Intuit's Q2 Earnings Surpass Expectations, Driven by AI Integration and Strong Performance in Key Segments

Intuit Beats EPS, Revenue Expectations | The Motley Fool

Intuit (INTU -2.05%), the financial software company best known for its QuickBooks and TurboTax products, reported its fiscal 2025 second-quarter results on Feb. 25. The company posted non-GAAP earnings per share (EPS) of $3.32, significantly surpassing the analysts' consensus of $2.57. Total revenue reached $3.96 billion, above the anticipated $3.83 billion. The quarter's performance was bolstered by substantial growth in its Credit Karma and global business solutions segments, showcasing the effectiveness of Intuit's artificial intelligence (AI) strategy. Overall, the quarter exceeded both analyst and management expectations, highlighting the company's strategic alignment and robust performance. Source: Analysts' estimates provided by FactSet. Intuit is a leader in financial software, primarily serving small businesses, self-employed individuals, and consumers with products like QuickBooks, TurboTax, and Mint. A critical driver of Intuit's recent success has been its AI-driven strategy, which enhances customer experiences by automating workflows and providing AI-powered advice. Intuit's small business segment, an engine of growth, benefits from tools that help businesses efficiently manage finances. Credit Karma, an important part of Intuit's consumer offerings, continues to grow by providing personal financial insights and products. The successful integration of AI into its products and expanding its market offerings are fundamental to Intuit's agenda. Intuit's focus on the small business and self-employed segment, which accounts for a significant share of revenue, remains pivotal. Intuit also targets growth in Credit Karma by leveraging personalized data insights, showcasing its commitment to consumer financial empowerment. During the fiscal quarter, which ended Jan. 31, Intuit managed notable financial achievements and made strategic progress. In particular, the global business solutions group's revenue rose by 19% to $2.7 billion. QuickBooks Online Accounting, a key driver, posted growth of 22%, fueled by customer additions and adjusted pricing. Online ecosystem revenue surged by 21%, aligning with management's goal of approximately 20% annual growth. The Credit Karma segment was a standout performer, with revenues jumping by 36% to $511 million, setting a new benchmark for the segment. For the full year, that segment is only expected to delver annual growth in the 5% to 8% range. The consumer group, however, faced a challenging quarter with modest growth of 3% to $509 million, which underperformed management's fiscal year expectations due to strategic adjustments in promotions. While Intuit recorded strong overall growth, some areas required attention. The ProTax group saw a revenue decline of 1% to $272 million. Management is targeting 3% to 4% growth for the fiscal year, but acknowledges the need for improvement. On the innovation front, Intuit continues to capitalize on its AI initiatives to enhance product offerings and customer experiences. Intuit reaffirmed its full-year guidance, projecting revenue between $18.160 billion and $18.347 billion, or growth of about 12% to 13%. GAAP operating income is expected to increase by 28% to 30%. That guidance suggests continued confidence in AI and customer-centric advancements as growth drivers. For the fiscal third quarter, Intuit projects revenues of $7.55 billion to $7.6 billion. GAAP diluted EPS is forecast to be between $9.22 and $9.28, with non-GAAP diluted EPS in the range of $10.89 to $10.95. Investors should monitor how Intuit's AI integration progresses, how it manages its expansion in key segments, and how it executes on its updated promotional strategies, as these factors will be crucial for maintaining growth and achieving its longer-term financial objectives.

Intuit Sees AI-Driven Growth With TurboTax, Credit Karma: Analyst Raises Price Forecast - Intuit (NASDAQ:INTU)

Piper Sandler analyst Arvind Ramnani reiterated Intuit Inc INTU with an Overweight and raised the price target from $765 to $785. Intuit's second-quarter results were well ahead of expectations with revenues of $3.96 billion (~$120 million above) and EPS of $3.32 (+$0.75). Growth came from GBS Online Ecosystem growth of 21% (up from 20% in the first quarter of 2025), Desktop Ecosystem growth of +14% (from -17% last quarter), and Credit Karma growth of +36% (+29% in the first quarter of 2025). The company continues to make progress toward the "done for you experiences," powered by AI and automation. Also Read: Photronics Q1 Earnings: Beats Estimates, Strong IC And FPD Demand, Growth in High-End Products, CEO Cautious on 2025 Outlook The analyst noteed the company is off to a strong start this tax season, in part due to an AI-enhanced interface. Intuit Assist has contributed to a 20% reduction in contact support within TurboTax year-to-date. Intuit stock is +6% after hours despite the company maintaining fiscal 2025 guidance across the board, following beats in both the first and second quarters of the year. The price target is based on 11.0 times Ramnani's fiscal 2026E revenue estimate of $20.5 billion (from 12.0 times his previous fiscal 2025E revenue estimate of $18.3 billion). The analyst forecasted revenue growth of +12.4% in fiscal 2025 and +12.1% in fiscal 2026. INTU Price Action: INTU stock is up 12.74% at $626.43 at publication Wednesday. Also Read: ON Semiconductor Focuses On AI Chip Growth, To Cut 2,400 Jobs to Stay Competitive Photo: sdx15 via Shutterstock INTUIntuit Inc$632.1313.8%OverviewMarket News and Data brought to you by Benzinga APIs