"Intuit is off to a strong start for fiscal 2002," said Steve Bennett, Intuit's president and chief executive officer. "We exceeded pro forma consensus per share estimates by two cents. Revenue grew 11 percent and we're on track to grow revenue faster this year than we did last year. As a result of the solid quarter and our confidence in the fundamentals driving our growth, we're raising our guidance for pro forma operating income for fiscal 2002 by $5 million to the $280 million to $290 million range, or growth of 27 percent to 32 percent over fiscal 2001."

Intuit reported revenue of $208.8 million for the first quarter, an increase of 11 percent over the year-earlier quarter.

On a GAAP basis (see Table A), Intuit reported a net loss for the quarter of $92.4 million, or a loss of $0.44 per share. Intuit typically reports a loss in its first fiscal quarter each year, when revenue from tax preparation businesses is minimal, but operating expenses to develop new products and services continue at relatively consistent levels. In the year-ago quarter, Intuit reported a net loss of $33.8 million, or a loss of $0.16 per share. Compared with the year-ago period, per share results for the current quarter reflected an additional $35.4 million, pre-tax, in combined charges and net losses related to write-downs of marketable securities and other investments, and impairment charges relating to assets received in connection with the prior sale of the company's online bill management business.

On the same pro forma basis Intuit has consistently followed for a number of years (explained below), the company reported a first-quarter net loss of $27.6 million, or a loss of $0.13 per share, $0.02 better than consensus estimates. Intuit had a pro forma net loss of $21.4 million, or a loss of $0.10 per share, for the first quarter of fiscal 2001. First-quarter 2002 loss per share increased from the prior year primarily due to lower interest income from declining interest rates and higher planned marketing and sales expenses to aggressively promote products and services during the peak selling season. (See Table B.)

First-Quarter Highlights
Intuit continues to see service revenue grow as a percentage of total revenue. Service businesses accounted for 37 percent of total revenue in the first quarter of fiscal 2002 versus 25 percent for the year earlier period.

Intuit's two large service businesses - Quicken Loans and payroll - both had strong results for the quarter:

• Quicken Loans revenue grew 136 percent to $40 million. The number of closed loans increased 118 percent over the year ago period, resulting in $1.2 billion in processed loans for the quarter. Intuit expects year-over-year revenue growth for Quicken Loans to be lower in the third and fourth quarters, though it continues to expect strong performance on a total year basis.
• Revenue from Intuit's total payroll business increased 43 percent to $34 million. Revenue from the Basic payroll product increased 64 percent over the prior year period. Deluxe payroll revenue increased 52 percent and Premier payroll revenue increased 10 percent. Intuit expects the year-over-year revenue growth rate for its payroll business to be lower in the third and fourth quarters, though it continues to expect solid performance on a total year basis. The company expects to grow pro forma operating profits from its payroll business faster than revenue growth in fiscal 2002 as the business benefits from operational rigor and process improvements.

Operating Income Guidance Raised for Fiscal 2002
Intuit raised its guidance for pro forma operating income for fiscal 2002, which ends July 31, 2002, by $5 million to the $280 million to $290 million range. Intuit reiterated its earlier guidance for revenue growth in the 15 percent to 20 percent range for the fiscal year. The company's policy is to not confirm, update or otherwise comment on its financial projections except in compliance with Regulation FD.

The accompanying fact sheet has more details on Intuit's historical performance and financial projections. The projections in the guidance given above are forward looking statements and are subject to a number of risks and uncertainties as described below under the heading "Cautions about Forward Looking Statements."

Information About Intuit's Seasonality and Financial Reporting
Intuit's financial results reflect the highly seasonal nature of its businesses, particularly its tax preparation businesses. Intuit typically reports a loss in its first and fourth quarters when revenue from tax businesses is minimal, but operating expenses to develop new products and services continue at relatively consistent levels. 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 than quarter-over-quarter comparisons. The timing of product launches and customer buying patterns 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 information, shown in Table B, is presented on the same basis Intuit has followed for a number of years. Pro forma results are presented using the same consistent standards from quarter to quarter and year to year and consistently exclude acquisition-related charges, gains as well as losses related to marketable securities and other investments, gains as well as losses related to divestitures, and similar items. Table B describes the specific items excluded for the current comparison periods.

Power Point Presentation and Conference Call
A PowerPoint presentation accompanying the Intuit earnings conference call and a live audio Web-cast of the call is available at www.intuit.com/company/investors/ and will remain available for two weeks. The conference call begins at 1:30 p.m. Pacific time today and the phone number is 800-615-5585 (706-679-0331 from international locations). No reservation or access code is needed. Those planning to listen to the conference call should download the PowerPoint file before the call begins. A replay of the call will be available for one week by calling 800-642-1687 (706-645-9291 from international locations). The reservation number is 2208530.

Cautions about Forward Looking Statements
This press release includes forward-looking statements about future financial results and other events that have not yet occurred, including predictions about Intuit's expected results for fiscal 2002. Statements with words like "expect," "anticipate" or "believe," and statements in the future tense, are forward-looking statements. Investors should be aware that actual results may differ materially from the company's expressed expectations because of risks and uncertainties about the future. The company will not update the information in the press release if any forward-looking statement later turns out to be inaccurate. Certain risks affecting the company's business are described below. More details about these and other risks are included in the company's fiscal 2001 Form 10-K, and at www.intuit.com/company/investors/considerations.html.

Risks and uncertainties that may affect future results and performance include, but are not limited to, the following: The company's revenue and earnings are highly seasonal, which causes significant quarterly fluctuations in revenue and net income. Acquisition-related charges, and gains and losses related to marketable securities can cause significant fluctuation in the company's net income. A continuation of the recent general decline in economic conditions could lead to significantly reduced demand for the company's products and services. If the company is unable to capitalize on new sources of revenue for its QuickBooks-related businesses, these businesses will not be able to achieve sustained growth. It is unlikely that the revenue and profit growth rates experienced by the company's Quicken Loans business during fiscal 2001 and the first quarter of fiscal 2002 will be sustainable long-term, either on a year-over-year basis or on a sequential quarter basis.

If the company fails to maintain reliable and responsive service levels for its electronic tax offerings, the company could lose revenue and customers. The company faces competitive pressures in all of its businesses, and particularly in the consumer tax preparation software business. This can have a negative impact on the company's revenue, profitability and market position. Products and services offered to consumers by government agencies may increasingly overlap with products and services offered by Intuit and others in the private sector, and could have a significant negative impact on the company's future financial results.

Despite the company's efforts to adequately staff and equip its customer service and technical support operations, the company cannot always respond promptly to customer requests for assistance. The company relies heavily on third party vendors to handle critical aspects of its primary retail desktop software product launches. The company faces risks relating to customer privacy and security and increasing regulation, which could hinder the growth of its businesses. Actual product returns may exceed the company's product return reserves, particularly for its tax preparation software. The company's ability to conduct business may be impacted by a variety of factors such as electrical power interruptions, earthquakes, fires, terrorist activities and other similar events.