Intuit Inc. (INTU) Q1 2026 Earnings Call Transcript

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Overview

The earnings call summary indicates strong financial performance with projected revenue and EPS growth. Product development, particularly AI and platform innovations, is promising. Market strategy includes expanding presence and leveraging partnerships. Financial health seems stable, and shareholder returns are likely supported by growth plans. The Q&A section highlights confidence in market share gains and strategic initiatives, despite some uncertainties. Overall, the sentiment is positive, with potential for stock price appreciation.

Key Financial Performance

Q1 Revenue Growth 18%, reflecting exceptional momentum across the company. The growth is attributed to the AI-driven expert platform strategy, which helps businesses manage from lead to cash and consumers from credit building to wealth building.

Global Business Solutions Group Revenue 18% growth during the quarter or 20% excluding Mailchimp. This growth is driven by the all-in-one platform and done-for-you experiences with expertise.

Online Ecosystem Revenue 21% growth in Q1 or 25% excluding Mailchimp. This includes approximately 40% growth for online ecosystem revenue for QBO Advanced and Intuit Enterprise Suite that serve mid-market.

QuickBooks Online Accounting Revenue 25% growth from higher effective prices, customer growth, and mix shift.

Online Services Revenue 17% growth in Q1 or 26% excluding Mailchimp. This growth was driven by money, which includes payments, capital, and bill pay as well as payroll.

Total Online Payments Volume 29% growth in Q1, reflecting continued momentum in payments and adoption of the bill pay offering.

Desktop Ecosystem Revenue 6% growth in Q1, with QuickBooks Desktop Enterprise revenue growing in the low double digits.

Consumer Platform Revenue 21% growth in Q1, driven by Credit Karma revenue growth of 27%, TurboTax revenue growth of 6%, and ProTax revenue growth of 15%.

Credit Karma Revenue 27% growth, reflecting continued momentum with members and partners. Personal loans accounted for 13 points of growth, credit cards for 10 points, and auto insurance for 3 points.

GAAP Operating Income $534 million versus $271 million last year, reflecting disciplined business management and AI efficiencies.

Non-GAAP Operating Income $1.3 billion versus $953 million last year.

GAAP Diluted Earnings Per Share $1.59 versus $0.70 a year ago.

Non-GAAP Diluted Earnings Per Share $3.34 versus $2.50 last year.

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Operating Highlights

AI-driven expert platform: Showcased an all-in-one business platform with AI agents and AI-enabled human experts automating tasks, workflows, and business functions. Introduced Intuit Intelligence, a system of intelligence for personalized actionable answers and execution. Launched Intuit Accountant Suite for accounting firms to manage clients, firms, and workforce.

AI agents: 2.8 million customers using AI agents. Accounting agent saves up to 12 hours/month, payments agent accelerates payments by 5 days, payroll agent automates payroll tasks, and sales tax agent ensures compliance.

Consumer platform innovations: TurboTax Live revenue grew 51%. Introduced Credit Spark for credit building and AI assistants for debt paydown, tax refund recommendations, and tax preparation.

Mid-market expansion: 40% growth in online ecosystem revenue for QBO Advanced and Intuit Enterprise Suite. Signed partnerships with accounting firms like Aprio, Cherry Bekaert, Raymond, and HoganTaylor to expand customer base.

Consumer TAM: Targeting $142 billion consumer TAM with AI-driven consumer platform innovations.

Revenue growth: Q1 revenue grew 18% to $3.9 billion. Online ecosystem revenue grew 21%, with 29% growth in total online payment volume.

Efficiency improvements: AI-driven efficiencies contributed to non-GAAP operating income growth of 36%.

AI and HI integration: Focused on delivering done-for-you experiences with AI and human intelligence to consolidate tech stacks and save time and money for customers.

Partnership strategy: Collaborating with accounting firms to penetrate mid-market and expand customer base.

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Risk or Challenges

Regulatory Risks: The company acknowledges that forward-looking statements are subject to risks that could cause results to differ materially, as outlined in their SEC filings. This implies potential regulatory or compliance challenges.

Market Competition: The company is targeting mid-market and enterprise customers, which are highly competitive segments. This could pose challenges in gaining market share and retaining customers.

Economic Uncertainty: The company’s reliance on consumer and business spending for products like TurboTax and Credit Karma could be impacted by broader economic conditions, such as a downturn or reduced consumer spending.

Execution Risks: The company is heavily investing in AI-driven platforms and new product launches. Failure to execute these strategies effectively could impact growth and customer satisfaction.

Integration Challenges: The company is expanding partnerships with accounting firms and integrating new AI capabilities. These efforts may face operational challenges or delays.

Dependence on AI and Technology: The company’s strategy heavily relies on AI and technology advancements. Any failure in AI systems or technological disruptions could adversely affect operations and customer trust.

Supply Chain and Operational Risks: Although not explicitly mentioned, the scale of operations and rapid product launches could lead to potential supply chain or operational inefficiencies.

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Guidance & Outlook

Fiscal 2026 Revenue Guidance: Total company revenue is projected to be between $20.997 billion and $21.186 billion, reflecting growth of 12% to 13%.

Global Business Solutions Group Revenue Growth: Expected growth of 14% to 15%, or 15.5% to 16.5% excluding Mailchimp.

Consumer Group Revenue Growth: Projected growth of 8% to 9%, including TurboTax growth of 8%, Credit Karma growth of 10% to 13%, and ProTax growth of 2% to 3%.

Earnings Per Share (EPS) Guidance: GAAP diluted EPS is expected to range from $15.49 to $15.69, reflecting growth of 13% to 15%. Non-GAAP diluted EPS is projected to be between $22.98 and $23.18, reflecting growth of 14% to 15%.

Second Quarter Fiscal 2026 Guidance: Total company revenue growth is expected to be 14% to 15%. GAAP EPS is projected to range from $1.76 to $1.81, and non-GAAP EPS is expected to be between $3.63 and $3.68.

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Shareholder Return Plan

Quarterly Dividend: The Board approved a quarterly dividend of $1.20 per share, payable on January 16, 2026. This represents a 15% increase versus last year.

Stock Repurchase: We repurchased $851 million of stock during the first quarter, and depending on market conditions and other factors, our aim is to be in the market each quarter.

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Key Q&A

Q:Can you provide more details on the OpenAI partnership, including revenue share, data privacy, and customer experience?

A:The partnership with OpenAI is described as game-changing, aiming to accelerate new customer growth. Intuit apps will be integrated within ChatGPT, providing personalized experiences. Data privacy and security principles remain unchanged, and there is no revenue share involved. Intuit will continue to train its large language models with customer data within its own systems.

Q:How is Intuit progressing in the mid-market segment, and what are the plans for growth?

A:Intuit is focusing on awareness, platform innovation, and accountants. They are increasing visibility through conferences and webinars, enhancing platform innovation with vertical-specific KPIs and dashboards, and redirecting internal sales resources to large accounting firms. Productivity is improving, and they plan to add more headcount in the coming quarters.

Q:What are the learnings from the recent tax extension season, and how do they apply to the upcoming season?

A:Intuit is bullish about the upcoming tax season due to innovations across the platform, including 300 experiments and enhancements in data and AI. They are expanding their local presence from 400 to 600 locations and opening a flagship store in New York to build trust and drive adoption.

Q:How does Intuit view the health of the U.S. consumer, and what signals are they observing?

A:Intuit sees stability in consumer data, with profits and cash flows stable or up. Payroll hours worked are increasing, and industries like IT services, construction, and manufacturing are performing well. Real estate and lending are slightly down. Intuit's platform is helping businesses be more successful, with businesses on the platform driving nearly 20 points higher profits.

Q:What is the outlook for Credit Karma's market share gains and its integration with TurboTax?

A:Credit Karma is gaining market share in loan originations and credit card issuance. Its integration with TurboTax contributed to a full point of growth last season. Innovations like Lightbox, which uses financial institutions' credit models, are driving personalized experiences and growth. Intuit sees significant runway for further growth and monetization opportunities.

Q:What is the progress with Mailchimp, and how does it contribute to growth?

A:Mailchimp is scaling its mid-market sales team, improving product experience, and increasing marketing efforts. Reacceleration to double-digit growth by year-end will require contributions from both mid-market and smaller customers. Progress will be clearer by early calendar year.

Q:How is Intuit leveraging AI for margin efficiencies and productivity improvements?

A:Intuit is using AI across its organization to improve productivity in technology, sales, customer success, finance, legal, and HR. AI is complementing the workforce, improving time-to-market, and enhancing customer experiences. The company remains disciplined in capital allocation and scaling successful initiatives.

Q:Why is there a difference in growth rates between accounting and online services?

A:The deceleration in online services is due to lapping prior pricing contributions. However, Intuit continues to see strong momentum in core business areas like charge volumes and improved adoption of services. Innovations in QuickBooks and other offerings are expected to drive future growth.

Q:What is the strategy behind Intuit's in-person TurboTax experience?

A:The strategy is to increase visibility and trust by showing up locally in 600 locations and 20 stores, including a flagship in New York. This approach aims to reach more customers and provide a better experience, price, and access to money, doubling down on winning in the assisted segment.

Q:How is Intuit addressing the consolidation of apps for small and mid-market businesses?

A:Intuit's platform helps businesses consolidate multiple apps into one, providing better insights and reducing costs. This strategy is particularly effective in the mid-market, where businesses see value in having everything in one place. Partnerships with accountants are also driving adoption and network effects.

Q:What are the key drivers of growth in Q2, and how does Intuit view the rest of the fiscal year?

A:Key drivers include strength in Global Business Solutions, online ecosystem, mid-market, and Credit Karma. Desktop growth is expected to decelerate in the second half, and Credit Karma will face tougher comps. Intuit remains confident in its ability to execute and deliver on its full-year commitments.

Q:What is the potential impact of the OpenAI partnership on customer behavior and engagement?

A:The partnership aims to be where the customers are, whether within ChatGPT or Intuit's own apps. Customers will receive personalized experiences, and data privacy and security are maintained. The impact on customer behavior will depend on how they choose to engage, but Intuit is well-positioned for both scenarios.

Q:Review of Unclear Management Responses

A:Management avoided directly addressing the specific timeline for when the OpenAI partnership would significantly impact customer behavior and engagement. They also did not provide detailed metrics or examples of how AI-driven efficiencies are quantitatively contributing to margin improvements.

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