Intuit Inc. has delivered strong Q3 25 results, driven by AI innovations and product expansion. It posted significant revenue growth, with EBIT and net profit also increasing substantially. The stock has shown impressive gains over the past year; BMO Capital and Deutsche Bank have also increased their target prices for the share, reflecting both positive analyst sentiment and the company's robust performance.
Intuit Inc focuses on and has specialized expertise in developing, publishing and marketing management software for small and medium businesses and private individuals, mainly operating in US (92%), with the remainder International (8%). They also offer the services of consulting, training and technical assistance services. They work in the following segments (contribution of sales on FY24): Small Business & Self-Employed (59%) (renamed as "Global Business Solutions"), Consumer segment (27%), Credit Karma segment (10%), and ProTax segment (4%). They are leveraging AI to drive the growth of the business along with investments in GenAI and data. The company has around 18,800 employees.
Intuit released its Q3 25 results, posting revenue up 15% y/y, reaching $7.8bn. This growth was driven by AI innovations and product expansion. EBIT rose by 20% to $3.7bn, with a margin of 48%. Net profit increased by 18% to $2.8bn. The Global Business Solutions segment saw a 19% increase, fueled by a 20% rise in online ecosystem revenue. Credit Karma's revenue grew 31%, ProTax segment revenue increased 9%, and Consumer group revenue rose 11%, driven by TurboTax Live. Credit Karma's growth was attributed to strong performance in credit cards, personal loans, and auto insurance. In addition, BMO Capital and Deutsche Bank upgraded the company's share price target to $870 and $850, respectively.
Intuit Inc. has introduced transformative AI agents within QuickBooks, enhancing business operations and growth. These agents automate workflows, provide real-time insights, and improve cash flow, saving businesses up to 12 hours monthly. They offer a 360-view of business metrics and work alongside AI-enabled human experts for added support. 78% of customers find it easier to run their business, and 68% can focus more on growth. Rolling out on July 1, these innovations will be available to QuickBooks Online users in the US.
Total revenue has rose at a CAGR of 19.1% over the period of FY 21-24, reaching $16.3bn, driven by early mover advantage in the AI industry and with the subject expertise and investments in data, machine learning, GenAI, and knowledge engineering. EBIT grew to $3.9bn, by 15% CAGR from FY 21-24. Net income rose at a CAGR of 12.8% to $2.9bn.
Cash flow from operations has increased to $4.9bn from $3.2bn, with a CAGR of 7% over FY 21-24. Cash and cash equivalent also rose from $2.6bn to $3.6bn.
The company's local peer, Robinhood Markets Inc, posted slightly lower revenue growth CAGR of 17.59% over FY 21-24, reaching $2.9bn. Net income has experienced a decline at a CAGR of minus 27.4% to $1.4bn.
Looking ahead, analysts anticipate a revenue CAGR of 13.4% over FY 24-27, reaching $23,7bn. EBIT CAGR of 15.6% to $9.9bn, with margins expanding by 233bp to 41.7% in FY 27. In addition, analysts estimate a net profit CAGR of 20.6%, reaching $5.2bn, with EPS expected to increase to $18.3 in FY 27, from $10.4 in FY 24. Likewise, analysts estimate EBIT CAGR of 29.9% and net profit CAGR of 7% for Robinhood Markets.
Overall, the company is led by the Global Business Solution segment in revenue growth along with high growth experiences in the Credit Karma segment. The growth is driven by the current market demand of AI, machine learning, GenAI and ease in taking decisions for the customers without much effort in their finances. Their focus on small and medium businesses, self-employed and salaried people, is driving the sales volume across segments.
However, the company face the risk of innovation, developing and introducing emerging technologies and various technological and privacy risks. They also face the risk of litigation as they are frequently a party to it and the risk of the borrower's inability to repay the loans extended by the company to the qualified small businesses.
