Even rivals are feeling good about the strong performance Intuit displayed when it released its Q3 earnings report this week.
The owner of QuickBooks attributed significant growth in its small business segment to the success, missing estimates but still yielding a 7 percent increase in late trading following the release. Reports said the company’s value saw a $3 billion increase in after-hours trading, the largest increase since it began trading publicly nearly a quarter century ago.
According to Intuit, QuickBooks Online subscribers increased by 59 percent in the quarter, now totaling about 2.2 million clients. Revenue in the small business segment jumped by 16 percent, and its small business online revenue spiked by 30 percent.
Intuit has also raised its guidance for the fiscal year, aiming for between $5.13 billion to $5.15 billion, a 9-10 percent growth rate.
“This was another strong quarter for Intuit, with a hard-fought tax season delivering the revenue we promised along with continued momentum for our QuickBooks franchise,” said Intuit Chairman and Chief Executive Officer Brad Smith in a statement. “Overall, we successfully delivered strong financial results. We entered the tax season with a clear plan to extend our lead in the do-it-yourself category and begin transforming the assisted category as well, embracing the power of the Intuit ecosystem.”
“In small business,” Smith added, “QuickBooks subscriber growth continued, driven by improvements across our platform for self-employed, small business and accountants.”
The data could be intimidating for rivals, but according to one competitor, New Zealand-based Xero, Intuit’s successes are actually indicative of a broader opportunity for the firm, said Xero Chief Executive Rod Drury.
“They definitely have quality revenue in the U.S. But they are not winning over accountants in the U.K. and Australia,” Drury told Stuff of Intuit’s latest earnings data. “We know they are spending a lot of money in the U.K. We don’t see them getting a lot of quality revenue there. There is no way Intuit is winning in the markets that we are in.”
Drury added that the massive share jump for Intuit signals a broader opportunity for growth for other SME accounting companies, including Xero.
“How can Xero be worth a tenth of their market cap, and yet we are half their size in the cloud market?” he asked. According to reports, Intuit’s share market increase of about $3 billion matches the overall value of Xero itself.
Still, according to Intuit, it’s Australia’s “fastest-growing” cloud accounting software product where Xero currently dominates.