Intuit
Subscription + transaction SaaS: QuickBooks Online recurring subs plus attached payments/payroll/capital take-rates (Global Business Solutions); seasonal DIY tax (Consumer/TurboTax); lead-gen/affiliate advertising marketplace (Credit Karma); pro-tax software (ProTax). Asset-light, ~80% gross margin, high FCF conversion.
Earnings, margins, COGS & capex
FY2025 was a strong year — revenue $18.8B (+16%), GAAP operating income $4.9B (+36%), net income $3.9B (+31%), GAAP diluted EPS $13.67, non-GAAP EPS $20.15 (+19%), operating cash flow $6.2B. Growth is led by QuickBooks Online (QBO Accounting +22% in Q3 FY2026 on price, unit and mix) and Credit Karma (+32% in FY2025 off a cyclical rebound); TurboTax is the soft spot, with FY2026 guidance cut and units expected down ~2%. Despite a beat-and-raise Q3 FY2026, the stock was hammered on AI-disruption fears, and management announced a 17% workforce reduction (~3,000 of ~18,200) with ~$300M of mostly-Q4 restructuring charges — framed as an AI-driven reallocation toward engineering/AI talent, not a demand problem.
Income statement — where each revenue dollar goes
% of revenueOf every $1 of revenue, ~21¢ is cost of goods and ~53¢ operating expense, leaving ~26¢ of operating profit (~21¢ net).
Revenue trend
Margins
stable, structurally high
expanding (+36% op income growth)
guided to keep expanding
up (+31% net income)
strong, +27% OCF growth
COGS structure
Cost of revenue is dominated by cloud/hosting/infrastructure, payment-processing interchange passed through on the payments business, customer support and amortization of acquired tech — keeping gross margin near 80%. Rising AI-inference/compute cost (embedding Intuit Assist/AI agents across QuickBooks and TurboTax) is an emerging COGS pressure but not yet margin-breaking; management still guides margin expansion.
Capex
Minimal relative to revenue (~1-2%) — asset-light SaaS with no heavy physical footprint. Cash is deployed primarily into R&D (opex), M&A (Credit Karma, Mailchimp historically), buybacks (new $8B authorization) and the dividend ($1.20/qtr, +15% YoY).
Latest earnings
Beat — revenue $8.56B (+10.4%) vs ~$8.52B consensus; non-GAAP EPS $12.80 vs ~$12.57 consensus. A beat-and-raise, yet the stock fell sharply (AI-disruption narrative + trimmed TurboTax outlook overwhelmed the beat).
Raised FY2026 revenue to $21.341-21.374B (+13-14%) and non-GAAP EPS to $23.80-23.85 (+~18%); but CUT the TurboTax/Consumer sub-guide (TurboTax Online units ~-2% and e-file share ~-1pt). Announced a 17% workforce cut (~3,000 roles) and ~$300M restructuring charge, mostly in Q4 FY2026.
- QuickBooks Online Accounting revenue growth
- +22% YoY (Q3 FY2026)
- Total revenue growth
- +10.4% YoY
- Non-GAAP EPS
- $12.80
- Buyback repurchased in quarter
- $1.6B (+ new $8B authorization)
- Quarterly dividend
- $1.20/sh (+15% YoY)
- Workforce reduction
- ~17% (~3,000 of ~18,200)
Growth drivers
- QuickBooks Online Accounting subscription growth — +22% in Q3 FY2026 on higher effective price, customer growth and mix shift up-market (mid-market/QuickBooks Advanced)
- Attach/monetization of payments, payroll and capital/lending on the QBO platform (take-rate expansion, the real long-term engine)
- Credit Karma re-acceleration (+32% FY2025) as lender/credit-card ad demand recovered; cross-sell into Intuit's consumer base
- AI monetization — 'Intuit Assist'/agentic AI and the mid-market 'done-for-you' push, positioned by management as a net revenue tailwind (higher ARPU, done-for-you services)
- International QBO expansion and up-market (mid-market) land-and-expand
- Price increases across QuickBooks and TurboTax Live (assisted/full-service tax)
Reported financials — SEC EDGAR
Audited GAAP figures pulled from SEC filings · latest filing 2026-09-09. The audited primary-source spine — not financial advice.
Revenue — annual (GAAP)
Margins & balance sheet — FY’26
Bull & bear
The market is pricing a terminal AI-disruption story onto a franchise that is still compounding double digits, expanding margins, and returning capital — at ~11-12x forward non-GAAP EPS, well below its historic 30-40x. If AI turns out to be a net tailwind (as management argues) rather than a destroyer, the re-rating is large.
- Beat-and-raise Q3 FY2026: revenue +10.4%, QBO Accounting +22%, non-GAAP EPS $12.80, FY26 EPS guide raised to ~$23.80-23.85 (+18%) — fundamentals are not broken
- QuickBooks is a system of record with deep switching costs (bank feeds, payroll, invoices, accountants, years of data) — far more defensible than seasonal tax; the durable engine keeps growing
- Valuation reset: ~16.7x GAAP / ~11-12x forward non-GAAP EPS and ~3.6x sales for a ~40% non-GAAP-margin, ~33% FCF-margin franchise — an unusually cheap entry vs its own history
- AI-as-tailwind case: Intuit's proprietary data + distribution let it sell 'done-for-you' AI services at higher ARPU; it can be the AI winner in SMB finance, not the victim
- Massive capital return signals confidence — $8B new buyback, $1.6B repurchased in the quarter, dividend +15%, buying back stock into a ~67%-off-highs drawdown
- Sell-side still sees large upside — street mean price target ~$491 (~80% above the current ~$275), though Goldman's downgrade to $276 shows the bear case has real sell-side support too
Generative AI structurally attacks Intuit's highest-margin 'guided software' value proposition — once an LLM can explain deductions, classify expenses and prep a return for free, DIY tax and entry-level bookkeeping commoditize. TurboTax units are already declining, guidance was cut, and a 17% headcount reduction concedes the pressure. Growth-plus-multiple compression can persist.
- TurboTax/Consumer directly in AI's crosshairs — question-driven, seasonal, 'explanation'-based; FY2026 TurboTax guide cut, units ~-2%, e-file share ~-1pt
- Stock down ~51% YTD 2026 and ~67% off the July-2025 ATH — the S&P 500's worst performer of the year on a genuine platform-shift fear, not a one-off
- 17% workforce cut (~3,000 roles, ~$300M charge) is a real signal of margin/AI pressure and near-term disruption, not just efficiency
- Growth engine increasingly relies on price hikes with flat/declining units — durability questionable if AI-native and free tools erode willingness to pay
- IRS Direct File and free-file expansion are a persistent regulatory/structural drag on the most profitable consumer franchise
- Credit Karma is ad-cyclical; a consumer-credit downturn compounds any TurboTax weakness
- De-rating risk: a former 30-40x compounder can sit at 10-15x for years if the growth-permanence thesis is broken (Goldman cut its target to $276, citing intensifying AI tax rivals)
What it is worth
Triangulation of forward P/E on FY2026 non-GAAP EPS guide (~$23.80-23.85), GAAP P/E, EV/Sales, and DCF sensitivity to the AI-disruption terminal case. At ~$275 the stock trades ~16.7x trailing GAAP EPS, ~11.5x forward non-GAAP EPS, and ~3.6x TTM sales — a steep discount to its historical 30-40x P/E as a premium compounder.
If AI structurally impairs the consumer/tax franchise and growth decelerates to mid-single digits, the multiple can stay compressed (~9-12x) with earnings estimates cut — sustaining a sub-$250-275 range or lower (Goldman's $276 target sits here); a value-trap outcome where cheapness alone does not re-rate.
~14-17x forward non-GAAP EPS (~$24) implies roughly $330-410 — a partial recovery reflecting durable QuickBooks growth but permanently lower TurboTax expectations and a lower steady-state multiple than the 30-40x pre-2026 regime.
Re-rating toward a market/quality multiple (~20-22x forward non-GAAP EPS of ~$24-26) implies ~$480-570 — i.e. ~75%+ upside, broadly consistent with the ~$491 sell-side mean target — if AI proves a tailwind and double-digit growth persists.
The entire valuation debate reduces to one question: is AI a net destroyer or a net enabler of Intuit's guided-finance value proposition? The market has repriced INTU from premium compounder to AI-disruption casualty (worst S&P 500 performer of 2026). Fundamentals (double-digit growth, ~40% non-GAAP margins, $8B buyback, +15% dividend, roughly net-cash-neutral) argue the sell-off overshot; the durability of TurboTax and entry-level bookkeeping in an AI world argues it may not have. Not financial advice.
SWOT
Strengths
- Dominant, entrenched franchises — QuickBooks is the SMB accounting standard in the US and TurboTax leads DIY consumer tax
- ~80% gross margin, ~40% non-GAAP operating margin, ~33% OCF margin — elite unit economics and FCF conversion
- High switching costs on QuickBooks (system of record wired into bank feeds, payroll, invoices, accountants, historical data)
- Proprietary data flywheel across ~100M consumer/SMB customers feeding AI (Credit Karma + QuickBooks + TurboTax data)
- Strong balance sheet and capital return — $8B buyback, growing dividend, $6B+ annual operating cash flow, roughly net-cash-neutral
Weaknesses
- TurboTax/Consumer is the most AI-exposed line — seasonal, question-driven, 'explanation' value prop directly attackable by LLMs; FY2026 guide cut and units down ~2%
- Heavy dependence on annual price increases to drive growth (units flat-to-down in tax) invites competitive and regulatory pushback
- Credit Karma revenue is cyclical, tied to lender/credit-card advertising budgets and consumer-credit conditions
- 17% workforce cut signals margin/AI pressure and execution risk during a disruptive transition
- Rising AI-inference COGS as AI is embedded across products
Opportunities
- 'Done-for-you' agentic AI (Intuit Assist / AI agents doing bookkeeping and taxes) could raise ARPU and expand TAM if Intuit owns the AI layer rather than being disintermediated by it
- Mid-market up-market push (QuickBooks Advanced / Intuit Enterprise Suite) — larger customers, higher retention, bigger ACVs
- Payments/payroll/lending attach on the QBO base — the durable monetization engine beyond seat subscriptions
- International QuickBooks expansion (under-penetrated vs US)
- Depressed valuation (~16.7x GAAP / ~11-12x forward non-GAAP EPS) offers large re-rating optionality if the AI-disruption fear proves overblown
Threats
- Generative AI (OpenAI, Anthropic, Google) plus AI-native tax entrants (Goldman flagged the likes of Perplexity Tax / Chime Tax) commoditizing tax guidance and bookkeeping — the core 2026 bear thesis; Intuit became the S&P 500's worst performer of the year
- IRS Direct File / free-file political momentum eroding paid TurboTax units
- Well-capitalized SMB competitors (ADP, Paychex, Block, Xero, Bill, Sage) plus AI-native accounting startups
- H&R Block and free/low-cost tax alternatives pressuring Consumer
- Multiple compression / loss of 'premium compounder' status if double-digit growth stalls
Moats, dependencies & bottlenecks
Moats
Wired into bank feeds, payroll, invoicing, payments, accountants and years of historical data; ripping it out is painful. The most AI-resilient part of the franchise.
Wide but eroding Decades of trust and top-of-funnel dominance in tax and SMB accounting; the tax brand moat is the one AI most directly threatens.
~100M customers across Credit Karma, QuickBooks and TurboTax generate proprietary financial data to train AI agents — a genuine edge IF Intuit owns the AI layer rather than being disintermediated.
Tax pros and bookkeepers are trained on and recommend QuickBooks/ProTax, reinforcing SMB lock-in.
Largest DIY e-file share and growing payments volume give cost and data advantages; e-file share is now slowly ceding ground.
Dependencies
Technology / competitive Intuit both builds on frontier models (inference cost, capability dependence) and is threatened by them commoditizing guided tax/bookkeeping — a two-sided dependency.
Government-provided free filing directly erodes paid TurboTax units; a perennial political overhang.
Cyclical / demand Credit Karma revenue swings with lender ad budgets and consumer-credit conditions.
Infrastructure / vendor Hosting/compute and interchange partners underpin cost structure; AI-inference compute is a rising cost line.
Credit Karma's offers/score product relies on bureau data feeds.
Demand concentration Consumer segment is heavily concentrated in the Feb-April filing window — a single weak season materially moves the year.
Advantages
- Two category-defining franchises (QuickBooks in SMB accounting, TurboTax in DIY tax) with entrenched share
- Elite margins (~80% gross, ~40% non-GAAP operating) and ~33% FCF conversion
- ~100M-customer proprietary financial dataset to fuel AI monetization
- Strong balance sheet + aggressive capital return ($8B buyback, growing dividend, roughly net-cash-neutral)
- Deep accountant/ProAdvisor distribution channel reinforcing lock-in
Weaknesses
- Consumer/TurboTax is the single most AI-and-regulation-exposed profit pool
- Growth increasingly leans on price increases over unit growth
- Credit Karma cyclicality adds earnings volatility
- Perception has flipped from premium compounder to AI-disruption casualty — sentiment overhang
- Rising compute costs pressure the margin narrative
Bottlenecks
- TurboTax unit growth — flat-to-declining; price is doing the work, and AI/free-file cap the ceiling
- AI transition execution — must ship 'done-for-you' AI that raises ARPU faster than free AI tools erode willingness to pay
- Rising AI-inference COGS as AI is embedded across all products
- Re-rating dependent on proving growth is durable, not just price-hike-driven
- Talent/morale risk through a 17% workforce reduction mid-transition
Top signals & trends
Top signals
Management deploying capital into a ~67%-off-highs drawdown — signals it views the stock as cheap.
Confidence in FCF durability despite AI fears.
Margin-positive and an AI-driven talent reallocation, but concedes real disruption pressure.
Overall business strong; the AI-exposed consumer line is the crack the market is fixated on.
Bearish (sentiment) / Contrarian-bullish (valuation) · Extreme de-rating — either a value trap or a mispriced compounder.
Core recurring engine still compounding fast — the part AI least threatens.
Sell-side conceding the disruption thesis has teeth, not just retail panic.
Trends
High / Negative-to-uncertain · The defining 2026 narrative — could commoditize DIY tax and entry-level accounting, or become Intuit's ARPU-expanding 'done-for-you' engine. Binary and unresolved.
High / Potentially positive · Shift from software-you-operate to AI-that-does-it-for-you; whoever owns the trusted agent + data wins.
Medium-High / Negative · Structural, policy-driven erosion of paid consumer tax.
Medium / Positive · QuickBooks Advanced / Intuit Enterprise Suite pushing into larger, stickier customers.
Medium-High / Positive · Take-rate monetization on the QBO base is the durable long-term growth lever beyond seats.
Medium / Negative · Rising compute cost as AI is embedded everywhere pressures gross margin.
Ecosystem & competitor graph
Suppliers feed the company; customers pull from it. Line thickness shows the strength of each tie (supply-chain dependency, customer earnings contribution). Hover to isolate a tie.
Amazon Web Services / cloud infrastructure providers Hosting and compute backbone for Intuit's SaaS platform.
Frontier models powering Intuit Assist/AI agents — supplier and competitive threat simultaneously.
Credit-bureau data feeds underpinning Credit Karma's scores and offers.
Visa / Mastercard (payment networks / processors) Interchange and processing rails behind QuickBooks Payments.
Core QuickBooks/payments/payroll base; the durable recurring engine.
TurboTax filers and Credit Karma members (~100M+ across products).
bookkeepers & tax pros (ProAdvisor / ProTax) Channel and end-users reinforcing SMB lock-in.
Buyers of Credit Karma's advertising/lead-gen — Credit Karma's true 'customers'.
Payroll/HCM leader for SMB-to-enterprise; overlaps QuickBooks Payroll and mid-market push.
SMB payroll/HR; direct competitor to QuickBooks Payroll in the small-business core.
SMB payments/POS + banking (Square) and consumer finance (Cash App) — competes with QuickBooks payments and, loosely, Credit Karma.
Cloud accounting; primary QBO competitor internationally and increasingly in the US.
SMB AP/AR, spend and cash-flow management; overlaps QuickBooks payments/bill-pay.
SMB/mid-market accounting, strong in UK/Europe; competes with QuickBooks up-market.
Assisted + DIY tax; primary TurboTax competitor and owner of free Wave accounting.
SMB payments and checkout; competes on the payments-attach layer.
Consumer fintech / lending marketplace; competes with Credit Karma for consumer-finance engagement.
Personal-finance lead-gen/affiliate marketplace directly analogous to Credit Karma.
Frontier-model assistants that can answer tax questions, classify expenses and prep filings for free — the existential 2026 disruption vector, alongside AI-native entrants like Perplexity Tax / Chime Tax cited by Goldman.
AI-native SMB payroll/HR/finance startups pressuring the QuickBooks ecosystem.