Weekly 10-Q: Intuit reports third quarter results, more loans, payments, and sweet, sweet Credit Karma consumer revenue

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Quarterly earnings report covered this week: Intuit
Quarterly earnings report covered last week: Affirm, Dave, Marqeta, MoneyLion, SoFi

Intuit reported third quarter results leading to 3% share hike – progress on track

Intuit announced financial results for its third quarter of fiscal 2022 on Tuesday – and the stock popped 3% in after-hours trading.

The company reported:

• QuickBooks Online Accounting and Payments revenue grew 32%, from $437 million in Q3 2021 to $578 million in this quarter. 
• Online Services revenue grew from $278 million to $357 million – up around 28%, excluding the revenue from its recent Mailchimp acquisition.
• Credit Karma revenue ramped from $316 million Q3 FY21 to $468 million this quarter.

Intuit’s positive results this quarter are a mix of primarily higher effective prices, customer growth, and mix-shift. In payments, the firm offers everything under one roof –  where SMBs can get paid, pay others, manage money, and access capital.

The growth in consumers accessing loans through QuickBooks Capital has tripled year-over-year in April, due to increased discoverability and expanded eligibility for the product. This is driven by the firm's rich data and proprietary risk models which allow it to use its customers’ data on their behalf, with permission, to offer access to loans. 

Intuit acquired Credit Karma in February 2020 – now it's reaping benefits of Credit Karma’s 110 million members, as well as its suite of financial products, which include credit card and loan comparison tools along with checking and savings accounts – an area into which Intuit has long sought to expand. Credit Karma's revenue growth in the quarter was driven by strength in personal loans and credit cards.

Top stories of the week

BANK OF AMERICA
BofA gives a bump in wages to $22 per hour
Bank of America employees will now take home a minimum salary equivalent to nearly $46,000 a year for full-time workers. The bank has raised its minimum wage several times in recent years — to $15 per hour in 2017, $17 in 2019, $20 in 2020, and $21 in 2021, along with its $25-per-hour pay pledge for 2025.

BofA's move comes amid a tight labor market – as inflation surges to new record levels in decades, large companies are pressured to boost pay in order to attract and retain employees – particularly those earning less, who are often hit hardest by inflation. Additionally, a record number of job options and resignations in the US economy are compelling employers to calibrate and scale wages to bag young talent and provide sufficient service. (Banking Dive)

Consumers are financially sound and won't slow spending, vouches BofA CEO
According to Brian Moynihan, Bank of America’s CEO, US consumers are in solid financial condition and possess adequate money in their accounts to keep spending. He claims the pre-pandemic account balances of consumers have multiplied. His message of a healthy consumer comes as stock investors have been unnerved by dwindling consumer activity, leading to weak quarterly reports last week from retail giants amid the spiraling rate of inflation that's hovering above 8% currently. (Yahoo)

BLOCK
Block – no longer just payments pure play
With the recent turn of events at Block’s investor day, the company’s scope has widened, as it continues to explore cryptocurrency and blockchain. Block started as Square back in 2009, and since then, the company has grown to include peer-to-peer payments, BNPL options with its Afterpay acquisition, and a music-streaming platform Tidal. The past 12 months have been downhill for the company’s shares (-60%), as it is getting hard to keep investors engaged amid a slowing economy and rising interest rates. (PYMNTS)

CAPITAL ONE
Capital One aims to go ‘fully hybrid’ by opening all US offices
Nearly a year after saying Capital One would become a "hybrid work company" moving forward, CEO Richard Fairbank anticipates all company branches to open to all associates beginning September 6 — with most employees working both in-person and virtually. (Virginia Business)

CFPB
CFPB believes in ‘competition is one of the best forms of motivation’
The Consumer Financial Protection Bureau (CFPB) is opening a new office, the Office of Competition and Innovation, as part of a new strategy to prompt innovation in finserv by boosting competition, where consumers have options and the ease of switching financial providers, to better understand how big players are squeezing out smaller players. (cfpb)

FEDERAL RESERVE
Digital Dollar could coexist with stablecoins, claims Fed Vice Chairwoman 
Federal Reserve VC Lael Brainard forecasts that in the future, a central bank digital currency could coexist with and be complementary to stablecoins by providing a widely available, government-backed means of payment – much like cash currently coexists with commercial bank money. (CoinDesk)

JPMORGAN CHASE
JPMorgan is full of promise about its 2022 forecast at the investor day
At its investor day on Monday, JPMorgan Chase painted a rosier picture and tried to assure its shareholders’ interest in achieving its profitability target sooner than later. The stock jumped 6.2% on the news, despite the bank being under scrutiny on how much more it will spend on growing its businesses (the stock being down 25% this year hasn’t made it any easier). JPMC is the worst performing bank stock among its largest Wall Street peers. 

The US’s largest bank forecasted that by the fourth quarter the bank will generate net interest income at a $66 billion annual clip, more than $20 billion higher than its 2021 level, profiting from higher rates and loan growth. If that’s the case, it could outdo $56 billion net interest income in 2022, beyond the $50 billion it guided to earlier in January. (Banking Dive)

JPMorgan poaches PayPal's exec to head fintech partnerships
Peggy Mangot, previously of PayPal Ventures and earlier led the rollout of Wells Fargo’s challenger financial institution, is the newly appointed JPMorgan Chase head of fintech partnerships for commercial banking. She will lead a team responsible for designing, growing, and driving commercial banking’s fintech partnership strategy. (PYMNTS)

JPMorgan puts blockchain to use for collateral settlements
JPMorgan is using blockchain for collateral settlements in an attempt to enable investors to pledge a wider range of assets as collateral and use them outside of market operating hours. The bank’s first such transaction came on May 20, when two of its units transferred the token representation of BlackRock money market fund shares as collateral on its private blockchain. (Bloomberg)

JPMorgan’s UK digital retail bank reaches half-million customer mark
JPMorgan’s UK digital retail bank has signed up 500,000 customers, received more than $10 billion in deposits, and has processed 20 million payments since its launch in September – but the bank expects a profit to be some years away. (Reuters)

MARQETA
Marqeta enters partnership with Alviere to power European expansion 
Marqeta is joining forces with Alviere, an embedded finance platform. With Alviere’s operations expanding into the European market, Marqeta will be able to reach end consumers across Europe and the United Kingdom. (Seeking Alpha)

WELLS FARGO
Wells Fargo robo-adviser to target young, first-time investors
Wells Fargo has relaunched its robo-advisor, Intuitive Investor, with upgraded features within its revamped mobile app. It’s programmed to entice new investors and younger generations to step into the investment world. The new version is available to consumers with a minimum deposit of $500 – down from $5,000. (Finextra)

Tweets of the week

1.

Source: Conor Sen

2.

Source: Richard Turrin

Charts of the week

1. Intuit earnings, history and forecast

Source: Defense World

2. Block’s growing ecosystem involves Bitcoin

Source: Main Street Investor

What's trending

Card issuer Marqeta is a buy and can go up 54% from here, according to Morgan Stanley (CNBC)

Deutsche Bank partners with fintech FinLync to enable real-time treasury for corporates (Finextra)

BNP Paribas joins JPMorgan’s blockchain network Onyx for fixed income trading (CoinDesk)

Citi launches sustainable deposit solutions (Finextra)

Crypto exchange FTX US is pushing into stock trading (TechCrunch)

Morgan Stanley execs don’t approve of spot Bitcoin ETFs (Blockworks)

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