Key Highlights
- Shares of Intuit declined approximately 13% during premarket hours following third quarter results and workforce restructuring plans
- Third quarter adjusted earnings per share reached $12.80, surpassing analyst expectations of $12.57; revenue hit $8.56B versus $8.54B projected
- Company plans to reduce full-time employee count by 17%, anticipating restructuring costs between $300–$340M
- Annual outlook improved: revenue guidance now $21.34–$21.37B with adjusted EPS of $23.80–$23.85
- TurboTax annual revenue projection reduced as CEO highlighted IRS filings tracking approximately 2 million below industry expectations
Shares of Intuit experienced a significant decline exceeding 13% during Thursday’s premarket session following the company’s third quarter earnings release and announcement of substantial workforce reductions affecting 17% of full-time employees. Trading activity showed shares at approximately $334.50, marking a notable decrease from the previous close of $383.93.
The financial performance itself demonstrated strength. Adjusted earnings per share landed at $12.80, exceeding the Wall Street consensus of $12.57. Total revenue reached $8.56 billion, surpassing the analyst forecast of $8.54 billion with a year-over-year increase of 10% — representing a deceleration from the 15% growth rate achieved during the comparable quarter last year.
The company also upgraded its full-year outlook. Management now projects fiscal 2026 revenue between $21.34 and $21.37 billion with adjusted earnings per share ranging from $23.80 to $23.85, both figures exceeding previous guidance and consensus estimates.
However, the workforce reduction announcement overshadowed the positive financial metrics. Management indicated expected restructuring expenses totaling $300–$340 million, with the majority concentrated in the fourth quarter.
When questioned about artificial intelligence’s influence on the workforce decision, CEO Sasan Goodarzi provided clarity. “This is not an AI layoff,” he stated. “Frankly, I think we overuse that as a reason to communicate across the industry.” He characterized the restructuring as a strategic move toward creating a more agile and efficient organization.
This clarification holds significance given industry trends. Numerous technology companies have attributed recent workforce reductions to AI implementation. Data from Layoffs.fyi reveals 111,173 technology sector employees have been laid off in 2026 to date — approaching the full-year 2025 total of 124,201. Companies including Meta, Cloudflare, and Snap have all implemented cuts during this period.
TurboTax Confronts Headwinds
Not all metrics showed improvement. Intuit reduced its full-year TurboTax revenue projection to a range of $5.277–$5.282 billion, down from the previous estimate of $5.305–$5.330 billion.
Goodarzi explained that aggregate IRS tax filings are expected to decline nearly 30 basis points this tax season — representing approximately 2 million fewer filings than broader economic projections and marking the most significant industry-wide decrease since the post-pandemic period.
While TurboTax Live returns expanded 38% year-over-year, aggressive promotional strategies resulted in average revenue per unit declining 1%. This growth rate also represented a slowdown from the 47% expansion recorded in the previous year.
Positioning AI as Growth Driver
CFO Sandeep Aujla challenged the notion that AI disruption is appropriately reflected in current market valuation. “Customers buy confidence, not code,” he emphasized, highlighting that customers invest at least seven times more in accounting and tax professionals than in software solutions alone.
Aujla characterized artificial intelligence as “a clear net tailwind” for operations, emphasizing Intuit’s proprietary data accumulated over decades of tax filer information — capabilities he suggested generic AI platforms cannot duplicate.
The Consumer business unit, 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 described the stock’s current valuation as “very undemanding” when assessed against long-term earnings growth prospects.
The company executed $1.6 billion in share 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, reflecting a 15% year-over-year increase.
INTU shares have declined approximately 42% during 2026.
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