• Revenue of $634.7 million increased 29 percent from the third quarter of fiscal 2002. Growth was driven primarily by strong gains in Intuit's TurboTax business as an increasing portion of consumer tax revenue shifted from the second to the third quarter. Intuit's Small Business Products and Services business also had strong year-over-year growth.
• Intuit's third-quarter pro forma net income from continuing operations was $220.3 million, up 46 percent from the year-earlier period. Pro forma diluted earnings per share of $1.05 was up 52 percent over the year-ago period. (See Table B1 for a reconciliation of pro forma financial measures to the most directly comparable GAAP financial measures.)
• On a GAAP basis, Intuit had net income of $294.0 million, up 103 percent from $144.5 million in the year-earlier period. This represents $1.40 per diluted share, up 109 percent from $0.67 per share in the third quarter of fiscal 2002. This quarter's GAAP results benefited from stronger revenue growth as well as a $71.0 million after-tax gain on the sale of its Japanese subsidiary.

"Intuit is a strong, growing and profitable company, as evidenced again by our solid quarterly results," said Steve Bennett, Intuit's president and chief executive officer. "We have a great portfolio of businesses with tremendous growth opportunities. And we're working to improve our execution and getting better every day."

Business Unit Revenue Growth

• TurboTax revenue of $313.1 million was up 28 percent from the third quarter of fiscal 2002. Year-to-date TurboTax revenue of $414.4 million was up 24 percent.
• Revenue from Intuit's Professional Accounting Solutions business increased 12 percent over the third quarter of fiscal 2002 to $81.2 million.
• Intuit's Small Business Products and Services revenue increased 41 percent over the year-ago quarter to $114.7 million. This unit includes payroll, supplies, technical support and information technology solutions.
• QuickBooks revenue grew 12 percent over the third-quarter of fiscal 2002 to $55.2 million as Intuit continues to execute its Right for My Business strategy. Revenue has increased 18 percent year-to-date.
• Intuit's Vertical Business Management Solutions unit contributed $25.7 million in revenue in the third quarter, a 7 percent increase over the revenue those companies generated in the year-earlier period.
• Revenue from Other Businesses, which includes Quicken and Canada, was $44.8 million, up 16 percent over third-quarter fiscal 2002.

Intuit Completes Another Successful TurboTax Season
Intuit completed another strong tax season, with revenue up 28 percent for the quarter and 24 percent year-to-date. Total paid TurboTax federal units were 8.5 million, up 12 percent over last season. According to the IRS, individual returns prepared by software - both on the desktop and Web - grew only 8 percent, slower than Intuit's growth.

"All in all, this was a solid tax season for us," said Bennett. "We grew faster than the industry and were successful in driving customers to new, higher-end offerings, though product activation didn't perform as we'd expected. Intuit has a long heritage of doing right by customers, and some of our customers didn't have the great experience they expect from Intuit. In addition, we didn't get the revenue and profit growth we expected. Therefore, we've decided to discontinue product activation next season." Bennett noted that next year, the company would include in-product technology to unlock marketing and trial versions of TurboTax products.

Forward-Looking Guidance for Fourth-Quarter and Fiscal 2003
Intuit's guidance for the fourth quarter of fiscal 2003 is:

• Revenue of $240 million-$250 million, or year-over-year growth of 28-34 percent. The company expects the following revenue ranges for its businesses:
  • QuickBooks: $53 million-$58 million.
  • Small Business Services: $112 million-$120 million.
  • TurboTax: $5 million-$8 million
  • Professional Accounting Solutions: $6 million-$8 million
  • Verticals: $24 million-$28 million
  • Other: $30 million-$33 million
• A pro forma operating loss of $30 million-$35 million and a GAAP operating loss of $41 million-$46 million.
• A pro forma net loss per diluted share of $0.06-$0.09 and a GAAP net loss per diluted share of $0.10-$0.13.

Adding fourth-quarter guidance to Intuit's actual results from the first three quarters, Intuit's guidance for fiscal 2003 is:

• Revenue of $1.65 billion-$1.66 billion, or year-over-year growth of 25-26 percent.
• Pro forma operating income of $395 million-$400 million, or growth of 44-46 percent over fiscal 2002. This corresponds to GAAP operating income of $338 million-$343 million.
• Pro forma EPS of $1.36-$1.39, or year-over-year growth of 48-51 percent. This corresponds to GAAP EPS of $1.61-$1.64. Pro forma EPS guidance has been adjusted to reflect the strength of third-quarter results.

Forward-Looking Guidance for Fiscal 2004
Intuit also provided its guidance for fiscal 2004, which begins Aug. 1, 2003:

• Revenue of $1.85 billion-$1.95 billion, or year-over-year growth of approximately 12-18 percent. Intuit's fiscal 2003 year-over-year revenue growth benefits from acquisitions the company made the prior year.
• Pro forma operating income of $480 million-$510 million, or growth of approximately 21-28 percent over fiscal 2003. On a GAAP basis, operating income is expected to be $449 million-$479 million, or growth of approximately 32-41 percent over fiscal 2003.
• Pro forma diluted earnings per share of $1.57-$1.67, or growth of approximately 14-21 percent over fiscal 2003. On a GAAP basis, diluted EPS is expected to be $1.47-$1.57, down approximately 3-10 percent from fiscal 2003. Fiscal 2003 GAAP EPS includes net income and gains from discontinued operations of nearly $80 million, which is not anticipated to recur in fiscal 2004.

About pro forma, or non-GAAP, financial measures
Intuit computes its pro forma, or non-GAAP, financial measures using the same consistent method from quarter to quarter and year to year. Pro forma operating income excludes acquisition-related charges, such as amortization of goodwill and intangibles and impairment charges, as well as amortization of purchased software and charges for purchased research and development. Pro forma net income and diluted earnings per share exclude discontinued operations, gains and losses on marketable securities and other investments, as well as the tax effects of these transactions. These pro forma financial measures are not prepared in accordance with generally accepted accounting principles and likely are different from non-GAAP or pro forma financial measures used by other companies. The accompanying tables and fact sheet have more details on Intuit's historical performance and financial projections, the GAAP financial measures that are most directly comparable to Intuit's pro forma financial measures, and the reconciliations of pro forma financial measures to GAAP.

Conference Call Scripts and Dial-In Information
The script that accompanies the Intuit earnings conference call and a live audio Web-cast of the call is available at www.intuit.com/company/investors. This press release, including the tables, is available at that site and any other supplemental financial and statistical information required to be posted, including pro forma reconciliations, will be posted to that site.

The conference call number is 800-615-5585 (706-679-0331 from international locations). The call begins today at 1:30 p.m. pacific time. No reservation or access code is needed. Those planning to listen to the conference call should download the script 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 186346.

Cautions About Forward-Looking Statements
This press release contains forward-looking statements about future financial results and other events that have not yet occurred, including guidance about Intuit's expected results for the remainder of fiscal 2003 and for fiscal 2004. Statements with words like "expects," "anticipates" or "believes," and statements in the future tense, are forward-looking statements. Actual results may differ materially from Intuit's expressed expectations because of risks and uncertainties about the future. Some of the important factors that could cause Intuit's results to differ are listed below. More details about these and other risks are included in Intuit's SEC filings and at www.intuit.com/company/investors/considerations.html. The company does not intend to update the information in this press release if any forward-looking statement later turns out to be inaccurate.

• Seasonality causes significant quarterly fluctuations in Intuit's revenue and net income.
• The reconciliation of the forward-looking pro forma financial measures to their most directly comparable GAAP financial measure includes all information reasonably available to Intuit at the date of this press release. The adjustments are those that management can predict. Intuit's pro forma financial measures exclude acquisition-related charges, discontinued operations and gains and losses on marketable securities. Events that could cause the reconciliation to change include acquisitions and divestitures of businesses, goodwill and other asset impairments and sales of marketable securities.
• Actual product returns may exceed product return reserves, particularly for Intuit's tax preparation software.
• If Intuit fails to maintain reliable and responsive service levels for its electronic tax offerings or customer support function, it could lose revenue and customers.
• Integrating acquired businesses creates challenges for Intuit's operational, financial and management information systems. If Intuit is unable to adequately address these and other issues presented by acquisitions, Intuit may not fully realize the intended benefits of its acquisitions.
• Expansion of Intuit's product and service offerings requires Intuit to develop and enhance more and increasingly complex products, market and sell higher-priced products and services and distribute and support an expanding portfolio of products and services. It also increases the number and complexity of Intuit's revenue models. If Intuit is unable to support its expanded businesses, they may not achieve sustainable financial viability or broad customer acceptance.
• Intuit faces competitive pressures in all of its businesses, which can have a negative impact on its revenue, profitability and market position.
• Acquisition-related charges can substantially reduce Intuit's net income, and cause significant fluctuations in net income.
• Risks related to Intuit's distribution channels include challenges in negotiating favorable terms with retailers and the negative effect of the current economic environment on retail sales. In addition, expansion of certain of Intuit's product and service offerings requires Intuit to develop and manage a direct sales organization, which is a new distribution method for Intuit.
• If Intuit does not provide accurate and timely services in its employer services businesses, it faces potential liability to customers, additional expense to correct product errors and loss of customers.
• Revenue growth for Intuit's vertical business management solutions is subject to risks such as the negative impact of the current economic environment and the potential disruption to the businesses during the acquisition integration process.
• If revenue from consumer tax products continues to shift to the third fiscal quarter, there will be increased uncertainty for the full tax season.
• Risks relating to customer privacy and security and increasing governmental regulation could hinder the growth of Intuit's businesses.

(Financial Statements and Fact Sheet follow)