2QFY7/24 revenue grew 11%, in line, FY7/24 revenue guidance intact
- Revenue grew by 11% y-o-y to US$3.4bn in 2QFY7/24, in line with market expectations
- Non-GAAP EPS surged 20% to US$2.63, beating estimates due to lower-than-expected operating expenses
- FY7/24 revenue forecast remains intact, with midpoint implying 12% y-o-y growth
Solid revenue growth of 11% in 2QFY7/24, driven by SBSE segment. Total revenue grew 11% y-o-y to US$3.4bn in 2QFY7/24, in line with market expectations. The Small Business and Self-Employed Group (SBSE) segment, accounting for 66% of the company’s total revenue, grew 18% y-o-y to US$2.3bn, supported by customer growth and higher effective prices of its QuickBooks Online Accounting solution. However, Consumer Group’s revenue, accounting for c.14% of the company’s revenue, dropped by 5% y-o-y due to the late opening of the Internal Revenue Service (IRS) this year. The IRS began accepting and processing returns starting 29 January, compared to 23 January last year. Non-GAAP EPS surged 20% to US$2.63, 14% higher than consensus estimates, thanks to its effective cost control measures. DPS increased by 15% y-o-y to US$0.9 in 1QFY7/24, representing a 0.6% dividend yield on a full-year basis.
FY7/24 revenue guidance unchanged. The company expects overall revenue to grow by 11-12% y-o-y to US$15.59-16.11bn. By segment, it foresees a c.17% growth in SBSE revenue and flat growth in Credit Karma revenue. We hold a positive view on the company’s outlook, and anticipate robust growth in its flagship product, QuickBooks, to continue. Additionally, the company has continued to enhance shareholder returns, and repurchased shares worth US$536m during 2QFY7/24, with US$2.7bn remaining under the company’s share repurchase authorisation.