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What’s Driving Intuit’s Small-Business and Self-Employed Unit

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Factors driving the small-business and self-employed unit

Intuit’s (INTU) small-business and self-employed division has seen double-digit revenue growth in the last five quarters, fueled by strong QuickBooks subscriber growth and higher online QuickBooks subscriber additions.

The graph above shows Intuit’s small-business and self-employed revenue over the last five quarters. It has followed an upward trend, rising at a compound annual rate of 4%.

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Detail analysis

In fiscal 1H18, small business and self-employed revenue came in at ~$1.4 billion, marking an 18% rise YoY (year-over-year). In fiscal 2Q18, it grew 19% YoY to $736 million.

The unit’s revenue growth was supported by robust improvement in Intuit’s QuickBooks Online Accounting business, which grew 58% YoY to $163 million. In the last five quarters, it has grown at a compound annual rate of 12%.

Its online ecosystem grew 40% YoY to $280 million, growing at a compound annual rate of 9% in the last five quarters. Intuit expects its online ecosystem revenue to grow more than 30% YoY in fiscal 3Q18.

Despite the wide availability of financial products from peers Automatic Data Processing (ADP), Global Payments (GPN), and PayPal (PYPL), Intuit has maintained a strong foothold in the market, buoyed by innovative product lineups backed by high-quality customer service.

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