Intuit Inc. (NASDAQ:INTU) shares traded lower on Wednesday after the company reported a fourth-quarter earnings beat on Tuesday.
Management used Tuesday’s earnings call to acknowledge shortcomings in customer acquisition and reset priorities to focus on winning new users.
Q4 Results At A Glance
The TurboTax and QuickBooks parent reported fourth-quarter revenue of $4.35 billion, up 14% year over year, beating the $4.27 billion consensus.
Adjusted earnings of $4.03 per share beat the $3.58 estimate and increased 47% year over year. GAAP diluted EPS was $1.34, compared with $1.35 a year earlier.
Full-year revenue increased 14%, while GAAP and adjusted diluted EPS each grew 20%.
CEO Sasan Goodarzi said Intuit now needs to accelerate new-customer growth after focusing heavily on assisted tax, Money, and mid-market offerings.
Intuit Acknowledges Customer Growth Weakness
Total online paying customers reached 8.9 million at fiscal year-end, growing 3% year over year, about two percentage points slower than the previous year.
During Q&A, Goodarzi said he was "personally dissatisfied" with performance in DIY tax and the low end of the business platform as Intuit resets expectations around customer acquisition.
Intuit is widening its funnel with QuickBooks Free and QuickBooks Lite. As of last month, more than 20,000 customers were actively using QuickBooks Free or had converted to paid offerings, with payments also generating monetization.
TurboTax Targets Price-Sensitive Customers
Management said price is now the No. 1 reason customers leave TurboTax, as Intuit lost quality DIY customers to lower-cost providers.
Intuit plans to accept lower initial DIY tax ARPC, make entry pricing more competitive, and rebuild the customer funnel.
Management expects to generate greater lifetime value through broader consumer-platform engagement and eventual TurboTax Live upgrades.
Fiscal 2027 Guidance Points To Slower Growth
Intuit expects fiscal 2027 revenue to be between $23.279 billion and $23.512 billion, representing 9% to 10% growth.
GAAP EPS is projected at $20.12 to $20.36, while adjusted EPS is expected at $22.88 to $23.12.
Intuit expects Global Business Solutions revenue to grow 13% to 14%, Consumer revenue to grow 4% to 6%, and TurboTax revenue to grow 2% to 3%. The company expects Credit Karma revenue to grow 11% to 13%.
For the first quarter, Intuit expects revenue growth of about 11%, GAAP EPS of $1.71 to $1.75, and adjusted EPS of $2.44 to $2.48.
Asked whether growth could reaccelerate by fiscal 2028, Goodarzi declined to commit to a timetable and said investors should judge progress through quarterly results.
INTU Price Action: Intuit shares were down 3.51% at $344.92 at the time of publication on Wednesday, according to Benzinga Pro data.
Photo: Tada Images / Shutterstock
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