What’s driving Intuit’s consumer division
Intuit’s (INTU) consumer unit revenue is highly seasonal. The business unit sees strong revenue growth in the third quarter of every fiscal year, driven by higher e-filling returns. The launch of TurboTax Live, targeting an untapped market, has also contributed to the consumer unit’s revenue growth.
The graph above shows the consumer division’s revenue growth in the last five quarters. It has followed an upward trend, growing at a compound annual rate of 3%.
The consumer unit generated revenue of ~$412 million in 1H18, gaining 11% YoY (year-over-year). During fiscal 2Q18, the division’s revenue grew 12% YoY to $334 million.
Outlook and TurboTax Live prospects
In fiscal 2018, Intuit expects its consumer revenue to grow 7%–9% YoY, to $2.36–$2.4 billion. The company remains highly optimistic about the launch of its high-margin TurboTax Live product, which is driving its average revenue per return. The product is expected to see 4 million customers in fiscal 2018.
The company continues to enhance its TurboTax Live customer experience by automating data entry, improving the onboard experience, and simplifying its help function by incorporating artificial intelligence and machine learning. The launch of such value-added products may not only counter competition from financial service peers such as H&R Block (HRB), StudioTax, and SimpleTax, but also drive Intuit’s revenue.