Intuit reported third quarter revenue of $239.7 million, an increase of 69% compared to the same quarter a year ago. Revenue associated with professional tax software sales by Lacerte, which was acquired in June 1998, was included in these results and not in the year-ago quarter. Excluding the revenue from its Lacerte subsidiary, Intuit posted a 48% increase compared to the same quarter a year ago.

On a GAAP basis, the Company reported net income for the quarter of $72.6 million, or $1.12 per share on a diluted basis, which included gains from the sale of marketable securities totaling $58.6 million. The results for the same fiscal quarter last year reflected a loss of $2.2 million, or $0.05 per share and included a non-recurring marketing charge of $16.2 million. (See Table A)

On a pro forma basis, the Company reported third fiscal quarter net income of $47.2 million and earnings per share on a diluted basis of $0.73. Net income associated with professional tax software sales by Lacerte, which was acquired in June 1998, was included in these results and not in the year-ago quarter. Pro forma net income for the same fiscal quarter last year was $10.2 million, or $0.20 per share. (See Table B)

Revenue and net income in the third quarter benefited from the launch of QuickBooks 99 in January and strong growth in personal tax products and Internet e-finance services, along with new business from the Lacerte acquisition. Third quarter results also reflect the highly seasonal nature of Intuit's businesses.

The GAAP financial results are prepared in accordance with generally accepted accounting principles and are shown in Table A. Pro forma financial information shown in Table B excludes gain on disposal of business, non-recurring marketing charges, acquisition-related charges, and gains on sale of marketable securities.

Business Highlights
Bill Harris, President and CEO, commented, "The success of our Internet-based tax products, consumer finance offerings, and small business payroll service underscored our strong third quarter. The growing acceptance of Intuit's e-finance solutions is reflected in the increase of our Internet commerce revenue which contributed 20% of Intuit's revenue in the third quarter, more than 2 ½ times the revenue for the third quarter last year."

"As the leader in electronic finance, Intuit is uniquely able to interconnect the various elements of people's financial lives," added Scott D. Cook, Chairman of the Executive Committee. "The success of Intuit's payroll business traces to its interconnections with our QuickBooks business. QuickenMortgage's success comes in part from its interconnections with Quicken.com."

Intuit Completes Record Tax Season
Intuit completed the tax season with a strong third quarter performance. Over 4 million personal federal tax products were sold. For the tax season, Turbo Tax remained the top selling tax software program with over 70% dollar share at retail for the tax season according to PC Data.

Intuit's Web-based tax services had a record year. WebTurboTax delivered a ten-fold increase in volume of returns prepared entirely via the Web. Separately, more than 1.5 million individual taxpayers filed their federal returns electronically through Intuit, over double last year's volume. Intuit was the nation's largest processor under the IRS Online Filing Program and accounted for more than 70% of the electronically filed returns from individuals using tax preparation software.

Intuit's ProSeries and Lacerte tax products also had a strong season, reaching more than 75,000 professional tax preparers. Intuit's personal and professional tax products account for one out of every five individual tax returns filed with the IRS.

Intuit Extends Electronic Finance Leadership
Intuit's Internet businesses ramped at a rapid pace. Internet commerce revenue (including electronic software distribution) for the quarter grew to over 20% of overall revenue, more than 2 ½ times the revenue for the third quarter last year.

During the third quarter Quicken.com traffic reached record levels with April page views of 180 million, up 10% in a single quarter and up 137% from a year ago. Moreover, on April 20, Quicken.com had over 8 million pageviews, a record day for the site. While page view growth has been strong traffic volumes can vary significantly from month to month due to seasonal trends, site performance, the timing of launches, competitor's activities, and other factors.

Intuit's QuickenMortgage website saw strong growth in closed loans. During the third quarter, QuickenMortgage originated over $400 million in closed loans, up more than 300% in one year and up 70% in one quarter.

While the Internet presents many opportunities, Internet commerce revenue for the first nine months of the fiscal year represented 14% of overall revenue. It is important that investors remember that potential Internet-related revenue and profits may be difficult to predict or achieve and may also be impacted by many factors including seasonal and interest rate trends.

Small Business Momentum Continues
QuickBooks revenue tripled versus the year ago quarter, due to the launch of QuickBooks 99 earlier in the year. QuickBooks has lengthened its lead with more than 85% share of accounting software dollars at retail, according to PC Data. QuickBooks gained 6 share points in the last twelve months.

During the third quarter, Intuit's Internet payroll service more than doubled the number of active customers, compared to the prior quarter. The interconnection between the payroll service and QuickBooks is successfully expanding the payroll service industry. Approximately 70% of Intuit's payroll service customers previously prepared and filed their payrolls themselves.

In addition, third quarter revenue from technical support plans offered by the QuickBooks Support Network grew 177% compared to the same quarter a year ago.

Many of Intuit's small business initiatives, while still in the early stages, represent opportunities to drive increased annuity revenue from an installed base of over 2.5 million QuickBooks users.

The performance of the Company's international operations continued to decline as revenue was down 23% versus the year ago quarter. The Company has increased its efforts to improve its international financial performance.

Intuit's financial results reflect the highly seasonal nature of its businesses, particularly its tax return preparation products. Historically, revenue and profitability are highest in the January and April quarters which reflect the intensity and the short season for its tax product sales. The Company experiences significantly lower revenue in the July and October quarters, while operating expenses to develop new products and services continue during these periods. In addition, Intuit's quarterly revenue pattern is inconsistent from year to year based on the variable timing of product launches. For example QuickBooks launched in the second quarter of the current fiscal year and in the fourth quarter of the previous year.