TLDRs;
- Intuit shares fall 5% after hours as Q3 outlook signals higher spending and EPS pressure.
- TurboTax and QuickBooks investments increase costs, even as revenue continues steady growth.
- AI partnerships with OpenAI and Anthropic expand user base but add short-term expenses.
- Investors monitor early tax-season demand and conversion rates as April filing deadline approaches.
Intuit Inc (NASDAQ:INTU) saw its stock decline by more than 3% in after-hours trading on Thursday, closing at $373.48 following the release of its third-quarter guidance. The drop came despite shares rising roughly 3.5% during the regular session to $394.42, reflecting investor caution after the company flagged increased spending on marketing and customer support.
The after-hours slide underscores the market’s sensitivity to how Intuit allocates resources during its critical tax-season period, which runs from January through April. Analysts and investors alike are closely watching how early filings and customer activity shape the growth narrative for the rest of the year.
Tax-Season Spending Pressures
Intuit’s CFO, Sandeep Aujla, highlighted that the company is expecting adjusted earnings per share (EPS) in the $12.45 to $12.51 range for the third fiscal quarter, projecting approximately 10% revenue growth. While revenue is expected to rise, heavier spending to attract and support users of assisted tax services and QuickBooks has created pressure on profits.
“Marketing and customer support expenses are higher as we expand our service offerings,” Aujla said.
Intuit competes directly with H&R Block and Oracle’s NetSuite in the assisted tax and mid-market finance segments, making customer acquisition and retention a top priority this season.
AI Partnerships Boost Engagement
Intuit continues to lean into AI, with multi-year partnerships with OpenAI and Anthropic. More than three million clients now interact with Intuit’s AI agents, which help streamline tasks in TurboTax and QuickBooks. These initiatives position Intuit at the intersection of AI and human intelligence, as CEO Sasan Goodarzi described, but they come with significant short-term costs.
Aujla emphasized, “We’re paying OpenAI and Anthropic for capabilities, not sharing revenue,” reflecting Intuit’s commitment to building proprietary advantages while managing expenses. Analysts note that the long-term potential of AI integration could offset temporary profit pressure.
Revenue Growth Continues
Despite the after-hours drop, Intuit’s second-quarter results showed healthy gains. Total revenue rose 17% to $4.651 billion, with Global Business Solutions revenue climbing 18% to $3.2 billion, and Consumer revenue hitting $1.5 billion, up 15%. TurboTax itself contributed $581 million, a 12% increase. The company maintained its full-year outlook, increased its quarterly dividend by 15% to $1.20 per share, and returned $961 million through share buybacks.
Seasonality remains a major driver of revenue swings. The majority of TurboTax and ProTax sales occur between November and April, meaning the quarters ending in January and April capture the bulk of revenue activity. Investors are keen to see whether early tax-season trends hold through the federal filing deadline on April 15.
Investor Outlook and Risks
While some analysts remain bullish, viewing Intuit as a mission-critical platform for small businesses, there is caution over spending efficiency. If marketing and support outlays increase faster than customer acquisition, profit margins could be impacted. Competition in the assisted tax and mid-market finance segments remains intense, adding pressure on the company to maintain growth.
Traders entering Friday’s session will closely monitor early tax-season demand, conversion rates for assisted tax products, and QuickBooks adoption as key indicators of Intuit’s near-term trajectory.
Considering a new stock? You may want to see what’s on our watchlist first.
Our team at Knockout Stocks follows top-performing analysts and market-moving trends to spot potential winners early. We’ve identified five stocks gaining quiet attention that could be worth watching now. Create your free account to unlock the full report and get ongoing stock insights.Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
