Are we ready to have this Gen AI thing move to the application layer already? Enough about this infrastructure thing, man. Let's get this to work and create value for customers at the application layer. So no better guest to talk about this than Sasan Goodarzi, who's CEO of Intuit. Welcome back to the Goldman Sachs Communacopia and Technology Conference. Always great to have you with us.
Thank you for having us. It's been a great day so far.
I'll never forget, you started talking about AI before AI was a thing. Was it 2018, 2019?
Yeah, it was 2018, 2019.
Yeah.
Yes.
You had it right.
And now it's the thing to talk about.
It's the thing to talk about, yeah. So with that maybe perfect setting to talk about, what are your aspirations for the company? Where do you see the company five years from now? You've been right on AI. Now there's Gen AI that's being overlaid on top of this theme. How do you see the company doing the next five years?
I love your question, but the best place to start is briefly on history.
Yes
... before we get into-
Yeah, yeah
... the future.
Yeah.
Going back, you know, five years, we were a tax and accounting platform.
Mm-hmm.
I think we were, like, $6.5 billion in size, growing high single digits, and what we said was that we wanted to become a platform company that really played a meaningful role in the lives of businesses and consumers, and really bet the whole company-
Mm-hmm
... on data and AI and the reason we bet the whole company on it back then was in order to create experiences that were already done-
Mm-hmm
... for our businesses and our consumers, and to give them insights to make decisions, we had to invest in AI.
Mm-hmm.
Today, you know, we're $18 billion in size that we just guided to 12%-13% top line growth. The focus on being a platform has really been important for our customers-
Mm-hmm
... to really ignite their growth. But now to answer your question, what does the next five years hold? I would actually say that we've gotta finish the job that we started five years ago.
Mm-hmm.
And I think three things we would want to be true in five years. One, is that all of our experiences for our customers are done for our customers. Marketing is done for them, cash flow management is done for them, helping them drive growth through done for them, bookkeeping, accounting, taxes.
Mm-hmm.
The experience is just done for our customers. They're in full control.
Mm-hmm.
They can ask us to do things for them, but we're doing it for them versus them doing it.
Mm-hmm.
And there's never a dead end, 'cause everything comes with an AI-powered human expert. So that, that will be true, in my view, in five years.
Mm-hmm.
It will have taken 10 years to execute the vision, but what we're doing is very hard.
Mm-hmm.
I think the second thing that will be true is we will absolutely be known for a mid-market company.
Mm-hmm.
A company that has some of the biggest mid-market brands on our platform because of our focus-
Mm-hmm
... on mid-market, which is a huge growth driver for the company. And I would say third is, we will have fundamentally changed how people get their taxes done.
Mm-hmm.
Particularly those that go to somebody else to get their taxes done.
Mm-hmm.
We will have digitized virtually a market that is very manual, very disaggregated, and very high priced into something that's done for you from anywhere in the world. Those three things will be true, and we're excited about sort of finishing what we started five years ago.
So I cannot tell my accountant, "I'm sorry, I'm traveling." No more excuses.
No, no more excuses.
No more excuses.
No more excuses.
Okay. I have to pay my taxes, but I will confess to you, and I have before, it's the one thing that I absolutely do not like-
We'll do it all for you, yeah.
... being told by my wife, "Have you done the taxes?" I'm collecting all these documents and putting together... It's just the least favorite thing. So one day we'll digitize. And I still remember, when we met with a lot of investors in Boston, you said, "I will sell you tax software aided with AI for..." You quoted a price, and you said, "You will still accept that price, will you not?" And I think you were absolutely spot on, because it was lower than what I was gonna pay my accountant.
Yeah.
The day will come when we can automate this.
Yeah.
One of the things I always love to get your perspective, it's been a theme, a repeated theme, is your perspective on the SMB part of the U.S. economy. When we last spoke on your conference call, but prior to that, you were right to say in January, early this year, that SMBs will have a tough time.
Mm-hmm.
Small businesses will have a tough time. Where are you in your assessment today, especially as we navigate through election cycle, potentially lower rates on the horizon? What is your assessment of what's happening with small businesses?
I'll tell you what we see on our platform. The revenue and profitability of the businesses on our platform is stronger this year than it was last year, so they're sort of getting back to accelerated growth-
Hmm
... from a year-over-year comparison.
Mm-hmm. Mm-hmm.
Their cash reserves are down about 7% year-over-year, but it's far stronger than it was several years ago.
Mm-hmm.
So I think what you should take away from that is strength.
Mm-hmm.
The third thing I would say is those businesses that have been in business for three to four years have much stronger growth and cash flow than those that maybe just started a year ago.
Mm-hmm.
That's typically the case.
Mm-hmm, mm-hmm.
But I think the environment, right? Higher cost of labor, higher cost of food, higher cost of supply, higher cost of gas.
Mm-hmm.
Those things has an impact on all of us.
Mm-hmm
... including businesses. Plus, consumers have been more selective where they spend their money. So when you take the combination of consumer spend and the real increase in their cost structure-
Mm-hmm
... it's had a bigger impact on the smaller, younger businesses-
Mm-hmm
... than those that have been around for a while.... but I would just leave you with, they're survivors, and they're healthier right now than they were this time last year, and we're actually quite hopeful for those that we see on our platform, that the future is gonna be better. The next several years is gonna be better for them than some of the challenges they had in the last several years.
Yeah. You sound more positive on small businesses than you did at the start of this year, so things-
You know, facts are friendly, and it's based on the data that we see on our platform.
You speak like an economist. I look at the data and let the data dictate my view.
Yeah, yeah, that's right. That's right.
We've talked about this, too. To what extent have high rates been an impediment to small businesses? And if we do get relief here, how do you see this playing out positively for spending appetite of small businesses on your solution?
First of all, let me answer your question in two ways.
Yeah.
One is it's been an absolute impediment. It's been challenging, 'cause if you think about what I just articulated, their costs have gone up on every dimension in the last several years. Plus, up until about a year ago, they actually had a hard time finding workers, 'cause they were competing with all of us that are in this room or in this conference, where there was a war for talent.
Mm-hmm.
And so costs are higher, losing talent, not being able to get talent.
Mm-hmm
... and consumers were really spending less with them.
Yeah.
So those, you know, were really fundamental challenges for these businesses. And I would just say that, as I articulated, you know, a moment ago, I just think the future-
Mm-hmm
... is much more brighter for businesses because what we see on our platform is, consumers are starting-
Mm-hmm
... to spend more-
Mm-hmm
... although lower than several years ago. And I'll use our internal stat that we've shared, on earnings. You know, our charge volume couple of years ago was growing at 35%.
Mm-hmm.
At earnings, we reported it was growing at 20%.
Mm-hmm.
Now, by the way, that's very strong in this environment.
It's very good. Yeah, exactly.
But that's also a reflection-
Yeah
... of consumers are spending less.
Yeah, yeah.
So, it's really impacted-
Mm
... businesses, and I'm proud of the role our platform has played because really, our platform today, in one place, you can grow your business, manage your cash flow, get your books and accounting done right, all in one place.
Mm-hmm.
Customers are saving a lot of time. They're getting paid faster, and they're able to grow faster 'cause we have all the capabilities in one place, and we give them insights based on all the data that we can leverage, you know, on their behalf.
Mm-hmm.
Businesses that are on our platform are growing faster-
Mm-hmm
... and they're 20 points more likely to be successful than those that are not on our platform. So as things come back, I'm even more excited about the future.
Mm.
But we're not counting on the macro environment. We're just counting on our AI-driven expert platform-
Mm
... being the reason why they grow, and as interest rates come down, as consumers start spending more, I just think it'll be a tailwind.
Yeah. Our Chief Economist, Jan Hatzius, was here a couple of days ago, and he said, in the next several quarters, he sees rates going down to potentially 325-350.
Mm.
That's a major regime change, and just as things get tougher and tougher on the way up, we cannot ignore the fact that it might get a little easier from a cost perspective.
It's real, right?
Yeah.
You're gonna pay-
Yeah
... less for a home, less for a car-
Yeah
... less for supplies-
Yeah
... less on your credit card-
Yeah
... less on a personal loan-
Yeah
... and that frees up cash to do other things.
Yeah.
It's very real, very tangible.
I like the way you said it, less on this, less on that. That sounds positive.
More on growth.
And more on growth, yeah. Now, small business is a big business for Intuit. It's approaching $10 billion, same size as ServiceNow. Bill McDermott was literally here a couple of hours ago, sitting on that seat. So it's a big business. Tell us about how you got here. So nobody talks about the small business as a $10 billion business for Intuit.
Yeah.
But it's... To me, it's very revealing, right?
Yeah.
Because at one point, many years ago, it was smaller than taxes. Everybody's fretting about taxes. You're a tax software stock, and-
Yeah
... so now you're not just a tax software stock and something bigger than that. How did you get here? What are your aspirations for the small business segment going forward?
I love your question 'cause we... Don't take billions away from us. We're guided our business group being more than $11 billion this year-
Okay
... growing at 16%-17%.
Okay.
It's a.
You're at a run rate of 10.
Yeah.
Okay.
It's a big business, to your point.
Yeah, yeah.
I would say, Kash, a couple of things. One, historically, as you know us well, we've just been an accounting software. So what does that mean? We have been truly your-
Yeah
... financial management platform of record, your system of record to understand how your business is doing.
Mm-hmm.
We made a shift to start to get to a place where we are actually the platform for your business.
Mm-hmm.
And not just the platform where you do the work, but the platform where we do the work for you. And so what does that mean? We can actually help you grow as a business-
Mm
... put together your marketing campaigns, who you should go after, why you should go after them-
Mm
... make sure you get paid, make sure that our workforce solutions can take good care of your employees, and oh, by the way, get your books and taxes and your accounting done for you.
Mm-hmm.
That shift to add services so we become the platform is really what's driven the growth-
Mm
... and as to why we've, you know, have the privilege of serving 10 million businesses at this scale. But I would tell you that the best is yet to come because we really are just making a real impact serving-
Mm
... larger businesses, mid-market businesses. When you look at our overall TAM-
Mm-hmm
... it's $300 billion in size. That's addressable.
Mm-hmm.
Of that, almost $200 billion is our business opportunity, and within that, almost $100 billion of it is mid-market for us.
Mm-hmm.
Mid-market for us is defined sort of up to about 250 employees, so over time, we're gonna go even bigger.
Wait, wait, so just up to 200 alone is seven hundred billion in-
Yeah, it's almost $100 billion in total addressable market. For mid-market, that goes up to about 250 employees.
Mm-hmm.
And so when I think about the future, back to your question, we have a massive opportunity to really serve mid-market customers. It's one of our five bets that we declared five years ago. We've got some exciting announcements coming in the coming month, in terms of additional capabilities to really serve larger, more complex
Mm
... customers. And I think that's what gets us excited about the future. And by the way, I had my very good friend, Bill McDermott, that you had earlier today-
Yes, yes
... actually come talk to our team about what does it really take-
Mm
... to build a mid-market enterprise business? Now, we don't wanna serve enterprises like ServiceNow-
Yeah
... which is a wonderful company.
Yeah.
But we are building a juggernaut of a platform and go-to-market motions to really serve mid-market, and that's really, when I think about going from $11 billion to $20 billion or $30 billion over time, just in our business group-
Mm-hmm
... that's the opportunity.
What are the things that he suggested to achieve that trajectory?
you know, it was great reinforcement-
Yeah
... of really our leadership team that we've revamped in mid-market to build the business, but coming from him, it means a lot.
Yeah.
The key things that he shared was, one, pick the segments that you wanna go after.
Mm.
We have a number of segments, but he said as you pick which ones they are, get two or three customers.
Mm
... that are influential, 'cause the rest in that segment will wanna flock with them.
Mm-hmm, mm-hmm.
Two, build the best customer success and sales organization possible-
Mm
... and let them drive your roadmap.
Mm-hmm.
Which, by the way, for us is very different-
Mm
... 'cause we've been a do-it-yourself platform.
Mm.
We'll, you know, do one-to-masses marketing.
Mm.
This is very different-
Mm-hmm
... where we've built the capability, a sales team. By the way, this is the first time in our history we have an outbound sales team.
Wow, okay. Yeah, I but-
But that just shows you-
People were asking, "How does Intuit sell? Do they have a sales force?" And we, "No-
It, it-
... the website is a sales force.
That's right. It's the one-to-many marketing-
Yeah
... and inside sales force-
Yeah
... in our business group, but now we've built out-
Yeah
... an outbound sales force to really-
How is that coming along? So what kind of people are you hiring, and what kind of ASPs can these guys go or people go get secure for you?
Yeah, so, you know, first of all, our average revenue per customer for these larger customers is 5X or more compared to the ARPC-
The ARPC
... of our smaller businesses.
Yeah.
And it's more because they use a lot more payments-
Mm
... payroll-
Mm-hmm
... Mailchimp-
Mm
... our human live expert capabilities, so the bigger customers, bigger scale-
Mm
... you know, bigger, bigger volume. But, you know, as we... You're gonna laugh at this, but it just demonstrates the opportunity that we have. As we've been building out our outbound sales force, not only as we call on our larger accounts-
Mm
... because they have an opportunity to upgrade to our platform, but as we prospect, 'cause a lot of our mid-market opportunity is non-consumption. They do everything manually. We're not having to get you to switch from another platform. The biggest thing we hear from our customers is, "Wow, this is the first time Intuit's ever called me." We've never had an outbound sales force. "Hey, by the way, can you fix these two, three things?
Mm-hmm.
Wow, you have payments. Wow, you have payroll. Oh, wow, you're about to come out with-
Mm-hmm
... capabilities, 'cause I need... I have multi-entity needs.
Mm.
I have consolidation of reporting needs. I have rev rec needs." Just like all the needs Intuit has-
Yeah
... these bigger businesses have.
Yeah.
And, uh-
It's funny you say bigger, but it's still 200 employees.
Still 200 employees-
You can still go higher.
... but they may have multiple branches-
Yeah
... and they need to consolidate-
Yeah
... their reporting. They need automation in their workflows. The CFO can see certain things, the CEO can see certain things.
Yeah.
Those are all the capabilities that are new, and what gives us a lot of confidence is we really serve the mid-market as we've defined it.
Mm-hmm.
We really have an opportunity over time to go to much larger-
Mm
... mid-market customers, and it's not a crowded space.
Mm-hmm. How, what, what's going on there? So why haven't people jumped into that market?
It's very hard. It's very hard. I mean, you've got Intuit, right? You have then the Oracles and the SAPs, and somewhere in the middle-
NetSuite, yeah
... you may have the NetSuite of the world.
Yeah.
Not maybe, you have the NetSuite of the world.
Yeah.
But when we look at this cohort of customers, they're looking for an easy platform.
Mm-hmm.
They're not looking for a two-year project to go to a platform.
Mm-hmm.
They're not looking to pay $20,000, $30,000, $40,000 a year.
Mm-hmm.
It's a sweet spot-
Mm-hmm
... for us because we know these customers. We just haven't had the capabilities in the cloud.
Mm.
We've had it for years on our Desktop Enterprise-
Yeah
... but not in the cloud.
Yeah.
So we're building all the capabilities in the cloud, and that's really some of the largest growth opportunities as we think ahead...
Mm
... for the company.
Great. Let's talk about Intuit Assist. We had Bill talk about Now Assist. Let's talk about Intuit Assist.
I have to talk to Bill. I don't know if he copied us or... or what, but, you know.
The assist thing, you know? Copilot Assist, it's all gonna become agents, Sasan.
Yeah.
So we will not have this debate at all-
Yeah
... a year from now, so.
You're right, we will not.
But still, you still have this brand name called Intuit Assist.
Yeah.
What is your vision for Intuit Assist in your segment going forward, and what is it that you can do for your customers that they're not able to do currently?
By the way, real, real important question, because Intuit Assist is not a feature. It's not a functionality. It's not a plugin. It's fundamentally the strategy that we declared five years ago.
Mm.
As just a quick refresher, what we declared five years ago is, we don't wanna build workflows so customers do all the work.
Mm-hmm.
We wanna build experiences where the work is done for our customers.
Mm.
In order to do that, we have heavily invested in the last six years in our customers' data and in our AI capabilities, particularly machine learning, knowledge engineering, and of course, now Gen AI.
Mm
... to really take the customer's data and do their marketing campaign for them, help manage their cash flow, create invoices, send invoices on their behalf, follow up with customers, make sure they get paid. That's what we mean by it's done for you.
Mm-hmm.
And the customer can always tweak and . . .
Mm
... let us know what things they want done, differently.
Mm-hmm.
So really, Intuit Assist is about done-for-you experiences.
Mm-hmm.
I think you made an excellent point a moment ago. There won't be an Intuit Assist. We won't be talking about Intuit Assist a couple years from now.
Mm.
It'll just be the experiences-
Yep. Yep.
Everything will be about-
Mm-hmm
... it's done for you.
Mm-hmm.
And, we're gonna talk about this in a couple of weeks at Investor Day. But we have really been in market with done-for-you experiences in certain areas across the company for about a year.
Mm-hmm.
There's nearly 30 million consumers on our platform that are using one element of Intuit Assist or another, and about a million businesses.
Mm-hmm.
And just to use a couple of examples,
A million businesses using Intuit Assist?
A million businesses, and the things that... And let me focus on the business example for a moment.
Mm-hmm.
We're taking things like a business's notes and a PDF file and creating an invoice or creating a bill.
Mm-hmm.
That's saving them more than 50% of time, and in many cases, those that are using these capabilities, the Intuit Assist capabilities, they're getting paid 40% faster.
Hmm.
Better cash flow-
Working cash flow.
Time savings. Monetizable for us 'cause they're using our
Mm
... money, capabilities. We're automating and onboarding for new customers, and so what we're seeing is, new customers that are using Intuit Assist, where we're doing the work for them, nine-point improvement in onboarding. By the way, that results over time when we nail the whole experience, where we do everything for them-
Mm
... conversion, retention, new customer growth. So we're seeing real, tangible impact by being in market.
It's also impacting your retention rates in small business.
Yeah, first of all, we're helping the... This is back to what's our objective.
Mm-hmm.
Our objective is to have a platform to help a small business-
Yeah
... and a mid-market business-
Yeah
... grow their top line and grow their profitability. That's our objective.
Yeah. Yeah.
When we do the work for them, we offer them marketing campaigns they should run 'cause we know where they can sell more services. When we help them with, "Hey, you can take out capital," we'll-
This is all Gen AI at work?
This is all Gen AI.
Yeah.
It helps drive their profitability and their revenue growth, and all those things I just mentioned, we monetize.
Yeah.
And so it's more-
Yeah
... payments volume for us, more payroll volume for us-
Yeah
... more Mailchimp volume for us 'cause we're doing it for customers versus having them do the work.
Sasan, I don't believe this. You're not spending $100 billion on CapEx with LLMs. How can you get Gen AI right? How is this possible?
So this is motivation for all of you to show up at our Investor Day. But we're not a capital-intensive company in terms of what we do, right? And we're not new at this.
Yeah.
Everything that I'm talking about is in our run rate and in our guidance 'cause we've been at this for five-plus years, and we use... You know, we, we've built our own, what we call GenOS, Gen AI operating system.
Mm-hmm.
We have our own LLMs that have agency and authority to deliver all these experiences 'cause we only train our LLMs on the customer's data.
Mm-hmm. Okay.
And in our world, things have to be accurate-
Mm
... right, 'cause we're dealing with people's money.
You can hallucinate? No? You don't allow it?
You know, sometimes I hallucinate at night when I'm sleeping, but our platform cannot hallucinate. So accuracy matters, right, 'cause our customers count on-
Yeah
... the experiences that we deliver.
Yeah.
And so therefore, we've been investing in this for years, and we use multiple cloud providers when we need to scale up and down. But we're not capital intensive, so everything that you're hearing from me does not require a massive ramp-up in our expenses or CapEx.
Yeah, so you have your own domain-specific model, SLM-
That's right
... or LLM, whatever you wanna call that. Yeah.
That, that's right.
Yeah.
It's called our Intuit Large Language Models. Now, by the way, we test and learn and work with multiple LLMs.
Mm-hmm.
We do it because we're always testing for accuracy, performance, and cost.
Mm-hmm.
And there are certain experiences, by the way, that we wanna deliver, we may use-
Mm-hmm
... our LLM may decide we're gonna use open source-
Correct. Yeah
... for a certain experience that we wanna deliver.
Yeah.
But we always compare the experience across those three dimensions: accuracy, cost, and performance.
Yeah.
And across all of those-
Mm-hmm
... our LLMs are executing, you know, quite well. But I believe a lot of LLMs are gonna exist over time. I don't think this is gonna be a space where only two, three people own the LLM market, 'cause everybody's gonna want to deliver experiences-
Yeah
... that are unique to their customers.
Yeah. Does the name Kevin Scott ring a bell, the CTO of Microsoft?
Yes.
He was here literally yesterday, and he talked about how he sees a role for LLMs, SLMs, in addition to LLMs. Of course, he was being very nice to the whole ecosystem, and he brought forth a very interesting point. He said, although the LLMs seem to be converging in functionality, that we're on the edge of another step-function improvement in price performance of generative AI, and he seemed-
100%. 100%.
Wow, okay.
In fact, I would just remind us-
Yeah
... We are so early in the journey of AI.
Mm-hmm.
Not just Gen AI, but AI. We've been at this for six-plus years, and so we've made so many investments across... Again, for us, we define it as machine learning, knowledge engineering, which is very proprietary to us, that's capability that delivers accuracy across our platform, and then Gen AI. We're still at the early days-
Mm
... in terms of the capability of LLMs. There are things that are being worked with LLMs that will blow your mind if we were to talk about it in this room, of things that are coming.
Mm-hmm.
I think at the end of the day, our focus is: Well, what problem does it solve for customers?
Mm-hmm.
What things can we do for customers that we couldn't do otherwise?
Mm.
And it really goes back to the examples I was sharing earlier.
Mm-hmm
... which is, if I can, if you're on the road, and you write stuff on a notepad, and you can take a picture, and I turn that into an estimate, I turn that into an invoice with progress payments, I follow up with your customers, I send notes to your customers, you're always in control of that-
This is happening right now?
These are the things we're working on right now. Come to Investor Day.
I will, of course.
Some of this-
I've never missed an Investor Day.
Some of this is... Well, I'm trying to get your audience to there.
Yeah. Yeah.
Uh-
Investor Day.
But these, for us, it's about what problem does it solve?
Yeah.
And that's the biggest learning journey we've been on-
Yeah
... which is, what can we do that the customer will care about?
Yeah.
'Cause all these discussions about LLM and this and that is interesting, but at the end of the day, if there isn't massive application adoption-
Mm-hmm
... none of it matters.
Sure.
I believe there will be a revolutionary-
Mm
... adoption of our applications over time when we solve some of these problems well, because we'll do it for you, with you always in control, versus you having to do the work.
Yeah. By the way, I love the setup of your analyst days, where you have people not just listen to presentations back to back, back to back to back to back, but actually go take turns, go through demos,
See the experience.
Yeah, exactly.
Yeah.
Go through multiple experiences, multiple product families-
Yeah
... multiple demos, multiple interactive sessions.
Yeah.
That's a best practice. Payments, let's talk about payments. This is unfair to you, but it goes back to the days of Brad Smith, who would say, "You know, if everybody, anybody who's got a credit card, that's 50% of the population, they should be using our payments business.
Yeah.
I mean, "They should be using our payments, and therefore, our business, payments business should do well." And for the longest time, I used to ask him this annoying question: "What is the attach rate of payments?" And he would say, "5%, 6%, 7%.
Yeah.
And he stopped answering, and I stopped asking. Where are you with payments? And when I spoke to you last couple of years ago, you laid out this vision for payments and this having built out the connections between these small businesses, the wiring that had to be done, integration to Intuit, integration of their QuickBooks to their banking system, and you said at one point, "This thing is gonna be so connected-
Yeah
... you're gonna hit escape velocity." Where are you? What are your aspirations for the payments business, and where are you in the process of building out potentially a massive payments business?
So in order for us to achieve what we've declared for our customers, and let me again use businesses as an example-
Mm
... which is to really drive their revenue growth and their profitability, we have to be excellent at helping them with cash flow.
Mm-hmm.
Which means that we have to help them get paid. We have to help them pay their bills. We have to actually help them with providing a loan, as long as we know that they can pay it back based on all the data and everything we know about them. So we have to be fantastic.
Mm
... in all money in, money out.
Mm-hmm.
And so the reason I start there is, to your question around payments, it's a massive opportunity, and we have to be great at it because it's fundamentally critical for our customers. And we've spent the last, by the way, five, six years building out all of our capital money movement platform capabilities, from the data to how we can leverage the data, to now we have capabilities to give you access to capital, to help you get paid, to be able to pay bills with bill pay, line of credit. We have all those capabilities now, and our biggest area of excitement is what Intuit Assist can do. So think about the examples I just used a moment ago.
Mm-hmm.
Like, right now, one of the most used features with Intuit Assist is we remind the customer, "You have all these invoices overdue. Would you like us to follow up with customers?" And we provide them a text.
Mm.
They can make it, say, click more friendly, more aggressive, and we create the follow-up, and we execute it. They've been getting paid 40% faster. So to your question of payments-
Mm
... it's really doing it for the customer.
Mm-hmm.
'Cause a lot of our customers still use checks.
Mm-hmm.
Believe it or not, a lot of businesses use, like 40-plus% of businesses still use checks to pay one another and how they engage with consumers. So it's really digitizing all of that, and the more we can do it for the customer-
Mm
... versus the customer has to figure out how to do it, the more we can grow our entire, money portfolio. And, we'll talk about this more at Investor Day, but, our workforce solutions, which includes payroll-
Mm
... grew more than 20% this past year. Our overall online money portfolio grew more than 30%, and that's because we're starting to really-
Good question
... deliver experiences for our customers where it's at the point of need-
Mm-hmm
... so that they can drive their growth.
Amazing. Amazing.
So more to come. I won't give you an exact number, but we have to be successful at it.
There has to be some percentage, yeah, but I'll take the billions of dollars in revenue over a-
A percentage
... percentage attached. Let's talk about QBO Advanced. I mean, is QBO Advanced gonna help you crack the plus 200 employee market, or is it still at the top end of the 200? Is that gonna open the doors for the next chapter?
So for the audience, right, our QBO Advanced is our platform to serve larger, more complex, businesses, and it's been quite successful. This past year, we actually had 28% customer growth.
Mm-hmm.
And the ARPC of QuickBooks Advanced for these larger customers is actually 5X the ARPC of the smaller businesses that we serve just with QuickBooks. So that just tells you the opportunity is massive, and our customers are embracing it 'cause it really drives their growth. You know, we'll be making some announcements in the near future that really launches new capabilities, like what I was mentioning a moment ago, things like consolidated reporting, segment reporting, multi-entity, just different currencies.
That's the big, big guy stuff, but yeah.
And that allowed us to serve the larger-
More sophisticated customers.
... customers.
Yeah.
And it's a $90 billion, closer to $100 billion total addressable market just in mid-market, and we're just scratching the surface. And so we have big aspirations to really drive revenue growth and profitability growth for our customers...
Mm-hmm
... with our advanced platform and some of the things, to come, and the go-to-market motions that we've been building.
So, I'm curious, what do people use in that segment of the market now? Is there some legacy stuff like NetSuite, JD Edwards?
Mainly manual. No, mainly... You know, we use the words non-consumption 'cause the mid- And what we mean by non-consumption is the majority of customers in all of the business segments that we serve, by the way, are using Excel-
Mm-hmm
... Google Sheets-
Even-
... Word documents.
Mm.
They may use an app here or there.
Mm-hmm.
On average, they use, like, seven different apps that don't talk to each other, so they waste a lot of time, a lot of money, a lot of cash flow issues.
Mm-hmm.
It's really digitizing their whole business. We're not switching them from a platform.
Mm.
We're switching them from doing everything manually to doing it in one place.
It's surprising how much- how little automation there is to that segment. If you notice that we spent 32 minutes, and I did not ask you anything about taxes, and I... My goal is to stay away from taxes as much as possible, but maybe we get to the end of it.
Yes.
But -
We love taxes.
I know you love taxes. I know you love taxes, and I have to pay my taxes, too. So one question before we get to the tax thing, how is the company evolving its product and go-to-market strategy to take on this mid, m-
Mid-market
... mid-market opportunity that you have in front of you?
It's been a significant evolution.
Yeah
... because we are a company, if you look at our 40-plus year history, where we've built do-it-yourself platforms, where we do mass marketing. What we've been accelerating the last several years is building a platform that large businesses use, which is very different than smaller businesses and the examples I provided earlier-
Mm-hmm
... but also building out our go-to-market motions.
Mm-hmm.
I mean, we, as I said a moment ago, for the first time, we have outbound sales.
Mm-hmm.
We've hired sales folks that are not only managing our, some of our large accounts and upgrading them but also, really hunting for new, 'cause we now have a very disruptive platform at a disruptive price that can really drive the growth of the businesses that we serve. So, we actually spent our leadership conference a week and a half ago talking about this, and that's where I'd invited Bill in-
Mm-hmm
... to talk about what it takes to be a mid-market enterprise company.
Mm-hmm.
And so the motions, the platform capabilities is significantly different, all of which, by the way, we've been investing in, and we're just, I think, building momentum.
Mm-hmm. So we've got a minute and 30 seconds to get to the dreaded taxes.
We love taxes. It's not dreaded.
You love taxes. I have to pay my taxes too, like I said. Now, a bearish investor, if you will, might argue, "Well, you know, Intuit is retreating from the tax market. They lowered their guidance. They're moving into the SMB market because the tax thing is just so competitive. They've given up on it." What is your rebuttal to that?
So first of all, we love proving people wrong, and-
I love it.
... we love being the underdogs, and we love being underrated. So don't ever bet against us.
Mm.
That's part one. Part two is, when you look at the tax market, it's about a $40 billion total addressable market. About $35 billion of that is assisted, meaning people are going to somebody else to get their taxes done. It's a very disaggregated market, hundreds of thousands of mom-and-pop shops, very manual, very high-priced. The other $5 billion is do it yourself.
Mm.
That's pretty much been-
Intuit
... our bread and butter in TurboTax, and we own the majority of the dollar share-
Mm
... in the do-it-yourself category. Our biggest opportunity and focus is the assisted segment and fundamentally changing the way taxes are done, where we do it within an hour, best experience at the lowest price. TurboTax Live, which is the platform to go after the assisted market, is now 30% of our TurboTax franchise.
Mm-hmm.
It's growing 17%, and we have a massive runway because we're just at the beginning of the journey.
Mm.
Out of that $35 billion in TAM, we're, like, less than 1% of it.
Mm-hmm.
And so we have a huge growth opportunity in tax. I lowered our long-term expectations and I was very clear, it's interim, for tax, to temper investor expectations, but watch what we do now.
Mm-hmm. You're going for value, not for volume, which I like.
Yeah.
It's getting a lot of people upset. "Oh, yeah, units are down, and ASP is up. They're overcharging their customers." But it's part of growing up-
Exactly
... to be a software company that adds value to its customers.
Exactly.
Able to charge a fair price for what you have to offer, and we wish you well in that journey.
Thank you.
Thank you for coming to the Goldman Sachs conference, and you're invited to come back again next year, and
We'd love to come back.
... show us more of the AI stuff.
Yeah.
Was it fun, guys? I mean, this is great, but let's give a round of applause to Sasan.
Thank you.