Great. Welcome, everybody. Delighted to be welcoming Intuit to the conference here this year. We're very fortunate to have Kenneth Lin here, CEO and Founder of Credit Karma. I've got some questions that we'll kinda go through, and we'll save some time at the end. If you have any questions, we'll give you the opportunity to ask questions. Feel free to raise your hand, and we'll get to you. Ken, thanks so much for joining us. Yeah, my pleasure. Great to have you here. Why don't we just start, you know, you're the Founder of Credit Karma, now part of Intuit. Maybe just a little bit of your background and kind of the impetus for the company. What was the idea behind the founding of the company and what are you excited about here as part of Intuit? Yeah. Great to be here. Thanks for having us. By way of background, you know, I started my career in financial services. I worked at a credit card company early on. I found my way to the internet. company said, "This is amazing," and started Credit Karma 17 years ago. That as a backdrop, you know, 17 years ago, when consumers were looking for credit scores, which is really one of the defining metrics of their financial life, you couldn't get it for free, and we thought that was a real opportunity. What I think our, our secret was, or sort of the linchpin of it, was when people were looking for their credit, they weren't actually looking for credit, they were looking for money, right? They were looking for financial services products or what their credit could afford them. That's really the impetus by which we've grown to over 120 million members on our platform, and partnering with some of the largest financial services companies, is that when a consumer is looking for credit, they're looking for which financial services products they're qualified for. Over time, we've really, you know, grown our platform and our business from just giving away credit scores to really understanding the nuance of what they're looking for, and then building our platform to drive certainty in helping them find the right, you know, financial product, whether that's a credit card, a mortgage, a personal loan, and so on. That's really what the platform has become. Awesome. That's great. You know, AI is obviously a key topic here for software in general. When I think of Credit Karma, I think of AI, you know, and Lightbox. Would love to get your perspective on the underpinnings of AI in the Credit Karma platform, the Lightbox engine, and where do you see the direction of Credit Karma with regard to AI? You know, it's been interesting, over the last year, everyone's talking about AI and, you know, Generative AI in particular. What's really interesting in that is this is something that Intuit has been focusing on for the last 5+ years, right? We've always said that we are going to be a, you know, an AI-driven, financial platform, and all of those key components have been landing, I think, within the last year. To give you a little perspective of how I think this has transformed, but also how we're thinking about it is, you know, what's interesting is the technology, right? Obviously, the LLMs and the ability to, you know, process language is interesting, but what's missing from the equation, which I think Intuit brings, is two important aspects. First, is the data side of it. Next is the capabilities. To give you very specific examples, if you go into a Gen AI platform today, and you say, "What's the best way to build my credit score?" It can give you a 1,000-word essay on what the best practices of building your credit score should be, but it won't give you any specific advice because it doesn't know you. It doesn't have any data that is pertinent to you. I think that's one aspect that is really important when we think about when it comes to financial services, the context really do matter, right? Generic advice never works. It has not worked over the course of the last 30 years. I think that's really why Credit Karma has been successful in that context. That's one key aspect. The other is capabilities, right? Consumers are gonna want their financial agent to do things on their behalf, right? They're gonna want you to move money around. They're going to want to apply for that product through the platform itself. It's those capabilities that will make Gen AI and financial services transformative. Right now, we can do a bunch of searches. We can, you know, ask for essays to be written. You know, have papers written. We can do searches in a really unique and differentiated way, but to have contacts in financial services, I think those are the key elements. If you think about what we have been acquiring over the course of the last 17 years, or building, right, it's all of the composite of the financial information on a consumer. It's the TransUnion Credit Report, the Equifax Credit Report, Clarity data, LexisNexis data, your driving behavior, what type of property you live in, right? Those are all things that we have on the Credit Karma platform. The Intuit platform, as a whole, has been building things like IDX, which is the ability to connect to financial institutions and get transaction-level data. It's ability to move money around through a set of APIs that Intuit has. You put all those things together, and now you have a true financial agent in your pocket that not can just answer questions, but actually make your life simpler in the form of, you know, taking care of tasks that you do on a daily basis, but in a way that you don't think about and, you know, creates real disruption. Mm-hmm. Mm-hmm. That's great. You've touched on some of this already, but maybe if you could just give us an idea of the underpinnings of Lightbox. Like, what is the data set that you're consuming? How are you consuming this data? How are you feeding that into the recommendation engine? Lightbox is our proprietary underwriting system. 17 years ago, when we started Credit Karma, everyone was coming to Credit Karma for their credit scores, and going back to this idea, what they're really looking for is: What does my credit score afford me? As big data's come into play, as you know, underwriting algorithms have gotten more complicated. 5 years ago, we decided to build Lightbox, which is our way of mimicking, mirroring what the financial services companies are doing in the form of underwriting decisioning. Mm-hmm. With it, all of the data goes into the platform, and then our partners can put their secret sauce, right, their underwriting models into our Lightbox platform. What happens there is we can then qualify consumers, sort of instantly as a consumer logs on to what product that they're qualified for. To give you a little bit of context, you know, in subprime lending, roughly 70% of loan applications are declined because the consumer who's looking for the loan simply isn't qualified for that product. Mm-hmm. When we use Lightbox for that same consumer, those approval rates get north of 95%, because instantly, we already have all the data, now we know the criteria by which, you know, the banks are making determination of eligibility. We've gotten so confident in the technology and the process itself, we have a product called Karma Guarantee, which is if you're not approved for the product, we'll actually pay you money, right? That's the evolution of the product. Going back to your question about Gen AI, I mean, this is the key components of how we think it'll be transformative in this space, because it's one thing to say, "Hey, you know, what is a good bank for a prime consumer?" It's another question to say: What is the best financial services product for me to get money at the lowest cost? Those are nuanced questions that only through data and these integrations that we're able to create. It's an example of how, you know, AI will come into play, but more importantly. Mm-hmm. how this will transform the industry in terms of the way that you find products, shop for products today, will be very different than how you think about them tomorrow. That's great. No, that's a great perspective. Thank you for that. Yeah. Maybe we could just talk a little bit about the business model. It's very different from your typical software subscription business. If you could elaborate on, you know, how you monetize and, you know, pricing. Yeah. You know, our business model is effectively free for all of our members, right? We started this 17 years ago with the idea that, while there's a lot of great data, a lot of great technology, it tended to be used by all the financial services companies, and consumers never had an ability to benefit from it. Mm-hmm. With that said, you know, we thought that the free model is the right way to do it. You know, we make all of our revenues from our financial services products. Our model is very simple. When you come onto Credit Karma, you're able to get your credit score, your credit reports, all for free. It takes about two minutes, 20 questions, you can register. With that, we can instantly see all of your debt. We can see when you last applied for a credit product, what the interest rates of those credit products are. We see something like $7 trillion worth of consumer debt on our platform, and we know what the interest rates of those products are. Now, to get specifically into your question about the business model, what's interesting is when you're able to see an auto loan at, you know, being charged at 19%, we can quickly determine that with Lightbox, that another lender would give that same consumer an auto loan at 12%. We can do the math, right? Computers are really good at that and say, "Well, you know, Brad, you would save $100 a month." Same term, we're not extending the term. You literally just save $100 because you're moving from 19% to 12%. In that model, when you do that, the bank would pay us a success fee, in the form of, you know, a few hundred dollars, usually. You, as a consumer, would save $100 a month for the next, you know, 39 months that you might have that loan. Mm-hmm. The bank gets a new customer, right? We think about it as a win-win-win. The loser in the equation is really that bank that was charging the consumer 19%. Oftentimes, we all know that, you know, auto loans, in particular, are a category that, you know, doesn't have a lot of shopping, doesn't have a lot of predatory. Really, that's the transparency, that's the simplicity that we bring into the space. Mm-hmm. over the course of the last 19 years or 16, 17 years, I guess, feels like 19 years. We've been moving, you know, from what we started off as a core vertical in the form of credit cards and personal loans, to things like mortgages... Mm-hmm. -to insurance, to banking services like Credit Karma Money and credit card and checking. Mm-hmm. You know, we've expanded over the last 15 years or so. Really, the core of what we do is, you know, providing data insights to our members and helping them find the right financial services products. Mm-hmm. -all for free, in an innovative way where, you know, our banking partners are- Mm-hmm. -paying with what their traditional marketing dollars- Mm-hmm. Would go to. Wonderful. Thanks, Ken. Yeah. The business is cyclical. It's proven to, you know, have some sensitivities in the macro. Maybe you could just touch on the impact from the macro slowdown on the business. How has that manifested in the business? Coming out of this, how do you expect the business to behave? Yeah, it's been a really interesting business cycle, right? You know, financial services in general, the economy in general, are quite cyclical. If you look over the last 30 years, there's a couple of interesting trends. One is that there's a very consistent aspect of borrowing. Mm-hmm. If you look at credit reports over the course of the last three years, on average, a consumer will take out 1.1-1.2 financial services transactions each and every year, like clockwork, right? That average has not moved at all in the last 30 years. Those would be credit cards, personal loans, refinance, you know, auto loans, you name it, student loans. Mm. That is a very predictable aspect of the business. What has been unpredictable are these sort of momentary, you know, changes in the economy, and it's the volatility that's, I think, created the biggest angst. Mm. What we saw over the course of the last year is a couple of things, right? If you look at personal loans, for us, it's the, you know, our second largest driver of revenue. Mm-hmm. Well, most of our personal loans partners, they securitize their loans in the ABS markets. When you are lending out loans or making loans and then selling the security, well, if you don't know what interest rates are going to be in a quarter, you have a hard time pricing those loans, and as a result, you tend not want to lend a lot of those loans because you have quite a bit of risk. If you price them too high, right, you get adverse selection, and you have risk in a different factor, right? Not, in that case, you have defaults versus inability to generate revenue from selling the loans. Mm-hmm. That's what we've seen in the personal loan side of the world. In the auto insurance space, which tends to be more acyclical, but what's happened here is that inflation has gotten the better of that industry, right? Historically, through most recessions, we all need insurance, we all buy insurance policies, and they tend to move through these cycles without being affected. Because of inflation, because of the cost of repairs, the cost of parts, the cost of labor, a lot of insurers were underwater in terms of their policy, right? They couldn't get their pricing ahead of what it costs to fix those loans or not loans, to sort of recoup the policies. As a result, you can see a lot of the loss ratios in that sector go north of 100%. All of those things will be back. Then lastly, sort of, you know, in the mortgage space, what you see is that obviously, you know, refinance doesn't make sense in a world where interest rates are moving up unless you need cash or unless you want to extend your term. The good news there is, as things get stable, even at higher interest rates, people are going to need to refinance their 5% mortgage at 5% in the future, right? All of those things tend to come back when you go through these cycles. What we've seen is that over the course of the last year- Mm-hmm. We were hit with all of those at the same time. Again, going back to the note that, you know, the borrowing rates of consumers are very steady... Mm-hmm. All of these things will work through the system, and refinance will be back. People will need to buy auto insurance policies, credit cards and personal loans will continue to thrive. Makes a lot of sense. Thanks for that, Ken. The Credit Karma brand is a strong one, resonates with consumers. Can you help us understand customer acquisition strategy here, go-to-market, how you drive awareness from here with the Credit Karma brand, and take advantage of the existing, you know, brand awareness? I mean, well, we have 120 million members on our platform. When we say that, we try to not use any metrics. That means that 120 million members have been validated through the credit bureaus with their Social Security number, their address, their KYC. Mm-hmm. More importantly, they've been deduped. You can't have more than one account on Credit Karma. You know, what we have been focused on over the last 17 years has been very successful on that front. As we expand the brand, what's really important is we're much more beyond credit today. As we think about the product, it's about expanding into these new alternative verticals, right? It's credit cards, which is our oldest vertical, personal loans, which is our second oldest vertical, to mortgages, to auto loans, to money. We think very much about how do we drive engagement on all of those dimensions from a user perspective? How do we add value? For example, you know, we have a product called, you know, Karma Drive, which is actually telematics. As part of loading up your Karma app, you can give us permission. We'll actually score how you drive, and that driving behavior will actually get you discounts on auto insurance. The note is, we've moved the product from much more from just credit and, you know, credit cards and personal loans to other key aspects of the business. When you think about something like mortgages, which is one of our newer verticals, right? If anyone in here has bought a home, which I suspect many of you have, you realize what's necessary for that is your credit report, your W-2, your tax returns, and your bank statement. Well, of those 4 big, you know, clunky data elements, we have 4 of 4 of those, right? What we can do with that is we can actually simplify the process, and as we think about things like Lightbox. Mm-hmm. We can pre-qualify you for a mortgage, but we can also pre-qualify you for a mortgage refinance, right? The opportunity there is, a lot of times consumers won't refinance their mortgage because it's painful, right? Even though I know I could save $50 or $100 a month, I'm not going to do it when interest rates move down, because I know that I'm going to get harassed, I'm going to have to go and dig up a bunch of paperwork. Mm-hmm. Our ability to have all this information in real time, sort of in connection with the key underwriting models that are driving the eligibility of it, that will be transformative in the space when you add in things like GenAI and the reminders, the prompts. Mm-hmm. the conversational, why is it a good time? I think that's what's going to disrupt the industry and help consumers. Mm-hmm. Great. You touched on some of this already, but from your view, what are some of the key trends shaping the industry today in personal finance? You know, what are some of the things that Credit Karma is doing to kind of skate to the puck, if you will, and satisfy those needs? Well, I think it's so much more consumer-centric, right? It used to be large financial institutions, a lot of multiple products. You know, that tended to be the center of your financial life. Mm-hmm. That's moved, right? We all have multiple financial services products. I bet you everyone, you know, in this room has at least you know, 3, if not, you know, 5 or 10 financial services accounts or interactions. Mm-hmm. I think that's an important aspect of it. Then I think data and consumer choice is really the key driver, right? Mm-hmm. Gone are the days when, you know, you were at the behest of the bank. They controlled all the eligibility. Everything was opaque in terms of what you were eligible for, your inability to shop. I think, you know, Credit Karma and other companies are actually changing that landscape, right? We're creating transparency, so when there are 10,000 financial products out there, you know which one's best for you, which one's qualified, which one you're qualified for, and what the pricing of all those products are upfront. We think that's what consumers really want. That's also the key aspect of leveling the playing field when it comes to sort of, you know, the sort of inequality around financial services products and sort of, you know, the income disparity that we see. Mm-hmm. across the U.S. and the world. Great. Where are some of the areas you're investing in the platform? You talked about, you know, some of these newer offerings. Are there others that you're considering, you know, adding in different categories, or is the focus on kind of building on what you already have across the lines of business? Yeah, we've always tried to stay center, right? If you think about what Credit Karma is, you know, we think about it from three key pillars, which, you know, are the key aspects of the consumer's financial life. First is the lending side. you know, that's the credit cards, that's the personal loans, that's the mortgages, it's areas that we have the data in, and, you know, the beautiful thing is all of these data elements tend. Mm-hmm. you know, tend to scale to other categories. There's lending. There's the asset side of it, right? That's the checking accounts, that's the investments accounts, that's the savings account. Mm-hmm. that's the ability to help consumers get into the banking space, build their credit scores over time. Lastly, is insurance, right? Those are the three key pillars of Credit Karma, and across those pillars, we continue to make investments in the form of data and capability. Mm-hmm. We continue to add more and more data onto our platform. Things like, you know, telematics, which is first-party data, that we're creating it as you drive. Mm-hmm. We're also buying things like, you know, claims information, so that we can actually price your insurance policy without you having to lift a finger. Mm-hmm. -insurance, in the United States, you know, that you fill out 40 questions to get 1 quote. Mm-hmm. If you want a second quote, you fill out another 40 questions, right? Mm-hmm. To have all of that in one place really simplifies and makes it easier for you to compare. Mm-hmm. Then on that, you know, last pillar of, of our business, which is on the savings and the asset side of it, right? There's Credit Karma Money, which is a set of capabilities that allow us to move money around on your behalf. When we talk about things like Gen AI. Mm-hmm. we have already building the capabilities, the API, so when you actually tell, you know, the chatbot or the AI to move your money, we have a set of APIs that actually can do that on your behalf, rather than saying: "Great, you should use your money. Now, you can move your money through the platform," we can centralize all that. Those are the capabilities, the data elements, and also the verticals that we're investing in. Got it. Great. With the entry into, you know, mortgage, auto loan, auto insurance, these are some of the newer lines of business. What have been some of the learnings? Are you feeling like that Lightbox engine is getting to the point where it's, you know, the relevance is getting to that flywheel or critical mass, however you want to describe it? I guess, just generally, what have been some of the learnings and, you know, where do you go from here on those new lines? Yeah, I alluded to it earlier. I mean, I think one of the great things is that the data scales across all platforms, right? The same credit report that we bought 17 years ago, that powers credit cards in Lightbox, is the same credit report that you can use today to power things like mortgages and auto lending. That's one great aspect. The platform itself moves from vertical to vertical. Mm-hmm. I think those are the opportunities. At the same time, you know, one of the challenges in the space is that, you know, a lot of these large financial institutions tend to be incumbents. They tend to move a little bit slower than what we would like as a technology company. Mm-hmm. That's okay. you know, it's sort of as much of it is, a challenge, is also the moat, right? Mm-hmm. You know, to get to scale... Mm-hmm. is important in this space, and that's what we've heard consistently, time and time again, from our partners, is that scale, longevity really do matter because when you think about the technology that we're building, thinking about the relationship that we're building with the financial institutions, it's all about trust. I mean, our partners are handing over their underwriting models, right? Mm-hmm. That's like, you know, that's the Coca-Cola secret recipe. You know, banks are very careful with that. When you do have that data, you create a much more compelling experience for your users. Mm-hmm. You also build this, you know, level of trust with, banks and financial institutions that are hard to replicate. You touched on the Credit Karma Guarantee, Credit Karma Drive is another newer offering. If you could perhaps elaborate on these new offerings and what you're excited about there? Yeah. We have I mean, you know, if you again, going back to this idea that Credit Karma is a lot bigger than just credit scores, right? Karma Drive is this, you know, is a set of technologies that you can put on your phone that will actually you know, look at how quickly you accelerate, how hard you stop, how you turn... Mm-hmm. How often you pick up your phone when you drive, all in the spirit of helping you lower your auto insurance policies. That's one area. Mm-hmm. When you talk, we have a product called Home Pulse, which is actually tracking the home equity that you have. This is using the same platforms that are actually the data that is doing AVMs or automated valuation models, that go into refinancing your loan. Not only can we tell you that you're qualified, but we can tell you how much equity you have, so you can track that as an opportunity. We have a product called Credit Builder, which you can pay yourself $20 a month. It's completely free. You by paying yourself $20 a month and making a promise to pay yourself $20 a month, we can improve your credit score. Some of the early data that we have on that product is we see, on average, your credit score going up 24 points in as little as 40 days, and oftentimes in the same day, right? It's just simple examples of driving engagement, building trust, but all with the idea that data, automation. TurboTax, QuickBooks, where do you see that one plus one equals three with those two, and what are some of the things you're doing running Credit Karma to integrate? Well, what's great is, you know, when Sasan and I started talking 5+ years ago, you know, the idea and the mission was really what resonated. The idea that we could change consumers' lives, and that's what we've been following over the last 5 years, and just thinking about a couple of the areas that we've innovated on. You know, if you think about TurboTax, where every year there's roughly $130 billion worth of tax refunds. Last year, we successfully drove a lot of those dollars into Credit Karma Money accounts, right? We actually offer 2 innovative benefits that, you know, I think only Credit Karma, Intuit, and TurboTax could. Mm-hmm. -provide, right? We could do, five days early in terms of your tax refunds, and that's interesting. Mm-hmm. What's really interesting is we were able to do refund anticipation deposits, where when the IRS accepted your refund, we could give you a portion of that refund in real time for free. The way that that works is 'cause the credit data allows us to know the credit quality of the user that we're dealing with. The TurboTax integrations with the IRS sort of, you know, and their history with the user base, also gives us insights, incredible insights on that user. Instantly, we're able to drive advantage in that space. Then, when you think about things like, you know, QuickBooks and the idea that something like $2 trillion worth of invoices are sent through that platform each year, well, things like point-of-sale financing become really interesting. Payment rails and money movement become really interesting across the ecosystem, across the Intuit platform. Wonderful. Sounds great. If you do have a question, feel free to raise your hand. We'll get a mic over to you. If not, I'll keep going. Okay. Ken, maybe, Credit Karma Money, kind of a new concept here for the business. If you could touch on what you're doing there in that end market and in the offering itself. Yeah. That's a really great product in that, we launched it about 3 years ago. Mm-hmm. What we did there was... You know, what's really important here is Credit Karma is not a bank, right? We don't lend the money. We don't even deposit the money, meaning it's not held into our bank account. What we do is we leverage the consortium of banks. With Credit Karma Money- Mm-hmm. You get one of the highest rates in the States. I'd say, you know, I think it's roughly 4.2 something% today. Don't quote me on it precisely. The idea is all of those dollars are FDIC insured up to $5 million because we actually make sure that no one institution is holding more than the limits itself. Mm-hmm. The idea is that we've always thought about, you know, you should get a fair rate for your money. It's a product that drives engagement for us. It's a product that makes money from us, for us, in the context of, interchange when you use your debit card. It also goes to this idea that engagement is key for Credit Karma, right? It's a strategic advantage for us. Mm-hmm. You know, we know that when a consumer uses more than one service on Credit Karma. Mm-hmm. Their engagement retention goes up by roughly 30%. That engagement goes up to something like 47% more retention, right? Mm-hmm. Credit Karma Money is just a suite of offerings that we have that are about driving engagement, driving trust, that we've always focused on in terms of helping consumers. Wonderful. The long-term revenue growth target of 20%-25%, what are the keys to getting back to that? Obviously, we're in a tough macro. You've talked about some of the headwinds there. When you think about that, getting back to that level and then sustaining that level of growth long term, what are the keys there? What are the key drivers? Yeah. I mean, the good news is we've seen this, right? We've seen this before. We've been doing this for 17 years, and we have a lot of data in terms of consumer behavior. There's three key components, and I would say maybe even a fourth one, as you think about sort of the growth of Credit Karma is, one is, you know, our user growth, right? We continue to add users onto the platform. It's 120 million+ today. You know, we're getting a large chunk of the 17-year-olds who are turning 18. That's an important aspect of growth. That's one. The second one is really the focus on engagement, right? You know, five years ago, our engagement was probably roughly three times per month on our active base. Today, it's a little north of five times. And with all the products, whether that's Credit Builder, Credit Karma Money, Home Pulse, Karma Drive, as consumers engage in those products, they tend to have higher retention rates and higher engagement rates. That's fundamentally important. Mm-hmm. The last note is really our revenue per transaction, right? Those have been also going up over time as we've moved into new verticals. Things like, you know, mortgage and personal loans, as we've grown that business, those tend to have higher revenue points for us. Mm-hmm. The other area is, as we branch into new verticals, it's the same data that we're using, right? The same data that is driving and powering the mortgage experience is the same data that we've already purchased for the credit card and personal loan side of the business, right? There's incredible scale in terms of the overall data, but if you put all of those things together, you know, it's our user growth, it is our engagement growth, it is our revenue per transaction. Mm-hmm. Then it's really the penetration rates of all the verticals that we've, you know, identified. You know, our most mature verticals today, which are credit cards and personal loans, has something like a 7% adoption rate, right? Mm-hmm. There's 93 points left to go. Mm-hmm. Some of our more nascent ones are sub 1%, so 99+% to go. Mm-hmm. Very, very early innings in terms of the opportunity in the market that we see. Wonderful. Ken, thanks so much for joining us. Learned a lot here. Great discussion. Appreciate you being here. Yeah, my pleasure. Thanks for the time. Thanks again.