Sasan Goodarzi
Chief Executive Officer at Intuit
Great. Thanks, Kim, and thanks to all of you for joining us today. As you read in our press release, we announced that Michelle will step down from the CFO role and plans to retire from Intuit. I'm pleased to share that Sandeep Aujla will assume the role of Chief Financial Officer on August 1, 2023. It is a well-crafted succession plan that we'll cover more in a few minutes, but let's first get started with the business. We had another strong quarter as we executed on our strategy to be the global AI-driven expert platform, powering prosperity for consumers and small businesses. Second quarter revenue grew 14%, fueled by small business and self-employed group revenue growth of 20%, and consumer revenue growth of 26%. This year, we are celebrating Intuit's 40th anniversary. We're incredibly proud of our history of reimagining the company and reinventing ourselves, which has enabled us to thrive during various technological shifts and economic cycles. Having successfully navigated multiple platform shifts over the years, including our largest transformation to artificial intelligence in the era of digitalization, we continue to be confident in our ability to fuel growth given our large TAM, low penetration, proven strategy, and five Big Bets. We are proud to be the global financial technology platform that powers prosperity for the people and communities that we serve.
I will first start with some thoughts about the tax season and our business in the current macro environment. As you know, the scale of our platform and rich data gives us unique insights into the lives and spending habits of 100 million-plus customers. Our small business performance continues to be very strong despite uncertainty in the broader macro environment. We continue to see strength in the areas that have the greatest impact, including the growth of our online mid-market customers contributing to strong subscription revenue and higher ARPC. In Q2, growth in both the number of companies running online payroll and the number of employees paid on our platform remained strong. Total online payments volume grew 25%, moderating some from the first-quarter. We're seeing strong growth in the number of payment enable invoices set by our small business customers, a good sign that our innovation is continuing to drive digitization. The shift to digitalization and the power of our small business platform including QuickBooks and Mailchimp resonate with customers as they grow their business and improve cash flow. We continue to observe that our AI-driven expert platform is critical to our customers' success.
Now turning to tax. We're confident in our strategy to both extend our lead in the do-it-yourself category and transform the assisted category. Following a highly successful extension season last year, we've doubled down on our learnings to further accelerate innovation to better serve our customers. First, we're evolving our TurboTax brand to increase awareness that we're the best alternative in the assisted tax segment for consumers and small businesses, combined $30-billion TAM. Our new campaign "Come to TurboTax and don't do your taxes" is resonating with our customers and is the key to our strategy as we focus on attracting customers from the assisted segment.
Second, we launched a number of high-impact TurboTax Live innovations. As part of our second big bet, we're solving one of the largest problems our customers face: lack of confidence, by connecting people to experts virtually. Building on our learnings from last season, we're continuing to use AI to bring in our customers' data and match them to the right experts to help customers get the maximum refund they deserve with confidence. To help customers finish their taxes even more quickly, we've created a new gamified experience focused on efficiency, backed by our lifetime guarantee. We evolved our full-service offerings so filers can have their returns completed in a single virtual session. We're off to a great start in tax and we continue to be confident in our game plan to win.
Now shifting to our five Big Bets, I would like to highlight some examples of recent progress. 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 second big bet is to connect people to experts. In addition to what I shared about TurboTax Live, we've achieved product market fit with QuickBooks Live, which we expect could help us penetrate non-consumption and drive breakthrough adoption. We're evolving our QuickBooks Live into a portfolio of expert services and are embedding these services as part of our lineup, similar to TurboTax Live. In the second quarter, we launched a free expert-guided setup available for all new QBO customers leveraging our virtual expert platform. Early results indicate that customers using this offering have more confidence in and awareness of our full ecosystem of services, which translate into better retention and higher adoption of our service offerings.
With our third big bet, our vision for Credit Karma is to become the comprehensive self-driving financial platform that propels our members forward wherever they are on their financial journey. We're innovating across all verticals and continue to have confidence in our long-term growth expectations of 20% to 25% percent despite near-term headwinds. I'll share a few examples. We're innovating to help members get faster access to cash and make financial progress, including improving their credit score with the help of Credit Karma Money. For example, with the integration of TurboTax and Credit Karma, approved members can get money in their hands in as little as one minute after the IRS accepts the return. As this is the largest paycheck of the year for many, this enables them to take care of immediate expenses, pay down debts, or build savings. Members also receive recommendations for how to achieve their financial goals, such as creating an emergency savings fund with our high-yield savings account, or building credit with credit builder. Members who activate credit builder see an average score increase of 21 points in as little as 30 to 45 days. Members who use Credit Karma Money show higher engagement on the credit Karma platforms.
We're driving more confidence for members with Karma Guarantee. As a reminder, Karma Guarantee offers indicate that members will either be approved or they'll receive $50. At the end of the quarter, 59% of members were eligible for at least one Karma Guarantee offer. With Mint now part of the Credit Karma platform, we're beginning to build a new experience for members with prime credit scores, which Credit Karma is underpenetrated in today. Leveraging Mint, we see the opportunity to develop personalized product recommendations leveraging networks, transaction and spend data, to highlight the product benefits that matter most to these numbers.
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 omnichannel world. We continue to innovate to digitize money movement from creating an estimate to invoicing a customer, to getting paid. Today, easier discovery, auto-enabled payments, instant deposit, and getting paid upfront all helping drive adoption of our payments offering. And we're making meaningful progress in 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. This quarter, we launched QuickBooks Business Network to millions of QuickBooks customers to further digitize B2B payments in the U.S. We're also building our bill pay functionality in QuickBooks and plan to launch this capability in the future.
Now 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; second, disrupting the mid-market by developing a full marketing automation, CRM, and e-commerce suite; and third, accelerating global growth with a holistic go-to-market approach. This quarter, we made some great progress against these priorities. To help our small businesses that customers run and grow their business in one place, we launched a real-time data sync that brings QBO data such as invoices, sales receipts, items, customers, and addresses into Mailchimp. This puts customer and purchase data together all in one place to power our customers' success.
To help our customers plan, execute, and track their marketing campaigns across multiple channels in one place, we launched a new capability called Campaign Manager. This reduces the number of tools needed to manage marketing and assess performance across channels. And to drive accelerated global growth and execute our refreshed international strategy, we're translating the product into multiple languages including Spanish and Portuguese. And beyond the progress we've made on these priorities, the product lineup innovation, assisted onboarding, and improved first-time use we shared last quarter is driving green shoots and paid conversion, which was up two points year-over-year in the second quarter.
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. As I mentioned earlier, online mid-market customer growth remains strong, and we're seeing increased adoption of QBO Advanced, payments, and payroll driving ARPC expansion as we serve these customers across our full ecosystem of services. Wrapping up, we feel confident in our AI-driven expert platform strategy and five Big Bets and in an uncertain macro environment, the benefits of our global financial technology platform are more important and more mission-critical than ever to our customers.
Now, let me hand it over to Michelle.
