Intuit Inc (INTU) — Q4 2025 Earnings Call Transcript

Great. Thanks, Bo. Good afternoon, and welcome to Intuit's Fourth Quarter Fiscal 2025 Conference Call. I'm here with Intuit's CEO, Sasan Goodarzi; and our CFO, Sandeep Aujla. Before we start, I'd like to remind everyone that our remarks will include forward-looking statements. There are a number of factors that could cause Intuit's results to differ materially from our expectations. You can learn more about these risks in the press release we issued earlier this afternoon, our Form 10-K for fiscal 2024 and our other SEC filings. All of those documents are available on the Investor Relations page of Intuit's website at intuit.com. We assume no obligation to update any forward-looking statements. Some of the numbers in these remarks are presented on a non-GAAP basis. We reconciled the comparable GAAP and non-GAAP numbers in today's press release. Unless otherwise noted, all growth rates refer to the current period versus the comparable prior year period, and the business metrics and associated growth rates refer to worldwide business metrics. A copy of our prepared remarks and supplemental financial information will be available on our website after this call ends. With that, I'll turn the call over to Sasan.

Great. Thank you, Kim, and thanks to all of you for joining us today. I'm incredibly proud of our momentum and strong fiscal year 2025 results. Our full year revenue grew 16% with another year of strong operating margin expansion. Our years of investments in data, data services, AI and human intelligence, coupled with strong execution against our AI-driven expert platform strategy fueled these outstanding results. Looking ahead to fiscal year 2026, we are confident in delivering another strong year of double-digit revenue growth and margin expansion. In the past year, we made significant progress powering prosperity for consumers, businesses, and accountants. We launched a transformative all-in-one business platform with a virtual team of AI agents and AI-enabled human experts that can manage lead to cash for customers, accelerated our innovation in mid-market with the introduction of Intuit Enterprise Suite and new go-to-market capabilities and delivered breakthrough adoption of TurboTax Live as we disrupt the assisted tax category. Looking ahead, we're doubling down in these key areas. Starting with our business platform. We're making great progress delivering done-for-you experiences with expertise for our customers. Last month, we launched a transformative virtual team of AI agents that complete jobs on behalf of our customers, dramatically improving how businesses run and grow. Combined with our AI-enabled human experts, these agents are automating workflows and proactively delivering real-time insights to improve cash flow and fuel growth. Our redesigned user interface and new business feed highlight these real-time insights and tasks completed by agents on behalf of the customer. We're seeing strong traction since the launch last month with customer engagement in the millions and repeat usage rates significantly above our expectations, demonstrating the value that we're providing to our customers. We're well positioned to consolidate our customers' tech stack and spend and significantly increase their ROI, where AI and human intelligence are doing the work to fuel their success. With an all-in-one platform, we have all the pieces to help our customers grow, save time, and save money while fueling Intuit's growth. Turning to mid-market. We continue to make strong progress serving large and more complex customers, which represent an $89 billion TAM. We are focused on fueling the success of customers with $2.5 million to $100 million in annual revenue with our all-in-one platform, including QBO Advanced, Intuit Enterprise Suite, and an ecosystem of connected services. Our comprehensive set of offerings is aimed at helping businesses achieve their growth goals such as boosting productivity and improving profitability by automating complex tasks, workflows, and functions, delivering insights and recommendations. Many customers tell us they are over-digitized with their data trapped in a number of disparate applications. This means they are spending too much time and money managing their business and not getting the benefits and return on their investments. Our data shows customers on our platform are spending billions per year on disparate apps. We are well-positioned to consolidate our customers' data and spend on Intuit's platform to help fuel their growth and save money all in one place. With quarterly product releases for Intuit Enterprise Suite, we aim to rapidly penetrate our existing TAM while expanding into new verticals. Our July product release was designed to supercharge customers' growth and profitability. The launch included improved multi-entity capabilities and new AI-driven, done-for-you setup experience that dramatically reduces the amount of time it takes customers to get up and running and new features that give customers a holistic view of their business KPIs, which streamline intercompany transactions and allocations. We also launched AI agents in Intuit Enterprise Suite, including accounting, payments, finance and project management agents, automating daily tasks, reducing hours of work to just minutes. Our done-for-you experiences are reducing manual work by up to 60% for customers when setting up projects. A recent Forrester study estimated that customers can see nearly a 300% return on investment over 3 years when using Intuit Enterprise Suite. As we evolve our go-to-market strategy for mid-market, we're strengthening our partnership with the largest tech-forward accounting firms. We're helping accountants serve their business customers more efficiently and grow their practices profitably. In Q4, we continued to see strong growth in IES deals through accountants. This quarter, we signed a partnership with a rapidly growing top 25 accounting and technology advisory firm. This particular firm serves more than 14,000 business clients, representing a meaningful opportunity to acquire new customers over time. We have many other partnerships of similar scale in the pipeline. I'm pleased with the momentum we're seeing with Intuit Enterprise Suite. The total number of new billed customers in Q4 was up nearly 2x versus Q3 with successful adoption by some very large customers, including one customer with over 200 entities that is also using payroll and payments. As we head into fiscal year 2026, we're nearing the 1-year mark of launching Intuit Enterprise Suite, and I'm proud of the progress we've made with both our product and our go-to-market strategy, which positions us to penetrate the $89 billion mid-market TAM. Turning to our consumer platform. We delivered an outstanding year. Consumer Group revenue grew 10%, more than 2-point acceleration from last year. This was driven by breakthrough adoption of TurboTax Live, which grew 47%, well above our long-term expectation of 15% to 20% revenue growth. This is the power of bringing data, AI, and human intelligence together to provide better experiences for customers. Credit Karma grew 32% this year and also drove 1 point of tax revenue growth as we delivered a seamless customer experience across TurboTax and Credit Karma. Our results also demonstrate the incredible opportunity to win as one consumer platform to drive year-round engagement and increase monetization by serving a broader set of needs from building credit to building wealth. The learnings we gained this year are fueling our investments and innovation to deliver durable double-digit growth across our consumer platform. We have significant momentum across the company, and I cannot be more excited about our opportunity ahead to accelerate growth. Our strategy and relentless focus on execution is working. We're leveraging data, data services, AI, and human intelligence to become the all-in-one platform for consumers, businesses, and accountants. Now let me hand it over to Sandeep.

Thank you, Sasan. We delivered strong results in fiscal 2025 across the company, including total revenue growth of 16%, a more than 2-point acceleration from fiscal 2024, and GAAP and non-GAAP operating income growing 36% and 18%, respectively. Our disciplined approach to managing the business allowed us to achieve strong margin expansion while driving breakthrough adoption in assisted tax, introducing transformative AI agents across our business solutions, and building our mid-market go-to-market capabilities. Our fourth quarter results include: revenue of $3.8 billion, up 20%; GAAP operating income of $339 million versus a loss of $151 million last year; non-GAAP operating income of $1 billion, up 39%; GAAP diluted earnings per share of $1.35 versus a diluted loss per share of $0.07 last year; and non-GAAP diluted earnings per share of $2.75, up 38%. Now turning to the business segments. Global Business Solutions Group revenue grew 18% during the quarter or 21% excluding Mailchimp and 16% for the full year or 18% excluding Mailchimp. Online Ecosystem revenue grew 21% in Q4 or 26% excluding Mailchimp and 20% for the full year or 25% excluding Mailchimp. This demonstrates the power of our all-in-one platform and that the innovation we are delivering is resonating with our customers, particularly as we move upmarket. We are making progress consolidating customers' data and spending with us to help fuel their growth. Our robust growth in Online Ecosystem revenue was driven by strength across both Online Accounting and Online Services. QuickBooks Online Accounting revenue grew 23% in Q4 and 22% in fiscal 2025. Growth for the quarter and year was driven by higher effective prices, customer growth, and mix shift. Online Services revenue grew 19% in Q4 or 29% excluding Mailchimp. Growth in Q4 was driven by money, which includes payments, capital, and bill pay, as well as payroll. For fiscal 2025, Online Services revenue grew 19% or 29% excluding Mailchimp driven by money and payroll. Within money, revenue growth in the quarter reflects payments revenue growth, which was driven by customer growth and an increase in total payment volume per customer and higher effective prices as well as QuickBooks Capital revenue growth. Total online payment volume growth in Q4 was 18%, relatively consistent with the range we have seen over the last several quarters. Within payroll, revenue growth in the quarter reflects customer growth, higher effective prices, and mix shift. Within Mailchimp, the revenue was down slightly versus a year ago, in line with our expectations for the quarter. We remain focused to ensure the offering resonates with both mid-market and small businesses, and we are confident in delivering an all-in-one business platform that integrates the power of Mailchimp and QuickBooks. We expect Mailchimp to exit fiscal 2026 growing double digits. The overall addressable market for our business platform is over $180 billion, roughly half of which is mid-market. And we are well-positioned to win as an all-in-one platform. Online Ecosystem revenue grew 21% in Q4 and 20% for the year. This includes approximately 40% growth for both the quarter and the year in Online Ecosystem revenue for QBO Advanced and Intuit Enterprise Suite that serve mid-market. Online Ecosystem revenue for small businesses and the rest of the base grew a strong 18% for both the quarter and the year. Our Online Ecosystem revenue growth reflects the progress we're making with our strategy of serving both small and mid-market businesses with more complex needs. We had an exceptional year driving 23% growth in combined QBO Advanced and Intuit Enterprise Suite customers and 8% growth in U.S. QBO customers, excluding Self-Employed. Overall, online paying customers grew 5%, reflecting the headwinds we saw in our Mailchimp and international businesses, both areas where we have game plans to accelerate growth in the future. Online Ecosystem ARPC growth accelerated more than 3 points in fiscal 2025 to 14%, reflecting our progress serving more complex customers. We feel great about the customer growth and ARPC expansion we saw this year with larger and more complex mid-market customers in our base. Turning to desktop. Desktop Ecosystem revenue grew 10% in Q4 and 5% for the full year. QuickBooks Desktop Enterprise revenue grew in the mid-teens in Q4 and high single digits in fiscal 2025. Turning to our consumer platform. Consumer Group revenue of $4.9 billion grew 10% in fiscal 2025. This outstanding tax performance reflects breakthrough adoption of TurboTax Live with revenue growth of 47%, a 30-point acceleration from last year, and customer growth of 24%. We saw strong customer growth in full-service consumer and business tax offerings, both outpacing overall TurboTax Live customer growth. The learnings we gained this year will help fuel durable growth in the future. In our ProTax Group, revenue was $621 million in fiscal 2025, up 4%. Credit Karma revenue grew 34% in Q4 and 32% in fiscal 2025. On a product basis in Q4, personal loans accounted for 15 points of growth, credit cards accounted for 13 points, and auto insurance accounted for 5 points. As Sasan mentioned earlier, Credit Karma drove 1 point of revenue growth in fiscal 2025 as we delivered a seamless customer experience across TurboTax and Credit Karma. I am proud of the progress the team made innovating on behalf of our members and partners this year, and I'm excited about the opportunity ahead. Shifting to our balance sheet and capital allocation. Our financial principles guide our decisions. They remain our long-term commitment and are unchanged. We finished the quarter with approximately $4.6 billion in cash and investments and $6 billion in debt on our balance sheet. We repurchased $748 million of stock during the fourth quarter and $2.8 billion during fiscal 2025. Depending on market conditions and other factors, our aim is to be in the market each quarter. The Board approved a quarterly dividend of $1.20 per share payable on October 17, 2025. This represents a 15% increase versus last year. Now shifting to fiscal 2026 and Q1 guidance. Our fiscal 2026 guidance includes total company revenue of $20.997 billion to $21.186 billion, growth of 12% to 13%. Our guidance includes Global Business Solutions Group revenue growth of 14% to 15% or 15.5% to 16.5% revenue growth, excluding Mailchimp. Our guidance also includes overall Consumer Group revenue growth of 8% to 9%, including TurboTax growth of 8%, Credit Karma growth of 10% to 13%, and ProTax growth of 2% to 3%. This guidance reflects the segment reporting change we shared today in our press release and fact sheet. GAAP diluted earnings per share of $15.49 to $15.69, growth of 13% to 15%, and non-GAAP diluted earnings per share of $22.98 to $23.18, growth of 14% to 15%. We expect a GAAP tax rate of approximately 23% in fiscal 2026. Our guidance for the first quarter of fiscal 2026 includes total company revenue growth of 14% to 15%, GAAP earnings per share of $1.19 to $1.26, and non-GAAP earnings per share of $3.05 to $3.12. You can find our full fiscal 2026 and Q1 guidance details in our press release and on our fact sheet. We are also reiterating our long-term growth expectations for each of our businesses. First, Global Business Solutions Group. With the momentum we see in Online Ecosystem revenue growth, we are reiterating our long-term revenue growth expectations for the Global Business Solutions Group of 15% to 20%. This includes online paying ARPC growth of 10% to 20% and online paying customer growth of 5% to 10%. Second, TurboTax. We had a strong tax season, and we see significant runway ahead to penetrate our TAM, particularly in assisted tax, which we expect to be the key driver of future growth. We are reiterating the TurboTax long-term revenue growth rate of 6% to 10% in this interim period with TurboTax Live revenue expected to grow 15% to 20%. Finally, Credit Karma. We are reiterating our long-term revenue growth expectations of 10% to 15%, reflecting the current size and scale of the business, our focus on delivering year-round benefits that lead to engagement, monetization, and TurboTax growth. With that, I'll turn it back over to Sasan.

Thank you, Sandeep. We are well on our way to becoming the global tech leader for enabling financial success for consumers, businesses, and accountants. Given our early bet on AI, our low penetration of our large $300 billion TAM, and the significant investments we've made in the last decade in data, data services, AI, and AI-enabled human intelligence, we are well-positioned to power prosperity for our customers and deliver sustained double-digit revenue growth with margin expansion. We look forward to unpacking why Intuit continues to have a very bright future with the best years yet to come at our Investor Day next month. With that, let's open it up to your questions.

Sasan, that's a great end to fiscal '25. Mainly, I want to focus on the small business that your global business grew 18% growth ex Mailchimp. But as you look at fiscal '26, what are the areas you're more excited about? And what did you learn in the fiscal '25 execution? And if I could add one more to this, there is concern about this lead generation with the slowdown in SEO search. I would love to hear your views in terms of what you're seeing in your QuickBooks business.

Thank you for the question. There are three key points that give us confidence in the business group as we enter the current fiscal year. First, we experienced customer growth of 8% in U.S. QuickBooks Online and 23% in the mid-market, which is strong and promising as we navigate some challenges related to Mailchimp and international markets. Second, we now offer an all-in-one platform that supports customers from lead to cash. We've recently launched new business feeds that involve both AI agents and human agents, with millions of customers already engaging, which boosts our confidence in future growth and service penetration. Third, the mid-market is performing well, with a 40% growth rate compared to an overall 20% growth in online services, alongside our improved product launches and go-to-market strategy, which gives us optimism not just for 2026 but for long-term potential. Regarding AI search, it is beneficial for us; our platform's traffic is significantly up this year, and AI search currently represents just 1% of our overall traffic, with top brands seeing substantial visibility benefits. Brands like QuickBooks and Credit Karma are positioned well in this regard. Additionally, Credit Karma heavily relies on in-app users rather than SEO search, which is less than 1% of our traffic and has not been adversely affected. Finally, as an AI-driven expert platform, we are focusing on optimizing our content for visibility not only in AI applications but also for future search relevance, which is currently only 1% of our traffic. It's also important to note that most of our growth is driven by recommendations, with search making up less than 15% of our entire portfolio. I wanted to ensure that this point was clear.

Congratulations on a really strong overall FY '25, a lot of the pieces coming together. Looking forward into FY '26, really one question but in two parts. I think on one side of the equation, you guys released a lot of really interesting functionality with new agents a couple of weeks back. What should our expectations be for monetization around those agents? Is it still too early? Or what should the time frame we should be thinking about those ramping up into the revenue base? And then on the other side of the equation, Mailchimp has been a drag through FY '25. That was the one bad part of the equation. But you guys sound really confident we're going to come back to double-digit growth. Any inklings you could give us on what's driving that confidence in getting that business back to a double-digit growth rate so it's no longer a drag on this overall GBS revenues anymore?

Yes, Keith. Let me address your first question about our all-in-one platform launch featuring AI agents and human experts. We have high expectations for future monetization, although we haven't factored that into our guidance for this year. Importantly, engagement has exceeded our expectations. Since our July launch, we have several million customers interacting with the AI agents, which is quite promising after just one month. The levels of repeat engagement and app discovery are also higher than anticipated. Our current focus is on enhancing the user experience and encouraging greater adoption of our services. We’re allowing our teams the necessary time to improve engagement and repeat engagement, as well as discovery, which are already above our projections. Monetization will follow after this foundational work. With the substantial spending that our customers allocate on services not provided by us, we are optimistic about our ability to streamline both the technology stack and the associated expenditures, leading to future revenue generation. Therefore, while we have expectations for future growth, we did not build this year’s guidance around it for prudence. Regarding Mailchimp, you're correct that it has been a growth hindrance. We anticipate finishing this fiscal year’s fourth quarter with double-digit growth. You can expect a gradual increase throughout the year. Two factors bolster our confidence: first, our refined sales strategy and our increased sales force are effectively targeting larger mid-market customers, which should drive significant growth. Second, the product enhancements we’ve implemented, along with more improvements on the way, are contributing to the highest customer satisfaction levels we've seen since acquiring the business. These positive indicators give us confidence in achieving double-digit growth by the fourth quarter.

I guess, Carl, for you, there are many positive developments happening with Xtend thanks to some of the partners. I was wondering if there are any challenges out there that might be balancing this out compared to what you might have anticipated at the start of the year, particularly regarding tariffs with Europe. Any context you could provide would be helpful, as it seems like you have some strong momentum with your early initiatives.

Kirk, was that question for us?

We can come back to Kirk.

Sasan, can you maybe talk about or just sort of outline the product and go-to-market priorities around IES in '26? Just thinking about some of the momentum behind the business and the potential acceleration in '26.

Yes, definitely. There are really three key points to consider. First, we are highly focused on the several hundred thousand customers in our base, approximately 800,000, who are eligible for either QBO Advanced or the Intuit Enterprise Suite. Our efforts to engage these customers significantly contribute to our current growth. Second, we have recently begun creating a flywheel effect by engaging with our accountant partners. Although these discussions represent more long-term opportunities, they hold great potential for us, not just in fiscal year '26 but beyond, particularly as we gain traction with the Intuit Enterprise Suite and Advanced, especially across multiple verticals. Lastly, it's worth noting that we are just one year into the Intuit Enterprise Suite, and we had our largest launch in July as we implement quarterly product releases. Our main focus is twofold: to enhance our penetration of the existing market and to expand our total addressable market. We are also very excited about Ashley joining the team and helping us accelerate our progress. These points highlight our main product and go-to-market priorities.

Sasan, some of the agentic capabilities and the AI you're launching seem very interesting. I'm curious about your thoughts on AI readiness among your customers. You are getting engagement already, but how prepared are your customers to implement these agents? Does that require some effort from your side, or is it relatively straightforward in terms of what we might expect in '26 and '27?

Yes, I appreciate your question because it centers on the customer perspective, which is crucial as we consider how to serve consumers, small, and large businesses. First, it's important to note that people are utilizing AI applications in their lives without being particularly concerned about the AI aspect itself. What they truly seek is assistance in growing their business, acquiring customers, focusing their marketing efforts, and making informed financial decisions. To illustrate this, let me share an experience from our recent launch. For example, our business feed can notify a customer about having 10 unpaid invoices, and based on their previous consent, we can initiate follow-up actions to help them collect that money. They can then see the improvements in their cash flow when they click on it. Additionally, we may send a notification informing them that they qualify for a line of credit due to their sales growth, along with details of that growth. The role of our AI agents is to empower customers in their decision-making processes, which is what they truly value. It's less about the technology itself being an AI agent and more about the real impact we're making in critical situations by helping them manage receivables, pay their obligations, access credit lines, and identify growth opportunities. I want to highlight the Forrester study that we referenced, emphasizing our goal to assist customers in consolidating their data, technology stack, and overall expenditure in one comprehensive solution. When we achieve this, there is potential for a 300% return on investment over three years. By centralizing their data with our AI agents, we can enable better decision-making that leads to increased revenue and profitability through our business feed and automated processes. Additionally, when we streamline their technology stack, customers may spend more with us while ultimately lowering their overall expenses. This encapsulates our approach towards engaging customers with these innovative experiences.

And Arjun, one other thing I would add to it, this is where we were super deliberate in how we introduce agentic experiences, we incorporate them into the lineup. So we expose our customers to them as opposed to having the customers go and pick a separate offering to add on. So that deliberate decision is also what is helping customers see the productivity, see the better business outcomes. And that's actually leading to conversations around what's the next set of agentic experiences AI involved because the customers are showing higher receptivity to it, as Sasan mentioned, significantly higher repeat usage than even our own internal expectations.

Sorry about earlier. Sasan, I was wondering if you could actually just talk a little bit about Credit Karma. Obviously, a fantastic year for that business. I think there's some concern, obviously, with that business that it can be potentially more cyclical than other parts of your business. But the double-digit guide for next year against what are very tough comps seems to give some indication that you guys feel good about how that's sort of operating. Just curious if you could add a little bit more color to sort of the confidence in the guide and maybe sort of some of the new product lines that are coming about to make that perhaps a little bit less cyclical than it was perhaps before you bought it in the early days.

Yes, certainly, Kirk. First, I want to emphasize the strategic reasoning behind our acquisition of Credit Karma. It's crucial to understand our goal of creating a unified consumer platform that assists customers with benefit delivery throughout the year. During tax time, we have the opportunity to handle customers' taxes directly through the Credit Karma platform. This is a key aspect because much of our innovation this year, along with what we've discussed regarding its contribution to tax, plays a vital role in engaging customers year-round. Additionally, due to our investments in data and AI, we are capturing more market share. When we examine our credit card and personal loan performance, we see that much of our success stems from effective execution and increasing share. The primary driver of this share growth is our data and AI capabilities, which allow us to engage customers within our app and at critical moments when they are looking for financial products. We present them with choices and support them in finding the best options for their needs. This increase in share bolsters our confidence. We have experienced several consecutive quarters where our performance has exceeded even our expectations, which ties into your question about cyclicality. We have been investing significantly in areas that are less cyclical. This includes taxes, which is why we acquired the platform, along with insurance and a focus on prime customers. Historically, the cyclicality of Credit Karma was mainly driven by personal loans for subprime or near-prime borrowers, hence our shift toward serving prime customers who have different needs. Moreover, we are heavily investing in providing instant access to funds during refund time, as well as engaging customers with their finances year-round. This comprehensive approach to innovation reinforces our confidence, not only in Credit Karma but across our entire consumer platform as we look to the future.

If I examine the performance of the global solutions business, excluding Mailchimp, it was exceptionally strong in the fourth quarter, primarily driven by an acceleration in online activity. Could you discuss the factors contributing to that performance and the sustainability of these trends as we approach 2026? Additionally, when considering the guidance without Mailchimp, it suggests a slight slowdown. Could you provide insight into what this means for desktop versus online and the underlying assumptions?

Taylor, it's Sandeep. Regarding Q4, the acceleration you mentioned was evident in both accounting and services. On the accounting side, our growth in the mid-market along with the introduction of a new lineup in early July contributed to this acceleration. On the services side, our investments and innovations in our money portfolio, such as making all invoices payable, which we launched in Q4, have also shown strong momentum. These developments are sustainable and should continue to yield benefits in the new fiscal year. As for your question about guidance excluding Mailchimp, the key difference between our performance in fiscal '25 and our guidance for fiscal '26 is related to reduced pricing. I mentioned this in Q4 as well—when we consider our accounting platform in desktop and services, we are seeing less pricing pressure heading into fiscal '26 compared to what we experienced in '25. The core momentum in the business remains strong, and the difference is primarily due to fewer pricing actions.

I was on mute. You would think I would have figured that out by now. Can you help expand a little on the improvements that support the confidence in the 15% to 20% TTL growth next year after such a fantastic year?

Yes. Brad, let me maybe kick us off. It's really, I would say, comes down to two big things. One is mid-market, $90 billion TAM. We are just scratching the surface with our penetration in that addressable market. Customers grew 23%. When you look at overall online growth, which was 20%, up to now $8 billion, over $8 billion, 40% growth in mid-market. So that gives us a lot of confidence for years to come, not just FY '26. I think the other one is with the launch that we had, which was sort of our all-in-one launch with a virtual team of agents and AI-enabled human experts, we now have all of our apps in one place to help customers manage from lead to cash. In fact, one of the reasons I mentioned earlier that we like where we are on a couple of million customers engaging, discovery, and repeat engagement is actually higher than what we had anticipated for only a month in, is that customers are actually surprised that we have all the apps that we have today because now it's all in one place. They visibly see it in one place, and we're actually continuing to do more and more of the work for them. And there's a significant services adoption opportunity within that, Brad. And so those are the two big things that give us a lot of confidence looking ahead because large TAM, low penetration. And I just think our product launches are positioned well for durable growth for years to come.

Sasan, that was really helpful. And shame on me, I didn't speak very clearly. I actually meant to say TurboTax Live and I abbreviated it TTL, but that was still very helpful.

Well, you know what, there's nothing like answering questions that were not asked. Let me at least allow Sandeep to respond to that question.

No worries, Brad. You got cut off for the first part. So we were actually debating the 15% to 20%. On TurboTax Live, look, we had a phenomenal year in fiscal '25 and made tremendous progress across showing up local, across making sure we extended our brand equity towards the assisted category. And that showed up in the timing of our brand spend and delivering a better together experience with Credit Karma with many of those customers coming over and picking the assisted method. And across all of those, we had outstanding outcomes, but we also had tremendous learnings, which gives us the confidence that as we execute that playbook in the year ahead and execute even better, that will continue to drive strong momentum in the assisted tax category, and that's where the confidence in the 15% to 20% comes.

I'm aligned with Brad. I believe I heard something about TurboTax Live, but I appreciate the explanation regarding QuickBooks Online. Sasan, while it may seem like a straightforward topic, could you elaborate on how Intuit markets its QuickBooks business? There seems to be some hesitation about AI searches and AI summaries replacing traditional paid search methods. Can you explain how QuickBooks and other products that rely on online advertising operate in this new landscape? How do you ensure that you aren't at a disadvantage, and how can you leverage the rise of AI search compared to conventional paid search?

Thank you for the question. As an AI company, we are deeply involved in all aspects of AI, including search visibility across various platforms. It's crucial for us to maintain clarity and focus on search. Generally, we have not relied heavily on search. In our business group, our traffic increased by double digits over the past year, with less than 15% coming from search. This context helps illustrate the diverse sources of our traffic, as we have intentionally invested in various channels over the years to reduce our dependence on search, reflecting where customers engage. Currently, AI search accounts for just 1% of our overall search efforts. However, we are committed to improving our presence across all platforms, whether social media or search. We approach our business in three straightforward dimensions: one-to-many, which supports new solopreneurs by promoting our all-in-one platform; one-to-one for our mid-market customers, particularly through our accountant channel which drives significant growth; and the overarching benefit of our platform that does not require additional spending on payments, payroll, or SMS, since everything is consolidated in one place. By attracting customers with initial benefits, our AI agents can assist them in various ways, such as payment processing or payroll support. We are intentional about the features available in our products to empower our customers. This framework guides our go-to-market strategy and emphasizes the significance of search for our business. Additionally, we benefit from being a leading brand as AI searches grow over time.

One thing I would add, Kash, is that it's important to remember that search traffic and AI traffic are not the same. AI traffic generally involves higher consideration and converts significantly better through the sales funnel. This is an area we are very aware of and are actively investing in to increase our AI traffic because it greatly enhances the efficiency of the funnel.

I would like to ask about the health of small and medium-sized businesses and what you are observing from a macro perspective. Have you noticed any changes in your underlying data or from customer feedback? What insights do you have regarding the deal environment?

Yes. Sure. A couple of things I would say. When you talk about businesses, you got to do it while talking about consumers, right, because businesses spend with businesses, but consumers spend with businesses. So I'll just start with consumers first. And generally, what we see across our well over 100 million customers is balances on things like credit cards is up 4% year-over-year, but please understand that over the last several years, it's been up double digits. And credit scores, depending on your credit band, could be down about 10 points. And so consumers, it's a good job market, but they are very intentional about where they spend money, and they are stretched. When it comes to businesses that we see on our platform, revenues are generally flat, but profits and cash flows are actually up year-over-year. Now that's across 10 million customers. There are sectors that are performing far better, and then there are sectors that aren't performing well. And as you know, we're not concentrated in any particular sector, but sectors like real estate, advertising, manufacturing, depending on what you manufacture are down, whereas other sectors are up. So net-net, profits are up, cash flows are up across the millions of customers that we serve.

Congratulations, Sasan. I wanted to follow up on the earlier question regarding the overall macro picture for your customer base. Looking ahead over the next 12 to 18 months, with all the functionality in your products and the integration of AI capabilities, how do you foresee your customers transitioning to a more straightforward yet comprehensive offering that moves them into higher tiers of service? How much of this change is driven by your efforts versus market demand? How do the agentic capabilities contribute to this potential? It seems there is a chance that AI search could enhance in-app selling and cross-selling, leading to greater efficiency in your go-to-market strategy while also improving margins. Could you elaborate on both of these points?

Yes, I appreciate your question. There are a few points I want to highlight. First, every customer and accountant I speak with feels overwhelmed by the number of apps they use. They are spending excessive amounts on various applications, which is consuming more of their time as they try to understand their business operations. More critically, their data is scattered across these different apps. Therefore, our primary opportunity and impact come from our all-in-one platform. The Forrester study we referenced illustrates the importance of consolidating data, technology, and expenses. By doing this, the significant return on investment stems from our platform's ability to leverage AI agents for improved revenue and profitability support. Additionally, consolidating technology enables us to automate workflows and tasks, leading to greater efficiency in one unified location rather than relying on disparate applications. When comparing the costs associated with multiple apps against what customers would pay us—who often end up paying more—they find that they ultimately save money. We have significant evidence that this approach is effective. In response to your question, it’s a combination of push and pull. With our AI agents and AI-assisted human experts, we are observing a shift towards customers conducting more of their work on our platform rather than other apps. However, we also recognize the need to drive that change due to the natural resistance to altering established habits. To facilitate this transition, we will focus on what we offer and how to inspire and motivate customers to consolidate their processes since everything is available in one location. Thus, we see it as both a push and pull dynamic, which will guide our ongoing strategy and the development of our offerings in the future.

Sounds like ERP for the SMB, and it's working.

I wanted to ask a question around the AI platform, maybe a little different angle. You've had the invoice generator out for quite some time, but would love to hear about any traction you're seeing there and how that's performing. And could that be a leading indicator perhaps for other agents that might be coming over time?

Yes, absolutely. What we observed early on is that customers using our invoice reminder experience a 10% increase in payment volume and conversion, plus they receive payments five days earlier. I'm glad you brought it up this way because it clearly illustrates how our payments AI agent, particularly with the invoice reminder, can significantly benefit our customers. Moreover, looking broader, our focus with the payments AI agent includes helping customers manage their billed payments, supporting them with lines of credit, enabling instant deposits, and creating payment-ready estimates. They can simply take a picture of a handwritten note, and we handle everything for them. These are some of the opportunities we have as we introduce a virtual team of AI agents.

Sasan, the playbook to get Mailchimp back to growth, how do you think about this? What's the most important thing? I know you mentioned the user interface was a little too complicated for SMBs to use. How much longer is this going to take to get you back to growth in that business?

Brent, this is Sandeep. Why don't I take this one? So a couple of things. Let's start with areas where we are seeing really good progress on the Mailchimp side, which is in the mid-market. As Sasan mentioned, we are scaling the sales force account management team there and getting really good ROI on that headcount and seeing really good progress there. The area where we continue to iterate fast, and I feel really good about the progress the team is making and it's showing up in the customer satisfaction scores going up and being some of the highest in recent history, is on the small businesses. The small businesses are the bread and butter. And the angle there is to make sure the small business can get to its first and second benefit on our platform within the first 30 days or thereabout. And that's where the team is helping make sure the offering is resonating, that they're able to navigate it, they're able to see the benefit. And we are making good progress, and I feel good about it, which is why we are confident in this business exiting double digit this fiscal year. The one thing to keep in mind, it is a subscription business. So there is a tilde 6-month lag in terms of these actions getting implemented and them showing up in the revenue, scaling up. So that's why we think it will be a couple of quarters at least before we start seeing the scaling up in revenue, but the momentum and the progress, we feel good about in Mailchimp.

Yes. Thank you, everyone, for attending. Thank you for all your great questions, and we look forward to seeing everybody at Investor Day. Until then, be safe. Bye, everybody.