"Intuit has never been in a better position to capitalize on its e-finance strategy," said Steve Bennett, President and CEO. "Our tax season in particular is going well. Federal returns completed using TurboTax on the Web are up a strong 5 fold over last year. I am delighted that Quicken TurboTax continued to win 7 out of every 10 retail customers through the end of January, despite a new tax competitor. Intuit's Internet businesses delivered $89.1 million of revenue, up 2.6 times from a year ago. Both QuickBooks and Quicken have had extraordinary quarters in terms of volume, share, and profits."

Intuit reported second quarter revenue of $425.5 million, an increase of 14% over the same quarter a year ago. Intuit experienced strong growth in its small business products, including QuickBooks 2000, strong growth for Quicken, and increased Internet revenue. The revenue growth rate for the second quarter was below that of the first quarter of fiscal 2000 due to:

• an aggressive marketing and pricing strategy for Quicken TurboTax which enabled it to maintain its share of retail units although lowering average selling prices and revenue
• certain tax bundling programs which caused us to defer recognition of approximately $25-30 million in revenue associated with electronic tax filing and state products from the second quarter to the third quarter
• the intentional closure of branch offices obtained in the Rock acquisition which allowed the Company to focus resources on Internet-based lending and which resulted in a decline in revenue for the mortgage business.

On a GAAP basis, net income for the second quarter was $57.3 million, or $0.27 per share and included a $25.8 million increase in acquisition-related costs over the second quarter of fiscal 1999. In addition, the second quarter of fiscal 1999 included a $10.1 million gain from marketable securities, which did not occur in the current quarter of fiscal 2000. Net income for the same fiscal quarter last year was $93.1 million, or $0.47 per share. (See Table A)

On a pro forma basis (explained below), the Company reported second fiscal quarter net income of $91.4 million, or $0.44 per share. Net income grew at a slower pace than revenue consistent with the Company's stated objective of aggressive investment in e-finance initiatives. "We are pleased with the strength of our traditional businesses which allows us to make these incremental investments," said Greg Santora, Intuit's Chief Financial Officer. "We remain on track to deliver our targeted 20% operating income growth over the $121 million Intuit reported for fiscal 1999." Net income for the second fiscal quarter last year was $89.0 million, or $0.45 per share, reflecting a lower number of shares used in calculating fully diluted EPS. (See Table B)

Results from CRI, the payroll processing company acquired in the fourth quarter of fiscal 1999, were included in the second quarter of fiscal 2000 but not in the second quarter of fiscal 1999. In addition, all periods presented include the results of Rock, which are accounted for as a pooling of interests.

All per share figures reflect Intuit's 3-for-1 stock split effective September 30, 1999.
Intuit's financial results reflect the highly seasonal nature of its businesses, particularly its tax preparation products. Historically, revenue and profitability are higher in Intuit's January and April quarters, which reflects the short season and intensity of 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 at relatively consistent levels during these periods. As a result, Intuit typically produces more than 100% of its annual profits in the January and April quarters combined. Therefore, annual results may provide a more meaningful comparison of operating results than quarter-over-quarter comparisons.

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 acquisition-related charges, re-organization costs, and gains and losses related to marketable securities.

Intuit Leads E-Finance with Major Advances
"Intuit continues to lead and define e-finance," said Scott D. Cook, Chairman of the Executive Committee.

Early results for Intuit's Quicken TurboTax for the Web and electronic filing show dramatic growth over the previous year. Through February 13 of this year, 405,000 federal returns were completed using the TurboTax online tax preparation service. This represents more than 5 times more consumers preparing and completing their returns online than this time last year.

Intuit accounted for 75% of all federal returns prepared by individual taxpayers and filed electronically with the IRS through February 11, showing Intuit's leadership in consumer electronic tax filing. In addition, 1.4 million federal returns had been electronically transmitted through Intuit's professional and personal tax products by February 13, more than double the number of returns for the same time last year.

QuickBooks had an extraordinary quarter, in part due to new QuickBooks 2000 with its industry-first integration of Internet-based business services. In the quarter, QuickBooks revenue increased over 50%, share of retail sales increased to a new record high, and profit contribution doubled over the same quarter a year ago. The Company believes that at least part of this demand came from Y2K upgraders so the revenue growth rate is expected to decline as the year progresses.

In an industry-leading advance, QuickBooks 2000 integrates Internet-based business services to revolutionize how small businesses manage their businesses. One example is QuickBooks Site Builder, the service enabling small business owners to create a professional-looking Web site in 10 minutes and get it hosted, all free for the first 6 months. After that, the price is a low $9.95 per month for hosting.

QuickBooks 2000 also introduced the QuickBooks Internet Gateway, the first small business solution to provide one-click access to a range of business e-services. The Gateway also channels new small business customers to the participating e-vendors. One of the 9 participating e-vendors has indicated that the QuickBooks Internet Gateway is so successful that it delivers the highest conversion rate from leads to customers. In addition 10% of all clickthrus to one service are going to a second or third offering. A representative service of the QuickBooks Internet Gateway is the QuickBooks Merchant Account Service which works within QuickBooks, so credit card payments accepted by the small business owner are entered into the accounting system and processed with the bank all in one streamlined process.

As of January 31, QuickBooks accounted for more than 80% share of US accounting software dollars at retail, according to PC Data.

Intuit's online payroll service business also registered solid growth with both revenue and the number of active customers growing 6 fold from the same quarter last year. In addition, the number of active customers enrolled in this online service increased by over 35% from the first fiscal quarter of this year. Investors should note that revenue is still immaterial.

Quicken.com grew strongly during the second quarter with traffic reaching record levels. January page views were 257 million, up almost 95 million page views from October 1999. In addition, Quicken.com grew unique visitors to 7 million in January 2000, up from 4.5 million in July 1999. While page views have grown over the past year, traffic volumes can vary significantly from month to month due to seasonal trends, site performance, the timing of launches, competitors' activities and other factors. The increase in page views does not necessarily result in a corresponding increase in revenue.

While the Internet presents many opportunities, 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 the highly competitive Internet finance environment and seasonal and interest rate trends.

Software Businesses Solid
Quicken had an extraordinary quarter. Revenue grew more than 50%, share at retail sales increased and profit contribution rose 3.5 fold versus last year. This growth was fueled in part by retail promotions with Quicken TurboTax and Y2K upgrades, so the revenue growth rate is expected to decline as the year progresses. Quicken remains the top selling personal finance software, with consistently greater than 70% share of dollars at retail according to PC Data.

The value of Quicken's industry leadership is increasingly recognized as more and more financial institutions connect to Quicken. By the end of the second quarter, Quicken was providing online banking services to 1031 banks, brokerages, credit unions, credit card companies and other financial services companies. This represents close to a 50% increase over the number of connected institutions at January 1999. Approximately 60% of all checking accounts in the U.S. can now be enabled for online banking through Intuit.

Although first half results have been solid, it is too early to assess the overall success of the entire Quicken 2000 season.

Quicken TurboTax continued to deliver a successful performance in the current tax season. Retail sell-through set a new record high for the quarter. Through January 31, Quicken TurboTax continued to win 7 out of every 10 customers. In anticipation of strong competition in the tax business, the Company implemented an aggressive marketing and pricing strategy for Quicken TurboTax. This allowed it to essentially maintain its share of retail units sold although the strategy also resulted in lower average selling prices and a deferral of recognition of certain tax revenue from the second quarter into the third quarter of the current fiscal year. Quicken TurboTax has also been chosen this year as the #1 tax software program by Business Week, Smart Money, the San Jose Mercury and C/NET.

While the response to this year's tax launch is encouraging, the tax market is aggressively competitive and it remains too early to predict results of the entire tax season.

Intuit's software products also saw growth internationally, reflecting the strength of QuickBooks and Quick Tax products in Canada along with continued strength in the Company's small business product offerings in Japan.

On PC Data's January Top 50 bestseller list, Intuit products held 6 of the top 10 spots. This spotlights the continuing growth and success of Intuit's software products.

Rock Acquisition Completed
In December 1999, Intuit completed the acquisition of Rock Financial Corporation, a leader and innovator in Internet-based mortgages. The combination of QuickenMortgage and Rock, renamed QuickenLoans, creates the leader in the online mortgage business. To date the new combined organization is in place and Rock is a listed lender on the QuickenLoans site. In addition, the Company is targeting mid-March for the launch of fully integrated functionality on the QuickenLoans site. In addition, Intuit is intentionally shrinking its traditional mortgage volume by closing branch offices obtained in the Rock acquisition in order to focus resources on Internet-based lending.

The acquisition was treated as a pooling of interests for accounting and accordingly, Intuit's historical financial statements have been restated to reflect the combined results.

Power Point Presentation and Conference Call
A PowerPoint presentation accompanying the Intuit earnings conference call is available at www.intuit.com/earnings and will remain available for two weeks. Those planning to listen to the conference call should download the PowerPoint file before the call begins.