Financial Performance

‘Great’ Tax Season Drives Intuit Earnings Beat

The company's DIY tax prep software was particularly strong in the third quarter, with TurboTax Live users more than tripling year over year.
Matthew HellerMay 24, 2019

Intuit reported better-than-expected quarterly earnings, reflecting strong tax season demand for its TurboTax software, and raised its outlook for the full year.

The company earned an adjusted $5.55 a share on sales of $3.27 billion in the third quarter ended April 30. Analysts had expected earnings of $5.39 a share on sales of $3.235 billion, according to Zacks Investment Research.

On a year-over-year basis, Intuit’s earnings rose 16% while sales climbed 12%.

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“We had a great tax season, growing the do-it-yourself (DIY) category overall as well as our share within the category driven by our innovation and significantly improved customer experience,” CEO Sasan Goodarzi said in a news release. “We produced our most robust free offering yet and made significant progress in our effort to transform the assisted category.”

In the DIY category, TurboTax Online units grew 7% and customers using TurboTax Live more than tripled year over year. The Turbo platform now has more than 14 million registered users, up from 5 million last year.

Intuit also said TurboTax Online’s share of the DIY market rose by an estimated half a point in the third quarter.

For fiscal 2019, Intuit is now calling for adjusted earnings in the range of $6.67 to $6.69 per share, with sales growing 12% to between $6.74 billion and $6.76 billion.

The strong performance of the TurboTax unit came amid mounting legislative and regulatory scrutiny of its business practices. On Wednesday, a group of federal lawmakers accused the company of using the IRS’s Free File program as a way to steer low-income taxpayers to TurboTax paying products.

Intuit denied wrongdoing, saying, “Any suggestion that Intuit does not support the IRS Free File Program is flat wrong.”