All right. Good morning, everyone. If I can, I'll ask us to try to grab our seat so we can get this started. Got a nice crowd this morning. It's good to see all these smiling faces in Mountain View, California.
So I want to welcome you to Intuit Annual Shareholder Meeting. I think for those of you who haven't had the pleasure of meeting, my name is Brad Smith and I serve as the company's President and Chief Executive Officer. And following this morning's formal portion of the meeting, I'll spend about a half an hour giving you an update on the company's performance and our strategic priorities as we look ahead and then we'll open it up to you to talk about anything that may be on your mind. Before we get started, there are just a few introductions. I won't make them all, but I just want to highlight some people that are in attendance this morning, starting with members of Intuit's Board of Directors.
We are interspersed throughout the room, so I'm going to just ask them to raise their hand and I'll call out the names. We have Bill Campbell, our Chairman of the Board. Yes, we have Scott Cook, who is our Co Founder Chairman of the Executive Committee sitting in the back. We have members of the Independent Directors, so we have Dennis Powell sitting here. We also have Chris Brody, Diane Greene, Suzanne Lord Johnson.
I'm scanning the room to see who else maybe we have some of the other directors. Okay, and then we also have Gordy Davidson here, our outside counsel, great friend from Finlayson West. We have members of our outside audit firm Ernst and Young and we have Chris Hummel from Broadridge who will be serving as our Inspector of Elections. Now you also have members of Intuit's management team in the room, so the people who produce the product and deliver the services that you count on every day are here as well, so hopefully you get the chance to meet some of them. And with that, I'd like to introduce one of those management team members, Laura Fennell.
She's our General Counsel. She also serves as our Corporate Secretary. She's going to conduct the formal portion of the meeting. So let me introduce Laura to come up, always fashionable. There you go.
Most important thing.
All right. So this is the formal portion. I have an affidavit from Broadridge certifying that the notice of the stockholder meeting was properly mailed on November 27, 2013 to all stockholders of record as of November 25, 2013. I also have a list of the registered stockholders entitled to vote at the meeting and it's available for inspection if you'd like. The Inspector of Election has executed his vote.
Broadridge has counted the votes cast on each proposal and we have a quorum. The polls are now open, so if you haven't already turned in your proxy and you need 1, please raise your hand, but you shouldn't vote unless you want to revoke your proxy or change your vote. So does anyone need a ballot? No? All right.
So, stockholders will vote on 4 proposals described in the proxy statement and management as you know recommends you vote for all 4 proposals. Please mark your ballots and then the polls are now officially closed. We will publish the final vote results in a Form 8 ks that we expect to file within 4 business days from today. We do have preliminary results of the vote and the stockholders have elected the 9 nominees named in our proxy statement to the Board. They've ratified the selection of Ernst and Young, they've approved our amended and restated equity incentive plan and have advised their approval of the company's executive compensation.
So that concludes the formal business today and the formal portion of the meeting.
So in
just a minute, I'll get Brad back up here, who's going to give you a business update and answer your questions. But before I do, I want to note 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. So for more information about those 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 thanks for your time. The formal portion is over and I'd like to bring Brad back up.
Thank you, Laura. Okay. So let me start by just setting some context. Fiscal year 2013, which ended on July 31, our fiscal year starts August 1 to July 31, was a year of a lot of change at Intuit, but it was proactive change. It was change that we think has better positioned the company for a stronger future and it's also change that's moving this company from an individual set of business units to an ecosystem that actually gets stronger by working together and we think that positions us for strong outside if we execute.
So what I want to do is spend some time this morning painting that picture for you. And to do that, I'll start with a look back at our performance in fiscal year 2013. And I'll start with our financial results. I realize this is old information now, but last year we had a challenging year in one of our major businesses, our TurboTax franchise. The total category had a tough year, the IRS was delayed in accepting tax filings and all of us were out there in a hyper competitive market.
Despite that challenge, company still collectively grew revenue double digits, we expanded our operating margins and we grew our earnings 11% year over year. But when we assess our performance against our own expectations, these are the financial principles that we use to run the company, we would tell you that it was a mixed year. 10% revenue growth did not achieve the internal aspirations we had set for ourselves nor do we believe that reflects the total potential of our company assets if we're executing on all cylinders. And I will tell you that our management team did a really nice job of offsetting that top line softness by reducing expenses, but we still delivered on the lower end of our 50 to 100 basis points of margin expansion. So that's why we would say it's a mixed year.
But I don't want to paint a bleak picture. Fiscal year 2013 was not without its share of significant wins and a lot of momentum and it also gave us increased clarity where we need to really double down to improve our performance. So for those of you who have attended before, I want to share what I do in each year, my reflections on both sides of the ledger. And I'll start with the areas where we're making progress. The company continues to work really hard at taking a company that just celebrated its 30th anniversary with 8,000 employees and move with the innovation and the speed of a start up.
To do that, we try to create a culture where the most talented people can do the best work of their lives. And I'm proud to tell you that last week Fortune Magazine just notified us that for the 13th year in a row Enso was ranked as one of the top 100 best places to work and this year we cracked the top ten at number 8, the highest ranking we've ever had. One of the reasons we're able to do that is we have a culture where 8,000 employees act as entrepreneurs. They run experiments. They're able to take unstructured time.
They identify big problems they think aren't being solved well. And then we experiment our way to find out which ones customers like and those are the ones we bet on. So it really empowers the organization. And we put more of our energy this year into trying to reimagine our main flag line or our flagship products. So TurboTax this year has a completely new look and feel for returning users and for new simple filers.
You'll see in a minute a completely reimagined QuickBooks online, the hosted version of QuickBooks. And so we're really applying that innovation to take our products to the next level. We have real momentum in small business. Last year, our small business ecosystem grew customer bases, expanded to over 100 countries and grew revenue 16% year over year. So, we've got really good momentum going there.
And then last but not least is last year I talked about driving a lot of change. We implemented a project called Bold and Bold was basically designed to restructure the company to focus the assets on 2 strategic outcomes and divest businesses that no longer strategically fit. I'll talk more about that in a minute. It took a lot of courage and it took a lot of change, but we think it's given us momentum in the first half of this year that we think will continue to build over time. So those are the positive attributes of last year, but we also know that we were not satisfied in several key areas.
First of all, I mentioned we don't think that 10% revenue growth is the total potential of the company. This year we guided 6% to 8%. We're in a little bit of a reset mode in our consumer tax business. We fundamentally believe over time this is a very strong double digit growth company if we do the things that we know we need to do. One of those things is we have to continue to invest in acquiring new users.
And in particular, our product experiences have to be drop dead simple for someone who's never used the product for the first time. To do that, we have to reduce all the complexity that sometimes gets built into a product over 10, 20 30 years. I'll show you a demo of QuickBooks Online to show you the from to of what it feels like now to get started in our new online accounting product. Global is another way we're going to accelerate our growth. There are 600,000,000 small businesses around the globe.
We have less than 1% of those as customers today and yet we have discovered our product really resonates for them and so we have an opportunity to accelerate global expansion. And consumer tax, I mentioned last year, TurboTax had a challenging year. At the same time, our team didn't sit back on our heels. This year they completely reimagined what Tax Prep Software can do. They're looking to eliminate 7,000,000,000 hours a year of tax preparation where people sit down and answer questions and key stuff in and we've got a first step of what I think will be a multi year journey to revolutionize the way we try to do tax.
So we've got a lot of focus on what we need to do. Each year we do this. We talk about areas we feel good about, areas that we're disappointed. The one thing I can tell you in 11 years of this company, when we focus on something, the next year we can drive improvement, which is why when you put this performance into perspective over the last 5 years, the company has grown its top line 11% and it's earning 16% and the stock price has outperformed the NASDAQ 2:1. So I fundamentally have confidence that while it wasn't the best year that we wanted to deliver, we've taken the lessons learned and we're applying that to our actions going forward.
That's sort of a look back at fiscal year 2013, but I want to finish with one last piece which was the second half of the last year, we implemented this thing called Project Bold that I just talked about. Why did we do it? Well, if you've been with us for many years, you know that in 2,008 we celebrated our 25th anniversary. At that time we saw that shrink-wrap software sold through retail outlets, which has always been our bread and butter, was quickly starting to shift to people who wanted to order products online, download the software or potentially order them through an app store. We call that connected services.
And so we said we've got to make the transition. Just as we did from dock to windows, we've got to be able to Windows up to people who want to use hosted products and on multiple devices and we committed to doing that. And in the last 6 years we've doubled the size of our client base. We had 2 thirds of our customers now using those hosted versions of products and our revenue has now shifted to 64% being recurring revenue and subscription, no longer one sale at a time. But we noticed something happening about a year and a half ago.
Our momentum was starting to slow down. We had a really strong run 2,008, 2,009, 2010 and then we started to say, you know what, this was a growth curve or what they call an S curve. I would say about 18 months ago we were right here. We weren't out of gas, but we just were happy to work too hard to get that next inch. And so we stepped back and we looked at the marketplace and we reassessed the customer needs and the big problems that had yet to be solved.
We looked internally and saw really spots of brightness, things going on in certain businesses and said, well, how do we teach the other businesses to do what this team is doing? We also followed best practice companies. We went out and we shadowed the best product companies that we admire and we learned from them. We put it all together and we said here's areas we need to double down on, global, small business, accountants. These are businesses that no longer fit, online banking, healthcare, they're becoming a distraction to management.
We've got to find a way to find a good home for those businesses and we repositioned the company to be more of an ecosystem. We think that set us up for the next chapter. So what I want to do is show you how it all fits together. And the story is about a half a dozen slides that you've seen before through the foundation of the company and through our company strategy that I talked to you about last year and then I'll show you how this restructure actually has put that strategy focused on 2 very specific outcomes that we think will accelerate performance. Fair enough?
All right, so we'll go with the story. The story goes back 30 years to that little kitchen table just across the hallway with Scott Watched Signy, struggled to balance the family checkbook and said there has to be a better way. And at that moment an idea which eventually became Quicken came to mind, but a mission which became the company to improve people's financial lives in such a way that couldn't imagine going back started a 30 year journey. Now along the way we learned that it wasn't just managing their bank accounts. Eventually they also had to deal with the other big thing, which was taxes and we moved into tax and it wasn't just consumer tax, but also accountants doing tax.
And then we found small businesses using a lot of these products because they were simpler than the ones built for businesses and so we eventually said, hey, we can kind of see the customers we're going to serve here. We're going to be a small business, a consumer and an accountant focused company. And we're very clear about what we do. We organize customer back and then we build products to solve the things they don't want to think about. We don't kid ourselves.
We don't make video games. People don't get excited about doing taxes. They're not waiting to pay the next bill. They can't wait to get to work to do payroll. So our job is to simplify that so they can get back to the things that they have passion for and we get excited about that.
The things that are required but not desired and if they don't get them right, they've got big consequences and that's what we do. We wake up every morning fired up about that. That's our mission, hasn't changed. We also talk about our values and values are important. You can't open up a newspaper today or go online and read a news feed and not hear about privacy and security breaches or credit cards, all these other things and it is important for us when we're dealing with the information we have to be very clear about the company we are and that we will treat your data with the respect that you deserve and we won't use that information without your permission and we will do everything we can to safeguard it.
That's why we talk about our values. These are the behaviors and standards we hold ourselves accountable for. The third thing that we have is foundational that hasn't changed in our strategy, we have our mission and our values is the capabilities we practice every day that we think make our products different than everyone else and make our company culture different for great talent to come and work. And these are 2 things. These are customer driven innovation and then design for delight.
And customer driven innovation on the left is basically how we choose to focus our company's resources. We look for huge unsolved problems in the market that no one else is solving well. We, plus select partners, go try to create a solution that no one could imagine could have ever been done and we try to turn that into a big business. And the Magic Intersection is that little yellow triangle there. And then Design for the Life, how you take an 8,000 person company and break them down into small Navy SEALs teams.
And they get to move with a lot of autonomy and independence and they're able to move fast and they're able to be creative and we look for the best ideas that emerge from those teams and those are the ones that we say that's something to invest in. Now the question is how do you take all this unbridled energy and pick the winners? We, I, I don't have to pick the winners. The market picks the winners and the way the team does it is we have this thing called succession metrics. Now what it basically does is avoid the trap that I will tell you I have fallen into in the past.
I used to ask the teams, I don't want to hear any ideas unless it's a $100,000,000 idea. Now I would not kid you when I said I probably got presentations for $50,000,000,000 $100,000,000 ideas a year because in a spreadsheet everything can add up to $100,000,000 The question is in the market is it really getting traction and ultimately going to be $100,000,000 So we start with love metrics. Show me one customer that used your prototype, loved it so much that they kept using it when you left the office and they're talking to their friends about it. Then we've got something. And now show me that you can introduce a better version of that prototype and the next group of customers love it even more.
That's the cohort. And then show me they start loving it more than the competition. That's the market. And then show me that it's a $100,000,000 idea. So that's the way we manage our projects and we get to pick the winners based upon the market data, okay?
Now the last foundational element of the strategy is True North. This is how we measure success at the company level. If the projects are managed with succession metrics, picking the winners that way, at the company level this is what we try to do. We want to have a company where the world's greatest talent can do the best work of their lives. We want that talent to be so customer passionate.
They show up every day trying to solve big problems for customers that grow our customer bases and our products are at least 10 points higher in net promoter willingness to recommend than any competitor. And finally, we want to do that in a way that pays back for shareholders who invest in this company and expect better returns. That's how my performance is measured. That's how the entire company's performance is measured. So, those 4 foundational elements haven't changed.
Neither have the big opportunities we see looking ahead. I shared this with you last year. These are the 4 macro trends, the 4 secular trends in the market. I won't go through them in detail because you've heard me talk about them before, but just as a reminder, the first is social. Now researchers call it participation driven innovation because they get paid by the word, but social is basically we want to participate now.
We choose the news feeds. We choose the apps. We choose the ringtone on our cell phone. And so if you want to be a successful company serving customers today, you can't just build a 1 size fits all product, it has to be a platform, a platform that you can customize to make it just the way you want it and other developers can actually build on it and give you additional services that maybe your engineers aren't going to have the time to build. So we have to be a product and platform company.
The second is the world's borders are gone. I mean we could see this in the political realm now, but what happened in the software world is as soon as everything moved up into the cloud with the internet, the very next day 20% of our customer support calls were coming from people outside the country. There is no border around the internet. I mean, look at governments trying to do all the censorship. You just can't stop the internet.
So we have to become a global company if we want to compete in the next chapter. The third is the mobile experience has changed all of our expectations. I teased last year about little kids that walk up to TV screens now and swipe the glass thinking that's how you change the channel. Well now it's getting even crazier. You've got Google Glass, You've got computers on wristwatches and we have to be thinking about how can we apply those tools to the things we do and will they have relevance going forward.
And then the last is the power of data. Data has two sides to it. You have to protect it. You have to ensure the privacy and security, priority number 1. But number 2 is can you use it in a way that makes the job easier for the customers, so they don't have to do any work at all and they get an even better return on the time they invest in the product.
I'll show you an example of that in a minute with QuickBooks Online. So those are the big trends and the last thing that's foundational that I shared with you last year, this is the 6th of the 6th slides, is this is our plan on a page. This is our strategy. It will be enduring for the next several years and it's very simple, but honestly it's very focusing. 1st and foremost, we still want to create the standard in the products that we deliver in the market.
We want to do the thing that people can't imagine going back to the old way. But our new paradigm is going to be measured by 2 things on the right. It has to be amazing for first time users because we have to grow the new user base. And number 2, it has to be reimagined in a world where the computer is now in the palm of our hand. No matter how hard, we will continue to support PC customers and we will continue to support those desktop customers.
At the same time though, they're shipping PCs now that don't even have disk drives and CDs. Now you have to download stuff. So we have continue to stay up with the technology. So we have to reimagine products that will also work on those devices. The second key piece, the second yellow box on the left is our product can't just be 1 size fits all.
They have to be platforms now that enable an end user to go in and configure them, but also enable us to solve 2 sided problems. Imagine an accountant who works with a small business all year and the small business keeps their books in QuickBooks and then the accountant needs to be able to reconcile those books and then have that feed into a tax return come tax time. Where on the desktop days, we used to email, it's called accountants copy back and forth and the small business had to stop work until the accountant did everything they wanted to do and send it back and they could work again. Now in the cloud, it's literally real time back and forth. And so it enables us to do it that way, it becomes a platform.
And the last is the power of data. Data is a really cool thing. Data can take an interview in TurboTax which used to take an hour and 40 minutes and help you get a tax return done in less than 15 because it finds all the information you keyed in last year, it goes to the bank and downloads your information, it imports your W-two from your employer and it does all the work you would have had to key in on your own And that is a powerful thing. Our goal is to have no data entry for taxes. Literally just log in and say here you go, does it look good?
That's what we would like to aspire to do and data will help us get there. So that's our strategy. Now, all those elements this past spring when we introduced Project Bold got laser focused on 2 things, 2 strategic outcomes, to be the operating system behind small business success around the globe, basically to power small business success around the globe and the second is to do the nation's taxes. Now if you look at the map over here, you'll notice it's not just the U. S, it's also Canada and we're not suggesting that Canada is the 51st state.
What we're saying is we have 2 countries today that we have a pro tax franchise that CPAs use a software and we have TurboTax that we sell in. That's why the apostrophe is after the F. The employees teased at first and said you're from West Virginia and they didn't teach you grammar, it's supposed to go before the F. I said no, it's plural, I think it goes after. So these are our 2 strategies.
I'm just going to hit them at a high level so you have a feel for what we're trying to do and then we'll open it up for questions, Okay? So first, to do the operating system behind small business success, what's happened behind the backdrop here is these business units, we used to operate as standalone silos. Our general manager for QuickBooks will convince you that we had the best solution to help you run your business And then 2 weeks later, our general manager from payroll would call you at home during dinner at night with a telemarketing call to try to see if you'd like to buy payroll that works with QuickBooks. And we would have these independent decisions. What we've now done is we have harmonized that experience so that you can't tell how we structured the company.
It's basically a seamless experience and I'll illustrate that for you. So, we've got several businesses here all focused on to be the operating system behind Small Business Success. The market opportunity is huge. In the U. S, 29,000,000 small businesses, today only 5,000,000 are customers.
I mentioned 600,000,000 around the world. There are 1,000,000,000,000 of dollars flowing through QuickBooks today. We get less than 1%. But we can't go at it one product decision at a time. Customers don't expect things to work that way anymore.
They want everything to work together. In fact, the average small business uses 20 different apps, applications and software to run their company And they want all of those things to feed each other. And if you become the one that the data won't flow into and out of, you become a source of friction and they will eliminate you and find somebody else who works with their other stuff. So we can't just be about working with Intuit's products anymore. We have to be about working with everything in the company that we're selling to.
That's why we're calling it an operating system. It needs to work with everything. And so that's our strategy, to be the operating At the heart of this operating system is QuickBooks Online. You notice it has a QuickBooks Online on the left side QBO and then there's one with an A after it which is for the accountants because the reason people do books is they have to work with their accountant so the accountant at the end of the year can reconcile them and do their taxes. So it needs to be a platform for both.
We also have additional things we do around the left to help small grow and pay their employees and on the right we help accountants get more clients and manage the firm. But all of it needs to work together seamlessly and that's our game plan. And by the way, not just with us, we announced the partnership with Square. If you've heard of Square, they're a very fast growing mobile payment company that for a couple of years everyone said, well, Intuit and Square are competitors. And I think we shocked the world by saying, no, we're solving 2 very complementary problems and we need to make sure that this works well for the client.
So that's what we're doing. Let me do a demo for you of QuickBooks Online. Now, I mentioned that we have new users as a focus. This is what you see when you're a new user. You come in, you have a couple of questions, you type in the industry, you see how the search works there, it keys in on certain words and says, okay, management consulting.
We ask you the company size, we ask you the products you sell and then we do something magical. We go out and start to look at the data in the cloud, over a half a 1000000 customers using the product today. We call this the business rainbow. Once we've looked at all those files, we look at those who happen to be management consulting just like you said you were and then we look for the ones that happen to be in your geography in case there's any special nuances between West Virginia and California. And then we say how did they set theirs up and we start to set up your QuickBooks online just the way they did which has proven to be good for them and then it's done in 10 seconds.
Now I want to contrast that with what it used to take in last year's version, 1 hour and 40 minutes. That's the power of data to not only make the product better for you, give you social proof that it's just set up the way others like you set it up, but get it done in seconds. This product has been in market now for just about 4 months or so. Was that right, Dan? Early indicators have been fantastic.
In fact, the accountants who typically have never liked our QuickBooks Online product did a review and called it Apple like. I was so excited to see that sort of a standard applied to our products. And the credit goes to Dan Wen O'Kos and his team sitting here, the General Manager, because they had really re imagined this product for the next chapter. What's neat about it by the way is it has an elegant version that works with the accountant just the same way and it's also global. It's not one for the U.
S. And everybody else has an older version, it's the same version around the world. So that's what's exciting about it. We're so excited, we have some very big aspirations. We think we can double the size of our customer base over the next 5 years.
Because now new users don't come in and go through an hour and 40 minute gauntlet, in seconds they're set up and hopefully they'll find a way to get really productive fast and they will continue to use the product. So that's our aspiration behind the small business operating system. The second piece is doing the nation's taxes. 2 quick elements here on tax. 1st, in our consumer tax business, TurboTax, we have set the paradigm twice.
Back in the early days when we bought the company ChipSoft, they took a form, put it on a doc screen, you could type it in faster than you could write and it quickly became the market leader and then as it became a part of the company, we transitioned that form into an interview. Did you get married? Do you have kids? Yes or no? And you could actually do that without having to fill out a form.
We did the form for you. Well, now a lot of competitors have copied that model. And so we've gotten into a battle of advertising dollars and lots of other things. And so we step back and the team said we have to re imagine what taxes could be and that's what we're going to talk to you about here. The other side is on the accountant side, the pro tax side.
The last time we saw accountants make a major decision to switch their software was when it went from DOS to Windows and now they pretty much stay with the software they're using. It's a 90 some percent retention rate, high 90s. Now what's happening is they're all raising their head and saying, I think I need to learn a little bit more about this internet and how it can work with my clients. And we have a 3 year head start on our competition with a hosted version of our Pro Tax product. So our game plan is in these two countries, Canada and the U.
S. Where there's 171,000,000 people filing returns with the Canadian government and U. S. Government, There's 2 different ways people file, they either give it to somebody else, it's either a tax store or an accountant or they do it themselves either with paper and pencil or software. The only 2 of those 4 that are growing are CPAs growing 1% and the number of returns through software growing 5% and Intuit is the market leader in both countries by a wide margin.
But we can't go at it the way we used to. We have to get a cloud based version in there for CPAs and we have to reimagine the tax paradigm for TurboTax. So we are doing that. A very similar sort of construct that you saw for the operating system for small business, but it's got a different outcome. Our goal is to eliminate 7,000,000,000 hours of tax preparation that people spend every year to get to the refunds that they deserve.
And for the CPA they spend 60% of their time keying in information that could have easily been just imported in. And so that's what we're trying to do is get to a paradigm of taxes are done for the consumer and they're ready to review for the CPA. We're excited about this. We have new versions of the products in the market and as always we have aspirational goals. Our team is signing up to do half of the tax returns in Canada and the U.
S. Over the next 5 years. That means adding 20,000,000 more tax filers to our franchise. Pretty exciting. Now, going to wrap up, got 3 slides here.
This is the story, that strategy I walked you through is focused on these two outcomes, but it really is grounded in the journey we began in 2,008 when we began to move our technology to the cloud. And because we have done that, these two ecosystems, the small business on the left and the taxes on the right are able to help each other as well. And here's an example. That new QuickBooks Online that I showed you the demo of has an accountant version, the sister version for the accountant and that accountant version has a button at the top called generate tax return. And now what happens is all year the small business is doing the accounting, it goes into the accountant's version, the accountant presses a button and in a matter of minutes the entire tax return is done for the small business.
And that would be a multi hour, multi call process done in minutes. So now our competitors say, I think I'm going to pick on QuickBooks, but how do I get the accountant to recommend, oh, I think I'm going to have Pro Tax but I don't have an accounting software, our stuff makes each other stronger because we're solving 2 sides of the market. So that's our game plan. We're excited. Our technology has been re architected to go after that.
At the same time, we're getting more efficient. We've shut down data centers over a dozen this past year that are no longer efficient. We have made our products easier to use by sharing data between them. We've been growing mobile, 10,000,000 customers using mobile and now our teams are really opening up the platform so that developers can build on it and we can start to share that data. The last piece here, now this is the fun stuff, this is the eye candy.
Has anyone seen any of the new ads on TV, the TurboTax ads or the QuickBooks ads or have you heard that we're running a contest where we're the 1st company in the history to actually buy an ad in the am I allowed to say this word, I guess I'm still not allowed to say it anyway, the biggest football game of the year in February. You actually have to pay royalties if you say what it is. But yes, so the point is we're actually buying an ad for a small business owner and the nation voted on the most inspirational story they saw and in the Q3 the biggest game of the year we will actually be buying an ad for a small business owner. First time a company has ever bought an ad for somebody else. And those are all fine, but they're all part of a strategy, it's a marketing strategy.
For 30 years, we have been proud of every product we built and that product has been carried with the brand Quicken, TurboTax, QuickBooks. And then we go out and talk to the market and we say, what do you think of Intuit? And they say, well, who's that? We make Quicken, Turbo, oh, I love you. Well, now you move into the cloud and you start to have ads running on TV and we start to find that the halo effect of one product helps another.
For example, putting the word into it in front of Mint, the personal finance software we bought 3 years ago, increased the trust in Mint 46%. QuickBooks customers all of a sudden discovered this year that we make TurboTax and they said, well maybe I won't go down to the tax store. I'll actually have you do my tax returns for me too. So we've moved from this house of brands to a branded house and you see all the ads now finish up with Intuit TurboTax, Intuit QuickBooks. It may seem very tactical, but it is a pretty big shift for us.
So I'm wrapped up now, I'm done. A lot of change. We are excited about the change. We have our strategy, we've organized the company against 2 outcomes and we have strong momentum in our new product pipeline and we're getting very positive early results. But the one thing we won't change and we haven't changed is why we get out of bed every morning.
We're still focused on the same mission that started this company 30 years ago with that little kitchen table outside. So thanks for your patience. That's how the company is performing and that's where we're heading. And with that, I'll open it up to you for any questions you have. Okay.
All right. Lisa, bring the microphone around if you don't mind. Yes. Would you address the how good your customer service is? Yes, I will.
Our customer service is not at the expectations that we have of ourselves and honestly for some of our customers it's not at the expectations they have of us. I will tell you we have a Chief Customer Care Officer, the first that we've had in the company that now sits on my staff, Noelle Leiter. She also runs customer care for the QuickBooks franchise, so she has a day job there and then she coordinates TurboTax and Quicken and all the others as well. We're making fundamental changes in our decisions of how we support customers, making it much easier to find how to access us, giving you options like chat or email or phone, talk live and for many of our businesses we have determined that it's the right thing to bring the customer support back on shore. We have learned that customers want to be supported by customers like them and in the U.
S. They want North American support, in India they want Indian support. All of that is underway, but the candid answer to your question is it's not where we need it to be, but it is 7% better in terms of customer care and issue resolution than it was 12 months ago and I'm confident we'll continue to make it better. I just have a comment with respect to that and I've gotten to the point that I will not choose a company or a product if they don't have good customer support to begin with. Yes.
And I'll tell you, it is centered to what we talk about, our mission. Scott often shares with us that people don't care what you know until they know that you care. And so no matter what the product is or what you think you have as an answer, until you show the empathy, the understanding and the response, you're not going to have a great customer experience. So I'm 100% with you. Thank you for the question.
Yeah? Yeah. You mentioned security and the cloud. I'm a little bit reticent about putting all my data in the cloud because I don't know what it is. Could you speak to that issue at all?
I can. First of all, it's an individual choice and at the same time, we've been moving a lot of data through the cloud or versions of the cloud for a lot of years. 40% of the U. S. Tax returns flow through an e file capability between us and the IRS.
We have online banking tools. We have hosted versions of our products. 3 out of 4 TurboTax customers actually use the online version, not the desktop version. And so there's a lot of people using the cloud, but it comes down to where people feel personally secure. What you often find when you step back and ask yourself how you do other things in your life, you may end up doing things that you just may not think about as in the cloud.
If you're sending email, it's going through the cloud. If you happen to pay your bills online with your bank, that's a cloud based version of a product. And so if people are getting more comfortable doing those things and I would say if anybody is on Facebook or LinkedIn, but sometimes I choose not to do what my daughters are doing. So it's just your decision. But the more things that people are doing that with, then they get more comfortable doing that in other parts of their life too like small business.
And so we're seeing a real shift. No matter how much we continue to market the desktop product, PC sales period are down 5%, 6% around the world and our own versions are very small, low single digit growth, but our online versions of our products are growing north of 30%. So the next generation expects it, but it really is an individual decision. Our job is no matter how you choose to do it, we have to promise you one thing, the data is yours and we will protect it whether it sits in a C drive or sits in the cloud and that's what we have to continue to reinforce. Okay?
You sort of alluded to it in the talk about more mobile users. So I was wondering for TurboTax, how do you address people who don't use PCs anymore in terms of doing their taxes? Yes. Well, many, many people today are still using PCs, but what we are finding and I haven't gotten the latest stats, the funds in here somewhere, leads our TurboTax business right here, so Fonda D'Arcy, but we are seeing a phenomenon. Many people today will start their search on the internet, whether it's looking for the next showtime for a movie or looking for a potential Christmas or Hanukkah gift, they'll actually go through the web for a mobile device, a tablet or a phone.
And so one of the things we have to make sure we do is that our experience represents itself whether it's on a PC or it's on a tablet or it's on a phone, we've got to make sure that we're having a great user experience. So what we're doing right now is we're reimagining the product as if it was built just for a phone or built just for a tablet or built just for a PC, we call that native, native development and we let the customer choose how they're going to access. But over the trends and the shifts we're seeing many, many more people now are using these computers called phones and tablets as the way they want to actually do their work and we have to make sure that our products are architected to do that. So that's what we're doing. We're basically making sure we have excellent native apps for each of those different devices.
Yeah? Brad, good morning. My name is Tim Winter. I'm President of the Parents Television Council. Hi, Tim.
Good morning. Good morning. The PGC is an Intuit shareholder. We represent about 1,300,000 Americans across the country whose mission is to protect children from sex and violence on television. I've come here from Los Angeles this morning to thank you.
As you recall, a representative from the PTC was here last year to express concerns about the company's advertising practices. We noted examples of extremely violent and sexually explicit programming that the company's media dollars were underwriting. You introduced us to your Chief Marketing Officer, Ms. Donahue, and subsequently re communicated with her about the company's media buying practices. And today, I'm happy to report that Intuit has gone from being in our categories, one of the worst corporate sponsors to one of the best.
And we want to thank you and your team for taking our concerns to heart and for crushing the course so quickly. And Intuit's diligent efforts are not just good for families, They're good for the shareholders too. Researchers at Ohio State, Michigan, Iowa State Universities have found that television viewers are less likely to recall the product being advertised if the advertisement airs within violent or sexually explicit programming. Walmart's Chief Marketing Officer has stated publicly that their media dollars generate an additional 18% return on investment if aired during safe programming rather than explicit programming. We know adhering to such strict media buying standards is not easy.
I spent 15 years at NBC Television and so I know how hard it can be. But Intuit is a prime example of how a company can support positive programming while at the same time reaching its target market. So on behalf of children and families across America, I thank you. Thank you for Intuit's change of direction. Thank you for implementing these changes so effectively and congratulations on the company's success and superb outlook for the future.
We will be sharing our news with our members and urging them to consider Intuit's leadership when it comes to purchasing business and financial management decisions. Tim, you're very welcome. Thank you. Yes. Good morning.
Good morning. I learned recently that the federal government is now one of your competitors that if you earn less than $57,000 they'll do their taxes for you in a row. What do you think of that and what are you doing about it? Yes. It's actually a program that the government's been participating in for some time and I'll give you a little bit of history on this.
First of all, we are all for making sure that every American has access to tools to get their taxes done and if they're below a certain income level or they serve the military or they qualify for earned income tax credit, they're trying to raise children, we have donated our software for free since 1998. So it's a part of our values and it's what we believe is right and we had that program since 'ninety eight. In 2000 and 3, the government looked across the industry and said, why is this just a company program? Why don't we have an industry program? We think we're going to do this.
And the industry raised the pan and said, well, we'll be willing to do it, so why don't you create the marketing site, it's called the Free File Alliance and we will donate our software inside that site if they meet those criteria and we promise we won't cross sell the customer. It can't become a marketing site for us to go get someone who has a certain income and then try to sell them more expensive stuff down the road. So that program is actually a program we fully endorse and support. That is full stop. The second though is, sometimes good intentions start to get scope creeped.
And others say, well, wow, if we can do it for them, why don't we do it for everyone? Just imagine if we sent you your tax return like a property bill and you just look at it and sign it and fully trust that we're going to give you the money that you deserve and then send it back. Well, that's where it breaks down. And so we have a lot of conversations with those on the Hill to say, look, there's a public private partnership here. We know what you need to try to do.
You need to collect taxes. We know what the individuals who represent do, which is they need to make sure they're only paying the amount of taxes they need to pay and they get the money back they deserve and let us enable that for you. That's why we're going after a vision of taxes are done. If their vision is send you a property bill then our vision is actually make sure that we do your tax for you without little to no effort to get you the maximum dollars. So that's what we're doing.
We support the Free File Alliance and the $57,000 or less, but we do not believe the government should start to do that for everyone. In fact, every country that's done it, including the UK has come and testified to Congress and said, don't do this. It's a mess. We don't even let Parliament or the Royal Family use the system. So that's sometimes what governments can unintentionally do.
I don't know if you've ever taken advantage of this, but since I'm retired every day, I do my Quicken. And it reassures me that nobody has stolen my credit card number. And now with Target and every year there's another blow up. Have you ever thought about marketing that aspect of that product? Yes, it's a great question.
Our General Manager for Quicken is in the room, Barry sitting in the back. So we'll take that as feedback. One of the things we want to make sure we do is reinforce to everybody that privacy and security is embedded in every product we do. But I think to take that what you just said because it's a very real concern especially with all the news going on and figure out whether or not there's something we can do more of, we'll take that as a suggestion. Thank you for that.
You are always, Jennifer, and a good looking sport coat at the same time. So that's why I enjoy these every time. Other questions? Yes sir. Karl Halter.
Karl. Excellent presentation as usual. Thank you. And I couldn't be more satisfied as a shareholder, because I was just looking at my records here and my investment in this company is up 44 times from what I the money that I invested in it and it continues to work. That's 4,000 percent.
I'm very happy for you, Karl. Thank you. No. I'm a user, have been since back when we were dealing with my actually got stock in Intuit by not buying Intuit, but buying the San Diego company that I thought had a real good product. You guys were smart enough to buy that company, which is where you are now.
Now, I am so frustrated as an old guy, I still use Quicken. I still use TurboTax. I have essentially the latest Apple gear with a wide screen Imac. I cannot see your stuff to provide the input onto my screen. I have tried everything.
I move the stand magnifying glass to make sure onto the screen that I'm getting the right, because I have a hard time between identifying between 3s and fives and those kinds of things. Yes. I realize that the company needs to get into all the new markets. I am just so frustrated that I cannot use Quicken properly or TurboTax properly because I cannot get it expanded for me to use it on the computer screen. Now you're the only company that I seem to have that problem with.
I mean, I deal with Schwab, if I want it larger on my screen, I hit enlarge and it goes up. You guys, nothing happens if I hit enlarge, I've tried everything I could think of and it's just a total frustration and when we talk, I can't I'm a reasonably intelligent person. I cannot believe that I'm the only person in the world that is having this problem with your base products. I think you can feel my frustration. I can.
In the whole thing. So I would appreciate it. I get an item periodically from Melinda about participating in a well, I realize I'm not in the current I'm not doing taxes on my WishWatch or No one else is yet. Yes, okay. But the problem is that I realize it's hard to look back and say, this is such a basic damn problem.
I can't imagine why other people aren't having the same problem and would get as equally frustrated as I have been. So, I appreciate if we could do something about being able to correct those old base problems about simple input into the product. Karl, thank you, first of all. I am sorry and we are sorry because we don't want to have a product in the market that does not live up to the standards. Even if it is a product that may not be continuing in the future with wristwatches and everything else, we're going to have products in the market that need to set the standard and we clearly are not doing that in the sense that.
There are best practices in software development now, things called responsive design where the actual code can decide how big is the landscape that I can paint the screen on. If it's a TV, I can make it that big. If it's a cell phone, I can make it this big and it should be able to be dimensionalized in a way that the user can see it. We have work to do to get our products to best practices and so let me make sure that both our general managers for TurboTax and for Quicken can take a look at this. The other thing I will tell you is I'm very proud that we have shareholders and customers who are willing to call out the things we need to work on because that enables us to make sure we're focused on the right things.
And so I'm sincere in telling you I am sorry that we have created that frustration and we will take that feedback and we will put that into our choices and decisions we have to make to make it a better experience. Okay, thank you. Hi. How are you doing? You mentioned globalization, what are the top two countries that you're most optimistic about outside North America?
Yes. So we currently are selling in 124 countries through sort of organic demand because it's in the cloud and customers can download it and start using it. And we've had like 50,000 trials around the world, but there are 4 countries in particular that we have narrowed in on, Canada and the UK, Australia and India, because each of those 4 countries give us an opportunity to test what's the right customer support model to have great customer support, how do you sell a market in India versus the United Kingdom, And so all of those have given us tremendous opportunity. I will tell you out of those, there's all kinds of shining spots. Canada is really on a tear right now.
It's doing extremely well. In the U. K, we're sort of in a reset and rekindle mode. Australia, we moved into that market because there was a distributor who sold our desktop product for years and we have kind of parted that relationship and now we're trying to move in with the cloud. But the one that's surprising us to the upside, maybe because our expectations were they weren't ready for the cloud yet, but we've actually been surprised the upside is India.
So to answer your question out of those 4, I'm excited about all 4 and we're focused on them, but I'd say right now Canada and India have really shown us something that we think can continue to grow really quickly. We do have a rest of the world strategy that we're under development now. We're starting to see where the demand is coming without us marketing and we're picking the spots where we can see customers really liking the product. But right now, just to answer your question, those are the 2. Thanks.
Okay, well, I'm about to hand it back to Matt Rhodes, who is the Head of Investor Relations for us, but I want to thank you again for your support of the company and your belief in the company and most importantly for your feedback today. It really helped us get better. Hope everybody has a great 2014 and look forward to speaking with you soon. Thanks, Frank. Hello everyone.
I'm Matt Rose. I'm the Director of Investor Relations here at Intuit. That's all the time we have for questions unfortunately. I do want to make sure that all the shareholders know that we're available to you all the time, not just today. Very specifically, we, myself, Mike Chikelou on my team, my boss, Marge Thomas, Lisa Rose in the back will all be out here and be able to spend some time with you and answer any other questions you have.
Our board members, including Brad and Scott need to get to a board meeting now, but we're happy to stick around and answer questions. My information is very easily publicly available for better or for worse via Google, via the Internet. So anytime you have questions about our products, about our financials, feel free to reach out. Thanks again for joining us and we'll