Lean, modular, monthly subscription products like "Quickbooks Self-Employed" represent future growth opportunities for Intuit. Image: Intuit.com

Online tax and accounting software provider Intuit (NASDAQ:INTU) reported fiscal fourth-quarter 2015 earnings Thursday of $0.05 per share, as compared to a loss of $0.10 in Q2 2014. Revenue for the full year landed at $4.2 billion, which was below the raised guidance of at least $4.4 billion, which the company issued in Q3. Intuit booked full-year net income of $365 million versus $907 million last year. 

With the earnings release, the company announced that it would divest itself of three product lines: Demandforce, QuickBase, and Quicken, in order to grow core revenue streams. A company statement explained that Intuit had decided to sell the products, "to focus on and invest in businesses that strengthen the ecosystem and align with two strategic goals: to be the operating system behind small business success, and to do the nations' taxes in the U.S. and Canada." 

The combined revenue of the three discontinued businesses is approximately $250 million, or about 5.5% of projected 2016 revenue of between $4.5 billion to $4.6 billion. While some may wonder at the decision to jettison personal finance program Quicken, which has long been a visible component of the Intuit brand, it simply doesn't have the growth potential of the suite of accounting, payroll, and tax services the company offers online.

As if to punctuate this reality, Intuit's press release trumpeted the continued rampant growth of its cloud-based accounting software, Quickbooks Online, or QBO. QBO's subscriber base grew 57% versus the prior-year quarter, to end the year at nearly 1.1 million subscribers. Non-U.S. purchasers are still outpacing domestic customers, with subscriptions rising during the quarter at a rate of 135%, to a total of 198,000.

Thursday's earnings release also appeared to confirm that Quickbooks Self-Employed, a scaled-down version of Quickbooks Online aimed at freelancers and independent contractors, is off to a swift start. Introduced in January 2015, Quickbooks Self-Employed's paying user base rose 67% during the quarter, to a total of 25,000.

Why the "Online Ecosystem" is so important to Intuit
Extensions of the Quickbooks Online service like Quickbooks Self-Employed represent the future of Intuit's accounting software revenue. Quickbooks Self-Employed is a lean, subscription-based service that provides very basic income and expense tracking for microbusinesses.

Yet the product is also modular by design. A Quickbooks Self-Employed customer can opt to bundle his or her service with Intuit's TurboTax. And by withholding key features such as invoicing and check writing as a trade-off for entry-level pricing -- as low as $9.99 per month -- the Self-Employed service is built to migrate customers toward various QBO subscriptions as a business grows.

Thus, it makes sense that Intuit would want to trim non-core revenue streams for the two services, tax and accounting, which have built-in growth opportunities for the foreseeable future. And products like Quickbooks Self-Employed, which are basically software derivatives of existing code (QBO), can be developed much more quickly, and more profitably, than non-related revenue streams.

Other news: Intuit hikes its dividend -- are more increases to come?
As I discussed in an earnings preview earlier this week, Intuit's move toward cloud-based accounting services, typified by the rapid growth of Quickbooks Online, has been extremely beneficial to the company's cash flow. QBO is primarily a subscription product: customers pay monthly for the basic product plus any add-ons. As these recurring revenues become a greater part of Intuit's annual sales, the predictability of its cash flow increases.

Thursday, Intuit announced a bump in its quarterly dividend payout from $0.25 to $0.30, an increase of 20%. This will take the current yield up to just more than 1.1%. During the year, the company also completed $1.25 billion of share repurchases, or a little less than half of the current $2.6 billion authorization.

Shareholders can reasonably expect that Intuit will complete the remaining share repurchase authorization in a similar time frame as its first set of repurchases -- that is, between the next four to five quarters. If the company's board doesn't replenish the authorization with a larger repurchase program in 2016 or 2017, Intuit may very well continue to increase its dividend aggressively.

The overall business is stable and growing, and management has shown a willingness to share a good portion of its cash spoils with shareholders in 2015.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.