Intuit Inc at Goldman Sachs Communacopia + Technology Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : So tell us what your five-pronged strategy is? And how does that leave you with your assessment of growth opportunities for Intuit going forward.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : And I know that you've talked about your 5 big bets. Maybe just for the benefit of audience that may not be familiar with the 5 bets very briefly recap those 5 bets those are unique to your vision, right?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : That's great. That's great. One of them was the bet on small businesses. And Microsoft got us a little concerned after their second quarter results that they were seeing some weakness in the SMB space, and we all got concerned. And you just blast it right through the gates with terrific July quarter SMB numbers. Why is Intuit doing so well? And I don't mean to ask it skeptically because I've lived through the 2008, 2009 financial crisis, when I did cover into it. And it was one of the very few companies that actually grew top line, except one quarter, but it taught me that there's something special about the way the products are adopted, how sticky they are and winning new business. Where do we stand today? Clearly, your numbers were phenomenal coming out of the July quarter. Why do you believe that Intuit is so resilient in that SMB ecosystem the street generally considers to be very fragile because MongoDB has talked about some weakness in SMB, Microsoft did? I think Snowflake alluded to that as well. Why aren't you guys doing so much better?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Yes. And so it looks like the TAM is also to the earlier point, you said the TAM is about $300 billion or so. You can grow during a tough time only if the market option is so big because part of the reasons you talked about as to why you said resilient is the value proposition of the product. You run your cash flows and you process your orders. It's the lifeblood of a small business, but you're a growth company, adding new subs at a pretty frantic rate, right? And how is it that these new customers that have not made a decision are going of Intuit knowing all to, they could be out of business, right? Is it because they want -- don't want to go out of business that their chances are better going to Intuit Is that what's driving that margin or customer to really say, you know what, I want to go into it, quickly to say?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : That was a program, you talked about right after you became CEO, I remember that. And how is that program going that being able to lend money and prop up the financials, so they come back, and they never get the good deed that you get did for them and then come back in (inaudible)

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : I'm going to get to payments in a few seconds here, but that's a whole new topic of super excitement. So on the topic of the economy. We all look at leading indicators. What kind of leading indicators are you seeing transaction volume or activity levels with Credit Karma, QuickBooks? And how does this compare to the last few months before and even relative to the pre-pandemic levels, any patterns that you see that are interesting?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Do you publish this data, or you just call it tieless? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 13, 2022 / 5:00PM, INTU.OQ - Intuit Inc at Goldman Sachs Communacopia + Technology Conference

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Then why once upon a time, might you remember, small business activity index with them?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : You'll (inaudible) with Goldman where our economists will have the first dips...

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : I was just trying to being funny.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : It's good to see and it's encouraging to hear that, right? As everybody is worried about, do we have another housing crisis? I mean how there have been problems in the housing industry. And that's a question that I posed off our Chief Economist yesterday. Does he see another crisis similar to the one that we have in...

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Yes. To -- when you talked about forward-looking guidance, which you already provided. I suppose you took into account potential for lower activity levels in the Credit Karma ecosystem. Can you talk to us about how you might have bulletproofed your business from a forward-looking perspective, given what you know with the leading indicators in housing, automotive financing, whatnot, which could be a little tougher?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : That's great. Talking about payments, which is something...

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Payments exactly. You want to get paid. Everybody wants to get paid. I remember back in 2014 or '15, I would ask on follow-up calls, Brad, what is the attach rate of payments. You'd say "Ah, it's 4%, 5%." What's your goal? Everybody that's got a credit card. That's my goal, 50 I want to be 50% rate. So it's been a great journey for you guys. As you said, payments has accelerated in growth. It feels like you could do even better as it has gotten, you could do even better. What are your most audacious goals for the payment business? If you were to look at it 5, 6 years from now, let's come back to the Goldman Sachs 2027 conference, how do you think we were going to be describing payments, how important is it for you?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : And I'm curious, what did you do to the infrastructure, the platform to make it support this kind of scale? Because I remember a point in time, we had 5 different platforms for payments, we consolidated down to 2. And now we're down to 1 bigger platform. What work have your engineers done to make this worthy of a potentially multibillion-dollar business?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Yes. And I noticed from just my personal experience dealing with plumbers, electricians. Maybe a couple of years back, they would send me a PDF invoice at least pay, then I who should I call? Do you have an online thing? And we like, no, you can send us a check. Really, during the pandemic, you want me to write a check and mail it. But now increasingly, what I'm finding is it has the QuickBooks logo press here to pay. Boom, it's done. It's got my bank checking account formation. They get paid quickly. And I don't have to be reminded with another PDF thing to process your payment.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Yeah. What percentage do you think you could process on your payment platform of this $2 trillion? All of that to be... REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 13, 2022 / 5:00PM, INTU.OQ - Intuit Inc at Goldman Sachs Communacopia + Technology Conference

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Got it. To what extent would you consider on the topic of payments, Apple Pay, PayPal, how competitive are they within your ecosystem?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Got it. Got it. So you have some big daring goals for online ecosystem. You have a $200 billion out of the [$300 billion] is a temporary online ecosystem. That's massive. What do you need to do from a product perspective or things that -- what are the things you could be doing for your customers? You do not do today that would put you in a better position to achieve your -- Don't realize you have a bigger chunk of the TAM?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : That's a good idea. They don't have resources. This is it.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Got it. What are the things, Sasan, you've done to Mailchimp since it's been a few quarters since you closed the acquisition. What are you finding out with respect to investments that they need, broaden out the product strategy, different market segment. What have you...

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Is it called Quickchimps?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : That we called Quickchimps or Mailbooks.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Got it. Perfect. Yes. I wanted to get to tax not because I love taxes. But we got taxes. Maybe I will...

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : I can see why you love taxes. This common refrain that I hear from time to time. It never goes away completely. And I've heard it so many times, the simplification of tax code, such a thing is -- I mean, the concept of the code that we have in the U.S. doesn't quite exist in the same degree outside in the EU or other countries. How confident are you that we can -- this will be the way that things will be that we have a complex tax code that does require need for software, and it's not going to go away? I'm wondering what your current thoughts are on that sort of existential risk for the tax business.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Got it. So when we first met after you took over CEO, I remember you talked about $20 billion spent -- but then you add another $10 million for SMB taxes. That gives you -- that's a 50%-time expansion from a ... REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 13, 2022 / 5:00PM, INTU.OQ - Intuit Inc at Goldman Sachs Communacopia + Technology Conference

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : I am there. I know, I changed my travel plans, and I'm going to be there for sure, absolutely. Now let's talk about the tax code got simplified, can you still command your ARPC of high 70s, 80s, whatever it is, will customers still pay you that much to do simpler taxes?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : I remember that first -- there was a trip in Boston that we did. Your first trip after we got named CEO. And there was a funny thing that observation that you made that. So your tax -- you said cash your tax ratio is probably complicated. I'm going to make you a special offer for $1000 per return, and you will take it. And yes, I said I would take it. Now I'm not trying to be positions, but is there really a market for the high end of the tax return? I know that you generally centralized in the middle of the bell curve, you go to the edge of the bell curve, not as many tax returns, but the ASPs there are truly multiple of multiples. Do you have any plans to get into that ran on the market?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : I am sign up by the way.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Okay. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 13, 2022 / 5:00PM, INTU.OQ - Intuit Inc at Goldman Sachs Communacopia + Technology Conference

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : What we got -- I am -- my accountant use TurboTax. So not me personally, and it's pretty expensive. Time flies, we just have 5 minutes a quick pulse check with our clients. If you have any questions, please. Max, I saw you first, and then we'll go to the gentleman you're right after Max. Can we get a question to Max? By the way, Max is going to be performing tonight at reception. So please show up. Unidentified Analyst To your own risk, it will be good, it will be good. Sasan, just as a user -- as a consumer, I get so many e-mails from service companies, small businesses showing me the invoice. In QuickBooks generated in an e-mail sent a me with no payment option. And I find this seems to be a huge friction point for you guys. What can you do -- because that's really the more people you can get on the payment solution just obviously much better longer term? How do you solve that friction point? And why is that -- why aren't they using the payment option?

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : I think 2 more seconds. I think we will wrap it up here. But don't -- I'll get to you in a second, but don't go anywhere because we've got an amazing lineup of Software CEOs, Nikesh Arora, Frank Slootman, Marc Benioff and Max (inaudible) will be performing this evening. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 13, 2022 / 5:00PM, INTU.OQ - Intuit Inc at Goldman Sachs Communacopia + Technology Conference But Sasan, back to you. Thank you so much, your true inspiration and icon in the valley. And it's good to see Intuit do so well under your leadership. So thank you for coming to the conference and meeting with our clients, and thanks to our clients for your tremendous participation and show of support.

Question: Kasthuri Gopalan Rangan - Goldman Sachs Group, Inc., Research Division - Analyst : Thanks once again. Absolutely.