Intuit (INTU) 4Q 2015 Earnings Call Transcript

Intuit (INTU) CEO Brad Smith mentioned they took market share

“TurboTax Online units grew 12% through February 20, with total units up 9%. We’re growing our accepted e-files season-to-date faster than the category, which implies that we’re once again taking share.  So right now, season to-date, we’re seeing market share increases in TurboTax Online. We’re seeing market share increases in TurboTax desktop at retail, and we’re also seeing an increase in the number of Free File Alliance customers using TurboTax. So it’s across the board.”

And you can now take a picture of your W-2 form and import the data digitally to help file your taxes

This season, all mobile and online customers can snap a photo of their W-2, and TurboTax will import the information into their tax return, whether they are on a phone, a tablet or a computer, which also saves time and reduces errors.

Intuit (INTU) CEO Brad Smith said the economic landscape remains murky but Intuit’s products remain essential regardless of economic climate

“Now we recognize that the macro environment looks choppy. But if you look back over the three-plus decades as a company, it is during uncertain times that our products are needed most by our customers. They still need to file their taxes, pay their bills, and look for ways to stretch their hard-earned dollars as far as they can. And we’ve never been in a stronger position to serve our customers.”

Intuit (INTU) CFO Neil Williams reiterated the company’s internal 15% return on investment criteria

We continue to take a disciplined approach to capital management, investing the cash we generate in opportunities that yield an expected return on investment greater than 15% over five years.”

Intuit (INTU) CEO Brad Smith said they focus on the lifetime value of a customer

In terms of volume relationship, our goal is always to expand the category and then to grow customers faster than revenue, because as you know ultimately, over time, those customers tax situations will become more complex. And over multiple years we can maximize the lifetime value.”

Intuit (INTU) CEO Brad Smith stated they still have a sizable target market opportunity in front of them

In terms of opportunity ahead in total addressable market, there’s about 29 million small businesses in the U.S. If you back out the self-employed, you’re still looking at the neighborhood of between eight million and 12 million, and we currently have one million that are using QuickBooks Online. So we aren’t running out of any sort of opportunities to grow. It’s just a matter of us continuing to lean in and execute.”

Workday FY 1Q16 Earnings Call Notes

Moving from 13k servers to 70k in the next three years

“His estimates were based on utilization of roughly around 5% and with our open stack project and elastic cloud that’s well underway we hope to do quite a bit better than that. No question that the financials involve a lot more or processing, in particular, around the analytics, and the analytics around financials are much higher.”

We displace SAP, PeopleSoft/Oracle, ADP

“we see Payroll as part of the finance organization. We displace the same legacy systems that we do for HR and Finance, SAP, PeopleSoft, Oracle. Probably in the order of PeopleSoft/Oracle then SAP. When you get to the mid market, we displace ADP and in those cases the customers usually bring some Payroll operations back in-house. So it’s really the same cast of characters with the addition of ADP as it is for the HCM world. In terms of opening the door to financials, absolutely it does.”

Seasonality starts to impact businesses more as they grow

“we are seeing a much more seasonality and I think part of it is our presence in the market is becoming stronger and there are just more cycles at the end of the fourth quarter as enterprises spend their budgets and began to formulate projects so they can start them to begin the new year.”

Big partners

“we’ve got several large partners all investing heavily in Workday, Deloitte, Accenture, IBM, Aon Hewitt, Price Waterhouse, KPMG, all the big shots are making big investments in Workday, and beginning to do it outside of North America as well. ‘

Companies are buying HR and finance software from the same vendor in the mid market and we expect that to continue in larger markets

“we’ve definitely seen the trend in the mid market towards buying a platform, buying HR and Finance from the same vendor and we obviously love that trend. I would say when you up market, I would expect that same trend to continue. It’s still relatively early in the days of selling finance large-scale to large-scale companies running in a pure cloud environment. I think if you were to look at the Fortune 500 data or Fortune 1000 data, my guess is with a 135 customers and the number we’ve live, we’re well ahead of our two legacy competitors. But that just tells you it’s still early on. I sure hope and I think the market will drive to suites. There is a natural fit between HR and Finance organizationally and in terms of the data that’s used, especially for non-manufacturing companies, most of the expenses is people related expenses. So if the mid market is any precursor to what’s going to happen in large companies, we definitely see a shift towards buying the full platform.”

Microsoft FY 4Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“The consumer x86 PC market declined as users continued to prioritize devices to touch and ability. At the same time we saw continued strength in our enterprise product and cloud solution and increased adoption of our consumer services.”

“our Windows business declined as the device market continued to evolve beyond the traditional PC. We are working to transition the business into this modern era of computing taking advantage of the new scenarios enabled our Windows 8.”

“We reduced the price of Surface RT by $150 to $349 per device. As a result of this price change as well as inventory adjustments for related parts and accessories we recorded a $900 million charge to our income statement.”

“I want to be very clear, we know we have to do better and that’s one reason we made a strategic and organizational changes we made last week. With over 1.5 billion Windows users around the world, a transition of this magnitude takes time. We are confident we are moving in the right direction.”

“We estimate consumer PCs declined more than 20%. As a result, OEM revenue declined 15%.”

“Server and Tools business which posted another solid quarter with 9% revenue growth and double-digit bookings growth.”

“Now I’ll move on to the Microsoft Business Division where revenue grew 2%. Within that, business revenue grew 7%, driven by 10% growth in annuity revenue. Consumer revenue declined 27%.”

“In the Entertainment and Devices division, revenue grew 8%. Xbox LIVE transaction revenue grew nearly 20% and is providing economic opportunities for publishers in the soft console market”

[analyst question] “Are you sensing that OEMs are trying to manage inventories down for the time being and waiting cautiously Intel suggested that maybe you’re seeing some inventory liquidation.” [Microsoft answer] “we are excited about the advances Intel has made with the fourth-generation core processor. And we’re also looking forward to the next ADAM chip but was launched a little less than a month ago. I think it’s little bit too early for me to say and like to wait and see how the quarter plays out.”

Microsoft 1Q13 Earnings Call Notes

This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. The quotes are generally pieces of information that I find interesting or helpful to understanding the company, industry or economy and are not meant to provide summaries of the full content of the call. Other posts in this series can be found by clicking here. Full transcripts can be found at Seeking Alpha.

“let me say a few words about the CFO transition we announced today…it’s a good time to refocus my priorities to spend time with family”

“revenue and earnings per share growth of 8%”

“With Windows 8, we are setting a new, accelerated pace for updates and innovations, as we focus on making the Windows experience richer and better…we will release the next version of Windows, codenamed Windows Blue, which further advances the vision of Windows 8 as well as responds to customer feedback.”

“As well, Intel’s fourth generation core processor will help enable new devices that combine performance benefits with power savings. Later in the year, we expect to see devices based on Intel’s upcoming Bay Trail Atom processor, which promises to deliver tablets and hybrid PCs with extended battery life at competitive prices.”

“In the Windows division, revenue was flat this quarter. Within that, OEM revenue performance was in line with the underlying x86 PC market, which continues to be challenged as the PC market evolves beyond the traditional PC to touch and mobile devices.”

“this quarter we saw continued progress in the transition of Windows XP to Windows 7, and now two-thirds of enterprise desktops are running Windows 7”

“we’re very encouraged by both Haswell and some of the Atom processors to really improve the overall user experience that Windows 8 delivers.”

“I did mention the fact that we believe [PC] inventories were drawn down. We do think they’re at normal levels at this point, though”

[in the enterprise] “the performance that you get relative to the price is really a compelling value proposition, and that’s what’s been enabling us to take share. The same on virtualization as well.”

“I think over the longer term, what’s more interesting is the long term evolution we’re seeing in the device market, which I think is actually going to be more of a driver than any temporal upgrade cycle. Innovation is happening faster, people are getting new experiences and new form factors. I think that’s what Windows 8 was designed to take advantage of”