INTUIT INC.

Previous wording

• Executive Overview: High-level discussion of our operating results and some of the trends that affect our business.• Critical Accounting Policies and Estimates: Policies and estimates that we believe are important to understanding the assumptions and judgments underlying our financial statements.• Results of Operations: A more detailed discussion of our revenue and expenses.• Liquidity and Capital Resources: Discussion of key aspects of our consolidated statements of cash flows, changes in our consolidated balance sheets, and our financial commitments.

Current wording

• Executive Overview: High-level discussion of our operating results and some of the trends that affect our business.• Critical Accounting Estimates: Policies and estimates that we believe are important to understanding the assumptions and judgments underlying our financial statements.• Results of Operations: A more detailed discussion of our revenue and expenses.• Liquidity and Capital Resources: Discussion of key aspects of our consolidated statements of cash flows, changes in our consolidated balance sheets, and our financial commitments.

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. We expect the actions associated with the Plan to be substantially complete by the first quarter of fiscal 2025. Restructuring costs associated with the Plan are estimated to be approximately $247 million. During the twelve months ended July 31, 2024, we recorded a $223 million charge in connection with the Plan. This charge is primarily related to severance and employee benefits and is recorded to restructuring in our consolidated statements of operations. See Note 16 to the consolidated financial statements in Item 8 of this Annual Report 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 included the exit of employees and the closing of real estate sites in certain markets to support 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 were $238 million. During the twelve months ended July 31, 2025 and 2024, we recorded charges in connection with the Plan of $15 million and $223 million, respectively. These charges are primarily related to severance and employee benefits and are recorded to restructuring in our consolidated statements of operations. See Note 15 to the consolidated financial statements in Item 8 of this Annual Report for more information.

Previous wording

On August 1, 2024, we renamed our Small Business & Self-Employed segment as the Global Business Solutions segment. This new name better aligns with the global reach of the Mailchimp and QuickBooks platform, our focus on serving both small and mid-market businesses, and our vision to become the end-to-end platform that customers use to grow and run their business.

Current wording

On August 1, 2024, we renamed our Small Business & Self-Employed segment as the Global Business Solutions segment. This new name better aligns with the global reach of the Mailchimp and QuickBooks platform, our focus on serving both small and mid-market businesses, and our vision to become the all-in-one platform that customers use to grow and run their business.

Previous wording

On August 1, 2023, we reorganized certain technology functions in our Consumer and ProTax segments that support and benefit our overall platform. Additionally, certain workplace and real estate functions in our Small Business & Self-Employed segment are now managed at the corporate 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 the twelve months ended July 31, 2023 and 2022, we reclassified $49 million and $21 million from Small Business & Self-Employed, $168 million and $150 million from Consumer, and $60 million and $64 million from ProTax to other corporate expenses, respectively. See Note 15, “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 the corporate 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 the twelve months ended July 31, 2024 and 2023, we reclassified $1.4 billion and $1.3 billion from Global Business Solutions, $573 million and $475 million from Consumer, and $33 million and $34 million from ProTax to other corporate expenses, respectively, to conform to the current presentation. See Note 14 to the consolidated financial statements in Item 8 of this Annual Report for more information.

Previous wording

Artificial intelligence (AI) is transforming multiple industries, including financial technology. Disruptive start-ups, emerging ecosystems, and mega-platforms are harnessing new technology to create personalized experiences, deliver data-driven insights, and increase speed of service. These shifts are creating a more dynamic and highly competitive environment where customer expectations are shifting around the world as more services become digitized and the array of choices continues to increase.

Current wording

AI, including GenAI, predictive AI, and agentic AI, is transforming multiple industries, in particular financial technology. Disruptive start-ups, emerging ecosystems, and mega-platforms are harnessing new technology to create personalized experiences, deliver data-driven insights, and increase speed of service. These shifts are creating a more dynamic and highly competitive environment where customer expectations are shifting around the world as more services become digitized and the array of choices continues to increase.

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

We operate in industries that are experiencing an increasing amount of fraudulent activities by malicious third parties, and those fraudulent activities are becoming increasingly sophisticated, including through the use of AI. 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.

Previous wording

Our operations are impacted by a rapidly-evolving regulatory environment and face increasingly heightened scrutiny. We are subject to numerous federal, state, and local, as well as foreign laws and regulations covering a broad and increasing range of subjects, both in the U.S. and internationally.

Current wording

Our operations are impacted by a rapidly-evolving regulatory environment and face increasingly heightened scrutiny. We are subject to numerous federal, state, and local, as well as foreign laws and regulations covering a broad and increasing range of subjects, both in the United States (U.S.) and internationally.

Previous wording

The most important financial indicators that we use to assess our business are revenue growth for the company as a whole and for each reportable segment; operating income growth for the company as a whole; earnings per share; and cash flow from operations. We also track certain non-financial drivers of revenue growth and, when material, identify them in the applicable discussions of segment results below. Service offerings are a significant part of our business. Our total service revenue was $13.9 billion, or 85% of our total revenue in fiscal 2024, and we expect our total service revenue as a percentage of our total revenue to grow over the long term.

Current wording

The most important financial indicators that we use to assess our business are revenue growth for the company as a whole and for each reportable segment; operating income growth for the company as a whole; earnings per share; and cash flow from operations. We also track certain non-financial drivers of revenue growth and, when material, identify them in the applicable discussions of segment results below. Service offerings are a significant part of our business. Our total service revenue was $16.4 billion, or 87% of our total revenue in fiscal 2025, and we expect our total service revenue as a percentage of our total revenue to grow over the long term.

Previous wording

In preparing our consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP), we are required to make estimates, assumptions, and judgments that can have a material 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 consolidated balance sheets. We believe that the estimates, assumptions, and judgments involved in the following accounting policies have the greatest potential impact on our consolidated financial statements, so we consider these to be our critical accounting policies:

Current wording

In preparing our consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP), we are required to make estimates, assumptions, and judgments that can have a material 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 consolidated balance sheets. Actual results could differ materially from our estimates. Critical accounting estimates are those estimates that involve a significant level of estimations and uncertainty and have had, or are reasonably likely to have, a material impact on our financial condition or results of operations. We believe that the estimates, assumptions, and judgments involved in the following accounting policies have the greatest potential impact on our consolidated financial statements, so we consider these to be our critical accounting estimates:

Previous wording

Our senior management has reviewed the development and selection of these critical accounting policies and their disclosure in this Annual Report on Form 10-K with the Audit and Risk Committee of our Board of Directors.

Current wording

Our senior management has reviewed the development and selection of these critical accounting estimates and their disclosure in this Annual Report on Form 10-K with the Audit and Risk Committee of our Board of Directors. For further information on all of our significant accounting policies, see Note 1, “Description of Business and Summary of Significant Accounting Policies” to the consolidated financial statements in Item 8 of this Annual Report.

Previous wording

We derive our revenue primarily from the sale of online services such as tax, accounting, payroll, merchant payment processing services, delivery of qualified links, marketing automation, customer relationship management, and desktop software products and desktop software subscriptions. Our contracts with customers often include promises to transfer multiple products and services, which are primarily recognized ratably over the relevant period. In determining how revenue should be recognized, a five-step process is used, which requires judgment and estimates within the revenue recognition process. The primary judgments include identifying the performance obligations in the contract and determining whether the performance obligations are distinct. If any of these judgments were to change, it could cause a material increase or decrease in the amount of revenue we report in a particular period. For additional information, see“Description of Business and Summary of Significant Accounting Policies – Revenue Recognition” in Note 1 to the consolidated financial statements in Item 8 of this Annual Report.

Current wording

We derive our revenue primarily from the sale of online services such as tax, accounting, payroll, merchant payment processing services, delivery of qualified links, marketing automation, live expert advice, financing for small and mid-market businesses, and desktop software products, desktop software subscriptions, and financial supplies. Our contracts with customers often include promises to transfer multiple products and services, which are primarily recognized ratably over the relevant period or when the customer consumes the related service. In determining how revenue should be recognized, a five-step process is used, which requires judgment and estimates within the revenue recognition process. The primary judgments include identifying the performance obligations in the contract and determining whether the performance obligations are distinct. If any of these judgments were to change, it could cause a material increase or decrease in the amount of revenue we report in a particular period. For additional information, see“Description of Business and Summary of Significant Accounting Policies – Revenue Recognition” in Note 1 to the consolidated financial statements in Item 8 of this Annual Report.

Previous wording

We estimate our income taxes based on the various jurisdictions where we conduct business. Significant judgment is required in determining our worldwide income tax provision. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax rules and the potential for future adjustment of our uncertain tax positions by the United States Internal Revenue Service or other taxing jurisdictions. We estimate our current tax liability and assess temporary differences that result from differing treatments of certain items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which we show on our consolidated balance sheets. We must then assess the likelihood that our deferred tax assets will be realized. To the extent we believe that realization is not likely, we establish a valuation allowance. When we establish a valuation allowance or increase this allowance in an accounting period, we record a corresponding tax expense in our consolidated statements of operations.

Current wording

We estimate our income taxes based on the various jurisdictions where we conduct business. Significant judgment is required in determining our worldwide income tax provision. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax rules and the potential for future adjustment of our uncertain tax positions by the U.S. Internal Revenue Service or other taxing jurisdictions. We estimate our current tax liability and assess temporary differences that result from differing treatments of certain items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which we show on our consolidated balance sheets. We must then assess the likelihood that our deferred tax assets will be realized. To the extent we believe that realization is not likely, we establish a valuation allowance. When we establish a valuation allowance or increase this allowance in an accounting period, we record a corresponding tax expense in our consolidated statements of operations.

Previous wording

Total net revenue increased $1.9 billion, or 13%, in fiscal 2024 compared with fiscal 2023. Small Business & Self-Employed segment revenue increased 19% due to growth in our Online Ecosystem revenue. Consumer segment revenue increased 7% due to the interrelated factors of a shift in mix to our higher-priced services offerings, such as TurboTax Live, and higher effective prices. See“Segment Results” later in this Item 7 for more information.

Current wording

Total net revenue increased $2.5 billion, or 16%, in fiscal 2025 compared with fiscal 2024. Global Business Solutions segment revenue increased 16% due to growth in our Online Ecosystem revenue. Credit Karma revenue increased 32% due to strength in our personal loan, credit card, and auto insurance verticals. Consumer segment revenue increased 10% due to growth in our higher-priced and additional service offerings, such as TurboTax Live and our early tax refund offerings. See“Segment Results” later in this Item 7 for more information.

Previous wording

Operating income increased $489 million, or 16%, in fiscal 2024 compared with fiscal 2023. The increase in operating income was due to the increase in revenue described above and an increase in expenses. Expenses increased due to staffing, marketing, restructuring, share-based compensation, and outside services. See“Operating Expenses” later in this Item 7 for more information. See Note 16 to the consolidated financial statements in Item 8 of this Annual Report for more information on our restructuring charges.

Current wording

Operating income increased $1.3 billion, or 36%, in fiscal 2025 compared with 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 increases in marketing, staffing, outside services, and sales-related expenses partially offset by a decrease in restructuring expenses. See“Operating Expenses” later in this Item 7 for more information. See Note 15 to the consolidated financial statements in Item 8 of this Annual Report for more information on our restructuring charges.

Previous wording

Net income increased $579 million, or 24%, in fiscal 2024 compared with fiscal 2023. The increase in net income was due to the increase in operating income described above, an increase in interest income due to higher average interest rates, and a decrease in income tax expense related to higher excess tax benefits on share-based compensation. Diluted net income per share increased 24% to $10.43 for fiscal 2024, in line with the increase in net income.

Current wording

Net income increased $906 million, or 31%, in fiscal 2025 compared with fiscal 2024. The increase in net income was due to the increase in operating income described above, 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 31% to $13.67 for fiscal 2025, in line with the increase in net income.

Previous wording

The information below is organized in accordance with our four reportable segments. All of our segments operate and sell to customers primarily in the United States. Total international net revenue was approximately 8% of consolidated total net revenue in each of the twelve months ended July 31, 2024, 2023, and 2022.

Current wording

The information below is organized in accordance with our four reportable segments. All of our segments operate and sell to customers primarily in the U.S. Total international net revenue was approximately 8% of consolidated total net revenue in each of the twelve months ended July 31, 2025, 2024, and 2023.

Previous wording

On August 1, 2024, we renamed our Small Business & Self-Employed segment as the Global Business Solutions segment. This new name better aligns with the global reach of the Mailchimp and QuickBooks platform, our focus on serving both small and mid-market businesses, and our vision to become the end-to-end platform that customers use to grow and run their business.

Current wording

On August 1, 2024, we renamed our Small Business & Self-Employed segment as the Global Business Solutions segment. This new name better aligns with the global reach of the Mailchimp and QuickBooks platform, our focus on serving both small and mid-market businesses, and our vision to become the all-in-one platform that customers use to grow and run their business.

Previous wording

On August 1, 2023, we reorganized certain technology functions in our Consumer and ProTax segments that support and benefit our overall platform. Additionally, certain workplace and real estate functions in our Small Business & Self-Employed segment are now managed at the corporate 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 the twelve months ended July 31, 2023 and 2022, we reclassified $49 million and $21 million from Small Business & Self-Employed, $168 million and $150 million from Consumer, and $60 million and $64 million from ProTax to other corporate expenses, respectively.

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 the corporate 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 the twelve months ended July 31, 2024 and 2023, we reclassified $1.4 billion and $1.3 billion from Global Business Solutions, $573 million and $475 million from Consumer, and $33 million and $34 million from ProTax to other corporate expenses, respectively, to conform to the current presentation.

Previous wording

Segment operating income is segment net revenue less segment cost of revenue and operating expenses. We include expenses such as corporate selling and marketing, product development, 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. For our Credit Karma 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 $5.9 billion in fiscal 2024, $5.2 billion in fiscal

Current wording

Segment operating income is segment net revenue less segment cost of revenue and operating expenses. 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 $8.7 billion in fiscal 2025, $8.0 billion in fiscal 2024, and $7.0 billion in fiscal 2023. Unallocated corporate items increased in fiscal 2025 compared with fiscal 2024 due to increases in cost of service revenue, research and development expense, and general and administrative expense, partially offset by a decrease in restructuring costs. See Note 14 to the consolidated financial statements in Item 8 of this Annual Report for reconciliations of total segment operating income to consolidated operating income for each fiscal year presented.

Previous wording

Small Business & Self-Employed segment revenue includes both Online Ecosystem and Desktop Ecosystem revenue.

Current wording

Global Business Solutions segment revenue includes both Online Ecosystem and Desktop Ecosystem revenue.

Previous wording

•Merchant payment processing and bill pay services for small and mid-market businesses that use online offerings;

Current wording

•Money offerings for businesses that use online offerings, which include merchant payment processing and bill pay services, and financing for small and mid-market businesses (QuickBooks Capital);

Previous wording

•QuickBooks Desktop software subscriptions (QuickBooks Desktop Pro Plus, QuickBooks Desktop Premier Plus, and QuickBooks Enterprise, and ProAdvisor Program memberships for the accounting professionals who serve small businesses);

Current wording

•QuickBooks Desktop software subscriptions (QuickBooks Desktop Plus, QuickBooks Enterprise, and ProAdvisor Program memberships for the accounting professionals who serve small businesses);

Previous wording

•Merchant payment processing services for small and mid-market businesses that use desktop offerings;

Current wording

•Money offerings for businesses that use desktop offerings, which include merchant payment processing services and financing for small and mid-market businesses (QuickBooks Capital); and

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 subscription and desktop payroll offerings, which are part of our Desktop Ecosystem. Our fiscal 2022 revenue includes Mailchimp revenue from the date of acquisition, which was November 1, 2021.

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, and 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.

Previous wording

Revenue for our Small Business & Self-Employed segment increased $1.5 billion, or 19%, in fiscal 2024 compared with fiscal 2023. The increase was due to growth in Online Ecosystem revenue, which contributed to $1.1 billion of the increase for fiscal 2024.

Current wording

Revenue for our Global Business Solutions segment increased $1.5 billion, or 16%, in fiscal 2025 compared with fiscal 2024. The increase was due to growth in Online Ecosystem revenue, which contributed to $1.4 billion of the increase for fiscal 2025.

Previous wording

Online Ecosystem revenue increased $1.1 billion, or 20%, in fiscal 2024 compared with fiscal 2023. Online Services revenue increased $603 million, or 21%, in fiscal 2024 compared with fiscal 2023 due to increases in revenue from our payroll offerings of $211 million, our payments offerings of $203 million, and Mailchimp of $125 million. Revenue increases were due to the interrelated factors described below. Online payroll revenue increased due to customer growth, higher effective prices, and a shift in mix to higher-end offerings. Online payments revenue increased due to customer growth, higher effective prices, and an increase in total payment volume per customer. Mailchimp revenue increased due to higher effective prices and paid customer growth. QuickBooks Online Accounting revenue increased $530 million, or 19%, in fiscal 2024 compared with fiscal 2023 due to customer growth, higher effective prices, and a shift in mix to our higher-priced offerings.

Current wording

Online Ecosystem revenue increased $1.4 billion, or 20%, in fiscal 2025 compared with fiscal 2024. QuickBooks Online Accounting revenue increased $741 million, or 22%, in fiscal 2025 compared with fiscal 2024 due to the interrelated factors of higher effective prices, customer growth, and mix-shift. Online Services revenue increased $669 million, or 19%, in fiscal 2025 compared with fiscal 2024 due to increases in revenue from our money offerings of $379 million, our payroll offerings of $279 million, and Mailchimp of $20 million. Revenue increases were due to the interrelated factors described below. Money revenue increased $379 million due to a $242 million increase in payments revenue from payments customer growth, an increase in total payment volume per customer, and higher effective payments prices, and due to a $137 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.

Previous wording

Online Ecosystem average revenue per customer, which we define as total online ecosystem revenue divided by the average number of online paying customers, increased 11% for fiscal 2024 compared with fiscal 2023. Online ecosystem paying customers, which we define as the sum of all QuickBooks Online customers, QuickBooks Time customers, Mailchimp paying customers, and customers who subscribe to standalone services outside of their QuickBooks Online experience, increased 6% as of July 31, 2024 compared with July 31, 2023.

Current wording

Online Ecosystem average revenue per customer, which we define as total online ecosystem revenue divided by the average number of online paying customers, increased 14% for fiscal 2025 compared with fiscal 2024. Online ecosystem paying customers, which we define as the sum of all QuickBooks Online customers, QuickBooks Time customers, Mailchimp paying customers, and customers who subscribe to standalone services outside of QuickBooks Online, increased 5% as of July 31, 2025 compared with July 31, 2024.

Previous wording

Desktop Ecosystem revenue increased $362 million, or 16%, in fiscal 2024 compared with fiscal 2023, $252 million of which is due to the interrelated factors of customer growth and price increases primarily in our QuickBooks Desktop and Enterprise subscription offerings. Approximately $110 million of fiscal 2024 revenue is associated with changes we made to our offerings in 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.

Current wording

Desktop Ecosystem revenue increased $134 million, or 5%, in fiscal 2025 compared with 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

Revenue for our Consumer segment increased $310 million, or 7%, in fiscal 2024 compared with fiscal 2023, due to the interrelated factors of a shift in mix to our higher-priced service offerings, such as TurboTax Live, and higher effective prices.

Current wording

Revenue for our Consumer segment increased $425 million, or 10%, in fiscal 2025 compared with fiscal 2024 due to growth in our higher-priced and additional service offerings, such as TurboTax Live and our early tax refund offerings.

Previous wording

In August 2023, we reorganized certain technology functions that support and benefit our overall platform. As a result, these costs are no longer included in segment operating income and are now included in other corporate expenses. For the twelve months ended July 31, 2023 and 2022, we reclassified $168 million and $150 million, respectively, from Consumer to other corporate expenses.

Current wording

In August 2024, we reorganized certain technology and customer success functions that support and benefit the overall platform and are managed at the corporate 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 twelve months ended July 31, 2024 and 2023, we reclassified $573 million and $475 million, respectively, from Consumer to other corporate expenses to conform to the current presentation.

Previous wording

Revenue for our Credit Karma segment increased $74 million, or 5%, in fiscal 2024 compared with fiscal 2023, due to increases in revenue from our credit card vertical of $32 million, auto insurance vertical of $25 million, and Credit Karma Money of $20 million, partially offset by a decrease in revenue from our home loan vertical of $6 million.

Current wording

Revenue for our Credit Karma segment increased $555 million, or 32%, in fiscal 2025 compared with fiscal 2024 due to increases in revenue from our personal loan vertical of $221 million, our credit card vertical of $213 million, and our auto insurance vertical of $99 million.

Previous wording

Revenue for our ProTax segment increased $38 million, or 7%, in fiscal 2024 compared with fiscal 2023, due to higher average revenue per customer.

Current wording

Revenue for our ProTax segment increased $22 million, or 4%, in fiscal 2025 compared with fiscal 2024 due to higher average revenue per customer.

Previous wording

Credit Karma segment operating income decreased $14 million, or 3%, in fiscal 2024 compared with fiscal 2023, due to increases in marketing expenses of $68 million and outside services expenses of $28 million, partially offset by the increase in revenue described above.

Current wording

ProTax segment operating income increased $13 million, or 3%, in fiscal 2025 compared with fiscal 2024 due to the increase in revenue described above, partially offset by an increase in marketing expenses of $6 million.

Previous wording

Our cost of revenue has three components: (1) cost of service revenue, which includes the direct costs associated with our online and service offerings, such as costs for data processing and storage capabilities from cloud providers, ongoing production support costs, customer support costs, costs for the tax and bookkeeping experts that support our TurboTax Live and QuickBooks Live offerings, and costs related to credit score providers; (2) cost of product and other revenue, which includes the direct costs of manufacturing and shipping or electronically downloading our desktop software and financial supplies products; and (3) amortization of acquired technology, which represents the cost of amortizing developed technologies that we have obtained through acquisitions, over their useful lives.

Current wording

Our cost of revenue has three components: (1) cost of service revenue, which includes the direct costs associated with our online and service offerings, such as staffing costs for ongoing production support, customer support, and tax and bookkeeping experts that support our TurboTax Live and QuickBooks Live offerings, costs for data processing and storage capabilities from cloud providers, and costs related to credit score providers; (2) cost of product and other revenue, which includes the direct costs of manufacturing and shipping or electronically downloading our desktop software and financial supplies products; and (3) amortization of acquired technology, which represents the cost of amortizing developed technologies that we have obtained through acquisitions, over their useful lives.

Previous wording

Cost of product and other revenue as a percentage of product and other revenue was consistent in fiscal 2024 compared with fiscal 2023. 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 flat in fiscal 2025 compared with 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 was flat in fiscal 2024 compared to fiscal 2023. Total net revenue increased $1.9 billion, or 13%, and total operating expenses increased $1.1 billion, or 14%. The increase in total operating expenses was due to increases of $294 million for marketing expenses, $257 million for staffing due to higher headcount, $223 million in restructuring charges which includes $25 million in share-based compensation, and $175 million for other share-based compensation. See Note 16 to the consolidated financial statements in Item 8 of this Annual Report for more information regarding restructuring charges.

Current wording

Total operating expenses as a percentage of total net revenue decreased in fiscal 2025 compared to fiscal 2024. Total net revenue increased $2.5 billion, or 16%, and total operating expenses increased $870 million, or 9%. The increase in total operating expenses was due to increases of $410 million for marketing expenses, $300 million for staffing expenses, $161 million for outside services, and $52 million for sales-related expenses, partially offset by a $208 million decrease in restructuring charges. See Note 15 to the consolidated financial statements in Item 8 of this Annual Report for more information regarding restructuring charges.

Previous wording

Interest expense of $242 million and $248 million in fiscal 2024 and 2023, respectively, consisted of interest on our senior unsecured notes, unsecured term loan, and secured revolving credit facilities.

Current wording

Interest expense of $247 million in fiscal 2025 consisted of interest on our senior unsecured notes, unsecured revolving credit facility, and commercial paper program. Interest expense of $242 million in fiscal 2024 consisted of interest on our senior unsecured notes and unsecured term loan.

Previous wording

(1)Interest income increased in fiscal 2024 compared to fiscal 2023, due to higher average interest rates.

Current wording

(1)Interest income increased in fiscal 2025 compared to fiscal 2024 due to higher average investable balances.

Previous wording

Our effective tax rate for fiscal 2024 was approximately 17%. Excluding certain tax benefits primarily related to share-based compensation, our effective tax rate was approximately 24%. This rate differed from the federal statutory rate of 21% primarily due to state income taxes and non-deductible share-based compensation, which were partially offset by the benefit we received from the federal research and experimentation credit.

Current wording

Our effective tax rate for fiscal 2025 was approximately 20%. Excluding certain tax benefits primarily related to share-based compensation, our effective tax rate was approximately 24%. This rate differed from the federal statutory rate of 21% primarily due to state income taxes and non-deductible share-based compensation, which were partially offset by the benefit we received from the federal research and experimentation credit.

Previous wording

Our effective tax rate for fiscal 2023 was approximately 20%. Excluding the tax benefits related to share-based compensation and a transfer of certain intangible assets from our United Kingdom subsidiary to the United States, our effective tax rate was approximately 24%. This rate differed from the federal statutory rate of 21% primarily due to state income taxes and non-deductible share-based compensation, which were partially offset by the benefit we received from the federal research and experimentation credit. See Note 11 to the consolidated financial statements in Item 8 of this Annual Report for more information about our effective tax rates.

Current wording

Our effective tax rate for fiscal 2024 was approximately 17%. Excluding certain tax benefits primarily related to share-based compensation, our effective tax rate was approximately 24%. This rate differed from the federal statutory rate of 21% primarily due to state income taxes and non-deductible share-based compensation, which were partially offset by the benefit we received from the federal research and experimentation credit. See Note 10 to the consolidated financial statements in Item 8 of this Annual Report for more information about our effective tax rates.