Intuit Inc. (INTU) Earnings Call Transcript & Summary

Thank you, everybody, for your attention here. Welcome to the Goldman Sachs Communacopia and Technology Conference. I've been saying this quite a few times, but for benefit of Sasan, we merged Communacopia and Technology conferences together to create what I think is considered to be the biggest conference Goldman Sachs has hosted for investors. So it's not possible unless we have great content from industry leaders such as Sasan. So thank you for coming to our conference. Really appreciate it. Great to see you. I think it's the first time I'm seeing you in person after...

It is. It's been a while.

Yes, January 2020, right?

Yes, yes.

We did a field trip and amazing, amazing recollection of that. Sasan Goodarzi needs no introduction, CEO. I think one of the iconic CEOs of our times of an iconic company. I still will never forget the first time we met; I think you talked to us about TurboTax Live. That was years and years back, right?

Yes.

And then when you became CEO, you had this five-pronged bet, which I thought was really unique. Intuit was run by very fairly iconic CEO and then you come along and you -- sorry, Brad, if you're listening, raised the game. How is that even possible? So tell us what your five-pronged strategy is? And how does that leave you with your assessment of growth opportunities for Intuit going forward.

Sure. Well, first of all, it's great to see you and great to be in person. I just got here, and it seems like you all have put together an incredible conference, looking forward to the day. I think to answer your question, when you look back at what we declared, it's really to help us shift from being a tax and accounting platform company to a platform company that really focuses on playing a meaningful role in your everyday life as a consumer and a small business to really power your prosperity. So that's really the big shift when you look at our refreshed strategy, the 5 Big Bets that we've declared as to shift us to become a much more meaningful role in your everyday life. And the result of that has been, prior to the Big Bets, we were growing low double digits and this past year, we delivered over 20% growth organically, if you exclude Mailchimp and the acquisition that we made. And I think our best years are ahead of us because we've got about a $300 billion TAM. Our penetration is like 4%, the majority of our TAM is what we call nonconsumption, which means people aren't using another platform. We don't need to get them to switch to a new platform. It's more about they're managing their finances using shoebox and pencil, paper, Excel, Google Sheets. So we're excited about the opportunity ahead.

And I know that you've talked about your 5 Big Bets. Maybe just for the benefit of audience that may not be familiar with the 5 bets, very briefly recap those 5 bets. Those are very unique to your vision, right?

Yes. Sure. Of course, of course. So in context of the shift that I just described, the 5 Big Bets are the following. The first one is really about revolutionizing speed to benefit for our customers. It's all a data and tech bet. It's about ensuring that our customers get maximum money, never having to lift a finger and achieving what they're trying to achieve as a small business and as a consumer with complete confidence. The second big bet is around connecting people to experts. We live in a world where our customers deal with money, and they look for confidence, and they do that through engaging with experts. And really, we are digitizing all of services so we can give access to our consumers and how our small businesses on our platform, all digitally, anywhere, anytime, anyplace. The third big bet is about unlocking smart money decisions. This is really about helping those that we serve make ends meet, and it's about helping them autonomously make very smart decisions where we deliver insights, put it in their hands so they can make the best decision possible. And that's where we become a much more meaningful player in your life every day because we're helping you with your money and giving you insights versus giving you work to do. Our fourth big bet is about being the center of small business growth. The thing that matters most to small businesses is they need to grow their customers and manage their cash flow. It's why they thrive and it's also why they go out of business. And really, our goal is to be the source of truth to have one platform where they can, in fact, grow their business and run their business. And then the last 5 big -- the last of the 5 Big Bets is about going upmarket and disrupting mid-market, small businesses, and that's really about serving mid-market customers with a platform that's easy to use, customizable for them but at fraction of the price that they would have to pay elsewhere. So those are the 5 Big Bets that we declared about 3.5 years ago. We just refreshed it in December to kind of create the next curve of growth for the company. And we're excited about what's possible.

That's great. That's great. One of them was the bet on small businesses. And Microsoft got us a little concerned after their second quarter results that they were seeing some weakness in the SMB space, and we all got concerned. And you just blast it right through the gates with terrific July quarter SMB numbers. Why is Intuit doing so well? And I don't mean to ask it skeptically because I've lived through the 2008, 2009 financial crisis, when I did cover Intuit. And it was one of the very few companies that actually grew top line, except one quarter, but it taught me that there's something special about the way the products are adopted, how sticky they are and winning new business. Where do we stand today? Clearly, your numbers were phenomenal coming out of the July quarter. Why do you believe that Intuit is so resilient in that SMB ecosystem that The Street generally considers to be very fragile because MongoDB has talked about some weakness in SMB, Microsoft did? I think Snowflake alluded to that as well. Why are you guys doing so much better?

Sure. Well, Kash, it really starts with what matters to our customers. We are maniacally focused on 2 things: one, helping our customers grow their customers; and two, helping them manage their cash flow. It is what drives and fuels their success. And we now have a platform where in one place, small businesses can do that. They can manage their customers, they can market to get new customers with CRM tools, and they can manage their better cash flow; all their invoicing, payments, payroll, all in one place. And the thing I always talk to folks about is our platform is mission-critical to a small business. We're not a line item. When times get tough, small businesses don't go through, their budget line and say, "Oh, can I reduce what I pay Intuit." We are the platform that they use to grow their business. So we're mission-critical to what they do. And I would say last but not least is we're subscription-based, 80% of our entire business is subscription-based. So we're very, very predictable. And in fact, our acquisition of Mailchimp added to the volume of subscription. So those are the 3 things. We know what matters to consumers, and small businesses in this case. We're mission-critical to them. We're not a line item in their budget. And we actually, in tough times, can help them achieve their success.

Yes. And so it looks like the TAM is -- also to your earlier point, you said that the TAM is about $300 billion or so. You can grow during a tough time only if the market option is so big because part of the reasons you talked about as to why you said resilient is the value proposition of the product. You run your cash flows and you process your orders. It's the lifeblood of a small business, but you're a growth company, adding new subs at a pretty frantic rate, right? And how is it that these new customers that have not made a decision of going with Intuit, knowing all too well, they could be out of business, right? Is it because they want -- don't want to go out of business that their chances are better going with Intuit Is that what's driving that margin or customer to really say, you know what, I want to go with Intuit?

Yes, I love your question. And let me just hit on a couple of things. One, out of the $300 billion in TAM, about $200 billion is the small business market. So a very large market. And the majority of these customers are using -- believe it or not, they're using a shoebox, Excel, Google Sheets to manage their business and multiple different apps. And they have a very hard time managing their cash flow. And one of the secular shifts that we declared prior to COVID was that there's going to be an acceleration to a virtual environment. There's going to be an acceleration to online and omnichannel, and COVID simply accelerated that 5 to 10 years, and we're still seeing that for small businesses. And to specifically answer your question, the reason more and more small businesses are, even if they're using our platform, adopting other services or if they're not using our platform, adopting the platform is, it's simple things. Like if I invoice you, typically, it will take you more than 60 days plus to pay me. I can now get paid instantly. That matters. I can now use the QuickBooks platform with Mailchimp to actually know who to market to, because we're helping the customer with insights because we have all the data insights to help them with market to Kash, don't market to Sasan. He has all your services, but Kash and 10 others like him will buy your services. So we are having a tangible impact on getting paid faster to get access to loans instantly on our platform because we know the 360 view of your business, and we can say, Kash, you have -- we can borrow $10,000 to buy more inventory, click here, and in 15 minutes, we'll have the money into your account. So we have a real impact in your business.

That was your program, you talked about right after you became CEO, I remember that. And how is that program going that being able to lend money and prop up the financials, so they come back, and they never forget the good deed that you did for them and then they come back and...

It is. We're making meaningful progress. And it's not just about a loan, it's actually for us about how we manage cash flow and money for a small business. So the capabilities we now have are things like we can help you with instant deposit of your invoice. If I invoice you, and I know you're going to pay me 60 days later, we now have a program which is getting paid upfront. I can get paid instantly. If I invoiced you $30,000, I can get paid instantly for that $30,000. And we do that because of our -- all of our machine-learning capabilities. I know the -- we know the creditworthiness of all of our customers. We know their creditworthiness, and we can, in essence, make instant decisions based on all of our machine learning capabilities. So it is working well in context of the holistic view that we have around our money movement innovation and our money portfolio, which is instant deposit, getting paid upfront, access to a loan. And that's really what's resulted in, when you look at our overall payments volume today, we're growing over 30%. 5, 6 years ago, we were growing 10% to 11%. And so at a much bigger scale, we've tripled our growth because of all the innovation and it's only because it matters to small businesses.

I'm going to get to payments in a few seconds here, but that's a whole new topic of super excitement. So on the topic of the economy. We all look at leading indicators. What kind of leading indicators are you seeing with transaction volume or activity levels with Credit Karma, QuickBooks? And how does this compare to the last few months before and even relative to the pre-pandemic levels? Any patterns that you see that are interesting?

I'll start with the kind of indicators that we see. We see consumer and small business spending. So we see that through the volume of how much consumers spend with small businesses. We also see it through the volume of how much small businesses spend with one another. We see indicators around employees that small businesses hire. But beyond employees, we actually see hours paid. So we can see if the hours are moving up or down. We see things around account balances, particularly with our small businesses. So we can see what was in their account today, what was it 4 or 5 years ago. And then things like delinquencies as in consumer delinquencies.

Do you publish this data, or you just qualitatively...

Here and there, we'll talk about it anonymously. We actually get pushed a lot because at the end of the day, based on the scale of our customers and platform, we are the indicator for small business success and -- when you do a better job to actually use that to communicate.

Then why once upon a time, Kim might remember, small business activity index...

Yes, yes, I do. I do. It's something -- thank you for the question. It's something that we need to really think about because essentially...

We'll do an exclusive with Goldman where our economists will have the first tips.

Yes, yes. We'll have a talk about that offline.

I was just -- I was being funny.

No, no, I know. It's good to be funny in this day and age. But to finish answering the question, those are all the indicators that we look at. And Kash, I would say, generally, the indicators, consumer spending is still strong. Why? because unemployment is low. And higher energy prices, although fuel has come down. It still takes a big chunk out of the consumer spend, food prices, rent prices. These are very real. But when you look at just the health of the account balances, their spending habits, it's strong. The areas that, of course, this current environment is impacting, higher interest rates means it's tougher to get a mortgage or refinance. Delinquency rates have ticked up a little bit, but they're still at lowest levels in a very, very long time. So generally, things are still strong relative to even pre-pandemic levels.

It's good to see and it's encouraging to hear that, right? As everybody is worried about, do we have another housing crisis? I mean how there have been problems in the housing industry. And that's a question that I posed off our Chief Economist yesterday. Does he see another crisis similar to the one that we have...

I'm not an economist. So your economist is better to predict that, but it's going to impact housing, right? Interest rates are much higher and it's going to take a big chunk out of your monthly payments.

Yes. And two, when you talked about forward-looking guidance, which you already provided, I suppose you took into account potential for lower activity levels in the Credit Karma ecosystem. Can you talk to us about how you might have bulletproofed your business from a forward-looking perspective, given what you know with the leading indicators in housing, automotive financing, whatnot, which could be a little tougher?

Yes. I would say in a couple of headlines. One is the way we run the company, this is, as you well know, a 40-year young company. We've been through multiple platform shifts. We've been through multiple tough times. And I would say we have a very strong system in which we run the company, where the indicators we look at, how we manage for the long and lean into the long, but also manage the short. And the guidance that we just provided, I think it was a few weeks back, it really took into account the current trends that we see, which I just shared for the most part, other than where you're seeing impact on interest rates on mortgage and personal loans and even car insurance providers, you're seeing an impact there because car prices are higher, insurance policymakers have to get their policies approved by the state, and so they're slow in the policies that they're declaring. So there is impact in those areas. But most of what we talked about in guidance really took into account the current trend.

That's great. Talking about payments, which is something...

I love talking about payments.

Exactly. You want to get paid. Everybody wants to get paid. I remember back in 2014 or '15, I would ask on your follow-up calls, Brad, what is the attach rate of payments? You'd say "Ah, it's 4%, 5%." What's your goal? "Everybody got to get a credit card. That's my goal. I want to be 50% rate." So it's been a great journey for you guys. As you said, payments has accelerated in growth. It feels like you could do even better as it has gotten, you could do even better. What are your most audacious goals for the payment business? If you were to look at it 5, 6 years from now, let's come back to the Goldman Sachs 2027 Conference, how do you think we were going to be describing payments? How important is it for you?

Well, first of all, it's critically important because it's the lifeline of our customers. Second, I would say the way we think about payments from a customer lens is managing money in and money out. So it's much broader than just payments for us. And to double-click on that, we have $2 trillion of invoices that we manage just on our QuickBooks platform. And when you think about that context and some of the stats that I shared earlier, our -- we've invested heavily in the last 6-plus years on just the infrastructure so that we can accelerate our money portfolio innovation. And that's resulted in going from 10%, 11% payments growth, charge volume-wise to well over 30%. And our penetration is still low of that $2 trillion because we keep growing that number. And so we are very excited about our progress, but we are so constructively dissatisfied with what's possible because this has a meaningful impact to our customers. And most of that $2 trillion is either business-to-business in our network or business-to-consumer, and this has a meaningful impact to cash flow. And so there is no destination to our innovation. In fact, I just had a review with the team on what we're doing around our money innovation, and I would just say that our brightest sort of years are ahead of us, and it's exactly what I said to you 3 to 4 years ago, and our growth has accelerated, and I just still think there's so much more we can do for our customers.

And I'm curious, what did you do to the infrastructure, the platform to make it support this kind of scale? Because I remember a point in time, we had 5 different platforms for payments; we consolidated down to 2. And now we're down to 1 bigger platform. What work have your engineers done to make this worthy of a potentially multibillion-dollar business?

I would just for simplicity, say, call out 3 things. One is exactly where your question started, which is we used to have multiple different money movement platforms, which means your data is siloed, your infrastructure is siloed, your investments are silo, you're not really taking advantage of any scale. So what we did 6-plus years ago is we've created one money organization and heavily invested in creating one platform. And that really has a meaningful impact because then your data is in one place. So that's one element. The second is we heavily invested in machine learning capabilities. A lot of the innovation I talked about earlier, instant deposit, get paid upfront, Kash your $10,000 is available for you, those -- all of those things is based on machine learning capabilities where we leverage over 26 billion data sources, and our machines are crunching these data sources to make the best decision for small businesses. That takes a lot of investment. So that's the second area of investment. The third, and they're all, of course, interconnected is risk and fraud capabilities. And so those are the investments at the highest level that we've made from an infrastructure perspective to actually enable our innovation. And so when you look ahead, we're really looking at digitizing all of B2B on our platform, which we've not focused on before. Well, now we can. B2B is, we have a lot of businesses in our network that send invoices that need to get paid, but it's all manual. It's all checks. We can digitize all of that. Things around just accounts payable, bill pay. And so those are the things that excite us about the future.

Yes. And I noticed from just my personal experience dealing with plumbers, electricians, maybe a couple of years back, they would send me a PDF invoice and please pay. They were like, "Who should I call? Do you have an online thing?" And we're like, "No, you can send us a check." Really, during the pandemic, you want me to write a check and mail it. But now increasingly, what I'm finding is, it has the QuickBooks logo, press here to pay. Boom, it's done. It's got my bank checking account formation. They get paid quickly. And I don't have to be reminded with another PDF saying, "Dude! where's your payment?"

And there's $2 trillion of that happening on our platform. And the majority of it is still what you've experienced, which is check. So that's where our opportunity is.

Yes. What percentage do you think you could process on your payment platform of this $2 trillion? All of that to be...

I know you mentioned some of the ambitious goal that Brad talked about years ago. And I would tell you, Brad is right. I mean, there's no -- if you just think about it at the level of a small business and a consumer, there's no reason you should be writing a check. There's no because it just -- it takes you a lot longer to get paid. And so our goal truly is that every single person should be digitally getting payments and being able to pay digitally everybody. Nobody should be writing a check. And so that's our mindset as we always get -- try to get to root cause of how do we keep penetrating. And a lot of our innovation, making it easy, discoverable, instant deposits, get paid upfront, that's what's enticing customers to recognize that cash flow. And now the last thing I'll say is we now have a module within QuickBooks, where we show your cash flow -- we predict your cash flow, something we didn't have before. And so if I predict your cash flow in QuickBooks, where you can see, here's my money coming in, here's my money going out. And you can see, if I don't figure out how to get paid sooner, I'm going to run out of cash, that entices you to start digitizing everything that you do. Inclusive of payroll by the way. It's not just -- that's why we look at -- we don't look at payments, we look at money in and money out and payroll is an element of it.

Got it. To what extent would you consider, on the topic of payments, Apple Pay, PayPal, how competitive are they within your ecosystem?

We actually, as you know -- well, it's a great question. Our focus is the customer. And we want every transaction on our platform. So we have PayPal on our platform. We have Apple Pay. We have Square. Because our view is if you're a small business and I'm a consumer and I want to pay you using Square, I want to pay you using PayPal or I want to pay you with Apple Pay, I want that enabled. Why? Because the more you transact on the platform, the more I know about your small business, the more I can actually offer you other services and help you manage your cash flow. So we are an open platform.

Got it. Got it. So you have some big daring goals for online ecosystem. You have a $200 billion out of the $300 billion in TAM for online ecosystem. That's massive. What do you need to do from a product perspective? Or things that -- what are the things you could be doing for your customers you do not do today that would put you in a better position to achieve your -- realize your TAM, bigger chunk of the TAM?

I'll actually focus on a lot of what we have launched in the last, I would say, year to 18 months that we didn't even have 3 to 4 years ago. So things around I mentioned earlier, 1 of our 5 Big Bets is to disrupt mid-market small businesses. We didn't have a mid-market platform in the cloud 3, 4 years ago. Now we do. So that is a huge opportunity to really serve mid-market. And we define mid-market by small businesses that are 10 to 100 employees. And these are small businesses, majority of them, nonconsumption. They don't use a platform, believe it or not. And they are underserved, and their alternatives are way above what they can afford. So that's a huge opportunity for us. The second is what we launched with QuickBooks Live. It's the sister, brother of TurboTax Live because the problem is the same with small businesses. They don't have the infrastructure that Goldman Sachs has or Intuit has. There -- it's them and 4, 5 other folks, and they need advice on should I hire employees, should I get more inventory, how do I manage my books. And so QuickBooks Live, brings an expert onto the platform to help them make decisions or even help them get set up.

Such a good idea. They don't have resources. This is it.

That's right. And the majority of nonconsumption are those that are looking to get an expert help on a digital platform. So that opens up the door for us. Mailchimp is another one that I'll mention, the last one that I'll mention, which is -- it opens up a whole door of -- the small business is trying to grow their business and manage their cash flow. Well, we always did a great job of -- on the cash flow and money side but lots of room to improve. We just talked about it, but we never did much on, well, let me help you grow. And because now we have the platform, we're pulling it together with the data in one place, we can truly be the source of truth for growing your business. So those are just 3 examples of back to your question of why we're sort of excited about not only penetrating more of that $200 billion but increasing our wallet share.

Got it. What are the things, Sasan, you've done to Mailchimp since it's been a few quarters since you closed the acquisition? What are you finding out with respect to investments that they need, broaden out the product strategy, different market segment? What have you...

Yes. Three of our priorities that we declared remain the same, and we're making great progress and they're durable. We've added one priority given what we've learned since the acquisition. The 3 that remain the same is, one is what we call creating one growth platform. This is, in essence, integrating all the data pipes between QuickBooks and Mailchimp, so that we, in essence, enable one platform and one place for small businesses to grow and run their business. So that's priority.

Is it called Quickchimps?

What's that?

That we called Quickchimps or Mailbooks.

Oh, wow. That's what I mean. You have a life in marketing. We're not chasing the brand but we'll consider that input. The second one is taking that game to mid-market. Mid-market is critical, but now we have a platform that can help you grow your business. That remains the same. Third is international. Really excited about international. Mailchimp, 50% of their customers and revenue is outside of the U.S., and they frankly have done very little. It tells you about the power of their platform, but they've done really very little to grow it internationally. So those 3 priorities, we declared at the time of acquisition, we're making great progress and they're durable. The one that we've added is around end-to-end conversion. We believe we can do a better job of converting folks that come top of the funnel and when they get into the product, delivering on the promise. So we've added that as a fourth priority. And I'll just end with I just had a business review with the Mailchimp team last week and the new leader that we've put into the business said, she actually the one that ran our -- has been running payments. So she's got an incredible proven track record. She said, "I didn't think it was possible to be more excited than you all around Mailchimp, but I actually think I am because of the assets." So we're excited about what Mailchimp brings for us, all in service of really just fueling the success of small businesses.

Got it. Perfect. Yes. I wanted to get to tax not because I love taxes, but we got taxes. Maybe I'll...

We love taxes.

I can see why you love taxes. There's this common refrain that I hear from time to time. It never goes away completely. And I've heard it so many times, the simplification of tax code, such a thing is -- I mean, the concept of the code that we have in the U.S. doesn't quite exist in the same degree outside in the EU or other countries. How confident are you that we can -- this will be the way that things will be that we have a complex tax code that does require need for software and it's not going to go away? I'm wondering what your current thoughts are on that sort of existential risk for the tax business.

We're actually big fans, and we've been vocal about this for years. I've been with the company for 17 years, and even long before I joined, we've been a huge advocates of tax implication because it actually -- we believe it's a tailwind for our business if you make the tax system easier. And our tax system is very complex and not just for consumers, but for businesses, right? Business tax, consumers, it's very complicated. So one, we're huge proponents of simplification. We actually think it will be a tailwind for the business. And the question I get a lot is around free and what could be the impact of free. The reality is free is actually available today for every single consumer. If you look across private industry, anybody inclusive of you, Kash, if you choose to get your taxes done for free, you actually can. So free actually has been more of a tailwind for us. The biggest opportunity for growth is its assisted tax. It's those 88 million folks that pay $20 billion, and these are consumers. There's another $10 billion opportunity, which is small business tax that we're going to talk about at Investor Day that we are going to be focused on going forward. So we look at a $30 billion market where they get a lot of assistance or need a lot of assistance, and we have opportunity to digitize it, simplify it, and that's where the growth factor will come from.

Got it. So when we first met after you took over as CEO, I remember you talked about $20 billion spent -- but then you add another $10 million for SMB taxes. That gives you -- that's a 50%-time expansion from...

Yes. Yes. So come to our Investor Day, you'll hear us talk about that...

I am there. I know, I changed my travel plans, and I'm going to be there for sure, absolutely. Now let's talk about the -- if tax code got simplified, can you still command your ARPC of high 70s, 80s, whatever it is, will customers still pay you that much to do simpler taxes?

Well, remember, when you look at our biggest growth opportunity being really changing the way taxes get done for those that need assistance, which is this $30 billion that we just talked about, they're paying a lot more than what they're paying us. So we are a price disruptor. And so that's why we and I are huge advocates for simplification. The simplification will actually create a bigger tailwind. It will reduce fear and it actually even bring more folks to us that will need expertise at a much lower price. It's actually, if I were to step back, it is one of our biggest advantages for both in small business and serving consumers with QuickBooks Live and TurboTax Live because it's digital, you can be anywhere in the world at any time to get access to the help that you need as a small business or a consumer, and we're disruptive from a price standpoint relative to the alternatives. Because remember, the alternatives are 1-person, 2-person shop that are helping you either as a small business or a consumer. So simplification actually works in our favor.

I remember that first -- there was a trip in Boston that we did. Your first trip after you got named CEO. And there was a funny thing that -- observation that you made that. So your tax -- you said, "Kash, your tax ratio is probably complicated. I'm going to make you a special offer for $1000 per return, and you will take it." And yes, I said I would take it. Now I'm not trying to be suspicious, but is there really a market for the high end of the tax return? I know that you generally centralized in the middle of the bell curve, you go to the edge of the bell curve, not as many tax returns, but the ASPs there are truly multiple of multiples. Do you have any plans to get into that realm of the market?

There is, but that is...

I am sign up by the way.

Yes, there is, but it's not our focus right now. So you're not in our cohort. And just to double-click on that, out of the 88 million consumers that go get assistance to get their taxes done, about 70 million of that 88 million is sort of in our sweet spot.

Okay.

And so maybe one day we'll go after the other 80 million. And by the way, the other 80 million is folks like yourself. But the 70 million is where the biggest opportunity is. These are sort of folks that, in their mind they have a complicated tax situation. But in the expertise that we have, it's actually quite straightforward. We have the right experts, whether it's helping you with investments or if you're a self-employed or if you had a life event change, our differentiation is we have experts that specialize in those areas digitally from anywhere in the world that can help you. And so that 70 million of that 88 million is really what we're going after. We'll do your taxes for you one day, Kash, but not right now.

What we got -- I am -- my accountant uses TurboTax. So not me personally, and it's pretty expensive. Time flies, we just have 5 minutes. A quick pulse check with our clients. If you have any questions, please. Max, I saw you first, and then we'll go to the gentleman here right after Max. Can we get a question to Max? By the way, Max is going to be performing tonight at reception. So please show up.

At your own risk, it will be good, it will be good. Sasan, just as a user -- as a consumer, I get so many e-mails from service companies, small businesses showing me the invoice in QuickBooks generated in an e-mail sent to me with no payment option. And I find this seems to be a huge friction point for you guys. What can you do to -- because that's really the more people you can get on the payment solution just obviously much better longer term. How do you solve that friction point? And why is that -- why aren't they using the payment option?

Yes. Well, first of all, that's exactly -- I love your question. That's exactly -- like that's a real-life problem that we're focused on solving. That's part of -- you're part of that $2 trillion that we manage on our platform, the majority of it not using, in essence, digital payments. And it's really in our control. One element of it is making it very drop that easy. And so when you ultimately get what you get, it should all be payment of it and on a click, you should be able to click, be able to pay all your -- with your blessing, all of your credit card or PayPal or any information, banking information should all be there, so you can click and get paid. So those are exactly the things that we are working on. The big friction between business-to-business is, we've never focused on it. Meaning if you're a business and I'm a business and I send you an invoice, it's all been manual. And now we are working on digitizing all of that. And so if you're a small business, I can just look you up in my network in QuickBooks. You show up in my network, I can click, and the invoice automatically is there, and I can hit click and get -- and pay it, and it's all automated. And you would actually have to go out of your way to write a check. So those are the fundamental things that we are working on. It's not that consumers and small businesses don't want to pay digitally. It's just a behavioral change. I've just always been used to getting my paycheck out, writing a check and sending it. And that's exactly the behavior change that we're focused on evolving and that's where the growth is coming from because we're seeing success, but huge opportunity and you're one of them, where everything you get should be payment enabled. I actually don't know why you're getting invoices that are not payment enabled by the way. So we should talk offline because that's something we've already addressed.

More than the service provider does -- probably not -- maybe they're not just aware that there's a payment option.

Yes, yes. So just to play back for the audience, right, it's probably the small business hasn't enabled the digital payments, and that's a huge area of...

And how do you solve that, that's what I'm saying, why don't they know there's a payment option?

Yes. Well, that's on us. We are -- there's a couple of areas that we are focused on. One, those that do reoccurring invoices, those that do estimates and then sort of our high-value customers. One of the things we have to go back in time and undo is those that set up reoccurring invoices, we have to help them understand, you can digitize all of this, and that's actually a big focus area for this year. So I bet what you are receiving, I shouldn't bet, I assume, could be reoccurring invoices. And this is a customer that we are targeting in our base to go back and say, "Hey, all you got to do is do X, Y and Z, and it's all digitized." And they'll want to do it because you'll pay them much faster. But that actually just paints the picture of the opportunity ahead.

So on capital allocation, Mailchimp and Credit Karma seem to be sort of clear successes. But how do you -- but the leverage has changed and returns on capital have changed in your stocks down, how do you think about -- what are your hurdle rates? How do you think about M&A? Sort of the thing is like one of the worst things that could happen to a gambler is a big success. These ones are clearly successes, but how do you sort of think about that? This -- it doesn't sort of disrupt shareholder returns, like dividend growth in that.

Yes, it's a great question. And I think this is where I would say our 40-year history of being financially very disciplined comes into place. I'll start with our financial principles have not changed. We want to grow our top line double digits. We want to grow our operating income faster than revenue. So in good or bad times, we'll always watch in terms of how we're doing that. We want to make sure that we are making investments organically. And with the cash left over, it's either stock buyback and/or if we see something inorganically from a time-to-market perspective that makes sense, we'll look at how we deploy our investments there. And our capital is very focused on our 5 Big Bets. We're very disciplined in terms of where the capital goes. So -- and in tough times, I think it serves us even better than in good times because we're very, very intentional about sticking to our financial principles because we feel like we've got such scale that we can still invest in growth, but even be more thoughtful about how we do it in tougher times and in more uncertain times. So it goes back to our financial principles and really sticking to the hurdle rates that we've declared.

I think 2 more seconds. I think we will wrap it up here. But don't -- I'll get to you in a second, but don't go anywhere because we've got an amazing lineup of Software CEOs, Nikesh Arora, Frank Slootman, Marc Benioff, and [ Max Jellinek ] will be performing this evening. But Sasan, back to you. Thank you so much. You're true inspiration and icon in the valley. And it's good to see Intuit do so well under your leadership. So thank you for coming to the conference and meeting with our clients. And thanks to our clients for your tremendous participation and show of support.

Thank you for having me.

Thanks once again. Absolutely.

Thank you.