Intuit Quarterly Loss More Than Doubles

Intuit is learning—and paying—the cost of channel shifting as higher expenses from its expanded online services sent its fourth-quarter losses soaring. It reported on Thursday (Aug. 21) a $39 million quarterly loss, which is more than double the $16 million loss Intuit reported for the same quarter last summer.

Company executives said the online may be expensive, but it is the right strategic move. “We’ve reached an inflection point, as more new customers chose QuickBooks Online over QuickBooks Desktop, fueled by the success of our reimagined QuickBooks Online product experience,” said Intuit CEO Brad Smith. “The benefits are clear: online experiences are better for customers, expand the total addressable market, and generate more predictable, recurring revenue streams.”

The reason for this quarter’s pain—beyond the expense increase—is the way the accounting is being handled, Smith said: “Our acceleration to subscription services and the changes to how we’ll develop desktop products beginning in fiscal 2015 will result in recognizing desktop revenue over time instead of as up front license revenue, as we’ve historically done. This creates a transition year in fiscal 2015 for reported financial results. We fully expect fiscal 2016 results to return to double-digit top and bottom line growth.”