Intuit Reports Strong Q4 Earnings but Stock Dips on Slower Growth Outlook

What's Happening?

Intuit, a software company, reported better-than-expected fiscal fourth quarter results, driven by strong demand for its AI-powered platform and diversified fintech offerings. Despite this, the company's stock fell over 6% in after-hours trading due to projections of slower revenue growth for Fiscal 2026 compared to Fiscal 2025. Intuit's Q4 revenue reached $3.8 billion, a 20% increase year-over-year, surpassing the consensus estimate of $3.75 billion. Adjusted earnings per share (EPS) were $2.75, exceeding the analyst forecast of $2.66 and marking a 38% year-over-year rise. Credit Karma was a standout performer, with a 34% year-over-year surge, driven by strong demand for personal loans, credit cards, and auto insurance products. CEO Sasan Goodarzi attributed the success to the company's AI agents and AI-enabled human experts.

Why It's Important?

The earnings report highlights Intuit's strong execution across its business segments, particularly in Credit Karma, TurboTax Live, and QuickBooks Online. The company's focus on AI-driven solutions is a significant factor in its growth, reflecting broader trends in the tech industry where AI is increasingly becoming a key driver of business success. However, the projected slower growth for Fiscal 2026 raises concerns about the sustainability of this momentum, impacting investor confidence and leading to the stock's decline. The company's strategic capital deployment, including a 15% increase in quarterly cash dividends and a new $3.2 billion buyback plan, indicates a commitment to returning value to shareholders.

What's Next?

Intuit expects Fiscal 2026 revenue to grow between 12% and 13%, with adjusted EPS rising between 14% and 15%. The company projects growth in its Global Business Solutions and Credit Karma segments, with TurboTax and Consumer Group expected to see an over 8% increase. For fiscal Q1, Intuit anticipates revenue growth of 14% to 15%, with adjusted EPS between $3.05 and $3.12. Wall Street maintains a Strong Buy consensus rating on Intuit stock, although estimates may change following the earnings report.