Intuit (INTU 1.12%), a financial software specialist, announced its fiscal 2025 first-quarter earnings on Nov. 21. The company's revenue rose 10% year over year to $3.3 billion, beating both analyst estimates and management’s guidance for 5% to 6% growth. GAAP diluted EPS of $0.70 exceeded the guidance range of $0.61 to $0.66, and non-GAAP EPS of $2.50 surpassed both management's expectations and analyst estimates of $2.36. Overall, the quarter was positive, bolstered by segments such as Credit Karma, despite some underperformance in the consumer and ProTax units.
| Metric | Fiscal Q1 2025 Result | Fiscal Q1 2025 Analysts' Estimate | Fiscal Q1 2024 Result | % Change YOY |
|---|---|---|---|---|
| Revenue | $3.3 billion | N/A | $2.978 billion | 10% |
| GAAP EPS | $0.70 | N/A | $0.85 | (18%) |
| Non-GAAP EPS | $2.50 | $2.36 | $2.47 | 1% |
| Operating income | $271 million | N/A | $307 million | (12%) |
Source: Analyst estimates provided by FactSet.
Overview of Intuit's Business
Intuit is a global financial software company best known for products such as QuickBooks, TurboTax, and Credit Karma. Its offerings cater to the small business and self-employed segments, as well as providing consumer tax, and professional tax solutions. The company is adapting to evolving market dynamics by integrating artificial intelligence (AI) to enhance its products and deliver personalized customer experiences.
Recently, Intuit's key strategic focus has been on AI-driven innovation and enhancing product offerings through AI and data-driven insights. The firm's "Big Bets" strategy comprises initiatives aimed at improving customer financial outcomes, addressing small business growth, and making deeper inroads into the mid-market business segment with tools that cater to it.
NASDAQ: INTU
Key Data Points
Highlighted Developments in the Quarter
In the fiscal first quarter, which ended Oct. 31., Intuit saw significant shifts across its business segments. The Online Ecosystem category, an important growth area, posted a 20% revenue increase, in line with management’s predictions. Credit Karma's revenue grew by 29%, largely driven by increased demand for personal loans and credit cards. Those performances were bright spots; other parts of the business faced challenges.
The consumer and ProTax segments experienced revenue declines of 6% and 7%, respectively, primarily due to prior-year tax deadline extensions impacting comparability. However, management’s anticipation of these challenges helped moderate the effect.
Operating income declined by 12% year over year to $271 million due to a combination of strategic investments in AI and competitive pressures. Despite this, the company maintained shareholder value through $570 million in share repurchases and a 16% increase in the quarterly dividend to $1.04 per share.
Intuit’s inspired investment in AI-focused initiatives has been central to its progress. In the earnings release, CEO Sasan Goodarzi emphasized the role that AI innovations were playing in driving the company's success.
Looking Ahead
Intuit has reiterated its full-year guidance, projecting revenue growth of 12% to 13% and GAAP operating income growth from 28% to 30%. Non-GAAP EPS is expected to rise by 13% to 14%. These projections demonstrate optimism, in spite of the competitive and economic headwinds that management acknowledges as challenges it will have to navigate.
Management continues to highlight the strategic importance of its AI initiatives and expects sustained growth from platforms like TurboTax Live and QuickBooks. The company's transition to subscription-based models aims to create stable revenue streams. However, it will likely impact short-term sales figures.
