Intuit (NASDAQ:INTU) reported third-quarter financial results on Wednesday. The transcript from the company's third-quarter earnings call has been provided below.

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Access the full call at https://event.on24.com/wcc/r/5335021/BDA552F2048CFCB62D65ACE5EA0B2C03

Summary

Intuit Inc. reported a 10% revenue growth in Q3, driven by significant progress in its AI-driven expert platform strategy, prompting an increase in full-year revenue guidance.

Key growth areas include Assisted Tax, Money Portfolio, and Mid Market, each growing over 30%, while TurboTax Live customers are expected to grow 38% this year.

The company faces challenges in the price-sensitive DIY tax filer segment, prompting a shift in strategy to offer better value and pricing models.

Intuit's AI native platform is gaining traction in the mid-market with a 38% growth in QBO Advanced and Intuit Enterprise suite revenues.

A 17% workforce reduction was announced to simplify the organizational structure, aiming for faster, leaner operations and increased focus on profitability.

Q3 results included a 15% growth in Global Business Solutions Group revenue, driven by strong performance in the online ecosystem and Money offerings.

Intuit raised its fiscal year guidance, expecting total revenue growth of 13 to 14% and non-GAAP diluted EPS growth of approximately 18%.

The company emphasizes long-term growth through aggressive scaling of growth engines, reimagining business models, and refining cost structures.

Full Transcript

OPERATOR

Good afternoon. My name is Chloe and I will be your conference operator today. At this time I would like to welcome everyone to Intuit's third quarter fiscal year 2026 conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press star two.

With that, I'll now turn the call over to Anne Sophie Senior Bowe, Intuit's Senior Vice President of Investor Relations, Corporate and strategic finance. Ms. Senior Bowe.

Anne Sophie Senior Bowe (Senior Vice President of Investor Relations, Corporate and Strategic Finance)

Thank you, Chloe. Good afternoon and welcome to Intuit's third quarter fiscal 2026 conference call. I'm here with Intuit Chairman and CEO Suzanne Goudharvi and our CFO Sandeep Aujla. Before we start, I'd like to remind everyone that our remarks will include forward looking statements. There are a number of factors that could cause Intuit's results to differ materially from our expectations. You can learn more about these risks in the press release we issued earlier this afternoon or our Form 10-K for fiscal 2025 and our other SEC filings.

All of those documents are available on the investor relations page of Intuit's website at intuit.com we assume no obligation to update any forward looking statements. Some of the numbers in these remarks are presented on a non GAAP basis. We've reconciled the comparable GAAP and non GAAP numbers in today's press release. Unless otherwise noted, all growth rates refer to the current period versus the comparable prior year period and the business metrics and associated growth rates refer to worldwide business metrics.

A copy of our prepared remarks and supplemental financial information will be available on our website after this call ends. With that, I'll turn the call over to Susan.

Suzanne Goudharvi (Chairman and Chief Executive Officer)

Great. Thank you, Ann, Sophie, and thanks to all of you for joining us today. We delivered strong overall results this quarter with Q3 revenue growing 10% as we made significant progress executing on our AI driven expert platform strategy. As a result, we're raising total company guidance for revenue and all non GAAP metrics for the full fiscal year. We delivered significant growth in key areas across the company, assisted tax money portfolio and mid market, all growing north of 30%.

We also experienced headwinds with the most price sensitive segment of DIY filers and TurboTax, which I will unpack shortly. First, let me re ground everyone in our durable strategy to win as an AI driven expert platform in our category, accuracy, compliance, security and trust of financial decisions are critical given the liability that comes with that. Our powerful combination of proprietary data, domain specific AI platform capabilities and AI powered human expertise is setting the standard for trusted financial intelligence.

Ultimately, customers buy confidence, not code, which is why they spend at least seven times more on accounting and tax experts than on software alone. Intuit brings together data, AI and human expertise into a single system of intelligence that does the work for customers. Our platform enables businesses to manage from lead to cash and consumers from credit building to wealth building all in one place so they can make high stakes financial decisions with confidence.

As we look at our overall performance, we see both exceptional momentum and meaningful opportunity. Our big bets have ignited growth engines, Assisted Tax Money Portfolio and Mid Market that are all growing north of 30%. Our focus now is on scaling these growth engines with even greater speed and impact. Let's now talk about our overall consumer performance in tax our consumer platform grew 8% this quarter, Credit Karma grew 15% and we expect TurboTax to grow 7% for the full year.

To set context, total IRS filers are expected to Decline by approximately 30 basis points this season, representing a gap of roughly 2 million units versus macro expectations and the most significant industry wide contraction since the post Covid tax season. As the category leader, this headwind impacted results among both existing and new customers across all demographics. Against this backdrop, we expect TurboTax Online paying units to grow 2% driven by share gains among higher ARPU filers.

We also expect ARPU to increase 11% reflecting continued demand for assistance and faster access to refunds. We saw significant strength in an area that's critical to our strategy and long term growth formula, disrupting the $37 billion assisted tax category 88% of the total TurboTax TAM. We expect TurboTax Life customers to grow 38% this year with new TurboTax Live customers up 29% excluding the impact of one time offers. Our local expert strategy played a key role in TurboTax Live acquisition with 36% of those acquired through local channels being new to TurboTax.

As a result, we expect TurboTax Live revenue to grow 36% this year, well above our long term expectation of 15 to 20% revenue growth. TurboTax Live will therefore represent over half of TurboTax revenue, up 11 points versus last year, a significant milestone in our journey to disrupt the Assisted category. This is a testament to the value we're delivering in a high stakes regulated environment. Shifting to the DIY segment representing a 5 billion TAM, or 12% of our total TurboTax TAM.

I'm constructively dissatisfied with our performance. We faced pressure among the most price sensitive DIY filers earning less than $50,000 a year. We lost on price to re accelerate this part of our business, we will evolve our business model by delivering the right lineups and price points to meet simple filers needs at the low end and lean into the power of our broader consumer platform to monetize beyond tax. The flywheel effect we saw across our consumer platform this season gives us further confidence in our strategy.

Average revenue per user is approximately 30% higher for customers using both TurboTax and Credit Karma compared to customers using TurboTax alone and we are seeing over 35% of TurboTax customers adopt our fast Money offerings. As a result, we expect to deliver 26% revenue growth across our consumer money portfolio this year. We also saw the impact of improved end to end consumer experiences. Credit Karma members with simple tax situations could have up to 80% of their taxes done before even starting in TurboTax.

This is helping drive a 54% increase in tax filers who start their filing experience in Credit Karma this year up 25 points. This progress underscores our ability to drive ARPU expansion by deepening engagement, delivering more value across the consumer platform and monetizing beyond tax. To Summarize in a $37 billion assisted TAM, we expect to grow TurboTax Live customers 38% and revenue 36% representing over half of our TurboTax franchise. We have significant momentum and confidence in our trajectory.

Our plan is clear. First, build on our momentum with TurboTax Live where we have the largest TAM and a significant ARPU opportunity. And second, evolve our DIY business model to deliver the right value at the right price point for the most price sensitive filers and monetize beyond tax with our consumer platform. We're confident in our platform assets and proof points to deliver on our long term growth goals. Now turning over to our all in one business platform that's becoming the control tower for businesses and accountants feeling their growth and consolidating their tech stacks.

Starting with mid market, our AI native platform continues to gain traction in a nearly $90 billion tab in Q3 online ecosystem. Revenue for QBO Advanced and Intuit Enterprise suite grew approximately 38%. We're scaling our direct sales team by approximately 30% as we shared last quarter and seller productivity continues to improve. This translates to 37% quarter over quarter growth of total into enterprise suite contracts in our money portfolio. We're making strong progress by putting money at the center of everything that we do.

Total online payment volume grew 30% this quarter including bill pay, reflecting continued momentum and helping customers get paid faster and manage cash flow more effectively. We are growing our line of credit offerings with Buy Now Pay later directly embedded within QuickBooks and the launch of Intuit Business Credit Card. These additions will give small and mid market businesses even greater access to capital and control over their financial operations.

Across the platform, we continue to scale new AI capabilities bringing together insights, forecasts and industry specific KPIs so our customers can run their business and grow with confidence. Our AI agents are delivering value at scale with our accounting AI agents powering recommendations across more than 50 million transactions each week and business tax AI agents identifying millions of dollars in deductions. Looking ahead, we are launching a sweeping expansion and a new lineup of our AI driven expert platform in August.

This represents a significant step forward a unified system of intelligence that serves as a strategic control tower for both businesses and accountants. Seamlessly moving from INS to autonomous execution on a single platform, accountants can run and grow their practices while managing and advising their clients and based on their partnership tier, we will connect them with new customers to fuel their success and strengthen our network effect. Businesses operate from the same control tower where AI agents don't just surface insights but take action across the business to manage performance KPIs and complete critical workflows autonomously all in one place. With a base of approximately 10 million business customers and 1 million accountants, this breadth of data customers and an ecosystem of industry specific domain expertise fuels a powerful network effect and durable competitive advantage. Underpinning all of this is our commitment to trusted intelligence. Built on four decades of leadership and accuracy, compliance and security, our platform enables customers to operate with confidence, making better decisions and running their businesses from a single integrated platform.

As we evolve our lineup with expanded functionality, we expect to take pricing actions at the higher end of our portfolio, reflecting the increased value we are delivering to customers. We will also introduce a consumption based model for our AI and human intelligence services, enabling customers to scale usage and unlock greater benefits and business outcomes. Based on initial tests, we see the strongest adoption among more complex customers on the advanced and PLUS offerings.

We are also expanding our offerings to meet the needs of the next wave of entrepreneurs. With a 94% year over year increase in people planning to start a business in 2026, we launched QuickBooks Free and QuickBooks Lite to provide a low friction entry point for millions of new businesses. These tiers ensure that early stage businesses scale they grow with the Intuit platform Before I wrap up, I want to address the decision we announced earlier today.

We are reducing our full time workforce by 17% to simplify our organizational structure to become a faster, leaner and more focused company. We are at an important inflection point with strong category leadership and multiple growth engines across our three big bets. To fully capitalize on this opportunity, we must operate with greater velocity, urgency and discipline. These deliberate actions are about scaling our growth engines and strengthening our core.

We're sharpening our cost structure to deliver durable long term growth and margin expansion. This is how we build the next chapter of Intuit Services as software powered by data, AI and human intelligence. We're positioning the company to deliver durable growth you can count on. Let me now hand it over to Sandeep.

Sandeep Aujla (Chief Financial Officer)

Thanks, Hassan we delivered solid third quarter company wide results for fiscal 2026 exceeding the top end of our guidance across revenue, operating income and earnings per share. Our third quarter results include revenue of $8.6 billion, up 10% GAAP operating income of 4 billion versus 3.7 billion last year, non GAAP operating income of 4.7 billion versus 4.3 billion last year GAAP diluted earnings per share of $11.09 versus $10.02 a year ago and non GAAP diluted earnings per share of $12.80 versus $11.65 last year reflecting our overall disciplined approach to managing the business, including continued AI efficiencies.

Now turning to the business segments, consumer platform revenue grew 8% in Q3 driven by TurboTax which grew 7% and Credit Karma which grew 15%. TurboTax revenue was in line with last year beginning with TurboTax. While we did not have the overall tax season we expected, we made significant progress against our strategic priority of disrupting the assisted category. As Sasan shared, we expect TurboTax live customers to grow 38% this year and revenue to grow 36% well ahead of our stated long term growth expectations of 15 to 20%.

TurboTex Live will therefore represent 53% of total TurboTax revenue this year. These results reinforce our conviction in our strategy to deliver powerful done for you experiences for customers with a unique combination of AI and AI driven human expertise. Overall, we expect total online paying units to grow 2% this year on share gains from higher ARPU filers. We saw strong monetization across simple and complex filers, driving an expected 11% increase in ARPU as more customers chose assisted offerings and faster access to refunds.

In total, we expect to deliver more than $25 billion in refunds through our Fast Money offerings this year. Our priorities are clear built on our exceptional momentum in TurboTax lives where we continue to see significant ARPU opportunity and evolve our DIY model at the low end to better serve price sensitive filers. We know what we need to do and the team is well positioned to execute given the strength of our assets across TurboTax and Credit Karma within the Protex group, revenue in Q3 was in line with last year.

For the full year we expect Protex Group revenue growth of approximately 4%. Turning to Credit Karma where revenue growth of 15% reflects continued momentum with our members and partners. On a product basis, personal loans accounted for 9 points of growth, auto insurance accounted for 5 points and home loans accounted for 1 point. Overall, we have conviction in our strategy and confidence in the actions we are taking to serve consumers with our all in one platform, engaging them year round to make smarter financial decisions by delivering done for you experiences, AI powered local tax expertise and faster access to money.

Turning now to the Global Business Solutions Group, we continue to make progress serving businesses with our all in one business platform and delivering done for you experiences powered by AI and human expertise. Global Business Solutions Group revenue grew 15% during the quarter or 17% excluding Mailchimp, while online ecosystem revenue grew 19% in Q3 or 22% excluding Mailchimp. This growth is underpinned by continued momentum in mid market with online ecosystem revenue for QBO Advanced and Intuit enterprise suite growing 38%.

Online ecosystem revenue for small businesses and the rest of the base grew 16% in Q3. We delivered strong growth in both online accounting and online services. QuickBooks Online accounting revenue grew 22% driven by higher affected prices, customer growth and mix shift online services revenue grew 15% in Q3 or 22% excluding Mailchimp. This growth was driven by money, which includes payments, capital and bill pay as well as payroll. Within Money, revenue growth in the quarter was driven by payments revenue growth fueled by customer growth and increase in total payment volume per customer and higher revenue yield.

Total online payment volume including BillPay grew 30% in Q3, reflecting a continued momentum in payments and adoption of our BillPay offering. Online payment volume growth excluding BillPay was 18% within payroll. Revenue growth in the quarter reflects mix shift customer growth and higher effective prices. Earlier this month we announced the launch of QuickBooks Workforce, an advanced integrated suite of offerings transforming how businesses run their human capital management end to end and we're excited about the opportunity this unlocks particularly for mid market customers.

Within Melchior, revenue was down slightly versus a year ago. As we continue to focus on improving churn and acquisition among small smaller customers while building on momentum in SMS and the mid market as part of the workforce changes announced earlier today, we are right sizing our investment in mailchimp. Overall we have confidence in our strategy and online ecosystem growth continues to be strong. This performance underscores powerful traction across our growth vectors and positions intuit to lead and win over the long term Turning to Desktop Desktop ecosystem revenue grew 6% in Q3 with QuickBooks Desktop enterprise revenue growing in the high single digits now shifting to our balance sheet and capital allocation. Our financial principles guide our decisions that remain our long term commitment and are unchanged. We finished the quarter with approximately 6.8 billion in cash and investments and 6.2 billion in debt on our balance sheet. We are leaning meaningfully into share repurchases this year. We repurchased $1.6 billion of stock during the third quarter, more than double the same period last year.

In the first three quarters of fiscal 2026, share repurchases are up over 60% versus last year. This reflects both a strong conviction in our long term trajectory and believe that our shares represent compelling value at current levels. We maintain our aim to be in the market each quarter. The Board approved a quarterly dividend of $1.20 per share payable on July 17, 2026. This represents a 15% increase versus last year. Delivering long term shareholder value is central to how we manage the company.

We continue to execute on opportunities to drive margin expansion over time through a disciplined approach to capital management and and ongoing efficiency gains. As Hassan mentioned, we announced today the decision to reduce our full time workforce by approximately 17%. This leaner structure will accelerate how we operate with greater focus, speed, agility and an even stronger commitment to profitability. We are committed to delivering annual EPS growth of at least mid teens over the coming years.

While these decisions are never easy, they are a reflection of our disciplined approach to capital management and we are confident it will ultimately allow us to deliver durable revenue growth, expanded margins and growing capital returns to shareholders over the long term. Moving on to Guidance we are raising total company guidance for revenue and all non GAAP metrics for the full fiscal year. Guidance includes total company revenue of 21.341 billion to 21.374 billion growth of 13 to 14%.

Our guidance includes Global Business Solutions Group revenue growth of approximately 16% with desktop revenue growth in the mid single digits and overall consumer group revenue growth of approximately 10%. The consumer group outlook is supported by TurboTax growth of approximately 7%, credit card growth of approximately 19% and pro tax growth of approximately 4%, GAAP diluted earnings per share of $15.79 to $15.84 growth of approximately 16% and non GAAP diluted earnings per share of 23.80 to $23.85 growth of approximately 18%.

We expect a GAAP tax rate of approximately 24% in fiscal 2026. Our guidance for the fourth quarter of fiscal 2026 include total company revenue growth of 11 to 12%, GAAP earnings per share growth of $0.73 to $0.79 and non GAAP earnings per share of $3.56 to $3.62. As a reminder, guidance for GAAP metrics includes $300 million in restructuring charges related to our workforce changes. You can find our full fiscal 2026 and Q4 guidance details in our press release and on our fact sheet.

Lastly, I'd like to officially welcome Kendra Goodenough to her new role as Intuit's Vice President, Investor Relations. I know she is looking forward to partnering with you all. Going forward with that, I'll turn it back over to Sufant. Great.

Sasan Goodarzi (Chief Executive Officer)

Thank you Sandeep and welcome Kendra. One of our biggest strengths as a company is taking a day one approach to feeling long term success, which is the most important thing to do in the era of AI. We are redefining the future of trusted financial intelligence to take advantage of our $300 billion in TAM by one aggressively scaling our growth engines already growing over 30%. Second, reimagining our business model to win in our core category and third, sharpening our cost structure to become leaner and faster, delivering long term value for both our customers and our shareholders. As a management team we take pride in reinventing ourselves and that is exactly what we are doing with that. Let me now open it up to your questions.

OPERATOR

Thank you ladies and gentlemen. If you would like to ask a question, please press Star then the number one on your telephone keypad. If you would like to withdraw your question, press star. 2. Please limit yourself to one question. We'd like to get to as many people as we can. We'll take our first question from Keith Weiss with Morgan Stanley. Your line is open.

Keith Weiss (Equity Analyst)

Excellent. Thank you guys for taking the question. I think the focus is going to be on sort of the tax results and the discipline in there. I wanted to dig in on that side of the equation first there's this that feels a little bit like 2023, 2024. The overall tax filings were disappointing. Losing share at the low end of the market. And it felt like in that scenario putting out a low end skew was, was, was a decent fix and got TurboTax back, back on track.

But this environment is different, right? We're thinking about emerging competitors, we're thinking about Gen AI changing the competitive landscape. So how year 23, 24 or how do you have to differently kind of fix the business today versus that period? Keith, thanks for your question. I think a couple of things that I would say. One is one of the things that we were very assertive and aggressive in tackling to win customers that are less than 50,000 in income was really around one time offers to get up into the to the franchise and ultimately be able to grow with those customers.

I think the thing that we have learned is two things that are very different. One is we need a durable approach to winning with these customers that are again less than 50,000 in income. And secondarily we now have incredible capabilities to monetize beyond tax, which is a lot of what we referred to just a moment ago around the ARPU increase. When you look at TurboTax Plus Credit Karma, ARPU is well over 30%, 35% of our TurboTax customers attach the money offering.

And so what's very different is those two things. We need a durable approach and a durable model to win with these customers. And you need a durable way to be able to actually monetize beyond tax of which we have and I think to make it real, Keith, for you and everybody else is it's a shift from complexity based to value based. And what that means is if you earn less than $50,000 and you have a W2, you may fall into a skew that's free. But if you then have a W2 plus you donate it to a charity, you may fall into a skew that you have to pay for.

And these are by the way, customers that are just free. These are actually customers that are paying other competitors. But the shift from complexity to value base is that based on the value that these folks that are less than 50,000 are looking for, we're going to have a model where we are very competitive on price. But then we have significant ARPU opportunities that we've already proven that where we can monetize that actually allows us to make up from a monetization perspective from other benefits that we deliver.

So that's what's very different than 2023. And I would just tell you that none of this has anything to do with AI. This is all about being priced right for customers that are less than $50,000 in income. They're actually willing to have experiences that are far worse for them as long as the price is right. And that's the approach and the shift we will be making in our model as we look ahead. Got it.

Suzanne Goudharvi (Chairman and Chief Executive Officer)

Just one thing to add. You know, in the sub 50 K segment there are millions of customers that we serve exceptionally well. Millions of them are using our live offerings and many of them come back and use the same SKU over and over again. What's referring to is the price sensitive segment of the under $50k which is a segment of the under $50k, not the entirety of the under $50k. So just distinction I wanted to call it as well. Excellent.

Keith Weiss (Equity Analyst)

Thank you guys for taking the question. Very welcome.

Suzanne Goudharvi (Chairman and Chief Executive Officer)

Hey, Keith, thank you for your partnership over the years. I think given your retirement, this is your final call. We appreciate the partnership you brought into Intuit over the years. Thank you.

Keith Weiss (Equity Analyst)

Thank you so much. I appreciate that.

OPERATOR

We'll move next to Sidi Penigrahi with Mizuho. Your line is open.

Suzanne Goudharvi (Chairman and Chief Executive Officer)

Thanks for taking my question. Suzanne, if you see some of the areas doing well, your assisted category you mentioned mid market or even money. But then there are segments that drag on the business. So I have a high level question. As investors now they're concerned about this AI disrupting software in turn growth rates. How do you give the confidence to the shareholder that Intuit can continue to deliver that durable growth and margin expansion, especially the area you think is your focus and you talked about the services as a software.

Why do you think that's the right approach to deliver the durable growth? Yes, Sidi, thanks for your question. I think the place that I would start is when you think about the consumers, businesses and accountants that we serve, these are high stakes decisions that.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.