Good afternoon. My name is Abby, and I will be your conference facilitator. At this time, I would like to welcome everyone to Intuit's third quarter fiscal year 2023 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer period. If you would like to ask a question during this time, simply press star, then 1 on your telephone keypad. If you would like to withdraw your question, again, press star, then 1 on your telephone keypad. With that, I'll now turn the call over to Kim Watkins, Intuit's Vice President of Investor Relations. Ms. Watkins? Thanks, Abby. Good afternoon, and welcome to Intuit's third quarter fiscal 2023 conference call. I'm 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 our press release we issued earlier this afternoon, our Form 10-K for fiscal 2022, 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'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. A copy of our prepared remarks and supplemental financial information will be available on our website after this call ends. With that, I'll turn the call over to Sasan. Great. Thank you, Kim, and thanks to all of you for joining us today. Third quarter revenue grew 7%, lower than our expectations, reflecting a unique tax season, while we exceeded operating income and earnings per share guidance. We continue to see strong growth in the Small Business and Self-Employed Group, which grew 21% in the quarter. Our overall performance this year demonstrates the strength of our platform and portfolio, including our ability to maintain earnings power in uncertain times, while investing in the most important areas to drive long-term durable growth. We are raising our total company fiscal year revenue, operating income, earnings per share guidance. I'm very proud of our team as we now expect revenue and operating income to grow double digits and margins to expand even more than previously guided. Let's turn to tax. While this was a unique tax season, we're making good progress transforming the assisted segment with TurboTax Live. This year, we expect overall IRS returns to decline 2% through July 31st, below our original expectations for total returns to grow 1%, which was more in line with historical trends. We also expect the DIY category share of total IRS returns to decline nearly 3/4 of a point, also below our expectations. We believe the IRS and DIY category declines are driven by those who filed in order to receive pandemic-era stimulus and tax credits during the past several years but did not file taxes this season. As a reminder, every point of IRS returns growth equals about one point of TurboTax revenue growth, and every point of DIY category share growth equals about 2.5 points of TurboTax revenue growth. The expected decline in total IRS returns and DIY category share equates to approximately $200 million of negative impact to revenue for TurboTax versus our original expectations. We expect our share of total IRS returns to be down approximately 80 basis points this fiscal year, primarily reflecting pandemic-era stimulus filers who did not file taxes this season. Each tax season has been unique since the pandemic began four years ago, although average annual trends over this period are far more in line with longer-term trends. Over this four-year period, we expect total IRS returns to be up approximately 1%, the DIY category share of total returns to be up a quarter of a point, and our share of total returns to be up approximately 20 basis points, and average revenue per return to be up nine points. These trends exclude users of the TurboTax Free File offering in prior year periods. Our strategy to transform the assisted category with TurboTax Live is working, given the growth we've experienced in an environment where IRS returns are declining. We expect TurboTax Live customers to grow 13% this year, with TurboTax Live revenue up 19%, and total average revenue per return to grow 12%. While TurboTax Live has driven strong growth over the last six tax seasons, we still have an immense opportunity to penetrate and transform the assisted tax segment at an accelerated rate. This remains our top priority as we prepare for next year. Turning to small business, while we're not immune to the macro environment, our platform is resilient. Total online payment volume growth moderated 5 points from Q2, growing 20%. Despite this, the shift to digitization and the power of our small business platform resonate with customers as they look to grow their business and improve cash flow. We continue to see strength in the areas that have the greatest impact, including growth of our online mid-market customers, contributing to strong subscription revenue and higher ARPC. In Q3, growth in both the number of companies running online payroll and the number of employees paid on our platform remained strong. Our small business platform, including QuickBooks and Mailchimp, remain critical to our customers' success. Let me now step back and talk about our company game plan to win. Four years ago, we declared our strategy to become the global AI-driven expert platform and 5 Big Bets as the primary areas of focus to drive durable growth. We invested heavily in our data and AI capabilities to deliver accelerated innovation. Today, we have over 100 million customers on our platform and use 400,000 customer and financial attributes per small business and 55,000 tax and financial attributes per consumer to power 58 billion machine learning predictions per day. The acquisitions of Credit Karma and Mailchimp each contributed a rich and additive data set, which helped deliver a 360-degree view of our customers. The scale of our data is an important competitive advantage and building block for our existing and future innovation with AI. We are accelerating reimagining our customer experiences with generative AI capabilities, which we believe will be the driver of our long-term growth. Our platform capabilities are key to continued acceleration across all of our 5 Big Bets. I'd like to highlight some examples of recent progress across these Big Bets. As a reminder, our Big Bets are revolutionize speed to benefit, connect people to experts, unlock smart money decisions, be the center of small business growth, and disrupt the small business mid-market. Our first Big Bet is to revolutionize speed to benefit. This data and technology bet is foundational to everything that we do. We began investing in generative AI two years ago to accelerate our ability to fuel the success of consumers and small businesses. We've implemented generative AI in Mailchimp, powering the email content generator, enabling customers to create faster email campaigns based on industry, marketing intent, and brand voice. We deployed large language models which recognize, summarize, and generate text in our virtual expert platform to automatically summarize calls, reduce call times by hundreds of thousands of hours per year, and reduce work for experts while improving efficiency. Our strategic investment in data and AI over the last four years positions us to lead through this technological shift, and we look forward to sharing more in the coming months. With our third Big Bet, our vision is for Credit Karma to become a comprehensive self-driving financial platform that propels our members forward wherever they are on their financial journey. We are focused on growing Credit Karma Money, increasing member confidence to access financial products with Karma Guarantee, building out a richer experience for prime members, and becoming the financial platform of choice for consumers with the seamless integration of Credit Karma and TurboTax. We're innovating across all verticals and continue to have confidence in our long-term revenue growth expectation of 20%-25% despite near-term headwinds. I'll share a few examples. This season, we further streamlined the TurboTax filing experience into the Credit Karma app, and the number of customers using the experience to file their taxes was over five times higher last year. With Credit Karma Money, we're innovating to help members get faster access to cash and make financial progress. This year, we saw over 45% growth in the number of TurboTax Online customers who received their refund advance in a Credit Karma Money account. This integration allowed approved members to get money in their hands in as little as one minute after the IRS accepted their return and drove increased debit card purchase activity, contributing to more than a 100% increase in Credit Karma Money revenue during the quarter. Members who use this offering show higher engagement on Credit Karma, which creates additional monetization opportunities over time. With the Mint team now part of Credit Karma, we're building a new experience for members with prime credit scores, where Credit Karma is under-penetrated today. During the quarter, we began rolling out Net Worth, which helps prime members better understand their wealth. Our fourth Big Bet is to become the center of small business growth by helping our customers get new customers, get paid fast, manage capital, and pay employees with confidence in an omni-channel world. In payroll, our U.S. QBO payroll customers grew double digits this quarter, and the mix of online customers choosing our high-end offerings increased by over 1 point, driving higher ARPC. In payments, we continue to innovate to drive digitization from creating an estimate to invoicing a customer to getting paid. Today, easier discovery, auto-enabled payments, instant deposits, and get paid upfront are all helping drive adoption of our payments offerings, leading to 20% total online payments volume growth this quarter. We're making significant progress digitizing B2B payments to accelerate and automate transactions between small businesses and ultimately improve their cash flow. We see a tremendous opportunity as 70% of B2B transactions are still completed with checks. Following our launch of the QuickBooks Business Network to millions of our QBO customers in January, we're piloting our own native bill pay solution and launched the initial beta of this functionality in QuickBooks earlier this month. Turning to Mailchimp, we're well on our way to becoming the source of truth for our customers to help them grow and run their business. We have three acceleration priorities with Mailchimp. First, delivering on our vision of an end-to-end customer growth platform. Disrupting the mid-market by developing a full marketing automation, CRM, and e-commerce suite. Third, accelerating global growth with holistic go-to-market approach. This quarter, we made great progress against these priorities. We're continuing to see better paid conversion, improving retention versus last quarter, and stronger paid customer growth. This, along with higher revenue per customer, drove several points acceleration in revenue growth versus last quarter. Let me share some details around our progress. To help introduce new customers to Mailchimp and drive customer growth over time, we introduced free trials similar to what we offer in QBO. In early testing, this is already driving higher paid conversion and a mix shift into our higher end offerings. To drive stronger retention of mid-market customers, we continue to leverage our virtual expert platform to offer assisted onboarding with the goal of guiding these customers to more advanced features and increasing awareness and usage. This quarter, we saw more than 7 point increase in high value customers going through this onboarding process versus last quarter, which we expect to help drive stronger retention over time. To drive accelerated global growth and execute our refreshed international strategy, we're translating the product into multiple languages. Early results indicate this translation work is driving increased activation and ultimately can drive revenue growth. Our fifth big bet is to disrupt the small business mid-market, representing a TAM of 1.7 million customers, of which 700,000 are already in our franchise today. Online mid-market customer growth remains strong, we're driving ARPC expansion as we serve these mid-market customers across our full ecosystem of services. Wrapping up with our durable AI-driven expert platform strategy, we're innovating at a high velocity using the power of our platform, modern technology capabilities, data sets, and artificial intelligence to deliver new offerings at scale. This is helping us put more money in our customers' pockets, saving them time, and ensuring complete confidence in every financial decision they make. We're well-positioned to power prosperity for the people and communities that we serve as we enter this next technological shift. Now, let me hand it over to Michelle. Thanks, Sasan. For the third quarter of fiscal 2023, we delivered revenue of $6 billion, GAAP operating income of $2.8 billion versus $2.4 billion last year. Non-GAAP operating income of $3.4 billion versus $2.9 billion last year. GAAP diluted earnings per share of $7.38 versus $6.28 a year ago. Non-GAAP diluted earnings per share of $8.92 versus $7.65 last year. Turning to the business segments, Consumer Group revenue of $3.3 billion grew 3% in Q3. There are four primary drivers of our consumer business. This data reflects our expectations through July 31, 2023 versus the prior year through July 31, 2022. The first is the total number of returns filed with the IRS. We expect total returns to decline 2% this year. This is below our original expectations of up 1%, as overall industry growth continues to reflect the multi-year impact from the pandemic. The second is the percentage of those returns filed using DIY software. We expect the DIY category of total IRS returns to be down nearly three-quarters of a point by the end of the fiscal year, below our original expectations. The third is our share. We expect our share of total IRS returns to decline by approximately 80 basis points this fiscal year, primarily reflecting pandemic-era stimulus filers who did not file this season. As a result of these same industry dynamics, we expect our retention to decline this year. The fourth is average revenue per return, which we expect to increase 12% this year, as we expect TurboTax Live customers to grow 13% with TurboTax Live revenue up 19%. Historically, each point of total IRS returns growth corresponds to approximately a point of revenue growth for the Consumer Group, and each point of DIY category share growth corresponds to approximately 2.5 points of revenue growth for the Consumer Group. Using these historical sensitivities, the expected decline in total IRS returns and DIY category share equates to an approximate $200 million negative impact to revenue for the Consumer Group versus our original expectations. As a result of this expected decline in IRS returns, we anticipate total customers to decline 5% this year. We expect TurboTax Online paying customers to decline 1% this year and a total of over 11 million customers who pay us nothing, down from 13 million last year. We now expect full year Consumer Group revenue growth of 5%-6% versus our prior guidance of 9%-10%, reflecting the expected declines in IRS returns and DIY category share I mentioned earlier. Looking back over the last four years, including our updated guidance for this fiscal year, we expect our revenue to have grown over 10% on average annually, in line with our long-term expectations. We continue to anticipate Consumer Group revenue growth of 8%-12% long term. Turning to the ProTax Group, revenue declined 5% in Q3. For the full year, we now expect ProTax Group revenue growth of 2%-3%. In the Small Business and Self-Employed Group, revenue grew 21% during the quarter, and online ecosystem revenue grew 23%. 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 25% in Q3, driven mainly by customer growth, higher effective prices, and mix shift. Second, we continue to focus on connecting the ecosystem. Online services revenue, which includes Mailchimp, payroll, payments, capital, and time tracking, grew 21% in Q3. Mailchimp revenue growth in the quarter accelerated several points from low teens growth last quarter. Growth was driven by higher effective prices and customer growth. Within payroll, revenue growth in the quarter reflects an increase in payroll customers and a mix shift to higher-end offerings. Within payments, revenue growth reflects ongoing customer growth as more customers adopt our payment offerings to manage their cash flow and an increase in total payment volume per customer. We continue to make progress expanding globally by executing our refreshed international strategy, which includes leading with Mailchimp. On a constant currency basis, total international online ecosystem revenue grew 12% in Q3. Desktop ecosystem revenue grew 16% in the third quarter, and QuickBooks Desktop enterprise revenue grew approximately 20%. We're just over halfway through a three-year transition to a subscription model for our desktop accounting solutions, making this revenue more predictable. We also raised our desktop prices for several products last September to price for value. Looking ahead, we expect continued strong desktop ecosystem revenue growth next quarter and as we complete the remaining part of the three-year transition. We will continue to build out our online ecosystem and help our desktop customers migrate seamlessly to our online offerings when they're ready. We continue to expect the online ecosystem to be our growth catalyst longer term. As a result of the strong growth we're seeing in the Small Business and Self-Employed Group, we are raising our full-year segment revenue growth guidance to 24% from 19%-20%. Credit Karma delivered revenue of $410 million in Q3, down 12%. As a reminder, Credit Karma represented 14% of our total revenue in fiscal 2022. On a product basis, the decline was driven primarily by headwinds in personal loans, home loans, auto loans, and auto insurance, partially offset by growth in Credit Karma Money and credit cards. We're seeing more stability across our core verticals. In both credit cards and personal loans, we continued to see some partners tighten eligibility while some expanded eligibility during the quarter. In personal loans, we continue to see partners facing funding constraints. We added more partners to the platform to help diversify our partner base. We continue to expect personal loan revenue to decline this year after very strong growth in fiscal 2022. We're updating our full-year Credit Karma revenue growth guidance to a decline of 11% from a decline of 15%-10%. Our financial principles guide our decisions remain our long-term commitment and are unchanged. We finished the quarter with approximately $4.3 billion in cash and investments and $6.6 billion in debt on our balance sheet. We repurchased $483 million of stock during the third quarter. Depending on market conditions and other factors, our aim is to be in the market each quarter. The board approved a quarterly dividend of $0.78 per share payable July 18th, 2023. This represents a 15% increase versus last year. As I've shared consistently in the past, we have an operating system we use to run the company. This includes a proven playbook for operating in both good and difficult economic times. Our first priority is to do the right thing for customers, giving them access to the tools and offerings they need most. We manage for the short and long term and control discretionary spend to deliver strong results while investing in what is most important for future growth. The scale of our platform, along with our rich data, gives us the unique ability to see leading indicators that allow us to be forward-looking and adjust quickly. I'm proud of the team for how effectively we have used our playbook to invest in the most important growth drivers to position Intuit for the future while maintaining earnings power this year despite the macro impact we are experiencing. We will continue to accelerate our innovation. Our goal remains for Intuit to emerge from this period of macro uncertainty in a position of strength. Moving on to guidance. We are increasing our fiscal 2023 guidance. This includes total company revenue growth of 12%-13%, up from prior guidance of 10%-12% growth. GAAP operating income growth of 19%-20%, up from prior guidance of 9%-13% growth. Non-GAAP operating income growth of 21%, up from prior guidance of 17%-19% growth. GAAP diluted earnings per share to grow 7%-8%, up from prior guidance of a decline of approximately 5%-1%. Non-GAAP diluted earnings per share growth of 20%, up from prior guidance of 15%-17% growth. Our guidance for the fourth quarter of fiscal 2023 includes revenue growth of 9%-10%, GAAP loss per share of $0.34-$0.29, and non-GAAP earnings per share of $1.43-$1.48. We expect a significant increase in our cash tax payments related to fiscal 2023 as a result of the tax law changes that require capitalization of certain R&D costs. With the recent IRS disaster area tax relief, we expect to pay approximately $700 million related to fiscal 2023 in Q1 of fiscal 2024. You can find our full fiscal 2023 and Q4 guidance details in our press release and on our fact sheet. With that, I'll turn it back over to Sasan. Excellent. Thank you, Michelle. I know you'll be with us for another couple of months, but since this is your last earnings call, I wanted to express my sincere appreciation for all that you've contributed to Intuit over the last 20 years. You have made me, my leadership team, and the entire company better, and I am forever grateful. Wrapping up, we feel confident in our AI-driven expert platform strategy and our 5 Big Bets. In an uncertain macro[audio distortion] mission-critical than ever to our customers. Let's now open it up to your questions. Thank you. Ladies and gentlemen, if you would like to ask a question, please press star then 1 on your telephone keypad. If you would like to withdraw your question, again, press star, then 1 on your telephone keypad. Please limit yourself to 1 question. We'd like to get to as many people as we can. Your first question comes from the line of Brad Zelnick from Deutsche Bank. Your line is open. Great. Thank you so much for taking the question. Michelle, congrats on a phenomenal run. We will miss you next quarter for sure on the earnings call. I've got one for Sasan, maybe you'll let me sneak one in for Michelle, especially since it's her last call. Sasan, how should we think about your big bet in helping customers overcome their lack of confidence by connecting them to live experts in a world where generative AI is advancing at breakneck speed? I think you spoke about how you're using generative AI to deliver the live platform. How is Intuit positioned in a world where LLMs may be able to deliver human-like guidance and interaction? Maybe for you, Michelle, your Consumer segment operating margin was consistent with last year, despite the pressure on the top line for all the reasons that you've mentioned. Just curious how much visibility that you might have had into how tax would play out, and if you scaled back investment at all, perhaps even marketing dollars into the end of the season. Thanks so much. Great. Brad, thank you so much for your question. I heard that I fell off when I was reading the last part of the script. If I have bad connection, I will switch phones and hop back to make sure I answer your question. Let me start with the question that you asked. You know, first of all, I would take us back to, you know, what we declared four years ago. As you know, I've been on the record four-plus years ago to say that I believe, and we believe as a company, that artificial intelligence is going to ignite global growth. I believe that it's the biggest thing next to what we've experienced over time with electricity and the internet. It's that big, and it's that critical of a platform of innovation, which is why data and AI have been core to our investments in the last, you know, four-plus years. With that as context, it's why we've been investing specifically in machine learning, knowledge engineering, natural language processing. Several years ago, we really started accelerating our investments in generative AI. If I take it back to your question, around confidence, you know, when we talked about solving the biggest, you know, unsaid problem that customers have, which is around confidence, it is really about solving it by helping them feel confident in their decisions, and it doesn't necessarily always mean people. In fact, if you look at our interactions today across all of our platforms, a large number of our interactions, it's actually our machines that are solving the customer's largest problems. The reason we are so excited about AI from four plus years ago is that you couple our data, which is a 360 view of the customer. It's actually where Credit Karma and Mailchimp have played such an important role to add to our rich data sets. You couple that with the investments in AI and now with generative AI, we can actually accelerate penetrating non-consumption. This is across every customer that we serve, whether it's consumers across Credit Karma, whether it's tax, whether it's small business. We have an incredible opportunity to accelerate on making things, you know, more easier, more digestible, and more confidence-inspiring for our customers. In fact, it's generative AI that gives us the ability to do things that we could never imagine possible because of the data that we have. For us, we saw this as an accelerant several years ago. It's why we accelerate our investments, and it's why we're so excited about the future because of the large language models coupled with AI, coupled with machine learning and the investments that we've made, we believe that we can actually accelerate our innovation as we look ahead. Hopefully, I was loud and clear. Yes. That was good. Brad, first of all, thank you for the kind words. Your question around our ability to, you know, maintain earnings power within CG really is a focus for us at the whole company, and it started last year when we were going through our three- and one- year planning process. We assumed that there would be economic uncertainty this year. As we were going through the process, we made sure that we had funded those things that were most important to delivering for customers and being able to drive our revenue growth. We were made lists of the levers that we had that we could pull as we went throughout the year to be able to maintain our earnings power. Those are some of the discretionary things we had, which were, you know, whether it's travel or advertising or, you know, moderating hiring. You know, our lower tax units also this year did result in lower expenses for that segment, specifically in customer success. Really it's about us looking at maintaining not CG margins, but really at the company level, and it started last year in planning. Your next question comes from the line of Kash Rangan from Goldman Sachs. Your line is open. Thank you very much. Goodbye to you, Michelle. We'll miss you. Question for Sasan and the team. Sasan, in order to get back to the targets of 8%-12% longer-term Consumer Group, you're gonna have to re-accelerate the tax business. If you can go back to the basics from the old days, how does it plan to grow the category, and how do you gain share of that category? That'd be great. Also as it relates to Generative AI, does this open up more opportunities netted against maybe potentially new competitive entrants? Because there is their thesis, which I'm sure you'll have a different view on, that it actually makes it easier to file for taxes. Brad was talking about that, Brad Zelnick earlier. Does it expand the opportunity set at the same time attracting new competition or how do we think about how it nets out for you guys? Thank you. Yeah. Thank you for the question, Kash. A couple of things I would start with. I'll take your question around re-accelerating revenue growth. You know, first of all, if I step back and look at the $200 million of impact that we experienced this year because of the lower number of returns. Based on all the analysis that we've done, it's really the pandemic era filers that came in to get access to their stimulus and to their tax credits. Those have based on our analysis, have really all now left the category. One, we believe we'll get to sort of a more normal environment. That is really what drove the performance, the lower performance than we expected this year. The second thing, to get to your question around re-acceleration, this is where I feel very good about the performance in an environment where there were lower returns with our TurboTax Live business. If you think about it, this is now a billion-dollar-plus business growing 19%, and I believe in, you know, the next several years, this will actually be the largest part of the TurboTax business. It's really in context of getting after the $30 billion of TAM that is consumers that go to an assisted offering to get their taxes done or businesses that get their business tax done. We believe based on what we learned this year with our full service offering, that we have an enormous chance to be able to really penetrate at a much more accelerated rate as we look ahead. Therefore, you know, very confident in not only our performance this year, if you exclude the lower number of returns, but also the green sheet that we saw going into next year, inclusive of the fact that we had five extra growth in the Credit Karma platform. We learned a number of things that we're gonna double down on going into next year. Let me couple that with your second question around AI. You know, listen, I would say we were the ones four-plus years ago that said, and we're on the record, that we believe that AI will absolutely be disruptive, and it's why we made investments in data. Because AI, particularly generative AI, is really meaningless without data. With the investments that we've made in having a 360 view of data for consumers and small businesses, we actually kind of see it as an incredible accelerant. I'll just remind us of, you know, we often talk about we have a $300 billion TAM with 5% penetration, and most of our customers use Excel, Google Sheets, shoe boxes, whether it's a small business or a consumer, to manage their life, to manage their business, or they go have a bookkeeper help them run their business. The reason it's 5% because it's all comes down to confidence. We actually see our investments in the last four-plus years in data and AI with what we are now investing in with generative AI, we, for us, think it's an accelerant because we have incredible scale. We have data scale, AI scale, customer scale, and we have sort of rich data sets that is really undisputed, which means we can do things for customers that is hard for anybody else to do. We actually see it as an accelerant, and we're excited about the possibilities given the proof points that we've seen and given the investments that we are currently making. That's the way we think about it. The next question comes from the line of Kirk Materne from Evercore ISI. Your line is open. Yes, congrats, Sasan. Thanks for taking the question, and Michelle, good luck on your next endeavor. I guess, Sasan, can you just talk about the state of the small business? There's a lot of debate on that right now. Obviously, you all had a nice quarter in SBSEG. Can you just talk about what you're seeing there in terms of, you know, the different verticals you play in and frankly, the ability for you all to upsell, some of your offerings like payroll payments? Thanks. Yeah, yeah, sure. Let me, Kirk, frame my answer in two dimensions. You know, One, what we see across all small businesses on our platform and off of our platform. There's a couple of things that we see. One is there is an impact to small businesses' revenue. They're still growing. It depends on the sector, but in aggregate, what we see is that they are still growing. They also, depending on the sector they serve, they have profit pressures. If they're in real estate or if they're in lending, they certainly have more profit pressure than those that don't serve those sectors. We also see that customers, you know, we put them in the bucket of the older, more tenured customers. 70% of those customers actually have more cash reserves than they did pre-pandemic. It's more the younger, newer businesses that have started since the pandemic that generally they have less cash reserves than they did. Sort of the state of the small businesses, they feel, you know, the impact and the pressure of the environment from consumer spending standpoint. Net-net, when you look in aggregate, they are still growing with some of the data points that I mentioned a moment ago. With that said, when we look at our platform, it's why we're continuing to be intentional about sharing the proof points that we shared today. Our platform is not immune, but we are resilient. When you look at some of the data points that we shared, you know, our payments, our total payments, online payments volume, is 20%, which is actually quite healthy, but it's down 5 points. At the same time, when you look at our overall performance across Mailchimp and QuickBooks, we actually are seeing strength in serving our mid-market customers and continuing to serve our customers that have been on the platform for a long time. The proof points that I shared was our customer growth in mid-market is strong. We're growing payroll, U.S. payroll, double digits, and we're actually seeing a migration to our higher-end payroll offerings. Net-net, we are not immune, but we are resilient, and we feel really good about the sustained growth that we've delivered and the trajectory of the KPIs that we see as we look into next year. Your next question comes from the line of Keith Weiss from Morgan Stanley. Your line is open. Excellent. Thank you for taking the question, guys. Michelle, it's been great working with you over the years. Congratulations on all the great work that you've done. Sasan, a question for you on just tax and kind of how unfolded throughout this season. I understand sort of overall filings down because of less people kind of getting the refunds, right? I understand DIY is probably a bigger component of it. I don't quite understand why TurboTax loses share in that dynamic. Like, what's the mechanism by which you guys get hit harder than others and therefore kind of lose share? That's question number one. Question number two, there has been some concern about an extended tax season and the ability for approximately 10% of filers to be able to file at a later date that pushes out of your fiscal year. You didn't mention that. Was there any significant impact from that side of the equation that some of this tax strength might just push into next fiscal year? Yeah, sure, Keith. Great question. Let me start with your share question. You know, first and foremost, the majority of, in fact, we would say close to all of those that came into the category of taxes to get access to their stimulus dollars and to their tax credits that were not tax filers before, almost all of them came into the do it yourself category because it was so much easier and faster to get access to, in essence, all their credits. Those are the filers that we see that have left the do it yourself category. The reason our share is down is actually pure math. We're the largest share player in the do it yourself category, we got the largest share of those folks that actually came in during the pandemic era. When they left the category just by pure math and the cohort of customers that we review in our retentions, what we in essence see is those cohort of customers that came in that did not file taxes before to get access to credits are the ones that left. Which is actually what gives us confidence when we look at our key retention cohorts looking ahead, but also our TurboTax Live performance that we talked about earlier. That's how the share plays out. It's pure math. We got the majority of them, and when they left the category, they left TurboTax. In terms of extensions, yes, there's dollars attached to it, Keith, but, you know, in context of a $14 billion company, we don't consider it material. That's why we didn't, Michelle and I didn't really spend much time talking about it. Your next question comes from the line of Siti Panigrahi from Mizuho. Your line is open. Thanks for taking my question. Michelle, it was great working with you. Good luck with your next endeavor. Sasan, I want to dig into Mailchimp. It's good to see that acceleration to mid to high teens growth on Mailchimp. Could you talk about, like, you made some changes, how much of that contributed, you know, to growth versus what are you seeing in the demand environment? Is macro really a headwind at this point? What are you seeing in the, you know, spending pattern on marketing from your customer base? How sustained going forward? Was the last part of your question how sustained? Is that going forward? Yeah. Thank you for the question. You know, first of all, very consistent with what I've shared in the last probably, you know, 18 months or so, we felt, and I felt very strongly that the opportunity that we had with Mailchimp is how we bring it together with QuickBooks to truly create one platform that becomes the source of truth for running your business. In an environment where now we have access to, with our customers permission, the data, applying AI and generative AI, we can now shift the platform to a place where we can do everything for you and deliver insights to help you manage your cash flow, to help you grow your customers. That's really the ultimate game changer that we are focused on. With that said, the thing that I've been very consistent with you all is that this is all about execution. All of the progress that you're seeing us talk about in Mailchimp is all better execution. It is not any macro tailwind. This is from the talent that we've put in place at the leadership level and the talent that we have upgraded across Mailchimp to then end-to-end. You know, we've been revamping the website. We have the looking at business model innovation in our lineup, and we've made improvements. We're improving the product. We're doubling down on mid-market and not only getting our existing customers to understand what features and functionality that we have to deliver the benefit, which helps us with retention and expansion revenue, but also the new customers that we're getting. It's assisted onboarding and using a lot of our AI and virtual expert platform capabilities. Those were sort of illustrative examples relative to why we're seeing paid conversion increase, paid customers increase. We're seeing better retention and better revenue per customer. It is all execution. I expect us to continue to improve our execution and coupling that with what we're doing across the QuickBooks platform, truly creating one platform that becomes the source of truth for your business. I am excited and bullish about the future possibilities of what we can do for small businesses, particularly with what's possible with data and GenAI. Your next question comes from the line of Scott Schneeberger from Oppenheimer. Your line is open. Thanks very much. Michelle, best wishes for sure. Sasan, I guess, this is gonna be a double tax question. The IRS is down 1% year-to-date. You're saying down 2% through the end of July. Just curious, what's gonna take it down more in your eyes and how that looks in future years if you continue to think this is more just a pandemic-related slow year and we get back to normalcy. That's part number one. Part number two, historically, when we look at unit growth of TurboTax, which was you anticipate to be -5%, and then revenue per return, which you anticipate to be +12%, usually A plus B equals the consumer segment revenue growth. You have. That would be 7% plus, but you're guiding 5%-6%. Is there conservatism in there, or is there maybe some financial products that you were unable to sell, so you're getting a little less, you know, that maybe is not qualified as revenue per return but something else, or maybe it's something that's not TurboTax related directly in the category? Thanks. Sure, Scott. Let me take your first question. There are two assumptions that we are making based on all the data that we have and what we see from last year. One is there was actually a lot more extensions last year than we view will take place this year, even with the states that have pushed out. Last year, there were more filers, this is in the bucket of the pre-pandemic era or the pandemic era filers that came in to get their stimulus money and their tax credits. There were still a lot of those filers last year through July and a little bit beyond. When we take out those filers and we compare to the extensions last year, our view is that IRS will be down two. That has, of course, an impact, 2%, which has an impact on the performance that we talked about. Secondarily, we really did an incredible amount of analysis to make sure that we had an understanding of these pandemic era filers and are they all sort of out. The reality is there's no more stimulus or, you know, tax credits to be had by those filers. Based on all of our analysis, they are out. Therefore, we expect, you know, this year that IRS at a minimum is going to be flat. Of course, when we guide, we'll share with you what we've assumed in our guidance in August. We would assume, you know, at a minimum it'll be flat, maybe even up, but at a minimum flat based on the reasons that I just mentioned. That's the first part of your question. The second part of your question is a really good one, and I'll get to the specifics in a moment. I think this sort of reiterates, even in an environment where IRS returns, you know, went down, our future is TurboTax Live, and our future is the growth of what we can do with our live platform, especially with the data and AI capabilities that we have to really disrupt the assistant segment. Our real compass going forward is gonna be the growth of our of our TurboTax Live platform, both in terms of customer growth and revenue growth. I may just ask Michelle to weigh in on this, but this sort of comes down to just, you know, pure math in terms of when we look at our units and we look at, what folks paid for, it sort of adds up to the 12 points being up in ARPC. It's really nothing beyond that. Let me just ask Michelle. Michelle, would you weigh in on that point at all beyond what I just shared? Sorry. I was having trouble with the mute button there. No, Sasan. You know, some of it can just be also rounding with units and returns. I wouldn't get overly concerned on that, Scott. Got it. The headline is it's the 12 points in ARPC growth is sort of very tangible relative to the units that we got. Yes. You got the 12 points of ARPC, as you said, Scott, we shared we expect the units to be down 5%, so. Your next question comes from the line of Daniel Jester from BMO Capital Markets. Your line is open. Great. Thanks for taking my question. A couple more on tax. I think you mentioned before that overall retention, because of the factors you mentioned on the call already, is gonna be down this year. Could you focus in on just live retention, given how important that's gonna be for the future of the platform? How did that shake out this year? If you could share in terms of live customer growth, are you getting more from takeaways from competitors, or is this DIY customers trading up to live? Any color you could provide there would be helpful. Thank you. Yeah, sure, Daniel. First of all, yes, you're right in what you heard us say earlier, which is we would expect retention to be, you know, down a point plus. We'll talk about it, of course, more at Investor Day. It's really because of these pandemic era filers that came in and have now left the category. Overall, we like the mix of what we've seen across our live platform. We'll share, again, more of the specifics as we get into Investor Day. Our retention and sort of existing customers coming back, we felt very good about what we expected and what we saw. I would say the second thing is it's a mix. It's a mix of both those that did taxes themselves the prior year that ultimately chose to upgrade to a sort of a live platform because something changed in their life, inclusive of getting customers that were prior year assisted. Remember, really, our competition is those that go to mom-and-pop shops. It's the, you know, it's the 88 million folks where the majority of them will ultimately go to a local mom-and-pop shop to get their taxes done, and that's where we get a lot of the switchers also from those mom-and-pop shops. We have a good mix of retention, those that did their taxes themselves last year and chose to use the live platform because of a confidence question or some concern, and then getting those that were prior assisted. That's a mix we like, and that's a mix we believe will continue. It'll be different as we take full service and use it even in the further scale because we believe we'll accelerate full service penetration at a much higher rate than even today. That's the way I would have you think about it. Your next question comes from the line of Raimo Lenschow from Barclays. Your line is open. Thank you. Thanks for squeezing me in. One question on Credit Karma. You kind of raised the guidance there. That came after a quarter where we had a lot of turmoil in the financial services industry with the regional banks, et cetera. Can you talk a little bit about what you saw this quarter in terms of the extra headwinds that obviously played out there, but you're actually doing better than what you had guided for previously? Thank you. We're actually continuing to see strength based on our innovation in a couple of areas. One is in card, in some parts driven by our Karma Guarantee, which is really unique to Credit Karma, where, you know, the certainty is very high for a member to get approved for what they are looking for because of the data and AI capabilities that we have. The second is Credit Karma Money, and this is where, as I always have shared, you know, we are building a consumer platform to be the destination for consumers with the integrations that we're doing with TurboTax and Credit Karma. In essence, we saw a 45% increase in the number of TurboTax customers that chose to put their money on a Credit Karma Money account. Not only do we make some revenue from that, but over time, based on the higher frequency of engagement, we can ultimately monetize even further, which were not in the numbers that I just mentioned. Really, it's across our innovation across cards and Credit Karma Money. That's why we saw the performance that we saw in the quarter. With one quarter left in the year, we of course have confidence to improve the guidance that we provided to what Michelle shared earlier. Your next question comes from the line of Jackson Ader from MoffettNathanson. Your line is open. Great. Thanks for taking our questions, guys. We saw the press release related to the IRS direct filing program. I just thought, you know, maybe Sasan, if we could hear what you're thinking are maybe the largest potential threats of that study that came out as part of the Inflation Reduction Act last year. Yeah, sure. Thank you for the question. You know, I'll share a couple of perspectives that is really consistent what we've talked about, but this is probably an important time to, you know, reiterate how we think about it. You know, first and foremost, I can't vouch for their study. I can simply vouch for the facts that we have and the facts that are already in the market. I think the first one is free tax software is already available to all consumers, and the awareness is actually quite high. That's the first thing that I would just remind us of. I think the second thing I would say is a reminder of this will yet be another free tax software in the marketplace. I would just say, if you look at the last, you know, four -plus years, there were several entrants, big entrants, into the free tax software. One was Credit Karma, before we acquired them, where, you know, they have 100 million plus customers, a trusted platform, and they entered into the market of providing free tax software with sort of very little to no impact. Another, you know, very large player, that we sold Credit Karma Tax to, when we acquired Credit Karma. And you can of course observe what their results are. The point is that free tax software is already available, has been available to every consumer, and the awareness is extremely high. To have another sort of free tax software that's available is really immaterial is the way we think about it. I'll remind us, by the way, it's actually not free. This is gonna cost taxpayers billions of dollars. It's really not free. I think the last thing I would say is really back to our vision. You know, our vision has been from what we declared four years ago to really become a consumer platform of choice, which means that beyond serving you to help you get your taxes done, we're delivering benefits through Credit Karma beyond tax, which means we can monetize beyond tax. Really out of the $35 billion TAM in tax, less than $5 billion is do it yourself. Really our biggest opportunity is the other $30 billion we're going after, $20 billion of it being consumers that have somebody else get their taxes done and $10 billion being business tax. That's our future, that's our present, that's where we are focused. Net-net, when I think about the IRS study that was, you know, announced, you know, I think it's a study. Facts are friendly. You look at the facts in the marketplace. This is for us, this is really not a threat at all. Your next question comes from the line of Brad Sills from Bank of America. Your line is open. Great. Thank you so much. I wanted to ask a question around the TurboTax ARPU number. Such a nice increase that you're expecting this year at 12%. Could you help unpack that a little bit for us, please? Obviously, TurboTax Live was a key driver there. I guess two questions. Were there other contributors here, premium mix shift, or other items perhaps? Also on TT Live, I mean, what would you attribute the strength to? We've seen the ads this tax season, you know, "Don't do your taxes, we'll do them for you." Is it just growing awareness of QuickBooks... sorry, of TurboTax as a solution to help with assisted? You've been at this for a number of years, just kind of, I guess, what's working there? Thank you. Sure, Brad. You know, a couple of things. You actually, you know, nailed it. Our ARPU increase on top of ARPU increases the last several years has come from TurboTax Live. It is a disruptive price offering. At the same time, it's got, you know, much higher ARPU and some of more premium customers that, you know, chose, they're either self-employed or they're investors and of course, chose our premium SKU, which, you know, has a higher ARPU. Those are a couple of big drivers. I would tell you that the thing that I am sort of most excited about were the insights and the learnings that we got this year that really informs what we're gonna double down on right now as we prepare for next year. One is full service. You know, full service is now an offering that has product-market fit. It's at scale. We got an 84 Net Promoter Score this year, which is the highest Net Promoter of anything across the company we have ever had. You've heard me say it before around Credit Karma. Well, this is even a higher Net Promoter. That contributed to a small amount this year because we were really being thoughtful and careful about ensuring we have the right product-market fit, and we can deliver for customers. Well, we surprised ourselves in terms of the product-market fit, we're gonna be really intentional about doubling down on that next year. I think I'd say the other thing back to your question around learnings is we really learned, where and how experts, and remember, experts is not just humans. It's both, our AI, generative AI capabilities and/or humans, depending on the need of the customer, engaging around the money experience, helping customers understand their refund, changes in their refund or their balance due and changes in their balance due. We learned, coupled with our go-to-market strategy, how to really nail that benefit, and that's what drove the growth. We believe we are capable of so much more growth as we look ahead based on the insights that we got, towards the end of the season, and that's what we'll be focused on as we head into next year. That's all the time we have today for questions. This concludes our question and answer session. Would you like to close with any additional remarks? Yes. Just to say thank you for all your great questions, and many thanks to our employees and customers for their amazing focus and being part of this storied franchise. We look forward to seeing all of you at next earnings. Thank you, everybody. Ladies and gentlemen, thank you for participating. This concludes today's conference call.