What's Happening?
Intuit has forecasted its first-quarter revenue growth to be below analysts' expectations, primarily due to underperformance at its marketing platform, Mailchimp. The company's shares fell nearly 6% following the announcement. Mailchimp, acquired by Intuit in 2021, experienced a slight decline in fourth-quarter revenue. Intuit's CFO, Sandeep Aujla, noted that Mailchimp is currently a drag on growth but expects improvements by the end of the year. The company has also completed a transition from QuickBooks Desktop licenses to subscriptions, which has slowed Desktop growth. Intuit has recently increased prices for its QuickBooks Online and Payroll subscription services, following the launch of AI agents for its QuickBooks portfolio.
AD
Why It's Important?
The forecasted revenue growth slowdown highlights challenges Intuit faces in integrating Mailchimp and transitioning its QuickBooks services. Small businesses, which are crucial to Mailchimp's success, have found the platform difficult to use, affecting retention and expansion. Intuit's strategic shift to subscription-based services and price adjustments are critical for maintaining competitiveness and profitability. The company's ability to manage these transitions and improve Mailchimp's performance will significantly impact its financial health and market position.
What's Next?
Intuit plans to implement initiatives to enhance Mailchimp's performance by year-end. The company expects fiscal 2026 revenue to align closely with analysts' estimates, indicating potential stabilization. Intuit's board has approved a $3.2 billion share buyback, increasing total repurchase authorization to $5.3 billion, which may bolster investor confidence. Monitoring customer attrition rates following price changes will be crucial for Intuit's future strategy.
