intu-20240430

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________________________

FORM 10-Q


☑						Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended April 30, 2024


☐						Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
						For the transition period from ____________ to ____________ .

Commission File Number 0-21180

INTUIT INC.

(Exact name of registrant as specified in its charter)


Delaware						77-0034661
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification No.)

2700 Coast Avenue, Mountain View, CA 94043

(Address of principal executive offices, including zip code)

(650) 944-6000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, $0.01 par value

INTU

Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting
company

☐

Emerging growth
company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. The number of shares (in thousands) of Common Stock, $0.01 par value, outstanding as of May 16, 2024 was 279,547.


INTUIT INC. FORM 10-Q INDEX


			Page
PART I - FINANCIAL INFORMATION

ITEM 1: Financial Statements (Unaudited)

Condensed Consolidated Statements of Operations for the three and nine months ended April 30 , 2024 and 2023			4

Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended April 30, 2024 and 2023			5

Condensed Consolidated Balance Sheets at April 30, 2024 and July 31, 2023			6

Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended April 30, 2024 and 2023			7

Condensed Consolidated Statements of Cash Flows for the nine months ended April 30, 2024 and 2023			9

Notes to Condensed Consolidated Financial Statements			11

ITEM 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations			29

ITEM 3: Quantitative and Qualitative Disclosures about Market Risk			46

ITEM 4: Controls and Procedures			46

PART II - OTHER INFORMATION

ITEM 1: Legal Proceedings			48

ITEM 1A: Risk Factors			48

ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds			62

ITEM 5: Other Information			62

ITEM 6: Exhibits			62

Signatures			63

Intuit, QuickBooks, TurboTax, Credit Karma, and Mailchimp, among others, are registered trademarks and/or registered service marks of Intuit Inc., or one of its subsidiaries, in the United States and other countries. Other parties’ marks are the property of their respective owners.



			Intuit Q3 Fiscal 2024 Form 10-Q			2

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. Please also see the section entitled "Risk Factors" in Item 1A of Part II of this Quarterly Report for important information to consider when evaluating these statements. All statements in this report, other than statements that are purely historical, are forward-looking statements. Words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “forecast,” “estimate,” “seek,” and similar expressions also identify forward-looking statements. In this report, forward-looking statements include, without limitation, the following:

•our expectations and beliefs regarding future conduct and growth of the business;

•statements regarding the impact of macroeconomic conditions on our business;

•our beliefs and expectations regarding seasonality, competition, and other trends that affect our business;

•our expectation that we will continue to invest significant resources in our product development, marketing and sales capabilities;

•our expectation that we will continue to invest significant management attention and resources in our information technology infrastructure and in our privacy and security capabilities;

•our expectation that we will work with the broader industry and government to protect our customers from fraud;

•our expectation that we will generate significant cash from operations;

•our expectation that total service revenue as a percentage of our total revenue to grow over the long term;

•our expectations regarding the development of future products, services, business models and technology platforms and our research and development efforts;

•our assumptions underlying our critical accounting policies and estimates, including our judgments and estimates regarding revenue recognition; the fair value of goodwill; and expected future amortization of acquired intangible assets;

•our intention not to sell our investments and our belief that it is more likely than not that we will not be required to sell them before recovery at par;

•our belief that the investments we hold are not other-than-temporarily impaired;

•our belief that we take prudent measures to mitigate investment-related risks;

•our belief that our exposure to currency exchange fluctuation risk will not be significant in the future;

•our assessments and estimates that determine our effective tax rate;

•our belief that our income tax valuation allowance is sufficient;

•our belief that it is not reasonably possible that there will be a significant increase or decrease in our unrecognized tax benefits over the next 12 months;

•our belief that our cash and cash equivalents, investments and cash generated from operations will be sufficient to meet our seasonal working capital needs, capital expenditure requirements, contractual obligations, commitments, debt service requirements and other liquidity requirements associated with our operations for at least the next 12 months;

•our expectation that we will return excess cash generated by operations to our stockholders through repurchases of our common stock and the payment of cash dividends, after taking into account our operating and strategic cash needs;

•our judgments and assumptions relating to our loan portfolio;

•our belief that the credit facilities will be available to us should we choose to borrow under them;

•our expectations regarding acquisitions and their impact on business and strategic priorities; and

•our assessments and beliefs regarding the future developments and outcomes of pending legal proceedings and inquiries by regulatory authorities, the liability, if any, that Intuit may incur as a result of those proceedings and inquiries, and the impact of any potential losses or expenses associated with such proceedings or inquiries on our financial statements.

We caution investors that forward-looking statements are only predictions based on our current expectations about future events and are not guarantees of future performance. We encourage you to read carefully all information provided in this report and in our other filings with the Securities and Exchange Commission before deciding to invest in our stock or to maintain or change your investment. These forward-looking statements are based on information as of the filing date of this Quarterly Report and, except as required by law, we undertake no obligation to revise or update any forward-looking statement for any reason.



			Intuit Q3 Fiscal 2024 Form 10-Q			3

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PART I - FINANCIAL INFORMATION


ITEM 1 - FINANCIAL STATEMENTS


INTUIT INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

	Three Months Ended				Nine Months Ended
(In millions, except per share amounts)	April 30, 2024		April 30, 2023		April 30, 2024		April 30, 2023
Net revenue:
Service	$	6,048	$	5,404	$	11,191	$	9,977
Product and other	689		614		1,910		1,679
Total net revenue	6,737		6,018		13,101		11,656
Costs and expenses:
Cost of revenue:
Cost of service revenue	1,014		924		2,517		2,252
Cost of product and other revenue	17		17		55		56
Amortization of acquired technology	36		40		110		122
Selling and marketing	1,419		1,203		3,208		2,922
Research and development	671		604		2,029		1,859
General and administrative	355		332		1,041		959
Amortization of other acquired intangible assets	120		120		360		362

Total costs and expenses	3,632		3,240		9,320		8,532
Operating income	3,105		2,778		3,781		3,124
Interest expense	(60)		(66)		(182)		(180)
Interest and other income, net	27		22		91		50
Income before income taxes	3,072		2,734		3,690		2,994
Income tax provision	683		647		707		699


Net income	$	2,389	$	2,087	$	2,983	$	2,295



Basic net income per share	$	8.53	$	7.44	$	10.65	$	8.17
Shares used in basic per share calculations	280		281		280		281



Diluted net income per share	$	8.42	$	7.38	$	10.51	$	8.11
Shares used in diluted per share calculations	284		283		284		283

See accompanying notes.



			Intuit Q3 Fiscal 2024 Form 10-Q			4

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INTUIT INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

	Three Months Ended				Nine Months Ended
(In millions)	April 30, 2024		April 30, 2023		April 30, 2024		April 30, 2023

Net income	$	2,389	$	2,087	$	2,983	$	2,295
Other comprehensive income (loss), net of income taxes:
Unrealized gain (loss) on available-for-sale debt securities	(1)		1		5		1

Foreign currency translation gain (loss)	(6)		1		(17)		(2)
Cumulative translation adjustment reclassified to net income	9		—		9		—
Total other comprehensive income (loss), net	2		2		(3)		(1)
Comprehensive income	$	2,391	$	2,089	$	2,980	$	2,294

See accompanying notes.



			Intuit Q3 Fiscal 2024 Form 10-Q			5

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INTUIT INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(In millions)	April 30, 2024		July 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	4,215	$	2,848
Investments	463		814
Accounts receivable, net	790		405
Notes receivable held for investment, net	698		687
Notes receivable held for sale	7		—
Income taxes receivable	4		29
Prepaid expenses and other current assets	337		354
Current assets before funds receivable and amounts held for customers	6,514		5,137
Funds receivable and amounts held for customers	2,722		420
Total current assets	9,236		5,557
Long-term investments	129		105
Property and equipment, net	1,032		969
Operating lease right-of-use assets	428		469
Goodwill	13,778		13,780
Acquired intangible assets, net	5,950		6,419
Long-term deferred income tax assets	512		64
Other assets	495		417
Total assets	$	31,560	$	27,780

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:

Accounts payable	$	886	$	638
Accrued compensation and related liabilities	689		665
Deferred revenue	843		921
Income taxes payable	437		698
Other current liabilities	586		448
Current liabilities before funds payable and amounts due to customers	3,441		3,370
Funds payable and amounts due to customers	2,722		420
Total current liabilities	6,163		3,790
Long-term debt	5,952		6,120

Long-term deferred income tax liabilities	3		4
Operating lease liabilities	468		480
Other long-term obligations	217		117
Total liabilities	12,803		10,511
Commitments and contingencies
Stockholders’ equity:
Preferred stock	—		—
Common stock and additional paid-in capital	20,040		19,029
Treasury stock, at cost	(18,495)		(16,772)
Accumulated other comprehensive loss	(58)		(55)
Retained earnings	17,270		15,067
Total stockholders’ equity	18,757		17,269
Total liabilities and stockholders’ equity	$	31,560	$	27,780

See accompanying notes.



			Intuit Q3 Fiscal 2024 Form 10-Q			6

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INTUIT INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)


	Three Months Ended April 30, 2024
(Dollars in millions, except per share amount; shares in thousands)	Shares of Common Stock	Common Stock and Additional Paid-In Capital		Treasury Stock		Accumulated Other Comprehensive Loss		Retained Earnings		Total Stockholders' Equity
Balance at January 31, 2024	280,025	$	19,739	$	(17,911)	$	(60)	$	15,140	$	16,908
Comprehensive income	—	—		—		2		2,389		2,391
Issuance of stock under employee stock plans, net of shares withheld for employee taxes	590	(150)		—		—		—		(150)
Stock repurchases under stock repurchase programs	(910)	—		(584)		—		—		(584)
Dividends and dividend rights declared ($0.90 per share)	—	—		—		—		(259)		(259)
Share-based compensation expense	—	451		—		—		—		451

Balance at April 30, 2024	279,705	$	20,040	$	(18,495)	$	(58)	$	17,270	$	18,757



	Nine Months Ended April 30, 2024
(Dollars in millions, except per share amount; shares in thousands)	Shares of Common Stock	Common Stock and Additional Paid-In Capital		Treasury Stock		Accumulated Other Comprehensive Loss		Retained Earnings		Total Stockholders' Equity
Balance at July 31, 2023	280,421	$	19,029	$	(16,772)	$	(55)	$	15,067	$	17,269
Comprehensive income	—	—		—		(3)		2,983		2,980
Issuance of stock under employee stock plans, net of shares withheld for employee taxes	2,297	(410)		—		—		—		(410)
Stock repurchases under stock repurchase programs	(3,013)	—		(1,723)		—		—		(1,723)
Dividends and dividend rights declared ($2.70 per share)	—	—		—		—		(780)		(780)
Share-based compensation expense	—	1,421		—		—		—		1,421

Balance at April 30, 2024	279,705	$	20,040	$	(18,495)	$	(58)	$	17,270	$	18,757

See accompanying notes.



			Intuit Q3 Fiscal 2024 Form 10-Q			7

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INTUIT INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)



	Three Months Ended April 30, 2023
(Dollars in millions, except per share amount; shares in thousands)	Shares of Common Stock	Common Stock and Additional Paid-In Capital		Treasury Stock		Accumulated Other Comprehensive Loss		Retained Earnings		Total Stockholders' Equity
Balance at January 31, 2023	280,668	$	18,392	$	(15,824)	$	(63)	$	13,337	$	15,842
Comprehensive income	—	—		—		2		2,087		2,089
Issuance of stock under employee stock plans, net of shares withheld for employee taxes	743	(51)		—		—		—		(51)
Stock repurchases under stock repurchase programs	(1,144)	—		(483)		—		—		(483)
Dividends and dividend rights declared ($0.78 per share)	—	—		—		—		(224)		(224)
Share-based compensation expense	—	419		—		—		—		419

Balance at April 30, 2023	280,267	$	18,760	$	(16,307)	$	(61)	$	15,200	$	17,592



	Nine Months Ended April 30, 2023
(Dollars in millions, except per share amount; shares in thousands)	Shares of Common Stock	Common Stock and Additional Paid-In Capital		Treasury Stock		Accumulated Other Comprehensive Loss		Retained Earnings		Total Stockholders' Equity
Balance at July 31, 2022	281,932	$	17,725	$	(14,805)	$	(60)	$	13,581	$	16,441
Comprehensive income	—	—		—		(1)		2,295		2,294
Issuance of stock under employee stock plans, net of shares withheld for employee taxes	1,993	(229)		—		—		—		(229)
Stock repurchases under stock repurchase programs	(3,658)	—		(1,502)		—		—		(1,502)
Dividends and dividend rights declared ($2.34 per share)	—	—		—		—		(676)		(676)
Share-based compensation expense	—	1,264		—		—		—		1,264

Balance at April 30, 2023	280,267	$	18,760	$	(16,307)	$	(61)	$	15,200	$	17,592

See accompanying notes.



			Intuit Q3 Fiscal 2024 Form 10-Q			8

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INTUIT INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	Nine Months Ended
(In millions)	April 30, 2024		April 30, 2023
Cash flows from operating activities:
Net income	$	2,983	$	2,295
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	111		127
Amortization of acquired intangible assets	470		484
Non-cash operating lease cost	63		68

Share-based compensation expense	1,421		1,264

Deferred income taxes	(361)		(389)


Other	69		48
Total adjustments	1,773		1,602
Originations and purchases of loans held for sale	(96)		—
Sales and principal repayments of loans held for sale	98		—
Changes in operating assets and liabilities:
Accounts receivable	(384)		(269)
Income taxes receivable	25		91
Prepaid expenses and other assets	18		(286)
Accounts payable	286		212
Accrued compensation and related liabilities	20		45
Deferred revenue	(79)		18
Income taxes payable	(262)		646
Operating lease liabilities	(45)		(59)
Other liabilities	130		(91)
Total changes in operating assets and liabilities	(291)		307
Net cash provided by operating activities	4,467		4,204
Cash flows from investing activities:
Purchases of corporate and customer fund investments	(564)		(566)
Sales of corporate and customer fund investments	491		196
Maturities of corporate and customer fund investments	489		335
Purchases of property and equipment	(208)		(220)
Acquisitions of businesses, net of cash acquired	—		(33)

Originations and purchases of loans held for investment	(1,926)		(1,600)
Sales of loans originally classified as held for investment	101		—
Principal repayments of loans held for investment	1,688		1,365
Other	(46)		(26)
Net cash provided by (used in) investing activities	25		(549)
Cash flows from financing activities:
Proceeds from issuance of long-term debt, net of discount and issuance costs	3,956		—
Repayments of debt	(4,200)		(509)
Proceeds from borrowings under unsecured revolving credit facility	100		—
Repayments on borrowings under unsecured revolving credit facility	(100)		—
Proceeds from borrowings under secured revolving credit facilities	95		212
Repayments on borrowings under secured revolving credit facilities	(25)		(22)
Proceeds from issuance of stock under employee stock plans	226		150
Payments for employee taxes withheld upon vesting of restricted stock units	(632)		(376)
Cash paid for purchases of treasury stock	(1,707)		(1,495)



			Intuit Q3 Fiscal 2024 Form 10-Q			9

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Dividends and dividend rights paid	(773)		(667)
Net change in funds receivable and funds payable and amounts due to customers	2,212		(196)

Other	(3)		(1)
Net cash used in financing activities	(851)		(2,904)
Effect of exchange rates on cash, cash equivalents, restricted cash, and restricted cash equivalents	(12)		2
Net increase in cash, cash equivalents, restricted cash, and restricted cash equivalents	3,629		753
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period	2,852		2,997
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period	$	6,481	$	3,750

Reconciliation of cash, cash equivalents, restricted cash, and restricted cash equivalents reported within the condensed consolidated balance sheets to the total amounts reported on the condensed consolidated statements of cash flows
Cash and cash equivalents	$	4,215	$	3,745
Restricted cash and restricted cash equivalents included in funds receivable and amounts held for customers	2,266		5
Total cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period	$	6,481	$	3,750




Supplemental schedule of non-cash investing activities:
Transfers of loans originated or purchased as held for investment to held for sale	$	106	$	—

See accompanying notes.



			Intuit Q3 Fiscal 2024 Form 10-Q			10

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INTUIT INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)


1. Description of Business and Summary of Significant Accounting Policies


Description of Business

Intuit helps consumers and small businesses prosper by delivering financial management, compliance, and marketing products and services. We also provide specialized tax products to accounting professionals, who are key partners that help us serve small business customers.

Our global financial technology platform, which includes TurboTax, Credit Karma, QuickBooks, and Mailchimp, is designed to help consumers and small businesses manage their finances, get and retain customers, save money, pay off debt, and do their taxes with ease and confidence. For those customers who run small businesses, we are also focused on helping them find and keep customers, get paid faster, pay their employees, manage and get access to capital, and ensure their books are done right. Lacerte, ProSeries, and ProConnect Tax Online are our leading tax preparation offerings for professional accountants. Incorporated in 1984 and headquartered in Mountain View, California, we sell our products and services primarily in the United States.


Basis of Presentation

These condensed consolidated financial statements include the financial statements of Intuit and its wholly-owned subsidiaries. We have eliminated all intercompany balances and transactions in consolidation. We have included all adjustments, consisting only of normal recurring items, which we considered necessary for a fair presentation of our financial results for the interim periods presented. We have reclassified certain amounts previously reported in our financial statements to conform to the current presentation.

In the first quarter of fiscal 2024, to align our presentation of revenue and cost of revenue with our current revenue mix, we began to aggregate other revenue with product revenue, rather than service revenue, and cost of other revenue with cost of product revenue, rather than cost of service revenue. We reclassified the previously reported balances to conform to the current presentation. The reclassification was not material and had no impact on previously reported total net revenue or cost of revenue.

On August 1, 2023, we reorganized certain technology functions in our Consumer and ProTax segments that support and benefit our overall platform. Additionally, certain workplace and real estate functions in our Small Business & Self-Employed segment are now managed at the corporate level. As a result of these reorganizations, costs associated with these functions are no longer included in segment operating income and are now included in other corporate expenses. For the three and nine months ended April 30, 2023, we reclassified expenses totaling $18 million and $37 million from Small Business & Self-Employed, $43 million and $126 million from Consumer, and $14 million and $45 million from ProTax to other corporate expenses, respectively. See Note 12, "Segment Information," for more information.

These unaudited condensed consolidated financial statements and accompanying notes should be read together with the audited consolidated financial statements in Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended July 31, 2023. Results for the nine months ended April 30, 2024 are not necessarily indicative of the results we expect for the fiscal year ending July 31, 2024 or any other future period.


Seasonality

Our Consumer and ProTax offerings have a significant and distinct seasonal pattern as sales and revenue from our income tax preparation products and services are typically heavily concentrated in the period from November through April. This seasonal pattern typically results in higher net revenues during our second and third quarters ending January 31 and April 30, respectively.


Significant Accounting Policies

We described our significant accounting policies in Note 1 to the financial statements in Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended July 31, 2023. There have been no changes to our significant accounting policies during the first nine months of fiscal 2024.



			Intuit Q3 Fiscal 2024 Form 10-Q			11

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Use of Estimates

In preparing our condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP), we make certain judgments, estimates, and assumptions that affect the amounts reported in our financial statements and the disclosures made in the accompanying notes. For example, we use judgments and estimates in determining how revenue should be recognized. These judgments and estimates include identifying performance obligations, determining if the performance obligations are distinct, determining the standalone sales price (SSP) and timing of revenue recognition for each distinct performance obligation, and estimating variable consideration to be included in the transaction price. We use estimates in determining the collectibility of accounts receivable and notes receivable held for investment, the appropriate levels of various accruals including accruals for litigation contingencies, the discount rate used to calculate lease liabilities, the amount of our worldwide tax provision, the realizability of deferred tax assets, the credit losses of available-for-sale debt securities, reserves for losses, and the fair value of assets acquired and liabilities assumed for business combinations. We also use estimates in determining the remaining economic lives and fair values of acquired intangible assets, property and equipment, and other long-lived assets. In addition, we use assumptions to estimate the fair value of reporting units and share-based compensation. Despite our intention to establish accurate estimates and use reasonable assumptions, actual results may differ from our estimates.


Computation of Net Income Per Share

We compute basic net income or loss per share using the weighted-average number of common shares outstanding during the period. We compute diluted net income per share using the weighted-average number of common shares and dilutive potential common shares outstanding during the period. Dilutive potential common shares consist of the shares issuable upon the exercise of stock options and upon the vesting of restricted stock units (RSUs) under the treasury stock method.

We include stock options with combined exercise prices and unrecognized compensation expense that are less than the average market price for our common stock, and RSUs with unrecognized compensation expense that is less than the average market price for our common stock, in the calculation of diluted net income per share. We exclude stock options with combined exercise prices and unrecognized compensation expense that are greater than the average market price for our common stock, and RSUs with unrecognized compensation expense that is greater than the average market price for our common stock, from the calculation of diluted net income per share because their effect is anti-dilutive. Under the treasury stock method, the amount that must be paid to exercise stock options and the amount of compensation expense for future service that we have not yet recognized for stock options and RSUs are assumed to be used to repurchase shares.

Dividend rights apply to all RSUs that we grant and are accumulated and paid when the underlying RSUs vest. Since the dividend rights are subject to the same vesting requirements as the underlying equity awards, they are considered a contingent transfer of value. Consequently, the RSUs are not considered participating securities, and we do not present them separately in earnings per share.

In loss periods, basic net loss per share and diluted net loss per share are the same since the effect of potential common shares is anti-dilutive and therefore excluded.



			Intuit Q3 Fiscal 2024 Form 10-Q			12

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The following table presents the composition of shares used in the computation of basic and diluted net income per share for the periods indicated.


	Three Months Ended				Nine Months Ended
(In millions, except per share amounts)	April 30, 2024		April 30, 2023		April 30, 2024		April 30, 2023
Numerator:


Net income	$	2,389	$	2,087	$	2,983	$	2,295

Denominator:
Shares used in basic per share amounts:
Weighted-average common shares outstanding	280		281		280		281

Shares used in diluted per share amounts:
Weighted-average common shares outstanding	280		281		280		281
Dilutive common equivalent shares from stock options
and restricted stock awards	4		2		4		2
Dilutive weighted-average common shares outstanding	284		283		284		283

Basic and diluted net income per share:


Basic net income per share	$	8.53	$	7.44	$	10.65	$	8.17



Diluted net income per share	$	8.42	$	7.38	$	10.51	$	8.11

Shares excluded from diluted net income per share:


Weighted-average stock options and restricted stock units that have been excluded from dilutive common equivalent shares outstanding due to their anti-dilutive effect	—		2		—		2


Deferred Revenue

We record deferred revenue when we have entered into a contract with a customer, and cash payments are received or due prior to transfer of control or satisfaction of the related performance obligation. During the three and nine months ended April 30, 2024, we recognized revenue of $85 million and $890 million, respectively, that was included in deferred revenue at July 31, 2023. During the three and nine months ended April 30, 2023, we recognized revenue of $85 million and $778 million, respectively, that was included in deferred revenue at July 31, 2022.

Our performance obligations are generally satisfied within 12 months of the initial contract date. As of April 30, 2024 and July 31, 2023, the deferred revenue balance related to performance obligations that will be satisfied after 12 months was $4 million and $5 million, respectively, and is included in other long-term obligations on our condensed consolidated balance sheets.


Concentration of Credit Risk and Significant Customers

No customer accounted for 10% or more of total net revenue in the three or nine months ended April 30, 2024 or April 30, 2023. No customer accounted for 10% or more of gross accounts receivable at April 30, 2024 or July 31, 2023.


Accounting Standards Not Yet Adopted

Segment Information - In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." This standard requires incremental segment information disclosures, including disclosures of significant segment expenses that are regularly provided to the chief operating decision maker (CODM), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources. The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, which means that it will be effective for our annual reporting for the fiscal year ending July 31, 2025 and for interim period reporting beginning in fiscal 2026. Early adoption is permitted, and retrospective adoption is required for all prior periods presented. We are currently evaluating the impact of our pending adoption of ASU 2023-07 on our consolidated financial statements and related disclosures.



			Intuit Q3 Fiscal 2024 Form 10-Q			13

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Income Tax - In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures." This standard requires additional disclosures related to the income tax rate reconciliation, income taxes paid by jurisdiction, and other income tax-related disclosures. The standard is effective for fiscal years beginning after December 15, 2024, which means that it will be effective for us for the fiscal year ending July 31, 2026. Early adoption is permitted. The standard should be applied on a prospective basis, and retrospective application is permitted. We are currently evaluating the impact of adopting ASU 2023-09 on our consolidated financial statements and related disclosures.


2. Fair Value Measurements


Fair Value Hierarchy

The authoritative guidance defines fair value as the price that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. When determining fair value, we consider the principal or most advantageous market for an asset or liability and assumptions that market participants would use when pricing the asset or liability. In addition, we consider and use all valuation methods that are appropriate in estimating the fair value of an asset or liability.

The authoritative guidance establishes a fair value hierarchy that is based on the extent and level of judgment used to estimate the fair value of assets and liabilities. In general, the authoritative guidance requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. An asset or liability’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the measurement of its fair value. The three levels of input defined by the authoritative guidance are as follows:

•Level 1 uses unadjusted quoted prices that are available in active markets for identical assets or liabilities.

•Level 2 uses inputs other than quoted prices included in Level 1 that are either directly or indirectly observable through correlation with market data. These include quoted prices in active markets for similar assets or liabilities; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs to valuation models or other pricing methodologies that do not require significant judgment because the inputs used in the model, such as interest rates and volatility, can be corroborated by readily observable market data for substantially the full term of the assets or liabilities.

•Level 3 uses one or more unobservable inputs that are supported by little or no market activity and that are significant to the determination of fair value. Level 3 assets and liabilities include those whose fair values are determined using pricing models, discounted cash flow methodologies, or similar valuation techniques and significant management judgment or estimation.


Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes financial assets and financial liabilities that we measured at fair value on a recurring basis at the dates indicated, classified in accordance with the fair value hierarchy described above.


	April 30, 2024				July 31, 2023
(In millions)	Level 1		Level 2		Total Fair Value		Level 1		Level 2		Total Fair Value
Assets:
Cash equivalents, primarily money market funds	$	3,174	$	—	$	3,174	$	1,888	$	—	$	1,888
Available-for-sale debt securities:

Corporate notes	—		470		470		—		805		805
U.S. agency securities	—		143		143		—		209		209
Total available-for-sale debt securities	—		613		613		—		1,014		1,014
Total assets measured at fair value on a recurring basis	$	3,174	$	613	$	3,787	$	1,888	$	1,014	$	2,902
Liabilities:
Senior unsecured notes (1)	$	—	$	5,286	$	5,286	$	—	$	1,309	$	1,309

(1) Carrying values on our condensed consolidated balance sheets at April 30, 2024 and July 31, 2023 were $5.45 billion and $1.49 billion, respectively. See Note 6, “Debt,” for more information.



			Intuit Q3 Fiscal 2024 Form 10-Q			14

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The following table summarizes our cash equivalents and available-for-sale debt securities by balance sheet classification and level in the fair value hierarchy at the dates indicated.


	April 30, 2024				July 31, 2023
(In millions)	Level 1		Level 2		Total Fair Value		Level 1		Level 2		Total Fair Value
Cash equivalents:
In cash and cash equivalents	$	3,174	$	—	$	3,174	$	1,888	$	—	$	1,888




Available-for-sale debt securities:
In investments	$	—	$	463	$	463	$	—	$	814	$	814
In funds receivable and amounts held for customers	—		150		150		—		200		200

Total available-for-sale debt securities	$	—	$	613	$	613	$	—	$	1,014	$	1,014

We value our Level 1 assets, consisting primarily of money market funds, using quoted prices in active markets for identical instruments.

Financial assets whose fair values we measure on a recurring basis using Level 2 inputs consist of corporate notes and U.S. agency securities. We measure the fair values of these assets with the help of a pricing service that either provides quoted market prices in active markets for identical or similar securities or uses observable inputs for their pricing without applying significant adjustments. Our fair value processes include controls designed to ensure that we record appropriate fair values for our Level 2 investments. These controls include comparison to pricing provided by a secondary pricing service or investment manager, validation of pricing sources and models, review of key model inputs, analysis of period-over-period price fluctuations, and independent recalculation of prices where appropriate.

Financial assets whose fair values we measure using Level 3 inputs consist of notes receivable held for sale. These loans are recorded at the lower of cost or fair value. As of April 30, 2024, total notes receivable held for sale were not material and the difference between amortized cost and fair value was not material.

Financial liabilities whose fair values we measure using Level 2 inputs consist of senior unsecured notes. See Note 6, “Debt,” for more information. We measure the fair value of our senior unsecured notes based on their trading prices and the interest rates we could obtain for other borrowings with similar terms.

There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the nine months ended April 30, 2024.


Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

Long-term investments primarily include non-marketable equity securities in privately-held companies that do not have a readily determinable fair value. They are accounted for at cost and adjusted based on observable price changes from orderly transactions for identical or similar investments of the same issuer or impairment. These investments are classified as Level 3 in the fair value hierarchy because we estimate the value of these investments using a valuation method based on observable transaction price changes at the transaction date. We recognized no upward adjustments during the three months ended April 30, 2024. We recognized $4 million in upward adjustments during the nine months ended April 30, 2024. We recognized no upward adjustments during the three and nine months ended April 30, 2023. Impairments recognized during the three and nine months ended April 30, 2024 and April 30, 2023 were not material. Cumulative upward adjustments were $75 million, and cumulative impairments were not material through April 30, 2024 for measurement alternative investments held as of April 30, 2024. The carrying value of long-term investments on our condensed consolidated balance sheets was $129 million and $105 million at April 30, 2024 and July 31, 2023, respectively.


3. Cash and Cash Equivalents, Investments, and Funds Receivable and Amounts Held for Customers

We consider highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. In all periods presented, cash equivalents consist primarily of money market funds. Investments consist primarily of investment-grade available-for-sale debt securities. Funds receivable and amounts held for customers represent funds receivable from third-party payment processors for customer transactions, funds in-transit to our customers, and funds held on behalf of our customers that are invested in cash and cash equivalents and investment-grade available-for-sale securities, restricted for use solely for the purpose of satisfying amounts we owe on behalf of our customers.

In the first quarter of fiscal 2024, we updated our terms of service and end user license agreements related to our payroll and payments offerings to reflect a change in our obligations with respect to funds we transmit on behalf of our customers. As a result of the change, our obligations are now satisfied when the funds are settled in the customers' accounts. These obligations, including funds in-transit to our customers, are reflected in funds payable and amounts due to customers in the accompanying condensed consolidated balance sheets. Under our previous agreements, our obligations were satisfied as of the point that we initiated the transmission of the funds on the customers' behalf.



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Except for direct obligations of the United States government, securities issued by agencies of the United States government, and money market funds, we diversify our investments in debt securities by limiting our holdings with any individual issuer.

The following table summarizes our cash and cash equivalents, investments, and funds receivable and amounts held for customers by balance sheet classification at the dates indicated.


	April 30, 2024				July 31, 2023
(In millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Classification on condensed consolidated balance sheets:
Cash and cash equivalents	$	4,215	$	4,215	$	2,848	$	2,848
Investments	463		463		819		814
Funds receivable and amounts held for customers	2,724		2,722		424		420

Total cash and cash equivalents, investments, and funds receivable and amounts held for customers	$	7,402	$	7,400	$	4,091	$	4,082

The following table summarizes our cash and cash equivalents, investments, and relevant portion of funds receivable and amounts held for customers by investment category at the dates indicated. As of April 30, 2024 and July 31, 2023, this excludes $306 million and $216 million, respectively, of funds receivable included on our condensed consolidated balance sheets in funds receivable and amounts held for customers not measured and recorded at fair value.


	April 30, 2024				July 31, 2023
(In millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Type of issue:
Total cash, cash equivalents, restricted cash, and restricted cash equivalents	$	6,481	$	6,481	$	2,852	$	2,852

Available-for-sale debt securities:

Corporate notes	472		470		811		805
U.S. agency securities	143		143		212		209

Total available-for-sale debt securities	615		613		1,023		1,014

Total cash, cash equivalents, restricted cash, restricted cash equivalents, and investments	$	7,096	$	7,094	$	3,875	$	3,866

We use the specific identification method to compute gains and losses on investments. We include realized gains and losses on our available-for-sale debt securities in interest and other income, net in our condensed consolidated statements of operations. Gross realized gains and losses on our available-for-sale debt securities for the nine months ended April 30, 2024 and April 30, 2023 were not material.

We accumulate unrealized gains and losses on our available-for-sale debt securities, net of tax, in accumulated other comprehensive income or loss in the stockholders’ equity section of our condensed consolidated balance sheets, except for certain unrealized losses described below. Gross unrealized gains and losses on our available-for-sale debt securities at April 30, 2024 and July 31, 2023 were not material.

For available-for-sale debt securities in an unrealized loss position, we determine whether a credit loss exists. The estimate of the credit loss is determined by considering available information relevant to the collectibility of the security and information about past events, current conditions, and reasonable and supportable forecasts. The allowance for credit loss is recorded to interest and other income, net in our condensed consolidated statements of operations, not to exceed the amount of the unrealized loss. Any excess unrealized loss greater than the allowance for credit loss at a security level is recognized in accumulated other comprehensive income or loss in the stockholders' equity section of our condensed consolidated balance sheets. We determined there were no credit losses related to available-for-sale debt securities as of April 30, 2024. Unrealized losses on available-for-sale debt securities at April 30, 2024 were not material. We do not intend to sell these investments. In addition, it is more likely than not that we will not be required to sell them before recovery of the amortized cost basis, which may be at maturity.



			Intuit Q3 Fiscal 2024 Form 10-Q			16

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The following table summarizes our available-for-sale debt securities, included in investments and relevant portion of funds receivable and amounts held for customers, classified by the stated maturity date of the security at the dates indicated.


	April 30, 2024				July 31, 2023
(In millions)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Due within one year	$	518	$	517	$	735	$	730
Due within two years	64		63		147		144
Due within three years	33		33		141		140
Due after three years	—		—		—		—
Total available-for-sale debt securities	$	615	$	613	$	1,023	$	1,014

The following table summarizes our funds receivable and amounts held for customers by asset category at the dates indicated.


(In millions)	April 30, 2024		July 31, 2023
Restricted cash and restricted cash equivalents	$	2,266	$	4
Restricted available-for-sale debt securities and funds receivable	456		416
Total funds receivable and amounts held for customers	$	2,722	$	420


(In millions)	April 30, 2023		July 31, 2022
Restricted cash and restricted cash equivalents	$	5	$	201
Restricted available-for-sale debt securities and funds receivable	383		230
Total funds receivable and amounts held for customers	$	388	$	431


4. Notes Receivable and Allowances for Loan Losses

As of April 30, 2024, our notes receivable portfolio consisted of notes receivable held for investment, including term loans to small businesses and refund advance loans to consumers, and notes receivable held for sale, including term loans to small businesses. We classify loans as notes receivable held for investment when we have both the intent and ability to hold until maturity or payoff. We classify loans as notes receivable held for sale when we have the intent and ability to sell substantially all of our rights, title, and interests in these qualified loans to a third-party investor. A loan that is initially designated as held for sale or held for investment may be reclassified when our intent for that loan changes. When a loan held for investment is reclassified to held for sale and recorded at the lower of amortized cost or fair value, the related allowance for loan loss for that loan is released, and any adjustment to record the loan at the lower of amortized cost or fair value is recorded.


Notes Receivable Held for Investment

Term loans to small businesses. We provide financing to small businesses via term loans that we originate directly or through an originating bank partner. During the nine months ended April 30, 2024 and 2023, we purchased term loans from our originating bank partner with principal balances in the amount of $1.2 billion and $103 million, respectively. As of April 30, 2024, we had commitments to purchase $22 million in term loans that were originated on or prior to April 30, 2024.

The term loans are not secured and are recorded at amortized cost, net of allowances for loan losses. As of April 30, 2024 and July 31, 2023, the net notes receivable balance for term loans to small businesses was $820 million and $757 million, respectively. The current portion is included in notes receivable held for investment and the long-term portion is included in other assets on our condensed consolidated balance sheets.

We maintain an allowance for loan losses to reserve for potentially uncollectible notes receivable. We evaluate the creditworthiness of our term loan portfolio on a pooled basis due to its composition of loans with similar general credit risk and characteristics and apply a loss rate at the time of loan origination. The allowance is subjective and requires management estimates. The loss rate and underlying probability of default methodology are updated periodically to reflect factors such as actual loan performance, changes to assumptions, portfolio growth, our current credit policies, changes to our applicant base, and macroeconomic conditions. Factors taken into consideration in the methodology include historical performance, customer creditworthiness, changes in the size and composition of the loan portfolio, delinquency levels, and actual credit loss experience. We use empirical data and management judgment to estimate losses for new credit tests or products for which we do not have enough history. We make judgments about the known and inherent risks in the loan portfolio, adverse situations that may affect borrowers’ ability to repay, and current and future economic conditions. When we determine that amounts are uncollectible, we write them off against the allowance. As of April 30, 2024 and July 31, 2023, the allowances for loan losses on term loans to small businesses were not material.



			Intuit Q3 Fiscal 2024 Form 10-Q			17

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We consider a loan to be delinquent when the payments are one day past due. We place delinquent term loans on nonaccrual status and stop accruing interest revenue. Term loans are returned to accrual status if they are brought current or have performed in accordance with the contractual terms for a reasonable period of time and, in our judgment, will continue to make periodic principal and interest payments as per contractual terms. Past due amounts were not material for all periods presented.

Interest revenue is earned on term loans originated and purchased and held for investment in accordance with the specified period of time and defined interest rate noted in the loan contract. Interest revenue is recorded net of amortized direct origination costs and is included in service revenue in our condensed consolidated statements of operations. Interest revenue was not material for all periods presented.

Refund Advance Loans. Refund advance loans are loans available to eligible TurboTax customers based on a customer's anticipated income tax refund, at no cost to the customer. The loans are repaid from the customer's income tax refund, which is generally received within three to four weeks after acceptance of the customer's income tax return by the IRS. We partner with a third-party issuing bank to originate the loans and subsequently purchase full participating interests in those loans. The refund advance loans are not secured and are recorded at amortized cost, net of an allowance for loan losses. As of April 30, 2024 and July 31, 2023, the net notes receivable balance for refund advance loans was $12 million and $5 million, respectively. We maintain an allowance for loan losses to reserve for potentially uncollectible loans. We estimate the allowance based on the expected funding of refunds by the IRS using historical trends. When we determine that any amounts are uncollectible, we write them off against the allowance. As of April 30, 2024 and July 31, 2023, the allowance for loan losses on refund advance loans was not material.


Notes Receivable Held for Sale

Term loans to small businesses. We have a forward flow arrangement with an institutional investor. Pursuant to this arrangement, we have a commitment to sell to the institutional investor a minimum of $250 million in participation interests in unsecured term loans purchased or made to small businesses over 18 months, subject to certain eligibility criteria. As of April 30, 2024, the remaining commitment to sell term loans under this arrangement was $57 million.

Notes receivable held for sale are recorded at the lower of amortized cost or fair value determined on an individual loan basis. To determine fair value, we utilize a cash flow methodology, taking into account estimated timing and expected selling prices. As of April 30, 2024, the balance of loans held for sale was $7 million and is included in notes receivable held for sale on our condensed consolidated balance sheets. Total sales of term loans during the nine months ended April 30, 2024 were $193 million. For the three and nine months ended April 30, 2024, gains on sales of loans were not material.


5. Acquired Intangible Assets

The following table shows the cost, accumulated amortization, and weighted-average life in years for our acquired intangible assets at the dates indicated. The weighted-average lives are calculated for assets that are not fully amortized.


(Dollars in millions)	Customer Lists / User Relationships		Purchased Technology		Trade Names and Logos		Covenants Not to Compete or Sue		Total

At April 30, 2024:
Cost	$	6,197	$	1,619	$	680	$	41	$	8,537
Accumulated amortization	(1,500)		(866)		(180)		(41)		(2,587)
Acquired intangible assets, net	$	4,697	$	753	$	500	$	—	$	5,950
Weighted-average life in years	14		9		13		0		13

At July 31, 2023:
Cost	$	6,197	$	1,616	$	680	$	42	$	8,535
Accumulated amortization	(1,178)		(756)		(140)		(42)		(2,116)
Acquired intangible assets, net	$	5,019	$	860	$	540	$	—	$	6,419
Weighted-average life in years	14		8		13		0		13



			Intuit Q3 Fiscal 2024 Form 10-Q			18

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The following table shows the expected future amortization expense for our acquired intangible assets at April 30, 2024. Amortization of purchased technology is charged to amortization of acquired technology in our condensed consolidated statements of operations. Amortization of other acquired intangible assets, such as customer lists, is charged to amortization of other acquired intangible assets in our condensed consolidated statements of operations. If impairment events occur, they could accelerate the timing of acquired intangible asset charges.


(In millions)	Expected Future Amortization Expense
Fiscal year ending July 31,
2024 (excluding the nine months ended April 30, 2024)	$	156
2025	623
2026	621
2027	594
2028	581
Thereafter	3,375
Total expected future amortization expense	$	5,950


6. Debt

The carrying value of our debt was as follows at the dates indicated:


(Dollars in millions)	April 30, 2024		July 31, 2023		Effective Interest Rate
Senior unsecured notes issued June 2020:
0.950% notes due July 2025	$	500	$	500	1.127%
1.350% notes due July 2027	500		500		1.486%
1.650% notes due July 2030	500		500		1.767%
Senior unsecured notes issued September 2023:
5.250% notes due September 2026	750		—		5.367%
5.125% notes due September 2028	750		—		5.221%
5.200% notes due September 2033	1,250		—		5.268%
5.500% notes due September 2053	1,250		—		5.565%
Term loan	—		4,200

Secured revolving credit facilities	500		430
Total principal balance of debt	6,000		6,130
Unamortized discount and debt issuance costs	(48)		(10)
Net carrying value of debt	$	5,952	$	6,120

Short-term debt	$	—	$	—
Long-term debt	$	5,952	$	6,120

Future principal payments for debt at April 30, 2024 were as shown in the table below.


(In millions)
Fiscal year ending July 31,
2024 (excluding the nine months ended April 30, 2024)	$	—
2025	500
2026	275
2027	1,475
2028	—
Thereafter	3,750
Total future principal payments for debt	$	6,000



			Intuit Q3 Fiscal 2024 Form 10-Q			19

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Senior Unsecured Notes

2020 Notes. In June 2020, we issued four series of senior unsecured notes (together, the 2020 Notes) pursuant to a public debt offering. The proceeds from the issuance were $1.98 billion, net of debt discount of $2 million and debt issuance costs of $15 million. As of April 30, 2024, $1.5 billion of the 2020 Notes remained outstanding.

Interest is payable semiannually on January 15 and July 15 of each year. The discount and debt issuance costs are amortized to interest expense over the term of the 2020 Notes under the effective interest method. We paid $10 million and $12 million in interest on the 2020 Notes during the nine months ended April 30, 2024 and 2023, respectively.

The 2020 Notes are senior unsecured obligations of Intuit and rank equally with all existing and future unsecured and unsubordinated indebtedness of Intuit and are redeemable by us at any time, subject to a make-whole premium. Upon the occurrence of change of control transactions that are accompanied by certain downgrades in the credit ratings of the 2020 Notes, we will be required to repurchase the 2020 Notes at a repurchase price equal to 101% of the aggregate outstanding principal plus any accrued and unpaid interest to but not including the date of repurchase. The indenture governing the 2020 Notes requires us to comply with certain covenants. For example, the 2020 Notes limit our ability to create certain liens and enter into sale and leaseback transactions. As of April 30, 2024, we were compliant with all covenants governing the 2020 Notes.

2023 Notes. In September 2023, we issued four series of senior unsecured notes (together, the 2023 Notes) pursuant to a public debt offering. The proceeds from the issuance were $3.96 billion, net of debt discount of $20 million and debt issuance costs of $24 million, and were used, together with operating cash, to repay the outstanding balance on our unsecured term loan. As of April 30, 2024, $4.0 billion of the 2023 Notes remained outstanding.

Interest is payable semiannually on March 15 and September 15 of each year. The discount and debt issuance costs are amortized to interest expense over the term of the 2023 Notes under the effective interest method. We paid $106 million in interest on the 2023 Notes during the nine months ended April 30, 2024.

The 2023 Notes are senior unsecured obligations of Intuit and rank equally with all existing and future unsecured and unsubordinated indebtedness of Intuit and are redeemable by us at any time, subject to a make-whole premium. The indenture governing the 2023 Notes requires us to comply with certain covenants. For example, the 2023 Notes limit our ability to create certain liens and enter into sale and leaseback transactions. As of April 30, 2024, we were compliant with all covenants governing the 2023 Notes.


Unsecured Credit Facilities

2021 Credit Facility. On February 5, 2024, we terminated our amended and restated credit agreement dated November 1, 2021 (2021 Credit Facility). The 2021 Credit Facility included a $4.7 billion unsecured term loan that was repaid in September 2023, and a $1 billion unsecured revolving credit facility that was set to mature on November 1, 2026. There were no amounts outstanding on the unsecured revolving credit facility at the time it was terminated.

We paid $42 million and $164 million in interest on the term loan during the nine months ended April 30, 2024 and 2023, respectively. Interest paid on the unsecured revolving credit facility was not material during the nine months ended April 30, 2024 and 2023.

2024 Credit Facility. On February 5, 2024, we entered into a credit agreement with certain lenders providing for a $1.5 billion unsecured revolving credit facility that expires on February 5, 2029 (2024 Credit Facility), which replaced the 2021 Credit Facility.

Under the 2024 Credit Facility, we may, subject to certain customary conditions, including approval of relevant lenders, on one or more occasions, increase commitments under the 2024 Credit Facility by an amount not to exceed $1 billion in the aggregate, and, on one or more occasions, extend the maturity date of the 2024 Credit Facility by one year. The 2024 Credit Facility includes a $500 million sublimit for borrowing swingline loans and a $250 million sublimit for the issuance of letters of credit. Advances under the unsecured revolving credit facility accrue interest at rates equal to (a) in the case of U.S. dollar borrowings, at our election, either (i) the alternate base rate plus a margin that ranges from 0.0% to 0.125%, or (ii) the adjusted term Secured Overnight Finance Rate (SOFR) plus a margin that ranges from 0.7% to 1.125%, or (b) in the case of foreign currency borrowings, the interest benchmark for the relevant currency specified in the credit agreement plus a margin that ranges from 0.7% to 1.125%. Actual margins under either election are based on our senior debt credit ratings.

The 2024 Credit Facility includes customary affirmative and negative covenants, including a financial covenant that requires us to maintain a ratio of total gross debt to earnings before interest, taxes, depreciation and amortization (EBITDA), as defined in the agreement, of not greater than 4.00 to 1.00 as measured on a rolling twelve month basis as of the last day of each fiscal quarter. As of April 30, 2024, we were compliant with all required covenants. At April 30, 2024, no amounts were outstanding under the 2024 Credit Facility. We paid no interest on this unsecured revolving credit facility during the nine months ended April 30, 2024.


Secured Revolving Credit Facilities

2019 Secured Facility. On February 19, 2019, a subsidiary of Intuit entered into a secured revolving credit facility with a lender to fund a portion of our loans to qualified small businesses (the 2019 Secured Facility). The 2019 Secured Facility is secured by



			Intuit Q3 Fiscal 2024 Form 10-Q			20

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cash and receivables of the subsidiary and is non-recourse to Intuit Inc. We have entered into several amendments to this facility, most recently on December 15, 2023. These amendments primarily increase the facility limit, extend the commitment term and final maturity date, and update the benchmark interest rate. Under the amended 2019 Secured Facility, the facility limit is $500 million, of which $300 million is committed and $200 million is uncommitted. Advances accrue interest at adjusted daily simple SOFR plus 1.5%. Unused portions of the committed credit facility accrue interest at a rate ranging from 0.25% to 0.75%, depending on the total unused committed balance. The commitment term is through July 18, 2025, and the final maturity date is July 20, 2026. The agreement includes certain affirmative and negative covenants, including financial covenants that require the subsidiary to maintain specified financial ratios. As of April 30, 2024, we were compliant with all required covenants. At April 30, 2024, $275 million was outstanding under the 2019 Secured Facility and the weighted-average interest rate was 6.96%, which includes the interest on the unused committed portion. The outstanding balance is secured by cash and receivables of the subsidiary totaling $1.0 billion. Interest on the 2019 Secured Facility is payable monthly. We paid $15 million and $11 million in interest on this secured revolving credit facility during the nine months ended April 30, 2024 and 2023, respectively.

2022 Secured Facility. On October 12, 2022, another subsidiary of Intuit entered into a secured revolving credit facility with a lender to fund a portion of our loans to qualified small businesses (the 2022 Secured Facility). The 2022 Secured Facility is secured by cash and receivables of the subsidiary and is non-recourse to Intuit Inc. We have entered into several amendments to this facility, most recently on April 30, 2024. These amendments primarily extend the commitment term and final maturity date and increase the commitment amount. Under the amended 2022 Secured Facility, the facility limit is $500 million, of which $300 million is committed and $200 million is uncommitted. Advances accrue interest at SOFR plus 1.3%. Unused portions of the committed credit facility accrue interest at a rate ranging from 0.2% to 0.4%, depending on the total unused committed balance. The commitment term is through April 30, 2026, and the final maturity date is April 30, 2027. The agreement includes certain affirmative and negative covenants, including financial covenants that require the subsidiary to maintain specified financial ratios. As of April 30, 2024, we were compliant with all required covenants. At April 30, 2024, $225 million was outstanding under the 2022 Secured Facility and the weighted-average interest rate was 6.71%, which includes the interest on the unused committed portion. The outstanding balance is secured by cash and receivables of the subsidiary totaling $666 million. Interest on the 2022 Secured Facility is payable monthly. We paid $8 million and $2 million in interest on this secured revolving credit facility during the nine months ended April 30, 2024 and 2023, respectively.


7. Other Liabilities and Commitments


Other Current Liabilities

Other current liabilities were as follows at the dates indicated:


(In millions)	April 30, 2024		July 31, 2023

Executive deferred compensation plan liabilities	$	194	$	171
Sales, property, and other taxes	88		45
Current portion of operating lease liabilities	78		89
Reserve for returns, credits, and promotional discounts	75		32






Interest payable	36		12
Other	115		99
Total other current liabilities	$	586	$	448

The balances of several of our other current liabilities, particularly our reserves for product returns, credits, and promotional discounts, are affected by the seasonality of our business. See Note 1, “Description of Business and Summary of Significant Accounting Policies – Seasonality,” for more information.


Other Long-Term Obligations

Other long-term obligations were as follows at the dates indicated:


(In millions)	April 30, 2024		July 31, 2023
Income tax liabilities	$	165	$	76
Dividends payable	19		16
Deferred revenue	4		5
Other	29		20
Total other long-term obligations	$	217	$	117



			Intuit Q3 Fiscal 2024 Form 10-Q			21

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Unconditional Purchase Obligations

We describe our unconditional purchase obligations in Note 9 to the financial statements in Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended July 31, 2023. There were no significant changes outside the ordinary course of business in our purchase obligations during the nine months ended April 30, 2024.


8. Leases

We lease office facilities under non-cancellable operating lease arrangements. Our facility leases generally provide for periodic rent increases and may contain escalation clauses and renewal options. Our leases have remaining lease terms of up to 18 years, which include options to extend that are reasonably certain of being exercised. Some of our leases include one or more options to extend the leases for up to 10 years per option, which we are not reasonably certain to exercise. The options to extend are generally at rates to be determined in accordance with the agreements. Options to extend the lease are included in the lease liability if they are reasonably certain of being exercised.

We sublease certain office facilities to third parties. These subleases have remaining lease terms of up to 6 years, some of which include one or more options to extend the subleases for up to 5 years per option.

The components of lease expense were as follows:


	Three Months Ended				Nine Months Ended
(In millions)	April 30, 2024		April 30, 2023		April 30, 2024		April 30, 2023
Operating lease cost (1)	$	25	$	33	$	77	$	97

Variable lease cost	6		6		18		15
Sublease income	(3)		(3)		(9)		(9)
Total net lease cost	$	28	$	36	$	86	$	103

(1) Includes short-term leases, which were not material for each of the three and nine months ended April 30, 2024 and 2023.

Supplemental cash flow information related to operating leases was as follows:


	Nine Months Ended
(In millions)	April 30, 2024		April 30, 2023
Cash paid for amounts included in the measurement of operating lease liabilities	$	58	$	73
Right-of-use assets obtained in exchange for operating lease liabilities	$	28	$	23

Other information related to operating leases was as follows at the dates indicated:


	April 30, 2024		July 31, 2023
Weighted-average remaining lease term for operating leases	7.9 years		7.9 years
Weighted-average discount rate for operating leases	3.3	%	3.0	%



			Intuit Q3 Fiscal 2024 Form 10-Q			22

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Future minimum lease payments under non-cancellable operating leases as of April 30, 2024 were as follows:


(In millions)	Operating Leases (1)
Fiscal year ending July 31,
2024 (excluding the nine months ended April 30, 2024)	$	17
2025	99
2026	84
2027	74
2028	65
Thereafter	289
Total future minimum lease payments	628
Less imputed interest	(82)
Present value of lease liabilities	$	546

(1) Non-cancellable sublease proceeds for the remainder of the fiscal year ending July 31, 2024 and the fiscal years ending July 31, 2025, 2026, 2027, 2028, and thereafter of $3 million, $7 million, $2 million, $1 million, $1 million, and $2 million, respectively, are not included in the table above.

Supplemental balance sheet information related to operating leases was as follows at the dates indicated:


(In millions)	April 30, 2024		July 31, 2023

Operating lease right-of-use assets	$	428	$	469

Other current liabilities	$