Financial software company Intuit (INTU 0.73%) dropped a surprise Thursday afternoon alongside its fiscal fourth-quarter earnings release. The company said both its chief executive officer and chief technology officer are stepping down at the end of the calendar year.
With both having helped drive business results that have sent the stock soaring, it would be difficult to overstate how instrumental these two executives have been to Intuit's success. As investors digest this news, here are the main takeaways about this shakeup that investors should know.
Intuit's QuickBooks Online. Image source: Intuit.
1. Brad Smith is sticking around
Though Intuit CEO Brad Smith is stepping down from his CEO role at the end of December, he is remaining with Intuit as executive chairman of its board of directors.
2. Smith served a long and accomplished tenure
After serving as Intuit's CEO for 11 years, it's not out of the ordinary for Smith to step down. During this time, Smith has helped the company double its customer base and top line while more than tripling earnings per share. Furthermore, investors were rewarded handsomely during this period, with a more than 600% gain between January 2008 and today. As Intuit was sure to point out, this return more than tripled the Nasdaq's rise over the same time frame.
"I'm extremely proud of what we've accomplished as a team," Smith said in a press release about the leadership change.
Smith continued:
We've transformed the company, delivered years of consistent growth and built a strong, enduring culture of innovation and self-disruption. We've also continued our long history of leadership development and built a deep bench of leaders who will make up the next generation of Intuit management. That includes a CEO successor in Sasan Goodarzi who is ready to take the reins of Intuit. With all this in place, the time is right for me to step down as CEO and continue serving the company in my role as Executive Chairman of the Intuit Board of Directors.
3. Intuit is promoting executives from within
Filling the roles of CEO Brad Smith and CTO Tayloe Stansbury are two important executives already serving vital roles within the company.
Intuit's upcoming CEO, Sasan Goodarzi, is currently overseeing the company's small-business and self-employed group, where the executive has served since May 2016. But Goodarzi has been working at Intuit since 2004, formerly in charge of the consumer tax group and serving as chief information officer.
Stepping up to take on Stansbury's position going into 2019 is the chief product development officer for Intuit's small-business and self-employed group.
"A former engineer and a captain in the Israeli Army, Tessel has proven leadership experience at both large companies as well as start-ups," Intuit said in a press release. "She held senior engineering leadership roles at General Magic, Ariba, VMware and Docker. While at VMware and Docker she had a chance to be at the forefront of significant technology transformations, including virtualization, cloud, containerization and DevOps."
QuickBooks Online. Image source: Intuit.
4. Smith and Stansbury are leaving on a good note
Intuit's CEO and CTO are leaving behind a business that appears to be firing on all cylinders. The company's fourth quarter ended the fiscal year with a bang. Revenue growth accelerated and both Intuit's top- and bottom-line results came in well above analyst estimates.
Revenue increased 17% year over year (an acceleration from 15% revenue growth in Q3) to $988 million. On average, analysts expected revenue of $952 million. Non-GAAP earnings per share soared 60% year over year to $0.32, crushing a consensus analyst forecast for $0.23.
Smith credited the company's accelerated growth in fiscal 2018 to its recently refreshed One Intuit Ecosystem strategy, which aims to serve customer needs with an increasingly integrated suite of financial products. Fortunately for shareholders, the incoming CEO was "a key architect" of Intuit's One strategy, Smith noted during the company's earnings call.
