直覺電腦 (INTU) 2013 Q4 法說會逐字稿

Good afternoon.

My name is Sayid, and I will be your conference facilitator.

At this time, I would like to welcome everyone to Intuit's fourth quarter and fiscal 2013 conference call.

All lines have been placed on mute to prevent any background noise.

After the speakers' remarks, there will be a question-and-answer period.

(Operator Instructions)

With that, I will now turn the call over to Matt Rhodes, Intuit's Director Investor Relations.

Mr. Rhodes, you may begin.

Good afternoon, and welcome to Intuit's fourth quarter and fiscal 2013 conference call.

I'm here with Brad Smith, our President and CEO, and Neil Williams, our CFO.

Before we start, I'd like to remind everyone that our remarks will include forward-looking statements.

There are number of factors that could cause Intuit's results to differ materially from our expectations.

You can learn more about these risks in the press release we issued earlier this afternoon, our Form 10-K for fiscal 2012, and our other SEC filings.

All of those documents are available on the Investor Relations page of Intuit's website at intuit.com.

We assume no obligation to update any forward-looking statements.

Some of the numbers in this report are presented on a non-GAAP basis.

We've reconciled the comparable GAAP and non-GAAP numbers in today's press release.

Unless otherwise noted, all growth rates refer to the current period versus the comparable prior-year period, and the business metrics and associated growth rates refer to worldwide business metrics.

Also, all reported results in fiscal 2014 guidance exclude Intuit Financial Services and Intuit Health, which have been sold and reclassified to Discontinued Operations.

A copy of our prepared remarks and supplemental financial information will be available on our website after this call ends.

And with that, I'll turn the call over to Brad Smith.

All right.

Thank you, Matt.

And thanks to all of you for joining us.

Fiscal 2013 has been a year of exciting wins as well as some challenges.

We've seized the opportunity to capture lessons learned, make the necessary adjustments, and position the Company for a stronger future.

For the fiscal year, we posted strong growth in small business, but we fell short of our expectations in consumer tax.

Full-year revenue at the Company level grew 10%, with non-GAAP earnings per share growing 13% when adjusted for the divestitures and the restructuring charges that we'll talk more about in a minute.

In anticipation of the next chapter of growth, we updated our connected services strategy last fall.

Then, in late spring, we reorganized our business units and functional groups to streamline decision-making and position our next generation of talent against the highest-impact opportunities.

And then, just this past month, we sold Intuit Financial Services and the Intuit Health Group, two businesses that's no longer aligned with our go-forward strategy.

These organizational changes have transformed Intuit from a portfolio of businesses into an ecosystem that now builds durable competitive advantage by working together.

The foundation is now in place for the next chapter of growth, and we're focusing the Company on two strategic outcomes.

First, to be the operating system behind small business success, and second, to do the nation's taxes today in the US and in Canada.

Let's take a closer look at each of these goals, and we'll start with small business.

The small business group had a great fiscal 2013, with revenue growing 16% overall, and each segment of the group growing double digits as well.

As we strive to be the operating system behind small business success, we're launching an exciting new user experience for QuickBooks online in the coming weeks.

It has been completely redesigned to delight new customers and to increase conversion from trial to subscription.

From this foundation, we are accelerating our growth outside the US by narrowing our focus on winning in Canada, the UK, Australia, and India, while we validate new geographies that we may choose to enter in the future.

We've also resourced the highly talented team to begin targeting smaller businesses that don't feel they're ready for QuickBooks.

This team is charged with identifying ways to win these prospects by solving important pre-accounting needs with lightweight mobile and online solutions.

And finally, with our customers' permission, we're advancing our capabilities to use customer data to deliver more tailored product experiences and offer them breakthrough benefits as well.

Now it's important to note we're not coming at the small business goal from a standing start.

For example, in the fourth quarter, QuickBooks online subscribers grew 28%, to 487,000 subscribers.

In addition, subscribers outside the US grew 80%, and now total more than 32,000 paying customers in over 100 countries.

Our online payroll customers also grew 18%, with our total payroll new users growing 8% in the fiscal year.

This is the highest new payroll user growth that we have seen in a decade, and demand for subscribers grew 40%.

The team's been leveraging QuickBooks data to cross sell into our customer base, and the early results have been promising.

As we head into fiscal 2014, this momentum is reinforced by significant product launches that I alluded to a few minutes ago, a more focused global strategy, and one of the most exciting marketing campaigns that we have ever launched in our small business segment.

We'll share more about these small business initiatives, as well as provide an overview of our longer-term tax strategy, at our upcoming investor day in September.

Switching to tax, we had tremendous assets and the leading market position in both the do-it-yourself and the CPA-prepared segments.

These are the two largest segments in the tax market.

And we had nearly 60% share in the do-it-yourself software category, which is the only tax preparation method that grew this past tax season.

Our teams are thinking big, and they're looking for ways to redefine our franchise and re-imagine the tax preparation industry overall.

You'll hear more about these ideas as we get a little closer to tax season.

And while it's going to be multi-year effort, we have some exciting things already slated for the upcoming tax season.

We'll focus squarely on product improvements.

Our team is energized to further simplify the new user experience while delivering a more personalized experience for all of our tax filing customers.

And amidst last year's tax challenges, we had some real wins that set the foundation for this upcoming season.

For example, this past year we saw tremendous growth in our mobile usage, which represents the next generation of do-it-yourself tax preparation.

SnapTax filings were up nearly three times this season, and five million TurboTax customers logged in through a mobile device at some point throughout the year.

Nearly one-fifth of SnapTax returns were completed in fewer than 15 minutes.

That shows us what is possible in TurboTax, if you leverage technology and data so that our customers' taxes are basically done for them in a matter of minutes.

Now looking ahead, we also feel confident that we can help our customers effectively navigate the Affordable Care Act.

And just as a reference point, we took a look back in history at what has transpired with similar legislation was implemented in Massachusetts just a few years ago.

In a headline, software did not lose market share due to health care legislation.

We like our opportunity to make the future healthcare aspect of our customers' tax returns simple to understand, just like we do with all other complexities that come through the tax code.

That's what we do here at Intuit.

We simplify the business of life so our customers can go about doing the things that fuel their passion.

That's why we have 28 million global TurboTax customers, which is more than any other tax prep provider, in addition to over 100,000 accountants who prepare more than another 25 million returns.

So to quickly sum up, we've embraced the lessons that we learned in fiscal 2013.

We've made proactive adjustments, and we are excited about our potential as we go after a global opportunity to transform financial lives of small businesses and consumers and the trusted accountants who serve them.

Now, you've seen our guidance for fiscal 2014.

I don't consider this the new normal.

By executing against the strategic goals that I just described, we expect to deliver results that are consistent with our financial principles, double-digit revenue growth and margin expansion.

Neil's going to provide more details on our longer-term financial outlook in a minute, which aligns with these principles and on that note I'll hand it over to Neil to walk you through the financial details and our guidance.

Thanks, Brad.

First, some context.

We completed the sale of Intuit Financial Services on August 1, as well as the sale of Intuit Health yesterday.

As a result, both have been moved to Discontinued Operations for all periods presented.

In fiscal 2013, the two businesses contributed revenue of approximately $340 million, and non-GAAP operating income of approximately $45 million.

Now let's move to our results.

For the fourth quarter of fiscal 2013, we delivered revenue of $634 million, up 12%, 10% organically.

Non-GAAP operating income of $9 million, GAAP operating loss of $60 million.

After interest expense, non-GAAP diluted earnings per share was breakeven.

GAAP loss per share of $0.05.

For fiscal 2013, we delivered revenue of $4.2 billion up 10%, 8% organically, non-GAAP operating income of $1.5 billion, up 8%.

GAAP operating income of $1.2 billion, up 6%, non-GAAP diluted earnings per share of $3.20, up 11%, GAAP diluted earnings per share of $2.83, up 9%.

In the fourth quarter, we incurred a charge of approximately $20 million as a result of a headcount reduction and other nonrecurring costs, which impacted our GAAP and non-GAAP operating income and earnings per share.

Adjusting for these charges, and the classification of Intuit Financial Services and Intuit Health as Discontinued Operations, our results would have been in line with the guidance we provided in May.

Turning to the business segments, total small business group revenue grew 13% for the quarter and 16% for the year.

Within small business, financial management solutions revenue grew 18% for the quarter and 20% for the year, including the acquisition of Demandforce.

Excluding Demandforce, revenue was up 13% for the quarter and 10% for the year.

Customer acquisition in our connected services businesses continues to drive our growth.

In addition to the stats that Brad mentioned, payments customers grew 13%, QuickBooks enterprise solutions subscribers grew 26%.

For the year, total QuickBooks customers grew 4%, with QuickBooks subscribers growing 27%, and QuickBooks desktop units declining 6%.

With almost 0.5 million subscribers, the QuickBooks online customer base is still growing fast and contributing increasing numbers of new users.

In fact, we anticipate nearly as many new users will sign up for QuickBooks online as QuickBooks desktop in fiscal 2014, marking an important tipping point in the business shift to connected services.

Employee management solutions revenue grew 12% for the quarter and the year, driven by customer growth price and growth in beyond payroll offerings.

Payment solutions revenue grew 7% for the quarter and 14% for the year.

As we discussed last quarter, we faced a tough comparison versus the fourth quarter of 2012, where revenue benefited from the Durbin Amendment and other fee structure changes.

Adjusting for this, payments revenue would have grown about 17% in the fourth quarter.

Card transaction volume grew 9%.

Consumer tax revenue was $30 million for the seasonally light fourth quarter, and revenue grew 4% for the year.

Despite single-digit revenue growth, margins in this business expanded by over 100 basis points over last year.

Accounting professionals revenue grew 29% for the quarter and 6% for the year.

Other businesses revenue grew 8% for the quarter and 6% for the year.

Now some housekeeping as we head into fiscal 2014.

Page 2 of our fact sheet shows how we intend to report results next year.

There, we provided our guidance in the new format, as well as historical results in the same format, to help you with your financial modeling.

We'll provide revenue and segment contribution margin for three reportable segments -- small business, consumer, and pro tax.

We will continue to share similar business and customer metrics to those we provide now, and we'll provide revenue for small business financial solutions, which includes QuickBooks for small businesses and accountants and payments, and small business management solutions, which includes payroll and Demandforce.

We also plan to report our consumer tax and consumer ecosystem revenue separately.

All reporting segments will include global, and there will no longer be an other businesses category.

Turning to the balance sheet, we continue to take a disciplined approach to Capital Management, investing the cash we generate in opportunities that yield a 15% plus ROI.

Our Board approved a $0.19 per share dividend for fiscal Q1, an increase of 12% payable on October 18.

And when it's the best use of cash, we'll return cash to shareholders via share repurchases.

We repurchased $292 million in shares in fiscal 2013.

We could not repurchase shares in Q4 due to the restructuring activities that took place during the quarter.

About $1.4 billion remains on our current authorization, and we received an additional $2 billion authorization from our Board in August.

We intend to use existing cash, and the proceeds from the IFS transaction, to accelerate the repurchase of shares.

When our window opens following our earnings report, we intend to put an accelerated share repurchase of more than $1 billion in place.

As a result, we expect a net reduction in our share count of 4% to 6% in fiscal 2014.

We provided our guidance for the first quarter and for fiscal 2014 in our press release.

Our full-year outlook includes revenue growth of 6% to 8%, with margin expansion and double-digit earnings per share growth.

We expect small business to have a strong fiscal 2014, and we've guided to another year of double-digit revenue growth.

On the tax side, we've made conservative assumptions about total filer growth following the decline in total filers this past tax year.

We're excited about our vision for the digital tax prep category, but anticipate a multi-year effort to drive significant change in consumer behavior.

As a result, we are guiding to mid-single-digit growth in consumer tax.

We expect to make progress in fiscal 2013, and to build on that progress over the next few seasons.

I'd like to ladder on Brad's comments about our strategic outcomes.

We have a longer-term financial outlook.

Looking beyond fiscal 2013, we're planning for our non-GAAP results to reflect revenue growth of 8% to 12% each year, double-digit operating income growth growing faster than revenue, and mid-teens earnings per share growth.

A number of variables will affect our growth in any given fiscal year, but we believe our strategy will enable us to deliver results in these ranges.

We'll provide more details about the drivers of this growth at our investor day in September.

I'll turn it back to Brad to close.

All right.

Thank you, Neil.

You've probably seen some of our new marketing efforts, which highlight our commitment to helping small businesses grow.

We are energized by the opportunity to enable small businesses to reach their full potential, and we're investing to give them voice and to help them succeed.

This marketing effort supports one of the biggest product redesigns that we've undertaken in my decade at Intuit.

It completely re-imagines and harmonizes the small business user experience across all of our products.

And in tax, we are energized by the opportunity to accelerate growth in the do-it-yourself category, capitalize on a shift to the cloud in the CPA-prepared segment, and we're looking for unique ways to leverage these collective assets as we strive to do the nation's taxes.

And to advance towards accomplishing both our small business and our tax goals, we've rallied behind accountants, offering new solutions and improved products that enable them to grow their practices and to improve their clients' financial lives.

Now we're going to talk more about these things, and our strategy to execute against them, at our investor day, which we're going to hold in Mountain View on our campus on September 24.

We'll showcase some exciting new products, as well as partnerships, so this is an event that you won't want to miss.

We hope to see you there.

As always, I want to thank our employees for their hard work and their ongoing focus.

And with that, Sayid, I will turn it over to you so we can open it up for questions.

(Operator Instructions)

Sterling Auty, JPMorgan.

Specific to the consumer tax -- and I'm just curious.

In hindsight, looking at the results for the tax year just past, any final thoughts in terms of competitively what happened in terms of market share?

And then on the go-forward outlook in consumer tax, you mentioned a conservative assumption on tax filing.

Can you give us a range, or is that something you'll go into detail at the analyst day?

Yes, Sterling, it's Brad.

Happy to try to take both now, and then we will provide more detail at investor day.

As we look back, there's still a lot of unanswered questions around what happened with total tax returns.

The latest update we have from the IRS was in May.

It still looks like the total returns are down about 0.7 or 0.8 of a point.

And everyone had anticipated it would be up between 0.5% to 1%.

So that's a pretty decent delta, in terms of 140 million total returns, as percentages matter.

In terms of competitive share, we held share overall.

We gained about two points in the retail desktop software segment, which is still about 25% of our total units, but we lost a little less than half a point in online.

And I would tell you that our diagnosis is, our product has an opportunity to get much more simple.

That's where we're laser focused as we look ahead.

It is not anything to do with investment in advertising or marketing.

In fact, we spent about 20% more this past season, and at the end of the day, we didn't get the results we wanted.

So you're going to hear us talk a lot more about the product focus as we head into next year, primarily on new users, as well as improving the experience for returning users.

You're going to hear us talk about a shift to the cloud in our pro tax business, which helps us with CPAs, and we're also going to be talking about a way to leverage both sets of assets to help customers who may need a little help in the process.

And we'll share more of those details come September 24 at investor day.

Okay.

Great.

Maybe one follow-up.

In QuickBooks on the International side, you mentioned UK, Australia, India, Canada, et cetera.

Can you go into maybe a little bit more color as to what was it about those markets that you decided to focus on them?

And what kind of investment will be necessary to drive the business?

Happy to do that, Sterling.

And again, we plan to share a lot more at investor day in about 30 days, but we selected these countries for the following reasons.

We're already in Canada and the UK.

We have a strong presence there, and we've been shifting to the cloud.

And so we want to continue to expand our presence and gain market share in those two countries.

And in terms of Australia, we had a multi-year partnership with a distributor that we've announced is coming to a close.

That distributor was Reckon.

And so we're moving into that market, because we feel that market is fundamental to not only understand how to win there, but as a launching pad into Asia.

And we've also chosen India for two reasons.

One, we have a very significant presence there, with over 600 engineers with our development center.

And secondly, it's a great test bed for developing a go-to-market model for emerging markets.

And we have very promising early results in India.

So, Canada and the UK is already a position that we are in that we want to continue to develop.

We picked Australia as a distributor relationship winds down, and we've also picked India as a great test bed for the emerging markets.

Brent Thill, UBS.

Brad, you had aspirations to grow 10% plus.

And I'm just curious, with some of the changes and now with the slowdown in consumer tax, do you feel that that aspiration is still out there?

Or do you have to turn to M&A or some other strategy to help reinvigorate that growth?

Yes, Brent, we do believe this capability exists in our current portfolio.

Neil just provided a few minutes ago our outlook beyond fiscal year '14.

Where, as we look at our three-year plans, and actually our five-year aspirations, and we sign up for those numbers with our board, we believe we can deliver revenue in the 8% to 12% range.

We can grow our operating income faster, and we believe we can deliver earnings per share in the mid-teens.

Now, what we're going to have to do to do that is, we have an opportunity to continue to accelerate in small business.

It's primarily around continuing to accelerate our performance in the US, with this new harmonized product that we will showcase in September.

It's about global expansion into these four countries while testing other markets.

And it's about going after these 12 million plus prospects that aren't big enough for accounting, with some of these lighter-weight mobile solutions that we're going to share a little more about in the coming season.

On the tax side, we do not believe the outlook of the 4% growth business.

We think the fundamentals are there, and the secular opportunities are there for us to accelerate the do-it-yourself category.

And we also think, with the shift to the cloud, that the CPA-prepared segment is going to have a lot of decisions up for consideration, and we have a three-year head start on our competition with the hosted version of tax prep for the accountants.

So we think there's a lot of fundamental opportunities in our core business to get us to double digits, and of course we will look at acquisitions as a way to supplement that.

And just a quick follow-up on consumer.

I think Neil had said it's a multi-year change that you're trying to incent in their behavior.

It seems like this is a longer-term road map versus something near-term that you can stimulate.

Maybe if you could just dive a little deeper into that, why you chose the word multi-year?

Well, I think it's a two-part process.

One is, we have some very interesting learnings coming out of last season, and some exciting experience -- experiments we've been doing over the summer that we think can basically reshape the paradigm of how taxes get done.

With that being said, there's a lot of work to demonstrate and prove that in the markets to our customers, to ourselves, and to you.

And we don't think we'll get all the way there in the next 12 months.

And so what we do believe, and actually what we plan to share with you a little closer to tax season, is a big step forward this year.

But we don't believe that will be enough for us to get to double digits this season in tax.

But we do believe that it gives us the foundation that if we execute well, we can continue to grow that business and get it back to double-digit in the out years.

So it is the multi-year effort, and for us, it's basically redefining how tax preparation gets done, and we'll share a little more on those details as we get closer to the season.

Peter Goldmacher, Cowen.

Quick question.

I thought your data point on SnapTax was really interesting, because you've used that as an example for never entered data, make the product just drop dead simple, and you're clearly seeing very, very small, but increasing results from that.

So, when you think about that product and what you've been able to accomplish in that product, what do you have to do in their organization, either in the air engineering organization or the product organization?

What has to change?

What are the kinds of things you need to work on to get that user experience out to the rest of your products

Yes.

Absolutely correct.

We're very excited about what we learned in SnapTax this year, because it basically takes what has been a 45 minute to 1.5 hours tax prep process and get it done in minutes.

And as you know, we've been working with our engineering teams and looked at ways to begin to leverage the data across the Company and all of our different products, as well as data that exists in the market, and begin to pull that data into what we call a financial data platform.

And the financial data platform basically pulls all the necessary forms, the bank account information, the W-2s out of the payroll system, and begins to leverage that data in a way that we do more of the work for the customer so the customer doesn't have to sit there and answer a bunch of questions.

That's what SnapTax demonstrated.

We think that that's a big step forward.

It's a part of our data strategy, and we're going to plan to show a little bit more of that on September 24 as well.

But basically, it's a way for us to begin to leverage the data from all of our products to help do the work for the customers so they don't have to put the effort in themselves.

When you think about the engineering effort behind that, or the organizational efforts, where are you in that process?

So we've been on a multi-year journey.

We've been re-architecting all the products.

QuickBooks online you'll see coming out here in the next 30 days or so.

It's a completely new re-design.

Underneath that, all the architecture is being rewritten.

And we plan to have all of our core products re-architected in a way by the end of fiscal year '15, which is another 18 to 20 months away, that will basically feed this financial data platform.

And so that's where we are in a journey right now.

We've got a big step forward with some of our core products, but to get across our entire product line, we think it's going to be another 18 to 24 months.

And that's why we're referring to this multi-year effort for us in terms of our outlook in the Tax business.

Okay.

Kash Rangan, Bank of America.

This is Jaymin filling in for Kash.

I just wanted to ask a couple of questions, Brad.

In the past, you've helped us bridge the gap between the different drivers of the tax category versus share gain to your revenue growth.

Is it early in the season for you to do that?

Or maybe you can help us out?

Yes, Jaymin, it's a little bit early for us to give a long-term forecast.

I can put a little bit of context around our fiscal year '14 guidance.

And as you know, there's four primary drivers in tax.

You just alluded to them.

One is how many returns will actually get processed with the IRS.

Typically, that forecast is about 0% to 1%.

This year, we saw a little bit of a step backward.

So we're being a little conservative in fiscal year '14.

We think that it's going to be somewhere in that -- instead, it's usually 1% to 2%.

We think it's going to be in the 0% to 1% range.

So call that maybe 1 point of growth for TurboTax, because 1 point of returns, and we hold share, gives us about 1 point of growth.

The second is the tax category.

The digital tax category, how fast is it growing?

And we expect the software category will grow somewhere in that 4% to 5% range, which means it should take about another 1 point of share away from the assisted methods.

And ultimately, every point that the tax category gains is about 3 points of growth to TurboTax.

So, you throw that on top of the earlier math I mentioned, and you're in that 4% range now.

3% from that, 1% from the IRS.

The third is share.

Can we actually take share in the market in the software category?

And right now, we're saying that we want to continue to grow share.

Obviously, last year, we held share.

So, if you put the range at 0% to 1%, then you basically translate into TurboTax growth, and that's about 1 point to 1.5 points of growth.

And then the fourth lever is revenue per return.

And we usually get a couple points of upside there in terms of people shifting from free to paid.

Last year, we only got a point, because we had to grow over the decision we made to outsource our refund bonus card.

Next year, we're hoping to get about 1 point of upside, as well.

So if you put the four together, that's how we got to our 4% to 5% guidance.

It's basically, we think the IRS is going to grow between 0% and 1%.

We think that the software category will maybe pick up a point of share if it goes 4% to 5% a year.

We're going to try to gain 1 point of share ourselves.

And ultimately, we are planning to get a little revenue per return outside, maybe 1% or so.

Got it.

That's very helpful, Brad.

One more quick thing on QuickBooks online.

If I see the growth rate here, 28% accelerated from last quarter, which is about 26%.

Is this just the online, the International presence, that's really driving the growth in online?

In the US, it grew 26%.

And with International, it grew 28%, but we are seeing accelerating fundamentals underneath the hood.

One of the things we did is we made the decision of where we ask for the credit card, and that's accelerating not only the funnel but also improving the 30-, 60- and 90-day retention rate, so the subscriber base continues to stay and we're adding more new users.

I will tell you, we also expect another step rate function as we roll out this new redesigned version in the next 30 days or so, which we are calling Harmony, that basically harmonizes that experience across QuickBooks, payroll and payments.

But we are seeing good fundamental improvements in QuickBooks online, and as a result, we are seeing acceleration of the customer growth.

Got it.

Greg Dunham, Goldman Sachs.

Following up on the Harmony release and the shift online in QuickBooks, is there anything that you can do, or have you thought about anything more, for driving even faster adoption and trying to accelerate that?

I know that's something that you've always balanced in terms of letting the customers decide.

But talk about the thought process there in terms of the pace of shift, and whether you want to drive that or your customers want to drive that?

That's the first question.

And then a follow-up question on the buyback.

Nice to see the $2 billion additional authorization of the 4% to 6% decline in share count under your outlook.

Should we assume that the acquisition strategy is pretty consistent with what it's been in the past?

We're looking at small seconds, nothing major, and give us an update.

Two different questions.

Sorry for the long-winded one.

That's all right, Greg.

We've got a lot of moving parts, so we want to take all the questions we can.

Let Neil and I piggyback on this one.

First of all, the regarding the first question on shifting online.

We still fundamentally believe that it's our job to provide an enticement or an incentive for customers to want to shift platforms.

The good news is, because they're using mobile phones and tablets in their lives, they're opting into these cloud-based products.

So you saw our desktop units actually declined 6%.

You saw QuickBooks online go up 28%.

QuickBooks Enterprise, which is subscription-based, is up 26%.

And actually, people can now buy a QuickBooks desktop product and get its data up into the cloud that works with phones and tablets, and that grew 23%.

So if you put that all together, we've got about 760,000 customers in that small business space now up in the cloud, and that group's growing at 27% collectively.

We believe that the best thing to do is to make them aware of the benefits of anytime, anywhere access, immediate online backup, the ability to use it with mobile phones and devices.

And we don't believe that there's anything we need to do to discourage them from staying on the desktop product, because they're already making the shift on their own.

And now that accountants are moving to the cloud, accountants tend to tell their small business customers what to do, and they're now encouraging QuickBooks online as well.

So we like the fundamentals without forcing the business model on the customer, and that will be our go-forward strategy as well.

Neil, do you want to take the stock repurchase (multiple speakers)?

Yes, in terms of acquisitions, Greg, I think that we have satisfied ourselves that we can deliver the share count reduction that we provided in guidance within any type of acquisition scenario that we think is likely or probable at this point.

As Brad mentioned earlier, we are always interested and always looking for inorganic opportunities to accelerate our business growth.

We're delighted with what's happened with Demandforce and how that's been helpful to us.

But there aren't a lot of those transactions available to us at favorable economics.

So we thought about this, and believe that we can deliver the share reduction we talked about and still have plenty of flexibility to take advantage of opportunities when they come along.

That's helpful.

Scott Schneeberger, Oppenheimer.

Start off -- I have a few, but the -- you're talking about the exciting marketing campaign, Brad.

Could you discuss, is that going to be -- in small business, is that going to be increased spend?

Is it across the whole category in small business.

Or specifically in some small areas?

And how different is it from how you've marketed it before?

Yes.

In terms of the increased spend, it is a slight increase in small business.

The amount was about --

About $10 million.

Yes, $10 million.

But we did it through reallocation, Scott.

The campaign itself, you may have seen some news on it.

We are actually pretty excited.

It is small business, big gain.

It's a six-month social campaign where we have small businesses that are basically submitting their testimonial or story on why they started their small business, and why they should be considered as the potential winner for us to buy them an ad in the third quarter of the nation's biggest game of the year in February, which is, obviously, the Super Bowl.

And this is a once-in-a-lifetime opportunity to change a small business' life.

And over the next six months, what's happening is, they're submitting their testimonials, they're encouraging their customers, their friends, their family to come in and vote.

And we're going to narrow down the top vote getters into the top 20.

And then our employees are going to go through those top 20, and we're going to actually narrow down to the top 4. Once the top four have been identified, we're going to visit each of those four with some professional consultants, including Bill Rancic.

You may have seen Bill.

Bill is actually a serial entrepreneur, and he was the season's first winner on The Apprentice a few years ago.

And he's notable in helping small businesses go in and basically do an extreme makeover to be able to accelerate their growth.

And those four businesses are going to get this sort of consulting practice, and we're also going to buy them advertising in their local markets.

But ultimately, we're going to narrow down, with the world voting, on those top four to pick the number one winner.

It's an exciting program.

I'll give you just a data point.

In the first 48 hours, we had over 2.3 billion impressions in terms of that news making it around the world and people logging in.

And that compares to 1 billion impressions in total all of last year for small business.

So in a couple days, we more than doubled what we did in 12 months last year.

Now, it's a program that's going to have multi-months to it.

There's going to be a lot of new stuff rolling out.

But in terms of investment, we basically shifted down in some places and reallocated to others.

And in small business, we basically put an extra 10 million in for this.

Great.

Thanks.

If I could do another one or two if I may.

The long-term guidance versus this year's guidance in revenue growth, Brad, thanks for, in TurboTax, giving the components previously of what it's going to be for this year.

Do you anticipate that being the move-up, an increase in TurboTax in the out years and a steadiness in small business that gets you back up into the double digits?

Or a feel for which of those two primary drivers it may be?

Not necessarily, Scott.

I think there's plenty of room for small business growth to be very strong for the years ahead.

For reasons we've already talked about, the pre-accounting opportunity, the opportunities outside the US, and opportunities with a better solution for new users.

So, I wouldn't pin the accelerated revenue growth on either segment, necessarily, disproportionately.

There's some big opportunities on both sides, and we think they're all going to contribute.

Okay.

Brad Zelnick, Macquarie.

Brad, if I understand your answer to Jaymin's question, I take it the 4% to 5% consumer tax guidance assumes you were able to hold share in the digital category while you're redesigning the franchise.

But you've guided to a much more narrow range than in the past.

Why would you have any greater precision, and how do you feel about your upside?

Asked a little bit differently, if the range were more typical, should I assume the midpoint would remain what it is?

Yes.

So first and foremost, the changes in our model right now for the fiscal year '14 are, total number of returns being filed with the IRS is a little more conservative than we would have typically put into the model.

When unemployment starts to normalize, you see those returns grow 1% to 2%.

We saw trends all moving in a direction that would have had us all forecast that this year, and instead returns went down about 0.8%.

So we're just being very -- basically pragmatic about how many returns people will actually file with the IRS.

The second is the digital category itself.

That digital category has been growing in the neighborhood of 6% to 8% when there was still some number of manual paper filers out there.

And as those paper filers are now down to just a few million, we've seen that category moderate a little bit -- category growth.

And that's a big lever for us.

Every point of category growth is about three points of growth for TurboTax, if we simply hold share.

So those are the two bigger drivers.

We think it's up to us to accelerate the growth of the do-it-yourself software category.

And we believe we have some plans in place that can re-imagine how people can get their taxes done to do that.

Again, that's a multi-year effort, but in terms of holding share, we did it this year.

We picked up 2 points in retail software.

We lost a little less than 0.5 point in online.

We never start the year planning to hold share.

We plan to actually pick it up.

But you can actually choose a zero, which is holding share, or a one next year, and it will be in that guidance range that we gave you.

Got it.

If I could ask just one more bigger picture question, you've often talked about using data to delight customers.

I remember getting excited a couple years back looking at QuickBooks' trends.

And haven't really seen step product, for example, blossom, or at least become more material.

But just a bigger picture question, how satisfied are you, Scott Cook, and the other leaders of the Company, with your progress in leveraging big data?

I would tell you it's been a heavier lift than we anticipated.

At the same time, I would say that we are very pleased with the momentum we have now built, and we have some exciting things coming out that we'll be able to show you that are going to have a much more mainstream effect on our core customers this fall.

When you get the chance to see the next version of QuickBooks online, you're going to see something our team referred to as the business rainbow.

And I won't steal their thunder, but it basically leverages data to do something for customers that we've never been able to do before.

And it's literally, we think, going to simplify the new user experience in ways we could have never imagined.

And we gave you an example of how we're getting SnapTax tax returns done in less than 15 minutes, and that's being powered by data, as well.

So we have some neat things coming out.

What we had to do over the last couple years is get in and re-architect our products, make sure that we had the right data hygiene in place, and then begin to teach our teams how to use this in a way that would do work for customers in ways that we wouldn't have them do themselves.

And so I would say our progress has been harder than we thought, or our momentum has been harder than we anticipated, but I like where we are now.

Kartik Mehta, Northcoast Research.

I think one of the statements you made is that you said you spent 25% more on marketing this year on tax, but didn't get the results you wanted.

Would that imply that next season, you will go back to more of a normal base of spending, and you'll cut some spending out?

Or is it that you will keep the same amount of spending, but just spend it differently?

Yes.

Kartik, right now we're not breaking down all the details on the tax business, for some of the obvious reasons, as we have a lot of time left between now and then.

Let me give you a philosophical answer to the question.

We think the best investment we can make right now in TurboTax is taking a big step forward in making the product drop dead simple.

And that's where all of our energy is going towards.

We also made a decision over the off-season to move to a new agency, Wieden and Kennedy.

You may be familiar with them.

They do the Nike ads.

They did the Procter and Gamble loved moms ads in the Olympics.

And they have really been helping us think differently about how to be much more effective with our advertising.

So right now, our energy is more on getting the product great, and making sure we have the most effective advertising.

And then our investment decisions will be driven from that, and we'll share a little more about that as we get a little bit closer to the starting gun.

And Brad, any thoughts on why tax filings were down this year?

It seems to be something that yet has been answered.

And I just wanted your perspective on, as you analyzed the data, why you thought they were down, and maybe why you anticipate next year to be flat to maybe up 1% compared to the normal?

Kartik, I really wish I had an answer.

I think we're not alone here.

And we've been reaching out and having dialogue and conversations.

I can tell you what we've seen.

We have seen the number of tax filing extensions go up about 10% in our consumer tax business and about 20% in our pro tax business.

So people went beyond April 15.

But even if that were an industry-wide trend, that still doesn't bring the IRS returns back to the original forecasted levels that people thought.

That basically would mean they were flat year-over-year.

So the real question is, what happened to the typical 1% to 2% growth you would get when unemployment is at that levels it is now?

And honestly, I don't have a good answer.

We're looking for one.

So, what we're doing right now is putting our energy into controlling what we can control.

And hopefully, with the IRS, we can sort this out as we head into next season.

Walter Pritchard, Citi.

Just two product questions.

First, on the Demandforce side, I am wondering if you could talk about your satisfaction with the performance of that business during fiscal '13?

And if that level of performance makes you want to double down there?

Because you do have a fairly small position in the front end market versus things like payroll payments and core financial software.

Yes, Walter.

We were delighted with our performance in Demandforce this year.

It's no easy feat, when you acquire fast-growing company, and you bring two cultures together, and you try to get used to each other's acronyms, and all the different things that happen.

And at the end of the day, this team not only stayed laser focused, they taught us a ton.

And what was most important is they taught us how to be scrappy.

They went in and worked with the QuickBooks data without having to interfere with QuickBooks.

They used the API's.

They found a way to get the product integrated with QuickBooks.

And as a result, they've been cross-selling into the QuickBooks space, and now it's one of their fastest-growing verticals.

And so we've really been pleased with their performance.

Their subscribers were up 40% again in the fourth quarter.

In terms of the front office, you just put your finger on it.

This is an area we think we now have a toehold in with Demandforce.

And if there's an area we want to continue to double down in, it's it expanding into the front office.

They have some neat ideas that they're working on and building now.

And it may also include partnerships or even potential small acquisitions over time.

But this is definitely a big important problem for small businesses, and Demandforce now gives us a great foundation to build upon.

And then just a product question on the tax side.

The last couple years, we've heard from you about pulling customers out of the assisted channel required you to provide some level of assistance yourself.

And you've tried the telephone assistance now for two years.

And I'm wondering, as we think about -- I don't feel like we've heard a lot about that on this call.

And I'm wondering, Brad, if you've changed your philosophy there around what it requires to pull customers out of the assisted channel, if you have to provide some level of support and handholding to convince the customer to move over?

Walter, we are going to spend a little more time on this in September when we get together for investor day, but I would tell you that we still see the same data.

As a group of people out there that are what we call delegators.

No matter what you do, they're going to feel more comfortable going to someone else to do their taxes, or they're going to feel that that's what they want to do.

They just don't want to waste any time on it.

And the good news, is their preferred method when they do it is to go to a CPA.

That's the largest segment of the assisted category.

It's the only one that actually grows a little bit year-over-year.

And we happen to be the market share leader in the CPA-prepared segment, with our ProSeries and Lacerte product.

So we want to make sure, for those people who want assistance, we've got the absolute best solutions for our CPAs.

And then for the do-it-yourself category, you've got a group of people out there that want this thing to be drop dead simple and to get them the maximum refund at the best price.

And so, we're not taking big steps forward to continue our leadership position in TurboTax.

In terms of this phone assistance model, I would tell you we learned a lot.

It primarily helped people that were already using TurboTax to get their questions answered.

So it had a little bit of an impact on retention, which was positive.

It was not sufficient, and not enough for us, to convince people to change their method and come into the do-it-yourself segment, but we are now running a couple of other experiments that we've seen some promising results on.

And that includes, how do we connect customers that are going to a CPA today?

Or excuse me, using TurboTax today to potentially to a CPA?

And so between our two products sets, we think we have an opportunity to begin to give customers choice.

And that's what we'll spend a little more time talking about as we get closer to tax season.

Great.

Jim MacDonald, First Analysis.

Just one more on tax volume.

What is your thinking now about any impact from the Affordable Care Act next year?

Jim, this one is going to be a hard one to call.

You see the news, and read the press, and hear the commentary like we do.

And there's still a lot of stuff evolving and a lot of open questions around how it's going to play out.

Probably the best answer we can give you is, we went back and looked at what happened in the state of Massachusetts when a similar program -- now admittedly, it was not a national program that didn't have all the press and the hoopla of what we're reading right now.

But in the State of Massachusetts, it was a pretty important legislation.

And they implemented it through the tax code, just like they plan to do at the federal level.

And we went back and looked at, what did consumers do when faced with that decision, and what were their tax preparation decisions?

And what we saw was there was no shift away from tax software into a paid preparer.

And we also did not see a significant increase in the number of people filing taxes.

So, we didn't see a cataclysmic or significant change in Massachusetts.

Now I will tell you what we're not doing.

We're not taking that as fait accompli.

We have got a dedicated team on it.

We have been working with partners in the industry.

We've been working with the agencies, and we plan to have the absolute best set of answers for our customers that we'll talk a lot more about when we get closer to season.

But we at least can fall back on answering your question with a set of facts.

And those facts are, if Massachusetts is any sort of a predictor of what happens at the national level, it didn't look like it drove a lot of people into the tax system.

And it didn't look like it changed a lot of people's preparation method decisions.

Okay.

And as a follow-up, it seems like you've done several small -- or venture type investments lately.

Is that a new strategy?

Or just they all happened to come at once, or -- could you talk about that?

Want to talk about that one, Neil?

Sure, Jim.

It's Neil.

Again, it's optimistic.

We have an organic -- inorganic road map for each one of our business units.

We know skills and attributes you're looking for, product enhancements you're looking for.

And we've gotten fortunate lately to run into some people we think would really help us accelerate our growth.

And we've made a couple small deals, including some that are tied to some of the front office-based things you're talking about.

But these are great way, we believe, to build our capability and to speed our time-to-market.

But I wouldn't tell you that we're doing a student body right to either one.

It just takes -- it's more opportunistic of what comes along that fits our need and that fits the inorganic road maps we have for each business unit.

So we like those.

We think they're going to be great for us, but that's how they came about.

Just to clarify, they're more strategic, not just to make money as a venture capitalist?

No, correct.

We don't do anything just from a VC perspective.

We're always looking for something that we either think we will learn from, something that we think we might have an interest in longer-term, or some talent that's going to be able to help us in the short run.

We don't -- we're not in the VC business.

And so no, we don't make any investments along those lines.

Jennifer Lowe, Morgan Stanley.

Just one quick clarification question, and I have a follow-up -- or another one.

But relative to the discussion earlier about the extensions, the number of extensions being greater than what we've seen in the past, and potentially that's one factor behind the tax growth being weaker this year at an IRS level.

Does your guidance assume that any of that comes back when people need to file those extended taxes later this year?

Or is that something that potentially could be a source of upside, if you see a catch-up from under-performance last year?

Jennifer, our guidance today, we have our best assumptions in on what we think a normalized tax season would look like, if you didn't have late legislation or some of the anomalies that hit this year.

We can't tell you that we've got digital precision on it, but we did our best to try to normalize what we thought would happen and put that into our guidance.

The one thing I would tell you is, the people filing taxes and consumer tax, we saw a year-over-year increase last year, too.

It was about 10%.

The pro segment is up a little bit more than we typically have seen, but the consumer segment has been shifting a little more to filing later and even asking for extensions, so it really wasn't that big of an anomaly for TurboTax.

It was a slightly larger one for our CPA-prepared segment.

And we've done our very best in our forecast to at least capture what we think is going to happen next year.

Great.

And then maybe just going back to some of the earlier questions.

As you think about the next couple tax seasons, and the potential to better leverage the assisted -- live assistance and things like that within your customer base.

How do you -- when you think about the prioritization of investments and strategic things you could do in tax to reinvigorate the category growth and the share growth, how do you balance that against the potential profitability or margin attached to that business?

So if you -- is there a nominal limit of how much you're willing to spend to reinvigorate the growth there?

Is the priority margins, or is the priority top line?

Yes.

Jennifer -- Neil, did you want to take this one?

I was going to say (laughter), they were both jumping at this, Jennifer, just because the priority is always growing customers, and it's always growing the Business.

Margins are something that come to this Business very well and very naturally when the Business is growing, so huge focus on continuing to get more customers into the franchise and have a product offering that motivates that large group of people we know that go to assisted prep methods today who have a relatively easy return to complete.

And so that's the big focus.

Yes, and Jennifer, just a case in point, to illustrate Neil's answer there.

This past year, our Consumer Tax business, as you know, grew about 4%.

And we still invested an incremental 20% in marketing to try to get at that number and try to get it grow faster, and we still expanded the margins over 100 basis points in consumer tax.

The marginal profit on every unit we sell is more profitable than the prior unit, because the digital COGS are so low that this is a highly scalable business.

And so, we will always focus on driving customers, and that, in turn, will give us the margin expansion.

And we don't think we have to trade off one for the other.

Nandan Amladi, Deutsche Bank.

This is Jovan Matthew on behalf of Nandan.

I just had a question on QuickBooks International product.

So it seems like growth in this Business has accelerated to around 20% growth sequentially from about low teens last quarter.

So is this a function of you expanding into new markets?

Or is this a function of existing investments in your core markets really taking off, and more customers adopting your product?

The International growth story for us is, as we've narrowed in on Canada, the UK, Australia and India, we've gotten better lessons learned on how to improve the people who come in and go into a trial period and get them to convert into a paid subscriber.

So by narrowing our focus on these four countries, we're getting a better yield on our marketing efforts, and we're also making faster improvements to localizing the product.

So it's really the result of us just getting much more narrow and having faster learnings and faster cycles and improving the product experience for the customer that is driving that growth.

At the same time, as you know, we turned QuickBooks online into a platform.

So, even though we're focused on these four countries, we currently have paying customers in over 100 countries.

In those countries, they can download the product, they can go in and make changes to the language themselves, they can help us localize the taxes, and it's much more of an organic process.

And we've got our eye on the radar to say, which is the next country that seems to have the strongest demand?

And that will be the one we choose to add as the fifth priority.

But right now, the results you're seeing accelerating is primarily coming from a focus on these four countries and just making faster cycles to localize the product and improve the go-to-market experience.

Got it.

Okay.

One final question, if I may.

In your initial fiscal '14 guidance, what are your assumptions for unit growth versus pricing growth across the businesses?

Units, units, units.

Predominantly, most of the increase you see in revenue is coming from units, it's coming from customers, and it's coming from cross sell.

We looked very carefully in our operating reviews and in our plan reviews for revenue growth that's being driven prominently by price, and that's something that we don't want to lean on, for obvious reasons.

And so, the lion's share of the revenue increase you see coming in is from new customers.

Got it.

Ross MacMillan, Jefferies.

The first one, to circle back on consumer tax, Brad, I had a clarification.

So, this past season you grew 4%.

And aggregate filers were down 70 basis points, and you also had a headwind on revenue per unit.

This season forward, you're saying 4% to 5%, and I think you commented that you would expect, obviously, to move past that revenue per unit headwind.

And also, you'd expect to see some better outcome on aggregate filers.

And I'm just curious as to why it isn't a little bit higher there for rather than just 1 point, or even actually 0.5 point at the midpoint, if you will, given those two factors that could be better?

Is there anything else that goes into that math for the guidance that I'm missing?

No.

As you know, we're trying to provide ranges here.

So we've got those IRS filings in the 0% to 1% range, so that's either going to be no help to TurboTax or an extra point.

We've got the digital category growing in that 4% to 5% range.

That's a little bit faster than this year.

And so ultimately, what we see happening there is maybe picking up 2 or 3 points for TurboTax growth.

We're going to hold share or pick up 1 point of share, so that's a zero to one on the guidance.

And ultimately, our goal here is focusing on growing customers.

And so we may have more people opting in to the free version or the very simple version.

And that has a little bit of a headwind impact on our revenue per return.

And we're fine with that, because as you know, we've been able to demonstrate that next year we can get them go to free to paid.

And we can actually have them be more profitable on a revenue per customer basis.

So this is all about focusing on customer growth, market share, and we're trying to be very prudent in the guidance that we're forecasting for consumer tax as a result of that.

That's helpful.

And one other question.

Actually, the way I look at your QuickBooks business as I sum desktop units and the sub-adds, and now, for two quarters in a row, that's been positive growth, which is very positive, because you're growing absolute units, whether subscribers or desktop.

Is that a function of this acceleration you're seeing on online or the subscription users?

Or is it also, do you think, a function of improving end market dynamics?

Are you seeing anything in your data that suggests new business creation is picking up?

Or any other dynamics from a macro cycle standpoint that look encouraging?

Yes, Ross, a two-part answer.

I'll start with the macro piece first.

Unfortunately, we're not seeing a significant improvement in the macro.

In fact, our own leading indicators and our own employment indices that we produce on a monthly basis suggest that it is very tough slogging out there for small businesses.

They're not growing their revenue month-over-month.

In fact, the employment index was down slightly in the last report we put out.

And so, that is still a challenging environment.

So we can't tell you that we're seeing that sort of a positive improvement.

What we are seeing is exactly what you highlighted.

We've now crossed a tipping point in the small business QuickBooks space.

We have a large space of almost 0.5 million people using QuickBooks online, growing at 28%.

We also have a group of people that are subscribing to the QuickBooks desktop product, and that's growing 23%.

And you put those together with our enterprise, which is a Subscription business, and you now have 0.75 million customers growing north of 20%.

And they're more than offsetting that decline of QuickBooks desktop, which is going down about 6% quarter-over-quarter.

So we think that we now have enough critical mass.

And we saw this happen in TurboTax in 2005, 2006, where we started to see more people go to the cloud, and it outran the decline in the desktop side, and basically continued to help us drive our unit growth.

And we believe we're getting close to that point now in QuickBooks.

That's really helpful.

Michael Millman, Millman Research.

Several tax questions.

It's units, units, units?

So on TurboTax, is there some price sensitivity that would get you more units?

TaxSlayer and TaxAdvantage showing you something on pricing?

Second question is, maybe you can give us some breakdown of the growth of online, just online.

How much of that is coming from desktop switching?

How much may be coming from paper and pencil?

How much of that may be coming from assisted?

And maybe you can talk a little bit about Good April, where that's going to fit in, if that meets some particular inorganic need, as you talked about?

Okay.

I'll take these one at a time.

First of all, on the price sensitivity question, all of us start with a free product.

And so it's very difficult for anyone to get more aggressive on free.

We do have some players out there -- you just named a couple of them -- that tend to have a low price point once you get into the paid segment.

We have not seen our market share go in their direction.

Our 0.5 point or less than 0.5 point of online share that we lost did not go to those smaller players.

And so we don't view price sensitivity as an issue.

We view making sure that we have such a compelling product experience that our net promoter score has to be at least 10 points higher than our competition, and if we do that, we don't have to worry about whether or not someone's $5 or $10 cheaper.

And that's why we are putting all of our energy into having a great, very simple product.

The second one is the sources of growth for online.

Manual has really pretty much gone down to zero now.

It's just a handful of millions of customers.

And those are benefiting us.

Tax storage and CPA's pretty much in an equal share, as we look at it.

It looks like they all co about one-third, one-third and one-third.

So there really isn't a benefit there.

Where we see growth coming in online, is a combination of first time filers who enter the category.

These are 3 million to 5 million first time filers, and they tend to have a digital orientation, because most things we do in our lives now are digital.

The second is, we are seeing people shift away from desktop and into the online version, because just the convenience of doing it on a mobile phone or a tablet or the internet.

And the third is, we continue to see that we take people out of assisted prep methods.

Now, right now, we tend to give back about as many as we take away.

And so our opportunity is how to retain them once we get them.

But those of the sources of growth for online.

It's first time filers, it's the ability to get us to go from desktop to online customers.

And the third is to take them away from assisted prep methods.

The key is not to lose them once we have them, and that's what's driving online.

Your last question was Good April.

For those who don't know, Good April was a very small acquisition we did, a talent and technology tuck-in for TurboTax.

They had a very interesting concept they came to market with, which basically helps you today figure out what your potential refund could be next tax season.

We felt this talent was highly entrepreneurial, and they're not only going to help us begin to think about how to have people make better decisions today that will impact their tax refund, but they're going to work on our Affordable Care Act team.

Because as you think about, what are the healthcare decisions that make today that may have tax implications?

There's no better team than a group of these entrepreneurs who are already thinking about how to do that today.

So that's the role they fit into our TurboTax schema right now.

Great.

Yun Kim, Janney Capital Markets.

Following up on Jennifer's question, just wanted to get your view on the margins, along with your view on revenue growth between small business group segment and tax segment for next year, and for your multi-year outlook you put out.

How should we think about which business segment is going to drive the margin expansion this year?

And also, over the next three to five years, given that you are likely to be more in and investment more in the small business segment while the consumer tax business is facing a lower revenue growth prospect?

Yes, Yun, this is Neil.

I think as you see our results that we'll report for the three reportable segments, in 2014, my expectation is that you'll see margin expansion in small business, consumer tax, and in the pro tax category.

We're not going to get more specific than that right now, and we don't want to be -- pin ourselves down too much in case we see additional opportunities.

But if we put our guidance together, as we think about our plans for 2014, we see opportunity to grow revenue and our operating income faster than revenue, really, in all three big segments.

We'll wait and see how the year plays out, but that's our expectation at this point.

Okay.

And in terms of -- in light of the margin impact that you guys saw with that Demandforce acquisition, and your plan to be more acquisitive, does that really impact on how big of an acquisition that you could make going forward?

That's a great question, and thank you for giving me the opportunity to expand on my prior answer.

We're not solving for margin percentage, necessarily, at the expense of growth.

If we saw a great opportunity like Demandforce, we'd be very excited about that.

And I think we would focus more on the growth in customers and the growth in revenue on the top line, and feel comfortable about our ability to manage the margin impacts over time.

So I wouldn't -- I don't see our margin goals or our margin guidance to be a restraint or a barrier at all to top line growth.

And if we saw a big opportunity to accelerate on that side, we would clearly prioritize customer growth and top line growth.

We can get margin expansion.

We're pretty comfortable with that.

Okay.

Great.

And I'm showing no further questions at this time.

Would you like to close with any additional remarks?

Yes, I sure would, Sayid.

Gang, we really appreciate everyone's time today and the thoughtful questions.

We realize there's been a lot of moving parts this past quarter, and this past year.

And I hope that we helped sort through some of those answers today.

I do want to encourage you, at the risk of being redundant, to try to make every effort to attend our investor day on September 24.

This is going to is going to be a little bit different.

We plan to show you how it all fits together with some of the changes we've just gone through, and we also plan to share some meaningful news.

So hopefully we'll see you at investor day on September 24.

And with that, I hope everybody has a great remainder of the season.

Ladies and gentlemen, thank you for participating in today's conference call.

This concludes our program.

You may all disconnect, and have a wonderful day.