"Once again, Intuit delivered a strong quarter - and we're off to a great start for fiscal 2003," said Steve Bennett, Intuit's president and chief executive officer. "We have five growth engines with large, under-penetrated opportunities. We have multi-year strategies to attack those opportunities. And we're executing better and better, delivering more value for our customers. Our first quarter results put us on track to deliver stronger financial performance in fiscal 2003."

First-Quarter Financial Results

• Revenue increased 32 percent to $223.3 million, slightly above the high end of Intuit's first-quarter guidance. Successful execution of Intuit's "Right for My Business" strategy drove the quarter's strong revenue growth. Approximately one-third of the first quarter's revenue growth was organic. Intuit expects about two-thirds of revenue growth to be organic for the full fiscal 2003. For acquired companies, organic revenue is defined as any revenue in excess of the revenue the companies had for the equivalent period before they were acquired.
• On a GAAP basis, Intuit narrowed its seasonal net loss to $54.7 million, or $0.26 per share. This is down significantly from a net loss of $92.4 million, or $0.44 per share in the first quarter of fiscal 2002. Intuit typically reports a loss in its first quarter when revenue from its tax preparation businesses is minimal, but operating expenses to develop new products and services continue at relatively consistent levels. Two factors contributed to the lower GAAP loss: lower acquisition-related charges due to the adoption of the Financial Accounting Standards Board's SFAS 142 and the absence of a charge for impairment of long-lived assets.
• Intuit's first-quarter pro forma net loss was $44.3 million, or $0.21 per share, $0.02 per share better than the company had projected. Intuit had a pro forma net loss of $37.8 million or $0.18 per share, in the first quarter of fiscal 2002. The year-over-year difference was due to planned increases in first-quarter 2003 expenses as Intuit invested to drive future growth.

Intuit continues to report pro forma performance to provide investors with an alternative method for assessing ongoing core operating results. Intuit's pro forma results, shown in Table B, are presented for information purposes only and use the same consistent standards from quarter to quarter and year to year.

Pro forma operating income (loss) excludes acquisition-related charges, such as amortization of goodwill and intangibles and impairment charges, and amortization of purchased software and purchased research and development. Pro forma net income (loss) and earnings (loss) per share exclude discontinued operations and gains and losses on marketable securities as well as the tax effects of these transactions. The notes to Table B describe the specific items excluded from pro forma results and the impact of those exclusions. Because there are no generally accepted industry standards for presenting pro forma results, the method Intuit uses may differ from the methods used by other companies.

"Right for My Business" Strategy Drives Stronger Results
QuickBooks, Small Business Products and Services and Vertical Business Management Solutions drove the strong first-quarter 2003 performance.

QuickBooks Revenue Up 55 Percent -- QuickBooks revenue grew 55 percent to $38.1 million. Approximately half of the QuickBooks first-quarter revenue growth came from the new higher-end QuickBooks offerings, which Intuit launched in fiscal 2002 as part of its "Right for My Business" strategy.

• To date, Intuit has had end-user sales of more than 67,000 copies of QuickBooks Premier (launched December 2001); nearly 2,000 copies of QuickBooks Enterprise Solutions (launched June 2002); and more than 4,000 copies of QuickBooks Point of Sale (launched May 2002).
• Intuit said it expects QuickBooks revenue to grow 20-30 percent in fiscal 2003.

Small Business Products and Services Revenue Up 29 Percent; Payroll Growth Stronger -- Intuit's small business products and services revenue increased 29 percent over the year-ago quarter to $100.8 million.

• Payroll, the largest component of this revenue, had revenue of $47.6 million, up 39 percent from first-quarter 2002.
• Intuit's branded payroll services - QuickBooks Do-it-Yourself Payroll, QuickBooks Assisted Payroll and Intuit Payroll Services Complete Payroll -- had even stronger growth, with revenue up 50 percent.
• Intuit's acquisition of Blue Ocean Software, which provides software to manage information technology resources, added approximately $6.0 million in revenue in the quarter.
• Intuit's financial supplies business had revenue of $30.6 million for the quarter, essentially flat with last year's first quarter.

New Vertical Businesses Growth Engine Adds Nearly $19 Million -- Intuit's newest growth engine, vertical business management solutions, added $18.8 million in new revenue in the quarter. Intuit has created this growth engine through acquisitions over the past year.

"We're excited about this opportunity, think our strategy is on target and are getting additional traction in execution," said Bennett. "In addition, we have an active pipeline and continue to look at making additional acquisitions." Bennett noted the vertical businesses have had some pressure on higher-priced products given the current economic environment. "To put things in perspective, we started with base revenue of approximately $90 million for our vertical businesses. We expect a 10-30 percent organic growth rate for these businesses in fiscal 2003. While this is still strong performance, it's somewhat slower than we'd originally projected."

Other Business Updates
Two of Intuit's smaller units - Japan and Premier payroll - had flat growth in the first quarter. Continued weak market conditions in Japan make revenue growth a challenge. Intuit's Japanese business represents less than 3 percent of Intuit's total annual revenue. The company said the business model for Premier payroll is not ideal because the banks that sell the private-label product - not Intuit - control customer acquisition. Intuit's Premier payroll service represents about 2 percent of Intuit's total annual revenue. "We're working to improve our positions with both Japan and Premier payroll," said Bennett.

As expected, revenue of $37.2 million from Intuit's personal finance business, which includes Quicken, declined from $38.8 in the year-ago quarter, reflecting the continued decline in the personal finance desktop software category. Quicken continues to account for more than 70 percent of retail unit sales and 70 percent of retail dollars in the personal finance desktop software category.

Intuit's two tax growth engines - TurboTax and Professional Accounting Solutions - had minimal revenue in the first quarter. Intuit generates the vast majority of its tax revenue in its second and third fiscal quarters.

Strong Cash Position
Intuit continues to have a strong balance sheet, with $831 million in cash at the end of the first quarter. The company spent approximately $177 million for its acquisition of Blue Ocean Software in the first quarter. In addition, it bought approximately 6.6 million shares of stock under its stock re-purchase program for approximately $300 million. For the full year, Intuit expects to generate cash from operations in line with pro forma operating results.

Forward-Looking Guidance to Reflect Strength of First-Quarter Results
"Intuit has proven we can execute on our strategies to drive stronger growth," said Bennett. "As a result, we're reflecting the strength of first-quarter results in our fiscal 2003 guidance, which raises our guidance for the full year." New guidance is:

• Revenue of $1.72-$1.80 billion, or growth of 27-33 percent, up from previous guidance of 25-33 percent. Intuit expects about two-thirds of its revenue growth to be organic in fiscal 2003.
• Pro forma EPS of $1.33-$1.38, or growth of 37-42 percent, up from previous guidance of 34-40 percent.

The accompanying fact sheet has more details on Intuit's historical performance and financial projections. The company's policy is to not confirm, update or otherwise comment on its financial projections except in compliance with Regulation FD.

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 one week. The conference call 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 for international locations). The reservation number is 6428971.