Intuit: Priced for a Disruption That Isn't in the Numbers
Intuit ($INTU) is down 56% YTD and 62% in the past twelve months. In that time it has beaten its own guidance, raised revenue, profit and EPS guidance, grown the products AI was supposed to kill by 22% and 36%, and approved an $8B buyback.
Intuit closed at $290.59 on July 17th, its 52-week high was $813.70. The stock has lost more than half its value this year alone, making it the worst performer in the Nasdaq-100 for the first half, and it did so while revenue grew double digits and guidance went up. The market has decided AI kills TurboTax and QuickBooks. The filings show something closer to the opposite, AI products are the fastest-growing things Intuit owns.
What Intuit Actually Does
Intuit sells the financial plumbing for American life. TurboTax files taxes for tens of millions of people, QuickBooks runs the books for small businesses, Credit Karma watches their credit, Mailchimp sends their marketing emails, and the newer Intuit Enterprise Suite chases mid-market companies that have outgrown QuickBooks but do not want SAP. Roughly 100M customers across the platform.
The model is a toll booth on obligations that never go away. Taxes must be filed, books must be kept, and once your business lives inside QuickBooks the cost of leaving is measured in accountant-hours and migraines. That switching cost is the moat, and for years the market paid a 30-times multiple for it, treating Intuit as one of the safest franchises in software.
It is also, on paper, exactly what a large language model should be able to do. Answer tax questions, categorise expenses, fill in forms. That is the whole argument, and it is why the stock has been cut in half.
The Q3 FY2026 Numbers
Intuit reported its Q3 results on May 20th, and it beat the top end of its own guidance on revenue, operating income and EPS.
Revenue rose 10% to $8.6B in the seasonally biggest quarter of the year. GAAP operating income was $4.0B against $3.7B last year, non-GAAP operating income was $4.7B against $4.3B, GAAP diluted EPS came in at $11.09 versus $10.02, and non-GAAP EPS at $12.80 versus $11.65. Consumer revenue grew 8% to $5.3B, within which TurboTax grew 7% to $4.4B and Credit Karma grew 15% to $631M. Global Business Solutions grew 15% to $3.3B, the online ecosystem inside it grew 19%, and QuickBooks Online accounting revenue grew 22% on higher prices, customer growth and mix. The mid-market Enterprise Suite business is growing north of 30%.
On the back of all this Intuit raised full-year guidance across the board, revenue of $21.341B to $21.374B (13% to 14% growth), non-GAAP operating income up 16%, and non-GAAP EPS of $23.80 to $23.85, an 18% increase. The board approved a new $8B repurchase authorisation on top of $1.6B bought back in the quarter, and the dividend was raised to $1.20 a quarter. One line went the other way, full-year TurboTax revenue growth was trimmed to about 7% from 8%.
A beat, a raise, a bigger buyback, a higher dividend, one trimmed product line, and the stock fell 20% the next day.
The Tax Problem
In the same quarter Intuit admitted it lost customers. Sasan Goodarzi said on the call, "We faced pressure among the most price-sensitive DIY filers earning less than $50,000 a year. We lost on price." Online TurboTax units are expected to fall 2% this year and e-file share to slip about a point. For a company that spent years raising prices on a captive audience, losing filers to cheaper alternatives cracks the pricing-power story, and pricing power was half the multiple.