"Intuit had another solid quarter," said Steve Bennett, president and chief executive officer. "We beat consensus estimates for pro forma profitability. Our Quicken Loans mortgage business was profitable for the quarter and grew revenue on a year-over-year basis for the first time in four quarters. Equally important, we are on track with Quicken TurboTax, QuickBooks and other new products and services launching soon."

First Quarter Results
Intuit reported revenue of $187.5 million for the first quarter of fiscal 2001, an increase of 6 percent compared to $176.9 million in the first quarter of fiscal 2000. Revenue growth resulted primarily from three factors:

• A 49 percent increase in payroll revenue;
• $5.1 million in new QuickBooks Internet Gateway revenue; and
• A 53 percent increase in Intuit funded online mortgage revenue.

As reported earlier, consumer demand for Quicken and QuickBooks in the year-ago quarter was exceptionally strong due to Y2K purchases, which has contributed to slower revenue growth in the first quarter of fiscal 2001.

On a GAAP basis, Intuit reported a net loss for the quarter of $33.8 million, or $0.16 per share, which included net pre-tax losses on marketable securities and other investments of $3.9 million. It also included the cumulative effects of changes in accounting for derivatives, net of taxes, of approximately $14.3 million. These results are consistent with Intuit's seasonal pattern that produces lower revenue and typically losses outside of the tax season. In the year-ago quarter, Intuit reported a net loss of $65.9 million, or $0.33 per share, which included $17.3 million in net pre-tax losses on marketable securities and other investments. (See Table A)

On a pro forma basis (explained below), Intuit reported a first-quarter net loss of $21.4 million, or $0.10 per share, which was 23 percent better than the year earlier quarter. A significant increase in interest income resulting from the company's strong cash position contributed to these results. Intuit had a pro forma net loss of $25.3 million, or $0.13 per share, for the first quarter of fiscal 2000. (See Table B)

Intuit's financial results reflect the highly seasonal nature of its businesses, particularly its tax preparation business. Intuit typically reports a loss in its first and fourth quarters when customers buy little tax software. First quarter revenue generally accounts for only 12 to 15 percent of annual revenue while operating expenses to develop new products and services continue at relatively consistent levels during the period. Intuit typically produces more than 100 percent of its annual profits in its second and third quarters combined.

Annual results may provide a more meaningful way to compare Intuit's operating performance rather than quarter-over-quarter comparisons. The timing of product launches and promotions can vary from one year to the next, shifting revenue to different quarters within a year.

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, reorganization costs, the cumulative effect of accounting for derivatives and net pre-tax gains and losses related to marketable securities and other investments.

Business Highlights
"Intuit is off to a solid start," said Bennett. "We continue to get traction in our high-growth businesses. At the same, we're advancing our small business strategy to help small business owners tackle mission-critical tasks with a comprehensive set of solutions while also broadening our relationship with small business customers and driving more revenue per customer."

Traction in High-Growth Businesses
Intuit continues to gain traction in key high-growth businesses:

• Quicken Loans-- Intuit's Quicken Loans mortgage business reached a key milestone in the first quarter. Intuit's total mortgage business posted a slight operating profit in the first quarter, representing a $5.2 million turnaround from last year. Revenue from Intuit-funded online mortgages was up 53 per cent over the prior year, driving a 7 percent increase in revenue for the total mortgage business. This growth came despite closing 22 offices of Rock Financial's branch network. Intuit expects the total mortgage business to continue to grow and be profitable for the full fiscal year.
• Online payroll -- Intuit's online payroll business continues its positive momentum. First quarter revenue was up 186 percent over last year. While this is still a relatively small business in comparison to some of Intuit's other high-growth businesses, the company is working to drive process improvements and continues to believe the business presents an excellent growth opportunity.
• QuickBooks Internet Gateway -- Intuit saw continued traction in the QuickBooks Internet Gateway, which grew from zero to $5.1 million in revenue in less than 12 months. With almost a year of learning with the Gateway, Intuit is refining its approach to selecting and working with QuickBooks Gateway vendors. The company is in the process of ending relationships with between three to five of its alliance companies where the business results are not meeting our expectations or theirs. These actions should have no material impact on Intuit's revenue and profitability for fiscal 2001.

At the same time, Intuit continues to add new partners to the Gateway, including the addition of Chase Merchant Services, L.L.C. to the successful credit card processing services area.

Internet revenue grew 42 percent from the first quarter 2000, and now represents 27 percent of total revenues.

Executing Small Business Strategy
Last week, Intuit announced its acquisition of EmployeeMatters, a provider of employee administration, benefits and payroll services via the Internet, to expand the business services it offers. This advances the company's strategy of helping small business owners tackle mission critical tasks with comprehensive set of solutions while also broadening our relationship with small business customers and driving more revenue per customer.

The acquisition has three strategic benefits for Intuit:

• It allows Intuit to enter the under-served employee benefits space.
• It adds a big-ticket business service - employee benefits - to Intuit's portfolio.
• It will soon give Intuit a standalone Web payroll product to broaden the company's total payroll offering.

Intuit has agreed to acquired EmployeeMatters in registered stock transaction valued at approximately $39 million, which may vary within a 20 percent range depending on Intuit's stock price according to a formula agreed to by both parties. (See separate press release dated Nov. 16, 2000.) Intuit does not expect any material impact from this acquisition on its fiscal year targets for revenue and operating income growth.

New Products and Services to Launch Soon
Intuit has a number of product and service launches just around the corner.

• Small Business -- Intuit is on track to launch QuickBooks 2001 soon. Intuit believes QuickBooks 2001 is the most significant QuickBooks upgrade in years, incorporating several of the features that customers have requested most and including an Internet payment service. In addition, Intuit is planning other announcements soon in the small business Internet space, including Internet-based accounting, an ASP for managing information that drives team productivity, more third-party solutions and increased connectivity. All are examples of the company's commitment to revolutionize the way small businesses manage their business and create changes so profound people can't imagine going back to the old way.
• Tax -- Intuit is heading into the tax season and is on schedule for an early December launch. The company is continuing to revolutionize how people do their taxes. Intuit has announced the Automated Tax Return this season, which lets taxpayers import tax data from five brokerage firms and three leading payroll processors directly into their tax return forms in Quicken TurboTax. This is a major milestone in delivering on Intuit's vision of the 10-minute tax return.

In addition, Intuit is introducing new services to make this year's products even more innovative and valuable while also driving additional revenue opportunity. Intuit will be introducing services that enable taxpayers to fund an IRA through financial institutions or apply for a "quick refund" loan as they prepare their taxes. The company is also expanding its tax gateway program to work with financial institutions that offer these services to Quicken TurboTax customers.

Targets for Fiscal 2001
Intuit is making no changes to the targets for fiscal 2001 revenue and pro forma operating income that were announced on Aug. 22, 2000.

For the fiscal year, Intuit expects revenue growth of 22 percent, which translates into a range of $1.32 billion to $1.34 billion, and pro forma operating income growth in the low 30s, which translates into a range of $202 million to $208 million. Intuit also expects a pro forma operating margin of more than 15 percent for the year.

• For the fiscal year, Intuit expects revenue growth of 22 percent, which translates into a range of $1.32 billion to $1.34 billion, and pro forma operating income growth in the low 30s, which translates into a range of $202 million to $208 million. Intuit also expects a pro forma operating margin of more than 15 percent for the year.
• The company believes that some revenue will shift from its direct channel to its Web and retail channels, primarily in its tax business. As a result, Intuit expects revenue to be higher in its third fiscal quarter, equally offset by lower revenue in its second quarter.

The company does not provide confirmation or update of its targets except through public announcements.

Additional Information
All periods presented include the results of Rock Financial and Title Source, which were acquired in December 1999 and accounted for as a pooling of interests.

Power Point Presentation and Conference Call
A PowerPoint presentation accompanying the Intuit earnings conference call is available at www.intuit.com/corporate/investor_relations and will remain available for one week. The conference call number is 888-732-8927. Those planning to listen to the conference call should download the PowerPoint file before the call begins.