Categories Earnings Call Transcripts, Technology

Intuit Corp. (INTU) Q2 2021 Earnings Call Transcript

INTU Earnings Call - Final Transcript

Intuit Corp. (NASDAQ: INTU) Q2 2021 earnings call dated Feb. 23, 2021

Corporate Participants:

Kim Watkins — Vice President, Investor Relations

Sasan Goodarzi — Chief Executive Officer

Michelle Clatterbuck — Executive Vice President, Chief Financial Officer

Analysts:

Scott Schneeberger — Oppenheimer — Analyst

Ken Wong — Guggenheim Securities — Analyst

Brad Zelnick — Credit Suisse — Analyst

Keith Weiss — Morgan Stanley — Analyst

Sterling Auty — JPMorgan — Analyst

Kash Rangan — Goldman Sachs — Analyst

Brent Thill — Jefferies — Analyst

Kirk Materne — Evercore ISI — Analyst

Michael Turrin — Wells Fargo Securities — Analyst

Jennifer Lowe — UBS — Analyst

Kartik Mehta — Northcoast Research — Analyst

Siti Panigrahi — Mizuho — Analyst

Brad Reback — Stifel — Analyst

Arvind Ramnani — Piper Sandler — Analyst

Michael Millman — Millman Research — Analyst

Presentation:

Operator

Good afternoon. My name is Latif and I will be your conference facilitator. At this time, I would like to welcome everyone to Intuit Second Quarter Fiscal Year 2021 Conference Call. [Operator Instructions]

With that, I’ll now turn the call over to Kim Watkins, Intuit’s Vice President of Investor Relations. Ms. Watkins?

Kim Watkins — Vice President, Investor Relations

Thanks, Latif. Good afternoon and welcome to Intuit’s second quarter fiscal 2021 conference call. I’m here with Intuit’s CEO, Sasan Goodarzi; and Michelle Clatterbuck, our CFO.

Before we start, I’d like to remind everyone that our remarks will include forward-looking statements. There are a number of factors that could cause Intuit’s results to differ materially from our expectations. You can learn more about these risks in the press release we issued earlier this afternoon, our Form 10-K for fiscal 2020 and our other SEC filings. All of these documents are available on the Investor Relations page of Intuit’s website at intuit.com.

We assume no obligation to update any forward-looking statement. Some of the numbers in these remarks are presented on a non-GAAP basis. We’ve reconciled the comparable GAAP and non-GAAP numbers in today’s press release. Unless otherwise noted, all growth rates refer to the current period versus the comparable prior year period and the business metrics and associated growth rates refer to worldwide business metrics. A copy of our prepared remarks and supplemental financial information will be available on our website after this call ends.

And with that, I’ll turn the call over to Sasan.

Sasan Goodarzi — Chief Executive Officer

Thanks Kim, and thanks to all of you for joining us today. Second quarter results reflect strong momentum across the company. Small Business and Self-Employed Group revenue grew double digits and Credit Karma performed very well. And we are encouraged by our early results this tax season. We’re on track for Intuit to deliver another year of double-digit revenue growth.

We are confident our game plan to win is durable, accelerated by digital tailwinds, given the pandemic. Our platform is well positioned to help customers take advantage of a shift to virtual solutions, acceleration to online and omni-channel capabilities and new ways to reduce debt and save money. The velocity of our innovation is helping our customers at a time when they need us most and positions us to accelerate growth in light of these structural and behavioral changes.

We closed the acquisition of Credit Karma on December 3rd and welcomed 1,300 Credit Karma employees to the Intuit family. We bring together a large customer base of 110 million Credit Karma members and 57 million Intuit customers to help them unlock smart money decisions.

Credit Karma’s data platform creates powerful network effects through personalized financial offers, benefitting members and partners, while adding a new monetization engine to Intuit. We are off and running executing on our innovation roadmap, which I will touch on shortly. Since we’re in the middle of tax season, let’s start there.

We’re very confident in our strategy and momentum extending our lead in the Do-It-Yourself category and transforming the assisted segment. We’re making great progress serving fast-growing underpenetrated Latinx, Self-Employed and investor segments. This season, we also expanded our free eligibility to better serve customers receiving unemployment benefits. We continue to aggressively transform the assisted segment by reshaping how 86 million filers can get their maximum refund with confidence virtually. We feel great about how the season is progressing.

Let me now shift to our Big Bets. We’re seeing strong momentum and accelerating innovation across the business with our AI-driven expert platform strategy and five Big Bets. These Big Bets are focused on the largest problems our customers face and represent durable growth opportunities for Intuit. I’ll highlight our progress, covering Big Bet number one last as it accelerates innovation across our platform and is foundational to the other bets.

Our second Big Bet is to connect people to experts. We’re solving one of the largest problems our customers face, lack of confidence, by connecting people to experts virtually with TurboTax Live and QuickBooks Live. With TurboTax Live, we’re transforming the $20 billion assisted category by providing 86 million filers the opportunity to access tax experts on our platform. We continue to lead the way in shaping the category, helping customers understand how they can get their taxes done in a new way with our marketing campaigns and for a limited time offering free Live expertise to filers with very simple returns to attract them into the category. We have significantly improved the TurboTax Live platform by making it easier for customers to access an expert throughout the filing process. And now with our innovative full service offering, our customers can hand-off their return to an expert who will prepare and file it for them.

We continue to make progress with QuickBooks Live, which is built on the same expert platform. Entering our second peak this season with QuickBooks Live, our customer base has doubled from a year ago and retention rates are improving. Although it’s early days for QuickBooks Live, we are confident in the long-term opportunity to penetrate non-consumption.

Our third big bet is to unlock smart money decisions. We’re making progress towards our goal of creating a personal financial assistant that helps consumers find the right financial products, put more money in their pockets and access the financial experts and advice. Our strategic focus is to grow the core, including credit cards and personal loans; expand growth verticals, including home loans, auto loans and insurance; and develop emerging verticals, focused on money innovation including savings and checking accounts.

As we make personalized financial offers to customers across our platform, Credit Karma provides an additional monetization engine, increasing our combined wallet share with both free and paying customers. We’ve made great initial progress combining our capabilities to fuel success of the Credit Karma platform. First, to create a complete financial profile for existing and prospective members, with customer consent, we combined income data from 26 million TurboTax returns with Credit Karma.

The combination of verified income data with credit history will enable Credit Karma to better personalize offers, driving engagement and creating a win-win-win for our members, partners and us over time. This enables us to grow in our core verticals for credit cards and personal loans and growth verticals for insurance and mortgages.

Second, we integrated Credit Karma Money into the TurboTax filing experience, providing approximately 36 million TurboTax customers the ability to deposit up to $88 billion of tax refunds into a no-fee checking account. And third, we are migrating Turbo users to Credit Karma. We’re very excited about the journey ahead of us.

Our fourth big bet is to become the center of small business growth by helping our customers get paid fast, manage capital, pay employees with confidence and grow in an omnichannel world. 60% of small businesses struggle with cash flow and we’re innovating with velocity to create solutions for customers to overcome this challenge. We’re making it even easier for customers to get paid fast with tools like payment-enabled invoices, by auto-enabling new customers to accept payments immediately, increasing our charge volume.

We continue to innovate with QuickBooks Cash, a small business bank account that helps our customers manage working capital by providing visibility into their full financial picture, along with the ability to move money instantly and ensure their money is working for them, while taking advantage of the built-in accounting of QuickBooks. We integrated bill pay into the offering this quarter. We are seeing growing adoption and active use of QuickBooks Cash, including a meaningful increase in activation rates.

We are making good progress with QuickBooks Commerce launched last September. QuickBooks Commerce is designed to better serve the 1 million product-based businesses on our platform and 6.4 million product-based businesses in our core markets. The offering provides inventory and order management tools small businesses need to grow their businesses in an omnichannel world. We continue to add new partner integrations, enabling a streamlined experience.

We’re further bolstering the offering with the acquisition of OneSaas in early February. OneSaas is an infrastructure platform that integrates data streams from multiple sources of e-commerce platforms. This will help our customers see a complete view in QuickBooks. It’s still early for both QuickBooks Cash and QuickBooks Commerce, but we’re encouraged by what we’re seeing.

Our fifth big bet is to disrupt small business mid-market with QuickBooks Online Advanced. The features we are introducing individually tailor the offering to the needs of small businesses with 10 to 100 employees at a disruptive price point. We continue to build out the offering and innovate to better serve these mid-market small business customers by adding more deeply integrated partners, important to both acquisition and retention.

And finally, our first big bet, revolutionize speed to benefit, enables us to put more money in our customers’ pockets, eliminate friction and deliver confidence at every touch point by using AI and customer insights. In TurboTax, we’re leveraging advanced models to proactively offer customers the right resources at the right time to keep them engaged and give them confidence to file their taxes. And in QuickBooks Advanced, we’re using AI to detect anomalies in price and quantity on customer invoices, saving our customers time and the frustration of having to resend an invoice. Our Live offerings are benefiting from a common AI platform that’s creating efficiencies at scale, driving profitable growth.

Across all of our big bets, we are building momentum and accelerating innovation which we believe positions us well for durable growth into the future. I’m excited about the opportunity we have ahead of us and I’m proud of the progress we are making as a team.

Now let me hand it over to Michelle.

Michelle Clatterbuck — Executive Vice President, Chief Financial Officer

Thanks, Sasan. Good afternoon, everyone. For the second quarter of fiscal 2021, we delivered revenue of $1.6 billion. GAAP operating loss of $25 million, versus operating income of $270 million last year. Non-GAAP operating income of $235 million versus $384 million last year. GAAP diluted earnings per share of $0.07 versus $0.91 a year ago.

The GAAP earnings include a $30 million gain from the sale of a note receivable that was previously written off. And non-GAAP diluted earnings per share of $0.68 versus $1.16 last year.

Turning to the business segments. Consumer Group revenue declined 71% in Q2, driven by the later IRS opening this year. We continue to focus on our strategy to expand our lead in DIY and transform the assisted segment with TurboTax Live. We remain confident in our plans and guidance of 9% to 10% growth in fiscal 2021.

Turning to the ProConnect Group, revenue declined 8% in Q2, reflecting a delay in forms availability. In the Small Business and Self-Employed Group, revenue grew 11% during the quarter, while Online Ecosystem revenue was up 22%. Our strategic focus within Small Business and Self-Employed is to grow the core, connect the ecosystem and expand globally. Our longer-term expectation remains 30% or greater online ecosystem revenue growth, driven by 10% to 20% growth in both customers and ARPC.

First, we continue to focus on growing the core. QuickBooks Online accounting revenue grew 22% in fiscal Q2, driven mainly by customer growth and mix-shift. We lapped a full quarter of a price increase last year, driving slower year-over-year growth versus last quarter.

Second, we continue to focus on connecting the ecosystem. Online Services revenue, which includes payments, payroll, time tracking and capital, grew 20% in fiscal Q2. Within payments, revenue growth reflects continued customer growth, along with an increase in charge volume per customer. Within payroll, we continue to see revenue tailwinds during the quarter from a mix-shift to our full service offering and growth in payroll customers.

Third, our progress expanding globally added to the growth of Online Ecosystem revenue during fiscal Q2. Total international online revenue grew 44%. The slower growth from last quarter was driven by lapping price increases a year ago and the lingering impact from lower retention and customer acquisition at the beginning of the pandemic.

Desktop Ecosystem revenue declined 2% in the second quarter, in- line with our expectations for the business to decline longer-term. Within this, QuickBooks Desktop Enterprise revenue grew mid-single digits.

Small businesses are resilient and we continue to help them put more money in their pockets when they need it most. We are pleased to see in most QuickBooks indicators are back to or better than pre-pandemic levels. This includes growth in customer acquisition, the number of companies running payroll and payments charge volume. This reinforces the digital tailwinds and positioning of our platform and Big Bets Sasan touched on earlier.

Credit Karma

We closed the acquisition of Credit Karma on December 3rd, resulting in revenue of $144 million for the partial quarter. Our strategic focus with Credit Karma is to grow the core of credit cards and personal loans; expand growth verticals, including home loans, auto loans and insurance; and develop emerging verticals focused on money innovation including savings and checking accounts. I’ll share more detail on each of these strategic focus areas.

First, our focus is growing the core. We are seeing new credit card and personal loan partners onboarding while overall partner activity continues to recover. Adoption of the industry-first Lightbox continues to grow. Lightbox enables Credit Karma to more tightly integrate with its financial partners, which helps match members to the products that are right for them. This now represents approximately 40% of credit card transactions and approximately 30% of personal loan transactions, up substantially year-over-year.

Second, our focus is expanding growth verticals. Although it’s early days, we are seeing strong growth in auto insurance followed by home loans and then auto loans. January revenue in the growth vertical is up over 1.5 times year-over-year, a high-water mark. During the quarter, we introduced Karma Drive, providing members an easy opportunity to qualify for an auto insurance discount based on actual driving habits.

Third, our focus is developing emerging verticals, particularly money innovation. And we’re just getting started with Credit Karma Money.

Turning to our financial principles. We remain committed to growing organic revenue double-digits and growing operating income dollars faster than revenue. As I’ve shared before, as we lean into our platform strategy, we’re starting to see the opportunity for faster margin expansion over time.

And I’m proud of the progress the team is making. We take a disciplined approach to capital management, investing the cash we generate in opportunities that yield an expected return on investment greater than 15%.

We continue to focus on reallocating resources to top priorities, with an emphasis on becoming an AI-driven expert platform. These principles remain our long-term commitment. Our first priority for the cash we generate is investing in the business to drive customer and revenue growth. We consider acquisitions to accelerate our growth and fill out our product roadmap. We return excess cash that we can’t invest profitably in the business to shareholders via both share repurchases and dividends.

We finished the quarter with approximately $2.7 billion in cash and investments on our balance sheet. We repurchased $175 million of stock during the second quarter. We have approximately $2.2 billion remaining on our authorization, and we expect to be in the market each quarter this year. The Board approved a quarterly dividend of $0.59 per share payable April 19th, 2021. This represents an 11% increase versus last year.

Moving on to guidance. While macro uncertainty continues, we remain confident in how our business is performing in the current environment. Our guidance for third quarter fiscal 2021 includes revenue growth of 53% to 55%, GAAP earnings per share of $5.85 to $5.95 and non-GAAP earnings per share of $6.75 to $6.85

You can find our full Q3 and reiterated fiscal 2021 guidance details in our press release and on our fact sheet.

With that, I’ll turn it back over to Sasan.

Sasan Goodarzi — Chief Executive Officer

Great. Thanks, Michelle. I’m very proud of our team and all we’ve accomplished together and I’m optimistic about the future. So with that said, let’s now open it up to your questions.

Questions and Answers:

Operator

[Operator Instructions] Our first question comes from Scott Schneeberger of Oppenheimer. Please go ahead.

Scott Schneeberger — Oppenheimer — Analyst

Thanks very much. Good afternoon. I’m going to smoothing on [Phonetic] tax since we’re in that season. And I’m just very curious on if you’re seeing any activity pickup from all the new brokerage accounts opened in 2020. If you’re seeing a lot of activity in your tax business from corresponding tax reporting from that. And Sasan, a few thoughts on that. Is that going to trigger more volume or do you think it’s more likely something that would trigger an increase in the revenue per return since such transactions might come in at a higher tier of offering? Thanks.

Sasan Goodarzi — Chief Executive Officer

Thank you for your question, Scott. If I were to take you back to what we declared several years ago, one element was under-penetrated segment. The investment community was one, of course, Self Employed and Latinx and the other element of course is about transforming the assisted segment, which also helps us serve that community well if they need expertise or if they want us to do their taxes for them.

And what I would tell you, we all see the same stat. There has been really a significant increase in retail investors using all the different tools that are out there and not just in the United States, but particularly in Brazil, India and the US. And so I feel good that we’re very well positioned. And all of those segments that I mentioned, Latinx, Self-Employed and Premier, we are actually experiencing the kind of growth that we expected and probably a tick up on our premier offering, which really serves our investment community. So we are experiencing an accelerating growth and it’s really all sort of in context of what we had declared.

And we’ll have to see how the season plays out when we tally up our results what it all looks like. We’re very, very pleased with the fact that we’ve really positioned ourselves to serve the segment a few years ago. And I think we’re positioned well for delivering for them this season both with Live platform and if you want to do it yourself.

Scott Schneeberger — Oppenheimer — Analyst

Thanks. Appreciate, Sasan. And then, staying on taxes, I’m just curious kind of a high-level question. And you get this throughout the pre-season, but now we’re into the tax season. What type of federal returns do you expect in this year versus last year? I saw recently that taxes because of what’s going on there in the last couple of weeks has gotten into late in June 25th. So, with that into account and then just the long tax season last year, a condense for most states tax season this year. What are you expecting just for an industry growth year-over-year? And anything that you’re seeing in the early season to support that view? Thank you.

Sasan Goodarzi — Chief Executive Officer

Sure. A couple of things, I would say. One, the assumptions that we made coming into this tax season is that IRS returns would be sort of flattish. And we expect to be able to grow our share of the total number of returns, particularly because of our focus on the underpenetrated segments that I mentioned and transforming the assisted segment with our Live platforms. So really for us it’s about growing our share of the entire category. And as you know, we have such a massive opportunity with 86 million filers that today go to somebody else to do their taxes and the fact that we have an opportunity to help them get their taxes done with that expert at their fingertips any time that they needed. So really our goal is about growing the category in context of a flattish IRS returns.

All of our guidance, we made the assumption that it’s April 15 finish, we contemplated the taxes announcement that was made yesterday. We really, just looking at past situations where there has been a disaster where IRS has extended the filing date, the behaviors are very different. Net-net, we feel very good about our progress. We feel very good about our momentum and really good about the potential that we have this season in the context of the guidance that we provided.

Scott Schneeberger — Oppenheimer — Analyst

Thanks, Sasan.

Sasan Goodarzi — Chief Executive Officer

Thank you, Scott.

Operator

Thank you. Our next question comes from Ken Wong of Guggenheim Securities. Your question please.

Ken Wong — Guggenheim Securities — Analyst

Great. Thank you for taking my question. The first one for you, Sasan, also on tax. As you think about TurboTax Full Service, not sure if you guys are starting to see some good traction there but would love to get a sense of what kind of customers you’re seeing utilize that particular product, is it guys coming from accountants, is it kind of net new filers who may have the greatest level of uncertainty, is it across the board? Any color you can give would be fantastic.

Sasan Goodarzi — Chief Executive Officer

Sure, Ken. Good to hear from you. It’s important just to remind ourselves that we’re — in the assisted segment, the biggest problem that we’re solving is confidence. These 86 million filers need to know that they can ask a question from an expert at any time that they need to and have the ability to turn over their return if they so choose. And we are getting very good traction with Full Service, but it really plays, I would say, a halo effect. What customers want to know is that they can come in, and if they choose to ask for help, they can get it. And somewhere in the experience if they choose to just stay here, let me give you all of my documents digitally that we can do it for them or even if this choose to make that choice upfront.

So full service beyond the actual number of customers that will end up using full service really is playing a halo effect, which is what we learned in our tax results last year. It really builds confidence for filers that come in from the assisted category. That I can get my questions answered, there’s always going to be an expert at my side. And as a reminder, last year, we experienced 70%-plus growth in TurboTax Live. And a majority of those customers actually came from the assisted category. So it’s playing the role exactly as we had assumed that it would. And so far so good this season in terms of the traction that we’re getting.

Ken Wong — Guggenheim Securities — Analyst

Great, great. That’s super helpful. And then, a quick one for you, Michelle. You touched on Light Box and seeing, I think, 40% of transactions, 30% of personal loans, just wondering kind of where do you think those numbers could trend up to? And then, as far as monetization, any color on kind of how monetization has improved for customers that are utilizing Light Box?

Michelle Clatterbuck — Executive Vice President, Chief Financial Officer

Hey, Ken. Thanks for the question here. Light Box is a great technology that really enables us to have a winning experience for both the customer and for our partners — our financial institution partners as well as us. There’s nothing more frustrating than for a customer to come in and not be able to get access to a financial product that they thought they would. And so, it enables the financial institutions to be able to better target the products that they have and then customers are much more likely to actually be approved. So with the metrics that we have right now, we’ll have to see how those trend over time. We’re very excited about it. We want to continue to have more and more transactions go through Light Box because, as we said, it’s a better experience for the customer and it also is a better experience for our partners.

Ken Wong — Guggenheim Securities — Analyst

Great. Thanks, Michelle.

Operator

Thank you. Our next question comes from Brad Zelnick of Credit Suisse. Please go ahead.

Brad Zelnick — Credit Suisse — Analyst

Great. Thank you so much for taking my questions. Sasan, we heard from Michelle’s comments that many of the Small Business indicators such as customer acquisition, number of companies running payroll, payments charge volumes, things like that, are all trending positively. Can you maybe expand a little bit more on the indicators that you’re looking at in terms of Small Business health and from your perspective kind of where we are in terms of Small Business recovery?

Sasan Goodarzi — Chief Executive Officer

Yeah, sure. Let me start, Brad, with the actual recovery. Depending on the geography, United States versus UK or different states within the US, every geography is performing differently. And just to use an example, we’ve got places like Florida, Texas, Arizona, Georgia, that have actually recovered quite nicely and then you have places like Michigan, Washington, California, New York that are lagging. And then within that, you have industries that have come back all the way and industries that haven’t. And then it’s the natural ones that you would assume. It’s fitness, restaurants, travel. I bring that up in context of yet another data point is when we look across the data points that we see, about 25% of our customers, their net dollars in their bank account is down nearly 50%.

So I give you those data points just to say that Small Businesses are still working hard to come back to where they were, and they’re not all the way back. That’s really important in context of all our trends are doing and what you heard from Michelle, which is, we watch acquisition, we watch retention of course, we watch our payments charge volume, the number of companies running payroll, the number of employees core company using payroll, Time Tracking, etc, and all of those indicators are at or above pre-COVID levels, except the number of employees at small businesses. And that really tells you a lot about just the innovation that’s happening on our platform, the power of our platform, and the fact that in times where Small Businesses are actually doing worse than they were prior to COVID are actually platform metrics are at or better than pre-COVID. And so that actually bodes well for us to not only deliver for our customers but the growth rate that we would expect as we look ahead. So good momentum and actually bullish about where we are in the opportunities for the future.

Brad Zelnick — Credit Suisse — Analyst

Thanks, Sasan. That’s very helpful. And maybe just a follow-on for Michelle. Credit Karma is off to a really strong start and you’re now just migrating Turbo users over and you’ve got so many growth opportunities ahead that you’ve talked about in your remarks, can you just remind us perhaps of the seasonality of this business? Because if we just start annualizing the last two months, I think we’d all be getting a little bit ahead of ourselves. What should we keep in mind relative to what we’ve seen out of the gate versus what you’re guiding for the full year?

Michelle Clatterbuck — Executive Vice President, Chief Financial Officer

Yes. Thank you, Brad. Good question. We are off to a strong start with Credit Karma, feel really good about the progress that they’re making. We’re seeing the business bounce back more quickly from the pandemic than we had expected. Not all the way back to pre-COVID levels, but definitely making progress there. When you think about seasonality in the business, they do see a little bit stronger in the January/February time period, but there isn’t huge seasonality in the business. But I would say January and February is a little bit more of an uptick as people are coming into the New Year and some of those New Year resolutions and so forth. But that’s what I would say you guys should expect.

Brad Zelnick — Credit Suisse — Analyst

Excellent. Thank you so much.

Operator

Thank you. Our next question comes from Keith Weiss of Morgan Stanley. Please go ahead.

Keith Weiss — Morgan Stanley — Analyst

Keith: Excellent. Thank you, guys, for taking the question. And very nice quarter. I wanted to expand a little bit on Brad’s next question. Can you help understand now that the indicators are at or above kind of like the pre-crisis levels, how should we think about the mechanism of how those indicators and the time frame for when those indicators will translate into kind of the revenue growth rates that you guys have guided to longer term and that were expected? So how should we moderate our expectations on to how quickly do indicators become sort of the actuality in terms of what we see on the income statement?

Sasan Goodarzi — Chief Executive Officer

Yeah. Thanks for your question, Keith. And in the context of being a subscription business, a lot of the growth rate we’re experiencing now is the things that were happening almost a year ago this time. And in context of slower acquisition, retention, dropping a couple of points starting in March of last year. And also there are a number of things that have huge benefit for customers that we paused, things like payroll full service migration. We have aligned for — to upgrade to QuickBooks Advance, we sort of dropped that line for a while. So it was the combination of acquisition, retention along with very intentional decisions we made around pricing and migration that has had an impact on the growth rate that we’re seeing now.

And in addition to all of that, we’re lapping price increases that we had done at the same time last year. So, the long answer to your short question is, what we are starting to see now, we should expect the growth rate to be impacted in the year ahead because a lot of those metrics and the trends that we’re experiencing now will see the follow-on benefit in the quarters ahead. But I would say, almost think about a year out or so is the best way to think about it.

Keith Weiss — Morgan Stanley — Analyst

Got it. Got it. And if I could ask a follow-up to Michelle on the margin side of the equation, really appreciate the continued kind of balance between good growth and faster margin expansion over time. Great to see that as part of the corporate philosophy. This quarter in particular, we saw the SMB contribution margin up nicely on a year-on-year basis. But I know a lot of the companies are talking to us about kind of one-time items or sort of crisis-related expense savings that we saw in the year past that might not sustain the year forward. Anything we should be aware of in terms of sort of expenses that might come on board that could upset — not upset but could temporarily sort of reverse the margin expansion that we’ve been seeing?

Michelle Clatterbuck — Executive Vice President, Chief Financial Officer

Thanks for the question, Keith, first of all. For us, as we’ve been thinking about margins and margin expansion, really the biggest driver of any of that is us becoming more and more of an AI-driven expert platform. And so, you may see some expenses here and there and obviously you’d see margins move around a little bit quarter to quarter, but I would say really focus on our guidance, which is after last year expanding margins a point. This year we expect margins to expand approximately 110 basis points, once you’re excluding Credit Karma. And that is really us continuing to evolve to being more of a platform company and seeing those areas for us to drive margin expansion across the company everything from technology to customer success to go to market. And so that is the biggest driver of margin expansion for us across the company.

Keith Weiss — Morgan Stanley — Analyst

Outstanding. Thank you so much, guys.

Sasan Goodarzi — Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from Sterling Auty of JPMorgan. Your line is open.

Sterling Auty — JPMorgan — Analyst

Yeah, thanks. Hi, guys. I think in some of the prepared remarks and press release, there was the talk of the cross-sell of TurboTax going to Credit Karma. But I’m wondering what the expectations are in terms of the cross-sell and marketing that you can do to Credit Karma users for TurboTax for this tax season.

Sasan Goodarzi — Chief Executive Officer

Yeah, sure, Sterling. Let me just, if I could, take it up one notch and I’ll come back specifically and answer your question. There are a number of things that we have launched. We’ve launched Credit Karma money at the end of the TurboTax experience, we’re migrating Turbo customers with Turbo being decrecated [Phonetic] to Credit Karma and of course to your question launching TurboTax as part of the Credit Karma platform. So there are a number of big things that we’re doing.

And all of them, Sterling, I would think about them as long-term opportunities with our focus being testing and experimenting right now to where we nail the experience. So, I wouldn’t expect really big impacts from those in the near-term. But we do expect these to deliver significant customer benefit and growth in the future. Because we’re really just testing and experimenting and want to really nail the experience before we launch things at scale. So hopefully that answers your question.

Sterling Auty — JPMorgan — Analyst

It does. Thank you.

Sasan Goodarzi — Chief Executive Officer

Thank you.

Operator

Our next question comes from Kash Rangan of Goldman Sachs. Your line is open.

Kash Rangan — Goldman Sachs — Analyst

Hi. Thank you very much. Congratulations on the quarter. Sasan, at the Analyst Day, you talked about a $24 billion US tax opportunity. And wondering what have you learned from Live and what are the things that you need to add to Live in terms of capabilities to be able to address in a larger scale? And also in the same vein, as you look at Q2 Advanced, what are the things that you’ve learned with that product out at the higher end of the SMB market that you’ve traditionally played in and what are the things that you’re looking to introduce in the current [Phonetic] to make it address the full breadth of the term? Thank you so much.

Sasan Goodarzi — Chief Executive Officer

Sure, Kash. Good to hear from you. Let me start with Live and the 86 million customers that today go to an assisted method. Based on research and work that we did several years ago, one of the learnings that we had is over 70 million of these 86 million customers are actually willing to use a digital platform as long as they can get help and expertise to be able to file their taxes with confidence. And in fact, they would like to get help beyond taxes, which is where Credit Karma comes in.

And so, to your question of what we have learned, with our — beginning our fourth year with the Live platform, we’re more bullish about the opportunity ahead of us than we were even four years ago when we launched TurboTax Live because in essence what we’ve learned and that’s informing what we’re executing this season is, one, with 86 million folks that we need to get to consider the fact that there’s a digital platform with an expert at their fingertips and the fact that they can actually hand everything off digitally for an expert, which is where you see what we’re doing in our marketing campaigns. And you may only see what we’re doing off air on TV. But we’ve got an incredible campaign in educating our customers in multiple different digital channels to help them understand how this works because we’re really shaping and reshaping the category. So one is about education, which is where a lot of our investment is going. The second is when they come in, really nailing the first-time use.

Immediately when they come in, help them understand how to get access to an expert, engaging with an expert, exchanging a document digitally and seeing how easy it is. And then, with now the launch of Full Service, if you choose to upgrade to Full Service or you come in and choose Full Service, how do we deliver instant benefit to you. And instant benefit by the way is confidence that there’s an expert there. Now, which gets me to the other side of the equation, which, I haven’t mentioned and that is our expert platform. That’s really where we have advantage. A lot of our AI investments are actually improving our expert platform around scheduling, document exchange, making sure that we connect the right expert to the right customer, ensuring that we deliver insight to the expert because of our machine-learning capabilities so that when the expert is talking to the customer, it actually deliver confidence with their know-how and their knowledge. And then being able to, by the way, the culture we’re creating with the experts that we have on our platform that love the culture, the income that they make and love the fact that they get to deliver for our customers in the comfort of their home.

So those are the areas that we are focused on, and frankly every day of the season we learn and we adjust, and we — we love our momentum and the opportunities ahead. And what we’ll learn over time is we’re launching TurboTax Live as part of the Credit Karma platform. And what’s unique in launching that as part of the Credit Karma platform is, we’ll actually be able to deliver a personalized experience because we’ll know that you are a prior-year assisted customer. And that again will pay off in the long-term, but those are the things that we’re testing now.

In terms of your question around disrupting the mid-market with QuickBooks Advanced, there’s a couple of things that we’ve learned. Frankly we believe that we can even go higher in the market beyond 10 to 100 employees. Now, our focus right now is 10 to 100 employees. But as we see the power of our platform and the ability for us to scale, we believe that we can actually serve even bigger mid-market customers at a disruptive price.

And to your question, the things that we’re continuing to add are things around like workflow management, automated invoice approval, batch invoicing, getting very deep integrations of critical apps that these customers need to be able to grow their business and run their business, some of which Michelle actually mentioned in the script around like DocuSign, HubSpot, Salesforce is just a few examples. And every day, we’re learning what we need to add to the platform, but it’s a lot of what we do today just at much, much higher scale. And the confidence it’s given us is not only being able to go up market but we’re actually — we have now 70% of the customers that we’re getting are upgraders, and 30% that are new to the franchise. And we’re actually seeing our new to the franchise growing even at a faster rate than what we thought without the focus yet in place to be able to go after the franchise. So, those are the few elements that I think are worth sharing, Kash.

Kash Rangan — Goldman Sachs — Analyst

Very insightful. Thank you, Sasan.

Sasan Goodarzi — Chief Executive Officer

Yeah, thank you.

Operator

Our next question comes from Brent Thill of Jefferies. Your line is open.

Brent Thill — Jefferies — Analyst

Good afternoon. Back on Small Business. I just wanted to drill on a handful of investor questions related to your comments around the pipeline yet Q1 to Q2, the growth rate decelerated in Small Business. I think many believed that they would stabilize or build. And I just want to make sure we’re truly understanding this that the comments or color that you’re seeing in the pipeline and close rates and things behind the scenes are showing a much better growth rate than what that reported number is indicating. And I just want to make sure if there is any anomalies or any differences that industry should be aware of. There’s a number of questions just a disconnect from the comment relative to the reported number. Thanks.

Sasan Goodarzi — Chief Executive Officer

Yeah, sure. Sure, Brent. One of the things that we’ve been pretty consistent in communicating is that our growth rates would decline sequentially before they start bouncing and going back up. And that’s really what we saw in Q2. It’s very consistent with what we expected. And it’s consistent with what we expected on a couple of fronts. One, because this time last year starting in March for several months both acquisition slowed but also our attrition popped. But in addition to that, there are things that as I mentioned a few moments ago that we paused like Full Service migration, we paused our QuickBooks Advanced lineup for those upgraders that we didn’t ask them to move up because we didn’t want to have them experience that in the early COVID times.

And so, what we’re experiencing now is just a reflection of some of those key indicators that we experienced earlier in the year. And we are on top of that lapping a price increase that we did last year that we didn’t do this year. So you put all of that together. We’re actually quite pleased with the growth rate that we experienced in the quarter, although we expect it to be a little lower than the last quarter. And then, as we look ahead, as I mentioned, in the coming quarters and year ahead, a lot of the indicators that Michelle and I shared will start turning into revenue growth. But everything is per our expectation. I think the only thing that’s not per our expectation is the business is actually performing better than what we thought in the pandemic. And that therefore we’re bullish about the future.

Brent Thill — Jefferies — Analyst

Great. Thanks, Sasan.

Sasan Goodarzi — Chief Executive Officer

You’re very welcome, Brent.

Operator

Our next question comes from Kirk Materne of Evercore ISI. Your question please.

Kirk Materne — Evercore ISI — Analyst

Hi, yes. Thanks very much. Actually, Sasan, I want to actually — maybe it’s more for Michelle. Just to Brent’s question, didn’t you get 4 points of benefit from the PPP program last quarter in your 24%? So if we sort of normalize — I guess, did you have any this quarter because if you normalize for that you would actually have accelerated from — I’m doing the math right — from 20 to 22 this quarter. So, I guess, just can you talk about the PPP program help QPO ecosystem at all this quarter?

Sasan Goodarzi — Chief Executive Officer

Yeah, I would say — in a headline, what I would say — oh, Michelle, please go ahead.

Michelle Clatterbuck — Executive Vice President, Chief Financial Officer

No, that’s okay. I was just going to say, Kirk, actually the PPP revenue that we got, that was actually in Q4, we saw that. And so, we did have about a 4-point decline, if my memory serves me correct, 28% Online Ecosystem revenue growth in Q4, which then dropped to 24% in Q1. And that was — that actually had PPP in it. But we didn’t have anything material in Q1.

Kirk Materne — Evercore ISI — Analyst

That’s fine. Just wanted to double-check that. But Sasan, I guess, just sort of on the Small Business, another question would be on the international growth. Clearly the UK was under a pretty severe lockdown for a lot of this quarter. Did that impact you all at all on international growth was still very strong in the mid-40%s. I was just kind of curious if that was one of the regions that perhaps was still maybe taking a little bit longer time to recover. Thanks.

Sasan Goodarzi — Chief Executive Officer

Yeah, Kirk, it actually has. I mean, I would say, if I look at it across the globe, the United States is really not just bounced back nicely but just the resiliency of our platform, the innovation on the platform was really allowing us to see all the indicators get back to or better than pre-COVID levels. When we look at outside of the United States, countries like UK, Australia, France actually were hit much harder. And to your point, they’re still, specifically UK and France in a lockdown. So that has impacted the growth rate relative to what we see in the United States. But all of that is within the context of the guidance that we provided. But we have seen a hit.

Kirk Materne — Evercore ISI — Analyst

Okay. That’s helpful. Thank you.

Sasan Goodarzi — Chief Executive Officer

Yeah, thank you.

Operator

And the next question comes from Michael Turrin of Wells Fargo Securities. Your question please.

Michael Turrin — Wells Fargo Securities — Analyst

Hey there. Thanks and good afternoon. Going back to Credit Karma, it looks like that segment outperformed what we were expecting on the partial quarter. Looking at what’s implied for the rest of the year, it looks like it’s still below the $1 billion that business was at in 2019. Can we just go back to what some of the factors are that could drive outperformance from that beyond what’s assumed in your current outlook? And then, on the margin there, is the 26% segment margin there a good building block for us to be thinking about or is the seasonality Michelle referenced somewhat impacting that number as well?

Sasan Goodarzi — Chief Executive Officer

Yeah, sure. Good to hear from you, Michael. Just as a quick refresher, there are three elements around growth in Credit Karma. It’s growing the core, which is credit cards and personal loans. It’s expanding our growth vertical, which is auto and home loans and insurance; and then emerging verticals which is really all around access, which is money innovation. And none of this growth is really coming from that third bucket. And the second point I would make is, we sort of have a 75/25, about 75% of the revenue is coming from credit cards and personal loans and about 25% coming from the growth vertical, which is auto and home loans and insurance, which has actually really improved versus about a year ago where it was 95% credit cards and personal loans.

And specifically with that context to answer your question, we’re seeing more partners come back on the platform. We’re seeing new partners come on. We’re starting to see higher spend. And because of just the innovation with Light Box and better matching, we’re getting more customers to actually get connected to the financial products that are right for them and partners benefitting from it. So, the performance we experienced this quarter is just we’re seeing stronger momentum when it comes to credit cards, personal loans and then the growth verticals specifically around auto insurance.

And when we look ahead, our overall guidance was just based on the trajectory that we assumed for the year and we’ll just have to continue to see how these verticals play out. But we like the momentum that we see. But that could be the reason in the long-term for over-performance to your question. Specifically around margin, really important to note that, one, we manage margins at the company level, so really pay attention to the guidance that we provide at the company level. Two, we are investing in Credit Karma. It is a — we see it in the long-term as a big growth engine for the company. The penetration, when you think about the 110 million members that Credit Karma has, the penetration with all these different financial products that I mentioned is actually still quite low. It’s actually quite exciting, as we look ahead, the possibilities of increasing penetration. So we are investing dollars in Credit Karma, all within the context of the guidance and margin expansion guidelines that we have provided. So I wouldn’t get too anchored on the current quarter margin rate. It was more because it performed better than what we thought and some of the investments in hiring shifted between quarters. I would more focus on company-level operating income that we provided and margin-wise [Phonetic] that we provided.

Michael Turrin — Wells Fargo Securities — Analyst

That’s all very helpful. Thank you.

Sasan Goodarzi — Chief Executive Officer

Yeah. Thank you.

Operator

Our next question comes from Jennifer Lowe of UBS. Your line is open.

Jennifer Lowe — UBS — Analyst

Great. Thank you. Just first one quick clarification from me relative to the question that Kirk asked earlier. Michelle, you clarified that Q4 had the PPP impact and by Q1 there wasn’t one. But given that that program reopened, I think, earlier this calendar year, can you just confirm whether there was an impact in Q2?

Michelle Clatterbuck — Executive Vice President, Chief Financial Officer

No, Jenn, that program, the new PPP program has been moving and you may have seen it in the press. It’s been moving much more slowly than anyone had anticipated. And we don’t have anything material in Q2 results.

Jennifer Lowe — UBS — Analyst

Perfect. And then, just going on some of the questions around the trajectory in Small Business, there’s a couple different factors that you called out. There’s first the fact that the economic indicators have improved but maybe not everything is back to pre-COVID levels. And then there’s also sort of this lagging effect from some of the subscription businesses or some of the pauses that you took as everyone sort of navigated the very uncertain time. So I just want to clarify if you think about the 30%-plus type aspirations for the Online Ecosystem component, is that something that you can get back to in the current environment and it’s just a function of working through some of these sort of leftover impacts from the last six to 12 months? Or do you need to see continued improvement in the broader Small Business economy as well to get back to pre-pandemic levels to support that 30%? Thanks.

Sasan Goodarzi — Chief Executive Officer

Yeah, Jenn, thanks for your question. What I would say is, the economic indicators are still below pre-COVID levels. It’s more our own indicators and the performance of our platform that has bounced back in many cases better than the pre-COVID levels, which gets, I think, the essence of your question, and that is our goal in the long-term has not changed. We believe that we will get this business, specifically the online revenue growth, back above 30%. And we just need to keep executing our game plan. And I would tell you that we don’t think it’s heavily relied upon how the economy bounces back. Because if you look at where we are today versus six months ago, a lot of the performance that we are talking about is based on the performance of the platform and our execution and the innovation on our platform. Now, at the end of the day, this economy does need stimulus — fiscal stimulus to get people back into jobs. But that is not the anchor for us to get back to the growth rates that we believe we can get pack to. It will just take some time.

Jennifer Lowe — UBS — Analyst

Great. Thank you.

Sasan Goodarzi — Chief Executive Officer

Yeah, thank you.

Operator

Next question comes from Kartik Mehta of Northcoast Research. Your question please.

Kartik Mehta — Northcoast Research — Analyst

Hey, Sasan. When you look at the QuickBooks business, obviously you’re lapping a price increase but you haven’t stopped innovation. I’m wondering what metrics you’ll look at to feel comfortable to adjust pricing.

Sasan Goodarzi — Chief Executive Officer

Sasan: Yeah. Kartik, thank you for your question. Our main focus around pricing will be when we believe it’s the right time given how Small Businesses are performing and given the pandemic. It is actually not related to our innovation. But as you know, we now have innovation that allows u us to go upmarket with both QuickBooks Advanced and QuickBooks Live, which is a much higher ARPU offering. We have the ability to garner a higher price from customers. But from a price increase perspective, it’s less about the metrics and indicators that we see with our own platform but more when we believe is the right time to raise prices with customers, given what they’re experiencing and the challenges that they’re experiencing for their business. So, the two are in many ways unrelated in terms of the way we think about it.

Kartik Mehta — Northcoast Research — Analyst

And then just finally, when you look at the Credit Karma customers as far as tax customers, is the mix of the products they’re using different than the core TurboTax customers, at least what you’re seeing early on?

Sasan Goodarzi — Chief Executive Officer

What I would share with you that we’ve learned about the Credit Karma base is a big portion of their customers actually use an assisted method. And that is actually what is exciting to us. Now, because they have 110 million members, you can imagine they have a strong cross-section of folks in the US, whether Latinx, Self-Employed, those that are retail investors. So that cross-section is generally consistent with the customers we serve in TurboTax today. What’s different is, we’ve got a good majority of those customers that in the prior year used an assisted method.

Kartik Mehta — Northcoast Research — Analyst

Thank you. Appreciate it.

Sasan Goodarzi — Chief Executive Officer

Yep. You’re very welcome.

Operator

Thank you. Our next question comes from Siti Panigrahi of Mizuho. Your line is open.

Siti Panigrahi — Mizuho — Analyst

Thanks for taking my question. Wanted to ask about the feedback you got from the product-based businesses, mainly QuickBooks Commerce that you launched a few months back. That seems like that’s an acquisition from TradeGecko, mainly has order into inventory. I’m wondering like how far you can expand that offering. It feels like you can become the back-office platform for these kind of businesses. So what sort of opportunity are you seeing and what sort of feedback you got so far?

Sasan Goodarzi — Chief Executive Officer

Yeah, sure. Thank you, Siti. First of all, we’re very excited about QuickBooks Commerce and it’s also very, very early innings with QuickBooks Commerce. And the acquisition we just made with OneSaas actually allows us to bring data into the platform from marketplaces, from POS providers, from fulfillment apps, and so really actually helps us help the customer understand how they’re doing and their profitability, which is what is most important for the customers.

We actually had to restrict at the top of the funnel to ensure that we can nail the customer experience. And so, our focus first was ensuring that we can serve new customers that don’t use our inventory today. Our next focus will be existing QBO customers that don’t use any of our inventory capabilities. And then third will be existing QBO customers that actually do use our current inventory capabilities. And the reason that’s important is, we want to ensure that if a customer already has inventory that we can easily sync all of the product catalogs and product numbers and to keep their books clean.

So net-net, we’re just getting started. We had to restrict the top of the funnel because of the demand and the excitement that was out there because we want to be very intentional in terms of building out the capability. Very early indicators are positive with the number of customers that we have on our platform. But again, think about QuickBooks Commerce, think about QuickBooks Cash as these are long-term plays in terms of when and how they will deliver growth. But so far, we’re bullish about all the early indicators.

Siti Panigrahi — Mizuho — Analyst

That’s great. Thank you, Sasan.

Sasan Goodarzi — Chief Executive Officer

All right. Thank you, Siti.

Operator

Thank you. Our next question comes from Brad Reback of Stifel. Your line is open.

Brad Reback — Stifel — Analyst

Great. Thanks very much. Michelle, as we think about free cash flow generation over time, is there any reason it shouldn’t [Technical Issues] operating income growth?

Michelle Clatterbuck — Executive Vice President, Chief Financial Officer

I’m sorry. Can you repeat that, Brad? I didn’t hear the last part of it.

Brad Reback — Stifel — Analyst

Sure. As we think about free cash flow generation over time, is there any reason it shouldn’t mirror operating income growth?

Michelle Clatterbuck — Executive Vice President, Chief Financial Officer

No, no. There shouldn’t be any real big reason why you shouldn’t see that. No.

Brad Reback — Stifel — Analyst

Okay. That’s great. And then, maybe one quick tactical one. Sasan, you talked about QuickBooks Live retention getting better. Is that meaningfully different than QuickBooks Online retention right now?

Sasan Goodarzi — Chief Executive Officer

Yeah. The biggest thing — well, first of all, it’s very early days. We look at more cohort of customers versus the aggregate numbers. The biggest reason we’re still focused on retention right now with QuickBooks Live is, we’re focused on understanding customer needs and really nailing the experience. Because with QuickBooks Live, our customers that come in to get set up, there are customers that come in that want us to provide them advice and they’re just looking for bookkeeping advice and there are customers that actually want us to do their taxes for them and run their books for them. And what we’re really being intentional about is understanding what are the needs, what are the experience that we need to deliver and what does that look like on the platform, which is why you heard me mention retention.

Retention right now is more focused on cohort and it is lower than QBO only because we’re looking at different cohorts of customers and their needs are very different. And before we really open up the top of the funnel, we want to make sure that every customer loves the experiences they’re getting from us on QuickBooks Live. And the team is just innovating like crazy to close some of the gaps and so we’re excited about the possibilities.

Brad Reback — Stifel — Analyst

Great. Thanks very much.

Sasan Goodarzi — Chief Executive Officer

Yeah, thank you.

Operator

And our next question comes from Arvind Ramnani of Piper Sandler. Your line is open.

Arvind Ramnani — Piper Sandler — Analyst

Thanks for taking my question. I want to follow-up on a question that was asked earlier around kind of the increase in brokerage accounts. And I just wanted to ask about potential lift from crypto users. This will be the first time these users will need to — some of them will be first-time filers, but many of them will certainly be adding kind of the added product for capital gains or losses. Are you seeing any kind of lift from this segment of users?

Sasan Goodarzi — Chief Executive Officer

Yeah, Arvind. It’s not particularly just from the crypto users. There are just millions more of customers that are doing their own trading in the US and outside the United States. And come tax time, they need to be able to do their taxes. And so we’re just seeing an increase in our Premier product both with Live because you need assistance, you can use Live. And if you want to Do-It-Yourself, you just use of course our Premier Do-It-Yourself product. So we’re seeing an overall increase based on an increase in retail investing. I couldn’t call out something that’s material on the crypto side.

Arvind Ramnani — Piper Sandler — Analyst

Arvind: Great. Great. And when you think about kind of the lift in revenues, I mean, not looking for a specific quantification, but directionally are you expecting more of a lift from increased ARPU or increased users?

Sasan Goodarzi — Chief Executive Officer

Yeah. The way we designed our long-term growth rate is on under-penetrated segments, which is investment community, Self-Employed and Latinx, and it’s TurboTax Live. And with TurboTax Live, just by design, it has a higher ARPU. Now, right now, we are so early in the shaping of the category and being able to acquire customers that the best thing for you all to anchor on is what we shared at Investor Day, which is our long-term expectations just on the tax side is 8% to 12%. And probably the largest driver of the higher end is ARPU. And just know that we’re being very intentional about right now raising awareness both with our campaign but the free expertise that we’re providing for those that has simple returns just to create awareness in the category but in the long-term it’s ARPU because of the assisted segment.

Arvind Ramnani — Piper Sandler — Analyst

Perfect. Thank you.

Sasan Goodarzi — Chief Executive Officer

You’re very welcome.

Operator

Your next question comes from Michael Millman of Millman Research. Your line is open.

Michael Millman — Millman Research — Analyst

Thank you very much. A couple of questions. You mentioned that Credit Karma was getting some business from assisted, and you talk about if that normal switching around between different methods, or if this is particularly a Credit Karma type business activity. Secondly, can you talk about — and maybe you do this — whether you can use RALs to kind of speed up some of this movement, particularly from assisted? And I guess let’s start with those.

Sasan Goodarzi — Chief Executive Officer

Yeah. Sure, Michael. Thank you for your question. The point I made earlier was twofold. One that this is a learning year for us in launching TurboTax as part of the Credit Karma platform. And we’re just running a lot of experiments to make sure that we can deliver a fantastic experience before we go big in the outyears. The second comment that I made is that a good portion, we’ve not divulged the number of Credit Karma members use the assisted segment. And it’s very much connected to when you look at there’s 155 or 160 million IRS returns, 86 million are in the assisted segment. Proportionality is the same thing within the Credit Karma base. So that’s the point that I was making earlier.

To your second question about RALs, really the biggest driver of getting a customer to use a digital platform is actually confidence and not early access to their money. They have to first have confidence that they can get their taxes done right with you, which is where our experts and expertise comes in. And that’s really where a lot of our investments are going. We also provide early access to your refund but really the big driver is about ensuring that we deliver confidence through our experts.

Michael Millman — Millman Research — Analyst

Do you say it’s a big opportunity to add money to — move with confidence over to eliminating RAL kind of money?

Sasan Goodarzi — Chief Executive Officer

Yeah. First of all, we’re really focused on getting these customers to come to our platform by ensuring that they know that they can get access to an expert. So confidence is first and foremost. And of course, our different methods that we can help these customers get early access to their refund, that’s very, very consumer-friendly. So, the answer is yes, but it’s secondary to providing expertise to these customers to use the platform.

Michael Millman — Millman Research — Analyst

Right. I appreciate it. Thank you very much.

Sasan Goodarzi — Chief Executive Officer

All right, Michael.

Michael Millman — Millman Research — Analyst

And stay safe.

Sasan Goodarzi — Chief Executive Officer

Thank you so much. Thank you. You do the same. And thank you, everybody. I know we ran a little bit over. Appreciate everyone’s questions. I wish everyone well. Stay safe until next time. We’ll talk to you next quarter. Thank you, everybody.

Operator

[Operator Closing Remarks]

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