Intuit Corp. (NASDAQ: INTU) saw declines in total revenues and adjusted earnings of 8% and 19% respectively during the third quarter of 2020 due to the extension of the IRS tax filing deadline and local shelter-in-place directives brought on by the coronavirus pandemic.
Intuit believes the health crisis will drive changes across several industries and alter the way people get loans, manage their businesses and do their taxes going forward. The company is seeing an accelerated shift to a virtual world with more people wanting to do their taxes themselves and wanting to get assistance while at home without hassles.
Intuit believes it is well-positioned to take advantage of this opportunity with its digital platform. During the third quarter, the Do-It-Yourself category performed notably well compared to the assisted category.
The company’s strategy focuses on investments in innovation and during this downturn, it plans on investing in its Big Bets, which are its biggest opportunities for the future.
“Our strategy and Big Bets position us better now than ever before. We have a proven playbook that focuses our investments on accelerated innovation and what matters most. In that context, we have aligned the company to invest in what’s most important for future growth while delivering against our financial principles.” – Sasan Goodarzi, CEO
Speed to benefit
This is the first of the Big Bets and it involves using artificial intelligence to provide services to customers in a fast and seamless way. The Intuit Aid Assist solution helps small businesses connect to the correct relief funding programs based on eligibility. The solution uses AI to simplify the CARES Act and provide users with information in a manner easy for them to understand.
Intuit also helped in simplifying and automating the Paycheck Protection Program loan application process through QuickBooks Capital, thereby improving access for very small businesses to this program.
Connecting people to experts
The second bet involves connecting people who want to do their taxes themselves with experts who can offer them help if needed. Intuit is using its TurboTax Live and QuickBooks Live solutions to expand its customer base, increase engagement and grow average revenue per customer.
Smart money decisions
This bet revolves around providing financial tools to customers that help them increase their income. The company is seeing active use for Turbo nearly double, indicating benefits from improvements such as mobile refund tracking and weekly credit score updates.
Intuit expects the acquisition of Credit Karma to help it in implementing this bet successfully. The company expects the transaction to close in the second half of 2020.
Center of business growth
Going forward, small businesses will need to increase their online presence. With this bet, Intuit aims to become the center of small business growth by helping customers improve their omni-channel capabilities and manage capital and payments.
The Cash Flow Planner tool uses AI to predict small business customers’ cash needs by evaluating their financial history and possible income and expenses. The Instant Deposit tool helps manage payments efficiently and has led to a doubling in payments volumes.
Disrupt the mid-market
This bet aims to disrupt the mid-market which is flooded with high-price offerings for small businesses that have up to 100 employees. The company’s QuickBooks Online Advanced offering is aimed at providing customers with customized solutions at an optimal price and a faster rate. This solution aims at attracting new mid-market customers and retaining larger customers.
Click here to read the full transcript of Intuit Q3 2020 earnings call