Intuit Financial Model

• Total assets: Approximately $28 billion to $30 billion.
• Key asset categories: Cash and short-term investments, accounts receivable, and massive intangible assets.
• Goodwill & intangibles: Represents over 60% of total assets, stemming primarily from the Mailchimp and Credit Karma acquisitions.
• Working capital profile:
• Days Sales Outstanding (DSO): 20 to 25 days.
• Days Inventory Outstanding (DIO): 0 days (software company).
• Days Payable Outstanding (DPO): 30 to 40 days.
• Net working capital as % of revenue: Consistently negative.
• Working capital dynamic: Intuit operates with negative working capital due to high deferred revenue from annual software subscriptions, providing a structural cash flow advantage.
• PP&E: Minimal (less than 5% of assets), consisting mostly of corporate office facilities and internal-use software.
• Right-of-use assets: Operating leases for office space are material but manageable, typically around $400 million to $500 million.

• Capex as % of revenue: 1.5% to 2.5% (historically very low).
• Maintenance vs. growth split: Almost entirely growth capex related to data centre equipment and capitalised internal-use software for new product features.
• Capitalised software: Material. Intuit capitalises significant engineering time spent on new platform capabilities, which is then amortised over 3 to 5 years.
• M&A pattern: Transformational acquirer. Intuit makes infrequent but massive acquisitions (Credit Karma for $8.1B, Mailchimp for $12B) to expand its total addressable market.
• Typical acquisition multiple paid: High revenue multiples (Mailchimp was acquired for approximately 15x forward revenue).

• Total debt: Approximately $6.0 billion to $6.1 billion.
• Debt/EBITDA ratio: Very conservative, typically below 1.5x.
• Credit rating: Investment grade (A- range).
• Key debt instruments: Senior unsecured notes (issued $4 billion in September 2023) and a $1.5 billion unsecured revolving credit facility.
• Maturity profile: Well-laddered with tranches maturing over the next 5 to 10 years.
• Interest rate profile: Predominantly fixed-rate senior notes.
• Share repurchase programme: Highly active. The company repurchased $2.8 billion of stock in fiscal 2025.
• Dividend policy: Consistent dividend payer with a low yield but high growth rate. Paid $4.16 per share in fiscal 2025 (approximately $1.2 billion total outflow).

• Operating cash flow conversion: Excellent. OCF / Net Income typically ranges from 1.2x to 1.4x.
• Free cash flow margin: 25% to 30% of revenue.
• Major non-cash items: Stock-based compensation, amortisation of acquired intangibles, and depreciation.
• Working capital cash flow impact: Deferred revenue growth acts as a major source of operating cash flow during periods of high subscription growth.
• Capex intensity: Very low, resulting in free cash flow that closely mirrors operating cash flow.
• Cash tax rate vs. GAAP effective tax rate: Cash taxes are often lower than GAAP taxes due to excess tax benefits from stock-based compensation exercises.

1. Assumptions: Macro drivers, segment growth rates, margin targets, tax rates, and capital return policies.
2. Revenue & Segments: Detailed build for Global Business Solutions, Consumer, Credit Karma, and ProTax (with a toggle to view the consolidated FY26 two-segment structure).
3. Income Statement: GAAP and Non-GAAP views, detailing COGS, R&D, Sales & Marketing, and G&A.
4. Balance Sheet: Assets, liabilities, and shareholders' equity, with specific breakouts for Goodwill and Deferred Revenue.
5. Cash Flow Statement: Indirect method starting from Net Income, highlighting SBC add-backs and deferred revenue changes.
6. Debt & Interest: Schedule of senior notes, interest expense calculations, and revolving credit facility balances.
7. Working Capital & Capex: DSO, DPO, deferred revenue waterfall, and capitalised software roll-forward.
8. DCF & Valuation: Unlevered free cash flow build, WACC calculation, terminal value, and implied share price.

1. Global Business Solutions Revenue = Prior Year Revenue x (1 + Global Business Solutions Growth Rate)
2. Consumer Revenue = Total Tax Returns Filed x Average Revenue Per Return
3. Credit Karma Revenue = Monthly Active Users x Revenue per MAU
4. Consolidated FY26 Consumer Segment Revenue = Legacy Consumer Revenue + Legacy Credit Karma Revenue + Legacy ProTax Revenue
5. Total Cost of Revenue = Total Revenue x (1 - Gross Margin Percentage)
6. Research & Development Expense = Total Revenue x R&D Margin Percentage
7. Sales & Marketing Expense = Total Revenue x S&M Margin Percentage (with a seasonal spike multiplier in Q3)
8. Non-GAAP Operating Income = GAAP Operating Income + Stock-Based Compensation + Amortisation of Acquired Intangibles + Restructuring Charges
9. Deferred Revenue Ending Balance = Deferred Revenue Beginning Balance + Total Billings - Recognised Revenue
10. Free Cash Flow = Operating Cash Flow - Capital Expenditures - Capitalised Software Costs
11. Interest Expense = Average Debt Balance x Weighted Average Interest Rate
12. Shares Outstanding = Prior Period Shares - (Share Repurchase Amount / Average Share Price) + Options Dilution

The Assumptions sheet drives the Revenue & Segments sheet. The resulting revenue figures feed into the Income Statement to calculate gross profit and operating expenses. Net income from the Income Statement flows to the top of the Cash Flow Statement and into Retained Earnings on the Balance Sheet. The Working Capital & Capex sheet calculates changes in operating assets and liabilities, which feed the Cash Flow Statement. The Debt & Interest sheet uses cash flow deficits or surpluses to trigger revolver drawdowns or debt paydowns, creating a circularity with interest expense on the Income Statement. The DCF & Valuation sheet pulls NOPAT from the Income Statement and D&A/Capex from the Cash Flow Statement.

• Revenues, assets, and equity are entered as positive numbers.
• Expenses on the Income Statement are entered as positive numbers and subtracted in subtotal formulas (e.g., Gross Profit = Revenue - COGS).
• On the Cash Flow Statement, cash inflows are positive and cash outflows (including capital expenditures and dividends) are negative.
• Liabilities are positive numbers.

• The company changed its segment reporting effective 1 August 2025 (fiscal 2026), merging Consumer, Credit Karma, and ProTax into a single Consumer segment. The model must handle this transition cleanly without breaking historical comparisons.
• Extreme seasonality in the legacy Consumer and ProTax segments means Q3 (ending 30 April) generates disproportionate revenue and cash flow. Annualising Q1 or Q2 results will drastically understate performance.
• Intuit excludes stock-based compensation from its non-GAAP metrics. Failing to account for SBC as a real economic cost in the DCF will artificially inflate the valuation.
• Deferred revenue balances fluctuate wildly around tax season. Working capital cash flow adjustments must capture this timing difference accurately.
• Credit Karma revenue is highly sensitive to macroeconomic conditions (interest rates and lending standards). Straight-line growth assumptions here will fail during credit tightening cycles.
• Capitalised software development costs flatter operating cash flow. The model must deduct these costs to arrive at true free cash flow.
• The effective tax rate benefits significantly from share-based compensation tax deductions. The GAAP tax rate (~20%) differs materially from the non-GAAP operating tax rate (~24%).
• Share count reduction from buybacks is partially offset by heavy employee stock option issuance. Net share reduction is lower than gross buyback dollars imply.

• Gross margin should remain tightly bound between 81% and 83%; flag if it falls outside this range.
• Fiscal Q3 Consumer revenue should represent more than 50% of the full-year Consumer segment revenue.
• Operating Cash Flow to Net Income conversion should consistently exceed 1.1x due to deferred revenue and SBC dynamics.
• Total Assets must equal Total Liabilities plus Shareholders' Equity in every forecasted period.
• Non-GAAP operating margin should be in the 37% to 39% range; flag if operating leverage assumptions push this above 40% prematurely.
• Debt to EBITDA should remain below 2.0x, reflecting the company's conservative balance sheet policy.
• Capital expenditures (including capitalised software) should not exceed 3% of total revenue.
• The sum of the legacy Consumer, Credit Karma, and ProTax segments must exactly equal the new consolidated FY26 Consumer segment revenue.

• Filings: SEC EDGAR (Intuit Inc. Form 10-K for fiscal year ended 31 July 2025), Intuit Investor Relations website.
• Key Peers: Block (SQ), PayPal (PYPL), H&R Block (HRB), Adobe (ADBE).
• Industry Data: IRS weekly tax filing statistics (critical for tracking TurboTax performance during tax season).
• Consensus Estimates: FactSet or Bloomberg for forward revenue and non-GAAP EPS estimates.
• Proprietary Data: SimilarWeb for TurboTax and Credit Karma web traffic trends; app store rankings for QuickBooks Online downloads.

• Intuit Inc. Form 10-K for the fiscal year ended 31 July 2025
• Intuit Q4 Fiscal 2025 Earnings Press Release (21 August 2025)
• Intuit Q2 Fiscal 2026 Earnings Press Release and Guidance Update (26 February 2026)
• SEC EDGAR Database (www.sec.gov)
• Intuit Investor Relations (investors.intuit.com)