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Intuit (INTU) is under pressure after reporting its Q3 results last night, its largest quarter of the year. The provider of TurboTax, QuickBooks, Credit Karma, and Mailchimp beat EPS expectations, while revenue increased 10.4% yr/yr to $8.56 bln, which was roughly in line with expectations and marked its slowest growth since Q1 (Oct) 2024. That said, Q4 guidance was more encouraging, with EPS of $3.56-3.62 nicely above expectations and revenue growth of +11-12%, implying roughly $4.25-4.29 bln, also ahead of expectations.

• Consumer revenue increased 8% yr/yr to $5.3 bln, driven primarily by TurboTax, which increased 7% yr/yr to $4.4 bln. Credit Karma remained a relative bright spot, increasing 15% yr/yr to $631 mln, while ProTax revenue was roughly flat at $278 mln.
• However, management was not pleased with the overall tax season, citing an expected industry-wide decline in IRS filers that would represent the steepest contraction since the post-COVID tax season. The bigger issue was DIY, as INTU faced pressure among the most price-sensitive filers earning less than $50,000 and acknowledged that it "lost on price."
• Encouragingly, assisted tax was a bright spot. TurboTax Live customers are expected to grow 38% this year, while TurboTax Live revenue is expected to increase 36%, well above INTU's long-term 15-20% target. It is also expected to represent 53% of total TurboTax revenue, underscoring the shift toward higher-ARPU assisted offerings that combine AI with human expertise.
• Global Business Solutions revenue increased 15% yr/yr to $3.3 bln, while Online Ecosystem revenue grew 19% to $2.5 bln. QuickBooks remained healthy, with QBO Accounting revenue up 22%, and INTU continued to see momentum in mid-market. QBO Advanced and Intuit Enterprise Suite revenue increased about 38%.
• INTU continues to argue that customers in tax and accounting buy confidence, not code, given the importance of accuracy, compliance, security, and trust in financial decisions. INTU also plans to launch a broader AI-driven expert platform lineup in August that will add more agentic capabilities for businesses and accountants.
• INTU also confirmed a 17% workforce reduction to simplify the organization and focus on its biggest growth opportunities, while maintaining confidence in mid-teens annual EPS growth. Capital returns remained active, with $1.6 bln of Q3 repurchases, a new $8 bln buyback authorization, and a 15% dividend increase.

Briefing.com Analyst Insight

Q3 is INTU's largest quarter, so the softer tax-season performance is likely the main driver behind today's weakness, especially with sentiment around software and AI disruption already under pressure. While INTU beat EPS expectations and Q4 guidance was encouraging, DIY tax was disappointing. INTU cited an industry-wide decline in IRS filers, but the larger concern appears to be that it lost on price among its most price-sensitive filers, raising questions around TurboTax's durability at the low end. There were still positives, including strong TurboTax Live growth, which reinforces INTU's ability to move customers toward higher-ARPU assisted offerings that combine AI with human expertise. QuickBooks demand also remained healthy, mid-market momentum continued, and capital returns were strong. However, the selloff suggests investors want more evidence that INTU can protect the low end of TurboTax while shifting the business toward assisted tax, AI-driven expert services, and broader platform monetization.