Intuit Inc. (INTU) Earnings Call Transcript & Summary

Good afternoon. My name is Sarah, and I will be your conference facilitator. At this time, I would like to welcome everyone to Intuit's Guidance Update Conference Call. [Operator Instructions] And with that, I'll now turn the call over to Kim Watkins, Intuit's Vice President of Investor Relations. Ms. Watkins?

Thanks, Sarah. Good afternoon, and welcome to Intuit's conference call to update guidance on the closing of the Credit Karma acquisition. I'm here with Intuit's CEO, Sasan Goodarzi; and Michelle Clatterbuck, our CFO. Before we start, I'd like to remind everyone that our remarks will include forward-looking statements. There are a number of factors that could cause Intuit's results to differ materially from our expectations. You can learn more about these risks in the press release we issued earlier this afternoon, our Form 10-K for fiscal 2020 and our other SEC filings. All of these documents are available on the Investor Relations page of Intuit's website at intuit.com. We assume no obligation to update any forward-looking statements. Some of the numbers in these remarks are presented on a non-GAAP basis. We've reconciled the comparable GAAP and non-GAAP numbers in today's press release. Unless otherwise noted, all growth rates refer to the current period versus the comparable prior year period and the business metrics and associated growth rates refer to worldwide business metrics. A copy of our prepared remarks and supplemental financial information will be available on our website after this call ends. And with that, I'll turn the call over to Sasan.

Great. Thanks, Kim, and thanks to all of you for joining us today. I'm delighted to share that we closed the acquisition of Credit Karma, and I could not be more excited about the opportunity ahead. Upon closing, we posted a slide deck on the Investor Relations section of our website containing more information about our vision and innovation agenda. This acquisition is a giant step forward in achieving our mission to power prosperity around the world and our bold 2025 goal to double the household savings rate for customers on our platform. Credit Karma will significantly accelerate our Big Bets vision to unlock smart money decisions for consumers, putting more money in their pockets. Today, many consumers struggle not knowing or fully understanding where they stand with their finances, and they struggle to make ends meet. The challenges of the global pandemic had made these personal finance needs even more critical. Currently, 62% of consumers are living paycheck to paycheck, 75% of Americans have concerns about their ability to pay bills and loans and 33% of Americans have lost income during the pandemic while household debt in the United States is at $14.3 trillion. Our vision is to address these challenges by creating a personal financial assistant that helps consumers find the right financial products, put more money in their pockets and access financial expertise and advice. The combination of the 2 trusted brands: customer reach, data and platform capabilities, will deliver breakthrough benefits that will power prosperity around the world. We bring together 110 million Credit Karma members and 57 million Intuit customers to create significant scale. With this scale, we'll be able to create a powerful data platform, including income, cash flow and credit history with visibility to customers' W-2s, 1099s, tax refunds and debt across mortgage, credit card, auto and student loans. With customer permission, we'll use this data and our AI platform to apply more than 8 billion data machine learning predictions to deliver unprecedented customer value at a speed and scale we could not have done on our own. To help consumers find the right financial products, we have the ability to match over 100 million consumers to personalize credit card, loan and insurance offers. With customer consent and transparency, we'll combine consumer data, including income, cash flow, transaction, credit scores, department of motor vehicles and behavioral data to create a more intelligent, personalized experience. To put more money in consumers' pockets, we'll help maximize their tax refund, connect them to checking and high-yield savings accounts and enable faster access to their money. We'll continue to accelerate growth of unpenetrated segments, such as Self-Employed, Latinx and investors and plan to provide TurboTax Live to Credit Karma members who are overpaying for pros and tax stores. Next, by introducing consumers to Credit Karma Money, we'll be able to help consumers deposit up to $88 billion of tax refunds and $208 billion of payroll into a new savings or checking account. We'll be able to provide consumers faster access to money by using our money movement platform capabilities. Additionally, we'll be able to provide consumers with financial expertise and advice, helping them make better financial decisions about their money by delivering insights, connecting them to experts. With the ability to create a complete financial profile using Credit Karma's credit and asset data, combined with Intuit's verified income and cash flow data, we'll provide unparalleled insights. As we execute on this vision, we plan to sunset Turbo and migrate the majority of the 22 million registered Turbo users to Credit Karma. To wrap up, I'm excited about the opportunity we have ahead of us, and I'm thrilled to welcome the talented Credit Karma team to Intuit. Now let me hand it over to Michelle.

Thanks, Sasan. I'm looking forward to welcoming the Credit Karma team to Intuit, and we're excited about the unprecedented benefits we can deliver for customers. We plan to operate Credit Karma as a separate segment and disclose revenue and operating income on our fact sheet. Credit Karma operating income will include all direct expenses, unlike our other business segments to which corporate expenses are not fully allocated. For example, expense related to IT and facilities costs will be included in Credit Karma segment margin, whereas these expenses are not included in into its other segment margins. Therefore, Credit Karma segment margins will not be comparable to those of Intuit's other business segments. To help you understand Credit Karma's performance, we plan to disclose annually the number of members on the Credit Karma platform. Each quarter, we'll also help you understand the most significant drivers of revenue growth as Credit Karma expands from its core verticals of credit cards and personal loans into new growth verticals such as insurance, auto loans, home loans and asset accounts like high-yield savings and checking. Moving on to guidance. Our guidance for Intuit and Credit Karma combined for fiscal 2021 includes revenue growth of 15% to 17%, GAAP earnings per share of $5.30 to $5.50, non-GAAP earnings per share of $8.20 to $8.40. This fiscal 2021 guidance includes Credit Karma beginning December 3 and includes expected Credit Karma revenue of $545 million to $580 million and a segment operating income of $15 million to $35 million. We expect Credit Karma to be approximately 200 basis points dilutive to the combined Intuit and Credit Karma non-GAAP operating margins in fiscal 2021. We also expect a reduction in fiscal 2021 Intuit GAAP operating income of $343 million for stock-based compensation and $174 million for amortization of intangibles associated with the acquisition of Credit Karma. Our fiscal 2021 guidance includes approximately 110 basis points of non-GAAP operating margin expansion for Intuit, excluding Credit Karma, as we're starting to see the leverage of our platform, which I shared at Investor Day. Going forward, we expect non-GAAP operating margin expansion to continue from this new level with Credit Karma as part of the Intuit portfolio. For Intuit and Credit Karma combined, we expect GAAP and non-GAAP tax rate of 24% for fiscal 2021. Our guidance for Intuit and Credit Karma combined for Q2 fiscal 2021 includes revenue growth of 14% to 16%, GAAP earnings per share of $0.43 to $0.49 and non-GAAP earnings per share of $1.25 to $1.31. This Q2 fiscal 2021 guidance includes Credit Karma beginning December 3. You can find our full Q2 and fiscal 2021 guidance details in our press release and on our updated fact sheet.

All right. Thanks, Michelle. I'm very excited about the opportunities ahead. Now let's open it up to your questions.

Thank you. [Operator Instructions] Our first question comes from the line of Josh Beck with KBCM.

Congratulations on the deal. I just wanted to ask, just high level, certainly, there's been an impact from COVID. And you had mentioned that little had a dip, but certainly, you saw some really encouraging signs that it was starting to return to pre-COVID levels. So maybe just help us understand how the business has shaped up, and as you build into your guidance, how you try to assess some of these macro factors?

Yes, sure. Good to hear from you, Josh. A couple of things I would say. When COVID hit, the business actually had an ensuing a couple of months, a fairly sharp decline. And the reason is with just unemployment and, really, the country being shut down, a lot of the financial institutions, in essence, pulled back their offline and digital marketing because there was so much uncertainty. It also -- as the visibility became much more clear, it actually began to come back equally as sharply. And so when financial institutions and insurance companies decided to come back, one of the first places that they actually came back was on digital platforms. in many cases, Credit Karma, first, just because of the power of the platform and some of their AI capabilities, including Lightbox. I think what I would say is as we look at the strategic vision that we have and the fit that we have, I would say the business is probably stronger now heading into the future than it was even coming into COVID for a couple of reasons. The majority of the business was really around credit cards and personal loans, probably north of 94%, 95%. And now about 75% of the business, just looking at last month, was credit cards and personal loans. And so there's been a diversification outside of personal loans and credit cards with the new verticals and the new innovation that we've been focused on, which is home and auto insurance, as an example. And also a diversification of the number of partners that have joined the platform that are new partners because of the growth opportunities that they see. So we've taken all of that into account. Of course, none of us are out of COVID yet, but we're actually really excited about the future, learn a lot in terms of the power of the platform, especially as we're on the other side of at least the reaction to COVID and are very excited about the possibilities ahead. And all of that informed our guidance.

Really helpful. And maybe just one follow-up. The introduction of the high-yield savings and checking account and debit card is a newer development to the Credit Karma store. Maybe just help us think long term how important that is in terms of a strategic ambition to get into this realm of maybe neo-banking and how it maybe pairs up with some of these other initiatives that we're seeing launched by both start-ups and maybe more established fintech companies.

Yes, sure. Josh, our vision is really simple. We want one place to have an application where we are leveraging the customers' data with their permission to deliver benefits to them. So we want the customer in one place to be able to leverage the power of their own data to get connected to financial products, which are the loans, the credit cards and the insurance. On the other side, we want to be able to put more money in their pocket. So we're going to give them access to TurboTax so they can do their own taxes and to live expertise. We're going to help them take those refunds and put it in a high-yield savings account. We want to help the 40 million Americans that pay a lot of money to get early access to their paycheck by a couple of days. We want to be able to do that within the gap. And really, we just want to automate money management and money flow. So that is our vision with the platform. And really, the best way to think about Credit Karma is it is a network effect, and it is a data platform. The currency and the power of the platform is the customers' data, and being able to use that data with their permission to put the power of their life in their own hands to be able to connect to ways to save money, get out of debt is really our vision. And this is a hard thing to replicate. They have over 110 million customers, with more than 37 million active monthly, Net Promoter of 72, which is the highest in any industry. And you bring their brand together with our brand and our assets more importantly, we're truly going to be able to do things that will be revolutionary for consumers and ultimately gives us a big leg of monetization and revenue growth as we look ahead.

Our next question comes from the line of Ken Wong with Guggenheim.

Just a couple of quick questions on my end. First, in terms of the Credit Karma acquisition, you guys did have to spin off the free tax business. Just wondering if there's any DOJ restrictions in terms of you guys being able to reintegrate Turbo or one of your tax engines into Credit Karma to offer that to that particular base? And any potential restrictions in terms of kind of the data integration from the Intuit side and the Credit Karma side?

Yes. Great. Thank you, Ken. Good to hear from you. I think the headline news is there are no restrictions. You're going to be seeing us launch TurboTax into the base. This will be a very important learning year. But what's fascinating about their base is more than 60% of their customers do not use TurboTax today. And the majority of those customers are those that actually use a Pro in the store. So it's really a great opportunity for us to deliver personalized TurboTax Live experience to them and help them get their taxes done, save money and then help them with what they should do with their refund within the Credit Karma platform. And there are also no data restrictions as we look ahead. Really, the strategic theory behind why we did this acquisition and what we can do for consumers stands as is, and there are no particular restrictions as we look ahead.

That's fantastic. And Michelle, maybe touching on the margin profile. I realize it's a little apples and oranges versus broader Intuit. But the math is roughly 4% EBIT margins. Any sense of what that looked like when it was a $1 billion business pre-COVID? And how should we think about that -- the trajectory as the business recovers over the coming years?

Ken, nice to hear from you. And yes, when you look at margins for Credit Karma, our guidance does imply a segment margin of 3% to 6%. And as I said earlier, it's not exactly comparable to the other segment margins because Credit Karma is fully burdened with all of the IT and facilities, all those kinds of costs. So it's not applicable to compare to our business units. Over the last 7 months, Credit Karma has seen an impact from the pandemic. And so they've done a really nice job of controlling costs, really trying to take out the cost that they could. And it's just not possible when you think about how quickly the revenue fell off to really react on the cost side as much. But they have been doing a good job there. And as we look forward, we're starting to see their revenue come back in October. For that month, it was close to what they had seen in pre-COVID times. And as the economy continues to recover, we would expect Credit Karma to also do the same. As Sasan said, they've been diversifying their revenue. They've been diversifying partners. Those are both positive aspects for them. And we do want them to continue to invest to accelerate revenue going forward.

And Ken, I just want to add one thing actually for the whole audience to what Michelle just shared. It's really important to think about this as a high-growth business that's coming out of the environment healthier than it went into the environment, and the opportunity that we have to really manage investments in our ecosystem across the company to fuel its growth. And so I think it will be important for you all to continue to focus on margins at the company level, which gives us the ability to really fuel Credit Karma's growth given the vision that I described earlier.

Our next question comes from the line of Keith Weiss with Morgan Stanley.

Congratulations on the transaction. This could really be a great new product line for Intuit on a going-forward basis. Two questions for you. One on kind of like the broader combination and what that means in terms of -- you talked a little bit of this on the data side of the equation. The sign-offs that you got from TurboTax customers to be able to utilize their data on Turbo, does that all just apply as you roll forward into the Credit Karma acquisition? And I guess that just gets us to the point of like whether there's any data restrictions on a go-forward basis. And then maybe digging deeper on to the expense side of the equation, can you give us any indications on kind of what Turbo was doing within Intuit. Should we be thinking about, like, revenues sort of coming out of the consumer side of the equation that you're expecting to get from Turbo? Or expenses coming out? Like, is there any financial impact we should be thinking about from shutting down that part of the business?

Yes. Great. Great to hear from you again, Keith. So the way I would really think about Credit Karma in context of the vision that I described is it's all about revenue synergy. When you think about what we're going to be able to do to get specific, we're going to be, at the end of the TurboTax experience, sending the majority of the customers to benefit from all the Credit Karma Marketplace and Credit Karma Money. We're going to be sending over the majority of the Turbo customers over to Credit Karma because in essence, we're deprecating Turbo. We're going to be launching Credit Karma Money to the millions of payroll customers that we have over time and as I mentioned earlier, launching TurboTax as part of the Credit Karma platform. So all of those are examples of bringing our vision to life, and it's all about revenue synergies. We have a very clear set of priorities across the company, which includes Credit Karma. By the way, we've been working on this, as 2 separate companies, for months. And so when day 1 hit last week, we were ready to move forward with all these areas that I mentioned. So think about it, Keith, as this is all about revenue synergies, not really about cost synergies because this is all about growth. And there are certain areas where we may need to get consent again from customers, but it's minimal in context of what we're trying to pull off because they're already in our ecosystem and in our base. So they won't -- we don't foresee a lot of friction as we look ahead as we launch some of what I just shared a moment ago.

Got it. Got it. And any impacts we should be expecting from sort of phasing out of Turbo?

No, not really. We've -- all that has been informed in our guidance, and not really. This is all about growth looking ahead. And everything has been accounted for.

Our next question comes from the line of Michael Turrin with Wells Fargo.

Let me echo my congratulations also for completing the transaction. Certainly, I can appreciate there are some puts and takes throughout the year in terms of Credit Karma's revenue contribution. But is there anything else you can add on where the scale is today versus maybe where it was to start the year? And how much room for just macro improvement could still lie ahead within their business? And then maybe just a complementary question I'll ask upfront, too. Is there anything else from a seasonal perspective for us to be aware of around the overall shape of their business as we're updating our models here?

Yes. Sure. Great to hear from you, Michael. So let me hit your questions in a couple of ways. One, going back to what I mentioned earlier, Credit Karma is really a network effect. The more consumers use it, the more data they contribute or data we get for them and from them, the more partners like financial institutions and insurance companies want to join. So it's a network effect. And really, the currency is the data. It's the customers' data to empower them as to the benefits that they can get with their data. And if you look at the history of Credit Karma in the last 13 years, they've spent 13 years building out this data platform, all the capabilities, the 8 billion machine learning predictions that they run and model on a daily basis. And as they built this platform out in the last 13 years, the majority, really, of their verticals has been focused on credit cards and personal loans. And even with that context, their penetration is actually quite low. The number of credit cards and personal loans that Credit Karma customers use and the percentage in which they get that on the Credit Karma platform is actually in the -- it's low. We've not divulged what that number is, but it's low. So one is we have a huge opportunity just to grow credit cards and personal loans, especially with data sharing. Because remember, we're bringing 2 companies together and with our customers' permission, we're bringing their data together. And so with all the TurboTax data, the W-2s, the 1099s that, in essence, helps with better underwriting, which means better matches, and more financial institutions will be excited about offering their capabilities on the Credit Karma platform. So bucket #1 is the big opportunity to continue to grow credit cards and personal loans. But then the other bucket is new verticals. As I mentioned earlier, a year ago, 95% of their business was credit card or personal loans. Today, it's 75% because new verticals are now had been launched, which is auto insurance, home insurance, as an example. And so there's an opportunity now based on the data platform and based on the trust that we have with customers to grow new verticals. And then you add on top of that what they just launched, which we're going to be accelerating is on the asset side, helping customers with what they do with their refunds, which -- in high-yield savings accounts, opportunities to help them with early access to wages. And then beyond that, getting into more automating money movement. So I think the macro point you're hearing from me is you've got a network effect company and a data platform that has spent 13 years growing 2 verticals on top of that platform. And now we have an opportunity to launch new verticals, deliver new benefits and penetrate with deeper wallet share, and a platform that has incredible trust in 110 million customers. So that's sort of bucket 1 as to how to think about it. And as I mentioned earlier, although revenues are coming back to pre-COVID levels, the platform is actually healthier, again, based on all the diversification that I mentioned as we look into the years ahead. Specifically around your question on seasonality, they don't have a huge seasonality. There's some in terms of the spend curve. But it's not a TurboTax seasonality so I wouldn't expect significant ups and downs in terms of what you will see on a quarterly basis.

Our next question comes from the line of Sterling Auty with JPMorgan.

Sasan, what's been the early reaction from the Credit Karma partners to into Intuit's ownership of the asset?

Yes. It's been actually quite positive when we announced this in February. As you know, we have relationships with 20,000 financial institutions. And some of the same ones that they use, we also are partners with them. Generally, it's been very positive because they see this as an opportunity for us to combine our data on the platform for better underwriting, and financial institutions ultimately see that as an opportunity for growth for them, including insurance companies. And so generally speaking, it's been positive. And when you think about some of the savings accounts that we've -- that I just talked about that we've launched, that's partnering with financial institutions. So our goal is ultimately to be agnostic. This is about making sure that we match consumers with products that are right for them, and financial institutions are a very important part of all of this. And again, going back to the core of your question, generally, it's been quite positive. And it's not from the time of close, but from the time that we announced in February.

That makes sense. And then one follow-up. I know you mentioned that this is absolutely not about cost savings. But just curious what you're going to do with the 2 underlying tech infrastructures. Intuit went through the long process of moving to the public cloud, and you're really seeing the benefits. What does that core tech infrastructure look like at Credit Karma? And what's going to be the road map?

Yes. Great question. And some of the audience that may not be familiar, we're on AWS, and Credit Karma is on Google Cloud. At this point, we're not planning on touching that. All of our focus is about innovation and customer growth, and the synergy cost opportunities are immaterial relative to the growth opportunity ahead. So our plan is to let Credit Karma continue to be on Google Cloud, and all of our focus is on accelerating innovation.

Our next question comes from the line of Alex Zukin with RBC.

This is Robert Simmons on for Alex. So first, I just wanted to clarify, is 100% of Credit Karma revenue transactional? And then kind of, really, are there any kind of issues that we should be aware of?

Robert, just a clarifying question. What do you mean by is it transactional?

There's no subscription. There's no, like, fee charged to partners independent of kind of the lead gen, you think of that?

No, no. It's not subscription. It is exactly as you mentioned. I would remind us though that 90% of revenue comes from existing customers. And it's about as reoccurring as TurboTax is because customers on average use 1.2 financial products per year and so a very highly, highly reoccurring business. But it is not a subscription. Very similar to TurboTax, which is highly reoccurring and high engagement.

Got it. Great. And then how much of the improvement from the 95% mix to the 75% mix has come from the growth of the other areas? How much has become -- has become because of credit cards and personal loans being impacted by the pandemic?

Yes. A big part of it. They had launched -- they were at the beginning of launching and have launched the insurance offerings in February. And so a big part of it is when you just look at the absolute comparison of those new verticals compared to last year. Of course, it's on a smaller base, but they're up significantly. So I would say the majority of it is just simply new innovations. And of course, a part of it is when you have primarily credit cards down, you're going to have the new verticals be become that bigger part of the overall portfolio. But a lot of it is just in absolute dollars. There's been significant growth, and we're just -- they're just getting started. I mean these were just recently launched. So we're actually quite bullish about the future. And in fact, one of the things that Ken would tell you, the founder and CEO, is they've gotten to a certain level of scale much faster than credit cards and personal loans ever did at a much faster rate. And the primary reason is because the data platform and the network effect has been established, and now it's about new verticals.

Our next question comes from the line of Brent Thill with Jefferies.

Sasan, you outlined a number of things you're excited by. If you had to narrow it down to one near-term opportunity that you're most excited by and maybe you could frame it on the other side in the long term, what's kind of the hidden gem 3 years out that you could see that could happen from this?

Yes, absolutely, Brent. A couple of things, I would say, and since you asked to be narrow, I'll just mention 2 things. One is data. Because of all of the -- we now together have 3,000 tax and finance attributes per customer, the millions of W-2s, 1099s that we have, all the data that we have from all the transactional money, which is TurboTax and payroll, the data. And we've been working separate -- as 2 separate companies, but we've been working on building this data bridge so we could, day 1, start with customers' permission passing data so that there's a more 360 complete customer data, which means better matches, better underwriting. So one, I'm very excited about putting the power of our consumers' data in their pockets, which gives them the ability to match to financial products that are right for them. And that will accelerate the verticals around credit cards, personal loans, insurance, home insurance, auto insurance. So that's one thing we're very excited about. And you can't replicate a data platform, right? It's hard. The second is assets. And if you think about Credit Karma, they are a network effect, they are a data platform and their primary 13-year life has been creating a marketplace, which is where their network effect comes into play. Now we're aggressively going into the other side, which is assets. And so this is all about the money, helping you with high-yield savings accounts, incentivizing you to put your paycheck on Credit Karma money, so we can give you early access to it and then doing many things beyond that. We are very excited about that. And I think the third thing, I would say -- I know I only said 2, is launching TurboTax Live as part of the platform. More than 60% of the customers are not TurboTax customers. The majority of those customers are ones that use an assisted method. And because they're Credit Karma customers, we can deliver personalized offerings that are right for them because we see what they do and where they do their taxes. So I think those are 3 big opportunities to deliver real benefit to customers.

Our next question comes from the line of Siti Panigrahi with Mizuho.

Sasan, so Credit Karma experienced a huge credit tightening environment after March. And earlier, you talked about seeing the bottom around June and then back to pre-COVID level in October. I'm wondering what are the trends there -- what are the trends or observation you saw from financial institution or banks adopting this kind of digital platform? Or any trends you saw in terms of fees, right, cost per action fees, any changes there you saw during this time?

Yes, sure. Good be hear from you, Siti. I would say that the Uber point I would make is when the country was shut down and unemployment just went through the roof, that creates an environment where financial institutions actually really become paralyzed for all the right reasons. And they're not able to make decisions with their models because unemployment is rapidly increasing. And it's hard to tell who has a job, who doesn't have a job, can they pay the loans back. So I would say that was the primary driver of why financial institutions in general just pulled back on their marketing. Now the biggest growth driver from financial institutions is to actually acquire new customers. And so one of the reasons I mentioned the business is healthier as we look into the next several years coming out of this is financial institutions were actually more enticed to join the Lightbox platform that Credit Karma has because they, in essence, can, in a proprietary way, put their underwriting models in an encrypted environment to get a far better match to customers that they want and for Credit Karma to make a far better match to customers that match their offerings without any type of a hard credit pull. And so this environment has made the access to a digital platform far more important as we look ahead. And some new partners have actually joined onto the platform because they see this platform as an opportunity because it's a network effect and a data platform to be able to grow their business. And it's not just financial institutions. This is where some of the growth is coming from, from helping customers with auto insurance, home insurance. And so those are the 2 big things that we have seen, what we've learned and what financial institutions have learned and why we feel like we're far better positioned looking ahead as we lead this environment over time and when we get past COVID.

And a follow-up to your guidance for the second half. When I look at -- I think your S-4, you talked about 6 months for -- January 2020, it was almost like $520 million revenue for Credit Karma. And now your guidance for second half Q3, Q4 implies $435 million to $460 million revenue. I'm wondering how much conservatism is baked into this guidance? Or what are the factors you have considered in your guidance considering that now, maybe we are again -- second wave is coming and any kind of uncertainty, that would be helpful.

Sure. Sure. So I think to your question, the guidance Michelle shared is -- we, starting December 3 and so the end of our fiscal year, the guidance is $545 million to $580 million. And we've taken a couple of things into effect. One is we think financial institutions, by the way, are far more stable going into the second and third wave of COVID than they were coming into the first because the first wave was a complete surprise and their models weren't exactly sure how to behave in that kind of an environment. We're actually seeing financial institutions, even in the last several weeks with the second wave, accelerate because they know how to operate in this environment and they have a lot of confidence in the Credit Karma platform. So one, we took that into account. But I think the other is, it's important to be prudent. It's important to ensure that we experience the vaccine coming, people getting back to the job market while we continue to innovate in these new verticals. And we've taken all of that into account based on the guidance that we provided. And again, I would tell you that we are more excited about the [ today's call ] than we were in February. In February, we were very excited because of the new verticals that we are launching and sort of what's ahead in terms of revenue growth possibilities. Hopefully, that answers your question, Siti.

Our next question comes from the line of Kirk Materne with Evercore ISI.

I'll echo the congrats on getting the deal across the finish line. Sasan, you mentioned this earlier about sort of repeat customers. But I was just kind of curious, can you talk a little bit more of just about visibility into the business going forward. I expect it's somewhat of a mix between your partners putting advertising dollars up against conversion rate. So I guess how much have you been able to sort of play around the modeling on that? And kind of what's your conviction on just understanding the visibility of this business relative to TurboTax, which you all have obviously owned for -- know extremely well. And there's also a point in time where people have to transact on TurboTax where it might be a little bit different for Credit Karma.

Sure. Sure. Absolutely, Kirk. Good to hear from you. First of all, I would tell you that our conviction around the strategy and what we can do together is higher now than even in February when we announced. And the reason is we work together quite a bit before we even announced to bring the companies together in February, and we now have 9 months under our belt as separate companies, but to really understand what's possible and what we can do together. So the conviction is high in the long term. And the reason the conviction is high is we are not diversifying. You have a marketplace where we had primarily Credit Karma stand-alone built a business from credit cards and personal loans, and now we're accelerating moving into new verticals with a marketplace that's established with 110 million customers with very, very high Net Promoter. But now we are accelerating the asset side, which actually provides, I would say, more visibility, and gives us more conviction in terms of the long-term growth and the predictability of this business. I would say that's one big element. The other element is I think it's important to recognize that when the pandemic hit, the country shut down and financial institutions, for all the right reasons, didn't actually know how to react. So they have to shut down all of their spend to understand what -- how the market was going to play out. And now we've seen that sharp of a comeback because financial institutions are starting to come back onto the platform, and they're actually seeing the return on their investment. And the reason is on the Credit Karma platform, 90% of the revenues are from existing customers, we have visibility into $5.5 trillion of debt. So we can see where customers are sending their money and we can offer them personalized experiences and match them to the right financial products, which gets to the last element of your question. The demand is actually higher in an environment like this by consumers. It's not lower. They're actually looking for ways to get access to personal loans. They're looking for ways to reduce their auto insurance on their car and home. They're looking for additional credit cards. I think it's the other side, which is are there products that will match their needs, which is where this Lightbox digital platform on Credit Karma comes into play and why we have conviction as we look ahead.

Our next question comes from the line of Arvind Ramnani with Piper Sandler.

Yes. This is Arvind Ramnani. Congrats in getting the deal done. I have a couple of questions. You've talked about the focused use of AI across your product suite and certainly, with the abundance data that you get with Credit Karma, can you just talk a little bit more about how you're planning to use AI to leverage what you're getting from Credit Karma?

Sure. I want to state that one thing that's really important here because we are -- we have talked a lot about our excitement around data. We have, along with Credit Karma, by the way, very strict and disciplined principles around the use of data, the security and the privacy of the data, and it's our customers' data. And so I just want to state that everything that we do is via clear transparency with customers' permission because our goal here is to put the power of the data in the hands of consumers so they can achieve financial freedom. With that said, this is one of the things that's very hard to replicate with Credit Karma. They run, on average, 8 billion machine learning predictions on a daily basis to make matches. And so a huge part of the power of their platform beyond the customer data is the machine learning capabilities that they have built and the behavior on longitudinal data. They have over 13 years to make a match, and that is very hard to make on any other platform. We know that firsthand because we tried to build out Turbo for the last 3 years. I think we turbocharge their capabilities. As you know, we have made significant investments in AI, both machine learning, knowledge engineering and natural language processing. It's what powers our live platform, TurboTax and QuickBooks. It's what powers payments, payroll, QuickBooks Capital, I could go on and on. And in essence, our CTO, Marianna, has been working with -- very closely the last many months with Ryan, Credit Karma CTO, to, in essence, figure out how to use a lot of our capabilities so over time we can apply our AI capabilities and allow Credit Karma to leverage it. And so we're very excited about the possibilities because this is really -- it's a network effect. It's a data platform, and it's all about applying AI to make perfect matches for consumers. And so we're sort of bullish in this area as we look ahead.

Great. Great. And then I had a question and this is more on your fintech platform. Certainly, there are many different ways you can go just given kind of the assets that you have under the Intuit umbrella. Are there -- are you kind of able to kind of dimension what the nearer-term opportunities are? And where is Intuit become over time? Does it become essentially like there's itself, like, customers had banking needs. Where is Intuit kind of start and stop, because it really feels that you can go in many different directions.

Yes. I'll share very quickly our vision and some of the launches that are coming. But the reality is we will let the customer problems that we want to solve drive our innovation in the future. But really, we are focused on building on this incredible network effects that Credit Karma has created. And we want to create a super app. And the super app gives a consumer the ability to find financial products that are right for them, be able to save money, get already access to their wages, over time, automate money movement. If they need help, an expert can help them with their -- with just their -- running their financial life and ultimately be able to do their taxes in one place in this app. And the whole essence of a network effect means that partners are essential partners to us. So financial institutions, insurance companies, just as an example, are going to be very important partners for us as we look ahead because together, we're going to be able to do things for consumers that we could never imagine possible. So we're going to let the customer problems that we've identified in our vision drive the innovation that we deliver in the future, but I just -- I wouldn't put any limits on us. This is all about what we can do together for consumers.

Great. And just last one, if I could? Certainly, it seems like the management team is fired up and certainly, a lot of excitement. Can you just talk a little bit more about the mood within both Intuit and Credit Karma, are sort of the folks -- is it more within the organization excited with the Credit Karma? Or is there some level of natural anxiety that comes with these mergers? And that's my last question.

Yes, for sure, Arvind. I would tell you there is absolute shared excitement. There was so much excitement that we could bottle up and show all of you the incredible excitement in February when we announced -- when we had our 10,000 employees together. I brought Ken in to talk to all of our employees. I went to talk to Credit Karma employees. The excitement was just you could feel it in the air. You could cut it with a knife. And then the pandemic hit. And we had to work through this deal and work through, of course, all the things we need to do to be ready for day 1. And it just so happened that we had a, what we call, a state of the company, where we bring all of our employees together to talk about how we're doing and talk about our innovation last Thursday. And Credit Karma joined that state of the company. It was the day of close. And both Ken and I talked about what we're going to do together. And I would tell you that our Slack channels blew up. People are so excited about what we can do together and so eager as to what we can do together. So our biggest focus, frankly, is to stay focused because there are so many things that we can do together, but we need to be very intentional what we do in the next 30 days, 60 days in the next year. And that's -- we do not lack excitement. So it's all about funneling that excitement to execute lights out for our customers.

Our next question comes from the line of Kartik Mehta with Northcoast Research.

Sasan, I wanted to understand maybe a statement you made, make sure I understood it. You talked a little bit about the percentage of Credit Karma customers that are not TurboTax customers. And I'm wondering if you could just talk about the overlap that you have between Credit Karma currently and TurboTax currently, just to get an idea of the potential greenfield you have just for the tax business.

Yes. Kartik, great to hear from you. And it's what I mentioned earlier, based on just preliminary data that we've looked at after close, it looks like 60% to 65% of customers -- Credit Karma customers, 110 million, they do not use TurboTax. And the majority of those customers are customers that today get assistance to their taxes done. So we feel like there's a -- if you think about the fact that there's 155 million filers, there's 110 million Credit Karma customers and about 60% don't use TurboTax, the greenfield opportunity is pretty significant.

And then just will you have from day 1 the entire TurboTax lineup available to all Credit Karma customers? Or is there a reason you might have to wait to offer some of the SKUs next year?

No. This is really for us a very, very important learning season. So we will, this season, be able to launched TurboTax as part of the Credit Karma platform. We've got work ahead of us to do that, right, because we've just closed the deal on Thursday. But our plan is to launch TurboTax this season, get a lot of learning. Because what's important for us is to really deliver a personalized experience for these Credit Karma customers, and so we're going to be very intentional about running lots of tests and experiments and then, of course, a full launch next season. But you can expect to see TurboTax within Credit Karma this season. It's just a matter of time.

Our next question comes from the line of Daniel Jester with Citi.

Just 2 quick ones. So first on Credit Karma. You've talked about some of the ways they're expanding mortgages, insurance. Can you just talk about sort of at a high level how the economics of these new products could compare to a credit card or a personal loan? Are they similar? Are they significantly different? And the second question is you talked about the sort of the end of life for Turbo, but I'm wondering kind of strategically how does Mint fit into all of this?

Yes. Sure. Daniel, good to hear from you. Let me hit on the economics do vary. And at this point, we've not shared publicly what the economics are. But really, our -- frankly, our biggest focus is to give the ability for consumers to connect to financial products they need to run their life. Because they're more products that they use, credit cards, personal loans, the more money we can save them on auto insurance on home insurance, the more ultimately this becomes the platform where they look for other benefits. So the economics may vary depending on each vertical. But our pursuit of verticals is based on customer benefit and the -- ultimately, creating the one place where they can have access to what they need versus just the economics. And ultimately, that really informs the growth opportunity that we have with Credit Karma, which we're excited about. Specifically for Mint is a wonderful platform and product that allows customers to sort of track their finances where Credit Karma, based on what I've described and what we're going to do, does a lot more than that. And so right now, we are staying very focused on our innovation agenda and our growth agenda with Credit Karma. And we don't want to do anything other than to fuel them -- fuel their success. We will run some test and learn the role that Mint could play in Credit Karma, and this is just an illustrative example. You could 1 day see potentially Mint as part of the Credit Karma platform if you choose to want to track your finances, as an example. Those are things that we'll be testing into and learning over time. Right now, the focus is deprecating Turbo, sending the customers to Credit Karma and making sure that we focus on the strategic imperatives that we have. And then over time, we'll see how Mint plays an important role as we look ahead. But Mint will have an important role. The question will become the how.

Our last question comes from the line of Michael Millman with Millman Research.

So a follow-up on some things that you've indicated, particularly that meant many factory and other customers that turnover their checks directly to you. Does that include kind of the 100 million taxpayers who were putting out $2,500 a year on average with no return? Are you working on a way to get that working for them? And I have another question.

Sure, Michael. Great to hear from you. You want to ask your other question as well, and then I'll just hit on all of them together?

Okay. The other question is something like you and your predecessors have talked about forever, and that's disruption. And I get the feeling that there is a lot of that talk about the 60% do-it-yourself, but also the massive amount that are assisted and not getting a lot of these benefits and are paying a lot more. Where do you stand on disrupting them as well?

Yes. Thank you for both your questions, Michael. Let me start with the last one, and that is our strategic imperative here, which we declared years ago, was to be able to solve the very important problem of taxes, but to move beyond taxes and to truly have a platform where a consumer can achieve financial freedom on our platform, including doing their taxes. And I think with Credit Karma, specifically to your question around taxes, it really does give us the opportunity to have visibility into those that today go to a store or a pro to get their taxes done and deliver a very personalized live experience for them so they can get the -- their taxes done in the comfort of their home or where they work at a -- with ease of an expert being by their side at a very, very good price to put more money in their pocket, which is really what we are after. And so this does give us the ability to truly disrupt. But I think beyond that to then offering them things that they can do with that tax refund, which I mentioned earlier. And that's really what we're excited about is to truly create an app that helps you with saving money and getting out of debt. And I think to your first question, I think may have hit on a portion of it as I answered this prior question, which is we have a lot of visibility to the 110 million members. We see over $5.5 trillion of debt that they have. And so we can really understand and target how they can save money, whether it's car insurance, whether it's their car loans, to ensure that combining 5 credit cards into 1 and taking out a personal loan. So based on everything that we see, we can really offer and deliver personalized experiences, all in service of helping our customers get out of debt and save money.

So to be specific, does that include trying to get them away from putting that $2,500 into a loan fund with no return?

Yes, it does. We would certainly offer, for instance, if your tax refund is $2,500, on the slot, we could offer you high-yield savings accounts. We could offer you ways to think about investing that money versus, I think, to your question, putting it into an account that's a noninterest-bearing account. The good news is we will provide choice. And ultimately, we want the power of choice in our consumers' hands with the power of their data, and those are the things that we'll be experimenting with.

And how aggressive are you approaching this?

Well, we will be -- we are excited on the behalf of our consumers to be very aggressive because they need us. And so we will -- you can count on us to be very, very aggressive. We can't wait to do all these good things for our consumers. Thank you so much. And I want to thank everyone for joining us today. Thank you for your wonderful questions. I wish everyone a very safe holiday season, be well, and we will look forward to talking to you over the course of the quarter and at our next earnings. Thank you, everybody.

Ladies and gentlemen, thank you for your participation. This concludes today's conference call. You may now disconnect.