Intuit (NASDAQ:INTU) raised its full-year guidance and delivered third-quarter results ahead of expectations as the company continued to benefit from its AI-focused platform strategy.
However, the financial software group also reduced its annual revenue outlook for TurboTax and announced plans to cut 17% of its workforce as part of a broader operational restructuring programme, sending the stock down more than 13% in premarket trading on Thursday. The company expects restructuring-related charges of between US$300 million and US$340 million, with most of the costs expected to be recorded during the fourth quarter.
Shares in Intuit have fallen roughly 42% since the start of the year as concerns grow that AI-powered tools capable of automating increasingly complex tasks could pose a significant threat to traditional software providers.
The company now forecasts full-year revenue of between US$21.34 billion and US$21.37 billion, representing growth of around 13% to 14%, compared with previous guidance of US$21 billion to US$21.2 billion, which implied growth of approximately 12% to 13%. The updated outlook is ahead of the analyst consensus estimate of US$21.25 billion.
Adjusted earnings per share are now expected to reach US$23.80 to US$23.85, above the average analyst forecast of US$23.22 and implying annual growth of roughly 18%. Previous guidance had ranged from US$22.98 to US$23.18 per share.
At the same time, Intuit lowered its fiscal 2026 revenue forecast for TurboTax, now expecting sales of between US$5.277 billion and US$5.282 billion compared with prior guidance of US$5.305 billion to US$5.330 billion.
During a post-results conference call, chief executive Sasan Goodarzi said total IRS tax filings are expected to decline by nearly 30 basis points this season, around 2 million below broader economic forecasts and marking the steepest industry-wide contraction since the period following COVID-19.
For the fourth quarter, Intuit forecast revenue growth of 11% to 12% alongside adjusted earnings per share of US$3.56 to US$3.62, comfortably above analyst expectations of US$3.13.
Asked whether markets were correctly pricing in the risks posed by AI disruption, chief financial officer Sandeep Aujla rejected that view.
“We can’t speak to market pricing, but we can speak to what we’re seeing in our business,” he told Investing.com.
“Customers buy confidence, not code — which is why they spend at least 7 times more on accounting and tax experts than on software alone,” he said.
Aujla also stated that Intuit views AI “as a clear net tailwind.”
Intuit operates a portfolio of financial technology products including tax preparation platform TurboTax, accounting software QuickBooks, consumer finance platform Credit Karma and marketing service Mailchimp.
“Our models are built on decades of actual filer and business data, not generalized data from the open internet, and we deliver personalized and actionable outcomes that probabilistic, generic agents cannot replicate,” Aujla continued.
For the quarter ended April 30, the company reported revenue of US$8.56 billion, up 10% year-on-year and broadly matching analyst expectations of US$8.54 billion.
Adjusted earnings per share came in at US$12.80, exceeding the consensus estimate of US$12.57, while adjusted operating income increased 8% to US$4.68 billion.
“We delivered strong third-quarter results, driven by our AI-driven expert platform strategy,” Intuit chief executive Sasan Goodarzi said in the company’s earnings release.
“The powerful combination of Intuit’s proprietary data, domain-specific AI platform capabilities, and AI-powered human expertise is setting the standard for trusted financial intelligence,” he added.
The Consumer division, which includes TurboTax and Credit Karma, generated revenue of US$5.3 billion, an increase of 8% from a year earlier. TurboTax Live tax return volumes rose 38% year-on-year, while total Live revenue increased 36%, although aggressive promotional activity weighed on average revenue per customer, which slipped 1%. Growth also slowed from the 47% increase recorded during the prior year.
“While Q3 results failed to provide the positive catalyst we had expected from a strong TurboTax Live performance, we see a solid catalyst path over the next few months with the stock at a very undemanding valuation versus the durable 15%+ earnings growth,” Morgan Stanley analyst Keith Weiss commented.
Intuit repurchased US$1.6 billion worth of shares during the third quarter and also received board approval for a new US$8 billion share buyback programme.
The board additionally approved a quarterly dividend of US$1.20 per share, representing a 15% increase from the previous year.