QBO subscriptions posted double-digit growth

In the previous part of this series, we looked at Intuit’s (INTU) fiscal 1Q6 results as well as its decision to divest three offerings: Quicken, Demandforce, and QuickBase. But Intuit said it will continue to support, maintain, and develop the products until the company finds a buyer. The company confirmed this with its recent launch of Quicken 2016, which includes a separate edition for Microsoft (MSFT) Windows and Apple (AAPL) OS X.

Let’s see how QBO (QuickBooks Online) performed in fiscal 1Q16. The growth of QBO is important for Intuit as it overhauls its entire business. QBO subscriptions rose by 87,000 to 1.2 million QoQ (quarter-over-quarter). On a YoY (year-over-year) basis, this growth was >57%.

Looking at QBO’s growth and increased traction, the company expects subscriptions to total 1.2 million in fiscal 2Q16. About 80% of QBO’s customers in fiscal 1Q16 were new to the company’s franchise.

Intuit’s QuickBooks Growth Continues to Accelerate in Fiscal 1Q16

Intuit’s small business online ecosystem revenue growth was offset by the fall in consumer ecosystem revenues

QuickBooks Online subscriptions outside the United States increased by two times on a YoY basis to reach 215,000 in fiscal 1Q16. QuickBooks Self-Employed subscription increased to 35,000 compared to 25,000 in 1Q15. Online payroll and payments customers rose 17% and 4%, respectively, on a YoY basis.

Within the payroll solutions space, Intuit faces competition from Paycom Software (PAYC) and Automatic Data Processing (ADP). In the Small Business operating segment, the Consumer Ecosystem Group’s revenues fell 5% to $16 million. This dampened the Small Business segment’s growth to a small extent.

Owing to strong customer acquisition as shown by the increase in subscriptions, the small business online ecosystem posted a revenue growth of 28% in fiscal 1Q16, which counterbalanced to an extent the fall in the consumer ecosystem group’s revenues.

The iShares US Technology ETF (IYW) has an exposure of 0.27% to Intuit. Microsoft, another leading technology player, accounts for 12.1%  of IYW.

Latest articles

This year, Pfizer (PFE) stock has fallen 0.34% and Bristol-Myers Squibb (BMY) stock has fallen 6.48%. Both companies are focused on strengthening their position in the high-growth oncology and immunology markets. Let's take a closer look at each.

Walt Disney’s (DIS) latest movie, Toy Story 4, has reportedly broken records in the opening weekend with $118 million in sales. However, the opening weekend collection was behind analysts’ expectations of at least $150 million in the first weekend.

24 Jun

Will Home Depot’s Upward Momentum to Continue?

WRITTEN BY Rajiv Nanjapla

As of June 21, Home Depot (HD) was trading at $209.39, which implies a rise of 9.7% since the announcement of its first-quarter earnings on May 21. Also, the company was trading at a premium of 32.4% from its 52-week low of $158.09 and a discount of 2.8% from its 52-week high of $215.43.

On June 21, Aurora Cannabis (ACB) made an announcement that indicated that it will move towards higher margin vape products. In addition, the company also believes concentrates and edibles will command higher margins. In anticipation of this development, the company announced the expansion of its facility to capitalize on growth related to these segments.

Shares of Mondelēz International (MDLZ) are scaling new heights thanks to its stellar gains so far this year. Mondelēz stock is up 38.0% on a YTD (year-to-date) basis, and it closed at $55.25—just a shade lower than its 52-week high of $55.71—on June 21.

24 Jun

How Long Will Facebook's Libra Fuel Bitcoin Rally?

WRITTEN BY Mayur Sontakke, CFA, FRM

Ever since the news about Facebook’s (FB) cryptocurrency project broke, Bitcoin has rallied on the hope that Facebook’s entry in the space will help make cryptocurrencies mainstream. Facebook’s cryptocurrency will be called Libra and will be governed by an association with 28 founding members across industries.