Q2 2025 Earnings Summary
- Strong penetration and growth in the mid-market segment, with Intuit's Intuit Enterprise Suite (IES) successfully displacing competitors and attracting customers due to cost savings, time savings, and the value of an integrated platform. Intuit is targeting a $90 billion total addressable market in the mid-market and believes that mid-market could become larger than their existing business group and a significant growth driver over the next decade.
- Better-than-expected performance in the Consumer Group, driven by a strong start to the tax season, with higher average revenue per return as customers engage more with expert help and add offerings like audit defense and faster access to refunds. This, combined with leveraging data and AI to improve products and experiences, gives Intuit confidence in meeting their 7% to 8% Consumer Group revenue growth guidance for fiscal 2025.
- Acceleration in Online Services revenue growth, excluding Mailchimp, with growth reaching 30%, propelled by strength in Intuit's Money offerings (payments, bill pay, instant deposit) and Payroll, aided by AI-driven experiences and higher attach rates among mid-market customers.
- Intuit's growth in the mid-market segment is primarily coming from its existing customer base, and expanding to new customers may present challenges as they begin to compete more directly with established point solutions.
- Mailchimp's revenue growth is decelerating due to lapping prior price increases, which could affect the overall growth of Intuit's online services revenue segment.
- Potential risks from IRS initiatives aimed at reducing waste and fraud could impact Intuit's TurboTax business, despite management's confidence that there is no risk to the IRS providing services to consumers and businesses.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +17% (Q2 2025: $3,963M vs Q2 2024: $3,386M) | Revenue growth was driven by an accelerated adoption of digital offerings and online ecosystems, as traditional segments transitioned to higher-growth subscription models, building on prior period improvements and customer upgrades. |
Operating Income (EBIT) | +61% (Q2 2025: $593M vs Q2 2024: $369M) | EBIT outperformed revenue growth due to improved cost management and operational efficiencies, leveraging scale benefits and more effective product mix adjustments compared to the previous quarter. |
Net Income | +33% (Q2 2025: $471M vs Q2 2024: $353M) | Net income increased as a direct result of higher operating margins, driven by strong revenue performance and controlled expenses, reflecting an improvement from prior period challenges. |
Diluted EPS | +33% (Q2 2025: $1.66 vs Q2 2024: $1.25) | EPS growth mirrors the net income rise and is further supported by potential share repurchase actions which reduced the outstanding share count, enhancing per-share profitability relative to the previous year. |
Depreciation & Amortization (D&A) | ~+97% (Q2 2025: $243M vs Q2 2024: $123M) | The near doubling of D&A expense is primarily due to increased capital investments in property and equipment, with depreciation adjustments reflecting more recent and higher levels of asset base compared to the last period. |
Interest Expense | ~90% decline (Q2 2025: $6M vs Q2 2024: $57M) | A dramatic reduction in interest expense indicates significant debt refinancing or deleveraging measures, resulting in lower interest-bearing liabilities compared with the prior period structure. |
Net Change in Cash | Reversal from +$644M to –$2,692M | The swing is driven by substantial investing outflows and a shift in financing activities, including likely debt repayments and changes in cash management strategies, marking a stark contrast to the previous period’s positive cash inflows. |
Key Business Segment – Small Business & Self-Employed | Not a YoY percentage but Q2 2025 revenue of $2,671M with Online Ecosystem at $2,038M (QuickBooks Online Accounting: $1,008M; Online Services: $1,030M) | The segment’s strong performance stems from robust growth in the online ecosystem, reflecting customer growth and higher-priced offerings, which builds on the evolving business mix seen in earlier periods. |
Geographic Performance – International Revenue | +9% (from $328.3M in Q1 2025 to approx. $357.57M in Q2 2025) | International revenue growth is attributed to localized product strategies and a continued shift towards subscription models in mature markets, sustaining momentum from the previous quarter’s performance. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Total Company Revenue Growth | FY 2025 | 12% to 13% | 12% to 13% | no change |
GAAP Operating Income Growth | FY 2025 | 28% to 30% | 28% to 30% | no change |
Non-GAAP Operating Income Growth | FY 2025 | 13% to 14% | 13% to 14% | no change |
GAAP Diluted EPS Growth | FY 2025 | 18% to 20% | 18% to 20% | no change |
Non-GAAP Diluted EPS Growth | FY 2025 | 13% to 14% | 13% to 14% | no change |
Total Company Revenue Growth | Q3 2025 | 13% to 14% | 12% to 13% | lowered |
GAAP EPS | Q3 2025 | $0.85 to $0.90 | $9.22 to $9.28 | raised |
Non-GAAP EPS | Q3 2025 | $2.55 to $2.61 | $10.89 to $10.95 | raised |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Total Company Revenue Growth | Q2 2025 | 13% to 14% | ~17% (from 3,386In Q2 2024 to 3,963In Q2 2025) | Beat |
GAAP Diluted EPS | Q2 2025 | $0.85 to $0.90 | $1.66 | Beat |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Mid-Market Expansion | Emphasized in Q4 2024 and Q3 2024 as a significant growth opportunity with dedicated investments, integrated business suites, and strategic “Big Bets” for untapped mid-market potential. | Highlighted in Q2 2025 as a key growth driver backed by a 40% growth in online ecosystem revenue and strong product adoption, with long-term potential to become larger than the entire business group. | Increased bullish sentiment with more concrete performance metrics and strategic focus supporting higher growth potential. |
AI-Driven Innovation and GenAI Solutions | Discussed in Q4 2024 and Q3 2024 as an integral part of the strategy through investments in machine learning, virtual experts, and gradual integration into offerings like TurboTax Live and QuickBooks Live. | Q2 2025 details tangible benefits such as 40% improved engineering productivity, operational efficiencies, and enhanced customer experiences across products through AI and GenAI. | Enhanced focus and validated performance with clear benefits now reflected in productivity and customer outcomes; sentiment remains strongly positive. |
Consumer Segment Performance and TurboTax/TurboTax Live Evolution | In Q4 2024 and Q3 2024, the consumer segment and TurboTax evolution were highlighted with strong revenue growth, expanding market share, and integrated strategies with Credit Karma and AI enhancements. | Q2 2025 maintains the positive outlook with steady Consumer Group revenue performance, further AI-driven enhancements, improved TurboTax Live features, and strengthened integration with Credit Karma. | Sustained strong performance with continuous innovation and integration, further elevating customer engagement and overall segment growth. |
QuickBooks Online and Online Ecosystem Revenue Growth | In Q3 2024 and Q4 2024, QuickBooks Online recorded 17–19% accounting revenue growth and online ecosystem revenue grew 18–20%, driven by higher effective pricing, customer growth, and strategic mix shifts. | Q2 2025 reports accelerated growth with QuickBooks’ online accounting revenue up 22% and overall online ecosystem revenue growing by 21%, highlighting continued momentum in the segment. | Accelerated growth with improved performance metrics compared to prior periods, reinforcing the positive market dynamics in this segment. |
Mailchimp Revenue Deceleration Concerns | In Q4 2024 and Q3 2024, concerns were noted over deceleration caused by lapping prior year’s pricing benefits; despite this, growth was supported by higher effective prices and customer growth with efforts aimed at integration and international expansion. | Q2 2025 continues to mention deceleration—attributed to lapping effects—with expectations for product improvements over subsequent quarters, while noting early progress. | Cautiously optimistic yet tempered; deceleration concerns persist but proactive measures and product improvements are underway. |
Regulatory Risks Impacting TurboTax (IRS Initiatives) | Not discussed in Q3 2024 or Q4 2024 earnings calls. | Addressed in Q2 2025 with reassurance that ongoing IRS initiatives pose no risk, and active engagement is mitigating any potential regulatory impact. | New topic emerging with a reassuring tone; regulatory concerns are now being proactively managed without significant negative sentiment. |
Restructuring and Operational Challenges | Q4 2024 discussions detailed significant restructuring charges, operational challenges impacting GAAP outcomes, and revenue recognition shifts due to changes in the desktop ecosystem. | Not mentioned in Q2 2025, suggesting that the focus on restructuring and its related operational challenges has diminished in the current period [—]. | No longer mentioned, indicating resolution or a reduced focus, which may imply stabilization after earlier challenges. |
International Expansion and Macroeconomic Challenges for Small Businesses | Q3 2024 and Q4 2024 earnings calls discussed global expansion strategies via QuickBooks and Mailchimp and noted cautious optimism about macroeconomic challenges, with small business health generally stable but with varying impact on different sectors. | Q2 2025 reiterates international growth with 9% constant currency growth (or 19% excluding Mailchimp) and provides detailed observations on how macroeconomic impacts vary by business size, emphasizing digital and AI-powered solutions for larger businesses. | Steady growth with cautious optimism; remains a critical area for future impact as global expansion and economic resilience continue to be focal points. |
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Margin Expansion and AI Efficiencies
Q: What's driving margin expansion and hiring plans?
A: Sandeep Aujla explained that strong margin expansion is due to expense discipline, earlier-than-expected efficiencies from AI implementations, and a slower start to the tax season. They hired fewer people than expected because AI tools increased productivity, such as 40% higher engineer productivity and 20% lower call volumes from TurboTax. They remain committed to driving margin expansion over the long term. -
Confidence in Consumer Segment Growth
Q: How confident are you in delivering 7%-8% consumer guidance?
A: Sasan Goodarzi expressed strong confidence in achieving the 7%-8% guidance for the consumer segment. They are seeing strength across both DIY and assisted categories, with strong traction among simple and complex filers. Innovations like access to expert help and access to money, as well as repositioning of their lineup, have accelerated paid growth. Their reinvented campaign, powered by data and AI, is resonating with customers. -
Small Business Trends and Mid-Market Expansion
Q: What's the outlook for SMBs and Intuit's mid-market growth?
A: Sasan Goodarzi noted that smaller businesses are seeing profits and cash flows up year-over-year, and larger businesses are focusing on digitization to drive growth. Intuit Enterprise Suite is gaining traction among mid-market customers, offering AI-powered experiences. The company believes mid-market will eventually be larger than the current business group and is excited about the potential. -
AI Enhancing Sales Productivity
Q: How is AI affecting sales team productivity?
A: The sales team's productivity has increased by 60% in recent months due to AI-powered tools. AI provides next-best actions, relevant playbooks, and battle cards to assist sales reps. Each cohort of salespeople is becoming more productive, and AI is a significant contributor to driving efficiency. -
Credit Karma Outperformance
Q: What's driving Credit Karma's strong performance?
A: Credit Karma is outperforming expectations, with about 40% of growth attributed to macro improvements and 60% to execution. Innovations in AI-powered experiences have improved shopping experiences and average revenue per customer. They expect the consumer platform, including Credit Karma and TurboTax, to grow double digits over the long term. -
Tax Season Outlook and Innovations
Q: How are tax season initiatives impacting full-service filers?
A: The revamped campaign and improved full-service experience are attracting full-service filers. They've shifted from a software provider to a service provider, matching experts with customers within seconds and completing taxes in less than two hours. Early signs indicate positive responses, strengthening the funnel, and building confidence for the rest of the season. -
Online Ecosystem and QBO Advanced Potential
Q: What's the growth potential of the online ecosystem and QBO Advanced?
A: The online ecosystem continues to show strong growth, with online services excluding Mailchimp growing 30%. The potential for QBO Advanced and Intuit Enterprise Suite is significant, especially in the mid-market segment. They believe mid-market could become larger than the current business group over the next ten years. -
Hiring Trends and Expense Management
Q: Are you still planning to hire as expected, and how does that affect expenses?
A: They have had good hiring rates but need fewer people due to AI efficiencies. They expect headcount to be flat to slightly up for the year. They remain committed to expense discipline and driving ROI from their investments.