Intuit's quarterly forecasts disappoint as delayed promotions weigh on growth
Updates shares in paragraph 2, adds background in paragraph 5
By Jaspreet Singh
Nov 21 (Reuters) -Intuit INTU.O projected second-quarter revenue and profit below Wall Street estimates on Thursday, indicating that its AI efforts would take longer to pay off and that a planned change in TurboTax promotion timings weighed on growth.
Shares of the company fell nearly 5% in extended trading.
Intuit's consumer group, which caters to individuals, is expected to see a single-digit revenue decline in the second quarter due to the delay in promotions for the desktop offering of TurboTax, its software widely used by Americans to file their taxes.
The company saidthe delay only impacts the current quarter andreiterated its annual forecast for double-digit revenue growth.
Intuit offersfinancial products, including personal finance portal Credit Karma, marketing platform Mailchimp and accounting software suite QuickBooks that help small businesses manage their finances.
Its shares had declined 5.1% on Tuesday after a Washington Post report that President-elect Donald Trump’s government efficiency team was considering creating a free tax-filing app.
"I am personally engaging with the incoming leaders and new administration," CEO Sasan Goodarzi told Reuters.
"And as we've always said, another free tax software is not going to make any impact because free (software) is already available to all Americans," he added.
Intuitexpects revenue to be between $3.81 billion and $3.84 billion in thesecond quarter, compared with estimates of$3.87 billion, according to data compiled by LSEG.
It forecastquarterly adjusted profit per share of $2.55 to $2.61, below estimates of $3.20.
The company on Wednesday made its generative AI financial assistant tool, Intuit Assist, generally available for QuickBooks Online users in the U.S. Intuit had launched the AI tool last year to help clients in financial decision-making when using its products.
"The current light quarter is indicating a pause until customers better understand the return on investment of AI," said Zeus Kerravala, principal analyst at ZK Research.
First-quarter revenue of$3.28 billion beat estimatesof $3.14 billion, while adjusted profit of $2.50 per share surpassed estimates of$2.35.
Reporting by Jaspreet Singh in Bengaluru; Editing by Mohammed Safi Shamsi
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