Intuit Reports Strong Quarterly Results, Raises Full-Year Guidance Boosted by AI Demand Despite Guidance Miss

Intuit Inc. exceeded Wall Street expectations for its third quarter, raised its full-year outlook, but saw a 6% pre-market share drop due to mixed guidance and a decline in free TurboTax users.

Intuit Inc. reported impressive financial results for its third quarter, exceeding Wall Street's expectations, thanks in part to surging demand for its artificial intelligence (AI) offerings. Despite this, the company experienced a share price drop in pre-market trading due to concerns over its current quarter guidance and a noticeable decline in free TurboTax users.

During the latest tax season, Intuit witnessed a reduction in its lower-end customer base, with the number of people using TurboTax to file their taxes declining by approximately 1 million to 10 million users. Additionally, the company's guidance for the current quarter ending on July 31 failed to meet analyst expectations. Intuit projected revenue to fall in the range of $3.06 to $3.1 billion, lower than the anticipated $3.34 billion, and adjusted earnings per share (EPS) between $1.80 and $1.85, under the expected $1.96.

Despite these challenges, Intuit saw significant year-over-year growth in its fiscal third quarter, which ended on April 30. The company's revenue increased by 12% to $6.7 billion, and its adjusted EPS rose by 11% to $9.88, surpassing the forecasts of $6.65 billion and $9.34, respectively. Buoyed by these strong results, Intuit raised its full-year revenue outlook to between $16.16 and $16.2 billion, up from its previous guidance range of $15.89 billion to $16.11 billion. The company also uplifted its adjusted EPS forecast to indicate a 17% growth, reaching $16.79 to $16.84, compared to the earlier growth expectation of 12% to 14%.

Despite the pre-market stock decline, Intuit CEO Sasan Goodarzi expressed pride in the company’s innovative strides and performance. He highlighted the upward revision of Intuit's revenue, operating income, and earnings per share guidance for the fiscal year, underscoring the company's positive momentum.

Shares of Intuit, however, reacted to the mixed news by trading down 6.2% at $621 before the market opened in New York on Friday, indicating that investor concerns over the guidance miss and the dip in free TurboTax users temporarily overshadowed the company's robust quarterly achievements and its optimistic full-year outlook.

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