Intuit (NASDAQ:INTU) Posts Better-Than-Expected Sales In Q1, Stock Soars

Tax and accounting software provider, Intuit (NASDAQ:INTU) reported Q1 CY2025 results exceeding the market’s revenue expectations, with sales up 15.1% year on year to $7.75 billion. On top of that, next quarter’s revenue guidance ($3.74 billion at the midpoint) was surprisingly good and 5.7% above what analysts were expecting. Its non-GAAP profit of $11.65 per share was 6.8% above analysts’ consensus estimates.

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Company Overview

Created in 1983 when founder Scott Cook watched his wife struggle to reconcile the family's checkbook, Intuit provides tax and accounting software for small and medium-sized businesses.

Sales Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can have short-term success, but a top-tier one grows for years. Over the last three years, Intuit grew its sales at a 12.2% annual rate. Although this growth is acceptable on an absolute basis, it fell short of our standards for the software sector, which enjoys a number of secular tailwinds. Luckily, there are other things to like about Intuit.

This quarter, Intuit reported year-on-year revenue growth of 15.1%, and its $7.75 billion of revenue exceeded Wall Street’s estimates by 2.6%. Company management is currently guiding for a 17.5% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 10.4% over the next 12 months, a slight deceleration versus the last three years. We still think its growth trajectory is satisfactory given its scale and implies the market is baking in success for its products and services.

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Billings

Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.

Intuit’s billings punched in at $7.61 billion in Q1, and over the last four quarters, its growth was solid as it averaged 15.5% year-on-year increases. This performance aligned with its total sales growth, indicating robust customer demand. The cash collected from customers also enhances liquidity and provides a solid foundation for future investments and growth.

Customer Acquisition Efficiency

The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.

Intuit is extremely efficient at acquiring new customers, and its CAC payback period checked in at 12.3 months this quarter. The company’s rapid recovery of its customer acquisition costs indicates it has a highly differentiated product offering and a strong brand reputation due to its scale. These dynamics give Intuit more resources to pursue new product initiatives while maintaining the flexibility to increase its sales and marketing investments.

Key Takeaways from Intuit’s Q1 Results

It was great to see Intuit raise its full-year EPS guidance and provide revenue guidance for next quarter that exceeded Wall Street’s estimates. We were also glad its revenue, EPS, and adjusting operating income topped analysts' expectations. Zooming out, we think this was a good "beat-and-raise" print with some key areas of upside. The stock traded up 6.8% to $711 immediately after reporting.

Indeed, Intuit had a rock-solid quarterly earnings result, but is this stock a good investment here? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.