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INTUIT INC. (INTU) Q2 2025 Earnings Summary

Executive Summary

  • Q2 FY25 delivered strong topline and profitability: revenue $3.963B (+17% YoY), GAAP diluted EPS $1.67 (+34% YoY), non-GAAP diluted EPS $3.32 (+26% YoY), and non-GAAP operating income $1.26B (+26% YoY) . Management reiterated full‑year FY25 guidance for revenue (+12–13%), GAAP OI (+28–30%), non-GAAP OI (+13–14%), GAAP EPS ($12.34–$12.54), and non-GAAP EPS ($19.16–$19.36) .
  • Segment highlights: Global Business Solutions Group (GBS) revenue $2.7B (+19% YoY), Online Ecosystem $2.0B (+21% YoY), Credit Karma $511M (+36% YoY), Consumer $509M (+3% YoY), ProTax $272M (−1% YoY) .
  • Positive surprise: Consumer Group grew 3% in Q2 despite prior guidance for a low single-digit decline; management cited stronger TurboTax Online monetization and average revenue per return from expert engagement and add-ons as drivers .
  • Capital allocation and liquidity: $721M buybacks; $1.04 dividend approved (+16% YoY); $4.5B revolver to fund 5-Day Early refund; cash/investments ~$2.5B and debt $6.3B at quarter end .
  • Catalyst into Q3: robust Q3 outlook (revenue $7.55–$7.60B; GAAP EPS $9.22–$9.28; non‑GAAP EPS $10.89–$10.95) and continued momentum in AI-driven Intuit Assist and mid-market growth (QBO Advanced/IES) .

What Went Well and What Went Wrong

What Went Well

  • GBS and Online Ecosystem strength: GBS revenue +19% to $2.7B; Online Ecosystem +21% to $2.0B driven by money, payroll, and Mailchimp; QBO Online Accounting +22% on price, customer growth, and mix-shift .
    Quote: “We delivered very strong second quarter fiscal 2025 results as we leverage AI to deliver breakthrough experiences…” — CFO Sandeep Aujla .
  • Credit Karma acceleration: revenue +36% to $511M with strength in credit cards (+15 pts), personal loans (+14 pts), auto insurance (+6 pts) .
  • AI and productivity: Intuit Assist “done‑for‑you” experiences at scale; QuickBooks Live up 2.5x with higher attach; internal AI drove ~$90M annualized efficiencies and −20% TurboTax support contact rate; engineers +40% coding productivity .

What Went Wrong

  • ProTax softness: revenue −1% YoY to $272M in Q2 .
  • Mailchimp drag: management flagged deceleration from lapping prior-year pricing changes; improvements will take several quarters to scale .
  • Desktop ecosystem remains structurally low growth (guiding low single digits FY25) despite Q2 growth (+14%) — transition to subscriptions largely complete, but long‑term growth limited versus online .

Financial Results

MetricQ4 FY24Q1 FY25Q2 FY25
Revenue ($USD Millions)$3,184 $3,283 $3,963
GAAP Operating Income ($USD Millions)$(151) $271 $593
Non-GAAP Operating Income ($USD Millions)$730 $953 $1,260
GAAP Diluted EPS ($USD)$(0.07) $0.70 $1.67
Non-GAAP Diluted EPS ($USD)$1.99 $2.50 $3.32

Segment breakdown:

SegmentQ4 FY24Q1 FY25Q2 FY25
Global Business Solutions Group Revenue ($USD Billions)$2.6 $2.5 $2.7
Online Ecosystem Revenue ($USD Billions)N/A (18% YoY growth) $1.9 $2.0
Credit Karma Revenue ($USD Millions)$485 $524 $511
Consumer Group Revenue ($USD Millions)$113 $176 $509
ProTax Group Revenue ($USD Millions)N/A$39 $272

KPIs and operating metrics:

KPIQ4 FY24Q1 FY25Q2 FY25
Total Online Payment Volume Growth (%)N/A17% 18%
QuickBooks Live EngagementN/AN/A2.5x increase; +20‑pt attach vs QBO base
TurboTax Support Contact RateN/AN/A−20% YTD (AI-driven)
Engineering Coding ProductivityN/AN/A+40% with GenAI
QBO Advanced & IES Online Ecosystem Revenue GrowthN/AN/A~40% (mid‑market)
Intuit Assist ImpactN/AN/A+10% higher overdue invoice payment conversion with AI reminders

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Billions)FY25$18.160–$18.347 $18.160–$18.347 Maintained
GAAP Operating Income ($USD Billions)FY25$4.649–$4.724 $4.649–$4.724 Maintained
Non-GAAP Operating Income ($USD Billions)FY25$7.241–$7.316 $7.241–$7.316 Maintained
GAAP Diluted EPS ($)FY25$12.34–$12.54 $12.34–$12.54 Maintained
Non-GAAP Diluted EPS ($)FY25$19.16–$19.36 $19.16–$19.36 Maintained
Segment Revenue Growth (GBS)FY25+16–17% +16–17% Maintained
Segment Revenue Growth (Consumer)FY25+7–8% +7–8% Maintained
Segment Revenue Growth (ProTax)FY25+3–4% +3–4% Maintained
Segment Revenue Growth (Credit Karma)FY25+5–8% +5–8% Maintained
Revenue ($USD Billions)Q3 FY25N/A$7.550–$7.600 New
GAAP Diluted EPS ($)Q3 FY25N/A$9.22–$9.28 New
Non-GAAP Diluted EPS ($)Q3 FY25N/A$10.89–$10.95 New
Dividend per share ($)Quarterly$1.04 (approved for Jan 17, 2025) $1.04 (approved for Apr 18, 2025); +16% YoY Maintained payout; YoY increase reiterated

Earnings Call Themes & Trends

TopicQ4 FY24 (Prior)Q1 FY25 (Prior)Q2 FY25 (Current)Trend
AI/Technology (Intuit Assist)Strategy: AI-driven expert platform; strong FY24 results “Done‑for‑you” experiences; Online Ecosystem +20% At scale: 10% invoice conversion uplift; QuickBooks Live up 2.5x; internal AI efficiencies (~$90M) Accelerating deployment and measurable impact
Mid‑market (QBO Advanced/IES)Rename to GBS; focus expanding to mid‑market Foundations set; Online Ecosystem growth ~40% growth in Advanced/IES online revenue; 60% sales productivity improvement; higher attach (payroll +12 pts, payments +9 pts) Strong momentum and improving sales productivity
Consumer TaxFY24 TurboTax Live revenue +17%; online units −2% Q2 guide: low single-digit decline Actual +3% growth; stronger ARPR via expert engagement and add-ons Better than guided; monetization improving
InternationalOnline revenue +11% cc in Q4 +10% cc in Q1 +9% cc total; +19% cc excluding Mailchimp Stable to slightly slower including Mailchimp; ex‑Mailchimp solid
Regulatory/IRS——Ongoing engagement; focus on fraud/waste reduction; no risk to IRS services seen by management Constructive stance; low perceived risk
R&D/Engineering Productivity——+40% faster coding with GenAI; operational AI efficiency Efficiency tailwind emerging

Management Commentary

  • “We delivered very strong results in Q2 with revenue growth of 17%… executing our global AI‑driven expert platform strategy.” — CEO Sasan Goodarzi .
  • “Global Business Solutions Group revenue grew 19%… Online ecosystem revenue growth of 21%… QBO Online Accounting up 22%.” — CFO Sandeep Aujla .
  • “Intuit Assist… automating workflows using AI agents… 10% higher payment conversion rate on overdue invoices with AI‑generated reminders.” — CEO Sasan Goodarzi .
  • “Investments in AI capabilities have delivered nearly $90 million in annualized efficiencies in the first half… 20% reduction in contact rate for TurboTax support… up to 40% faster coding.” — CFO Sandeep Aujla .
  • “We estimate… local experts in 130+ markets give us access to ~80% of assisted filers… filers are ~5x more likely to convert when given a local option.” — CEO Sasan Goodarzi .

Q&A Highlights

  • Consumer guidance confidence: strength across DIY and assisted; AI matching of customers to experts within seconds; conversion ~80% when an expert connects; funnel strong from fall campaigns .
  • SMB macro: smaller businesses’ profits and cash flows up YoY on platform; larger businesses leaning into digitization; IES benefits on price/TCO/experience .
  • Expenses/margins: disciplined spend; AI efficiencies arriving earlier; hiring flat to slightly up but need fewer headcount due to AI productivity; margin expansion confidence .
  • Assisted marketing traction: shift from software to services; faster completion times (often <2 hours; sometimes ~30 min), immediate access to money, competitive pricing; building strong funnel .
  • Mid‑market execution: sales productivity +60%; cohort productivity improving; AI‑enabled next best actions for sales desk; industry specialization aiding close rates .

Estimates Context

  • We attempted to retrieve S&P Global consensus for Q2 FY25 (EPS and revenue) but data was unavailable due to S&P Global daily request limits today. As a result, explicit comparisons vs Wall Street consensus cannot be provided in this report. Note: Management highlighted Credit Karma outperformance relative to consensus in analyst Q&A context, but we do not present consensus figures here due to the data constraint .

Key Takeaways for Investors

  • Broad‑based strength and AI leverage: Q2 revenue $3.963B (+17% YoY), GAAP EPS $1.67 (+34% YoY), non‑GAAP EPS $3.32 (+26% YoY) — AI is improving both customer outcomes and operating efficiency; internal AI savings (~$90M) and product support contact rate (−20%) support margin trajectory .
  • Consumer surprised positively vs guidance: Q2 Consumer +3% vs guided decline on better TurboTax Online monetization (expert engagement/add‑ons, faster refund access) — watch ARPR tailwinds through Q3 tax peak .
  • Mid‑market momentum building: QBO Advanced/IES online revenue ~+40%; sales productivity +60%; higher attach (payroll +12 pts; payments +9 pts) — durable growth vector with attractive TCO and price positioning .
  • Credit Karma acceleration: +36% revenue with strong cards/loans/auto insurance; comps tougher in back half, but one consumer platform integration with TurboTax is a strategic asset .
  • Guidance intact; Q3 outlook robust: FY25 guidance maintained; Q3 revenue $7.55–$7.60B and GAAP EPS $9.22–$9.28 — sets up near‑term catalyst through tax season updates and potential FY raise next call .
  • Capital deployment: $721M buybacks, $1.04 dividend (+16% YoY), $3.6B remaining authorization; $4.5B revolver to fund refund offering — shareholder returns remain consistent within a disciplined framework .
  • Watch Mailchimp drag and desktop mix: lapping pricing changes dampens growth near term; desktop FY growth low single-digit — focus remains on Online Ecosystem expansion .

Notes:

  • Q4 FY24 Online Ecosystem revenue was not disclosed; YoY growth of 18% was provided .
  • All non-GAAP metrics are reconciled in company tables; management uses a 24% long‑term non‑GAAP tax rate .

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