Intuit Inc ($INTU) Q3 2026 Earnings Call

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 in TurboTax, which I will unpack shortly. First, let me 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 them. 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 and 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 RPO filers. We also expect RPO 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 Live 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 face pressure among the most price-sensitive DIY filers earning less than $50,000 a year. We locked on price. To reaccelerate 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 RPO 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 live on our long-term growth goals. Now turning to our all-in-one business platform that's becoming the control tower for businesses and accountants, fueling their growth and consolidating their tech stacks. Starting with mid-market, our AI-native platform continues to gain traction in a nearly $90 billion TAM. 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 Intuit 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 insights 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 in 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 Light to provide a low-friction entry point for millions of new businesses. These tiers ensure that as early-stage businesses scale, they grow with the Intuit platform. Before I wrap up, I want to address a 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 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.

Great. Thank you, Sandeep, and welcome, Kendra. One of our biggest strengths as a company is taking a day-one approach to fueling 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.

Yeah, 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 them into 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. Our ARPU is, you know, well over 30%, 35% of our TurboTax customers attached a 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, 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 to a charity, you may fall into a skew that you have to pay for. These aren't, by the way, customers that are just free. These are actually customers that are paying other competitors. But the shift from complexity to value-based 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 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.

Very welcome. 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 to Intuit over the years. Thank you.

Yeah, Siti, thanks for your question. I think that the place that I would start is when you think about the consumers, businesses, and accountants that we serve, these are high-stake decisions that these constituents make. And let me just for a moment focus on businesses and accountants. When you think about what we have created, it is an end-to-end platform that's actually a system of intelligence that helps you manage your business, to run your business, and to grow your business. And remember, businesses are trying to manage customers. They're managing cash flow. They're trying to understand which customers are profitable. They're managing money coming in and money going out. They're managing payroll and they're ensuring that they can be compliant and have their taxes done and books done right. We have created a platform, a true control tower, that not only helps businesses grow and run, but also provides the intelligence to make better decisions. And that's why we believe in the durable growth and margin expansion, because we are providing essential services that are deeply integrated into the financial operations of our customers.

For their business, but with our launch of the Intuit Accountant Suite, we've created a network effect where these same accountants are not only able to grow their firm, grow their practices, and manage their clients, but also be able to now provide expert services because every business has to have an accountant to help them with advice, books, and inventory decisions as an illustrative example. When it comes down to running a business, that's why we bet the entire company on data and AI and the one of the largest networks of AI-powered expertise, which is our accountants, to really fuel the success of businesses. A really important proof point around that is our growth engines. When you look at our growth engines, you've got mid-market, you've got our money portfolio, and you've got assisted tax that's growing north of 30%. That's a substantial part of the company, which brings me to the second point I wanted to make. When you look at the total addressable market of tax, 88% of it is assisted. And with assisted tax, very similar to the importance of accounting and bookkeeping, customers spend over seven times on people to help them make decisions versus just software and code. And we have a platform that is all-in-one, with both technology and people on one platform to help customers get their taxes done right. You can see from our results, we really are just at the beginning of what's possible in assisted tax, and that's going to be a fuel for years. If I were to put a bow around it, the what gives us confidence, and what should give you and investors confidence, is one: we are looking to scale our growth engines even further, taking things like assisted tax, money, and mid-market that are already growing north of 30% and scaling them faster. Two: we're reimagining how we continue to win in our core. Core tax is an illustrative example: we serve millions of customers very well that make income less than $50,000, but there's a smaller set of price-sensitive customers where we can now durably change our model because we can also monetize beyond tax. This is a company that is very focused on effectiveness and efficiency in how we run the company, which is partly why we reduced our workforce by 17%, because it was all in service of less layers, less coordination roles, and much more efficiency and effectiveness in how we run the company. That's what gives us the confidence and the durability of both the top-line growth and margin expansion. You can expect this company to grow EPS GAAP and non-GAAP north of 15%. Probably a longer answer than you were looking for, but I wanted to unpack it holistically.

You're very welcome.

Sure. Let me thank you for your question. Let me start with the last question first. The reason we are really bullish about our consumer platform trajectory and growth moving forward is that I think the biggest highlights from this tax season were really around one: assisted segment performance. When you look at new assisted customer growth, it grew 29%. When you look at total customer growth, it grew 38%. And our revenue grew 36%. And now it's 53% of our entire franchise, up 11 points over last year. We continue just to be at the tip of the iceberg in terms of what's possible because what we did with our local strategy really worked this year, and Credit Karma is becoming a meaningful impact because there's a 54% increase in filings of taxes through Credit Karma. Those are big highlights. As you look at us continuing to scale, pursuing 88% of the total addressable market gives us a lot of confidence. In the DIY segment, remember the goal we've articulated is that we want to maintain revenue share, and we actually expect this year to maintain our revenue share in the DIY category. In that context, we feel very good about a business model change for the price-sensitive segment of these folks that are $50,000 or less because these folks are just overall price-sensitive to what they pay. We're going to evolve our model to not only be competitive on price but then be able to monetize beyond tax. That overall gives us confidence irrespective of the total filings. Now, let me get to the initial part of your question. We expect that the total filings will decline about 30 basis points, while e-files will be up one. But e-files don't include the manual filings. What we saw this year across the entire base is there was a big chunk of manual filers that just did not file. As a category champion, this was really just within DIY. It's worth about two million units. But the reason I am reiterating it irrespective of total filings is when we look at our assisted opportunity and our opportunity with our model change in DIY, that's what gives us confidence regardless of whether total IRS returns grows one point or is flat year-over-year.

Thank you for the question. Let me start it off and I'll tag team with Sandy. First of all, Brad, as you mentioned, these for us are always very hard decisions because at the end of the day, we're in a people business and culture matters a lot. We don't take decisions like this lightly. With that said, it's very important for us as a company that we take a lot of pride in treating everything that we do like it's day one. So if today is day one as a CEO and management team, what would we do? Let me tell you what this is not about. This was not about AI. As you know, we are very invested in AI and the tools we use internally, which is what's driving a lot of our efficiencies and margin expansions, and AI is embedded in everything that we do that helps us serve customers, which is what's fueling our growth. We always look at how we can continue culturally to have a company of builders and move fast. One of the things we've been studying for the last year is beyond the tools we are putting in place across the company, what are the biggest blockers and what's getting in our way? Several things led to this 17% reduction. First, we significantly reduced the number of management layers to reduce the complexity of information flow and how fast we make decisions, so we can push decision-making to our frontline folks that are the builders. Second, by reducing the number of management layers, we also reduced the number of what we call coordination-heavy roles that we had in place. These could be PMO, biz ops, more product and designer product managers and designers that you may need because of what's possible in terms of how fast you can build. That was the second big area. The third big area was that now that we've put TurboTax and Credit Karma together as a unit and a platform, as we are concluding all of the integration work, we had a lot of duplication, and so we reduced the number of roles that were essentially duplicates. Last but not least, worthy of mentioning is sizing and resizing Mailchimp in the context of the growth opportunities ahead. Those are all the main drivers of the restructuring. What are we doing with the restructuring? Where is it going? I would say there are three things that matter most again with a day-one mentality. One is making sure we feel good about our growth engines. Assisted tax, money, and mid-market are all growing well north of 30%, and we want to scale those faster. The second is we want to reimagine, particularly in DIY tax, how we ensure for a certain segment of customers that are less than $50,000 that we can win with those customers. Third, by being faster, flatter, and more focused, it allowed us to look at the workforce reduction. A big chunk of this you can count on to go to margin expansion and EPS growth, and a smaller part is going to scaling the growth engines because we actually feel good that the growth engines are funded quite well just because of the productivity we're seeing internally. Probably longer answer than you were looking for, but I wanted to unpack it.

You're very welcome.

Alex, thanks for your question. I'll start with the essence of your question, which is structure. When you look at the total tax TAM, it's $42 billion. Out of that $42 billion, about $37 billion is assisted. And we are structurally very advantaged to go after that 88% of the total addressable market. It shows up in our results. Our penetration is still incredibly low. Although overall customers grew 38%, new customers in the assisted segment grew 29% and revenue at 36%. We're structurally advantaged there. Why? The reason we're structurally advantaged is we have built out a virtual expert platform that is all driven by our data engines and data ingestion capabilities, AI that does a lot of the incredibly complex work from matching customers to the right experts, routing, capacity planning, and doing a lot of the work for our experts so they can manage the relationship with the end client. Structurally, we went on experience, we went on price, and access the fast money and other benefits that we provide across our consumer platform. We have a big structural advantage there. When you look at the DIY segment, it's $5 billion of the total spend. Within that $5 billion, there is an element of that spend that is those that are $50,000 and less in income. Within that, Alex, there are those that are very price sensitive. I would just say that this is an area that did not just sneak up on us. This is an area where we've been very focused on what's the best way to win these very price-sensitive customers. The biggest thing we have done in the last three to four years is one-time offers. Durably, the biggest thing we have learned is these customers care about price. They are willing to pay for benefits beyond tax, but what they care about is can they come back in the same SKU the next year. This is what Sandeep was touching on earlier: a lot of customers come back in the same SKU year after year. What we are going to do durably different for a very small segment of this DIY segment that are less than $50,000 is a durable model change where we are competitive on price, where we can ultimately monetize with benefits that are outside of tax, and now we have all the capabilities to do that that we didn't have several years ago. To zoom out and answer your question, we're structurally advantaged for almost 90% of the TAM, and we now have all the assets and capabilities to go after those that are less than $50,000 in income, particularly that segment that is very price sensitive. Anything that we put our minds to we can turn around fairly quickly. All of that is irrespective of the workforce reductions that we did, and I think that was one element of your question. We've done this from a place of strength, replacing the roof while the sun is shining to make sure we can be more focused, faster, and flatter in an environment where we want to move faster than entrepreneurs but at the scale of the company. I would not connect the workforce reductions at all to DIY tax. They are discretely different choices and decisions.

I'm really glad you asked that. I want to amplify something Sandeep and I touched on in the script, but it's really important. There are two very important, in line with our strategy, important pivots that we have made. One is we've traditionally thought about accountants as partners and as a channel. The strategic pivot we've made is that we are treating accountants like customers. The reason that's important is when you look at our platform and your question about sales, we now have one single unified platform that accountants use not only to run their firm and their practice but to manage all of their clients that are Intuit clients and use all of our capabilities to drive automation within the firm to drive their profitability, and also to deliver added value services that they can monetize and drive their revenue growth. Based on what we are launching in August, we will also have opportunities to monetize based on consumption, not just subscription. A few examples would be AI agent builder capabilities that help them customize industry-specific KPIs and reporting that they can monetize. Based on their usage, we will monetize on consumption, leveraging the distribution of customers that they have that otherwise we wouldn't monetize in the past. That's a very important strategic way to think about accountants. At the same time, businesses are using the same platform, but it's built for them. The reason I shared that control power with one platform strengthening our network effect is that's where our added sales force comes into play, where they are now selling an end-to-end platform that is unified not only to get more end businesses on our platform but to get accountants to accelerate the number of customers they bring onto our platform. We're seeing productivity improvement. We've opened up the aperture where we're now pursuing more new to the franchise beyond going after our base. Productivity has increased, and it shows up in a 37% quarter-over-quarter contract increase in the enterprise suite. Again, probably longer answer than you were looking for, but I wanted to unpack the pivots because they're actually important for our long-term growth.

Thank you.

Kirk, thanks for your question. Let me take it in a couple of parts to ensure my answer is specific. First of all, on assisted tax, it's important to start with the customer. The 88% of our TAM that go to somebody else to do their taxes for them has nothing to do with how good software gets. This is all about confidence. They want somebody else to do their taxes because they want to delegate the liability of these very high-stake decisions to somebody else to ensure they are accountable and that they have confidence in the outcome. It's important to recognize that over the years, if you look at the structure of the market, the money spent on tax experts, accountants, and bookkeepers has actually gone up in the last five years. It doesn't matter how good technology becomes for that customer; they want to ensure they have the confidence that they're running their business the right way and getting their taxes done correctly, whether it's a consumer or a business. With the customer psyche and our declaration years ago where we built out a virtual expert platform that's all driven by data, AI, and AI-powered human expertise, we are structurally advantaged to virtually help you get your taxes done at the best experience and best price, and provide benefits like fast access to money. That shows up in our results, particularly in new assisted customer growth. The role that AI plays is that the majority of people are buying confidence to get assistance, irrespective of how much software improves. It helps us actually serve them. That was on assisted tax. I also want to touch on the business platform. The whole fuel of our growth in mid-market and money is the system of intelligence we have created as a control tower to help businesses and accountants run their business and serve businesses. It's all driven by data and AI. Businesses can't run their business with an LLM because you're managing your books, your money, and your payroll, and accuracy and compliance matters. Running a business is mission-critical. The psyche of businesses and accountants is that they need us to be their AI platform to provide expertise so they can run and grow their business. The biggest thing our partnership with Anthropic and OpenAI really fuels is that when you look at our $300 billion total addressable market where we have 6% penetration, it's actually opening up the funnel for us with high-intent customers that are just getting started. They may want to start with basic capabilities like invoicing and managing customers, and we help them do that by connecting to QuickBooks within an LLM. But once they become a legitimate business, they want to run their business on our platform. That's where what we've built, a network effect where accountants recommend us, they use our platform to run their firm and the business, is where we are very differentiated with all of our data, AI, and expert capabilities. Hopefully, that answers your question more specifically around how we think about consumers and businesses.

Great. Well, thank you for all the questions. We look forward to talking to you next quarter. Bye, everybody.