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MOUNTAIN VIEW, Calif. - Intuit Inc. (NASDAQ:INTU), known for products like TurboTax and QuickBooks, announced its plan to acquire GoCo, a provider of HR and benefits solutions catering to small and mid-sized businesses. With a market capitalization of $163 billion and impressive gross profit margins of nearly 80%, Intuit continues to strengthen its market position. The acquisition aims to enhance Intuit’s Human Capital Management (HCM) offerings, integrating GoCo’s features into Intuit’s payroll solutions. According to InvestingPro analysis, Intuit maintains strong financial health with robust cash flow generation of $5.7 billion in the last twelve months.
The move is set to expand Intuit’s Enterprise Suite and QuickBooks Payroll services, currently serving U.S. customers with Premium or Elite Payroll. Intuit’s Enterprise Suite, launched in 2024, is a set of integrated financial products for mid-market businesses, designed to grow with the company and improve productivity and profitability. The company’s strategic expansion comes amid steady revenue growth of 13.7% year-over-year, reflecting its strong market execution. For detailed insights into Intuit’s growth strategy and valuation metrics, investors can access comprehensive analysis through InvestingPro, which offers exclusive financial health scores and growth projections.
Olivier Bartholot, Intuit’s Vice President and Segment Leader of Workforce Solutions, emphasized the importance of a comprehensive HCM solution for businesses scaling up, highlighting the need for a single source of truth for employee information. GoCo’s addition is expected to bring advanced HR and benefits capabilities to Intuit’s product portfolio.
GoCo, established in 2015, provides services such as hiring, onboarding, talent management, and benefits administration. The company’s AI tools will complement Intuit’s data and AI capabilities, aiming to enhance HR teams with personalized insights. GoCo’s integration into Intuit’s suite promises a seamless experience for managing the full employee lifecycle.
Nir Leibovich, Co-Founder & CEO of GoCo, expressed enthusiasm for joining Intuit, aligning with the vision to create a comprehensive team-management platform for business growth and team management.
The deal is anticipated to be finalized in Q4 FY25, with the financial terms remaining undisclosed. This acquisition is part of Intuit’s strategy to serve the evolving needs of growing mid-market businesses by offering a connected platform that supports various aspects of running and expanding a business. Based on InvestingPro Fair Value analysis, Intuit appears slightly undervalued at current levels, suggesting potential upside for investors. The company’s strong financial position is further evidenced by its moderate debt levels and consistent dividend payments maintained for 15 consecutive years.
Intuit serves approximately 100 million customers globally, while GoCo has been recognized with awards such as the 2024 HR Tech Award for Best Small Business-Focused Solution. The integration of GoCo’s services into Intuit’s offerings is expected to enhance the management of payroll for the 18 million workers paid through QuickBooks Payroll annually in the U.S. This information is based on a press release statement.
In other recent news, Intuit Inc. has seen its outlook upgraded to positive by S&P Global Ratings, reflecting robust revenue and EBITDA growth. The company’s strong performance, particularly in its Credit Karma and QuickBooks segments, has contributed to this revision. Analysts expect Intuit to continue delivering strong operating results in fiscal 2025, with projected revenues surpassing $18 billion and a free operating cash flow of about $5.6 billion. Additionally, KeyBanc Capital Markets has maintained its Overweight rating on Intuit, highlighting an increase in Average Revenue Per Transaction growth and a positive shift towards larger transactions within its TurboTax Live product suite. Mizuho Securities also reiterated its Outperform rating, emphasizing the strategic importance of Intuit’s AI-powered platform and its potential to drive future growth. The recent decision by the Trump administration to phase out the IRS Direct File program could further benefit Intuit, as more taxpayers may turn to third-party platforms like TurboTax. These developments collectively point to a promising outlook for Intuit, with analysts expressing confidence in its strategic positioning and product offerings.
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