Intuit reported stronger-than-expected fiscal fourth-quarter earnings on Thursday, but shares dropped sharply on Friday after the company offered a softer revenue outlook for fiscal 2026.
The stock was down by more than 6.2% to $653.88 in opening trade, despite a year of solid growth in its flagship platforms.
The maker of TurboTax, Credit Karma, and QuickBooks posted quarterly revenue of $3.8 billion, a 20% increase from the prior year and slightly above Wall Street’s consensus of $3.75 billion.
Adjusted earnings per share came in at $2.75, topping analyst forecasts of $2.66 and marking a 38% year-over-year rise.
Management credited adoption of its AI-driven platform for much of the momentum, with Credit Karma revenue surging 34% on the back of strong consumer demand for loans, credit cards, and auto insurance.
Mailchimp drags on growth outlook
While overall results were solid, the company’s guidance fell short of analyst expectations.
Intuit projected fiscal 2026 revenue growth of 12% to 13%, to nearly $21 billion, compared with this year’s faster pace.
Adjusted earnings per share are expected to rise 14% to 15%.
A key factor behind the tempered outlook is weakness at Mailchimp, Intuit’s email marketing business acquired in 2021.
The unit saw a slight revenue decline in the latest quarter, continuing a trend that has weighed on growth.
Chief Financial Officer Sandeep Aujla told Reuters that Mailchimp remains a “near-term drag” but initiatives are underway to improve performance by year-end.
He noted that small businesses, which make up Mailchimp’s core customer base, have found the platform “a bit harder to use,” hurting retention and expansion.
Excluding Mailchimp, Intuit said revenue deceleration is also due to reduced contribution from price increases in fiscal 2026, particularly within QuickBooks Desktop, where the company has largely transitioned customers to subscription-based QuickBooks Online.
AI rollout shows early promise
Despite Mailchimp’s challenges, management highlighted new opportunities.
Intuit has begun rolling out AI-powered “agents” designed to automate workflows for small businesses.
Chief Executive Sasan Goodarzi said millions of customers have already engaged with the feature, with repeat usage rates surpassing expectations.
Although the company did not include revenue contributions from AI agents in its fiscal 2026 forecast, Goodarzi emphasized their long-term potential.
“The agents aim to automate workflows, boosting efficiency and growth for Intuit’s business customers,” he said.
Alongside earnings, Intuit declared a quarterly dividend of $1.20 per share, up 15% from last year, payable October 17 to shareholders of record as of October 9.
The board also approved a new $3.2 billion share repurchase program, boosting total buyback authorization to $5.3 billion.
Analysts weigh in on outlook
Wall Street analysts were divided on the implications of the results.
JP Morgan maintained an “overweight” rating with a $750 price target but warned Mailchimp would weigh on near-term growth.
BofA Global Research kept a “buy” rating and an $800 objective, though it noted “a fix to lagging Mailchimp is not in sight.”
It also noted that Mailchimp provides a mere 1.5% headwind to the company’s overall business solution growth.
Evercore ISI took a more optimistic stance, reiterating “outperform” with a $875 target, citing intact long-term trends despite quarterly disappointment.
Barclays, with an “overweight” and $785 target, pointed to AI adoption and steady demand as reasons for optimism.
Stifel maintained a ‘Buy’ but slashed price target to $800/share from $850.
Analyst price targets range from $560 to $938, with an average of about $818—suggesting potential upside of 17% from current levels.
GuruFocus estimates also imply a 12% gain over the next year.
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