Intuit (INTU) rises 4.9% as QuickBooks Workforce AI, Credit Karma expansion land

Intuit (INTU) shares rose 4.9 per cent on May 7 after the company unveiled a pair of AI-powered product expansions, extending a strategy that has already put automated agents in front of more than 3 million customers.

The Mountain View, California-based company introduced QuickBooks Workforce on May 6, an AI-native human capital management system that consolidates payroll, time tracking, benefits, recruiting and compliance into a single platform for small and medium-sized businesses. Two days later, Credit Karma opened its platform to the estimated 17 million US adults who lack a conventional credit history, letting them build a file through on-time utility and phone payments.

The product launches land roughly 10 weeks after Intuit reported second-quarter results that beat consensus by a wide margin. Revenue for the three months to January rose 17 per cent year on year to $4.7 billion, ahead of the $4.53 billion analysts had forecast. Non-GAAP earnings per share of $4.15 exceeded the $3.68 consensus estimate by 12.8 per cent. GAAP EPS climbed to $2.48 from $1.67 a year earlier.

The Global Business Solutions group, which houses QuickBooks, grew revenue 18 per cent in the quarter, or 21 per cent excluding Mailchimp. The online ecosystem ran faster still, expanding 21 per cent overall and 25 per cent when Mailchimp is stripped out. QuickBooks Online Accounting revenue rose 24 per cent, driven by pricing, customer growth and mix shift. Online services revenue, which covers payments, capital, bill pay and payroll, increased 18 per cent, or 28 per cent excluding Mailchimp. Desktop ecosystem revenue grew 10 per cent, with the enterprise segment up in the high teens.

The Consumer group posted revenue growth of 15 per cent. TurboTax revenue rose 12 per cent despite IRS returns processed through early February running 5 per cent below the prior-year period. Credit Karma revenue jumped 23 per cent, helped by double-digit gains in personal loans, credit cards and auto insurance policies. ProTax revenue increased 7 per cent.

The Mailchimp unit, acquired for $12 billion in 2021, remains a drag. Revenue slipped slightly year on year in the second quarter, and CFO Sandeep Aujla told analysts on the February earnings call that a return to double-digit growth is expected “sometime beyond fiscal 2026.” He added that “all options are on the table” for the marketing platform. Mid-market customer wins and retention are improving, but the small-customer segment is lagging.

The AI architecture

Intuit’s product announcements this week show how its AI strategy is built. Multi-year agreements with Anthropic and OpenAI put their models into QuickBooks, TurboTax and Credit Karma. The company has also embedded its own tax and finance expertise into Claude and ChatGPT.

QuickBooks Workforce uses virtual AI agents to automate recurring tasks. A payroll agent can collect and validate time data and flag inconsistencies before processing payments, the company said. Higher-tier subscribers get access to a personal HR adviser, combining automation with human oversight. The system builds on QuickBooks Payroll, which serves 18 million US workers.

On the Credit Karma side, the expansion targets what the company calls the “credit invisible”: Americans with no file or a thin file at the major bureaus. New users can access Credit Spark, which uses on-time utility and phone payments to build a credit history, and Credit Builder, a secured-account product that tracks deposits.

What the numbers show

The AI push is backed by operating metrics. Intuit disclosed in February that its accounting AI agent categorised more than 237 million transactions in January alone, while repeat engagement among the 3 million customers using its AI agents exceeds 85 per cent. QuickBooks Live customer growth ran at 50 per cent, and new Intuit Enterprise Suite contracts rose 50 per cent quarter on quarter.

Full-year guidance, reaffirmed in February, calls for revenue of $20.997 billion to $21.186 billion, growth of 12 to 13 per cent. Non-GAAP EPS is guided to $22.98 to $23.18, up 14 to 15 per cent. The company bought back $961 million of its own stock in the second quarter and raised the quarterly dividend 15 per cent to $1.20 per share. Cash and investments stood at $3 billion against total debt of $6.2 billion.

TD Cowen reiterated a Buy rating on the stock in a May 4 note, according to Investing.com, arguing that the AI product cycle is not yet reflected in the multiple. The shares trade at a discount to the broader software sector after a 35 per cent decline over the past year.

What’s next

Intuit reports fiscal third-quarter results on May 20, covering the February-to-April period that captures the bulk of the US tax season. The company has guided for third-quarter revenue growth of roughly 10 per cent and non-GAAP EPS of $12.45 to $12.51.

The May 7 share price jump, which pushed the stock to an intraday high above $406 before settling, partially reversed by May 9, when INTU traded at $388.85, down roughly 4.4 per cent from the midweek peak. Investors are weighing whether the AI product cycle is priced in ahead of the earnings print. The shares remain more than 30 per cent below their all-time high.

Analysts will watch the Q3 print for evidence that the QuickBooks Workforce launch is converting payroll subscribers to higher-tier HCM plans, and whether Credit Karma’s move into the credit-invisible segment is driving new user growth ahead of the company’s fiscal 2027 targets.