Intuit’s latest earnings report gave investors fresh evidence for the bull case Morgan Stanley laid out before the company’s fiscal third-quarter results, while also leaving some of Wall Street’s biggest concerns around TurboTax and artificial intelligence unresolved.
The company reported fiscal third-quarter revenue of $8.56 billion, up 10% from a year earlier, while GAAP diluted earnings per share rose 11% to $11.09. Non-GAAP diluted earnings per share climbed 10% to $12.80, as Consumer revenue increased 8% and Global Business Solutions revenue rose 15%.
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Those results landed after Morgan Stanley framed the quarter as a key test for Intuit. In a note given to TheStreet by Morgan Stanley, analyst Keith Weiss kept an Overweight rating on Intuit, named it a Top Pick in large-cap software, and set a $580 price target on the stock. The note said shares had fallen about 40% year to date before the report and traded at 19 times calendar 2027 GAAP EPS, creating what Morgan Stanley viewed as a favorable risk-reward setup.
Intuit raised its full-year fiscal 2026 revenue outlook to a range of $21.34 billion to $21.37 billion, representing growth of about 13% to 14%. It also raised its outlook for non-GAAP operating income and non-GAAP EPS, with the company now expecting non-GAAP EPS of $23.80 to $23.85.
TurboTax still carries the debate
In the quarter, Intuit said Consumer revenue rose to $5.3 billion, while TurboTax revenue grew 7% to $4.4 billion. Credit Karma revenue increased 15% to $631 million, driven by strength in personal loans, auto insurance, and home loans, while ProTax revenue was flat from the prior year.
The company’s full-year tax guidance showed both the strength and the pressure in the business. Intuit expects TurboTax Live revenue to grow 36% to $2.8 billion and represent about 53% of total TurboTax revenue, with TurboTax Live customers expected to grow 38%. At the same time, the company expects total TurboTax Online units to decline about 2%, TurboTax share of e-files to decline about 1 point, and pay-nothing customers to fall to roughly 7 million from 8 million last year.
The note said investors were worried that lower-cost tax options and AI-native entrants could pressure TurboTax units and average revenue per customer, especially among simple DIY filers. Morgan Stanley argued TurboTax still has advantages in consumer trust, prior-year continuity, tax-form imports, integrated filing workflows, refund visibility, and access to expert help when returns become more complex.
Assisted tax becomes a bigger part of the story
The earnings update makes assisted tax look even more important to Intuit’s long-term growth story. The company’s guidance for 36% TurboTax Live growth shows that customers are moving toward higher-touch products, even as total online units are expected to fall.
Morgan Stanley had already identified that mix shift as the key to changing how investors value the tax business. In the note given to TheStreet by Morgan Stanley, the firm estimated TurboTax Full Service reached about 900,000 returns in fiscal 2025 and projected 1.62 million Full Service returns in fiscal 2026. The note also said that every 1% of paying DIY filers moving into Full Service could add about $44 million of revenue.
The new company guidance gives the article a sharper angle than the pre-earnings version. Intuit is showing revenue growth in tax, with TurboTax Live becoming a larger piece of the mix, while also acknowledging unit pressure in the broader TurboTax Online base.
QuickBooks remains the growth anchor
QuickBooks gave Intuit another important proof point. Global Business Solutions revenue rose to $3.3 billion, up 15%, while Online Ecosystem revenue increased to $2.5 billion, up 19%. QuickBooks Online Accounting revenue grew 22%, helped by higher effective prices, customer growth, and mix shift.
Morgan Stanley had argued that QuickBooks is better positioned than a basic bookkeeping product because it reaches across accounting, payroll, payments, invoicing, bill pay, tax connectivity, cash flow, and accountant workflows. The note also said investor expectations for Global Business Solutions growth appeared closer to 16% to 17%, above consensus near 14.8%, as QuickBooks momentum and Intuit Enterprise Suite traction continued.
Intuit’s updated full-year outlook now calls for Global Business Solutions growth of about 16%, which is directly in line with that higher investor bar. The company also expects Consumer revenue to grow about 10%, including TurboTax growth of about 7% and Credit Karma growth of about 19%.
Related: TurboTax parent cuts thousands of jobs ahead of earnings
