for being here, for the afternoon session of the Citi Technology Conference. I'm Steve Enders, as part of the software research team here. And with us for the session, we have Marianna Tessel, from Intuit. Yeah. Marianna, very happy to have you here today. Thank you. Glad to be here. Yeah. I guess, maybe just to start, I think everyone has some exposure to you through your years at Intuit, but maybe you can just talk a little bit about your path to now becoming the head of the SMB Group at Intuit. Thank you for that. First of all, nice to meet everybody, and actually, I've been at Intuit for seven years, and I started at Intuit as leading engineering for the business unit where I'm in right now, and did that for like a little bit over a year, and then I became a CTO for Intuit for five years and helped with modernizing our technologies, getting to a platform, embarking on AI more decisively, GenOS, Gen AI, all of that, then I became the general manager. Before that, my background is in various technology companies, VMware, Ariba, things like that. I'm also a board member at Cisco, so I understand big companies and how they work. Yeah. Yeah, I think, that, that's great to hear. I do wanna talk a little bit about the segment name change. I think it's now called the Global Business Solutions segment, if I'm, if I'm correct. So maybe can you just kind of walk through what that name change reflects, and maybe how the business and the vision changes as a result of this? Yeah, we recently changed the name to GBSG, Global Business Solutions Group, and really almost every... well, every word in there matters. So first of all, global is to signify that we are global and being clear about that. The second thing is business, because we are after businesses of different sizes, from solopreneur to mid-market, small business to mid-market. The third is solution, is that we're actually offering a platform and a set of solutions, so we're end-to-end platform, and we're a group, so here you go, GBSG. All right. No, that's great. I know Intuit, big focus on Five Big Bets. How does that strategy drive the GBS segment, and how does that fit into your own investments that you are focused on in leading that group? Yeah. We declared the Five Big Bets five years ago, actually, when I was a CTO, and I'm very familiar with them. And they're actually fueling our growth across the company. But let me kind of start one by one. The first one is with kind of a strategy of speed to benefit, and in there is deploying data, AI and increasingly Gen AI to get our customers to benefit quickly. The second is connecting people to experts and making sure that expertise is available across our platform end-to-end to our customers, and making that available. Then the fourth Big Bet is about being the center of small business growth. I left Big Bet three because it's more targeted towards our consumer segment, but Big Bet four is about being the small business, the center of small business growth, and that comes in different ways. First of all, with making sure we understand all the jobs to be done across the platform, making sure that with Mailchimp, we can help customers get, grow, and manage customers. And with our money solutions, we are helping customers with their money. And last is, of course, mid-market. The last Big Bet is really focused around mid-market. And actually, all these areas we invested throughout the years, and now we continue using that. Ooh, this is making a squeaky noise. Continue using that to kind of fuel our growth. Okay. No, great to hear. That, that's great to hear. I do wanna ask about just the demand environment. I think everyone thinks of Intuit as being a pretty good bellwether for what's going on in the SMB world. So can you just talk about what you're seeing today, how you're feeling about the relative health within that segment, and maybe what you've seen relative to some headwinds that other people have called out in that SMB segment? Yeah. So you're right that by looking at our data, we're actually able to see how small businesses are doing. And, you know, we do see, I would say overall, there's no big news this year, and that is pretty stable. We do see, actually increase in revenue and profitability for small businesses, which is nice. However, the cash balance is a little bit more difficult for small businesses and is down about 7%. Other positive sign is across our payroll offerings, we see that hours worked has been increasing, so more activity in employment. All of that is positive. We can also see that some sectors have been doing better than others, and sectors such as, insurance or construction, these have been growing and healthy sectors. And other sectors still, I wouldn't say struggling, but they're still having a hard time, I would say, recovering from pre-pandemic, and that would be real estate or lenders. You know, those are the ones. IT services. So those are still not growing at a pace that we see some of the other sectors. Okay. No, that's that makes complete sense. Maybe kind of dovetailing off of, you know, what you're seeing from the customer side, but more connecting it to the consumer side of your business. I know that there's been some synergies in place between your segment and the consumer side. Can you maybe just talk about, you know, what the interconnections and synergies with that group look like, and maybe how has that evolved over the past few years? Yeah, you know, what we have seen is. I'm actually gonna highlight business tax as an area where we see this synergy. So in business tax, what we have done lately is actually we offered business tax for our QuickBooks customers with QuickBooks Live, and we've seen tremendous excitement from the market on this. So we're gonna continue doubling down on that and offer surfacing it to more customers, offering more of that. So that's like an area where we can take a TurboTax experience and offering it to small businesses. I will actually say, interestingly, maybe one of the things that the audience is not aware, and as kind of I can share from being a CTO, is that we actually build everything on one platform. So often, a synergy might not—you might not see it in like a direct connection, but it's there, and it allows us, one, to develop these more connectivity across our platform, but also taking something that really worked in one place and then apply it to another. I will give the example of expertise, is that we started with TurboTax Live several years ago, and actually, we built this virtual expert platform, which is a platform that allows us to onboard experts and then help them serve, with AI, our customers really, really well. And as we build that platform, we build it in a way that is across our Intuit platform, if you want, and then what it does is that it helps us serve QuickBooks customers. And QuickBooks Live offering is actually based on our platform. So we already know from the get-go, as we start scaling that, that it is going to scale, that experts are gonna be effective and productive on it, that they're gonna use some of the most advanced AI-based technology, whether it's matching and how we match expertise, whether it is summarizing calls and things like that, being able to during the conversation surface the right thing to say for our experts. So this is the kind of way in which we also see synergies across our platform that actually helps our customers, is that we really have one platform that helps us serve Intuit and helps us scale and move offerings across our products. I do wanna touch a little bit more around what you did in the past on the tech side and how you think about the AI opportunity moving forward. But I think before we get into that, I do wanna ask a little bit about some of the changes in the outlook and some of the evolution we saw from this past earnings call. I think maybe for one, I wanna start on just how your thinking on the growth equation has shifted between ARPC and volume here moving forward. I guess, are there any examples of shifts in the execution to reflect that change? And I guess, what led to the decision now that this is the right time to kind of lower that outlook? Yeah. So our overall growth, that kind of remained at 15%-20% as the long-term guidance, so that has not changed. But our formula has evolved a little bit in that we are increasingly understanding that we are going to go after a higher ARPC. We have an opportunity to go after a higher ARPC, and as a result, we are just being more, you know, like, once you say, lowered our customer growth- Mm-hmm. and we put it in the 5%-10%, which we thought will be better matching. Because as you look at higher ARPC and some of the customers we're going after, there's actually less of these customers. Like, tip of the pyramid, there is less customers, so that felt like more matching, but there's higher ARPC that we can go after there. And an example that I gave in one of the meetings was that if you look at in a mid-market customer. Let me just actually go back and say, we go after the entire-- our plan is to go over the entire pyramid, and what we are doing is going after solopreneurs, small businesses, and mid-market. And those customers have similar needs, so it, they're really well served by our platform, but they're different in ways. In mid-market, obviously, small businesses need more than a solopreneur, and then mid-market needs even more. And when you are mid-market, you more likely need a payroll solution, you more likely need capital, you more likely need our fintech solution, payments, bill pay, you need more sophisticated reporting. So the needs are similar, but they're also evolving across those segments. And as we look at the segment that is mid-market, there's less customers there, but there's higher ARPC. And in fact, if you look today, even today, we have 3x the ARPC for mid-market customers than other customers within our ecosystem. So that's definitely a very compelling market for us, and we believe we serve it well, and we can serve it better, and that's what we are after. We're gonna continue to increase our customer base across all three segments. We're gonna continue going after solopreneurs as well. Okay. I guess, as we're thinking about, maybe some of the volume shift there, I guess, does this maybe change how you think about, you know, the size of the addressable market for SMB or the sustainability of new logo growth moving forward? Like, is there a view of saturation maybe coming into, that lower end of the market? I don't view this as like saturation. One thing that I kind of wanna share is that there's constantly new businesses being created, and it's ever-evolving and ever-growing, and we see us playing there. I would say at the lower end, maybe one thing to pay attention to is that we have, you know, crystallizing who we wanna go, being clear on who we wanna go after. Mm-hmm. I believe we still have, like, a great opportunity there to grow, actually, pretty massively, but we were, you know, several years ago, we attempted to go after what we called self-employed, and we're being clear of what type of self-employed we wanna go after, and we wanna go less after the gig workers that might be not needing use of much of the software and also tend to churn very heavily. In fact, we had an offering called QuickBooks Self-Employed that was built on a different stack. What we are doing is we actually released last year a solopreneur offering that is built on a QuickBooks stack that is targeting really solopreneurs. Maybe it's could be a food truck, somebody like who just wanna run a food truck or like a designer, an architect, different type of like solopreneurs, and what those customers, they tend to start small, but they actually do evolve. In fact, like, some of our mid-market started as solopreneurs. And, so we believe this is a customer that's within our profile, and we are pivoting to target that customer with an offering that we think is excellent for them, with the right, right price point for them. So we're still gonna acquire, and we're gonna lean on that segment. So we see still growth for us across the pyramid, and we're tackling it in a very deliberate way, understanding what is that profile of customers that are gonna start with us and grow with us or stay with us in what's right for their business. But we look at a lifetime for these customers and how they might evolve, and we want them to stay on our platform. Got it. That makes complete sense. I do wanna ask about mid-market and some of those capabilities, but I guess before going there, I do wanna ask about price. And I think one of the questions that we get from investors is: how do you think about the sustainability of leveraging price as a driver of growth? And I guess, at what point do you see pushback from customers that, you know, they aren't able to digest the price increases coming through? Yeah. I actually been asked quite a few times about price today, and you know, and I just wanna maybe answer this like, you know, first of all, explain that we do have principles by which we decide on price, and we decide on price increases. And, fundamentally, at the end of all of this, what we look is what we say, price to value, is that we continue releasing features, we continue adding value, and we wanna make sure that we price the value. Another thing that we have is that we have different offerings that are right for different type of customers. We talked about solopreneur at the lower end, and we talked about, you know, QuickBooks Advanced and mid-market at the higher end, right? So, we believe customers can find the right home at our platform, as you know, because we have multiple offerings. This allows us, obviously, to be clear and flexible with, like, how we think about price. We're putting value in higher SKUs, and we are priced for them. So, with that in mind, as we looked at price to value, we saw we have an opportunity in the last few years, and we looked at price increases, and then we've done the same this year. When we do that, we actually have a rigorous playbook that we are working off to go after these price increases. This starts from communication, starts with bringing our ecosystem of accountants and others to help us with the change. It's then, like, making sure we monitor, we answer customer questions, and I wanna say the good news is that we rarely seen any negative impact from these price increases, and we actually know, especially on the higher end, that we still have room to grow with price on in those. We constantly innovate in those areas, so I would say yes, there is part of a strategy, price to value, and we still have room. We don't feel like we tapped off, and that's kind of also what we have been monitoring throughout the years of the reaction of our customers. Okay. No, that's great to hear. Maybe shifting gears a little bit, I do wanna focus on the mid-market strategy, 'cause it feels like that is a big emphasis and focus for you all right now. I guess, how far up can Intuit go today up into the mid-market? And I guess, what are kind of the unlocks that help your platform move into the next tier of customers and capture, you know, the next, I don't know, 100, 500, 500-1,000 employee kind of customers? Yeah. So, traditionally, we define mid-market as 10 to 100 employees, but, you know, this is really just a way to express and be able to capture what we say, a bigger customer, a more complex customer. So really the way you should think about it, that mid-market is about going after bigger, more complex customers, and we use the number of employees as approximation. But we don't view it as a ceiling. We're not saying, "Oh, you can't use our products, but you have 102 employees, so we're not gonna sell to you," right? So it's just more a way for us to gauge our TAM and to gauge kind of what customers we should sell to. So, that's about kind of where we are tackling. And as we looked at our mid-market customers, I would say we focus in on two areas. First area is to make sure our product really fits those customers, and we do it in. And the second area is go-to-market. But let me start from product. Sure. On the product side, we look at making sure that we understand. And by the way, increasingly, we always talked about our platform, but increasingly, our strategy is be the platform in which businesses run their business daily, and where we help them increase their revenue and profitability. And as we look at that platform, we understand what are the different jobs to be done for small businesses, and we are going after the different tasks, the different jobs that small businesses need to do in order to run their business. And that's kind of our portfolio of services, is the way to think about it. And as we look for mid-market, we see two phenomena. One is they need more depth across the jobs to be done. Mm-hmm. You know, they need more modules, they need more sophisticated features. Like for example, they need bulk type of features. Like, they wanna do things in a batch. They wanna do things like several things at a time. They wanna set recurring versus, like, one time, so we see more of that. They need more sophisticated reporting, and then we also look at how we connect the platform for them more seamlessly, so for example, the reporting can really yield much more insight for them beyond what they might see today, so understanding their needs, there's sometimes they have... we discover new modules that they need. We recently added benefits. It's like we heard from customers, this is through partnerships, by the way. We heard from customers, this is something that they need, and we went ahead and partner and added that. So deepening each one of these jobs, connecting the dots with seamless transition, integration across these, and that's on the product side and then on the go-to-market side is really about how we are approaching those mid-market customers, and making sure that we actually have a go-to-market that's right for them. They wanna have more of a relationship with us, with us. We build a sales team that can go after this, these mid-market customers and can sell to them proactively. We actually call customers, which we haven't done before. Those are the kind of things we are doing on the go-to-market side, from marketing to sales, to then services and support, and making sure we have the support structure that they need with account management, with more dedicated support. Those are the kind of things that we're hearing from mid-market customers on the go-to-market side that we are investing in, to make sure we can really be helpful for these customers. Okay. That makes sense there. I guess maybe focusing on the product side there, I guess, what are kind of like the key areas in the roadmap that you feel like still needs to be done that can help you expand and execute on that mid-market opportunity? Like, are there certain gaps, or as you kind of already put it, you've kind of already addressed some of those, but what are kind of the further unlocks that will help you on that move-up market? Yeah, one of the things we heard from customers is around multi-entity. They can do multi-entity today with our product, but they ask for a solution that is more out of the box and make it seamless. And those are the kind of things that we build and we're building, and that's actually a platform play because then they need it across the platform. They ask for more sophisticated reporting. An example would be, show me my profitability and other things. So, those are the kind of things they're asking, and I mentioned some more on the workforce management, things like benefits, so we created that. And then, like, in the features themselves, on Bill Pay, for example, our more advanced billers want, like, you know, being able to have bills, like, more and more bills that are, like, more volume. Mm-hmm. They need certain, like, features there to help them with basically more volume of bills, how they pay for them, different kind of vendors, how they connect to their system, so we're building those features that we have heard from our customers about. That makes complete sense. I do wanna ask about the AI investments that Intuit has made, and I think as former CTO and largely leading that initial effort, it would be great to get your perspective on this. So can you maybe talk about the underlying AI stack? Where does Intuit differentiate versus others? And I guess, what parts do you own versus maybe leveraging third parties for as part of your AI stack? Yeah. I always enjoy AI questions, but I need to be careful not to rabbit hole, so somebody ring the bell if I'm, you know. So, joking aside, you know, one of the things that we declared about a year ago is GenOS, which is a way for us to really offer Gen AI to our customers. And what we've done is we created that operating system that allows us to plug in different LLMs, and then allows us also to easily connect to services we had in our system. So you can not only use an LLM, but you can use it within a workflow very easily. So a lot of companies today, they have hard time refactoring their platform to use with Gen AI. And what we have done is we said, "Oh, here is like a wrapping, or here's a way to take a traditional service and make it available for, like, Gen AI." So you can easily create Gen AI-based experiences, but also use the depth of your platform with different modules. So that's kind of GenOS. So what this allows us is to use the different LLMs in the market, and we use actually multiple of them. We do use OpenAI LLMs and a few of them, and we also have our own LLM based on Llama that we have developed, and we use those LLMs in different setups, depending on the different like, you know, the best LLM for the need. Mm-hmm. Importantly, one of the things that's nice about Gen AI is also build privacy and security into it. And then, like, you know, it just makes it easier for our developers to develop experiences super fast, as opposed to really worry one feature at a time, or what to do about security, what to do. It's, like, all built in. They actually use a tool that we call GenStudio that allows them to develop, and all this goodness that I told you, it's already there. They can select the LLM, they can connect to services. You know, we have the privacy, security is all built in. Right. Actually, we've seen dozens of experiences already in production. Hopefully, that wasn't too technical. No, that was, I think it was great. I guess maybe, I guess the question probably is, you know, you have all this functionality, how do you monetize it? Where do you see the use cases to potentially pull that in and drive revenue for both Intuit and also for the SMB group, specifically? Yeah. We have multiple ways of monetizing. The first one is we actually believe this helps us with attracting more customers. One scenario where we deployed Gen AI, and we're scaling. Some of our experiences, they're already at scale, but most of them are still, like, in different phases of scale. But, you know, we deployed Gen AI in an experience that allows us to simplify the onboarding and to just kind of, like, ask for a minimal amount of information, and then with that, just being able to pull the rest of the data and kind of a speed up onboarding. Those kind of things help us with acquisition of customers. Also, customers knowing that we have Gen AI and that we're competitive is attractive to customers and they wanna use us. So like, so the first thing is include the- i ncrease the number of customers. The second thing is, discovery of services and ARPC. Very concrete examples is with Gen AI, we're actually using our data to surface at the right moment, at the right moment of need, very personalized information for our customers. Like, for example, we could see a customer actually being on the transaction page on our platform, and we could, with Gen AI, surface the idea that they could use help, or we could see that their cash flow is low, and we can say, "Do you wanna connect to an expert to actually get some help? Because we see your cash flow is low, or like you're about to hit payroll." So we can use personalized data and service the customers at the moment in need, a very specific suggestion for help. We actually, again, started deploying that. I gave several examples with QuickBooks Live, but we do it for other things like payroll- Mm-hmm. ... capital, et cetera, and that really helps us expand ARPC. As an example, of course, this is, like I mentioned, also a gateway to Live and ability to connect to Live experts. And, last, we also look at direct monetization. We already have GenAI for higher SKUs on Mailchimp, and we're also gonna continuously explore direct monetization with GenAI. Okay. So in your view today, it's really about driving cross-sell and upsell and get people to adopt more of the Intuit product set? Correct. As well as we do see direct monetization, we think that would be, you know, something we can do. And Mailchimp are already doing that, and then we could. We see it as something that helps with overall adoption of our ecosystem to begin with. Okay. No, that makes sense. I do want to ask about Mailchimp. I think there's been a lot of talk around a combined CRM product there. I guess, kind of, where are we on that cross-sell opportunity, that potential, and that kind of bigger combined product coming out? Yes. Mailchimp does play a important role for us, and the reason for adding Mailchimp to our portfolio still exists. It is about getting, growing, and managing customers, and that's what Mailchimp helps us do. It was a very important component for our customers because it was very important for our customers to manage and grow their customers, and we needed to add that. We didn't have that. So it's a critical part. It also helps us bridge the data between Mailchimp and QuickBooks, and we've been building a CRM. We had to go and make sure we fix some foundational things in Mailchimp, but we actually also developed things like the Revenue Intelligence engine, which we just released with Mailchimp, and it's gonna be available for QuickBooks. And what that allows us is to proactively seek revenue opportunities for our customers. We see great engagement of customers with it. And then, like you mentioned, CRM and making sure that Mailchimp is part of our overall platform, and easily can be used by our customers, discovered by our customers, and we're extending the functionality to actually include CRM in addition to marketing and the features it has today. Okay. No, that makes, that makes complete sense. I do wanna ask a little bit on the Live opportunity. I guess, how do you kind of view that for what that means for the SMB segment? I think it's maybe a little bit better understood on the consumer side of the house, but how do you view that and the impact that has on the SMB side? Yeah, it's interesting, because actually, being a small business sometimes could be scary and terrifying. Yeah. And what we actually, when we talk to small businesses, they actually tell us that the biggest thing they have is lack of confidence. They're not sure if what they do is right, they're not sure what other businesses are doing, and actually, having somebody to talk to is critical for small businesses. We identified that as an opportunity. Like I said, we have the same platform, so we're able to try it out, and it's actually been a feature that really resonated with customers. We had to find the right kind of angle. But just this year, for example, we went for Do It With Me- Mm-hmm. -which basically means that this is not just full service. You are still in the driver's seat, but we can do something with you. And we expanded to more services, like for example, I mentioned business tax. And with all of this, we actually saw quadrupling of our uptake of Live. So we're very optimistic of where this is going. And Kim is looking at me. Did I quote the wrong number? Tripling. Okay, I was wondering, is it tripling or quadrupling? Okay, tripling. Scratch that. Tripling, which is still over tripling of our QuickBooks Live adoption, and that's been very encouraging. And by the way, the retention on that is also very high, so it's promising. It's very promising. Okay. No, that's, that's great to hear. I think we're getting close on time. I think we've got about a minute left here, but I do wanna ask about, yeah, there's a lot going on in the portfolio today, a lot of investments you're making. You know, let's say we're at Citi Tech Conference in five years, you know, how does the GBS segment look different in 2030 versus, you know, where we're at today, and where do you see the most kind of opportunity or potential based on what you're investing in? Yeah. What I'm working on with the team is exactly kind of what I shared. It's that full platform, end-to-end platform for small businesses, mid-market businesses, to... for businesses to run their business every single day, where they can increase their revenue and profitability. And hopefully, what I want us to-- what I'm working towards is having that platform adopted. First of all, we fully complete that. It's adopted by customers, from solopreneurs all the way to mid-market, and we continue to be the de facto must-have platform for these businesses. So hopefully, we can see a lot of growth coming from that, from our strategy. I'm very bullish on it. Okay, awesome. I think we're at time here, but Marianna, thank you so much for being here. I think we all learned a lot about the GBS segment, so really appreciate having you here. Thank you so much for having me. All right. Thanks, everybody.