Key Highlights
- Intuit shares plunged approximately 13% during premarket hours following third-quarter earnings release and major restructuring plans
- Third-quarter adjusted earnings per share reached $12.80, exceeding analyst expectations of $12.57; revenue hit $8.56B versus $8.54B forecast
- Workforce reduction of 17% announced, with anticipated restructuring expenses ranging from $300–$340M
- Fiscal year outlook elevated: revenue projected at $21.34–$21.37B with adjusted EPS of $23.80–$23.85
- TurboTax annual revenue projections reduced; CEO highlighted IRS filing decline of approximately 2 million versus industry expectations
Shares of Intuit tumbled over 13% during Thursday’s premarket session following the software company’s third-quarter earnings report and announcement of significant workforce reductions affecting 17% of full-time employees. The stock traded near $334.50, marking a decline from its previous close of $383.93.
The financial performance delivered impressive numbers. The company achieved adjusted earnings per share of $12.80, surpassing Wall Street’s projection of $12.57. Revenue reached $8.56 billion, exceeding the consensus estimate of $8.54 billion while marking a 10% year-over-year increase — representing a slowdown from the 15% expansion recorded during the comparable quarter one year earlier.
Looking ahead, the company elevated its fiscal 2026 projections. Management now anticipates revenue between $21.34–$21.37 billion alongside adjusted earnings per share of $23.80–$23.85, surpassing both previous guidance and analyst consensus.
However, the workforce reduction announcement overshadowed the positive financial results. The organization disclosed expected restructuring expenses ranging from $300–$340 million, primarily concentrated in the fourth quarter.
CEO Sasan Goodarzi addressed speculation about artificial intelligence’s involvement in the decision. “This is not an AI layoff,” he stated. “Frankly, I think we overuse that as a reason to communicate across the industry.” He positioned the restructuring as an initiative to create a more agile and efficient organization.
This clarification holds significance. Numerous technology companies have attributed recent headcount reductions to AI-driven initiatives. Data from Layoffs.fyi indicates 111,173 tech sector employees have been laid off through 2026 — approaching the 124,201 total recorded for the entire 2025 calendar year. Companies including Meta, Cloudflare, and Snap have implemented workforce reductions this year.
TurboTax Revenue Outlook Lowered
Certain areas showed concerning trends. Intuit reduced its full-year TurboTax revenue projection to $5.277–$5.282 billion, down from the previous estimate of $5.305–$5.330 billion.
Goodarzi explained that overall IRS tax filing volume is expected to decline nearly 30 basis points this season — approximately 2 million filings below broader economic projections, representing the most significant industry-wide contraction since the post-pandemic period.
While TurboTax Live returns experienced 38% year-over-year growth, aggressive promotional campaigns resulted in average revenue per unit declining 1%. Additionally, the growth rate decelerated from the 47% increase posted in the previous year.
Artificial Intelligence Viewed as Growth Driver
CFO Sandeep Aujla challenged concerns that AI disruption is adequately reflected in the stock’s valuation. “Customers buy confidence, not code,” he emphasized, highlighting that customers invest at least seven times more in accounting and tax professionals than on software solutions alone.
Aujla characterized artificial intelligence as “a clear net tailwind” for operations, emphasizing Intuit’s proprietary dataset accumulated through decades of tax filer information — capabilities he argued generic AI solutions cannot duplicate.
The Consumer division, encompassing TurboTax and Credit Karma, generated revenue of $5.3 billion, representing an 8% increase.
Morgan Stanley analyst Keith Weiss observed that the third-quarter performance “failed to provide the positive catalyst” anticipated from TurboTax Live but characterized the stock’s current valuation as “very undemanding” considering its long-term earnings expansion prospects.
Intuit executed $1.6 billion in stock repurchases during the quarter and secured board authorization for an additional $8 billion buyback program. The board also approved a quarterly dividend of $1.20 per share, marking a 15% year-over-year increase.
INTU stock has declined approximately 42% year-to-date in 2026.
