INTUIT INC

Previous wording

In July 2024, our management approved, committed to, and initiated a plan of reorganization (the Plan) focused on reallocating resources to our key growth areas. The Plan includes the exit of employees and the closing of real estate sites in certain markets in service to growing technology teams and capabilities in strategic locations. The actions associated with the Plan were substantially complete in the first quarter of fiscal 2025. Total restructuring costs associated with the Plan are estimated to be approximately $237 million. During the three months ended October 31, 2024, we recorded a $9 million charge in connection with the Plan. This charge is primarily related to severance, employee benefits, and site closure costs and is recorded to restructuring in our condensed consolidated statements of operations. See Note 13, "Restructuring," for more information. See Note 12, "Segment Information," for more information.

Current wording

In July 2024, our management approved, committed to, and initiated a plan of reorganization (the Plan) focused on reallocating resources to our key growth areas. The Plan includes the exit of employees and the closing of real estate sites in certain markets in service to growing technology teams and capabilities in strategic locations. The actions associated with the Plan were substantially complete in the first quarter of fiscal 2025. Total restructuring costs associated with the Plan are estimated to be approximately $236 million. During the six months ended January 31, 2025, we recorded a $13 million charge in connection with the Plan. This charge is primarily related to severance, employee benefits, and site closure costs and is recorded to restructuring in our condensed consolidated statements of operations. See Note 13,"Restructuring,"for more information. See Note 12,"Segment Information," for more information.

Previous wording

On August 1, 2024, we reorganized certain technology and customer success functions in our Global Business Solutions, Consumer, and ProTax segments that support and benefit our overall platform and are managed at that level rather than at the segment level. As a result of these reorganizations, costs associated with these functions are no longer included in segment operating income and are now included in other corporate expenses. For thethree months ended October 31, 2023, we reclassified expenses totaling$332 million from Global Business Solutions,$65 million from Consumer, and$8 million from ProTax to other corporate expensesto conform to the current presentation. See Note 12, "Segment Information," for more information.

Current wording

On August 1, 2024, we reorganized certain technology and customer success functions in our Global Business Solutions, Consumer, and ProTax segments that support and benefit our overall platform and are managed at that level rather than at the segment level. As a result of these reorganizations, costs associated with these functions are no longer included in segment operating income and are now included in other corporate expenses. For thethree and six months ended January 31, 2024, we reclassified expenses totaling$350 million and $682 million from Global Business Solutions, $129 million and $194 million from Consumer, and $8 million and $16 million from ProTax to other corporate expenses, respectively, to conform to the current presentation. See Note 12,"Segment Information," for more information.

Previous wording

Global Business Solutions: This segment serves small and mid-market businesses around the world, and the accounting professionals who assist and advise them. Our QuickBooks offerings include financial and business management online services and desktop software, payroll solutions, time tracking, merchant payment processing and bill pay solutions, checking accounts through an FDIC member bank partner, and financing for small and mid-market businesses. Our Mailchimp offerings include marketing automation and customer relationship management.Consumer: This segment serves consumers and includes do-it-yourself and assisted TurboTax income tax preparation products and services sold in the U.S. and Canada. Credit Karma: This segment serves consumers with a personal finance platform that provides personalized recommendations of credit card, home, auto, and personal loan, and insurance products; online savings and checking accounts through an FDIC member bank partner; and access to their credit scores and reports, credit and identity monitoring, credit report dispute, credit building tools, and tools to help understand net worth and make financial progress. ProTax: This segment serves professional accountants in the U.S. and Canada, who are essential to both small business success and tax preparation and filing. Our professional tax offerings include Lacerte, ProSeries, and ProConnect Tax Online in the U.S., and ProFile and ProTax Online in Canada.

Current wording

Global Business Solutions: This segment serves small and mid-market businesses around the world, and the accounting professionals who assist and advise them. Our QuickBooks offerings include financial and business management online services and desktop software, payroll solutions, time tracking, merchant payment processing and bill pay solutions, checking accounts through an FDIC member bank partner, financing for small and mid-market businesses, and bookkeeping services. Our Mailchimp offerings include marketing automation and customer relationship management.Consumer: This segment serves consumers and includes do-it-yourself and assisted TurboTax income tax preparation products and services sold in the U.S. and Canada. Credit Karma: This segment serves consumers with a personal finance platform that provides personalized recommendations of credit card, home, auto, and personal loan, and insurance products; online savings and checking accounts through an FDIC member bank partner; and access to their credit scores and reports, credit and identity monitoring, credit report dispute, credit building tools, and tools to help understand net worth and make financial progress. ProTax: This segment serves professional accountants in the U.S. and Canada, who are essential to both small business success and tax preparation and filing. Our professional tax offerings include Lacerte, ProSeries, and ProConnect Tax Online in the U.S., and ProFile and ProTax Online in Canada.

Previous wording

With the introduction of GenAI, we are transforming how we strive to serve our customers by delivering “done for you” experiences, where we do the hard work for them, and connecting them with AI-powered human expertise to fuel their success. We use powerful and relevant contextual data sets spanning small business, consumer finance, and tax to deliver personalized financial insights to customers across our platform.

Current wording

With the introduction of GenAI, we are transforming how we strive to serve our customers by delivering “done for you” experiences, where we do the hard work for them, and connecting them with AI-powered human expertise to fuel their success. We use powerful and relevant contextual data sets spanning small and mid-market businesses, consumer finance, and tax to deliver personalized financial insights to customers across our platform.

Previous wording

•Disrupt the mid-market: We aim to disrupt the mid-market with a tailor-made, integrated ecosystem, which includes our QuickBooks offerings, as well as our workforce solutions and money offerings. These solutions are designed to address the more complex needs of mid-market businesses. Mailchimp’s marketing offerings enable mid-market businesses to digitally promote their business across email, social media, landing pages, ads, websites, and more, all from one place. These offerings enable us to increase retention of these larger customers and accelerate mid-market demand.

Current wording

•Disrupt the mid-market: We aim to disrupt the mid-market with a tailor-made platform designed to address the more complex needs of mid-market businesses. This includes our core financial management solutions, as well as our marketing and workforce solutions and money offerings. Together, these offerings enable us to increase retention of these larger customers and accelerate mid-market demand.

Previous wording

We operate in industries that are experiencing an increasing amount of fraudulent activities by malicious third parties. We implement additional security measures, and we continue to work with state and federal governments to implement industry-wide security and anti-fraud measures, including sharing information regarding suspicious activity. We continue to invest in security measures and to work with the broader industry and government to protect our customers against this type of fraud.

Current wording

wide security and anti-fraud measures, including sharing information regarding suspicious activity. We continue to invest in security measures and to work with the broader industry and government to protect our customers against this type of fraud.

Previous wording

Key highlights for the first three months of fiscal 2025 include the following:

Current wording

Key highlights for the first six months of fiscal 2025 include the following:

Previous wording

In preparing our condensed consolidated financial statements, we make estimates, assumptions, and judgments that can have a significant impact on our net revenue, operating income or loss, and net income or loss, as well as on the value of certain assets and liabilities on our condensed consolidated balance sheets. We believe that the estimates, assumptions, and judgments involved in the accounting policies described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended July 31, 2024 have the greatest potential impact on our financial statements, so we consider them to be our critical accounting policies and estimates. There were no significant changes in those critical accounting policies and estimates during the first three months of fiscal 2025. Senior management has reviewed the development and selection of our critical accounting policies and estimates and their disclosure in this Quarterly Report on Form 10-Q with the Audit and Risk Committee of our Board of Directors.

Current wording

In preparing our condensed consolidated financial statements, we make estimates, assumptions, and judgments that can have a significant impact on our net revenue, operating income or loss, and net income or loss, as well as on the value of certain assets and liabilities on our condensed consolidated balance sheets. We believe that the estimates, assumptions, and judgments involved in the accounting policies described in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended July 31, 2024 have the greatest potential impact on our financial statements, so we consider them to be our critical accounting policies and estimates. There were no significant changes in those critical accounting policies and estimates during the first six months of fiscal 2025. Senior management has reviewed the development and selection of our critical accounting policies and estimates and their disclosure in this Quarterly Report on Form 10-Q with the Audit and Risk Committee of our Board of Directors.

Previous wording

Total net revenue for the first quarter of fiscal 2025 increased $305 million, or 10%, compared with the same quarter of fiscal 2024. Our Global Business Solutions segment revenue increased during the quarter due to growth in our Online Ecosystem revenue. Credit Karma segment revenue increased during the quarter due to strength in our personal loan, auto insurance, and credit card verticals. Revenue in our Consumer and ProTax segments was seasonally light, consistent with the same quarter of fiscal 2024. See “Segment Results” later in this Item 2 for more information about the results for all of our reportable segments.

Current wording

Total net revenue for the second quarter of fiscal 2025 increased $577 million, or 17%, compared with the same quarter of fiscal 2024. Our Global Business Solutions segment revenue increased during the quarter due to growth in our Online Ecosystem revenue. Credit Karma segment revenue increased during the quarter due to strength in our credit card, personal loan, and auto insurance verticals. See“Segment Results” later in this Item 2 for more information about the results for all of our reportable segments.

Previous wording

Operating income for the first quarter of fiscal 2025 decreased $36 million, or 12%, compared to the same quarter of fiscal 2024. The decrease in operating income was due to an increase in expenses, partially offset by the increase in revenue described above. Expenses increased due to marketing, staffing, and outside services. See "Cost of Revenue" and “Operating Expenses” later in this Item 2 for more information.

Current wording

Operating income for the second quarter of fiscal 2025 increased $224 million, or 61%, compared with the same quarter of fiscal 2024. The increase in operating income was due to the increase in revenue described above, partially offset by an increase in expenses. Expenses increased due to marketing, outside services, staffing, and share-based compensation. See"Cost of Revenue" and“Operating Expenses” later in this Item 2 for more information.

Previous wording

Net income for the first quarter of fiscal 2025 decreased $44 million, or 18%, compared with the same quarter of fiscal 2024. The decrease in net income was due to the decrease in operating income described above, a $42 million net loss on a long-term investment, partially offset by an $18 million increase in the net gains on executive deferred compensation plan assets, an $8 million increase in interest income due to higher investable balances, and a decrease in income tax expense. Diluted net income per share decreased to $0.70 for the first quarter of fiscal 2025 compared to $0.85 for the same quarter of fiscal 2024, in line with the decrease in net income.

Current wording

Net income for the second quarter of fiscal 2025 increased $118 million, or 33%, compared with the same quarter of fiscal 2024. The increase in net income was due to the increase in operating income described, partially offset by an increase in income tax expense. The increase in income tax expense is due to the increase in operating income described above and a decrease in excess tax benefits related to share-based compensation. Diluted net income per share increased to $1.67 for the second quarter of fiscal 2025 compared to $1.25 for the same quarter of fiscal 2024, in line with the increase in net income.

Previous wording

The information below is organized in accordance with our four reportable segments. See“Executive Overview – About Intuit” earlier in this Item 2 and Note 12 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for more information. All of our segments operate and sell to customers primarily in the U.S. Total international net revenue was approximately 10% of consolidated net revenue for each of the three months ended October 31, 2024 and 2023.

Current wording

The information below is organized in accordance with our four reportable segments. See“Executive Overview – About Intuit” earlier in this Item 2 and Note 12 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for more information. All of our segments operate and sell to customers primarily in the U.S. Total international net revenue was approximately 9% of consolidated net revenue for each of the three and six months ended January 31, 2025, respectively. Total international net revenue was approximately 9% and 10% for the three and six months ended January 31, 2024, respectively.

Previous wording

On August 1, 2024, we reorganized certain technology and customer success functions in our Global Business Solutions, Consumer, and ProTax segments that support and benefit our overall platform and are managed at that level rather than at the segment level. As a result of these reorganizations, costs associated with these functions are no longer included in segment operating income and are now included in other corporate expenses. For thethree months ended October 31, 2023, we reclassified expenses totaling$332 million from Global Business Solutions,$65 million from Consumer, and$8 million from ProTax to other corporate expensesto conform to the current presentation.

Current wording

On August 1, 2024, we reorganized certain technology and customer success functions in our Global Business Solutions, Consumer, and ProTax segments that support and benefit our overall platform and are managed at that level rather than at the segment level. As a result of these reorganizations, costs associated with these functions are no longer included in segment operating income and are now included in other corporate expenses. For thethree and six months ended January 31, 2024, we reclassified expenses totaling$350 million and $682 million from Global Business Solutions, $129 million

Previous wording

Segment operating income or loss is segment net revenue less segment cost of revenue and operating expenses. See“Executive Overview – Industry Trends and Seasonality” earlier in this Item 2 for a description of the seasonality of our business. We include expenses such as corporate selling and marketing, general and administrative, and non-employment related legal and litigation settlement costs, which are not allocated to specific segments, in unallocated corporate items as part of other corporate expenses. As part of our platform strategy, we also include customer success and product development for our Global Business Solutions, Consumer, and ProTax segments in unallocated corporate items as we do not allocate these expenses to the segments because they are managed at the platform level. Customer success includes the costs of tax and bookkeeping experts that support our TurboTax Live and QuickBooks Live offerings. For our Credit Karma reportable segment, segment expenses include certain direct expenses related to selling and marketing, product development, and general and administrative. Unallocated corporate items for all segments include share-based compensation, amortization of acquired technology, amortization of other acquired intangible assets, goodwill and intangible asset impairment charges, professional fees and transaction charges related to business combinations, and restructuring charges. These unallocated corporate costs for all segments totaled $2.0 billion in the first three months of fiscal 2025 and $1.8 billion in the first three months of fiscal 2024. Unallocated corporate items increased in the fiscal 2025 period, due to increases in general and administrative expense, product development expense, share-based compensation expense, and restructuring. See Note 12 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for reconciliations of total segment operating income or loss to consolidated operating income or loss for each fiscal period presented.

Current wording

Segment operating income or loss is segment net revenue less segment cost of revenue and operating expenses. See“Executive Overview – Industry Trends and Seasonality” earlier in this Item 2 for a description of the seasonality of our business. We include expenses such as corporate selling and marketing, general and administrative, and non-employment related legal and litigation settlement costs, which are not allocated to specific segments, in unallocated corporate items as part of other corporate expenses. As part of our platform strategy, we also include customer success and product development for our Global Business Solutions, Consumer, and ProTax segments in unallocated corporate items as we do not allocate these expenses to the segments because they are managed at the platform level. Customer success includes the costs of tax and bookkeeping experts that support our TurboTax Live and QuickBooks Live offerings. For our Credit Karma reportable segment, segment expenses include certain direct expenses related to selling and marketing, product development, and general and administrative. Unallocated corporate items for all segments include share-based compensation, amortization of acquired technology, amortization of other acquired intangible assets, goodwill and intangible asset impairment charges, professional fees and transaction charges related to business combinations, and restructuring charges. These unallocated corporate costs for all segments totaled $4.1 billion in the first six months of fiscal 2025 and $3.7 billion in the first six months of fiscal 2024. Unallocated corporate items increased in the fiscal 2025 period, primarily due to increases in cost of service revenue, selling and marketing expense and general and administrative expense. See Note 12 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report for reconciliations of total segment operating income or loss to consolidated operating income or loss for each fiscal period presented.

Previous wording

Segment service revenue is primarily derived from our Online Ecosystem revenue and revenue from the services and support that are provided as part of our QuickBooks Desktop subscription and desktop payroll offerings, as well as merchant payment processing services. Segment product and other revenue is primarily derived from revenue related to delivery of software licenses and the related updates, including version protection, for our QuickBooks Desktop subscriptions and desktop payroll offerings, which are part of our Desktop Ecosystem. Our money offerings consist of our merchant payment processing services, financing for small and mid-market businesses (QuickBooks Capital), and bill pay services.

Current wording

Segment service revenue is primarily derived from our Online Ecosystem revenue and revenue from the services, support, and when-and-if-available product upgrades and enhancements that are provided as part of our QuickBooks Desktop subscriptions, services and support for our desktop payroll offerings, as well as merchant payment processing services. Segment product and other revenue is primarily derived from revenue related to delivery of software licenses, version protection updates, and payroll software updates for our QuickBooks Desktop subscriptions and desktop payroll offerings, which are part of our Desktop Ecosystem. Our money offerings consist of our merchant payment processing services, financing for small and mid-market businesses (QuickBooks Capital), and bill pay services.

Previous wording

Revenue for our Global Business Solutions segment increased $200 million, or 9%, in the first quarter of fiscal 2025 compared with the same period of fiscal 2024. The increase was due to growth in Online Ecosystem revenue, which contributed to $325 million of the increase for the three months ended October 31, 2024.

Current wording

Revenue for our Global Business Solutions segment increased $426 million, or 19%, in the second quarter of fiscal 2025 and $626 million, or 14%, in the first six months of fiscal 2025 compared with the same periods of fiscal 2024. The increase in both periods was primarily due to growth in Online Ecosystem revenue.

Previous wording

Online Ecosystem revenue increased $325 million, or 20%, in the first quarter of fiscal 2025 compared with the same period of fiscal 2024. QuickBooks Online Accounting revenue increased $167 million, or 21%, in the first quarter of fiscal 2025 due to the interrelated factors of customer growth, higher effective prices, and a shift in mix to our higher-priced offerings. Online Services revenue increased $158 million, or 19%, in the first quarter of fiscal 2025, due to increases in revenue from our money offerings of $91 million, our payroll offerings of $53 million, and Mailchimp of $17 million. Revenue increases were due to the interrelated factors described below. Money revenue increased $91 million due to a $65 million increase in payments revenue from payments customer growth, higher effective payments prices, and an increase in total payment volume per customer, and a $26 million increase from QuickBooks Capital. Online payroll revenue increased due to customer growth, higher effective prices, and a shift in mix to higher end offerings. Mailchimp revenue increased due to higher effective prices and paid customer growth.

Current wording

Online Ecosystem revenue increased $350 million, or 21%, in the second quarter of fiscal 2025 compared with the same period of fiscal 2024. QuickBooks Online Accounting revenue increased $182 million, or 22%, in the second quarter of fiscal 2025 due to the interrelated factors of higher effective prices, customer growth, and a shift in mix to our higher-priced offerings. Online Services revenue increased $168 million, or 19%, in the second quarter of fiscal 2025, due to increases in revenue from our money offerings of $85 million, our payroll offerings of $79 million, and Mailchimp of $6 million. Revenue increases were due to the interrelated factors described below. Money revenue increased $85 million due to a $53 million increase in payments revenue from payments customer growth, an increase in total payment volume per customer, and higher effective payments prices, and a $32 million increase from QuickBooks Capital. Online payroll revenue increased due to customer growth, mix-shift, and higher effective prices. Mailchimp revenue increased due to higher effective prices and paid customer growth.

Previous wording

Desktop Ecosystem revenue decreased $125 million, or 17%, in the first quarter of fiscal 2025 compared with the same period of fiscal 2024, reflecting changes we made to our QuickBooks desktop offerings in early fiscal 2024 to complete the transition to a recurring subscription model, including more frequent product updates.

Current wording

Desktop Ecosystem revenue increased $76 million, or 14%, in the second quarter of fiscal 2025 compared with the same period of fiscal 2024. The increase was due to higher effective prices and changes we made to our QuickBooks desktop offerings beginning in early fiscal 2024 to complete the transition to a recurring subscription model, which more closely aligns our Desktop license and related product updates to our Desktop subscription billing model.

Previous wording

Credit Karma segment operating income increased $74 million, or 70%, in the first quarter of fiscal 2025 compared to the same period of fiscal 2024, due to the increase in revenue described above, partially offset by increases in marketing expenses of $37 million.

Current wording

Global Business Solutions segment operating income increased $376 million, or 22%, in the second quarter of fiscal 2025 compared with the same period of fiscal 2024, due to the increase in revenue described above, partially offset by increases in staffing expenses of $10 million and sales-related expenses of $3 million.

Previous wording

Global Business Solutions segment operating income increased $175 million, or 10%, in the first quarter of fiscal 2025 compared with the same period of fiscal 2024, due to the increase in revenue described above, and decreases in marketing expenses of $16 million and staffing expenses of $10 million.

Current wording

Global Business Solutions segment operating income increased $551 million, or 16%, in the first six months of fiscal 2025 compared with the same period of fiscal 2024, due to the increase in revenue described above, partially offset by increases in staffing expenses of $19 million and marketing expenses of $16 million.

Previous wording

In August 2024, we reorganized certain technology and customer success functions that support and benefit our overall platform and are managed at that level rather than at the segment level. As a result, these costs are no longer included in segment operating income and are now included in other corporate expenses. For the three months ended October 31, 2023, we reclassified $332 million from Global Business Solutions to other corporate expenses to conform to the current presentation.

Current wording

In August 2024, we reorganized certain technology and customer success functions that support and benefit our overall platform and are managed at that level rather than at the segment level. As a result, these costs are no longer included in segment operating income and are now included in other corporate expenses. For the three and six months ended January 31, 2024, we reclassified $350 million and $682 million, respectively, from Global Business Solutions to other corporate expenses to conform to the current presentation.

Previous wording

In August 2024, we reorganized certain technology and customer success functions that support and benefit our overall platform and are managed at that level rather than at the segment level. As a result, these costs are no longer included in segment operating income and are now included in other corporate expenses. For the three months ended October 31, 2023, we reclassified $65 million from Consumer to other corporate expenses to conform to the current presentation.

Current wording

In August 2024, we reorganized certain technology and customer success functions that support and benefit our overall platform and are managed at that level rather than at the segment level. As a result, these costs are no longer included in segment operating income and are now included in other corporate expenses. For the three and six months ended January 31, 2024, we reclassified $129 million and $194 million, respectively, from Consumer to other corporate expenses to conform to the current presentation.

Previous wording

Revenue for our Credit Karma segment increased $119 million, or 29%, in the first quarter of fiscal 2025 compared to the same period in fiscal 2024, due to increases in revenue from our personal loan vertical of $44 million, our auto insurance vertical of $36 million, and our credit card vertical of $31 million.

Current wording

Revenue for our Credit Karma segment increased $136 million, or 36%, in the second quarter of fiscal 2025 compared to the same period in fiscal 2024, due to increases in revenue from our credit card vertical of $57 million, our personal loan vertical of $51 million, and our auto insurance vertical of $23 million.

Previous wording

In August 2024, we reorganized certain technology and customer success functions that support and benefit our overall platform and are managed at that level rather than at the segment level. As a result, these costs are no longer included in segment operating income and are now included in other corporate expenses. For the three months ended October 31, 2023, we reclassified $8 million from ProTax to other corporate expenses to conform to the current presentation.

Current wording

In August 2024, we reorganized certain technology and customer success functions that support and benefit our overall platform and are managed at that level rather than at the segment level. As a result, these costs are no longer included in segment operating income and are now included in other corporate expenses. For the three and six months ended January 31, 2024, we reclassified $8 million and $16 million, respectively, from ProTax to other corporate expenses to conform to the current presentation.

Previous wording

Cost of service revenue as a percentage of service revenue was relatively consistent in the first quarter of fiscal 2025 compared with the same period of fiscal 2024.

Current wording

Cost of service revenue as a percentage of service revenue was relatively consistent in both the second quarter and first six months of fiscal 2025 compared with the same periods of fiscal 2024.

Previous wording

Cost of product and other revenue as a percentage of product and other revenue was relatively consistent in the first quarter of fiscal 2025 compared with the same period of fiscal 2024. Costs of product and other revenue are expensed as incurred, and we do not defer any of these costs when product and other revenue is deferred.

Current wording

Cost of product and other revenue as a percentage of product and other revenue was relatively consistent in both the second quarter and first six months of fiscal 2025 compared with the same periods of fiscal 2024. Costs of product and other revenue are expensed as incurred, and we do not defer any of these costs when product and other revenue is deferred.

Previous wording

Total operating expenses as a percentage of total net revenue increased in the first quarter of fiscal 2025 compared to the same period of fiscal 2024. Total net revenue for the first quarter of fiscal 2025 increased $305 million, or 10%, while total operating expenses for the quarter increased $278 million, or 15%. The increase in total operating expenses was due to increases of $117 million for marketing, $67 million for staffing, and $46 million for outside services.

Current wording

Total operating expenses as a percentage of total net revenue decreased in the second quarter of fiscal 2025 compared to the same period of fiscal 2024. Total net revenue for the second quarter of fiscal 2025 increased $577 million, or 17%, while total operating expenses for the quarter increased $271 million, or 13%. The increase in total operating expenses was due to increases of $110 million for marketing expenses, $54 million for staffing, $41 million for outside services, $18 million for sales-related expenses, and $14 million for share-based compensation.

Previous wording

Interest expense of $60 million and $65 million for the first three months of fiscal 2025 and 2024, respectively, consisted of interest on our senior unsecured notes and secured revolving credit facilities.

Current wording

Interest expense of $120 million and $122 million for the first six months of fiscal 2025 and 2024, respectively, consisted of interest on our senior unsecured notes and secured revolving credit facilities.

Previous wording

(1) Interest income for the three months ended October 31, 2024 increased compared to the same periods of fiscal 2024 due to higher average investable balances.

Current wording

(1) Interest income for the three and six months ended January 31, 2025 increased compared to the same periods of fiscal 2024 due to higher average investable balances.

Previous wording

(3) During the three months ended October 31, 2024, we recorded a $42 million net loss on long-term investments.

Current wording

(3) During the three and six months ended January 31, 2025, we recorded a $1 million and $43 million in net losses on long-term investments, respectively.

Previous wording

We recognized excess tax benefits on share-based compensation of $28 million in our provision for income taxes for each of the three months ended October 31, 2024 and 2023.

Current wording

For the three and six months ended January 31, 2025, we recognized excess tax benefits on share-based compensation of $29 million and $57 million, respectively, in our provision for income taxes. For the three and six months ended January 31, 2024, we recognized excess tax benefits on share-based compensation of $56 million and $83 million, respectively, in our provision for income taxes.

Previous wording

Our effective tax rate for the three months ended October 31, 2024 was approximately 8%. Excluding discrete tax items primarily related to share-based compensation, our effective tax rate was approximately 24%. The difference from the federal statutory rate of 21% was primarily due to state income taxes and non-deductible share-based compensation, which were partially offset by the tax benefit we received from the federal research and experimentation credit.

Current wording

Our effective tax rates for the three and six months ended January 31, 2025 were approximately 17% and 15%, respectively. Excluding discrete tax items primarily related to share-based compensation, our effective tax rate for both periods was approximately 24%. The difference from the federal statutory rate of 21% was primarily due to state income taxes and non-deductible share-based compensation, which were partially offset by the tax benefit we received from the federal research and experimentation credit.

Previous wording

Our effective tax rate for the three months ended October 31, 2023 was approximately 9%. Excluding discrete tax items primarily related to share-based compensation, our effective tax rate was approximately 24%. The difference from the federal statutory rate of 21% was primarily due to state income taxes and non-deductible share-based compensation, which were partially offset by the tax benefit we received from the federal research and experimentation credit.

Current wording

We recorded $1 million in tax expense on pretax income of $354 million for the three months ended January 31, 2024. Our effective tax rate for the six months ended January 31, 2024 was approximately 4%. Excluding discrete tax items primarily related to share-based compensation, our effective tax rate for both periods was approximately 24%. The difference from the federal statutory rate of 21% was primarily due to state income taxes and non-deductible share-based compensation, which were partially offset by the tax benefit we received from the federal research and experimentation credit.

Previous wording

At October 31, 2024, our cash, cash equivalents, and investments totaled $3.4 billion, a decrease of $716 million from July 31, 2024 due to the factors discussed under“Statements of Cash Flows” below. Our primary sources of liquidity have been cash from operations, which entails the collection of accounts receivable for products and services, the issuance of senior unsecured notes, and borrowings under our credit facilities. Our primary uses of cash have been for research and development programs, selling and marketing activities, capital projects, acquisitions of businesses, debt service costs and debt repayment, repurchases of our common stock under our stock repurchase programs, and the payment of cash dividends. As discussed in“Executive Overview – Industry Trends and Seasonality” earlier in this Item 2, our business is subject to significant seasonality. The balance of our cash, cash equivalents, and investments generally fluctuates with that seasonal pattern. We believe the seasonality of our business is likely to continue in the future.

Current wording

At January 31, 2025, our cash, cash equivalents, and investments totaled $2.5 billion, a decrease of $1.6 billion from July 31, 2024 due to the factors discussed under“Statements of Cash Flows” below. Our primary sources of liquidity have been cash from operations, which entails the collection of accounts receivable for products and services, the issuance of senior unsecured notes, and borrowings under our credit facilities. Our primary uses of cash have been for research and development programs, selling and marketing activities, capital projects, acquisitions of businesses, debt service costs and debt repayment, repurchases of our common stock under our stock repurchase programs, and the payment of cash dividends. As discussed in“Executive Overview – Industry Trends and Seasonality” earlier in this Item 2, our business is subject to significant seasonality. The balance of our cash, cash equivalents, and investments generally fluctuates with that seasonal pattern. We believe the seasonality of our business is likely to continue in the future.

Previous wording

We have historically generated significant cash from operations, and we expect to continue to do so in the future. Our cash, cash equivalents, and investments totaled $3.4 billion at October 31, 2024. None of those funds were restricted and approximately 91% of those funds were located in the U.S.

Current wording

We have historically generated significant cash from operations, and we expect to continue to do so in the future. Our cash, cash equivalents, and investments totaled $2.5 billion at January 31, 2025. None of those funds were restricted and approximately 88% of those funds were located in the U.S.

Previous wording

Our unsecured revolving credit facility and commercial paper program are available to us for general corporate purposes. At October 31, 2024, no amounts were outstanding under the unsecured revolving credit facility or the commercial paper program. See Note 6 to the financial statements in Part I, Item 1 of this Quarterly Report for more information.

Current wording

On January 30, 2025, we entered into a credit agreement with certain lenders providing for a $4.5 billion unsecured short-term revolving credit facility that matures on April 30, 2025 (2025 Credit Facility) to fund a portion of our TurboTax 5-day early refund offering. See Note 6 to the financial statements in Part I, Item 1 of this Quarterly Report for more information. Additionally, our $1.5 billion unsecured revolving credit facility and our commercial paper program are available to us for general corporate purposes. At January 31, 2025, no amounts were outstanding under the unsecured revolving credit facilities or the commercial paper program. See Note 6 to the financial statements in Part I, Item 1 of this Quarterly Report for more information.

Previous wording

Our secured revolving credit facilities are available to fund a portion of our loans to qualified small businesses. At October 31, 2024, $670 million was outstanding under our secured revolving credit facilities.

Current wording

Our secured revolving credit facilities are available to fund a portion of our loans to qualified small businesses. At January 31, 2025, $804 million was outstanding under our secured revolving credit facilities.

Previous wording

The following table summarizes selected items from our condensed consolidated statements of cash flows for the first three months of fiscal 2025 and fiscal 2024. See the financial statements in Part I, Item 1 of this Quarterly Report for complete condensed consolidated statements of cash flows for those periods.

Current wording

The following table summarizes selected items from our condensed consolidated statements of cash flows for the first six months of fiscal 2025 and fiscal 2024. See the financial statements in Part I, Item 1 of this Quarterly Report for complete condensed consolidated statements of cash flows for those periods.

Previous wording

As described in Note 10 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report, during the first three months of fiscal 2025, we repurchased 915,000 shares of our common stock under repurchase programs that our Board of Directors has authorized. On August 20, 2024, our Board of Directors approved an increase in the authorization under the existing stock repurchase program under which we are authorized to repurchase up to an additional $3 billion of our common stock. At October 31, 2024, we had authorization from our Board of Directors for up to $4.3 billion in stock repurchases. We currently expect to continue repurchasing our common stock on a quarterly basis; however, future stock repurchases under the current program are at the discretion of management, and authorization of future stock repurchase programs is subject to the final determination of our Board of Directors.

Current wording

As described in Note 10 to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report, during the first six months of fiscal 2025, we repurchased 2.0 million shares of our common stock under repurchase programs that our Board of Directors has authorized. On August 20, 2024, our Board of Directors approved an increase in the authorization under the existing stock repurchase program under which we are authorized to repurchase up to an additional $3 billion of our common stock. At January 31, 2025, we had authorization from our Board of Directors for up to $3.6 billion in stock repurchases. We currently expect to continue repurchasing our common stock on a quarterly basis; however, future stock repurchases under the current program are at the discretion of management, and authorization of future stock repurchase programs is subject to the final determination of our Board of Directors.

Previous wording

We have continued to pay quarterly cash dividends on shares of our outstanding common stock. During the three months ended October 31, 2024, we declared quarterly cash dividends that totaled $1.04 per share of outstanding common stock for a total of $295 million. In November 2024, our Board of Directors declared a quarterly cash dividend of $1.04 per share of outstanding common stock payable on January 17, 2025 to stockholders of record at the close of business on January 9, 2025. We currently expect to continue paying comparable cash dividends on a quarterly basis. However, future declarations of dividends and the establishment of future record dates and payment dates are subject to the final determination of our Board of Directors.

Current wording

We have continued to pay quarterly cash dividends on shares of our outstanding common stock. During the six months ended January 31, 2025, we declared quarterly cash dividends that totaled $2.08 per share of outstanding common stock for a total of $598 million. In February 2025, our Board of Directors declared a quarterly cash dividend of $1.04 per share of outstanding common stock payable on April 18, 2025 to stockholders of record at the close of business on April 10, 2025. We currently expect to continue paying comparable cash dividends on a quarterly basis. However, future declarations of dividends and the establishment of future record dates and payment dates are subject to the final determination of our Board of Directors.