![]() Customers use QuickBooks to manage their businesses’ finances like bookkeeping, payroll, invoicing, etc. QuickBooks (Desktop + Online) make up most of the Small Business and Self-Employed segment (51% of revenues and 51% of operating income). This is already a quarter of the revenues of the consumer segment. Exiting fiscal year 2022, TurboTax live contributed $1B in revenues and grew 30% y/y. So even with the higher costs associated with running TurboTax Live from the payment to professionals, gross margins should remain near current levels. ![]() The industry average DIY revenue per return is $66 but assisted revenues are almost 4x that amount at $244. This is because TurboTax Live comes at a higher price. Second, the company will aim to increase the average revenue per return. The company states that over 10M filers abandon the DIY method (4M attrition for TurboTax) and go to the assisted method every year. First, Intuit will aim to decrease the number of filers that start their return on TurboTax but ultimately file assisted by a professional. There are two benefits that Intuit expects to achieve with growth of the TurboTax Live product. ![]() There are over 2k professionals on the offering. Filers can connect to professionals to ask for advice on specific issues or opt for a full-service filing of their return. TurboTax is aiming to take share from the Tax Stores and CPA/Pros (87M total filers in 2022) through its TurboTax Live offering that was launched towards the end of 2020. The CPA/Pro market has remained relatively consistent from 68M in 2012 to 72M in 2022. Share gains have come at the expense of Tax Stores like H&R Block but that only accounts for 4M of the 16M in growth. TurboTax assisted 47M filers in the company’s fiscal year 2022, which was up from 31M in fiscal year 2012. 17% for H&R Block and 11% for TaxAct), the shift from assisted to DIY has benefited TurboTax over the past decade. Because TurboTax has high share in DIY (63% for TurboTax vs. The four drivers for TurboTax growth are: (1) the number of total returns, (2) the % of those returns using DIY software, (3) TurboTax share of DIY, and (4) average price per return.
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