Good morning, everyone. Welcome to Intuit's Annual Shareholder Meeting. It's nice to see so many familiar faces. For those of you I haven't had the pleasure of meeting, my name is Brad and I want to welcome you to Intuit's Mountain View campuses.
Our agenda today is pretty straightforward. After our formal presentation, I'll spend a few minutes walking through a business update and then we'll open up the floor to any questions that you may have. But before we get started, I'd like to begin with just a few brief introductions, and I'll begin with Intuit's Board of Directors, most of whom are in attendance today and they're seated throughout the room. So I'll just show you their pictures, call out their name and they can hold their hand up and let you know where they are. We have Ms.
Eve Burton, Scott Cook, who may be in transit. Rick Dalzell does have a calendar conflict this morning, so he won't be with us. He was with us last evening and you'll get the chance to see him again in the future. Deb Lieu. We have Suzanne Nour Johnson, Dennis Powell, you speaking to me.
Our newest nominee, Tom Szczukak. We have Raul Vasquez and Mr. Jeff Weiner. Now as you can see from their respective profiles, we benefit from a depth and a breadth of experience that is invaluable to me and to the management team in navigating and growing this company, and it is a real pleasure to serve with these individuals. But in addition to these Board members, we also have in attendance today Gordy Davidson, who is our outside counsel from Fenwick and West.
We have both Brian Outland and Ye Wang, who is from Ernst and Young, our outside auditing firm. Over here, we have Mr. Chris Hummel from Broadridge, who will be serving as our Inspector of Elections. And last but never least is Intuit's General Counsel and Corporate Secretary who will conduct the formal portion of our meeting this morning with Laura Fanell. Come on up Laura.
Good morning. So, thank you Brad. And I have an affidavit from Broadridge certifying that the
notice of this stockholder meeting
was properly mailed on or about November 22, holder meeting was properly mailed on or about November 22, 2017 to all stockholders of record as of November 20, 2017. I also have a list of registered stockholders entitled to vote at the meeting and that's available for inspection. The Inspector of Election has executed his oath and it will be filed with the minutes of this meeting. And Broadridge has counted the votes cast on each proposal and Mr. Hamel has informed me that we have a quorum.
So the polls are now open. You don't need to vote unless you'd like to vote for the first time or revoke your proxy. So does anyone need a ballot? Okay. Great.
Stockholders voted on 5 proposals described in the proxy statement. And following the poll's closing, Mr. Hummel will tally the ballots and proxies and determine which proposals have been approved and I'll announce the preliminary results. Proposal number 1 is the election of 10 directors. Proposal 2 is the advisory vote on executive compensation or otherwise known as the say on pay vote.
Proposal number 3 is the advisory vote on frequency of future say on pay votes. Proposal number 4 is the approval of the material terms of the performance goals under our senior executive incentive plan. And proposal number 5 is the revocations of Intuit's selection of Ernst and Young as our independent registered public accounting firm for fiscal year 2018. Management recommends that you vote for all 10 director nominees and proposals 2, 45 and vote 1 year on proposal number 3. So since there are no ballots to be collected, we are going to officially close the polls.
We'll publish the final vote totals in the current report on Form 8 ks, which we expect to file within 4 business days from today. So we do have preliminary results, and the stockholders have elected all 10 nominees to the Board. They've advised of their approval of the company's executive compensation. They've advised of their approval of the future sale on pay occurring every year. And they have approved material terms of our performance goals under the senior executive incentive plan.
And then finally, they've ratified the selection of Ernst and Young. So that concludes our formal business for today. And I'll turn it over to Brad in just a moment, but I want to remind you that Brad's remarks may contain forward looking statements and there are a number of risks that may cause actual results to differ materially from our expectations. For more information about these risks, please see the webcast version of this presentation and our SEC filings, which can be found on the Investor Relations page at intuit.com. So thank you, and welcome back, Brad.
And thank you once again for your support. And now we'll move to the business update and it's always wise to begin by looking back. My mom and dad used to tell me those who fail to study history are doomed to repeat it. And last year, as I was traveling around the globe visiting our offices, I came across this article in Fortune Magazine entitled How the Best Business Leaders Disrupt Themselves. And it was the first sentence in the article that caught my attention.
Why isn't Intuit dead? I thought I'd better read this article. As I went on to read the article, the author went on to describe that the answer is easy to state, but it's hard to emulate. It's because Intuit is continually disrupting itself, something only a handful of incumbents have been able to do, companies like Amazon, Netflix and Yes Into It. And the author studied these companies and recognized 3 patterns that we all shared in common.
The first is we view our businesses the way a disruptor would view it. The second, we have the courage to drive change even when the company is performing well. And third, we do this time and time again. And that is exactly what every generation of Intuit employees have done over 34 years, through 4 major technology shifts through numerous new competitors entering the market. Intuit's employees have been willing to step back and fall in love with the customer problem and not our existing solution, then go deep to understand the customer problem, apply the most simple, elegant design we can and use the most contemporary technology of the day and then we measure success in the only way that really matters at Intuit through the eyes of our customer.
To say it more simply, Intuit strives to be customer obsessed, design inspired and technology powered. As you know, our most recent reinvention began in fiscal year 2012 when we set out to reinvent the company from a North American desktop software company to a global cloud driven product and platform company. That required a massive restructure. We divested businesses that no longer fit strategically, including the company's original product, Quicken. And we also changed our financial model to move to a ratable revenue model.
And what's exciting is over the last 5 years, while driving that change, we found a new gear. Our customer growth for those customers adopting the cloud and mobile has accelerated 12% over this 5 year time frame, while we've retained a very important and loyal customer base that still loves our desktop products. At the same time, we shifted our sources of revenue by 10 points. We now get 73% of our revenue through very predictable recurring subscription services. And we've expanded our global footprint by over 100%.
It's the culmination of all of these efforts that led to a strong financial performance in fiscal year 2017, where we delivered double digit top line revenue growth, expanding operating margins and we grew our earnings per share 17%. And I'm pleased to tell you this momentum has continued through the first quarter of fiscal year 2018, which ended on October 31. And while we are pleased with these financial results, this is Intuit and we step back and we look at ourselves very constructively. And when you go underneath the financials and you look at the performance drivers of the company, there are areas where we are performing well and areas where I believe I and we are capable of doing more. I'd like to spend a few minutes just talk about both sides of the ledger and then we'll shift to what we're doing about it.
So first, starting with our company culture. It is a privilege to serve in this company. It is a company that has been values driven from the day it was founded. It's a company that prides itself in having great talent. And for 17 consecutive years, we've been rated as one of the top 100 best places to work.
We're in 7 countries and in 3 of the countries, we were rated number 1. At the same time, our employees would tell you we're not moving fast enough. We aren't making fast enough decisions. We aren't putting the productivity tools in front of them that enable them to get work done as quickly as they believe they can. We're working on this.
The second, we are very passionate about our customers and we make improvements every year to our products. But we haven't yet captured a way to put that passion into end to end experiences that are so amazing that your willingness to recommend our product is at least 10 points higher than the 2nd best alternative. We call that the Net Promoter Score and we have a goal of 10 points better than the 2nd closest alternative. We aren't there in all of our products, but we're working hard to get there. We have been transforming the company since 2012 away from being a product company to a platform.
A platform means that all the other products in your life, whether we built them or not, will work with ours. And it means that other people you do business with, whether it's billers or it's employees or it's accountants, can easily work with you on this platform. We've made progress with accountants and small businesses, but in terms of third party developers building on our platform, working well with banks, we still have more work to do. As a 34 year old company, you have some really new exciting technology and you have some technology that's a little bit old and dated. We've been working hard to refresh all of our technology so all of our customers get the most relevant experience.
But as we look ahead, we still have some work to do. We're rewriting our tax platform to be global enabled. We're also making sure we're moving our products into the public cloud, Amazon Web Services, so we can actually host that more efficiently and get faster innovation from our engineers. And we're working on something called artificial intelligence and machine learning. You've heard a lot about this.
It basically means we get our product to do all the heavy work, so you don't have to worry about that. You simply get to the outcome much faster. Market results. We had a really good year in small business last year. We were able to grow our customer base 58% in our online version.
We improved the quality of our product 22 points year over year in Net Promoter and we achieved our financial results. Tacx also had a good year, but tax also would tell you that we only held market share and we have a higher bar for ourselves. So this year, you're going to see some exciting new things coming out of our tax business to try to take our game to the next level. I touched on the financial results, good double digit growth, but I'm about to take you through a new company strategy. With the new strategy comes a new set of priorities, which means we need to put resources on those new things and begin to move resources away from some of the historical things.
So when you look at this, it was a good year. We know there are things we can work on to be better, but it gives us a really strong foundation upon which to build. And we're going to need this foundation because as you look out over the future, there are major shifts occurring in the marketplace. These shifts can be catalysts for growth if we capitalize on them or they could be sources for disruption if we fail to execute. Now to learn about these, we took our top 100 leaders, we broke them down into 3 person teams like you would in school, We call them action learning teams.
We sent them out around the globe. They spent time meeting with 500 customers, interviewing 225 Venture Capital Firms and Experts and they ran experiments in 5 countries. And what we learned as a result of that 9 month effort was pretty important. First of all, customers now want immediate benefit. In fact, the average attention span for a digital native is 8 seconds.
It was 12 seconds 4 years ago and a goldfish attention span is 9 seconds. So we are now getting measured in immediacy. They also want deeply personalized experiences. They log in. They wanted to say, Hello, Brad, and maybe I've never even logged in.
So we've got to work on that. Also, there's the rise of the self employed. You've heard about these individuals. They drive for Uber and DoorDash and Lyft and TaskRabbit. They work for multiple companies, not one company.
It used to be 17% of the workforce a quarter of a century ago. It's 34% of the workforce now and it's going to be almost half in the next 5 years. This is the new way people are going to be working. We have to make sure we understand what's important to them. This next piece is many and many of our customers are living more hours a day online on their iPhones, on their Android phones, on Facebook, on LinkedIn, on Amazon, up to 8 to 10 hours a day.
We need to go where our customers are. I mentioned the next generation. As we look at the employees of the future, they want to have a purpose driven company. They care about corporate social responsibility. They care about the environment and they want to have an impact, which means they want to work in a company where they can move at the speed of a start up.
They want to have access to the most contemporary technology, which today is machine learning and big data. And they want to work for a company that has the courage to disrupt itself because somewhere in a dorm room or a garage, a company is trying to invent the next version of what we have and they're going to try to put us out of business. So we have to be willing to do that ourselves just as that article said at the very beginning of this talk track. So this was a lot of new insights and it led to some implications for us. We have to remain customer obsessed, but we're going to have to get really clear about what it is the customer wants when they buy our product.
We call that the customer benefit. We're going to have to get much more personalized in our products and we have to make our products a platform where people can spend time interacting with all the different constituents that they do business with. Also, the roles of the players that we serve are evolving. The self employed customers have a unique set of needs. They're not consumers.
They're not small businesses and we have to build a product that's right for them. The accountants, they have been our partners for 34 years. If there's a profession that's going to get drastically changed with this big data and this machine learning, it's the accounting profession. We're working with them to help them get to the next chapter, so they remain just as viable and relevant in the next chapter as they have been in the last one. And of course, we're working with the Apples and the Amazons and Facebooks, these mega platforms, so we can have good partnerships with them.
That will help us build new advantage in the future. So that's sort of the overall insights we captured. We thought we would learn something. I quite frankly underestimated how profound those insights would be. As a result, we've rewritten the company's game plan to win, including a new company mission, a new strategy and a new set of metrics.
I'm going to spend a few minutes just walking you through at a high level what this new game plan is. I'll talk about how it's already driving improvement in our customers' life. It's building new sources of competitive advantage and it's opened up new growth opportunities. That will take about 10 minutes and then we'll open it up for questions. You with me?
All right. So a game plan always begins with why. Why are you in business? Our why began 34 years ago at that small kitchen table that sits out there in the hallway when Scott observed his wife trying to balance the family checkbook and said there has to be a better way. What you may not know is over 34 years how we've defined that why in words has actually changed 4 times.
Our most recent mission used to be to improve our customers' financial lives so profoundly, they couldn't imagine going back to the old way of doing things. Now that was an aspirational mission, but it was anything but succinct, 16 words and a comma. So we said we can do better. We want something that makes our hearts beat fast, but needs to be more memorable. And so we have now captured the mission this way, powering prosperity around the world.
As you might imagine, we have debated every single word on this slide. Why prosperity? If you look up the definition, it is the state of thriving, of succeeding, of good fortune. It's also something you can define in your own terms. Some customers say, hey, I want to live better work life balance.
Others say, I want to be the next Scott Cook. And so you let people define what prosperity means to them. But for Intuit, it captures why, why we get out of bed every morning, to be the champion of those who dare to dream the self employed and the small businesses who employ half of the world's workforce. They create 60% of all new jobs, but they know the odds of success are stacked against them. 1 out of 2 fail in this 1st 5 years.
They are the backbone of the world's economy, but the world is working against them. We want to be the champion of those who dare to dream. On the other side are individuals and families who struggle to make it paycheck to paycheck. 70% are fighting to put food on the table and get their kids to school. We want to provide them financial freedom.
If we can make that happen for those 2 groups, the entire world's prosperity will improve and that's what we focus on. Of course, we have a company that we strive to be a company that's built to last. It is a values based company. And like our mission, our values have been refreshed in words 4 times over the last 34 years, most recently was in 2014. I've shared these with you in the last several years.
They haven't changed. They stand the test of time. So I won't go through them again this morning, but we live them every day. The next part of our game plan is how do you measure success? Every company has a way of measuring success.
We call this true north. It's grounded in 2 principles, stewardship and stakeholders. By stewardship, it means we not only hold ourselves responsible for delivering great results this year, but we hold ourselves responsible for making decisions today that leave the company better for the generation who will follow us. We call that short and long term thinking. In terms of stakeholders, it simply means we're clear about who we serve and we've asked them what success means to them.
And these are the 4 stakeholders we serve: employees, customers, partners and shareholders. And for each of them, we have a vision statement and a set of aspirational objectives. Now there's an internal version of this document that underneath each of these objectives we have a 1, 2 and 3 year goal. That's how the Board assesses my performance. That's how every employee in the company's performance is assessed not just this year, but are we on track for the next 3 years?
Now that is exciting. Those are outcomes. But how are you going to make it happen? And that's where strategy comes in. A strategy is like a GPS.
A GPS begins by asking you where you're trying to go. We're trying to go here, our mission, powering prosperity around the world. And this is okay, if that's where you want to go, where are you beginning? And we begin here 1 customer at a time. But we've taken the time to figure out why they buy our products.
Our products are finance and compliance products. When you ask customers what's the benefit you need most from our products, they want more money in their pocket with little to no effort and complete confidence they didn't leave any pennies on the table. So that's how we measure success at an individual customer level. If we know where we are and where we want to go, the next thing a strategy does is say, okay, here's the route to get there. And that is the 1 Intuit ecosystem strategy.
Our new strategy is designed to unlock the power and the contributions and the data everyone who works on our platform to translate that into a better outcome for every single individual. We basically describe it as unlocking the power of many for the prosperity of the one. Here's how we got there. We studied 34 years of history and said what has enabled our company to end up in that Fortune Magazine article. It's because we remain customer obsessed, design inspired, technology powered and we said we're going to keep that.
And then we said, where are we going to focus all of our employees' passion and energy? And we're focusing on finance and compliance. And this is where I'm going to make a confession. I have 2 daughters. I'll talk to you about them often.
When they were younger, they would say, Daddy, I love that you work it into it and I love going to the campus. But really accounting and tax and payroll, what about video games? And I said, Honey, those are all exciting products. Let me tell you why we do what we do. These things aren't things people get excited about, but if they get them wrong, there are big consequences.
They have late fees and penalties and interest and they go bankrupt and their kids can't go to school and they can't buy video games. So you're helping your kids' parents buy them video games. They said, Dad, you're cool. So we focus on finance and compliance. Now we take that and we say, let's be clear who we serve.
This is one of the things that makes me proud about this company. There is a gravitational pull to call on the big businesses who signed tens of 1,000,000 of dollars worth of contracts, but we focus on the overlooked and the underserved, the small businesses and the self employees who power the world's economy and the individual families who are trying to make it paycheck to paycheck. But we realize in today's world as a platform, we can't solve their problems alone. So now like King Arthur's table, these partners sit at the table with us and it's their contributions with ours that co create value. And this is where the strategy comes alive with all of their wisdom, all of their experience, all the mistakes they're willing to share with each other and their successes.
We put that with our technology and our data, and we're able to deliver those personalized experiences that the customer said they want through a trusted open platform where everything works well together and we create indispensable connections where no one is ever alone again that have other people with them who are willing to help. That's our strategy, the 1 Intuit ecosystem unlocking the power of many for the prosperity of 1. Every company takes those things and breaks them down. We've got 6 priorities. 3 are designed to accelerate our speed and doing what's right for customers.
That's delivering awesome products at the speed of a start up with new technology. And on the right, we're very clear about delivering those benefits I talked about earlier for those customers. And of course, we have metrics we measure. We measure these on an hourly, daily, weekly, monthly, quarterly and annual basis. But when you put it all together, what you should hear is over a 9 month period, we studied history, we looked to the future, we challenged ourselves and we refreshed our game plan from top to bottom.
Now I'll be the first to tell you, these are just words on a PowerPoint slide with some pretty visuals and builds. And the way you really test the strategy, if it's improving the customer's life, if it's building new competitive advantage that makes it hard for competitors to compete and if it's giving you new opportunities for growth. I'll wrap up with that and then take questions. The first thing our strategy has done has helped us leapfrog away from just conducting a transaction like filing a tax return to now facilitating an interaction between you and a tax professional if you have a question, you and an accountant if you're a small business and I'll give you some examples. The first, I mentioned small businesses, really big dreamers, odds stacked against them.
The number one way they can prevent failure is by working with an accountant. If a small business works with an accountant, the odds of success go up 89%. But on the other side, the accountants have these clients who show up with shoe boxes full of receipts, folders full of paper and sometimes not all the stuff they need. So they get 4 new clients a year on average because they're so busy typing stuff into software. Well, we took our product called QuickBooks Online, made it a platform.
We turned it into a dating service called Matchmaking. And we said, let's take all of our small businesses who need an accountant and all of our accountants who could use more clients and let's start to connect them. In the last 12 months, the number of small businesses in our base who now have an accountant is up from 43% to 53%. Accountants are getting 300% more leads from us than they were 1 year ago. They're both succeeding.
And by the way, because they're doing that on our platform, the retention of our platform has gone up 12 points. We call that win, win, win. Same thing with tax professionals. Tens of millions of people will be willing to file their taxes and pay nothing or on average for TurboTax $50 but they often have one question they're unsure of. They sold stock last year.
They moved between states they're just afraid they're going to get that wrong, so they end up going to a tax store or a professional and paying 100, if not 1,000 of dollars. Well, we said what if we could bring the tax professional into the product and we launched something called SmartLook. At the touch of screen, a tax professional shows up in a one way video, you ask the question, they answer the question, they even circle on your screen where to push to teach you where to go. And in that one product feature, we've increased confidence in the taxpayer 10 points. We've created a new revenue stream for tax professionals who are willing to get paid by the hour to answer our customers' questions and we've opened up a whole new group of customers we can now serve with our product, again a win win win.
And last but not least, I mentioned self employed. Here's what happens with self employed. They make a choice not to work for 1 company and get a paycheck but multiple companies. What they don't realize is by doing that, the government now considers them a small business, which means they have to file a special tax form called a Schedule C. Now that means they have to separate all their personal expenses throughout the year from all their business expenses or they'll miss important deductions.
What we did is we launched QuickBooks Self Employed, swipe left if it's personal, swipe right if it's business. We launched a sister product called TurboTax Self Employ where you push a button, it goes in there and does your tax form for you. And what we did last year is found $4,300 in tax savings for the average self employed. That is an 8% annual income increase for those individuals. And these are the fastest growing products in our platform.
So you can see these are three examples of dozens where we're now creating value on all sides and creating more value for Intuit. That is creating new sources of competitive advantage. This is how we've historically competed. We've earned the trust of the government, of the banks, of the accountants, of the small businesses and consumers to take care of their data and protect it. We've worked hard to connect accountants and small businesses, but most importantly, we're known for this.
Taking 72,000 pages of the IRS tax code and turning it into simple yes and no questions in TurboTax will make complicated things simple. We're going to keep doing that. But with our strategy, we have a new source of competitive advantage. It's called this platform and ecosystem. As I already showed you, by having people on both sides be able to interact with each other, it increases the stickiness on our platform so customers stay with They're contributing a whole bunch of data.
In that data, we now have 150 patents filed where we've written smart algorithms that can do the work for the customers and help them get more money with less effort. And last but not least is we're creating this network effect where people are stronger together than apart. So we now have new sources of competitive advantage. It's really hard for others to match, which takes me to my very last point. We now have new opportunities for growth and you've seen it show up the last couple of years.
First of all, in our core products that are already in the market and in the markets we're already in, we've caught a tailwind. The tailwind is the cloud is here and mobile devices are the way people want to do a lot of their work. We now have 8 out of 10 of our new QuickBooks customers choosing the cloud and 9 out of 10 TurboTax. The cloud allows us to go across the globe into new countries and it allows us to serve the self employed who, by the way, operate in cars. They don't use desktop products.
They use their mobile phone. And by creating this product on a mobile device, that's grown 3 50%. That TAM, total addressable market is $30,000,000,000 We're $5,500,000,000 in revenue today. That is a lot of headroom for growth. But in addition to growing our core, I just showed you examples of how we're connecting the ecosystem, which is accelerating our growth.
I talked about accountants and small businesses. I talked about tax professionals inside of TurboTax. Here's a couple of others. We're taking our invoicing out of QuickBooks, putting it in partnership with Google and Google Calendar, sending an invoice right out of Google Calendar and getting them paid in 1 third of the time. The small business is getting paid faster.
That's creating a win for everybody, including Google. The other example is lending. Small businesses need loans. 60% of them, the banks turn down. But inside of QuickBooks, we can see they pay their bills on time.
We can see how many people owe them money. We can see the projects and the inventory they have. We've written algorithms that are better predictors of their creditworthiness than what's in the market. And we've been able to get loans extended through other lenders to these individuals that 50% of them were considered unlendable 1 year ago by the bank. So that's creating new opportunities for growth.
And then last but not least, we think we're starting to come really clear on a global playbook. And there are other countries beyond the 7 we're in that we believe if we can go replicate that success, we can once again expand our opportunities for growth. So that's a lot. That's a year of reimagination and transformation. What I hope you took away from this was fiscal year 2017 was a milestone year for our company.
While we delivered really good results, we also recognized we have opportunities to improve. So we studied history and we brought those lessons forward. We tried to look into the future and we said, what do we need to change to be ready for the future and then we rewrote our company with a new mission, a strategy to unlock the power of the many for the prosperity of the 1 and we are at work today to make this all a reality. Thank you for your patience as I went through that business update. And with that, I'll open it up for any questions that you would like to talk about.
Thank you. I know this group is never shy. Here we go.
Can you explain what effect the new tax changes might have on Intuit?
Thank you. So first and foremost, this is still getting finalized, as you know, and we're waiting some final things to come out of Congress in terms of how it will be implemented. But in the headline, Intuit has always been for tax simplification. We have felt that it would be the right thing for consumers to be able to get their obligation done in a way that was less onerous on them. So we spent a lot of years trying to make this complicated thing simple.
I think we took a step in that direction. I believe everyone would tell you it's not as far as we all wished it would be. But at a minimum, it is a little more simple than it used to be. But what happens in the market is any time there's change, there's fear, uncertainty and doubt. And so this is where we've shown up.
We have a portal where we can answer all the questions and a calculator that helps you say what does this mean to me. We've armed our accountant partners with the same kind of information so they can work with their clients. And we've launched a product that not only allows you to do your taxes yourself, but you can bring a tax professional in like I showed you at the touch of a screen and get your question answered. I think this is good news in terms of our ability to help more people realize they can do their taxes on their own. It's getting more simple and we've got services to help you make it even more simple.
On the business side, as you know, roughly 95% of our revenue and profits are in the U. S. Our taxable rate on a non GAAP basis was about 33%. With this new tax rate, we'll have a blended rate this year that will move it closer to the 27% And then over time, it will get closer down to the more statutory level, the 21% to 23%. So that will somehow lead to about a, call it, dollars 0.35 to 0.75 dollars opportunity in earnings per share.
So we think that will create new opportunities for us to continue to reinvest and grow this company to make sure we have a culture that retains the top talent and continue to deliver for our shareholders. So it's opportunity for us to make it simpler for customers and it's opportunity for our company to use new powder to say let's make sure we're creating a vibrant company for the long term. Thank you.
Thank you, Brad. Thank you. My wife watches more TV than I do and she called me about seeing an ad by I think H and R Block that was saying their product was better than yours. Yes. Do they do that?
What's your response?
Well, I think first of all, our competitors are amazing companies. They're all strong in their own right. They keep us on our toes. Secondly, beauty is in the eye of the beholder. And we ask our customers whether our products are better or worse.
And if you go out to the Amazon reviews or the Apple or the Google reviews, you can look at star ratings and reach your own conclusion. But the answer is our competitors are mentioning us in their ads and I take that as a tremendous compliment because the more advertising for TurboTax, the better for all of us.
Next question. Yes. Some companies are moving out of Silicon Valley because it's so hard to hire new talent because of housing prices. So how are you doing on retention? And how about relocating?
Yes. Well, thank you for the question. As you know, we have about 8,000 employees around the globe. We have roughly 3,000 here in Northern California, another 1,000 or so in San Diego and then the rest are around the globe. So we do have locations around the globe where we employ top talent.
And God was egalitarian when he handed out talent. The economies weren't egalitarian when they handed out jobs. They tend to be on the coast, but there are lots of great people everywhere and we try to recruit from everywhere and create an environment where they can contribute. But to answer your question on our attrition, I'm very pleased to tell you that our voluntary attrition rates right now are about 11%, which are 200 to 300 basis points lower than our peers sitting right here next to us in the valley. So we work hard to create an environment everyone feels like they're an entrepreneur.
This year, Scott's gone to every location with me around the globe and we've trained them on the Scott Cook innovation methods. We call that customer driven innovation design for delight. So everyone's treated like an entrepreneur and we'll create space for them to work on new and exciting projects. So if we keep doing that, we think we can compete for talent. We have no plans at this point to exit Silicon Valley.
This is where great talent is. We just have to work hard to make sure we're keeping these employees with us and getting more people to join us as well. All right.
I have an acquisition target for you. Okay. It's called Paycom, p a y c o m.
Familiar with Paycom.
Okay. So I own some shares. They went up the stock price went up 78% in 2017. Yes. And you only went up 38%.
I know that. Paycom envy. Honestly, Paycom is a wonderful example of why it's important for companies that have been around like we've been around to continue to reinvent itself. They that have been around like we've been around to continue to reinvent itself. They've done a wonderful job.
They're solving the important problem that's not new, helping you manage your employees, your HR, your benefits, but in a new fresh and contemporary way. We study them. We study lots of other companies and we try to bring those best practices in. That used to be called plagiarism. Now it's called benchmarking.
And so we're more than happy to learn from anybody. And if and when there's ever an opportunity for us to Yes.
I'm a long time user of TurboTax and it's very sticky, which is a really good thing. And I also am a point person for many of my friends who are not as technically literate or don't have the time. And so I talk to them about changes in things like TurboTax. And I've been using the home and business version, which is but you mentioned that there is now a new version called self employed and I wasn't even aware of that. So I was wondering how do you decide which version?
Is there some information about that helps point you to which one? Because I didn't even know that one existed.
Yes. Well, thank you for the feedback. Clearly, we have more work to do if that's the case. Actually, our Home and Business version has morphed into this self employed version. So there's a little bit of a brand change, but there's also a feature functionality change.
When you go to turbotax.com, we're working hard and we have more work to do to make it easy for you to figure out which of these you should select. We try to describe it in terms that we wouldn't use, but every day I might use at home with my wife. And we're trying to make it easy for you to get in there. And then if you end up in a solution that's not right, we want to make it easy for you to go ahead and transfer the data into the other one. We've got more work to do, but the short answer to your question is if you go to turbotax.com, you'll actually see the product lineup and then you'll it has a tile selector where you can go in and say which one would be right for you.
And then please, after you do that,
And so there are those are 2 different versions currently.
Yes. Dan, do you want to grab the microphone and answer that one? Hey, Dan lead this is Dan Wernicoff, who leads our consumer group, which includes TurboTax for those of the right Yes,
the online product is TurboTax Self Employed. The desktop is home and business currently. And they'll start to they'll continue to transition. A lot of this is bringing like Brad said the ecosystem together. So QuickBooks Self Employed actually works with TurboTax Self Employed in the online editions where the data can flow very seamlessly between them.
But home and business will probably persist for some time on the desktop. One more thing. I'm really glad you're keeping the disks because some of us do have longer attention spans than 9 seconds.
Yes. By the way, I say that not only just let us know how quickly people want immediacy, you talk about the 8 seconds, but I think I've shared with you before neuroscientists have studied children under the age of 10 who were born after the invention of the iPhone. Their brains do something our brains can't do. They can process multiple things simultaneously. We actually multitask.
Our brains go red and green and it depends on what we're doing. So they have a real ability despite parenting saying focus. They're like, I am focused. How could you focus when you're listening to music? I could do 2 things at once.
No, you can't. Mom, you can't. I can't. Yes?
Could you talk a little bit about global expansion? Over the years, I've been kind of interested that you're still limited in the number of countries you try to do business in. Can you talk a little bit about
I can. And I think many of you who've been with us for a while would know that it's not new for us. In the 1990s, we had gone to roughly 27 countries with a desktop product, and we did it through a variety of ways. We bought the leading player in each market or we took a U. S.
Product and we reengineered it and tried to introduce it as a local version there. And we really weren't that successful. The technology was hard to localize. The competitors saw us coming. Many times we bought the leader, but then we didn't give them the attention because we're very U.
S.-centric and so they ended up getting beat by local competition. So when the cloud came about 2,007, 2008, we said this is a new chance to do it again, but let's go study that history. Let's go learn from companies we admire PayPal and Amazon, Facebook and others and let's figure out how we're going to do this right. And the formula was pretty straightforward. Don't start with your solution, start with the customer problem.
Go in and understand what their needs are, then decide does the product in your current portfolio work or do you need to invent something new? And can you do it in a way that's better than the local competition? When you get that right, that's called product market fit, which means you have the right product for the right market and it's better than any other alternative. That's when you turn on advertising. What you see us doing in a very deliberate fashion is going one country at a time and going through that methodology.
So even though we're currently in Canada, the U. K, Australia, France, Brazil, India, We have scout teams in other countries, and they're already running those experiments and answering the question, would it be QuickBooks? Would it be another product or should we invent? And that's when we go in. I'm pleased to say we're starting to see the fruits of that labor.
Last year, our global product grew 75%. The year before, it had grown 45. And so it continues to accelerate, which gives us confidence we're starting to see the playbook. I will say this and I know I've used this analogy before, again a father of 2 daughters. Sometimes there's a nervousness that we don't get there fast someone will beat us to the market.
But we've learned it's not when you get to the dance that matters, it's how you look when you show up. So we need to make sure when we show up that the product is right and it's better than any other alternative and that will allow us to dance as long as we want to dance. Make sense? Other questions? I want to thank you once again.
You're an incredibly supportive group. I enjoy seeing the faces each year. I love the questions and thank you for the feedback throughout the year. You're one of the many reasons why Intuit is proud to serve and ultimately why we're successful. And if you have any feedback for me after today's session, I'm always open and willing to hear that.
But thanks again for coming today and I wish you a happy 2018.