Intuit is a provider of small-business accounting software (QuickBooks), personal tax solutions (TurboTax), and professional tax offerings (Lacerte). Intuit accounts for the lion's share of US market for small-business accounting and DIY tax-filing software.
The company reported revenue of $2 billion for the Q1 2022, which was up by 52% on Q1 2021 and was $200 million above consensus. Adjusted EPS increased by 63% to $1.53 and was also ahead of expectations of $0.97. Looking ahead, the company is projecting revenue of between S12.2 and $12.3 billion. This is significantly up from the previous guidance of between $11.0 to $11.2 billion, which represents growth of 26% to 28%.
EPS is projected to be in the range of $11.48 to $11.64 (previous guidance: $11 to $11.25) representing growth of 18 to 20%. The Intuit board approved a quarterly dividend of $0.68 per share, an increase of 15% on Q1 2020. Over the last decade, dividends have increased by over 250% while the pay-out ratio has increased from just 25% to 30%.
Looking at various business segments, QuickBooks Online Accounting revenue grew 32% driven primarily by customer growth, higher effective prices and mix-shift. Online Services revenue increased 42%, driven by QuickBooks Online payroll and QuickBooks Online payments. Total international online revenue grew 39% on a constant currency basis.
Intuit is a high-quality business consistently generating operating margins of close to 30% and returns on equity of above 20%. Over the last decade revenues have increased by 130%, but perhaps more impressive is the growth in operating profits and free cash flow which have increased by 200% and 190% respectively. Although the company is on a relatively elevated valuation, we hold the stock in the Cratos Worldwide Flexible Fund.