Credit Karma and Mailchimp has allowed Intuit to ‘leap forward five to ten years’: Intuit CEO

Sasan Goodarzi, Intuit CEO joins Yahoo Finance’s Brian Sozzi and the Yahoo Finance Live panel on the news of Intuit acquiring Mailchimp for about $12B,

Video transcript

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ZACK GUZMAN: Welcome back to Yahoo Finance Live. Today, big news for the maker of TurboTax. Parent company Intuit announcing the acquisition of Mailchimp, the email service for businesses out there, for $12 billion. And the cash and stock deal going to give the company a big boost, but how big of a boost?

Well, here to discuss that with us is the CEO of Intuit, Sasan Goodarzi joining us on the program once again, alongside Yahoo Finance's Brian Sozzi. And Sasn, last time you were on, just only a couple of weeks ago. We were talking about acquisitions and whether or not that was the best way to go for growth. Now you got 12 billion reasons to say that Mailchimp is the right way to go. So what are they?

SASAN GOODARZI: Well, first of all, thank you both for having me. You know, I tell you, we're very excited about Mailchimp. For us, it's a game changer. And I'll start with customers. You know, one of the things that we talk a lot about is customers, 50% of them go out of business after five years. 2/3 of customers tell us that their biggest issue is actually getting customers, and the second biggest issue is their cash flow.

And this gives us the opportunity really in one place to help customers be able to take their business online, market their business with marketing automation, manage their customers with CRM capabilities, and then put the power of QuickBooks at their fingertips so they can send estimates, invoicing, payments, access to capital, and of course, make sure that their books are right, which is what we've been known for, for years.

But I'll tell both of you, the magic in this is on top of what I just shared. And that is for the first time, a small business can have their customer data and purchase data in one place. The reason that's really important is most small businesses do a lot of marketing, but they don't actually know your purchasing behavior, your transactional behavior. They don't know what you bought, when you bought it, how many things you bought, if there's opportunities for selling you more products, or if they should use very specific targeting.

So now we combine a Mailchimp's customer data and QuickBooks's customer data with customers' permission and put the power where it belongs, which is in the hands of small businesses. So we couldn't be more excited.

BRIAN SOZZI: Sasan, I want to take a step back for a second because in under a year, you will have put close to $20 billion of capital to work. Of course, you bought Credit Karma for a little over $7 billion. That's a lot of money. What are you-- what are some of your guardrails? How are you finding some of these targets? Because from the outside looking in, I mean, this is a major retransfor-- just a major transformation of Intuit.

SASAN GOODARZI: Yeah, it's a wonderful question. You know, first of all, it starts with what we declared three years ago, which is what matters most to our customers. You know, we truly want to help customers make ends meet, save money, and get out of debt. And we want to fuel the success of small businesses. So, one, we're very grounded on what matters most to our customers.

Secondly, you know, we're repositioning the company to be far more than a company that you can use to help get your taxes done right and do your accounting. We want to be a platform that consumers can rely on to achieve financial freedom and for small businesses to-- leverages us to fuel their success and power the global economy.

So, in that context, you know, we have very clear financial principles. You know, we want to grow the company double digits. We want our operating income to grow faster than our revenue. And we want to put our capital to great use. And both Credit Karma and Mailchimp really allowed the company to leap forward 5 to 10 years. They brought us capabilities that, frankly, we've experimented with, we've tried to build.

And what we realize is what they've done, we can also do. It'll just take us 10 plus years, which is why, you know, both companies are 13 plus years young. And it's time to market for us. So we feel very good about the capabilities that we're bringing on. And this is all about acceleration now that we have these capabilities to do things for customers that, you know, we never imagined possible.

BRIAN SOZZI: A number that stood out to me, Sasan, is you're paying out $200 million of retention bonuses in terms of, I would imagine, restricted stock units. Is one of the fears there after you close this deal that you would lose employees? And Mailchimp has been a private company for a while, a very creative company. And we have seen this before. When you close these deals, a lot of these creative folk go out and try to create another company.

SASAN GOODARZI: Yeah, for us, everything comes down to employees. I mean, really, we're buying a lot of capabilities, but what's behind those capabilities is people. And that's what Intuit stands for. It's a culture that we've built for the last 38 plus years. And it's very similar to what we did with Credit Karma. It's actually playing offense and being on our toes and not playing defense. You know, we believe that every employee should really benefit from equity so that when they do amazing work for customers, they can enjoy our stock price over time going up.

And in fact, not only Credit Karma has done an amazing job of retaining their employees, they're actually growing rapidly to build out the capabilities that we need. This is the same thing with Mailchimp. In fact, one of the things that we're very excited about, in addition to the $200 million that you just cited, is they don't have an equity plan at Mailchimp. And we're going to be bringing them onto our Intuit benefits and Intuit equity plan, so that every employee can actually participate as part of their total compensation and equity.

So this is actually us being on our toes. And we're excited about Atlanta being a hub for Intuit. And so we're really excited about bringing on more talent in Atlanta to really help us innovate across the company.

ZACK GUZMAN: Yeah, Sasan, as Sozzi points out there, close to $20 billion in money you spent. This is a cash and stock deal. And last time you were on, just a few weeks ago, we were talking about the way that you were increasing your share buybacks, getting, what, $1 billion additionally and then $2 billion cleared by the board. I mean, talk to me about maybe your appetite to spend out there now that you've racked up this many in terms of chasing deals and stock buybacks, what it looks like in terms of appetite to further maybe acquire things out there now.

SASAN GOODARZI: Yeah, you know, first of all, this is not going to impact, over time, our dividends and stock buyback. You know, with that said, when we refreshed the company strategy in context of the customer problems that I just mentioned three years ago and then declared five big bets, two of our bets were the bets where we needed to build out most of our capabilities. Our third bet, which is called unlocking smart money decisions, and our fourth bet, which is about being the center of small business growth.

And both Credit Karma and Mailchimp really fulfill some of the capability areas that we wanted to play offense for our customers and to accelerate the company. So, you know, Mailchimp and Credit Karma, of course, naturally, get all of the attention. But we've also made aqua hires in the last three years. We've bought technology automation tools that has really fueled the innovation that we have across the company.

And we'll be very purposeful. These were two important capabilities that we needed. But as we look ahead for us, it's about delivering for our customers and time to market. And we'll always be very responsible in terms of how we put our capital to use.

ZACK GUZMAN: Mailchimp coming a long way from being the sponsor of the "Serial" podcast, now acquired for $12 billion. Sasan Goodarzi, congrats on the deal, man. Appreciate coming back on to chat with us today, alongside Yahoo Finance's Brian Sozzi. Thanks again for the time.