Intuit (INTU) Stock Plunges 13% Despite Earnings Beat as Company Slashes Workforce by 17%

Key Highlights

• Intuit shares plummeted approximately 13% in premarket activity following third-quarter results and workforce restructuring disclosure
• Third-quarter adjusted earnings per share reached $12.80, surpassing analyst expectations of $12.57; revenue hit $8.56B versus the $8.54B projection
• Management announced plans to eliminate 17% of full-time employees, anticipating restructuring expenses between $300M and $340M
• Annual outlook received an upward revision: projected revenue of $21.34B–$21.37B with adjusted EPS between $23.80 and $23.85
• TurboTax yearly revenue projection was reduced, with leadership citing approximately 2 million fewer IRS filings than industry-wide projections

Shares of Intuit tumbled over 13% during Thursday’s premarket session following the release of third-quarter financial results alongside news of significant workforce reductions affecting 17% of full-time employees. Trading activity showed shares hovering near $334.50, representing a sharp decline from the prior close of $383.93.

Intuit Inc., INTU

The financial performance itself delivered positive surprises. Adjusted earnings per share registered at $12.80, exceeding Wall Street’s consensus of $12.57. Total revenue reached $8.56 billion, surpassing the anticipated $8.54 billion while marking a 10% year-over-year increase — though notably decelerating from the 15% expansion recorded during the comparable period last year.

Management also elevated its full-year projections. The company now anticipates fiscal 2026 revenue between $21.34 billion and $21.37 billion, with adjusted earnings per share ranging from $23.80 to $23.85, both figures exceeding previous guidance and analyst consensus.

However, the workforce reduction announcement overshadowed the positive financial results. Management indicated it anticipates incurring restructuring expenses ranging from $300 million to $340 million, with the majority expected during the fourth quarter.

This clarification holds significance given current industry trends. Numerous technology companies have attributed workforce reductions to AI-driven efficiency gains. Data from Layoffs.fyi indicates 111,173 technology sector employees have been displaced in 2026 thus far — approaching the 124,201 total recorded throughout 2025. Companies including Meta, Cloudflare, and Snap have implemented cuts during this period.

TurboTax Revenue Outlook Weakens

The quarter brought some concerning developments. Intuit reduced its full-year TurboTax revenue expectations to a range of $5.277 billion to $5.282 billion, down from the previously projected $5.305 billion to $5.330 billion.

Goodarzi explained that total IRS filing volumes are expected to decline nearly 30 basis points this tax season — approximately 2 million returns below broader economic projections and representing the most significant industry-wide decline since the pandemic recovery period.

While TurboTax Live returns expanded 38% year-over-year, aggressive promotional strategies resulted in average revenue per unit declining 1%. Additionally, this growth rate represents a deceleration from the 47% expansion posted in the previous year.

Artificial Intelligence Viewed as Growth Catalyst

Aujla characterized artificial intelligence as “a clear net tailwind” for operations, emphasizing Intuit’s proprietary datasets accumulated through decades of taxpayer information — capabilities he argued generic AI platforms cannot duplicate.

The Consumer business unit, encompassing TurboTax and Credit Karma, generated $5.3 billion in revenue, representing an 8% increase.

Morgan Stanley analyst Keith Weiss observed that Q3 performance “failed to provide the positive catalyst” anticipated from TurboTax Live but characterized the stock’s current valuation as “very undemanding” relative to long-term earnings expansion potential.

Management also executed $1.6 billion in share repurchases during the quarter and secured board authorization for an additional $8 billion buyback program. Directors approved a quarterly dividend of $1.20 per share, representing a 15% year-over-year enhancement.

INTU shares have declined approximately 42% throughout 2026.

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