Intuit (INTU)

Financial technology platform Intuit (NASDAQ:INTU) reported revenue ahead of Wall Street’s expectations in Q4 CY2025, with sales up 17.4% year on year to $4.65 billion. The company expects next quarter’s revenue to be around $8.54 billion, close to analysts’ estimates. Its non-GAAP profit of $4.15 per share was 12.7% above analysts’ consensus estimates.

Company Overview

Originally named after its founding product "Intuitive for the first-time user," Intuit (NASDAQ:INTU) provides financial management software and services including TurboTax, QuickBooks, Credit Karma, and Mailchimp to help consumers and small businesses manage their finances.

The demand for easy to use, integrated cloud based finance software that integrates tax and accounting operations continues to rise in tandem with the difficulty workers find trying to use existing accounting tools like spreadsheets given the growing volume of finance data littered across a multitude of enterprise applications. A related demand driver is the secular increase of e-commerce and rising adoption of modern point of sales and payments platforms which easily integrate with backend financial software.

Intuit competes with financial software providers like Microsoft (NASDAQ:MSFT) for small business accounting, H&R Block (NYSE:HRB) and private tax preparation services in the tax preparation space, Experian (OTCMKTS:EXPGY) and TransUnion (NYSE:TRU) in the credit monitoring market, and companies like Constant Contact and Adobe (NASDAQ:ADBE) in marketing automation.

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Intuit grew its sales at a decent 21.1% compounded annual growth rate. Its growth was slightly above the average software company and shows its offerings resonate with customers.

Long-term growth is the most important, but within software, a half-decade historical view may miss new innovations or demand cycles. Intuit’s annualized revenue growth of 15.5% over the last two years is below its five-year trend, but we still think the results were respectable.

This quarter, Intuit reported year-on-year revenue growth of 17.4%, and its $4.65 billion of revenue exceeded Wall Street’s estimates by 2.5%. Company management is currently guiding for a 10.1% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 11.1% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and indicates its products and services will see some demand headwinds. At least the company is tracking well in other measures of financial health.

Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.

Intuit’s billings punched in at $4.75 billion in Q4, and over the last four quarters, its growth was solid as it averaged 17.6% year-on-year increases. This performance aligned with its total sales growth, indicating robust customer demand. The cash collected from customers also enhances liquidity and provides a solid foundation for future investments and growth.

The customer acquisition cost (CAC) payback period represents the months required to recover the cost of acquiring a new customer. Essentially, it’s the break-even point for sales and marketing investments. A shorter CAC payback period is ideal, as it implies better returns on investment and business scalability.

Intuit is very efficient at acquiring new customers, and its CAC payback period checked in at 23.4 months this quarter. The company’s rapid recovery of its customer acquisition costs indicates it has a highly differentiated product offering and a strong brand reputation due to its scale. These dynamics give Intuit more resources to pursue new product initiatives while maintaining the flexibility to increase its sales and marketing investments.

Software is eating the world. It’s one of our favorite business models because once you develop the product, it usually doesn’t cost much to provide it as an ongoing service. These minimal costs can include servers, licenses, and certain personnel.

Intuit’s robust unit economics are better than the broader software industry, an output of its asset-lite business model and pricing power. They also enable the company to fund large investments in new products and sales during periods of rapid growth to achieve higher profits in the future. As you can see below, it averaged an excellent 80.9% gross margin over the last year. That means Intuit only paid its providers $19.10 for every $100 in revenue.

The market not only cares about gross margin levels but also how they change over time because expansion creates firepower for profitability and free cash generation. Intuit has seen gross margins improve by 1.8 percentage points over the last 2 year, which is solid in the software space.

In Q4, Intuit produced a 78.5% gross profit margin, up 1.2 percentage points year on year. Intuit’s full-year margin has also been trending up over the past 12 months, increasing by 1.1 percentage points. If this move continues, it could suggest better unit economics due to more leverage from its growing sales on the fixed portion of its cost of goods sold (such as servers).

Many software businesses adjust their profits for stock-based compensation (SBC), but we prioritize GAAP operating margin because SBC is a real expense used to attract and retain engineering and sales talent. This metric shows how much revenue remains after accounting for all core expenses – everything from the cost of goods sold to sales and R&D.

Intuit has been a well-oiled machine over the last year. It demonstrated elite profitability for a software business, boasting an average operating margin of 27.1%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Analyzing the trend in its profitability, Intuit’s operating margin rose by 4.8 percentage points over the last two years, as its sales growth gave it operating leverage.

In Q4, Intuit generated an operating margin profit margin of 18.4%, up 3.4 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

Intuit has shown terrific cash profitability, driven by its lucrative business model and cost-effective customer acquisition strategy that enable it to stay ahead of the competition through investments in new products rather than sales and marketing. The company’s free cash flow margin was among the best in the software sector, averaging an eye-popping 34% over the last year.

Intuit’s free cash flow clocked in at $1.52 billion in Q4, equivalent to a 32.8% margin. This result was good as its margin was 6.6 percentage points higher than in the same quarter last year, but we note it was lower than its one-year cash profitability. Nevertheless, we wouldn’t read too much into a single quarter because investment needs can be seasonal, causing short-term swings. Long-term trends carry greater meaning.

Over the next year, analysts predict Intuit’s cash conversion will slightly fall. Their consensus estimates imply its free cash flow margin of 34% for the last 12 months will decrease to 30.4%.

It was good to see Intuit narrowly top analysts’ billings expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. On the other hand, its EPS guidance for next quarter missed and its full-year revenue guidance fell slightly short of Wall Street’s estimates. Overall, this was a softer quarter. The stock remained flat at $382.50 immediately following the results.

Updated: February 26, 2026 at 9:15 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in Intuit.

There’s plenty to admire about Intuit. To kick things off, its revenue growth was solid over the last five years. And while its expanding operating margin shows it’s becoming more efficient at building and selling its software, its impressive operating margins show it has a highly efficient business model. On top of that, its bountiful generation of free cash flow empowers it to invest in growth initiatives.

Intuit’s price-to-sales ratio based on the next 12 months is 4.8x. When scanning the software space, Intuit trades at a fair valuation. If you trust the business and its direction, this is an ideal time to buy.

Wall Street analysts have a consensus one-year price target of $729.26 on the company (compared to the current share price of $378.50), implying they see 92.7% upside in buying Intuit in the short term.