Intuit’s latest earnings report showcased solid growth in the company’s fiscal third quarter, affirming the bullish outlook presented by Morgan Stanley. The company reported a revenue of $8.56 billion, marking a 10% increase from the previous year. Additionally, GAAP diluted earnings per share rose by 11% to $11.09, while non-GAAP diluted earnings per share climbed 10% to $12.80. Consumer revenue saw an 8% increase, and Global Business Solutions revenue rose by 15%.
Before the earnings report, Morgan Stanley had highlighted the quarter as a crucial test for Intuit. Analyst Keith Weiss maintained an Overweight rating on the company, naming it a Top Pick in the large-cap software sector and setting a $580 price target on the stock. Despite a 40% decline in share price year-to-date, Intuit’s favorable risk-reward setup was underscored by trading at 19 times calendar 2027 GAAP EPS.
Intuit revised its full-year fiscal 2026 revenue outlook to a range of $21.34 billion to $21.37 billion, projecting growth of 13% to 14%. The company also raised its guidance for non-GAAP operating income and non-GAAP EPS, anticipating earnings of $23.80 to $23.85.
The performance of TurboTax, a key revenue driver, was a focal point of the earnings report. Consumer revenue reached $5.3 billion, with TurboTax revenue increasing by 7% to $4.4 billion. Credit Karma revenue also saw a 15% boost to $631 million. However, concerns lingered regarding the impact of lower-cost tax options and AI-native competitors on TurboTax units and average revenue per customer.
Intuit’s emphasis on assisted tax services highlighted a notable shift in customer preferences towards higher-touch products. The company’s guidance for 36% growth in TurboTax Live revenue underscored this trend, even as total online units were expected to decline. The expansion of TurboTax Live’s share of total revenue and customer base signaled a strategic pivot towards more personalized tax solutions.
QuickBooks continued to drive growth for Intuit, with Global Business Solutions revenue increasing by 15% to $3.3 billion. Online Ecosystem revenue also rose by 19% to $2.5 billion, fueled by a 22% growth in QuickBooks Online Accounting revenue. The company’s updated full-year outlook projected Global Business Solutions growth of around 16%, aligning with investor expectations.
Overall, Intuit’s strong performance in key revenue segments, coupled with strategic shifts towards personalized tax services and continued growth in QuickBooks, position the company for sustained success in the market. Investors will be closely monitoring Intuit’s progress as it navigates evolving industry dynamics and emerging competition in the software sector.
