By Bill Peters
Artificial intelligence is ‘delivering significant benefits to our customers and strong results across the company,’ CEO says
Shares of Intuit Inc. fell after hours on Thursday, as the tech company behind TurboTax filing software and the personal-finance site Credit Karma warned of a decline in the number of people who use TurboTax for free.
The drop came even as the company raised its full full-fiscal-year profit and sales outlook. Shares fell 6.4% after hours.
Intuit (INTU) said it expects fiscal-year sales of $16.16 billion to $16.2 billion, or growth of around 13%. That’s up from a prior forecast for gains of 11% to 12%.
The company also raised its full-year adjusted per-share profit forecast to $16.79 to $16.84, representing a roughly 17% increase, better than a previous call for growth of 12% to 14%.
The company gave that forecast in the wake of the key tax season, which Intuit depends on for sales. However, Intuit said that for its fiscal year, which concludes at the end of July, it expected the number of TurboTax customers who pay nothing to file to be over 10 million. That would be down from over 11 million last year.
During the company’s earnings call, Chief Executive Sasan Goodarzi said the company wasn’t interested in those customers anyway, as Intuit tries to upsell users on its expert-help services, in which people can do their taxes with a tax professional.
“Because of our Credit Karma and TurboTax platform, we actually see the customers that are just really looking for a free tax software and are bouncing between platforms, and we are not interested in those customers,” he said.
Intuit issued those forecasts as higher interest rates and tighter credit standards crimp borrowing, while higher prices make it harder for people to pay their bills on time. The price people end up paying for tax preparation, via software or an accountant, has risen, as the industry tries use higher pay to attract new accountants.
The company’s third-quarter results topped Wall Street’s expectations.
For its fiscal third quarter, Intuit reported net income of $2.39 billion, or $8.42 a share, compared with $2.09 billion, or $7.38 a share, in the same quarter last year.
Adjusted for amortization and share-based compensation, Intuit earned $9.88 a share. Revenue rose 12% to $6.74 billion.
Analysts polled by FactSet expected Intuit to report adjusted earnings per share of $9.38, on revenue of $6.65 billion.
Management attributed those results in part to its adoption of artificial intelligence, as it tries to use that technology and other data to help people file taxes – with the aid of human experts – and deal with other business matters.
“The era of AI is one of the most significant technology shifts in our lifetime, and our strategy to be the global AI-driven expert platform is delivering significant benefits to our customers and strong results across the company,” Goodarzi said in a statement.
“I’m proud of our innovation and performance, and because of our momentum, we are raising Intuit’s revenue, operating income and earnings per share guidance for the fiscal year,” he continued.
Intuit on Thursday also said that Joe Kauffman would become the chief executive of Credit Karma on Aug. 1. He is currently Credit Karma’s president.
Intuit bought Credit Karma, known for offering information related to credit scores, in 2020, and has taken steps to integrate Credit Karma’s services with TurboTax.