Intuit Separates Mailchimp and Halts Its Growth
Mailchimp aims for zero growth as an independent segment.
1Mailchimp's Independent Journey
Intuit is separating Mailchimp from its main business, turning it into an independent segment. This move indicates that Mailchimp will start with a zero growth target in fiscal 2027. The company forecasts that Mailchimp will generate between $1,256 million and $1,266 million in revenue, representing a growth range of -1% to 0%.
2Intuit's Overall Performance
Intuit reported $21.4 billion in revenue for the year ending July 31, marking a 14% increase. GAAP operating income rose 20% to $5.9 billion. CEO Sasan Goodarzi highlighted that the company surpassed $20 billion in revenue, driven by its 'Big Bets,' which collectively grew 34% and accounted for 30% of annual revenue.
3Mailchimp's Impact
Mailchimp's separation is affecting growth in Intuit's other segments. For example, Global Business Solutions revenue grew 16%, but excluding Mailchimp, the growth was 18%. Similarly, Online Ecosystem revenue increased 19%, but without Mailchimp, it rose to 23%.
4Restructuring Costs
Intuit recorded $293 million in restructuring costs in the fourth quarter, significantly higher than the $15 million recorded in the previous year. The company stated that these costs are preliminary and subject to change, with more details to be disclosed in the future.
5TurboTax and Credit Karma Performance
TurboTax revenue increased 7% to $5.3 billion, although unit sales declined. TurboTax Live revenue surged 37%, now accounting for 53% of all TurboTax revenue. Credit Karma grew 20% to $2.6 billion, driven by personal loans, car insurance, and credit cards.
6Mailchimp's Competitive Position
Mailchimp remains a key tool for small businesses in Europe. However, AI-powered tools like Fin, acquired by Salesforce for $3.6 billion, are challenging Mailchimp's competitive edge. Intuit's international revenue grew 10%, but growth in Europe lagged behind.
7Investor Day and Future Plans
Intuit plans to share detailed information about its 'Big Bets' at its Investor Day in September. Additionally, more details about the restructuring plan are expected to be disclosed in the future. Mailchimp's independent reporting starting in 2027 will make its growth rates more transparent.
8Intuit's Cash Distribution Strategy
Intuit repurchased $5.5 billion worth of shares this year, a 96% increase, and raised its dividend by 15%. This reflects the company's strategy of returning cash to shareholders rather than investing it elsewhere. Mailchimp's future will play a significant role in this strategy.
Original article: The Next Web — Intuit, Mailchimp'i Ayırıyor ve Büyümesini Durduruyor