K+ Active Tax Save Time Grow Their Practice and Accounting Pros in the Ecosystem Make a Difference Helping small businesses succeed and accountants grow
A Tale of Accountant Ecosystem Expansion Accounting Firm, La Crescenta, CA Tax to Accounting Case Study 1998 Today Ecosystem Accounting Tax Tax Accounting participation 4.25X • Tax ecosystem: $24K Value to Intuit Increase Tax Ecosystem: $24K • QBDT Ecosystem: $65K (Current Rev/Yr) • QBO Ecosystem: $13K Winning with accountants who fuel small business success
A Tale of Accountant Ecosystem Expansion Accounting Firm, La Crescenta, CA Tax to Accounting Case Study 1998 Today Ecosystem Accounting Tax Tax Accounting participation 4.25X • Tax ecosystem: $24K Value to Intuit Increase Tax Ecosystem: $24K • QBDT Ecosystem: $65K (Current Rev/Yr) • QBO Ecosystem: $13K Accounting Firm, Philadelphia, PA Accounting to Tax Case Study 2009 Today Ecosystem Accounting Tax Accounting Tax 2X participation • QB Ecosystem: $15K Increase Value to Intuit QB Ecosystem: $15K • Tax ecosystem: $15K (Current Rev/Yr) Winning with accountants who fuel small business success
Creating a Much Larger Addressable Market Accountant Total Addressable Market $2.4B $5.4 $0.6B Billion $2.4B Small Business / Small Business Total ProTax Accountant Tax Ecosystem Software & Addressable Attach Service Marketplace Attach Market
The Challenging World of Accountants and Small Businesses • Regulatory Changes Increased Complexity • Healthcare Reform • Tax Complexity
The Challenging World of Accountants and Small Businesses • Regulatory Changes Increased Complexity • Healthcare Reform • Tax Complexity • Customer Growth Sustained Growth • Revenue Growth • Cash Flow/Credit
The Challenging World of Accountants and Small Businesses • Regulatory Changes Increased Complexity • Healthcare Reform • Tax Complexity • Customer Growth Sustained Growth • Revenue Growth • Cash Flow/Credit • Convergence of Generations Changing Workforce • Growth in Service Economy • Technology Expectations Increased pressure on time and ability to grow their business
To Win With Accountants Who Fuel Small Business Success We start with a common view of the accountant small business relationship
To Win With Accountants Who Fuel Small Business Success We start with a common view of the accountant small business relationship Everything Works Together Across Tax and Accounting
To Win With Accountants Who Fuel Small Business Success We start with a common view of the accountant small business relationship Everything Works Together Across Tax and Accounting Service Marketplace Where Accountants and Small Business Connect
To Win With Accountants Who Fuel Small Business Success We start with a common view of the accountant small business relationship Everything Works Together Across Tax and Accounting Service Marketplace Where Accountants and Small Business Connect Collaboration Enabling Accountants To Make A Difference
To Win With Accountants Who Fuel Small Business Success We start with a common view of the accountant small business relationship Everything Works Together Across Tax and Accounting Service Marketplace Where Accountants and Small Business Connect Collaboration Enabling Accountants To Make A Difference Benefits: Accountants and Small Businesses save time, save money, and grow
Accountants’ Work Today is Trapped in Manual Processes Data Data Collection Entry Paper Intensive 30% 35% Wasted Hours Duplication of data entry Lack of direct data access 130M Hours 5.3M Days Our strategy is to eliminate wasted time in data collection and entry
Everything Works Together : Data Does the Work Client Collaboration Data • Intuit Link reduced accountant Access Accountant and client cycle time 9 Client Client and Import days/32% • 60-80% 1090X coverage today • 75% W-2 Coverage Unified Workflows Tax and Accounting • Books-to-Tax saves ~60 minutes per business return • Over 1M QBO users growing Access Intuit Tax Online from QuickBooks Online for Accountants over 50% YOY Books-to-Tax and Trial Balance Pro Segment Impact: Saves 11 million hours & improves cycle time by 32%
Accountants and Small Businesses are More Successful Together Small Business / Self-Employed Are Their Most Attractive Clients Small Business Self-Employed Accountant • > 50% of small businesses do not survive 5 years • Small business clients are 10X more profitable than consumers • 89% believe an accountant improves their success • But they are difficult for • But…small businesses do not feel confident in finding the accountants to find right qualified accountant But they need help finding each other
The Service Marketplace Where SMB’s & Accountants Connect 200K+ Intuit Accountants Accountant Self Small QuickBooks Ecosystem: Employed Business • 2.3M paying small businesses • 25K Self-Employed 25K Self-Employed 2.3M Paying Small FY15 Tax Test: and Growing Businesses • 600+ Accountants, $7K avg. new revenue for active firms • Users 30% small business/ self-employed with NPS of +80 Growing accountants’ revenue by 10-15%
Collaborate: Leveraging Data to Make a Difference Unique Data Access Enabling Accountants to Make a Difference Payroll Data QuickBooks Data 1.4M Small Business 2.3M Small Business Data Analytics to Guide Small Businesses $240B $540B • Save Money Invoices Created Vendor Payments • Better Access to Credit • Improve Cash Flow Helping Small Business to Save and Grow
Intuit Builds Accountant and Small Business Relationships QuickBooks Online Accountant is… THE PLACE Everything Works Together Grow Collaborate Eliminate Data Collection/Entry Unified Workflows The Service Marketplace Make a Difference Where accountants and small business work, grow, & collaborate
Long-Term ProTax Growth Drivers One Point of Growth in Yields Revenue Growth of … Multiyear Range These Key Drivers … ~0 - 1% 1.5 - 2% Customer Growth ~1 - 1.5% 1 - 2% Customer Expansion ~1% 1.5 - 2% Attach and New Services Implied ProTax Revenue Growth: 4% - 6% With operating margins of 60%+
Accountants Accelerate Ecosystem Growth Key Drivers Of Ecosystem Growth to $5.4B Impact of Accountant Expanding the 24% New Subscriber Growth Total Addressable Market 1 st Year Retention 15 pts 13% Cost to Acquire $5.4B 54% Desktop Migrations 19% Attached Averages 300% Service Marketplace Winning with accountants who fuel small business success
WIN WITH TURBOTAX ONLINE & MOBILE Sasan Goodarzi GM, Consumer Tax Group
To improve our customers’ financial lives so profoundly… they can’t imagine going back to the old way Mission Integrity Without Compromise We Care & Give Back Be Bold Be Passionate Be Decisive Learn Fast Win Together Deliver Awesome Values Employees Customers Partners Shareholders True Create an environment where the Delight customers more than rivals Delight partners who add Inspire confidence in our long term North world’s top talent can do the best in ways that matter most value to the ecosystem growth, leading to a higher stock price Goals work of their lives Do the Nations’ Taxes Be the Operating System Behind SMB Success Delivering Awesome Enabling the Contributions of Others Using Data to Product Experiences - “Network Effect Platforms” Create Delight Strategy Win worldwide Win with Win with Data-driven Industry-wide Technology to with QBO accountants who TurboTax Online intelligent security accelerate growth Ecosystem fuel SMB success and Mobile systems leadership Priorities • Deliver the customer benefit • Deliver the customer benefit • Deliver the customer benefit • % ready-to-consume strategic • Deliver breakthrough • Reduced fraud …Intuit services benefits for customers (& customers & industry • QBO customer base growth relative • Share of accountants doing • Grow DIY category vs. partners, with permission) to our strongest local competition tax & accounting assisted methods • Reduce downtime minutes … • Intuit trust rating customers & agents • % customers utilizing data • Improve QBO LTV/CAC • Increase # of accountants doing • Grow online/mobile share tax & QBO+3 vs. rivals • Reduce % of customers needing help • Data coverage • QBO Ecosystem NPS relative to local rivals • Increase $ value of accountant • Improve Conversion • Improve customer effort score • Reduce user errors Metrics • NTTF QBO • NPS of accountants doing tax • TTO NPS vs. rivals • % of developers & agents on • Reduce time to insight • Accountants & acctg. vs. rivals common tools
Well Positioned: #1 in Growing Categories Total individual returns CAGR Intuit leads in U.S./Canada (M) FY'12-FY'15 growth categories 175 #1 Position 1% 81 Pros • 26M returns • 32% share of returns (3%) 20 Stores #1 Position 4% Software 66 • 42M returns • 63% share of returns (12%) Manual 8 FY’15
U.S. Market Opportunity: Room for Growth FY’12-FY’15 Complex Simple TOTALS TREND Professional 45M 23M 68M NPS: 31 +0% CAGR Tax Store 9M 8M 17M NPS: 48 -4% CAGR Software 27M 31M 58M NPS: 52 INTUIT = 18M INTUIT = 18M +4% CAGR ~67% Share ~60% Share Manual 2M 4M 6M NPS: -45 -9% CAGR 148M • Addressable Market share = 85% (excludes Complex Filers that file Fed for free) • NPS source is from annual NPS survey U.S. MARKET TOTAL (RETURNS)
Total Addressable Market: Growing Software Share 4 Pts Returns (M) 148.0 146.5 145.4 144.9 150 57% 58% 59% 60% 100 Assisted (Pro/Tax Store) DIY Software DIY Manual 50 39% 38% 35% 36% 5% 5% 4% 4% 0 FY’12 FY’13 FY’15 FY’14 Drivers: Cloud, Mobile, Next Gen Workforce
Total Addressable Market: We Expect Continued Growth Returns (M) Using Historical Industry Performance to Project FY’16 – FY’18 160 152.2 150.6 149.2 148.0 146.5 145.4 144.9 120 54% 55% 56% 57% 58% 59% 60% Assisted (Pro/Tax Store) DIY Software 80 DIY Manual 40 43% 42% 40% 39% 38% 35% 36% 5% 5% 4% 4% 3% 3% 3% 0 FY’12 FY’13 FY’14 FY’15 FY’16 FY’17 FY’18 * Data sources: Based on IRS, competitive data and internal estimates … Intuit extrapolated out FY’16 – FY’18
Share vs. Rivals: Taking Share (~2.5 pts) in Growing Category 9% 9% 10% 10% 13% 14% 13% 14% 16% 16% 18% 17% Other Competitor 1 Competitor 2 TurboTax 62% 61% 59% 59% FY’12 FY’13 FY’14 FY’15 * Data represents DIY category by units
Net Promoter vs. Rivals: +5 pts Better than Nearest Rival FY’15 Online Net Promoter +5 pts 59 TurboTax Competitor 1 Competitor 2
External Trends: Fraud & Sharing Economy Acceleration Trend Implications for Intuit Mobile Computing Everywhere & Anytime Sharing Economy •Ace Mobile •Win self-employed 3 rd Computing Platform •Data driven personalization •Security is job #1 Security & ID Fraud Price Consciousness
Customer Experience Funnel: Big Opportunity FY’15 TurboTax Online FY'15 Results FY'15 Total U.S. visitors 89M +6% Log-ins 34M +7% Returns filed 24M +12% 3-Year Retention: Attrition • Free: +3 pts 6M • Paid: +2 pts
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