Intuit Inc. (INTU) shares took a hit on Wednesday, even after the company delivered a solid fourth-quarter earnings beat on Tuesday. The market's reaction wasn't about the past, but the future: management used the earnings call to admit that customer growth has been lagging and to reset priorities around winning new users.
Here's the quick rundown of Q4: Revenue came in at $4.35 billion, up 14% year over year and ahead of the $4.27 billion consensus. Adjusted earnings of $4.03 per share beat the $3.58 estimate, a 47% jump from last year. GAAP diluted EPS was $1.34, slightly down from $1.35 a year earlier. For the full year, revenue grew 14%, and both GAAP and adjusted EPS grew 20%.
So why the sell-off? Because the future looks a bit less rosy. CEO Sasan Goodarzi said Intuit needs to accelerate new-customer growth, especially after focusing heavily on assisted tax, Money, and mid-market offerings. The company is now pivoting to a broader strategy that prioritizes customer acquisition over short-term metrics.
Customer Growth: The Weak Spot
At fiscal year-end, total online paying customers reached 8.9 million, growing just 3% year over year. That's about two percentage points slower than the previous year. During the Q&A session, Goodarzi didn't mince words: he said he was "personally dissatisfied" with performance in DIY tax and the low end of the business platform. The company is resetting expectations around customer acquisition.
To widen the funnel, Intuit is pushing QuickBooks Free and QuickBooks Lite. As of last month, more than 20,000 customers were actively using QuickBooks Free or had converted to paid offerings, with payments also generating monetization. It's a classic land-and-expand play, but it means accepting lower initial revenue per customer in exchange for long-term growth.
TurboTax: Price Is the Problem
Management was blunt about TurboTax: price is now the No. 1 reason customers leave. Intuit lost quality DIY customers to lower-cost providers, and it's planning to fight back. The strategy includes accepting lower initial DIY tax ARPC (average revenue per customer), making entry pricing more competitive, and rebuilding the customer funnel. The bet is that broader consumer-platform engagement and eventual TurboTax Live upgrades will generate greater lifetime value.
Guidance: Slower Growth Ahead
For fiscal 2027, Intuit expects revenue between $23.279 billion and $23.512 billion, representing 9% to 10% growth. That's a step down from the 14% growth in fiscal 2026. GAAP EPS is projected at $20.12 to $20.36, while adjusted EPS is expected at $22.88 to $23.12.
Segment-wise, Global Business Solutions revenue is expected to grow 13% to 14%, Consumer revenue 4% to 6%, and TurboTax revenue just 2% to 3%. Credit Karma is expected to grow 11% to 13%. For the first quarter, Intuit expects revenue growth of about 11%, GAAP EPS of $1.71 to $1.75, and adjusted EPS of $2.44 to $2.48.
When asked whether growth could reaccelerate by fiscal 2028, Goodarzi declined to commit to a timetable. He said investors should judge progress through quarterly results. That's a cautious stance, and the market seems to be pricing in the uncertainty.
At the time of publication on Wednesday, Intuit shares were down 3.51% at $344.92.
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