管理層發言
Good afternoon. My name is Chloe, and I will be your conference operator today. At this time, I would like to welcome everyone to Intuit's Third Quarter Fiscal Year 26 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer period. Simply press star then the number 1 on your telephone keypad. With that, I will now turn the call over to Anne-Sophie Seigneurbieux, Intuit's Senior Vice President of Investor Relations, Corporate and Strategic Finance.
Thank you, Chloe. Good afternoon, and welcome to Intuit's Third Quarter Fiscal 26 Conference Call. I am here with Intuit's Chairman and CEO, Sasan Goodarzi, and our CFO, Sandeep Aujla. Before we start, I would like to remind everyone that our remarks will include forward-looking statements. There are a number of factors that could cause Intuit's results to differ materially from our expectations. You can learn more about these risks in the press release we issued earlier this afternoon or our Form 10-Ks for fiscal 25 and our other SEC filings. All of these documents are available on the Investor Relations page of Intuit's website at intuit.com. We assume no obligation to update any forward-looking statements. Some of the numbers in these remarks are presented on a non-GAAP basis. We have reconciled the comparable GAAP and non-GAAP numbers in today's press release. Unless otherwise noted, all growth rates refer to the current period versus the comparable prior year period and the business metrics and associated growth rates refer to worldwide business. A copy of our prepared remarks and supplemental financial information will be available on our website after this call ends. With that, I will turn the call over to Sasan.
Thank you, Anne-Sophie, and thanks all of you for joining us today. We delivered strong overall results this quarter with Q3 revenue growing 10% as we made significant progress executing on our AI-driven expert cloud platform strategy. As a result, we are raising total company guidance for revenue and all non-GAAP metrics for the full fiscal year. We delivered significant growth in key areas across the company. Assisted tax, money, portfolio and mid market, all growing north of 30%. We also experienced headwinds with the most price-sensitive segment of DIY filers in TurboTax which I will unpack shortly. First, let me reground everyone in our durable strategy to win as an AI-driven expert platform. In our category, accuracy, compliance, security and trust of financial decisions are critical given the liability that comes with that. Our powerful combination of proprietary data, domain-specific AI platform capabilities, and AI-powered human expertise is setting the standard for trusted financial intelligence. Ultimately, customers buy confidence not code, which is why they spend at least 7x more on accounting and tax experts than on software alone. Intuit brings together data, AI and human expertise into a single system of intelligence that does the work for customers. Our platform enables businesses to manage from lead to cash, and consumers from credit building to wealth building, all in one place so they can make high-stakes financial decisions with confidence. As we look at our overall performance, we see both exceptional momentum and meaningful opportunity. Our big bets have ignited growth engines — assisted tax, money, portfolio and mid market — that are all growing north of 30%. Our focus now is on scaling these growth engines with even greater speed and impact. Let's now talk about our overall consumer performance and tax. Our consumer platform grew 8% this quarter. Credit Karma grew 15%, and we expect TurboTax to grow 7% for the full year. To set context, total IRS filers are expected to decline by approximately 30 basis points this season, representing a gap of roughly 2 million units versus macro expectations and the most significant industry-wide contraction since the post-COVID tax season. As the category leader, this headwind impacted results among both existing and new customers, across all demographics. Against this backdrop, we expect TurboTax Online paying units to grow 2%, driven by share gains among higher ARPU filers. We also expect ARPU to increase 11% reflecting continued demand for assistance and faster access to refunds. We saw significant strength in an area critical to our strategy and long-term growth formula: adopting the $37 billion assisted tax category, which is 88% of the total TurboTax TAM. We expect TurboTax Live customers to grow 38% this year, with new TurboTax Live customers up 29% excluding the impact of one-time offers. Our local expert strategy played a key role in TurboTax Live acquisition, with 36% of those acquired through local channels being new to TurboTax. As a result, we expect TurboTax Live revenue to grow 36% this year, well above our long-term expectation of 15% to 20% revenue growth. TurboTax Live will therefore represent over half of TurboTax revenue, up 11 points versus last year, a significant milestone in our journey to disrupt the assisted category. This is a testament to the value we are delivering in a high-stakes regulated environment. Shifting to the DIY segment, representing a $5 billion TAM, or 12% of our total TurboTax TAM, I am constructively dissatisfied with our performance. We face pressure among the most price-sensitive DIY filers earning less than $50,000 a year. We lost on price. To reaccelerate this part of our business, we will evolve our business model by delivering the right lineup and price points to meet simple filers' needs at the low end, and lean into the power of our broader consumer platform to monetize beyond tax. The flywheel effect we saw across our consumer platform this season gives us further confidence in our strategy. Average revenue per user is approximately 30% higher for customers using both TurboTax and Credit Karma compared to customers using only one, and we are seeing over 35% of TurboTax customers adopt our fast money offerings. As a result, we expect to deliver 26% revenue growth across consumer money portfolio this year. We also saw the impact of improved end-to-end consumer experiences. Credit Karma members with simple tax situations could have up to 80% of their taxes done before even starting in TurboTax. This is helping drive a 54% increase in tax filers who start their filing experience in Credit Karma this year, up 25 points. This progress underscores our ability to drive ARPU expansion by deepening engagement, delivering more value across the consumer platform and monetizing beyond tax. To summarize, in a $37 billion assisted TAM, we expect to grow TurboTax Live customers 38% and revenue 36%, representing over half of our TurboTax franchise. We have significant momentum and confidence in our trajectory. Our plan is clear. First, build on our momentum with TurboTax Live where we have the largest TAM and a significant ARPU opportunity. Second, evolve our DIY business model to deliver the right value at the right price point for the most price-sensitive filers and monetize beyond tax on our consumer platform. We are confident in our platform assets and proof points to deliver on our long-term growth goals. Now turning over to our all-in-one business platform, which is becoming the control tower for businesses and accountants, fueling their growth and consolidating their tech stacks. Starting with mid market: our AI-native platform continues to gain traction in a nearly $90 billion TAM. In Q3, online ecosystem revenue for QBO Advanced and Intuit Enterprise Suite grew approximately 38%. We are scaling our direct sales team by approximately 30% as we shared last quarter and solid productivity continues to improve. This translates to 37% quarter-over-quarter growth of total Intuit Enterprise Suite contracts. In our money portfolio, we are making strong progress by putting money at the center of everything we do. Total online payment volume grew 30% this quarter, including bill pay, reflecting continued momentum and helping customers get paid faster and manage cash flow more effectively. We are growing our line of credit offerings with buy now, pay later directly embedded within QuickBooks, and the launch of Intuit business credit card. These additions will give small and mid market businesses even greater access to capital and control over their financial operations. Across the platform, we continue to scale new AI capabilities bringing together insights, forecasts, and industry-specific KPIs so our customers can run their business and grow with confidence. Our AI agents are delivering value at scale, with our accounting AI agents powering recommendations across more than 50 million transactions each week, and business tax AI agents identifying millions of dollars in deductions. Looking ahead, we are launching a sweeping expansion and a new lineup of our AI-driven Expert platform in August. This represents a significant step forward: a unified system of intelligence that serves as a strategic control tower for both businesses and accountants, seamlessly moving from insights to autonomous execution. On a single platform, accountants can run and grow their practices while managing and advising their clients, and based on their partnership tier, we will connect them with new customers to fuel their success and strengthen our network. Businesses operate from the same control tower where AI agents do not just surface insight, but take action across the business to manage performance, KPIs, and complete critical workflows autonomously, all in one place. With a base of approximately 10 million business customers and 1 million accountants, this breadth of data, customers, and an ecosystem of industry-specific domain expertise fuels a powerful network effect and durable competitive advantage. Underpinning all of this is our commitment to trusted intelligence. Built on four decades of leadership in accuracy, compliance and security, our platform enables customers to operate with confidence, making better decisions and running their businesses from a single integrated platform. As we evolve our lineup with expanded functionality, we expect to take pricing actions at the higher end of our portfolio, reflecting the increased value we are delivering to customers. We will also introduce a consumption-based model for our AI and human intelligence services enabling customers to scale usage and unlock greater benefits and business outcomes. Based on initial tests, we see the strongest adoption among more complex customers on the Advanced and Plus offerings. We are also expanding our offerings to meet the needs of the next wave of entrepreneurs. With a 94% year-over-year increase in people planning to start a business in 2026, we launched QuickBooks Free and QuickBooks Lite to provide a low-friction entry point for millions of new businesses. These tiers ensure that as early-stage businesses scale, they grow with the Intuit platform. Before I wrap up, I want to address the decision we announced earlier today. We are reducing our full-time workforce by 17% to simplify our organizational structure to become a faster, leaner and more focused company. We are at an important inflection point with strong category leadership, and multiple growth engines across our three big bets. To fully capitalize on this opportunity, we must operate with greater velocity, urgency and discipline. These deliberate actions are about scaling our growth engine and strengthening our core. We are sharpening our cost structure to deliver durable long-term growth and margin expansion. This is how we build the next chapter of Intuit: services and software powered by data, AI, and human intelligence. We are positioning the company to deliver durable growth you can count on. Let me now hand it over to Sandeep.
Thanks, Sasan. We delivered solid third quarter company-wide results for fiscal 26, exceeding the top end of our guidance across revenue, operating income and earnings per share. Our third quarter results include revenue of $8.6 billion, up 10%. GAAP operating income of $4.0 billion versus $3.7 billion last year. Non-GAAP operating income of $4.7 billion versus $4.3 billion last year. GAAP diluted earnings per share of $11.09 versus $10.02 a year ago, and non-GAAP diluted earnings per share of $12.80 versus $11.65 last year, reflecting our overall disciplined approach to managing the business, including continued AI efficiencies. Now turning to the business segments. Consumer platform revenue grew 8% in Q3, driven by TurboTax, which grew 7%, and Credit Karma, which grew 15%. ProTax revenue was in line with last year. Beginning with TurboTax: while we did not have the overall tax season we expected, we made significant progress against our strategic goal of disrupting the assisted category. As Sasan shared, we expect TurboTax Live customers to grow 38% this year, and revenue to grow 36%, well ahead of our stated long-term growth expectations of 15% to 20%. TurboTax Live will therefore represent 53% of total TurboTax revenue this year. These results reinforce our conviction in our strategy to deliver powerful done-for-you experiences for customers with a unique combination of AI and AI-driven human expertise. Overall, we expect total online paying units to grow 2% this year on share gains from higher ARPU filers. We saw strong monetization across simple and complex filers, driving an expected 11% increase in ARPU as more customers chose our assisted offerings and faster access to refunds. In total, we expect to deliver more than $25 billion in refunds through our fast money offerings this year. Our priorities are clear: build on our exceptional momentum in TurboTax Live, where we continue to see significant ARPU opportunity, and evolve our DIY model at the low end to better serve price-sensitive filers. We know what we need to do, and the team is well positioned to execute given the strength of our assets across TurboTax and Credit Karma. Within the ProTax Group, revenue in Q3 was in line with last year. For the full year, we expect ProTax Group revenue growth of approximately 4%. Turning to Credit Karma, where revenue growth of 15% reflects continued momentum with our members and partners. On a product basis, personal loans accounted for 9 points of growth, auto insurance accounted for 5 points, and home loans accounted for 1 point. Overall, we have conviction in our strategy and confidence in the actions we are taking to serve consumers with our all-in-one platform, engaging them year-round to make smarter financial decisions by delivering done-for-you experiences, AI-powered local tax expertise, and faster access to money. Turning now to the Global Business Solutions Group. We continue to make progress serving businesses with our all-in-one business platform and delivering done-for-you experiences powered by AI and human expertise. Global Business Solutions Group revenue grew 15% during the quarter, or 17% excluding Mailchimp, while online ecosystem revenue grew 19% in Q3 or 22% excluding Mailchimp. This growth is underpinned by continued momentum in mid market, with online ecosystem revenue for QBO Advanced and Intuit Enterprise Suite growing 38%. All-in ecosystem revenue for small businesses and the rest of the base grew 16%. In Q3, we delivered strong growth in both online accounting and online services. QuickBooks Online Accounting revenue grew 22%, driven by higher effective prices, customer growth, and mix shift. Online services revenue grew 15% in Q3, or 22% excluding Mailchimp. This growth was driven by money, which includes payments, capital and bill pay, as well as payroll. Within money, revenue growth in the quarter was driven by payments revenue growth, fueled by customer growth, an increase in total payment volume per customer, and higher revenue yield. Total online payment volume, including bill pay, grew 30% in Q3, reflecting continued momentum in payments and adoption of our bill pay offering. Online payment volume growth excluding bill pay was 18%. Within payroll, revenue growth in the quarter reflects mix shift, customer growth and higher effective prices. Earlier this month, we announced the launch of QuickBooks Workforce, an advanced integrated suite of offerings transforming how businesses run their human capital management end-to-end, and we are excited about the opportunity to unlock value, particularly for mid market customers. Within Mailchimp, revenue was down slightly versus a year ago as we continue to focus on improving churn and acquisition among smaller customers while building on momentum in SMS and the mid market. As part of the workforce changes announced earlier today, we are rightsizing our investment in Mailchimp. Overall, we have confidence in our strategy, and online ecosystem growth continues to be strong. This performance underscores powerful traction across our growth vectors and positions Intuit to lead and win over the long term. Turning to desktop, desktop ecosystem revenue grew 6% in Q3, with QuickBooks Desktop Enterprise revenue growing in the high single digits. Now shifting to our balance sheet and capital allocation. Our financial principles guide our decisions; they remain our long-term commitment and are unchanged. We finished the quarter with approximately $6.8 billion in cash and investments and $6.2 billion in debt on our balance sheet. We are leaning meaningfully into share repurchases this year. We repurchased $1.6 billion of stock during the third quarter, more than double the same period last year. In 2026, share repurchases are up over 60% versus last year. This reflects both our strong conviction in our long-term trajectory and our belief that our shares represent compelling value at current levels. We maintain our aim to be in the market each quarter. The Board approved a quarterly dividend of $1.02 per share payable on July 17, 2026. This represents a 15% increase versus last year. Delivering long-term shareholder value is central to how we manage the company. We continue to execute on opportunities to drive margin expansion over time through a disciplined approach to capital management and ongoing efficiency gains. As Sasan mentioned, we announced today the decision to reduce our full-time workforce by approximately 17%. This leaner structure will accelerate how we operate with greater focus, speed, agility and an even stronger commitment to profitability. We are committed to delivering annual EPS growth of at least mid-teens over the coming years. While these decisions are never easy, they reflect our disciplined approach to capital management and we are confident it will ultimately allow us to deliver durable revenue growth, expanded margins, and growing capital returns to shareholders over the long term. Moving on to guidance, we are raising total company guidance for revenue and all non-GAAP metrics for the full fiscal year. Guidance includes total company revenue of $21.341 billion to $21.374 billion, growth of 13% to 14%. Our guidance includes Global Business Solutions Group revenue growth of approximately 16% with desktop revenue growth in the mid single digits, and overall consumer group revenue growth of approximately 10%. The Consumer Group outlook is supported by TurboTax growth of approximately 7%, Credit Karma growth of approximately 19%, and ProTax growth of approximately 4%. GAAP diluted earnings per share of $15.79 to $15.84 represents growth of approximately 16% and non-GAAP diluted earnings per share of $23.80 to $23.85 represents growth of approximately 18%. We expect a GAAP tax rate of approximately 24% in fiscal 26. Our guidance for fiscal 2026 includes total company revenue growth of 11% to 12%, GAAP earnings per share growth of $0.73 to $0.79, and non-GAAP earnings per share growth of $3.56 to $3.62. As a reminder, guidance for GAAP metrics includes $300 million restructuring charges related to our workforce changes. You can find our full fiscal 26 and Q4 guidance details in our press release and on our fact sheet. Lastly, I would like to officially welcome Kendra Goodman to her new role as Intuit's Vice President of Investor Relations. I know she is looking forward to partnering with you all going forward. With that, I will turn it back over to Sasan.
Thank you, Sandeep, and welcome Kendra. One of our biggest strengths as a company is taking a day-one approach to fueling long-term success which is the most important thing to do in the era of AI. We are redefining the future of trusted financial intelligence to take advantage of our $300 billion in TAM by: one, aggressively scaling our growth engines already growing over 30%; two, reimagining our business model to win in our core category; and three, sharpening our cost structure to become leaner and faster, delivering long-term value for both our customers and our shareholders. As a management team, we take pride in reinventing ourselves, and that is exactly what we are doing. With that, let me now open it up to your questions.
分析師問答
Thank you. Please limit yourself to one question. We would like to get to as many people as we can. We will take our first question from Keith Weiss with Morgan Stanley. Your line is open.
Excellent. Thank you guys for taking the question. I think the focus is going to be on the tax results and the disappointment there. So I am just going to dig in on that side of the equation first. There is a sense that this feels a little bit like 2023-2024, right? The overall tax filings were disappointing, moving share at the low end of the market, and it sounds like that scenario, putting out a low-end SKU was a decent fix and got TurboTax back on track. But this environment is different, right? We are thinking about emerging competitors. We are thinking about GenAI changing the competitive landscape. So how good is that analogy of 2023-2024? Or how do you have to fix the business differently today versus that period?
Yes, Keith, thanks for your question. One of the things that we were very assertive and aggressive in tackling to win customers that are less than $50,000 in income was around one-time offers to get them into the franchise and ultimately be able to grow with those customers. The thing we have learned is twofold. First, we need a durable approach to winning with these customers who earn less than $50,000. Second, we now have incredible capabilities to monetize beyond tax, which is a lot of what I referred to just a moment ago around the ARPU increase when you look at TurboTax plus Credit Karma: our ARPU is well over 30% higher. Thirty-five percent of our TurboTax customers attach the money offering. So what is very different is those two things. When you have a durable model to win with these customers and a durable way to monetize beyond tax, of which we have the capabilities, it is a structural shift from complexity-based to value-based. For example, if you earn less than $50,000 and you have only a W-2, you may fall into a SKU that is free. If you then have a W-2 plus you donated to a charity, you may fall into a SKU that you have to pay for. These are not customers who are necessarily free everywhere; many of them are paying competitors. The shift from complexity to value-based pricing means we will be very competitive on price but also capture monetization opportunities that go beyond tax. That allows us to make up, from a monetization perspective, via other benefits we deliver. So that is what is very different than 2023. And I would stress none of this has anything to do with AI. This is about being price-right for customers that are less than $50,000 in income. They are often willing to accept a worse experience if the price is right. That is the approach and the shift we will be making in our model as we look ahead.
Got it.
One thing I would add, Keith, is within the under-$50,000 segment there are millions of customers that we serve exceptionally well. Many of them are using our Live offerings and return to the same SKU year after year. What Sasan is referring to is the price-sensitive portion of the under-$50,000 segment, which is a subset, not the entirety, of that cohort. Just a distinction I wanted to call out.
Excellent. Thank you, guys, for taking the question.
Very welcome. Hey Keith, thank you for your partnership over the years. I think given your retirement, this is your final call. We appreciate the partnership you brought to Intuit over the years. Thank you.
I appreciate that. We will move next to Sitikantha Panigrahi with Mizuho. Your line is open.
Thanks for taking my question. Sasan, you mentioned some areas doing well, like mid market and money, but then there are segments that are a drag on the business. As investors are concerned about AI disrupting growth rates, how do you give confidence to shareholders that Intuit can continue to deliver durable growth and margin expansion, especially in the areas you think are your focus or growth drivers? You talked about services as software — why do you think that is the right approach to deliver durable growth?
Think of the customers we serve — consumers, businesses and accountants — making high-stakes decisions. For businesses and accountants, we have created an end-to-end platform that is a system of intelligence helping you manage, run and grow your business. Businesses manage customers, cash flow, profitability, payroll and compliance. We have built a control tower that helps businesses run their operations and provides accountants a platform to grow and manage their practices. Every business needs an accountant for advice, bookkeeping and tax decisions. We bet the company on data, AI, and one of the largest networks of AI-powered expertise — our accountants — to fuel business success. A proof point is our growth engines: mid market, money portfolio, and assisted tax, all growing north of 30%. That is a substantial part of the company. Second, look at the TAM. Eighty-eight percent of it is assisted. Similar to accounting and bookkeeping, customers spend over 7x on people to help them make decisions versus just software. We provide both technology and people on one platform to help customers get their taxes done right, and our results show we are just at the beginning of what is possible in assisted. To put a bow around it: one, we are scaling growth engines like assisted tax, money and mid market which are already growing north of 30%; two, we are reimagining how we win in core categories — for example, serving price-sensitive under-$50,000 customers with a durable model that monetizes beyond tax; and three, we are improving effectiveness and efficiency across the company, which is part of why we reduced the workforce by 17% — to have fewer layers, less coordination, and better speed and agility. That is what gives us confidence in durable top-line growth and margin expansion. You can expect the company to grow EPS, GAAP and non-GAAP, north of 15%.
Okay. Thanks for the color.
Thank you. You're very welcome.
We will take our next question from Brent John Thill with Jefferies. Your line is open.
Hi. Thank you. This is John Byun on behalf of Brent John Thill. Just maybe a couple of questions around the tax side. You mentioned the IRS filings will be down about 30 basis points. Wondering if you may have more color as to why they may be down versus a typical growth of 0% to 2%. And as you look forward, the assisted tax side has been so strong to offset whatever margin pressure you had on the DIY side. How do you think about that going forward and whether the assisted side is going to be more than half?
Sure. Let me start with the latter question. We are really bullish about our consumer platform trajectory because of highlights from this tax season: assisted segment performance was strong. New assisted customer growth grew 29%, total customer growth grew 38%, and revenue grew 36%. Assisted is now 53% of our entire franchise, up 11 points from last year. Our local strategy worked well this year and Credit Karma is becoming a meaningful contributor; there was a 54% increase in filings that started in Credit Karma. These are big highlights. Regarding the DIY segment, our goal is to maintain revenue share, and we expect to maintain our revenue share in the DIY category this year. That is why we are changing the business model for the price-sensitive under-$50,000 customers: be competitive on price and monetize beyond tax. On the total filing decline of about 30 basis points, we had expected filings to be up about 1%. E-filed returns are up 1%, but e-file does not include manual filings. What we saw this year is a chunk of manual filers who did not file at all within DIY, about 2 million units. Regardless of the total filing change, our assisted opportunity and our planned model change in DIY give us confidence looking forward.
John, one factor I would also add is that your question around the growth we are seeing in assisted tax — Sasan mentioned how we are scaling a number of customers.
The other thing I find really encouraging is as we are adding new customers at a healthy rate, we are also seeing retention go up. Retention was up two points in TurboTax Live. Just another factor that plays into how this offering is resonating with our customer base.
Thank you. You're very welcome.
We will take our next question from Brad Zelnick with Deutsche Bank. Your line is open.
Thanks so much for taking the question. I wanted to ask a little bit more about the restructuring, which I know you take very seriously and appreciate is intended to best position the company for durable long-term growth. But can you share more detail on how much might be attributable to AI efficiencies and perhaps a structural shift from labor to tokens? How much is rightsizing Mailchimp? And how are you thinking about reinvesting the savings?
Thank you for the question, Brad. These decisions are always very hard because we are in a people business and culture matters. We do not take these decisions lightly. Let me be clear about what this is not: this was not about AI taking jobs. We are very invested in AI and the tools we use internally, which are driving efficiencies and margin expansion, and AI is embedded in everything that helps us serve customers and fuel growth. Over the last year we studied beyond tools what the biggest blockers were. Several things led to this 17% reduction. First, we significantly reduced the number of management layers to reduce complexity of information flow and speed decision-making so we can push decision-making to our frontline builders. Second, reducing layers led us to reduce coordination-heavy roles — PMO, biz ops, some product management and design roles that exist because of previous structure. Third, now that we have integrated TurboTax and Credit Karma as a unit and platform, we have concluded much of the integration work and identified duplication, which we reduced. Lastly, we resized Mailchimp in the context of future growth opportunities. As for how we will use savings: three things matter. One, fuel our growth engines — assisted tax, money and mid market — which are growing well north of 30% and we want to scale faster. Two, reimagine the DIY tax model for price-sensitive filers under $50,000. Three, be faster, flatter and more focused. The majority of these cost reductions we expect to flow to the bottom line and support margin expansion and EPS growth. A smaller part will go to scaling growth engines because we see strong productivity internally already. That covers the main drivers; Sandeep, anything to add?
Sasan covered it well, Brad. As a management team, our responsibility is to deliver for all stakeholders. We are investing in our three big bets and playing offense in our core. What is different from 2024 is that the majority of cost reductions we expect to flow to the bottom line. On Mailchimp specifically, with the actions we are taking there, we believe Mailchimp's cash flow profile will generate more value for Intuit than a third party is likely to pay for that asset in the current equity and debt environment for software. That is another consideration as you look at what we are doing with Mailchimp.
Thank you, guys.
Very welcome.
We will move next to Alex Zukin with Wolfe. Your line is open.
Hey, guys. Thanks for taking the question. In the spirit of Keith's and Siti's questions, one of the main questions today is whether the performance around taxes indicates anything structural that is changing. It does not sound like AI; it sounds like maybe a bit of a surprise. Could you walk through what specifically surprised you? Is there any structural change that could impact the durability or shape of growth going forward? And what changes are you making with the rightsizing of the employee base to get in front of that specific dynamic?
Alex, thanks for the question. On structure: of the total tax TAM, $42 billion, about $37 billion is assisted, and we are structurally advantaged to go after that 88% of TAM. It shows in our results: assisted customer growth and revenue growth. We have built a virtual expert platform driven by data, AI, and tools that do complex work — matching customers with the right experts, routing, capacity planning, and enabling experts to manage client relationships. Structurally, we win on experience, price and access to fast money and other consumer platform benefits. The DIY segment is $5 billion of spend. Within that, the under-$50,000 cohort includes a price-sensitive subset where we need to compete on price. This is not a surprise; we have been focused on how to win these customers, and the biggest lever in the past few years has been one-time offers. What we learned is these customers care about price and are willing to accept a worse experience if the price is right. They also can be monetized beyond tax once we provide them additional offerings. We have the capabilities now to deliver a durable model change for this small segment of the DIY TAM. All of that is irrespective of the workforce reductions; the reductions were a separate decision to make the company more focused, faster and flatter. We are doing this from a place of strength — replacing the roof while the sun is shining. Now, on the GBSG side, you asked about increasing sales capacity last quarter and traction. We have made two important pivots. First, we have traditionally treated accountants as partners and a channel; strategically we are treating accountants as customers because they use the platform to run their firms and manage clients and can monetize additional services. Based on our August launch, we will offer consumption-based monetization, like AI agent builder capabilities and industry-specific KPIs that accountants can customize and monetize. That leverages their distribution of customers. Second, businesses use the same platform, and our salesforce now sells an end-to-end unified platform that brings accountants and businesses together. We are seeing productivity improvement; for example, Intuit Enterprise Suite contracts grew 37% quarter-over-quarter. We are opening the aperture to pursue more new-to-franchise customers and improve productivity by enabling accountants to bring more clients onto our platform. I hope that unpacks the pivots and why they are important for long-term growth.
Excellent and super clear. I appreciate that, Sasan. I guess maybe on the GBSG side, you highlighted meaningfully increasing sales capacity last quarter. Can you highlight the traction around both attracting top sales talent to the organization and the impacts on outputs you are seeing from that initiative in the quarter and in the pipeline?
I am glad you asked. There are two important pivots relevant to sales productivity. First, treating accountants like customers enables us to offer them tools to run their firm and monetize new services. Accountants can now use our platform to drive automation, profitability and deliver new services to their clients that they can monetize. Second, our salesforce sells a unified end-to-end platform to businesses and accountants. This not only helps get more businesses on our platform, but enables accountants to accelerate the number of customers they bring to us. We are seeing productivity improvement and a broader go-to-market approach. The result shows in the 37% quarter-over-quarter increase in Intuit Enterprise Suite contracts. We are pursuing new-to-franchise growth and improving sales productivity across the board.
Love your long answers, Sasan. Thank you, guys.
We will take our next question from Taylor McGinnis with UBS. Your line is open.
Hi. Thanks so much for taking my question. Maybe on the Global Business Solutions Group: excluding Mailchimp, there was a bit of a deceleration in the online business, particularly on the services side. Can you provide more color on what drove that in the quarter? And as we look at the Global Business Solutions Group growing at 15%, any changes to your level of comfort in the 15% to 20% outlook in the near term? Also, are there upcoming monetization or pricing efforts that could be a tailwind?
Hey Taylor. On services, performance continues to be strong both including and excluding Mailchimp. The delta you see versus Q2 is that Q2 had specific benefits from tax-related items in the payroll side and other timing-related items that affected the quarter-to-quarter comparison. In terms of the broader GBSG, we remain confident in our strategy around mid market. There is a lot of headroom with Intuit Enterprise Suite. We are scaling our salesforce and see meaningful opportunity to drive new-to-franchise growth with our accountant partnerships as well as our direct sales team. We also launched QuickBooks Workforce which should help platform adoption and resonate with mid market payroll needs. We will continue to add deeper functionality to QuickBooks Advanced and IES for more complex customers. These product and go-to-market actions, plus the work on the money platform, give us confidence in strong durable growth for the Global Business Solutions platform.
Thanks so much.
You're very welcome.
We will move next to Kirk Materne with Evercore. Your line is open.
Thanks very much. Just one for Sasan and then a follow-up for Sandeep. Sasan, you mentioned that what is going on in tax has nothing to do with AI. That makes sense. AI has gotten more powerful in the last year. Can you talk about what you are seeing with AI, whether it is your tools or competitors', and why you feel that models getting more powerful over the next year will not disintermediate some of the strength you are seeing in the assisted category? And for Sandeep, can you talk about Mailchimp? What does rightsizing mean in terms of the drag on the overall Global Business Solutions business? Can you keep the drag to a minimum while taking up the cash flow from that business?
Kirk, let me take this in parts. For assisted tax, start with the customer: 88% of the TAM seeking assistance is driven by a desire for confidence and to delegate liability for high-stakes decisions. No matter how good software becomes, many customers want a human expert they trust. Over the years, spend on tax experts, accountants and bookkeepers has actually increased. Our virtual expert platform, powered by data, AI and human expertise, is structurally advantaged to serve this market at scale, providing experience, price and access to fast money. For businesses, too, the system of intelligence we have built functions as a control tower — businesses cannot run mission-critical operations on a generic model alone because accuracy, compliance and integration into core financial systems matter. Our partnerships with AI providers enhance our capabilities, but the differentiated value we offer is the integrated platform, domain-specific data, and accountant network. Regarding the TAM and penetration: we have roughly 6% penetration of a very large TAM, and that opens up significant opportunity as we connect more high-intent customers into our stack. So while AI models will advance, they augment our ability to serve customers and scale our expert network — they do not disintermediate the value of trusted, accountable human expertise integrated into a platform that manages money and compliance. That is the core of our differentiation.
Kirk, on Mailchimp: part of being a disciplined operator is doing multiple things at once. The Mailchimp team will remain focused on resonating with small businesses, driving SMS innovation and mid market momentum. At the same time, we are adjusting the cost profile commensurate with its growth profile to maximize cash generation. Think about a desktop business where we run for solid profitability and take that cash flow to reinvest in our growth engines — the three big bets — and return capital to shareholders. Given current market conditions for software, the terms a third party would pay for Mailchimp today are not attractive, so we are optimizing for profitability and maximizing shareholder value.
Very welcome.
We have reached the end of our question-and-answer session. I would now like to turn back to management for any additional or closing remarks.
Well, thank you for all the questions and we look forward to talking to you next quarter. Bye, everybody.
Ladies and gentlemen, thank you for participating. This concludes today's conference call.