Good afternoon. My name is Chelsea and I will be your conference operator today. At this time, I would like to welcome everyone to Intuit’s Fourth Quarter and Full Fiscal Year 2022 Conference Call. [Operator Instructions] With that, I will now turn the call over to Kim Watkins, Intuit’s Vice President of Investor Relations. Ms. Watkins, please begin.

Thanks, Chelsea. Good afternoon and welcome to Intuit’s fourth quarter fiscal 2022 conference call. I am here with Intuit’s CEO, Sasan Goodarzi and Michelle Clatterbuck, our CFO. Before we start, I’d like to remind everyone that our remarks will include forward-looking statements. There are a 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 2021 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 statement. Some of the numbers in these remarks are presented on a non-GAAP basis. We have 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. A copy of our prepared remarks and supplemental financial information will be available on our website after this call ends. With that, I will turn the call over to Sasan.

Great. Thank you, Kim and thanks to all of you for joining us today. We had a very strong fourth quarter, ending the year with momentum as we executed on our strategy to be the global AI-driven expert platform powering prosperity for consumers and small businesses. We continue to be focused on solving our customers’ biggest problems by putting more money in their pocket, eliminating work and saving people time and ensuring that they have complete confidence in every financial decision they make. Full year revenue reached $12.7 billion, up 32%, including the addition of Mailchimp and a full year of Credit Karma. Excluding MailChimp, revenue grew 24%. Total revenue growth was fueled by 38% growth for the Small Business and Self-Employed Group, which includes 16 points from Mailchimp. Consumer Group revenue grew 10%, and Credit Karma had an outstanding year with revenue of $1.8 billion, up 58% on a pro forma basis year-over-year. I am very proud of the team’s performance, delivering strong growth and strong margins, which very few companies at our scale are able to achieve. I’m optimistic about our strategy and opportunities for growth, especially considering an uncertain global macroeconomic environment. The Intuit platform remains mission-critical for powering our customers’ prosperity. I’m pleased we are guiding to another year of strong revenue growth and strong margins in fiscal year 2023. Our global AI-driven expert platform strategy is accelerating innovation, and our 5 Big Bets are solving the largest problems our customers face. We continue to deliver strong proof points that demonstrate the success and are well positioned for durable growth in the future. As a reminder, our 5 Big Bets are: revolutionize keep the benefit, connect people to experts, unlock smart money decisions, be the center of small business growth, and disrupt the small business mid-market.…

Thanks, Sasan. For the fourth quarter of fiscal 2022, we delivered revenue of $2.4 billion, down 6%, reflecting the earlier IRS tax filing deadline this year, partially offset by the addition of Mailchimp; GAAP operating loss of $75 million versus operating income of $402 million last year; non-GAAP operating income of $433 million versus $715 million last year; GAAP loss per share of $0.20 versus diluted earnings per share of $1.37 a year ago; and non-GAAP diluted earnings per share of $1.10 versus $1.97 last year. You can find our full fiscal 2022 results in our press release and on our fact sheet. Turning to the business segments. In the Small Business and Self-Employed Group, revenue grew 41% during the quarter and 20% on an organic basis, excluding $265 million in Mailchimp revenue. In fiscal 2022, revenue grew 38% and 22% on an organic basis. Online Ecosystem revenue grew 66% in Q4 or 32% excluding Mailchimp and 61% for the full year or 34% excluding Mailchimp. With the goal of being the source of truth for small businesses, our strategic focus within the Small Business and Self-Employed group is threefold: grow the core, connect the ecosystem and expand globally. First, we continue to focus on growing the core. QuickBooks Online accounting revenue grew 34% in fiscal Q4 driven mainly by higher effective prices, customer growth and mix shift. In fiscal 2022, QuickBooks Online accounting revenue grew 33%. Second, we continue to focus on connecting the ecosystem. Online Services revenue, which includes Mailchimp, Payroll, Payments, Capital and Time Tracking grew 116% in fiscal Q4. Excluding Mailchimp, Online Services revenue grew 29%. In fiscal 2022, QuickBooks Online Services revenue grew 107%. Excluding Mailchimp, Online Services revenue grew 34%. Mailchimp revenue included in Online Services was $265 million. Although we are making progress…

Great. Michelle, thank you. As you have now heard from Michelle and I we are seeing continued momentum across the company given our strategy of being an AI-driven expert platform. With our accelerated organic innovation and the addition of Credit Karma and Mailchimp, we are the leading global financial technology platform that powers prosperity for people and communities. We have a large TAM, secular shifts working in our favor and a highly predictable set of revenue streams. Our innovation is unlocking new opportunities for our platform and delivering truly game-changing benefits for our customers. Intuit remains a best place to work around the world, and I’m proud of the team and what we’ve accomplished this year. Now let me turn it over to you for any questions that you may have.

Chelsea, I think we’re ready to take questions.

Thank you. [Operator Instructions] Our first question will come from Keith Weiss with Morgan Stanley.

Excellent. Thank you, guys for taking the question and a very nice quarter. Michelle, I think this is more of a question for you. For the FY ‘23 guide, you’re looking for operating margins to continue to move higher or just to move higher from where they were in FY ‘22. Part of that is just kind of anniversarying the legal settlement on those part of FY ‘22. Can you talk to us about sort of the organic, if you will, or sort of like the fundamental margin improvement that you’re expecting in the business in FY ‘23? How big is that and how durable on a go-forward basis if we think about the model like beyond FY ‘23? Is this a progression that we could see being more durable in terms of driving operating efficiencies, number one? And number two, in your remarks about finding levers in the business, the one that really stuck out to me is saying – you said there is levers to maintain the earnings power. So should I take that to mean that a lot of those levers have to do with the OpEx side of the equation, that there is levers you could pull to maintain margins and maintain profitability even in a weaker macro environment, if you will? Thank you.

Thanks for your questions. Appreciate it. Yes, we are very happy to see our operating margin guidance for this coming year. It implies margin expansion of 100 basis points versus FY ‘22. And as you know, that aligns to our financial principles to be able to grow revenue double digits and operating income dollars faster than revenue. So we feel really good about that. As we look at where that’s really coming from, as we’ve been continuing to grow more and more as a platform over time, that really does enable us to look across the business and be able to drive efficiencies and effectiveness while driving accelerated revenue growth, which is resulting in our ability to expand margins while being able to continue to invest to really drive the accelerated revenue growth. As to how we think about that, I don’t really see anything that really structurally that impacts that over time. We haven’t given any longer-term expectations or long-term guidance on what margins might look like in the longer-term, but I don’t necessarily see anything really structurally that prevents us – as we continue to grow as a platform that prevents us from continuing that growth. To the second part of your question as for the levers that we would pull, yes, I mean, there are a number of things that we would pull, which could be OpEx. As I mentioned, there is marketing spend or travel, hiring, other things like that, that we can pull pretty much in – a lot of those in real time to be able to impact our operating expenses and be able to maintain the margins that we have committed to. So we want to be ready. It’s really kind of what we do on a day-to-day basis. We’re always looking for opportunities to drive different efficiencies across the business.

Awesome. Thank you very much.

Thank you. Our next question will come from Brad Zelnick with Deutsche Bank.

Great. Thank you so much. And congrats on strong fiscal year and a strong guide for next year. Maybe for my first question, with Mailchimp a bit disappointing, can you double-click on the actions you’re taking? And what it is that gives you the confidence, its product and not the environment?

Yes. Brad, how are you? I’ll take that question. First and foremost, I would share with you that we are the ones that pulled back that resulted in the performance that we just shared. So the great news is it’s in our control. The second point I would make is the biggest thing that’s been reaffirmed as we’ve been – become one family with Mailchimp is two of the biggest problems that matters most to our customers and especially, by the way, in tougher times is being able to grow their customer base and being able to manage their cash flow. And the biggest insight that we learned as we started accelerating our marketing spend, which we had shared with all of you that we would do, is that there are conversion on gaps in the product that we felt like were critical to address and not just spend the marketing dollars without the benefit of improved conversion. And specifically, those were things like coming to the website and the number of people that we saw falling off versus what we would expect based on our experience with across the QuickBooks platform, across the Credit Karma platform, the TurboTax platform, what we believe are some best-in-class engagement and conversion. Then when you get into the product, we measure active use and making sure that you’re getting into the features that you really wanted to get into and hence why you signed up for Mailchimp and even our checkout process. So those are just three illustrative examples of what I would say just basic blocking and tackling product conversion that we really wanted to double down on to make sure that we are ready for busy season. That did not take away from the priorities that we have shared about Mailchimp, which is one is to create one growth platform with QuickBooks, which we are on track to do. Two, it’s a double down on international. In fact, it is now part of our refreshed international strategy to double down on helping customers grow customers with Mailchimp. And then the third is to actually go into mid-market. So what we just announced in terms of our results actually has nothing to do with the environment. It has everything to do with what’s in our control and decisions that we made very explicitly to be ready for busy season. And these are playbooks that we know how to execute when it comes to product conversion.

Thank you. That makes a lot of sense, Sasan. And maybe if I can follow-up with a quick one for Michelle, Michelle, just on the long-term guidance and how we’re thinking about small business going forward, and you talked about a range of 15% to 20% growth versus – from 10% to 15% but thinking more holistically. Just as I think about some of the pricing actions more recently in desktop, for example, can you just remind us, as you think about that long-term view, how should we think about pricing as a lever and pricing for value going forward? Thank you.

Hi, Brad. Thanks for the question. We’re really excited about being able to raise the long-term expectations for small business from 10% to 15% to 15% to 20%. I just think it goes to show, as Sasan talked about earlier, really the mission-critical nature of the products and the offerings that we have in small business. As we have increased the growth expectations, the growth algorithm overall is really still focused on the same things. It’s about driving customers and it’s about driving ARPC. Yes, pricing may be part of ARPC, but really, it is about focusing on driving value and how do we continue to provide offerings for customers that may have a higher ARPC, whether it’s QBO Advanced, QuickBooks Live, those kinds of products. And we really are focused on pricing for value, so not just continually raising price. But once we’re delivering those additional features that are providing additional value to the customers and we’re bringing more innovation to the table, then we look at really should we be raising the price. But overall, very excited about the growth we see with small business.

Excellent. Thank you so much and thanks for taking the question. Thanks, Sasan.

Yes. One other thing that – just amplifying what Michelle just shared, and that is our reliance on price has not changed, meaning that we have an algorithm whereby price is just an element of our overall performance. And we’re not relying more on price looking ahead than we did looking backwards. So just reiterating one point that Michelle made just a moment ago?

Excellent. Thank you, guys.

Thank you. Our next question will come from Alex Zukin with Wolfe Research.

Hey, guys. Thanks for taking the questions. I guess – so one bigger-picture kind of question, and then just one on tax. As we parse the numbers, I think the surprise factor sitting here is the guidance. And it’s surprising in that it feels like it’s not that conservative, I guess. And Sasan, I want to press on that a little bit. I think what you’re saying is that, look, you guys have a lot of forward-looking indicators into the macro environment. And you’re looking at those indicators, and they were really good in the quarter. And then I think you mentioned in your script that your guidance does not assume significant deterioration in those factors. So I guess my first question would be, why not? And why – what gives you the confidence to guide with that methodology? And then if you – what level – if you did add conservatism into the guidance for next year, where would we find it? And just tactically, maybe what is the assumption for Mailchimp growth given that variability you talked about that was a choice, I guess, in the quarter?

Sure, Alex. Appreciate the question. I’ll say a couple of things. First of all, our approach to how we run the company and our approach to guidance and how we factor things in has not at all changed. So just know that our approach is consistent with the way Intuit has always set expectations and set guidance, which is really to deliver on our commitment. That’s the number one. Number two, what really informed our perspective as we look ahead is all of the indicators that we see that are forward-looking. But let me just – if I could double-click in, in a few of the areas. I’ll start with tax to put that out of the way, which is no matter the environment, we’re not going to expect nor have we seen in our history really any material impact in tax. That’s 35% of the company. When you look at the other 51% of the company, which is small business, it’s important to note that we are a very different company today than we were 3 years ago, much less 5 years ago, where small businesses are relying on our platform to run their businesses, actually their livelihood. And 80% of our revenue is subscription. And the 20% of that is transactional-based. We take the current environment and how things could play out into account as we set guidance. And the third, which is Credit Karma and 14% of the overall company revenue, we have taken the current environment and what we assume will take place into account. And most of our verticals other than Credit Karma, in fact, have seen an impact, and we have included that in our guidance. So really, that was a long way of saying we are fairly consistent across all of our segments. And we feel very good about the indicators that we see, how we view things will play out and how that informed our guidance moving forward.

That’s helpful. It sounds like you’re reaffirming a notion of diversification and exposure. I guess, maybe just a follow-up. On the tax side, on the Consumer business, when you think about – I mean you mentioned that business is kind of much more resilient irrespective of the macro, everybody’s doing their taxes. Is there any impact we should think about from recent legislation and just in general, the type of a tax season that a more volatile macroeconomic recession might – or environment might instigate?

Yes. Alex, I would say nothing more than what we’ve experienced in the last couple of years. That’s really the short answer. When you look at the last 2 to 3 years, environmentally, it has had probably more of an impact in the tax business than we’ve seen in years. And as you know, I’ve been with the company for 17 years plus, ran the tax business for 3 years. And what happened when we hit COVID, the implication on consumers, the extend the tax season, the child tax credit, there are so many things that played into the tax season in the last several years. And as we look at the year ahead, frankly, we view a much more simplified approach to the tax season. Although some of the tax laws will impact what we need to do in the product, that’s what we’re great at. That’s what we know how to do well. So we actually see more normality as we look ahead than we experienced in the last 2 to 3 years.

Got it. Can’t argue with the results, guys. Congratulations.

Thank you, Alex.

Thank you. Our next question will come from Kash Rangan with Goldman Sachs.

Hi, congratulations on a super finish to the fiscal year and also a very constructive guidance. Sasan or Michelle, when you look at the – I know you’re not going to be talking about the Small Business-Online Ecosystem revenue split going forward. but it clearly looks like the business is at a point where you have two-thirds of the business coming from Online Ecosystem that’s growing roughly 30% plus range, right? I think many of us are surprised that the outlook for that business, you raised the overall business at 15% to 20%. So it looks like Online Ecosystem is actually doing pretty decently, right? So in the event of a downturn – I know, Sasan, this was a question that I’ve asked you on prior conference calls. But how confident are you that – of course, retaining subs is one thing, but then adding net new subscribers in a challenging economy, how confident are you that you can keep that ball rolling while continuing to have your price increases stick and, at the same time, managing retention such, because if retention goes down, then you have more pressure to add more news. So how does that mathematical equation play out during a downturn? Thank you so much and congrats.

Yes. Sure, Kash. Thank you for the compliment. I actually love the nature of your question. And let me hit on a couple of things. This is why earlier – or one of the things I talked about is we are such a different company when it comes to the small business platform than we were even 3 years ago. And so to your question of why do we have confidence around our guidance, and I know that it doesn’t go past us that in this environment, we actually raised our long-term expectation. And it’s because of just the – how mission-critical the platform is but the services that we have. And two examples I would share with you is, when you look at the formula that we’ve shared, which is we’re going to grow customers 10% to 20% and we’re going to grow ARPC 10% to 20%, the two examples I would give is we have a set of offerings on our platform today that we didn’t have before. QuickBooks Advanced, which is going after mid-market, which has much higher ARPC, 4x the use of sort of services, is something that we didn’t have 3 to 4 years ago. And we are just early in our penetration into that TAM. And in fact, we’ve not only seen no slowing but strengthening in this environment because folks want to ensure that they are on our platform to get paid faster to be able to take care of their employees. And so one is, when you look at going up mid-market, when you look at QuickBooks Live, which is really an opportunity for us to lift heads and go after non-consumption, those are offerings we have that we didn’t have before that are actually higher ARPC. That’s one. Two, remember, 4 to 5 years ago, our Payments business was growing 11% because of where we were on innovation in the platform. Now we’re growing north of 30%. And we have about almost $2 trillion of invoices that are managed on our platform. We’re growing at that rate, and our penetration is very low. And more and more customers are starting to digitize their form of payments because of the innovation on our platform, and they are already on our platform. So we have – and those are just two illustrative examples but very real examples of why we’re seeing the strength that we’re seeing here now and the strength and all the indicators that we see in the coming year. And I would just sort of finish with the bank box of 80% our business is subscription business. So it’s highly, highly predictable. And those are the things that give us confidence as we look ahead.

Tremendous dissection of what is driving your confidence. Thanks so much and we will not let Microsoft tell us anything about SMB. We will listen to you first. Thank you so much.

We are the ones to look for when we talk about SMBs. Thank you.

Thank you. Our next question will come from Daniel Jester with BMO Capital Markets.

Great. Thanks so much for taking my question. Maybe just on Credit Karma and now moving Mint into that segment on an official basis. Maybe we just spend a minute talking about sort of the opportunities there in a little more detail. How much can Mint drive engagement in addition to Credit Karma Money? And just over the long-term, how should we be thinking about that combination?

Yes. Daniel, thank you for your question. We kicked off a strategy project. It’s been almost probably a year ago to just understand how we can accelerate making ends meet and our vision to truly have a consumer financial platform that can be the self-driving platform for consumers no matter where they are in their life, whether they are students or someone that is later in their life where they have achieved a level of financial freedom and have different sets of needs. And given the work that we did around our vision, we decided to bring Mint and Credit Karma together because in essence, although we have a lot of prime members as part of the Credit Karma base, Mint actually has a number of feature and functionality that the prime members need the most. So that’s number one is bringing some of the features and functionalities together as part of the Credit Karma platform. And over time, that will actually make Credit Karma much more robust to be able to serve all kinds of members no matter what their sort of credit band is. Number two is actually leveraging the scale and the power of the algorithm, the machine learning capabilities, the decision engines that we have in Credit Karma that ultimately deliver north of 35 billion machine learning predictions per day. We can leverage a lot of those capabilities to make Mint a lot better as part of Credit Karma. So, we do expect that this will be accretive in the long-term, delivering benefits to members, and ultimately, truly of achieving our mission and our vision of unlocking smart money decisions for consumers. So, that is our approach and thinking, and we are very excited about it.

Great. Thanks. And then just a second one on Mailchimp, appreciate all the context you provided about the quarter and the trajectory of the business. I guess are there any learnings from the Mailchimp acquisition that you would share that maybe will impact your acquisition philosophy going forward? And just maybe a comment on sort of what the acquisition outlook and playbook is today. Thank you very much.

Sure. Absolutely. Let me start with the single-biggest thing that we have learned, and we are diagnosing it wouldn’t have changed any of what we have done. We are very, very excited about what we are going to do in executing our vision with Mailchimp and QuickBooks coming together. But it’s having diagnosed upfront some of the product conversion opportunities that we are going after. I would say that’s probably the single-biggest thing that we did not diagnose as well as I would like to see us diagnose. I would also say that’s a – if you are going to misdiagnose something, that’s an okay one because it’s within your control and you can address it. But I would say that’s probably the biggest one. It has not at all altered the priorities that I mentioned a moment ago. But it is something that we have really gone back, and we are looking as to how we can put that in our playbook to do a better job diagnosing upfront. But in no way, shape or form does it change how we feel about the possibilities ahead, and it has not impacted our timeline at all. The second thing is our M&A playbook has not changed. Our Uber goal is time to market. Our principles around looking at capabilities that could help us accelerate delivering our vision are unchanged. And so I would just – I would leave it at that. Nothing new to report. It’s unchanged.

Great. Thank you.

Very welcome.

Thank you. Our next question will come from Siti Panigrahi with Mizuho.

Thank you. Thanks for taking my question and great quarter. Just wanted to dig into the payment part of the business, I guess that’s one of the underappreciated asset, I would say, Intuit has. You talked about total invoices now growing $2 trillion versus last year, $1.5 trillion. Could you help us understand how you have been gaining share within that business? And also, what are the opportunity you see for Intuit payments to expand beyond QuickBooks like some of the acquired asset? If you could share some of your long-term vision on that, that would be great.

Sure. Absolutely. What’s great about your question, Siti, is our Big Bet 4, which is about being the center of small business growth, is really about helping our customers grow their customer base. And it’s actually about cash flow, managing their cash flow. And that’s where the power of Mailchimp and QuickBooks come together. Specifically around the $2 trillion of invoices that we are now managing on our platform and your question about how do we continue to gain share, I will start with just sharing how we have accelerated our growth from the 11% several years ago to the 30% that I mentioned a moment ago from a charge volume perspective, and it’s really just basic innovation. It’s around discoverability. It’s around innovation like instant deposit. It’s around innovation like paid up-front, which really gives you the ability to send an invoice and get paid instantly because of all the data points that we see. And it’s just really making the experience – auto enabling the experience for payments to always be on versus opting in. Those are illustrative examples of where we have innovated to accelerate the growth in payments. And by the way, I want to be clear, there is so much more yet to do there because – when you look at the last 5 years to 6 years, our team has spent probably the first half of those 6 years just building the basic platform capabilities to be able to innovate much faster. We have a lot of those capabilities. Now we are able to innovate and deliver faster innovation to our customers. So, that’s one area where we will continue to double down to take more share. But we also have a significant opportunity to digitize all of business-to-business. A big chunk of this…

That’s great color. And just a quick follow-up to one of your comments on Mailchimp that you are planning to grow up to meet market. Can you help us understand who are the Mailchimp’s strength right now, maybe in the employee segment and where you are targeting, right, that mid-market? And is it also something – are you trying to expand your features more beyond e-mail marketing when you are trying to go into the mid-market?

Yes. Absolutely. I would liken – since you and many that are listening have followed us for years, I would liken that the Mailchimp journey that we are on, very similar to the QuickBooks journey. Specifically, there is a lot of overlap in the type of customers that we serve. Mailchimp generally has served the smaller small businesses, less than 10 employees. However, it actually has a lot of the capabilities to be able to serve the mid-market customers. And it comes down to adding some features and functionalities, basic things like how you do billing to actually ensure that you have the right inside sales force and customer success agents to be able to serve these mid-market customers. A lot of what we have built and know how to build in mid-market for our QuickBooks Advanced, but we are doing the same thing now with Mailchimp. So, it has a lot of the feature functionalities, but we are building out additional ones. But we are also building out our sales and customer success inside sales and customer success to be able to then serve those customers. And then you put that together with going to market together with QuickBooks, it really sort of brings the power of the benefits that we are able to deliver to customers and makes us far more attractive in the market for those small businesses that we want to serve.

Thank you. Next, we have Michael Turrin with Wells Fargo Securities.

Hey there. Thanks and good afternoon. Appreciate taking the question. The EPS guide for the full year, it’s not the highest, among the highest we have ever seen at 16% growth as a starting point from Intuit. You have had some questions, it’s especially notable given the current environment. I think it’s clear that increasing the target range for small business helps. But is there anything else you would point to? Are there platform advantages you are finding with some of the newer segments, or just anything else you would point us towards that’s helping to unlock the bigger EPS growth algorithm?

Yes. Sure, Michael. I will just amplify what Michelle shared earlier. We have leverage that is coming from three places that we view as durable. One is on the technology side. And we are actually excited about having there kind of walk of you through our technology stack, our technology vision and how it’s fueling innovation and also how it’s giving us margin leverage at Investor Day. But in that context, that’s one significant lever where we are continuing to build services so we can build them once and use them multiple times across the company. And it’s actually one of the things that is an accelerant to fueling innovation and acquisitions like Mailchimp and Credit Karma. The second is the leverage we get from how we are building out our marketing platform so that our MarTech services can be used across all of the segments across the company. And third is the technology that we are building once and applying to all of our customer success operations, which just recall, is quite large. We have over 700 million interactions with customers. And we shifted the company years ago from every segment builds out their own operations. So, we are building it once, and the segments leverage the same operations across the company and then making sure that we ensure that those services and those platforms are used by not only across the company but our acquisitions like Credit Karma and Mailchimp. So, the leverage is coming from technology across the company, MarTech and customer success operations. And that’s what’s driving what we delivered this past year, the guidance that you heard Michelle talk about and the durability that we believe we have looking ahead.

Thank you. Just a quick follow-on, if I may. Some useful commentary around mix throughout the call. With Credit Karma, you are guiding for 10% to 15% growth. It’s below the longer term targets we have seen. But clearly, there was some outside – outsized growth there over the past year. So, I am wondering if there is any way you can help disaggregate the tough comps versus some of the macro assumptions to frame that guide in relation to the longer term targets we have seen. Thank you.

Yes. Sure Michael. It is in fact, both. One is we have a big comp 2 years of 37% and then last year, 58% growth. And we have a lot of confidence in our long-term expectations for 20% to 25%. So, that is unchanged. So yes, one element is the tough comp. But really the – I would say the other element, probably a bigger element, is the current trends that we are seeing that we have really incorporated in our guide. When you look at our verticals around credit cards, personal loans, insurance and then home loans, just – and then there is the money vertical, almost every vertical has been impacted. And by the way, you can see based on our guide, the resiliency of the platform, other than, of course, the credit card vertical that really has not seen any significant impact. So, that’s the second piece that we have incorporated into our guidance is the, in fact, the macroeconomic environment that we see.

Thank you. Our next question will come from Brent Thill with Jefferies.

Thanks. Sasan, a number of CEOs have been calling out the shift to services-based economy from a product-based. And I believe, correct me if I am wrong, you have a heavy services base inside the small business. I am curious do you think that’s helping kind of shelter the small business in this environment right now? Is that playing into some of the defensive nature of what you are seeing in the results in small business for your core?

Yes. It’s a great question, Brent. And I think the short answer is absolutely. And there are two elements. And I will start with just a reminder that when we look at the small business market of sort of zero to 100 employees, about 70% of it is service-based businesses and about 30% is product-based businesses. And our really strength is in the service-based businesses. And I think the second thing I would just say is we are very, very diversified in the service-based businesses that we serve. We are not sort of overly anchored in one vertical or another. And that really helps with the diversification of not only our performance looking backwards, but opportunity as we look ahead.

And when you look at Credit Karma in past downturns, can you just give us a compare and contrast? I know you have compared the small business segment to be more SaaS. You have got virtually layered services around. Is there something different that they have done in the business to diversify? Assuming things got a little worse and not saying that’s what you are saying to the guide, but if that was the case, what gives the defensive nature of that business?

The single largest, I would say, uniqueness about Credit Karma, aside from you got 100 million customers, incredible trough, high Net Promoter, 14-plus years of behavioral data where we know so much about these customers and know what they need, when they need it and how they need it, putting that to the side as a foundation, which is critically important, it’s Lightbox. With Lightbox, it raises certainty of the experiences that – and offers that we can deliver members. But in this environment, more importantly, it is quality, which is there is a huge fight to quality by our partners. So, because we now have almost 70% of our credit card and personal loan transactions on Lightbox – and by the way, growing, that’s 15 points higher than it was last year, and of course, almost non-existent years ago. And I don’t even think Lightbox existed in the last recession. That is the single-biggest thing of where financial institutions have a lot of certainty when their models are part of Lightbox, so they can identify the kind of customer they want, the kind of offers that they want to provide. And of course, we make the perfect amount. So, I would say that is the single biggest thing. And it’s just the scale of the platform. We are a large part of the economy providing a match between what consumers want to the financial products that they have. But I would say Lightbox.

Thank you. Our next question will come from Kirk Materne with Evercore ISI.

Thanks very much. And I will echo the congrats. Sasan, you have alluded to this a couple of times, but I was wondering if you could just sort of dive into it in a little bit more detail. Just the power of the platform in small business and as we go into a potentially soft economic backdrop, are customers starting to talk to you all about trying to consolidate on to your platform in a bigger way now? You obviously have the ability to help them address both the back office and the front office. And while we are seeing that, I think anecdotally in payments and payroll, I was just kind of curious, given that budgets might come under more scrutiny, are you benefiting from the idea of consolidating towards one platform versus maybe taking a best-of-breed approach? Thanks.

Yes. Sure, Kirk. And in fact, this is probably one of the most misunderstood or least understood element of the benefit that our platform provides. And so I will just start with stating something that I mentioned a moment ago because it really plays into your question, and that is we are not a line item on the small businesses budget. We are the platform that fuels their success. We are mission-critical. Without our platform, a small business can’t run their business. And so it’s really important to have that frame of mind as to what’s the role that we play in the lives of small businesses. The second, to go – to get to your question, is we now have the services that we didn’t have 3 years ago, 5 years ago. And in fact, yes, they are having those conversations with us less from a can I save money, but more from a perspective of I don’t want to deal with all of these different applications where things are sort of disparate and discrete where I can have everything on your platform. If I am using somebody else’s payroll or somebody else’s capital or somebody else’s payments, why not just use all the services on your platform. And frankly, this is an area where our small business team is actually doubling down on looking forward, which is how do we evolve our go-to-market to actually have a conversation with our customers about all the services that they don’t use that they should use where there will be far more efficient, effective and potentially even save some money because we see all their transactions. We can see what they do if they don’t do it on our platform because they have connected their bank accounts and so on. So, we believe this is an opportunity as we look ahead.

Thank you. Ladies and gentlemen, that is all the time we have today for questions. And I would like to turn the call back over to management for any additional or closing remarks.

Awesome. Well, thank you for the wonderful questions. And we are really looking forward to seeing, hopefully, all of you, at our Investor Day at September 29th. We will, number one, walk through probably the next level of depth around the experiences that we are delivering and why in this environment they matter the most to our customers across all of our five Big Bets. And you will have a great opportunity to not only ask more questions, but connect with my wonderful team that leads a lot of this great work. So, look forward to seeing you then. Until then, be good, stay safe, and we will talk to you all soon. Thank you.

Ladies and gentlemen thank you for your time today and this concludes our conference. We appreciate your participation and you may disconnect at any time.