INTU Q1 Earnings Call: Missed Revenue Expectations, AI and Platform Initiatives Drive Outlook

Tax and accounting software provider, Intuit (NASDAQ:INTU) missed Wall Street’s revenue expectations in Q1 CY2025, but sales rose 15.1% year on year to $7.75 billion. Its non-GAAP EPS of $11.65 per share was 6.8% above analysts’ consensus estimates.

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StockStory’s Take

Intuit’s first quarter performance was shaped by broad-based growth across its tax, small business, and credit segments, fueled by investments in artificial intelligence (AI) and platform automation. Management emphasized the contribution of TurboTax Live, crediting a 47% rise in its revenue to adoption of AI-enabled human expertise and seamless integration with Credit Karma. CEO Sasan Goodarzi noted that data-driven enhancements reduced customer time on tax returns and improved expert productivity, with over half of customers completing returns in under an hour. The company also highlighted a shift in marketing strategy, with earlier spending aimed at reaching assisted tax customers, and ongoing efforts to optimize product experiences for both new and returning users.

Looking ahead, Intuit’s updated guidance is anchored in expectations for continued AI-led product innovation, expanded 'done-for-you' experiences, and enhanced platform value for small and mid-market businesses. Goodarzi laid out plans to launch a suite of interconnected AI agents for tasks ranging from payments to project management, aiming to automate more customer workflows and improve monetization through value-based pricing. CFO Sandeep Aujla stressed that ongoing AI investments are expected to drive productivity gains across the organization, contributing to operating margin expansion while supporting sustained revenue growth. Management believes that recent product launches and increased integration between TurboTax and Credit Karma will underpin future growth across consumer and business segments.

Key Insights from Management’s Remarks

Management attributed the quarter’s results to accelerated adoption of AI-powered offerings, improved customer experiences, and strategic focus on higher-value assisted tax services.

• TurboTax Live momentum: Management reported a 47% year-over-year increase in TurboTax Live revenue, driven by higher adoption of AI-enabled human expertise and expanded full-service options. The seamless integration with Credit Karma contributed to new customer growth and improved engagement, with 22% of new TurboTax customers coming from Credit Karma using live offerings.
• AI platform enhancements: The company highlighted significant operational efficiencies from AI, including a 12% reduction in average customer time spent on tax returns and a 20% reduction in expert preparation time. These advances improved conversion rates and expert productivity, with more customers completing returns in under an hour.
• Business platform automation: New 'done-for-you' features in QuickBooks, such as AI-generated invoice reminders, led to a 10% higher payment conversion rate on overdue invoices. Usage of QuickBooks Live, which connects customers with AI-enabled experts, doubled in the quarter, reflecting rising demand for automated business solutions.
• Credit Karma outperformance: Credit Karma revenue grew 31%, well above prior expectations, as AI-driven product matching and new features like Lightbox and TakeShare increased partner spend in credit cards, personal loans, and insurance. Management cited execution in integrating AI as a key differentiator.
• Segment leadership changes: Intuit announced new leadership roles to accelerate its business solutions focus. Mariana Tessel now leads small business (QuickBooks and Mailchimp), Ashley Still oversees mid-market, and David Hahn is responsible for services (money and workforce solutions), aiming to drive execution and innovation in each area.

Drivers of Future Performance

Intuit expects future growth to be driven by the rollout of interconnected AI agents, deeper platform integration, and value-based pricing, while ongoing AI investments are intended to support margin expansion.

• AI-driven product expansion: Management plans to launch a suite of AI agents covering functions such as payments, customer management, and accounting. These agents are designed to automate routine tasks, improve cash flow, and offer predictive insights, supporting higher customer engagement and platform stickiness.
• Platform integration and monetization: The company will introduce refreshed product lineups and pricing models, with value-based and modular pricing to match customer usage and needs. This approach is expected to help customers consolidate spending on multiple apps into Intuit’s ecosystem, potentially reducing their overall costs while increasing Intuit’s share of wallet.
• Margin and efficiency focus: Ongoing investment in AI and automation is anticipated to yield productivity improvements across sales, technology, and support teams. Management expects these gains to allow operating income to grow faster than revenue, helping to offset macroeconomic uncertainty and support long-term profitability.

Catalysts in Upcoming Quarters

In coming quarters, our analysts will track (1) the launch and customer adoption of new AI agents and 'done-for-you' platform enhancements, (2) measurable improvements in customer productivity and platform engagement, and (3) sustained growth in Credit Karma and business solutions, particularly in the mid-market segment. Progress on integrating Mailchimp and effective execution in value-based pricing will also be important markers for future performance.

Intuit currently trades at a forward price-to-sales ratio of 10.3×. Should you double down or take your chips? See for yourself in our full research report (it’s free).

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