For the fiscal year ended July 31, 2016

For the transition period from                                          to                                          

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

The aggregate market value of Intuit Inc. outstanding common stock held by non-affiliates of Intuit as of January 29, 2016, the last business day of our most recently completed second fiscal quarter, based on the closing price of $95.51 reported by the NASDAQ Global Select Market on that date, was $23.6 billion.

There were 257,938,052 shares of Intuit voting common stock outstanding as of August 25, 2016.

Portions of the registrant’s definitive proxy statement for its Annual Meeting of Stockholders to be held on January 19, 2017 are incorporated by reference in Part III of this Annual Report on Form 10-K.

FISCAL 2016 FORM 10-K

This Annual Report on Form 10-K contains forward-looking statements that involve risks and uncertainties. Please see the section entitled “Forward-Looking Statements and Risk Factors” in Item 1A of this Report for important information to consider when evaluating these statements.

Intuit Inc. creates business and financial management solutions that help simplify the business of life for small businesses, consumers, and accounting professionals. With flagship products and services that include QuickBooks and TurboTax, we help customers solve important business and financial management problems such as running a small business, paying bills, and filing income taxes. ProSeries and Lacerte are Intuit’s leading tax preparation offerings for professional accountants. We had revenue of $4.7 billion in our fiscal year ended July 31, 2016, with approximately 7,900 employees in major offices in the United States, Canada, India, the United Kingdom, Singapore, Australia, and other locations.

Intuit was incorporated in California in March 1984. We reincorporated in Delaware and completed our initial public offering in March 1993. Our principal executive offices are located at 2700 Coast Avenue, Mountain View, California, 94043, and our main telephone number is 650-944-6000. Our corporate website, www.intuit.com, provides materials for investors and information relating to Intuit’s corporate governance. The content on any website referred to in this filing is not incorporated by reference into this filing unless expressly noted otherwise. When we refer to “we,” “our” or “Intuit” in this Annual Report on Form 10-K, we mean the current Delaware corporation (Intuit Inc.) and its California predecessor, as well as all of our consolidated subsidiaries.

We file reports required of public companies with the Securities and Exchange Commission (SEC). These include annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and other reports, and amendments to these reports. The public may read and copy the materials we file with or furnish to the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. We make available free of charge on the Investor Relations section of our corporate website all of the reports we file with or furnish to the SEC as soon as reasonably practicable after the reports are filed or furnished. Copies of this Annual Report on Form 10-K may also be obtained without charge by contacting Investor Relations, Intuit Inc., P.O. Box 7850, Mountain View, California 94039-7850 or by calling 650-944-6000.

We organize our businesses into three reportable segments – Small Business, Consumer Tax, and ProConnect (formerly known as Professional Tax).

Small Business: This segment targets small businesses and the accounting professionals who serve and advise them and includes QuickBooks financial and business management online services and desktop software, payroll solutions, and payment processing solutions. It also includes third-party applications that integrate with our offerings.

Consumer Tax: This segment targets consumers and includes TurboTax income tax preparation products and services.

ProConnect: This segment targets professional accountants in the U.S. and Canada, who are essential to both small business success and doing the nations’ taxes. Our ProConnect professional tax offerings include Lacerte, ProSeries, ProFile, and ProConnect Tax Online.

We continue to make significant progress in this environment. Connected services (total service and other revenue) generated $3.4 billion, or 73 percent, of our total revenue in fiscal 2016, compared with about 50 percent of our total revenue eight years ago.

During fiscal 2016 we offered our products and services in the three segments described in “Business Overview” above. The following table shows the classes of similar products or services that accounted for 10% or more of total net revenue within the last three fiscal years.

Our products and services are described below. International total net revenue was less than 5% of consolidated total net revenue for fiscal 2016, fiscal 2015, and fiscal 2014. See Item 1A, “Risk Factors and Forward-Looking Statements – Our international operations are subject to increased risks which may harm our business, operating results, and financial condition,” for a discussion of risks relating to our international operations.

For financial information about our segments, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 and Note 14 to the financial statements in Item 8 of this Annual Report.

QuickBooks Online. Our QuickBooks Online offerings bring small business users and accounting professionals financial management tools that are designed to be easy to use and are accessible from personal computers and mobile devices. QuickBooks Online users can track income and expenses, create invoices and estimates, manage and pay bills, and review a variety of financial reports. Our online offerings for small businesses include QuickBooks Online Simple Start, for smaller, less complex businesses and QuickBooks Online Essentials and QuickBooks Online Plus, for progressively larger and more complex businesses. Our online offering for accounting professionals is QuickBooks Online Accountant, which provides the tools and file-sharing capabilities they need to efficiently complete bookkeeping and financial reporting tasks.

Online Payroll Solutions. We offer two online payroll solutions that are sold on a subscription basis and seamlessly integrate with our QuickBooks Online and QuickBooks Desktop offerings. QuickBooks Online Payroll includes online payroll processing, direct deposit of employee paychecks, payroll reports, electronic payment of federal and state payroll taxes, and electronic filing of federal and state payroll tax forms. QuickBooks Full Service Payroll provides comprehensive payroll services to QuickBooks customers who prefer not to perform payroll tasks themselves.

Online Payments Solutions. We offer a full range of merchant services to small businesses that include credit card, debit card, electronic benefits, and gift card processing services; check verification, check guarantee, and electronic check conversion, including automated clearing house (ACH) capabilities; and Web-based transaction processing services for online merchants. In addition to transaction processing services, we provide a full range of support for our clients that includes customer service, merchant and consumer collections, chargeback and retrieval support, and fraud and loss prevention screening.

Intuit Developer Group. The Intuit Developer Group provides the tools third-party developers need to create online and mobile applications that personalize and add value to QuickBooks. The platform allows developers to build applications that integrate with QuickBooks data and solve the unique needs of our customers. Developers can create applications using any development platform they choose, and must pass a standards and security check before offering their programs to customers. All applications are available at apps.com. Here QuickBooks users can find, buy, and use applications connected to the platform. A growing number of companies offer applications built for the platform, including PayPal, Shopify, Square, and Bill.com.

QuickBooks Desktop. Our desktop software offerings include QuickBooks Desktop Pro and QuickBooks Desktop for Mac, which provide accounting functionality for small businesses; QuickBooks Desktop Premier, which provides small businesses with advanced accounting functionality and business planning tools; and QuickBooks Enterprise, which is designed for larger businesses. QuickBooks Desktop Pro Plus, QuickBooks Desktop Premier Plus, and QuickBooks Enterprise with Hosting are subscription versions of these offerings. QuickBooks Desktop Premier and Premier Plus and QuickBooks Enterprise provide industry-specific reports and features for a range of industries, including Contractor, Manufacturing and Wholesale, Nonprofit, and Retail.

Desktop Payroll Solutions. QuickBooks Payroll is a family of products sold on a subscription basis to small businesses that use QuickBooks desktop software and prepare their own payroll or want some assistance with preparing their payroll. It is also sold to accountants who use QuickBooks desktop software and help their clients manage their payrolls. The product family includes:

Desktop Payments Solutions. We offer a full range of merchant services to small businesses that include credit card, debit card, electronic benefits, and gift card processing services; check verification, check guarantee, and electronic check conversion, including automated clearing house (ACH) capabilities. In addition to transaction processing services, we provide a full range of support for our clients that includes customer service, merchant and consumer collections, chargeback and retrieval support, and fraud and loss prevention screening.

QuickBooks Technical Support. We offer several technical support options to all of our QuickBooks customers. These include support plans that are sold separately and priced based on the length of the plan. We also offer a limited amount of free technical support assistance to customers, a free self-help information section on our QuickBooks.com website and free access to the QuickBooks Community, an online forum where QuickBooks users can share information with each other.

Financial Supplies. We offer a range of financial supplies designed for individuals and small businesses that use QuickBooks. These include standard paper checks and Secure Plus checks with CheckLock™ fraud protection features; envelopes, invoices and deposit slips; and business identity products such as business cards and stationery. We also offer tax forms, tax return presentation folders and other supplies for professional tax preparers.

Tax Return Preparation Offerings. For the 2015 tax season we offered a range of software products and services that included TurboTax Basic, for simple returns; TurboTax Deluxe, for taxpayers who itemize deductions; TurboTax Premier, for taxpayers who own investments or rental property; and TurboTax Home and Business, for small business owners. We also offered TurboTax Free Edition for the simplest returns. We offered live tax advice from U.S.-based tax professionals to TurboTax customers during the 2015 tax season. TurboTax Answer Exchange is an online forum where participants can learn from and share information with other users while preparing their income tax returns. For the 2015 tax season our online tax preparation and filing services were offered through the websites of thousands of financial institutions, electronic retailers, and other online merchants. Financial institutions can offer our online tax preparation and filing services to their customers through a link to TurboTax Online. Our TurboTax U.S. and Canada offerings consist of desktop, online, and mobile offerings.

Electronic Filing and Other Services. Our desktop, online, and mobile tax preparation customers can electronically file their federal and state income tax returns through our electronic filing center. For the 2015 tax season TurboTax customers had the option to receive their income tax refunds on a prepaid debit card that we provided through a partner. We also offered audit defense, audit support, and identity restoration services.

Intuit Tax Freedom Project. Under the Intuit Tax Freedom Project, we provide online federal and state income tax return preparation and electronic filing services at no charge to eligible taxpayers. For the 2015 tax season we provided approximately one million free federal returns under this initiative. We are a member of the Free File Alliance, a consortium of private sector companies that has entered into an agreement with the federal government to provide free online federal tax preparation and filing services to eligible taxpayers. See also “Competition – Consumer Tax Segment” later in this Item 1 for more information on the Free File Alliance.

We continue to make substantial investments in research and development, and we expect to focus our future research and development efforts on enhancing existing products and services and on developing new products and services, including new mobile and global offerings. We also expect to continue to focus significant research and development efforts on ongoing projects to update the technology platforms for several of our offerings. Our research and development expenses were $881 million or 19% of total net revenue in fiscal 2016; $798 million or 19% of total net revenue in fiscal 2015; and $714 million or 17% of total net revenue in fiscal 2014.

Multi-Channel Shop-and-Buy Experiences. Our customers increasingly use the Internet and mobile devices, such as smartphones and tablets, to research products and services. Some customers buy and use our products and services entirely online or through their mobile devices. Others purchase desktop products and services using the Internet. Still others make their final decision at a retail location. Although retail sales of our products and services are gradually declining as online distribution channels grow in importance, we continue to coordinate our websites, promotions, and retail displays to support an integrated, multi-channel, shop-and-buy model.

Direct Sales Channel. We sell many of our products and services directly through our websites and call centers. Telesales continues to be an effective channel for serving customers that want live help to select the products and services that are right for their needs. We also have a direct sales force that calls on U.S. and international accountant firms and seeks to increase their awareness, usage, and recommendation of our Small Business solutions.

Retail Channel. We sell our QuickBooks and TurboTax desktop software as well as payroll services and merchant credit card payment processing services at retail locations across the United States. We sell these products and services directly and through distributors to office supply superstores, warehouse clubs, consumer electronics retailers, general mass merchandisers, online retailers, and catalogs. In Canada and the United Kingdom we also rely on distributors and other third parties who sell products into the retail channel. The retail channel provides broad customer reach through retailer-sponsored advertising and exposure to retail foot traffic. This channel also gives us the opportunity to communicate our products, services, and messages through multiple touch points and allows us to serve our customers at relatively modest cost.

Online Mobile Application Stores. We distribute many of our offerings for mobile devices through proprietary online stores that provide applications for specific devices. These include the Apple App Store, which provides apps for the Apple iPhone and iPad, and Google’s Play Store, which provides apps for Android-compatible smartphones and tablets.

Other Channels. We have strategies to address the alliance partner and solution provider channels. We sell our consumer and small business products and services through selected alliance partners that help us reach new customers at the point of need and drive growth and market share by extending our online reach. Solution providers combine our products and services with value-added marketing, sales, and technical expertise to deliver a complete solution at the local level. As we expand our mobile and global offerings, we expect that strategic partnerships will become increasingly important to our business.

Small Business Segment. QuickBooks is the leading small business financial management software in the U.S. Our small business desktop products and services face competitive challenges from companies such as The Sage Group plc, which offers software and associated services that directly target small business customers. Our small business online products and services face competition from online accounting offerings from companies such as Xero, free or low-cost online accounting offerings, and free online banking and bill payment services offered by financial institutions and others. In our payroll business we compete directly with Automatic Data Processing, Inc. (ADP), Paychex, and many other companies with payroll offerings, including online payroll offerings. In our merchant services business we compete directly with large financial institutions such

Consumer Tax Segment. In our Consumer Tax segment, our future growth depends on our ability to attract new customers to the self-preparation tax category from tax stores and other tax preparers. In the U.S. private sector we face intense competition from H&R Block, which provides tax preparation services in its stores and a competing software offering. We also face competition from several other large tax preparation service providers, from a myriad of small tax preparers, and from numerous online self-preparation offerings, including Blucora’s TaxAct. In Canada, our TurboTax Canada offerings face competition from H&R Block, SimpleTax, StudioTax, and UFile. These competing offerings subject us to significant price pressure in both the U.S. and Canada.

ProConnect Segment. In the U.S., Lacerte professional tax offerings face competition from competitively-priced tax and accounting solutions that include integration with non-tax functionality. These include CCH’s ProSystems fx Office Suite and Thomson Reuters’ CS Professional Suite and GoSystems Tax. Our ProSeries professional tax offerings face competition from CCH’s ATX and TaxWise offerings, Drake, and other smaller providers. In Canada, our ProFile professional tax offerings face competition from CCH’s Cantax and Taxprep offerings and from Thomson Reuters’ DTMax and UFile Pro offerings. We also face growing competition from online tax and accounting offerings in the U.S. and Canada, which may be marketed more effectively or have lower pricing than our offerings for accounting professionals.

As of July 31, 2016, we had approximately 7,900 full-time employees in major offices in the United States, Canada, India, the United Kingdom and other locations. We also employ a significant number of seasonal and contract employees during the second and third quarters of our fiscal years to support our consumer tax customers. For example, at the peak of the 2015 tax season we employed approximately 1,100 seasonal employees. We believe our future success and growth will depend on our ability to attract and retain qualified employees in all areas of our business. We do not currently have any collective bargaining agreements with our employees, and we believe employee relations are generally good. Although we have employment-related agreements with a number of key employees, these agreements do not guarantee continued service. We believe we offer competitive compensation and a good working environment. We were named one of Fortune magazine’s “100 Best Companies to Work For” in each of the last fifteen years. However, we face intense competition for qualified employees, and we expect to face continuing challenges in recruiting and retention.

We have also started to increasingly utilize the distribution platforms of third parties like Apple’s App Store and Google’s Play Store for the distribution of certain of our product offerings. Although we benefit from the strong brand recognition and large user base of these distribution platforms to attract new customers, the platform owners have wide discretion to change the pricing structure, terms of service and other policies with respect to us and other developers. Any adverse changes by these third parties could adversely affect our financial results.

The Company is subject to federal, state and local laws and regulations that affect the Company’s activities, including, without limitation, areas of labor, advertising, tax, financial services, data privacy and security requirements, digital content, consumer protection, real estate, billing, e-commerce, promotions, quality of services, intellectual property ownership and infringement, import and export requirements, anti-corruption, foreign exchange controls and cash repatriation restrictions, anti-competition, environmental, health and safety. There have been significant new regulations and heightened focus by the government on many of these areas, as well as in areas such as insurance and healthcare (including, for example, the Affordable Care Act). Recent legal developments in the European Union have created compliance uncertainty and increased complexity regarding certain transfers of information from Europe to the U.S. In addition, governmental authorities around the world are considering a number of of legislative and regulatory proposals concerning data protection. Due to the uncertain international environment, we could acquire additional compliance obligations that could cause us to incur costs or require us to change our business practices in a manner adverse to our business. As we expand our products and services and revise our business models, both domestically and internationally, we may become subject to additional government regulation or increased regulatory scrutiny. Further, regulators may adopt new laws or regulations or their interpretation of existing laws or regulations may differ from ours as well as the laws of other jurisdictions in which we operate. These regulatory requirements could impose significant limitations, require changes to our business, require notification to customers or employees of a security breach, restrict our use or storage of personal information, or cause changes in customer purchasing behavior which may make our business more costly, less efficient or impossible to conduct, and may require us to modify our current or future products or services, which may harm our future financial results. For example, as our business continues to expand to new industry segments that may be more highly regulated for privacy and data security, and to countries outside the United States that have more strict data protection laws, our compliance requirements and costs may increase. We have incurred – and may continue to incur – significant expenses to comply with mandatory privacy and security standards and protocols imposed by law, regulation, industry standards or contractual obligations.

Our acquisitions have resulted in significant expenses, including amortization and impairment of acquired technology and other acquired intangible assets, and impairment of goodwill. Total costs and expenses in these categories were $34 million in fiscal 2016; $339 million in fiscal 2015, of which $149 million was classified as discontinued operations; and $25 million in fiscal 2014. Although under current accounting rules goodwill is not amortized, we may incur impairment charges related to the goodwill already recorded and to goodwill arising out of future acquisitions. We test the impairment of goodwill annually in our fourth fiscal quarter or more frequently if indicators of impairment arise. The timing of the formal annual test may result in charges to our statement of operations in our fourth fiscal quarter that may not have been reasonably foreseen in prior periods. The total costs and expenses for fiscal 2015 included goodwill and intangible asset impairment charges of $297 million, of which $149 million was classified as discontinued operations. At July 31, 2016, we had $1.3 billion in goodwill and $44 million in net acquired intangible assets on our balance sheet, both of which may be subject to impairment charges in the future. New acquisitions, and any impairment of the value of acquired intangible assets, may have a significant negative impact on our future financial results.

On February 1, 2016 we entered into a master credit agreement with certain institutional lenders for a new five-year credit facility in an aggregate principal amount of $1.5 billion. The master credit agreement includes a $500 million unsecured term loan and a $1 billion unsecured revolving credit facility that will expire on February 1, 2021. As of July 31, 2016, $500 million was outstanding on the term loan and no amounts were outstanding under the revolving credit facility. We may use the proceeds of any advances against the credit facility for general corporate purposes, including future acquisitions and share repurchases.

Our principal locations, their purposes, and the expiration dates for the leases on facilities at those locations as of July 31, 2016 are shown in the table below. We have renewal options on many of our leases.

We own buildings comprising approximately 224,000 square feet of the total square feet shown in the table above for our Mountain View, California headquarters facility. We also lease or own facilities in a number of smaller domestic locations and internationally in Canada, the United Kingdom, Singapore, Australia, and several other locations. We believe our facilities are suitable and adequate for our current and near-term needs, and that we will be able to locate additional facilities as needed. See Note 9 to the financial statements in Item 8 of this Annual Report for more information about our lease commitments.

Intuit’s common stock is quoted on the NASDAQ Global Select Market under the symbol “INTU.” The following table shows the range of high and low sale prices reported on the NASDAQ Global Select Market for the periods indicated. The closing price of Intuit’s common stock on August 25, 2016 was $110.00.

As of August 25, 2016 we had approximately 500 record holders and approximately 135,000 beneficial holders of our common stock.

We declared and paid quarterly cash dividends that totaled $1.20 per share of outstanding common stock or $318 million during fiscal 2016; $1.00 per share of outstanding common stock or $283 million during fiscal 2015; and $0.76 per share of outstanding common stock or $220 million during fiscal 2014. In August 2016 our Board of Directors declared a quarterly cash dividend of $0.34 per share of outstanding common stock payable on October 18, 2016 to stockholders of record at the close of business on October 10, 2016. We currently expect to continue to pay comparable cash dividends on a quarterly basis in the future; however, future declarations of dividends and the establishment of future record dates and payment dates are subject to the final determination of our Board of Directors.

Stock repurchase activity during the three months ended July 31, 2016 was as follows:

Note: All of the shares purchased as part of publicly announced plans during the three months ended July 31, 2016 were purchased under a plan we announced on May 19, 2015 under which we are authorized to repurchase up to $2 billion of our common stock from time to time over a four-year period ending on May 19, 2019. At July 31, 2016, authorization from our Board of Directors to expend up to $360 million remained available under that plan. On August 19, 2016 our Board approved a new stock repurchase program under which we are authorized to repurchase up to an additional $2 billion of our common stock.

The graph below compares the cumulative total stockholder return on Intuit common stock for the last five full fiscal years with the cumulative total returns on the S&P 500 Index and the Morgan Stanley Technology Index for the same period. The graph assumes that $100 was invested in Intuit common stock and in each of the other indices on July 31, 2011 and that all dividends were reinvested. The comparisons in the graph below are based on historical data – with Intuit common stock prices based on the closing price on the dates indicated – and are not intended to forecast the possible future performance of Intuit’s common stock.

In fiscal 2007 we issued $1 billion in senior notes and in fiscal 2012 we repaid $500 million of those notes when they became due using cash from operations. The remaining senior notes are due in March 2017. In fiscal 2012 through fiscal 2016 we acquired several companies and we have included the results of operations for each of them in our consolidated results of operations from their respective dates of acquisition.

To better understand the information in these tables, investors should read “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 7 of this Annual Report, and the financial statements and related notes in Item 8 of this Annual Report, especially Note 7, “Discontinued Operations.”

You should note that this MD&A discussion contains forward-looking statements that involve risks and uncertainties. Please see the section entitled “Forward-Looking Statements and Risk Factors” at the beginning of Item 1A for important information to consider when evaluating such statements.

In fiscal 2014 we completed the sales of our Intuit Financial Services (IFS) and Intuit Health businesses. In fiscal 2016 we completed the sales of our Demandforce, QuickBase, and Quicken businesses. We accounted for all of these businesses as discontinued operations and have therefore reclassified our statements of operations for all periods presented to reflect them as such. We have also segregated the net assets of our Demandforce, QuickBase, and Quicken businesses from continuing operations on our balance sheet at July 31, 2015. Because the cash flows of these discontinued operations were not material for any period presented, we have not segregated them on our statements of cash flows. See “Results of Operations – Non-Operating Income and Expense – Discontinued Operations” later in this Item 7 for more information. Unless otherwise noted, the following discussion pertains to our continuing operations.

This overview provides a high level discussion of our operating results and some of the trends that affect our business. We believe that an understanding of these trends is important in order to understand our financial results for fiscal 2016 as well as our future prospects. This summary is not intended to be exhaustive, nor is it intended to be a substitute for the detailed discussion and analysis provided elsewhere in this Annual Report on Form 10-K.

For a complete discussion of the most significant risks and uncertainties affecting our business, please see “Forward-Looking Statements and Risk Factors” in Item 1A of this Report.

The most important financial indicators that we use to assess our business are revenue growth for the company as a whole, for each reportable segment, and for product lines within each reportable segment; operating income growth and operating income margins for the company as a whole and for each reportable segment; earnings per share; and cash flow from operations. We also track certain non-financial drivers of revenue growth and, when material, identify them in the applicable discussions of segment results below. These non-financial drivers include, for example, customer growth and retention for all of our businesses and transaction volume for our payment processing business. Total credit and debit card transaction volume correlates strongly with the macroeconomic environment and is one of the key drivers of revenue growth in our payment processing business. Customers for our connected services offerings have generally grown faster than those for our traditional desktop software offerings, reflecting our strategic focus on connected services over the past few years. Connected services (total service and other revenue) generated $3.4 billion or 73% of our total revenue in fiscal 2016, compared with about 50% of our total revenue eight years ago. We expect connected services revenue as a percentage of our total revenue to continue to grow in the future.

Total net revenue for fiscal 2016 was $4.7 billion, an increase of 12% compared with fiscal 2015. Total net revenue results were affected by changes we made to our desktop software offerings in fiscal 2015. Starting with the release of QuickBooks Desktop 2015 in the first quarter of fiscal 2015, and for all subsequent versions, we began delivering ongoing enhancements and certain connected services for our QuickBooks Desktop software products. We plan to continue to provide ongoing enhancements and certain connected services for all future versions of these products. As a result of these changes, we recognize revenue for these QuickBooks Desktop software products as services are provided over approximately three years. Revenue in our Small Business segment increased 9% compared with fiscal 2015 due to growth in Small Business Online Ecosystem revenue and the impact of the changes to our QuickBooks Desktop software products. The changes to our desktop software offerings also

affected our ProConnect segment, whose revenue increased 51% to $428 million in fiscal 2016. In fiscal 2015 we began delivering ongoing enhancements and certain connected services for our ProConnect desktop software products and we plan to continue to provide them for all future versions of those products. Due to these changes, we recognize revenue for these offerings as services are provided through the end of each calendar year. Prior to these changes, we recognized a substantial portion of the revenue for these offerings during our third fiscal quarters ended April 30. Revenue in our Consumer Tax segment increased 10% compared with fiscal 2015 due to 12% growth in U.S. federal TurboTax units.

Operating income from continuing operations increased 68% in fiscal 2016 compared with fiscal 2015 due in part to the increase in revenue described above. Higher revenue was partially offset by higher costs and operating expenses, including higher spending for staffing, depreciation, advertising and other marketing programs, and share-based compensation. We also recorded goodwill and intangible asset impairment charges of $148 million to operating expense in fiscal 2015.

Net income from continuing operations increased 95% in fiscal 2016 compared with fiscal 2015 due to the increase in operating income and a lower effective tax rate in fiscal 2016. Diluted net income per share from continuing operations for fiscal 2016 increased 110% to $3.04 as a result of the increase in net income and the decline in weighted average diluted common shares compared with fiscal 2015.

We ended fiscal 2016 with cash, cash equivalents and investments totaling $1.1 billion. In fiscal 2016 we generated cash from operations, net sales of investments, proceeds from our term loan, the sales of our Demandforce, QuickBase, and Quicken businesses, and the issuance of common stock under employee stock plans. During the same period we used cash for the repurchase of shares of our common stock under our stock repurchase programs, the payment of cash dividends, and capital expenditures, including the purchase of certain previously leased facilities. At July 31, 2016, we had authorization from our Board of Directors to expend up to an additional $360 million for stock repurchases through May 19, 2019. On August 19, 2016 our Board approved a new stock repurchase program under which we are authorized to repurchase up to an additional $2 billion of our common stock.

We derive revenue from the sale of software subscriptions, hosted services, packaged software products, financial supplies, technical support plans, transaction fees, merchant services hardware, and multiple element arrangements that may include a combination of these items. We follow the appropriate revenue recognition rules for each type of revenue. For additional information, see “Revenue Recognition” in Note 1 to the financial statements in Item 8 of this Annual Report. We generally recognize revenue when persuasive evidence of an arrangement exists, we have delivered the product or performed the service, the fee is fixed or determinable and collectibility is probable. However, determining whether and when some of these criteria have been satisfied often involves exercising judgment and using estimates that can have a significant impact on the timing and amount of revenue we report. For example, for multiple element arrangements containing only software and software-related elements, we must exercise judgment and use estimates in order to (1) allocate the total price among the various elements we must deliver; (2) determine whether undelivered services are essential to the functionality of the delivered products and services; (3) determine whether vendor-specific evidence of fair value exists for each undelivered element; and (4) determine whether and when each element has been delivered. For multiple element arrangements containing non-software elements, we must exercise judgment and use estimates in order to (1) determine whether and when each element has been delivered; (2)

As described in “Description of Business and Summary of Significant Accounting Policies – Business Combinations,” in Note 1 to the financial statements in Item 8 of this Annual Report, under the acquisition method of accounting we generally recognize the identifiable assets acquired, the liabilities assumed, and any noncontrolling interests in an acquiree at their fair values as of the date of acquisition. We measure goodwill as the excess of consideration transferred, which we also measure at fair value, over the net of the acquisition date fair values of the identifiable assets acquired and liabilities assumed. The acquisition method of accounting requires us to exercise judgment and make significant estimates and assumptions regarding the fair values of the elements of a business combination as of the date of acquisition, including the fair values of identifiable intangible assets, deferred tax asset valuation allowances, liabilities related to uncertain tax positions, and contingencies. This method also requires us to refine these estimates over a one-year measurement period to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the measurement of the amounts recognized as of that date. If we are required to retroactively adjust provisional amounts that we have recorded for the fair values of assets and liabilities in connection with acquisitions, these adjustments could materially decrease our operating income and net income and result in lower asset values on our balance sheet.

As described in “Description of Business and Summary of Significant Accounting Policies – Goodwill, Acquired Intangible Assets and Other Long-Lived Assets,” in Note 1 to the financial statements in Item 8 of this Annual Report, in order to estimate the fair value of goodwill we use a weighted combination of a discounted cash flow model (known as the income approach) and comparisons to publicly traded companies engaged in similar businesses (known as the market approach). The income approach requires us to use a number of assumptions, including market factors specific to the business, the amount and timing of estimated future cash flows to be generated by the business over an extended period of time, long-term growth rates for the business, and a rate of return that considers the relative risk of achieving the cash flows and the time value of money. We evaluate cash flows at the reporting unit level. Although the assumptions we use in our discounted cash flow model are consistent with the assumptions we use to generate our internal strategic plans and forecasts, significant judgment is required to estimate the amount and timing of future cash flows from each reporting unit and the relative risk of achieving those cash flows. When using the market approach, we make judgments about the comparability of publicly traded companies engaged in similar businesses. We base our judgments on factors such as size, growth rates, profitability, risk, and return on investment. We also make judgments when adjusting market multiples of revenue, operating income, and earnings for these companies to reflect their relative similarity to our own businesses. We had a total of $1.3 billion in goodwill on our balance sheet at July 31, 2016. See Note 5 to the financial statements in Item 8 of this Annual Report for a summary of goodwill by reportable segment.

the relative risk of achieving those cash flows. We also make judgments about the remaining useful lives of acquired intangible assets and other long-lived assets that have finite lives. We had a total of $44 million in net acquired intangible assets on our balance sheet at July 31, 2016.

During the fourth quarters of fiscal 2016, fiscal 2015, and fiscal 2014 we performed our annual goodwill impairment tests. Using the methodology described in “Description of Business and Summary of Significant Accounting Policies – Goodwill, Acquired Intangible Assets and Other Long-Lived Assets,” in Note 1 to the financial statements in Part 8 of this Annual Report, we determined that the estimated fair values of all of our reporting units exceeded their carrying values and that they were not impaired. In addition, during this analysis we concluded that the estimated fair values of all of our reporting units substantially exceeded their carrying values.

During the third quarter of fiscal 2015 there was a significant decline in the revenue and operating income forecast for our Consumer Ecosystem reporting unit. As a result of this development, we performed an interim impairment test of goodwill and acquired intangible assets for that reporting unit. We concluded that the carrying value of goodwill associated with our Consumer Ecosystem reporting unit was impaired and we recorded an impairment charge of $263 million that reduced the carrying value of goodwill to $211 million as of April 30, 2015. See “Fair Value Measurements – Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis,” in Note 2 to the financial statements in Item 8 of this Annual Report for more information.

At July 31, 2016, there was $585 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under all equity compensation plans which we will amortize to expense in the future. Total unrecognized compensation cost will be adjusted for future changes in estimated forfeitures. We expect to recognize that cost over a weighted average vesting period of 2.4 years.

At July 31, 2016, we had net deferred tax assets of $132 million which included a valuation allowance of $40 million for loss and tax credit carryforwards related to state tax credits, foreign losses, and state capital and operating losses. We recorded the valuation allowance to reflect uncertainties about whether we will be able to utilize some of our deferred tax assets before they expire. While we believe our current valuation allowance is sufficient, we could in the future be required to increase the valuation allowance to take into account additional deferred tax assets that we may be unable to realize. We assess the need for an adjustment to the valuation allowance on a quarterly basis. The assessment is based on our estimates of future sources of taxable income for the jurisdictions in which we operate and the periods over which our deferred tax assets will be realizable. See Note 10 to the financial statements in Item 8 of this Annual Report for more information.

Fiscal 2016 Compared with Fiscal 2015

Total net revenue increased $502 million or 12% in fiscal 2016 compared with fiscal 2015. Total net revenue results were affected by the fiscal 2015 changes we made to our desktop software offerings described in “Executive Overview – Overview of Financial Results” earlier in this Item 7. Revenue in our Small Business segment increased 9% due to growth in Small Business Online Ecosystem revenue and the impact of the changes to our QuickBooks Desktop software products. The fiscal 2015 changes to our desktop software offerings also affected our ProConnect segment, whose revenue increased 51% to $428 million in fiscal 2016. Revenue in our Consumer Tax segment increased 10% due to 12% growth in U.S. federal TurboTax units. See “Segment Results” later in this Item 7 for more information.

Operating income from continuing operations increased 68% in fiscal 2016 compared with fiscal 2015 due in part to the increase in revenue described above. Higher revenue was partially offset by higher costs and operating expenses. Total operating expenses increased about $28 million for staffing, about $26 million for depreciation, about $10 million for advertising and other marketing programs, and about $34 million for share-based compensation. In fiscal 2015, we recorded goodwill and intangible asset impairment charges of $148 million for our Consumer Ecosystem reporting unit in operating expense. See “Operating Expenses” later in this Item 7 for more information.

Net income from continuing operations increased 95% in fiscal 2016 compared with fiscal 2015 due to the increase in operating income and a lower effective tax rate in the fiscal 2016 period. See “Non-Operating Income and Expenses – Income Taxes” later in this Item 7 for more information. Diluted net income per share from continuing operations for fiscal 2016 increased 110% to $3.04 as a result of the increase in net income and the decline in weighted average diluted common shares compared with fiscal 2015.

Fiscal 2015 Compared with Fiscal 2014

Total net revenue decreased $51 million or 1% in fiscal 2015 compared with fiscal 2014 due to the fiscal 2015 changes we made to our desktop software offerings described in “Executive Overview – Industry Trends and Seasonality” earlier in this Item 7. Revenue in our Small Business segment decreased 2% due to the impact of these changes on our QuickBooks Desktop offerings, which more than offset QuickBooks Online revenue growth. The fiscal 2015 changes to our desktop software offerings also affected our ProConnect segment, whose revenue decreased 33% to $284 million in fiscal 2015. Revenue in our Consumer Tax segment increased 8% due to 7% growth in U.S. federal TurboTax units. See “Segment Results” later in this Item 7 for more information.

Operating income from continuing operations decreased 43% in fiscal 2015 compared with fiscal 2014 due to the impact of the changes we made to our desktop software offerings on fiscal 2015 revenue and due to higher costs and operating expenses. Total operating expenses were $407 million higher in the fiscal 2015 period, including increases of about $96 million for staffing, about $57 million for share-based compensation, and about $38 million for outside services. We also recorded goodwill and intangible asset impairment charges of $148 million for our Consumer Ecosystem reporting unit in operating expense in fiscal 2015. See “Cost of Revenue” and “Operating Expenses” later in this Item 7 for more information.

Net income from continuing operations decreased 52% in fiscal 2015 compared with fiscal 2014 due to the decrease in operating income and a higher effective tax rate that related to the goodwill impairment charge in the fiscal 2015 period. See “Non-Operating Income and Expenses – Income Taxes” later in this Item 7 for more information. Diluted net income per share from continuing operations for fiscal 2015 decreased 51% to $1.45, in line with the decrease in net income for that period.

Segment operating income is segment net revenue less segment cost of revenue and operating expenses. Segment expenses do not include certain costs, such as corporate selling and marketing, product development, and general and administrative expenses and share-based compensation expenses, which are not allocated to specific segments. These unallocated costs totaled $1.15 billion in fiscal 2016, $1.01 billion in fiscal 2015, and $870 million in fiscal 2014. Unallocated costs increased in fiscal 2016 compared with fiscal 2015 and in fiscal 2015 compared with fiscal 2014 due to increases in corporate product development and selling and marketing expenses in support of the growth of our businesses and to higher share-based compensation expenses. Segment expenses also do not include amortization of acquired technology, amortization of other acquired intangible assets, and goodwill and intangible asset impairment charges. See Note 14 to the financial statements in Item 8 of this Annual Report for reconciliations of total segment operating income to consolidated operating income from continuing operations for each fiscal year presented.

Fiscal 2016 Compared with Fiscal 2015

Small Business segment total net revenue increased $185 million or 9% in fiscal 2016 compared with fiscal 2015 due to growth in Small Business Online Ecosystem revenue and the impact of the fiscal 2015 changes we made to our QuickBooks Desktop offerings described in “Executive Overview – Overview of Financial Results” earlier in this Item 7. Small Business Online Ecosystem revenue grew 25%, driven by customer acquisition. QuickBooks Online subscribers grew 41% and online payroll customers grew 17%. Active online payments customers grew 6% and online payments charge volume grew 15%. In our Small Business Desktop Ecosystem, revenue increased 4%. QuickBooks Desktop revenue increased due to 8% unit growth and the impact of the fiscal 2015 changes we made to our QuickBooks Desktop offerings. QuickBooks Enterprise revenue grew 27%. Desktop payments revenue decreased 10% in fiscal 2016 as we focused resources on core offerings for QuickBooks merchants and deemphasized certain non-QuickBooks payments offerings.

Small Business segment operating income as a percentage of related revenue increased in fiscal 2016 compared with fiscal 2015. The increase was due to the higher revenue described above and relatively stable spending during fiscal 2016.

Fiscal 2015 Compared with Fiscal 2014

Small Business segment total net revenue decreased $50 million or 2% in fiscal 2015 compared with fiscal 2014 due to the impact of the fiscal 2015 changes we made to our QuickBooks Desktop offerings described in “Executive Overview – Overview of Financial Results” earlier in this Item 7, which more than offset Small Business Online Ecosystem revenue growth. Small Business Online Ecosystem revenue grew 25%, driven by customer acquisition. QuickBooks Online customers grew 57% and online payroll customers grew 18%. Active online payments customers grew 5% and online payments charge

Fiscal 2016 Compared with Fiscal 2015

Revenue for our Consumer Tax segment increased $173 million or 10% in fiscal 2016 compared with fiscal 2015 due to 12% growth in TurboTax U.S. federal units excluding Free File Alliance federal units. TurboTax Online U.S. federal units increased 15% in fiscal 2016. Online U.S. federal units represented approximately 84% of total TurboTax U.S. federal units for the 2015 tax season, up from approximately 82% for the 2014 tax season.

Consumer Tax segment operating income as a percentage of related revenue increased in fiscal 2016 compared with fiscal 2015 due to the higher revenue described above partially offset by higher expenses for staffing and advertising and other marketing programs in fiscal 2016.

Fiscal 2015 Compared with Fiscal 2014