# INTUIT INC. (INTU) FY 2024 MD&A

Verbatim Item 7 Management's Discussion and Analysis from INTUIT INC.'s 10-K for fiscal year 2024.

SEC filing source: https://www.sec.gov/Archives/edgar/data/896878/000089687824000039/intu-20240731.htm
Accession: 0000896878-24-000039
Filing date: 2024-09-04
Report date: 2024-07-31
Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary.
Confidence: high

Company profile: /company/INTU/
All MD&A years: /company/INTU/mda/
Previous year: /company/INTU/mda/fy2023/ (FY 2023)
Next year: /company/INTU/mda/fy2025/ (FY 2025)

ITEM 7 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to provide readers of our consolidated financial statements with the perspectives of management. This should allow the readers of this report to obtain a comprehensive understanding of our businesses, strategies, current trends, and future prospects. Our MD&A includes the following sections:

• Executive Overview: High-level discussion of our operating results and some of the trends that affect our business. • Critical Accounting Policies and Estimates: Policies and estimates that we believe are important to understanding the assumptions and judgments underlying our financial statements. • Results of Operations: A more detailed discussion of our revenue and expenses. • Liquidity and Capital Resources: Discussion of key aspects of our consolidated statements of cash flows, changes in our consolidated balance sheets, and our financial commitments.

You should note that this MD&A contains forward-looking statements that involve risks and uncertainties. Please see the section entitled “Forward-Looking Statements” immediately preceding Part I of this Annual Report for important information to consider when evaluating such statements.

You should read this MD&A in conjunction with the consolidated financial statements and related notes in Item 8 of this Annual Report.

In the Results of Operations sections of this MD&A, where we describe two or more factors that contributed to changes in revenue and operating income, we have, where possible, quantified the impact of those factors. Where a change is the result of multiple factors that are interrelated and cannot be separately quantified, we have identified the interrelated factors without quantifying them.

On November 1, 2021, we acquired all of the outstanding equity of The Rocket Science Group LLC (Mailchimp). Our Mailchimp offerings are part of our Small Business & Self-Employed segment. We have included the results of operations of Mailchimp in our consolidated statements of operations from the date of acquisition. See Note 7 to the consolidated financial statements in Item 8 of this Annual Report for more information.

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 twelve months ended July 31, 2023 and 2022, we reclassified $49 million and $21 million from Small Business & Self-Employed, $168 million and $150 million from Consumer, and $60 million and $64 million from ProTax to other corporate expenses, respectively. See Note 15, “Segment Information,” for more information.

In July 2024, our management approved, committed to, and initiated a plan of reorganization (the Plan) focused on reallocating resources to our key growth areas. The Plan includes the exit of employees and the closing of real estate sites in certain markets in service to growing technology teams and capabilities in strategic locations. We expect the actions associated with the Plan to be substantially complete by the first quarter of fiscal 2025. Restructuring costs associated with the Plan are estimated to be approximately $247 million. During the twelve months ended July 31, 2024, we recorded a $223 million charge in connection with the Plan. This charge is primarily related to severance and employee benefits and is recorded to restructuring in our consolidated statements of operations. See Note 16 to the consolidated financial statements in Item 8 of this Annual Report for more information.

On August 1, 2024, we renamed our Small Business & Self-Employed segment as the Global Business Solutions segment. This new name better aligns with the global reach of the Mailchimp and QuickBooks platform, our focus on serving both small and mid-market businesses, and our vision to become the end-to-end platform that customers use to grow and run their business.

EXECUTIVE OVERVIEW

This overview provides a high-level discussion of our operating results and some of the trends that affect our business. We believe that an understanding of these trends is important in order to understand our financial results for fiscal 2024, as well as

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our future prospects. This summary is not intended to be exhaustive, nor is it a substitute for the detailed discussion and analysis provided elsewhere in this Annual Report on Form 10-K.

Industry Trends and Seasonality

Industry Trends

Artificial intelligence (AI) is transforming multiple industries, including financial technology. Disruptive start-ups, emerging ecosystems, and mega-platforms are harnessing new technology to create personalized experiences, deliver data-driven insights, and increase speed of service. These shifts are creating a more dynamic and highly competitive environment where customer expectations are shifting around the world as more services become digitized and the array of choices continues to increase.

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.

We expect the seasonality of our Consumer and ProTax businesses to continue to have a material impact on our quarterly financial results in the future.

Key Challenges and Risks

Our growth strategy depends upon our ability to innovate, develop, and introduce emerging technologies, including AI and GenAI, to drive broad adoption of our products and services and enter new markets. Our future growth also increasingly depends on the strength of our third-party business relationships and our ability to continue to develop, maintain, and strengthen new and existing relationships. To remain competitive and continue to grow, we are investing significant resources in our product development, marketing, and sales capabilities, and we expect to continue to do so in the future. Much of our future success also depends on our ability to continue to attract, retain, and develop highly skilled employees, including those in technical and leadership roles who are critical to our strategic growth, in a highly competitive talent environment.

As we offer more online services, the ongoing operation and availability of our platforms and systems and those of our external service providers is becoming increasingly important. Because we help customers manage their financial lives, we face risks associated with the hosting, collection, use, and retention of personal customer information and data. We are investing significant management attention and resources in our information technology infrastructure and in our privacy and security capabilities, and we expect to continue to do so in the future.

We operate in industries that are experiencing an increasing amount of fraudulent activities by malicious third parties. We implement additional security measures, and we continue to work with state and federal governments to implement industry-wide security and anti-fraud measures, including sharing information regarding suspicious activity. We continue to invest in security measures and to work with the broader industry and government to protect our customers against this type of fraud.

Our operations are impacted by a rapidly-evolving regulatory environment and face increasingly heightened scrutiny. We are subject to numerous federal, state, and local, as well as foreign laws and regulations covering a broad and increasing range of subjects, both in the U.S. and internationally.

For a complete discussion of the most significant risks and uncertainties affecting our business, please see “Forward-Looking Statements” immediately preceding Part I and “Risk Factors” in Item 1A of Part I of this Annual Report.

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Overview of Financial Results

The most important financial indicators that we use to assess our business are revenue growth for the company as a whole and for each reportable segment; operating income growth for the company as a whole; earnings per share; and cash flow from operations. We also track certain non-financial drivers of revenue growth and, when material, identify them in the applicable discussions of segment results below. Service offerings are a significant part of our business. Our total service revenue was $13.9 billion, or 85% of our total revenue in fiscal 2024, and we expect our total service revenue as a percentage of our total revenue to grow over the long term.

Key highlights for fiscal 2024 include the following:

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[[/GREPCENT_TABLE]]

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

In preparing our consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP), we are required to make estimates, assumptions, and judgments that can have a material impact on our net revenue, operating income or loss, and net income or loss, as well as on the value of certain assets and liabilities on our consolidated balance sheets. We believe that the estimates, assumptions, and judgments involved in the following accounting policies have the greatest potential impact on our consolidated financial statements, so we consider these to be our critical accounting policies:

•Revenue Recognition

•Business Combinations

•Goodwill, Acquired Intangible Assets, and Other Long-Lived Assets – Impairment Assessments

•Legal Contingencies

•Accounting for Income Taxes – Estimates of Deferred Taxes, Valuation Allowances, and Uncertain Tax Positions

Our senior management has reviewed the development and selection of these critical accounting policies and their disclosure in this Annual Report on Form 10-K with the Audit and Risk Committee of our Board of Directors.

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Revenue Recognition

We derive our revenue primarily from the sale of online services such as tax, accounting, payroll, merchant payment processing services, delivery of qualified links, marketing automation, customer relationship management, and desktop software products and desktop software subscriptions. Our contracts with customers often include promises to transfer multiple products and services, which are primarily recognized ratably over the relevant period. In determining how revenue should be recognized, a five-step process is used, which requires judgment and estimates within the revenue recognition process. The primary judgments include identifying the performance obligations in the contract and determining whether the performance obligations are distinct. If any of these judgments were to change, it could cause a material increase or decrease in the amount of revenue we report in a particular period. For additional information, see “Description of Business and Summary of Significant Accounting Policies – Revenue Recognition” in Note 1 to the consolidated financial statements in Item 8 of this Annual Report.

Business Combinations

As described in “Description of Business and Summary of Significant Accounting Policies – Business Combinations,” in Note 1 to the consolidated financial statements in Item 8 of this Annual Report, under the acquisition method of accounting, we generally recognize the identifiable assets acquired, the liabilities assumed, and any noncontrolling interests in an acquiree at their fair values as of the date of acquisition. We measure goodwill as the excess of consideration transferred, which we also measure at fair value, over the net of the acquisition date fair values of the identifiable assets acquired and liabilities assumed. The acquisition method of accounting requires us to exercise judgment and make significant estimates and assumptions regarding the fair values of the elements of a business combination as of the date of acquisition, including the fair values of identifiable intangible assets, deferred tax asset valuation allowances, liabilities related to uncertain tax positions, and contingencies. This method allows us to refine these estimates over a one-year measurement period to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. If we are required to retroactively adjust provisional amounts that we have recorded for the fair values of assets and liabilities in connection with acquisitions, these adjustments could materially decrease our operating income and net income and result in lower asset values on our consolidated balance sheets.

Significant estimates and assumptions that we must make in estimating the fair value of acquired technology, customer lists, and other identifiable intangible assets include future cash flows that we expect to generate from the acquired assets. If the subsequent actual results and updated projections of the underlying business activity change compared with the assumptions and projections used to develop these values, we could record impairment charges. In addition, we have estimated the economic lives of certain acquired assets and these lives are used to calculate depreciation and amortization expense. If our estimates of the economic lives change, depreciation or amortization expenses could be accelerated or slowed.

Goodwill, Acquired Intangible Assets and Other Long-Lived Assets – Impairment Assessments

We estimate the fair value of acquired intangible assets and other long-lived assets that have finite useful lives whenever an event or change in circumstances indicates that the carrying value of the asset may not be recoverable. We test for potential impairment of goodwill annually in our fourth fiscal quarter or whenever indicators of impairment arise. The timing of the annual test may result in charges to our consolidated statements of operations in our fourth fiscal quarter that could not have been reasonably foreseen in prior periods.

As described in “Description of Business and Summary of Significant Accounting Policies – Goodwill, Acquired Intangible Assets and Other Long-Lived Assets,” in Note 1 to the consolidated financial statements in Item 8 of this Annual Report, in order to estimate the fair value of goodwill, we use a weighted combination of a discounted cash flow model (known as the income approach) and comparisons to publicly traded companies engaged in similar businesses (known as the market approach). The income approach requires us to use a number of assumptions, including market factors specific to the business, the amount and timing of estimated future cash flows to be generated by the business over an extended period of time, long-term growth rates for the business, and a rate of return that considers the relative risk of achieving the cash flows and the time value of money. We evaluate cash flows at the reporting unit level. Although the assumptions we use in our discounted cash flow model are consistent with the assumptions we use to generate our internal strategic plans and forecasts, significant judgment is required to estimate the amount and timing of future cash flows from each reporting unit and the relative risk of achieving those cash flows. When using the market approach, we make judgments about the comparability of publicly traded companies engaged in similar businesses. We base our judgments on factors such as size, growth rates, profitability, risk, and return on investment. We also make judgments when adjusting market multiples of revenue, operating income, and earnings for these companies to reflect their relative similarity to our own businesses. See Note 6 to the consolidated financial statements in Item 8 of this Annual Report for a summary of goodwill by reportable segment.

We estimate the recoverability of acquired intangible assets and other long-lived assets that have finite useful lives by comparing the carrying amount of the asset to the future undiscounted cash flows that we expect the asset to generate. In order to estimate the fair value of those assets, we estimate the present value of future cash flows from those assets. The key assumptions that we use in our discounted cash flow model are the amount and timing of estimated future cash flows to be generated by the asset over an extended period of time and a rate of return that considers the relative risk of achieving the cash flows and the time value of money. Significant judgment is required to estimate the amount and timing of future cash flows and the relative risk of achieving those cash flows. We also make judgments about the remaining useful lives of acquired

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intangible assets and other long-lived assets that have finite lives. See Note 6 to the consolidated financial statements in Item 8 of this Annual Report for a summary of cost, accumulated amortization, and weighted-average life in years for our acquired intangible assets.

Assumptions and estimates about future values and remaining useful lives are complex and often subjective. They can be affected by a variety of factors, including external factors such as industry and economic trends, and internal factors such as changes in our business strategy and our internal forecasts. For example, if our future operating results do not meet current forecasts or if we experience a sustained decline in our market capitalization that is determined to be indicative of a reduction in fair value of one or more of our reporting units, we may be required to record future impairment charges for goodwill and acquired intangible assets. Impairment charges could materially decrease our future net income and result in lower asset values on our consolidated balance sheets.

During the fourth quarters of fiscal 2024, fiscal 2023, and fiscal 2022, we performed our annual goodwill impairment tests. Using the methodology described in “Description of Business and Summary of Significant Accounting Policies – Goodwill, Acquired Intangible Assets and Other Long-Lived Assets,” in Note 1 to the consolidated financial statements in Item 8 of this Annual Report, we determined that the estimated fair values of all of our reporting units substantially exceeded their carrying values and that they were not impaired.

Legal Contingencies

We are subject to certain legal proceedings, as well as demands, claims, and threatened litigation that arise in the normal course of our business. We review the status of each significant matter quarterly and assess our potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable and the amount can be reasonably estimated, we record a liability and an expense for the estimated loss. If we determine that a loss is reasonably possible and the range of the loss can be reasonably determined, then we disclose the range of the possible loss. Significant judgment is required in the determination of whether a potential loss is probable, reasonably possible, or remote, as well as in the determination of whether a potential exposure is reasonably estimable. Our accruals are based on the best information available at the time. As additional information becomes available, we reassess the potential liability related to our pending claims and legal proceedings and may revise our estimates. Potential legal liabilities and the revision of estimates of potential legal liabilities could have a material impact on our financial position and results of operations. See Note 14 to the consolidated financial statements in Item 8 of this Annual Report for more information.

Accounting for Income Taxes – Estimates of Deferred Taxes, Valuation Allowances, and Uncertain Tax Positions

We estimate our income taxes based on the various jurisdictions where we conduct business. Significant judgment is required in determining our worldwide income tax provision. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax rules and the potential for future adjustment of our uncertain tax positions by the United States Internal Revenue Service or other taxing jurisdictions. We estimate our current tax liability and assess temporary differences that result from differing treatments of certain items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which we show on our consolidated balance sheets. We must then assess the likelihood that our deferred tax assets will be realized. To the extent we believe that realization is not likely, we establish a valuation allowance. When we establish a valuation allowance or increase this allowance in an accounting period, we record a corresponding tax expense in our consolidated statements of operations.

We record a valuation allowance to reflect uncertainties about whether we will be able to utilize our deferred tax assets before they expire. We assess the need for an adjustment to the valuation allowance on a quarterly basis. The assessment is based on our estimates of future sources of taxable income in the jurisdictions in which we operate and the periods over which our deferred tax assets will be realizable. While we have considered future taxable income in assessing the need for a valuation allowance for the periods presented, we could in the future be required to increase the valuation allowance to take into account additional deferred tax assets that we may be unable to realize. An increase in the valuation allowance could have an adverse impact on our income tax provision and net income in the period in which we record the change.

We recognize and measure benefits for uncertain tax positions using a two-step approach. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained upon audit, including resolution of any related appeals or litigation processes. For tax positions that are more likely than not of being sustained upon audit, the second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. Significant judgment is required to evaluate uncertain tax positions. We evaluate our uncertain tax positions on a quarterly basis. Our evaluations are based upon a number of factors, including changes in facts or circumstances, changes in tax law, correspondence with tax authorities during the course of audits, and effective settlement of audit issues. Changes in the recognition or measurement of uncertain tax positions could result in material increases or decreases in our income tax expense in the period in which we make the change, which could have a material impact on our effective tax rate and operating results. See Note 11 to the consolidated financial statements in Item 8 of this Annual Report for more information.

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[["","Intuit Fiscal 2024 Form 10-K","38"]]
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RESULTS OF OPERATIONS

A discussion regarding our financial condition and results of operations for fiscal 2024 compared to fiscal 2023 is presented below. A discussion regarding our financial condition and results of operations for fiscal 2023 compared to fiscal 2022 can be found under Item 7 of Part II in our Annual Report on Form 10-K for the fiscal year ended July 31, 2023, filed with the SEC on September 1, 2023, which is available free of charge on the SEC’s website at www.sec.gov and on the Investor Relations section of our corporate website at investors.intuit.com.

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Total net revenue increased $1.9 billion, or 13%, in fiscal 2024 compared with fiscal 2023. Small Business & Self-Employed segment revenue increased 19% due to growth in our Online Ecosystem revenue. Consumer segment revenue increased 7% due to the interrelated factors of a shift in mix to our higher-priced services offerings, such as TurboTax Live, and higher effective prices. See “Segment Results” later in this Item 7 for more information.

Operating income increased $489 million, or 16%, in fiscal 2024 compared with fiscal 2023. The increase in operating income was due to the increase in revenue described above and an increase in expenses. Expenses increased due to staffing, marketing, restructuring, share-based compensation, and outside services. See “Operating Expenses” later in this Item 7 for more information. See Note 16 to the consolidated financial statements in Item 8 of this Annual Report for more information on our restructuring charges.

Net income increased $579 million, or 24%, in fiscal 2024 compared with fiscal 2023. The increase in net income was due to the increase in operating income described above, an increase in interest income due to higher average interest rates, and a decrease in income tax expense related to higher excess tax benefits on share-based compensation. Diluted net income per share increased 24% to $10.43 for fiscal 2024, in line with the increase in net income.

Segment Results

The information below is organized in accordance with our four reportable segments. All of our segments operate and sell to customers primarily in the United States. Total international net revenue was approximately 8% of consolidated total net revenue in each of the twelve months ended July 31, 2024, 2023, and 2022.

On November 1, 2021, we acquired Mailchimp in a business combination. Our Mailchimp offerings are part of our Small Business & Self-Employed segment. We have included the results of operations of Mailchimp in our consolidated statements of operations from the date of acquisition.

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 twelve months ended July 31, 2023 and 2022, we reclassified $49 million and $21 million from Small Business & Self-Employed, $168 million and $150 million from Consumer, and $60 million and $64 million from ProTax to other corporate expenses, respectively.

Segment operating income is segment net revenue less segment cost of revenue and operating expenses. We include expenses such as corporate selling and marketing, product development, general and administrative, and non-employment related legal and litigation settlement costs, which are not allocated to specific segments, in unallocated corporate items as part of other corporate expenses. For our Credit Karma segment, expenses include certain direct expenses related to selling and marketing, product development, and general and administrative. Unallocated corporate items for all segments include share-based compensation, amortization of acquired technology, amortization of other acquired intangible assets, goodwill and intangible asset impairment charges, professional fees and transaction charges related to business combinations, and restructuring charges. These unallocated corporate costs for all segments totaled $5.9 billion in fiscal 2024, $5.2 billion in fiscal

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2023, and $4.6 billion in fiscal 2022. Unallocated corporate items increased in fiscal 2024 compared with fiscal 2023 due to increases in restructuring costs, share-based compensation expense, and product development expense. See Note 15 to the consolidated financial statements in Item 8 of this Annual Report for reconciliations of total segment operating income to consolidated operating income for each fiscal year presented.

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Small Business & Self-Employed

Small Business & Self-Employed segment revenue includes both Online Ecosystem and Desktop Ecosystem revenue.

Our Online Ecosystem includes revenue from:

•QuickBooks Online, QuickBooks Live, QuickBooks Online Advanced, QuickBooks Self-Employed, and QuickBooks Solopreneur financial and business management offerings;

•QuickBooks Online Payroll;

•Merchant payment processing and bill pay services for small and mid-market businesses that use online offerings;

•Mailchimp’s marketing automation and customer relationship management offerings;

•QuickBooks Checking; and

•Financing for small businesses.

Our Desktop Ecosystem includes revenue from:

•QuickBooks Desktop software subscriptions (QuickBooks Desktop Pro Plus, QuickBooks Desktop Premier Plus, and QuickBooks Enterprise, and ProAdvisor Program memberships for the accounting professionals who serve small businesses);

•Desktop payroll products (QuickBooks Basic Payroll, QuickBooks Assisted Payroll, and QuickBooks Enhanced Payroll);

•Merchant payment processing services for small and mid-market businesses that use desktop offerings;

•Financial supplies; and

•Financing for small businesses.

Segment service revenue is primarily derived from our Online Ecosystem revenue and revenue from the services and support that are provided as part of our QuickBooks Desktop subscription and desktop payroll offerings, as well as merchant payment processing services. Segment product and other revenue is primarily derived from revenue related to delivery of software licenses and the related updates, including version protection, for our QuickBooks Desktop subscription and desktop payroll offerings, which are part of our Desktop Ecosystem. Our fiscal 2022 revenue includes Mailchimp revenue from the date of acquisition, which was November 1, 2021.

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Revenue classified by significant service and product offerings was as follows:

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Revenue for our Small Business & Self-Employed segment increased $1.5 billion, or 19%, in fiscal 2024 compared with fiscal 2023. The increase was due to growth in Online Ecosystem revenue, which contributed to $1.1 billion of the increase for fiscal 2024.

Online Ecosystem

Online Ecosystem revenue increased $1.1 billion, or 20%, in fiscal 2024 compared with fiscal 2023. Online Services revenue increased $603 million, or 21%, in fiscal 2024 compared with fiscal 2023 due to increases in revenue from our payroll offerings of $211 million, our payments offerings of $203 million, and Mailchimp of $125 million. Revenue increases were due to the interrelated factors described below. Online payroll revenue increased due to customer growth, higher effective prices, and a shift in mix to higher-end offerings. Online payments revenue increased due to customer growth, higher effective prices, and an increase in total payment volume per customer. Mailchimp revenue increased due to higher effective prices and paid customer growth. QuickBooks Online Accounting revenue increased $530 million, or 19%, in fiscal 2024 compared with fiscal 2023 due to customer growth, higher effective prices, and a shift in mix to our higher-priced offerings.

Online Ecosystem average revenue per customer, which we define as total online ecosystem revenue divided by the average number of online paying customers, increased 11% for fiscal 2024 compared with fiscal 2023. Online ecosystem paying customers, which we define as the sum of all QuickBooks Online customers, QuickBooks Time customers, Mailchimp paying customers, and customers who subscribe to standalone services outside of their QuickBooks Online experience, increased 6% as of July 31, 2024 compared with July 31, 2023.

Desktop Ecosystem

Desktop Ecosystem revenue increased $362 million, or 16%, in fiscal 2024 compared with fiscal 2023, $252 million of which is due to the interrelated factors of customer growth and price increases primarily in our QuickBooks Desktop and Enterprise subscription offerings. Approximately $110 million of fiscal 2024 revenue is associated with changes we made to our offerings in fiscal 2024 to complete the transition to a recurring subscription model, which more closely aligns our Desktop license and related product updates to our Desktop subscription billing model.

Small Business & Self-Employed segment operating income increased $1.2 billion, or 25%, in fiscal 2024 compared with fiscal 2023, due to the increase in revenue described above, which was partially offset by increases in marketing expenses of $105 million, staffing expenses of $67 million, and outside services expenses of $54 million.

In August 2023, we reorganized certain workplace and real estate functions that are now managed at the corporate level. As a result, these costs are no longer included in segment operating income and are now included in other corporate expenses. For the twelve months ended July 31, 2023 and 2022, we reclassified $49 million and $21 million, respectively, from Small Business & Self-Employed to other corporate expenses.

On August 1, 2024, we renamed our Small Business & Self-Employed segment as the Global Business Solutions segment. This new name better aligns with the global reach of the Mailchimp and QuickBooks platform, our focus on serving both small and mid-market businesses, and our vision to become the end-to-end platform that customers use to grow and run their business.

[[GREPCENT_TABLE]]
[["","Intuit Fiscal 2024 Form 10-K","42"]]
[[/GREPCENT_TABLE]]

Tables of Contents

Consumer

Consumer segment service revenue is derived primarily from TurboTax Online and TurboTax Live offerings, electronic tax filing services, and connected services.

Consumer segment product and other revenue is derived primarily from TurboTax desktop tax return preparation software and related form updates.

[[GREPCENT_TABLE]]
[["(Dollars in millions)","Fiscal 2024","","Fiscal 2023","","Fiscal 2022","","2024-2023 % Change","","2023-2022 % Change"],["Service revenue","$","4,214","","","$","3,915","","","$","3,694"],["Product and other revenue","231","","","220","","","221"],["Total segment revenue","$","4,445","","","$","4,135","","","$","3,915","","","7","%","","6","%"],["% of total revenue","27","%","","29","%","","31","%"],["Segment operating income","$","2,920","","","$","2,875","","","$","2,633","","","2","%","","9","%"],["% of related revenue","66","%","","70","%","","67","%"]]
[[/GREPCENT_TABLE]]

Revenue for our Consumer segment increased $310 million, or 7%, in fiscal 2024 compared with fiscal 2023, due to the interrelated factors of a shift in mix to our higher-priced service offerings, such as TurboTax Live, and higher effective prices.

Consumer segment operating income increased $45 million, or 2%, in fiscal 2024 compared with fiscal 2023, due to the increase in revenue described above, partially offset by increases in marketing expenses of $116 million, staffing expenses of $70 million associated with both our shift in mix to our higher-priced service offerings and increasing service availability, and outside services expenses of $24 million.

In August 2023, we reorganized certain technology functions that support and benefit our overall platform. As a result, these costs are no longer included in segment operating income and are now included in other corporate expenses. For the twelve months ended July 31, 2023 and 2022, we reclassified $168 million and $150 million, respectively, from Consumer to other corporate expenses.

[[GREPCENT_TABLE]]
[["","Intuit Fiscal 2024 Form 10-K","43"]]
[[/GREPCENT_TABLE]]

Tables of Contents

Credit Karma

Credit Karma segment revenue is primarily derived from cost-per-action transactions, which include the delivery of qualified links that result in completed actions such as credit card issuances and personal loan funding; cost-per-click and cost-per-lead transactions, which include user clicks on advertisements or advertisements that allow for the generation of leads, and primarily relate to mortgage and insurance businesses; and Credit Karma Money.

[[GREPCENT_TABLE]]
[["(Dollars in millions)","Fiscal 2024","","Fiscal 2023","","Fiscal 2022","","2024-2023 % Change","","2023-2022 % Change"],["Service revenue","$","1,708","","","$","1,634","","","$","1,805"],["Product and other revenue","\u2014","","","\u2014","","","\u2014"],["Total segment revenue","$","1,708","","","$","1,634","","","$","1,805","","","5","%","","(9","%)"],["% of total revenue","10","%","","11","%","","14","%"],["Segment operating income","$","414","","","$","428","","","$","531","","","(3","%)","","(19","%)"],["% of related revenue","24","%","","26","%","","29","%"]]
[[/GREPCENT_TABLE]]

Revenue for our Credit Karma segment increased $74 million, or 5%, in fiscal 2024 compared with fiscal 2023, due to increases in revenue from our credit card vertical of $32 million, auto insurance vertical of $25 million, and Credit Karma Money of $20 million, partially offset by a decrease in revenue from our home loan vertical of $6 million.

Credit Karma segment operating income decreased $14 million, or 3%, in fiscal 2024 compared with fiscal 2023, due to increases in marketing expenses of $68 million and outside services expenses of $28 million, partially offset by the increase in revenue described above.

[[GREPCENT_TABLE]]
[["","Intuit Fiscal 2024 Form 10-K","44"]]
[[/GREPCENT_TABLE]]

Tables of Contents

ProTax

ProTax segment service revenue is derived primarily from ProConnect Tax Online tax products, electronic tax filing services, connected services, and bank products.

ProTax segment product and other revenue is derived primarily from Lacerte, ProSeries, and ProFile desktop tax preparation software products, and related form updates.

[[GREPCENT_TABLE]]
[["(Dollars in millions)","Fiscal 2024","","Fiscal 2023","","Fiscal 2022","","2024-2023 % Change","","2023-2022 % Change"],["Service revenue","$","147","","","$","127","","","$","120"],["Product and other revenue","452","","","434","","","426"],["Total segment revenue","$","599","","","$","561","","","$","546","","","7","%","","3","%"],["% of total revenue","4","%","","4","%","","4","%"],["Segment operating income","$","487","","","$","455","","","$","447","","","7","%","","2","%"],["% of related revenue","81","%","","81","%","","82","%"]]
[[/GREPCENT_TABLE]]

Revenue for our ProTax segment increased $38 million, or 7%, in fiscal 2024 compared with fiscal 2023, due to higher average revenue per customer.

ProTax segment operating income increased $32 million, or 7%, in fiscal 2024 compared with fiscal 2023, due to the increase in revenue described above. Expenses were relatively flat in fiscal 2024 compared with fiscal 2023.

In August 2023, we reorganized certain technology functions that support and benefit our overall platform. As a result, these costs are no longer included in segment operating income and are now included in other corporate expenses. For the twelve months ended July 31, 2023 and 2022, we reclassified $60 million and $64 million, respectively, from ProTax to other corporate expenses.

[[GREPCENT_TABLE]]
[["","Intuit Fiscal 2024 Form 10-K","45"]]
[[/GREPCENT_TABLE]]

Tables of Contents

[[GREPCENT_TABLE]]
[["Cost of Revenue"],["(Dollars in millions)","Fiscal 2024","","% of Related Revenue","","Fiscal 2023","","% of Related Revenue","","Fiscal 2022","","% of Related Revenue"],["Cost of service revenue","$","3,250","","","23","%","","$","2,908","","","24","%","","$","2,196","","","20","%"],["Cost of product and other revenue","69","","","3","%","","72","","","4","%","","70","","","4","%"],["Amortization of acquired technology","146","","","N/A","","163","","","N/A","","140","","","N/A"],["Total cost of revenue","$","3,465","","","21","%","","$","3,143","","","22","%","","$","2,406","","","19","%"]]
[[/GREPCENT_TABLE]]

Our cost of revenue has three components: (1) cost of service revenue, which includes the direct costs associated with our online and service offerings, such as costs for data processing and storage capabilities from cloud providers, ongoing production support costs, customer support costs, costs for the tax and bookkeeping experts that support our TurboTax Live and QuickBooks Live offerings, and costs related to credit score providers; (2) cost of product and other revenue, which includes the direct costs of manufacturing and shipping or electronically downloading our desktop software and financial supplies products; and (3) amortization of acquired technology, which represents the cost of amortizing developed technologies that we have obtained through acquisitions, over their useful lives.

Cost of service revenue as a percentage of service revenue was relatively consistent in fiscal 2024 compared to fiscal 2023.

Cost of product and other revenue as a percentage of product and other revenue was consistent in fiscal 2024 compared with fiscal 2023. Costs of product and other revenue are expensed as incurred, and we do not defer any of these costs when product and other revenue is deferred.

[[GREPCENT_TABLE]]
[["Operating Expenses"],["(Dollars in millions)","Fiscal 2024","","% of Total Net Revenue","","Fiscal 2023","","% of Total Net Revenue","","Fiscal 2022","","% of Total Net Revenue"],["Selling and marketing","$","4,312","","","26","%","","$","3,762","","","26","%","","$","3,526","","","29","%"],["Research and development","2,754","","","17","%","","2,539","","","18","%","","2,347","","","18","%"],["General and administrative","1,418","","","9","%","","1,300","","","9","%","","1,460","","","11","%"],["Amortization of other acquired intangible assets","483","","","3","%","","483","","","3","%","","416","","","3","%"],["Restructuring","223","","","1","%","","\u2014","","","\u2014","%","","\u2014","","","\u2014","%"],["Total operating expenses","$","9,190","","","56","%","","$","8,084","","","56","%","","$","7,749","","","61","%"]]
[[/GREPCENT_TABLE]]

Total operating expenses as a percentage of total net revenue was flat in fiscal 2024 compared to fiscal 2023. Total net revenue increased $1.9 billion, or 13%, and total operating expenses increased $1.1 billion, or 14%. The increase in total operating expenses was due to increases of $294 million for marketing expenses, $257 million for staffing due to higher headcount, $223 million in restructuring charges which includes $25 million in share-based compensation, and $175 million for other share-based compensation. See Note 16 to the consolidated financial statements in Item 8 of this Annual Report for more information regarding restructuring charges.

Non-Operating Income and Expenses

Interest Expense

Interest expense of $242 million and $248 million in fiscal 2024 and 2023, respectively, consisted of interest on our senior unsecured notes, unsecured term loan, and secured revolving credit facilities.

[[GREPCENT_TABLE]]
[["","Intuit Fiscal 2024 Form 10-K","46"]]
[[/GREPCENT_TABLE]]

Tables of Contents

Interest and Other Income, Net

[[GREPCENT_TABLE]]
[["(In millions)","Fiscal 2024","","Fiscal 2023","","Fiscal 2022"],["Interest income (1)","$","147","","","$","106","","","$","15"],["Net gain (loss) on executive deferred compensation plan assets (2)","24","","","12","","","(12)"],["Other","(9)","","","(22)","","","49"],["Total interest and other income, net","$","162","","","$","96","","","$","52"]]
[[/GREPCENT_TABLE]]

(1) Interest income increased in fiscal 2024 compared to fiscal 2023, due to higher average interest rates.

(2) In accordance with authoritative guidance, we record gains and losses associated with executive deferred compensation plan assets in interest and other income, and gains and losses associated with the related liabilities in operating expenses. The total amounts recorded in operating expenses for each period are approximately equal to the total amounts recorded in interest and other income in those periods.

Income Taxes

Our effective tax rate for fiscal 2024 was approximately 17%. Excluding certain tax benefits primarily related to share-based compensation, our effective tax rate was approximately 24%. This rate differed from the federal statutory rate of 21% primarily due to state income taxes and non-deductible share-based compensation, which were partially offset by the benefit we received from the federal research and experimentation credit.

Our effective tax rate for fiscal 2023 was approximately 20%. Excluding the tax benefits related to share-based compensation and a transfer of certain intangible assets from our United Kingdom subsidiary to the United States, our effective tax rate was approximately 24%. This rate differed from the federal statutory rate of 21% primarily due to state income taxes and non-deductible share-based compensation, which were partially offset by the benefit we received from the federal research and experimentation credit. See Note 11 to the consolidated financial statements in Item 8 of this Annual Report for more information about our effective tax rates.

At July 31, 2024, we had net deferred tax assets of $695 million, which included a valuation allowance for California net deferred tax assets primarily related to state research and experimentation tax credit carryforwards, foreign loss carryforwards, and state operating loss carryforwards. See “Critical Accounting Policies and Estimates” earlier in this Item 7 and Note 11 to the consolidated financial statements in Item 8 of this Annual Report for more information.

Under the 2017 Tax Cuts & Jobs Act, research and development costs incurred in taxable years beginning after December 31, 2021 are no longer fully deductible and are required to be capitalized and amortized for U.S. tax purposes. The mandatory capitalization requirement, effective for us beginning August 1, 2022, significantly increased our deferred tax assets and income taxes payable for fiscal 2023 and fiscal 2024, and we expect it to continue to cause an increase in our deferred tax assets and income taxes payable in the near term.

The Inflation Reduction Act was enacted on August 16, 2022. This law, among other provisions, provides a corporate alternative minimum tax on adjusted financial statement income, which was effective for us beginning in fiscal 2024. There was no impact from the corporate alternative minimum tax in fiscal 2024. The corporate alternative minimum tax is not expected to have a significant impact to our provision for income taxes. We continue to monitor developments and evaluate impacts, if any, of these provisions on our results of operations and cash flows for future years.

In 2021, the Organisation for Economic Co-operation and Development (OECD) announced Pillar Two Model Rules, which call for the taxation of large multinational corporations at a minimum rate of 15%. Many non-U.S. tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in fiscal 2025 with the adoption of additional components in later years or announced their plans to enact legislation in future years. The currently enacted Pillar Two Model Rules are not expected to have a significant impact to our provision for income taxes. We continue to monitor developments and evaluate impacts, if any, of these provisions on our results of operations and cash flows for future years.

In the current global tax policy environment, the U.S. and other domestic and foreign governments continue to consider, and in some cases enact, changes in corporate tax laws. As changes occur, we account for finalized legislation in the period of enactment.

[[GREPCENT_TABLE]]
[["","Intuit Fiscal 2024 Form 10-K","47"]]
[[/GREPCENT_TABLE]]

Tables of Contents

LIQUIDITY AND CAPITAL RESOURCES

Overview

At July 31, 2024, our cash, cash equivalents, and investments totaled $4.1 billion, an increase of $412 million from July 31, 2023, due to the factors described in “Statements of Cash Flows” below. Our primary sources of liquidity have been cash from operations, which primarily includes the collection of accounts receivable for products and services, the issuance of senior unsecured notes, and borrowings under our credit facilities. Our primary uses of cash have been for research and development programs, selling and marketing activities, acquisitions of businesses, repurchases of our common stock under our stock repurchase programs, the payment of cash dividends, debt service costs and debt repayment, and capital projects. As discussed in “Executive Overview – Industry Trends and Seasonality” earlier in this Item 7, our business is subject to significant seasonality. The balance of our cash, cash equivalents, and investments generally fluctuates with that seasonal pattern. We believe the seasonality of our business is likely to continue in the future.

The following table summarizes selected measures of our liquidity and capital resources at the dates indicated:

[[GREPCENT_TABLE]]
[["(Dollars in millions)","July 31, 2024","","July 31, 2023","","$ Change","","% Change"],["Cash, cash equivalents, and investments","$","4,074","","","$","3,662","","","$","412","","","11","%"],["Long-term investments","131","","","105","","","26","","","25","%"],["Short-term debt","499","","","\u2014","","","499","","","NM"],["Long-term debt","5,539","","","6,120","","","(581)","","","(9)","%"],["Working capital","2,187","","","1,767","","","420","","","24","%"],["Ratio of current assets to current liabilities","1.3 : 1","","1.5 : 1"]]
[[/GREPCENT_TABLE]]

__________________________

NM - Not meaningful

We have historically generated significant cash from operations, and we expect to continue to do so during fiscal 2025. Our cash, cash equivalents, and investments totaled $4.1 billion at July 31, 2024. None of those funds were restricted, and approximately 92% of those funds were located in the U.S.

On November 1, 2021, we acquired all of the outstanding equity of Mailchimp. The fair value of the purchase consideration totaled $12.0 billion, and included $5.7 billion in cash, and 10.1 million shares of Intuit common stock with a fair value of $6.3 billion. See "Business Combinations" below for more information.

In September 2023, we issued $4 billion in senior unsecured notes, and used the proceeds, together with operating cash, to repay the outstanding balance on our term loan.

In October 2023, we made tax payments of $710 million as a result of 2023 IRS disaster relief which allowed the deferral of certain fiscal 2023 tax payments to the first quarter of fiscal 2024.

On February 5, 2024, we terminated our amended and restated credit agreement dated November 1, 2021, and entered into an unsecured credit agreement with certain lenders providing for a $1.5 billion unsecured revolving credit facility that expires on February 5, 2029. Our unsecured revolving credit facility is available to us for general corporate purposes. At July 31, 2024, no amounts were outstanding under the unsecured revolving credit facility. See Note 8 to the consolidated financial statements in Item 8 of this Annual Report for more information.

In June 2024, we established a $1.5 billion commercial paper program under which we may issue and sell unsecured short-term promissory notes (commercial paper). As of July 31, 2024, no amounts were outstanding under this program.

Our secured revolving credit facilities are available to fund a portion of our loans to qualified small businesses. At July 31, 2024, $585 million was outstanding under both secured revolving credit facilities.

Based on past performance and current expectations, we believe that our cash and cash equivalents, investments, cash generated from operations, borrowing capacity under our credit facilities and commercial paper program, and access to external financing will be sufficient to meet anticipated 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.

We expect to return excess cash generated by operations to our stockholders through repurchases of our common stock and payment of cash dividends, after taking into account our operating and strategic cash needs.

We evaluate, on an ongoing basis, the merits of acquiring technology or businesses, or establishing strategic relationships with and investing in other companies. Our strong liquidity profile enables us to quickly respond to these types of opportunities.

[[GREPCENT_TABLE]]
[["","Intuit Fiscal 2024 Form 10-K","48"]]
[[/GREPCENT_TABLE]]

Tables of Contents

Statements of Cash Flows

The following table summarizes selected items from our consolidated statements of cash flows for fiscal 2024, fiscal 2023, and fiscal 2022. See the consolidated financial statements in Item 8 of this Annual Report for complete consolidated statements of cash flows for those periods.

[[GREPCENT_TABLE]]
[["","Fiscal","","Fiscal","","Fiscal"],["(In millions)","2024","","2023","","2022"],["Net cash provided by (used in):"],["Operating activities","$","4,884","","","$","5,046","","","$","3,889"],["Investing activities","(227)","","","(922)","","","(5,421)"],["Financing activities","(397)","","","(4,269)","","","1,732"],["Effect of exchange rates on cash, cash equivalents, restricted cash, and restricted cash equivalents","(13)","","","\u2014","","","(22)"],["Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents","$","4,247","","","$","(145)","","","$","178"]]
[[/GREPCENT_TABLE]]

During fiscal 2024, we generated $4.9 billion in cash from operations. We also received $4.0 billion from the issuance of unsecured senior notes, $3.4 billion from the net increase in funds receivable and funds payable and amounts due to customers, $422 million from the net sales and maturities of investments, $282 million from the issuance of common stock under employee stock plans, and $155 million from net borrowings under our secured credit facilities. During the same period, we used $4.2 billion for the repayment of debt, $2.0 billion for the repurchase of shares of our common stock under our stock repurchase programs, $1.0 billion for the payment of cash dividends, $1.0 billion for payments for employee taxes withheld upon vesting of restricted stock units, $250 million for capital expenditures, and $236 million for net originations of term loans to small businesses.

During fiscal 2023, we generated $5.0 billion in cash from operations. We also received $222 million from borrowings under our secured credit facilities, and $228 million from the issuance of common stock under employee stock plans. During the same period, we used $2.0 billion for the repurchase of shares of our common stock under our stock repurchase programs, $1.0 billion for the repayment of debt, $889 million for the payment of cash dividends, $633 million for payments for employee taxes withheld upon vesting of restricted stock units, $326 million for the net purchases of investments, $260 million for capital expenditures, and $256 million for net originations of term loans to small businesses.

Stock Repurchase Programs and Dividends on Common Stock

As described in Note 12 to the financial statements in Item 8 of this Annual Report, during fiscal 2024 and fiscal 2023, we continued to repurchase shares of our common stock under a series of repurchase programs that our Board of Directors has authorized. At July 31, 2024, we had authorization from our Board of Directors for up to $1.9 billion in stock repurchases. On August 20, 2024, our Board of Directors approved an increase in the authorization under the existing stock repurchase program under which we are authorized to repurchase up to an additional $3.0 billion of our common stock. We currently expect to continue repurchasing our common stock on a quarterly basis; however, future stock repurchases under the current program are at the discretion of management, and authorization of future stock repurchase programs is subject to the final determination of our Board of Directors.

We have continued to pay quarterly cash dividends on shares of our outstanding common stock. During fiscal 2024, we declared cash dividends that totaled $3.60 per share of outstanding common stock, or approximately $1.0 billion. In August 2024, our Board of Directors declared a quarterly cash dividend of $1.04 per share of outstanding common stock payable on October 18, 2024 to stockholders of record at the close of business on October 10, 2024. We currently expect to continue to pay comparable cash dividends on a quarterly basis; however, future declarations of dividends and the establishment of future record dates and payment dates are subject to the final determination of our Board of Directors.

Business Combinations

Mailchimp

On November 1, 2021, we acquired all of the outstanding equity of Mailchimp for total consideration of $12.0 billion, which included $5.7 billion in cash and 10.1 million shares of Intuit common stock with a fair value of $6.3 billion. The fair value of the stock consideration is based on the October 29, 2021 closing price of Intuit common stock of $625.99.

Pursuant to the equity purchase agreement, we also issued approximately 583,000 restricted stock units (RSUs) in substitution of outstanding equity incentive awards. These RSUs have a grant date fair value of approximately $355 million and are being expensed over three years. Additionally, we issued approximately 325,000 RSUs with a total grant date fair value of approximately $211 million to Mailchimp employees, of which $151 million is being expensed over four years and $60 million was expensed during the first six months following the acquisition date.

[[GREPCENT_TABLE]]
[["","Intuit Fiscal 2024 Form 10-K","49"]]
[[/GREPCENT_TABLE]]

Tables of Contents

Mailchimp is part of our Small Business & Self-Employed segment. We have included the financial results of Mailchimp in the consolidated financial statements from the date of acquisition. See Note 7 to the consolidated financial statements in Item 8 of this Annual Report for more information.

Commitments for Senior Unsecured Notes

In June 2020, we issued $2 billion of senior unsecured notes, of which $1.5 billion is outstanding as of July 31, 2024, and is comprised of the following:

•$500 million of 0.950% notes due July 2025;

•$500 million of 1.350% notes due July 2027; and

•$500 million of 1.650% notes due July 2030 (together, the 2020 Notes).

Interest is payable semiannually on January 15 and July 15 of each year. At July 31, 2024, our maximum commitment for interest payments under the 2020 Notes was $75 million through the maturity dates.

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 July 31, 2024, we were compliant with all covenants governing the 2020 Notes. See Note 8 to the consolidated financial statements in Item 8 of this Annual Report for more information.

In September 2023, we issued $4 billion of senior unsecured notes comprised of the following:

•$750 million of 5.250% notes due September 2026;

•$750 million of 5.125% notes due September 2028;

•$1,250 million of 5.200% notes due September 2033; and

•$1,250 million of 5.500% notes due September 2053 (together, the 2023 Notes).

Interest is payable semiannually on March 15 and September 15 of each year. At July 31, 2024, our maximum commitment for interest payments under the 2023 Notes was $2.9 billion through the maturity dates.

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 July 31, 2024, we were compliant with all covenants governing the 2023 Notes. See Note 8 to the consolidated financial statements in Item 8 of this Annual Report for more information.

Credit Facilities

Unsecured Revolving Credit Facilities

On February 5, 2024, we terminated our amended and restated credit agreement dated November 1, 2021 (2021 Credit Facility), and 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).

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 July 31, 2024, we were compliant with all required covenants. At July 31, 2024, no amounts were outstanding under the 2024 Credit Facility. We monitor counterparty risk associated with the institutional lenders that are providing for the credit facility.

[[GREPCENT_TABLE]]
[["","Intuit Fiscal 2024 Form 10-K","50"]]
[[/GREPCENT_TABLE]]

Tables of Contents

Secured Revolving Credit Facilities

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 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 July 19, 2024. 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 August 31, 2025, and the final maturity date is August 31, 2026. The agreement includes certain affirmative and negative covenants, including financial covenants, that require the subsidiary to maintain specified financial ratios. As of July 31, 2024, we were compliant with all required covenants. At July 31, 2024, $285 million was outstanding under the 2019 Secured Facility and the weighted-average interest rate was 6.99%, which includes the interest on the unused committed portion. The outstanding balance is secured by cash and receivables of the subsidiary totaling $1.1 billion.

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 dates 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 July 31, 2024, we were compliant with all required covenants. At July 31, 2024, $300 million was outstanding under the 2022 Secured Facility and the weighted-average interest rate was 6.68%. The outstanding balance is secured by cash and receivables of the subsidiary totaling $832 million.

Commercial Paper Program

In June 2024, we established a $1.5 billion commercial paper program under which we may issue and sell unsecured short-term promissory notes (commercial paper). The maturities of the commercial paper may vary up to 397 days from the date of issuance. As of July 31, 2024, no amounts were outstanding under this program.

Cash Held by Foreign Subsidiaries

Our cash, cash equivalents, and investments totaled $4.1 billion at July 31, 2024. Approximately 8% of those funds were held by our foreign subsidiaries and subject to repatriation tax considerations. These foreign funds were located primarily in Canada, the United Kingdom, and India. We do not expect to pay incremental U.S. taxes on repatriation. We have recorded income tax expense for Canada, India, and Israel withholding taxes on earnings that are not permanently reinvested. In the event that funds from foreign operations are repatriated to the United States, we would pay withholding taxes at that time.

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[["","Intuit Fiscal 2024 Form 10-K","51"]]
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CONTRACTUAL OBLIGATIONS

The following table summarizes our known contractual obligations to make future payments at July 31, 2024. We generally expect to fund these short and long-term obligations with cash from operations, the issuance of senior unsecured notes, and borrowings under our credit facilities.

[[GREPCENT_TABLE]]
[["","Payments Due by Period"],["","Less than","","1-3","","3-5","","More than"],["(In millions)","1 year","","years","","years","","5 years","","Total"],["Amounts due under executive deferred compensation plan","$","207","","","$","\u2014","","","$","\u2014","","","$","\u2014","","","$","207"],["Senior unsecured notes","500","","","1,250","","","750","","","3,000","","","5,500"],["Secured revolving credit facilities","\u2014","","","585","","","\u2014","","","\u2014","","","585"],["Interest and fees due on debt","272","","","494","","","342","","","1,985","","","3,093"],["Operating leases (1)","87","","","166","","","133","","","221","","","607"],["Purchase obligations (2)","675","","","497","","","82","","","413","","","1,667"],["Total contractual obligations (3)","$","1,741","","","$","2,992","","","$","1,307","","","$","5,619","","","$","11,659"]]
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(1)Includes operating leases for facilities and equipment. Amounts do not include $14 million of future sublease income. See Note 10 to the consolidated financial statements in Item 8 of this Annual Report for more information.

(2)Represents agreements to purchase products and services that are enforceable, legally binding, and specify terms, including: fixed or minimum quantities to be purchased; fixed, minimum, or variable price provisions; and the approximate timing of the payments.

(3)Other long-term obligations on our consolidated balance sheet at July 31, 2024, included long-term income tax liabilities of $157 million, which related primarily to unrecognized tax benefits. We have not included this amount in the table above because we cannot make a reasonably reliable estimate regarding the timing of settlements with taxing authorities, if any.

RECENT ACCOUNTING PRONOUNCEMENTS

For a description of recent accounting pronouncements, if any, and the potential impact of these pronouncements on our consolidated financial statements, see Note 1 to the financial statements in Item 8 of this Annual Report.

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[["","Intuit Fiscal 2024 Form 10-K","52"]]
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