Key Takeaways
- Intuit shares plummeted approximately 13% in premarket hours following third-quarter results and major layoff disclosure
- Third-quarter adjusted earnings per share reached $12.80, surpassing analyst projections of $12.57; revenue hit $8.56B versus $8.54B expected
- Company plans to eliminate 17% of full-time employees, anticipating restructuring costs between $300M and $340M
- Annual outlook increased: projected revenue of $21.34B to $21.37B and adjusted earnings per share of $23.80 to $23.85
- TurboTax yearly revenue projection decreased; leadership highlighted IRS filing volumes down approximately 2 million compared to industry expectations
Intuit shares tumbled over 13% during Thursday’s premarket session following the release of third-quarter financial data and disclosure of plans to reduce its full-time employee count by 17%. Trading activity showed shares hovering near $334.50, a significant decline from the previous close of $383.93.
The financial performance proved robust. Adjusted earnings per share registered at $12.80, exceeding Wall Street’s projection of $12.57. Total revenue reached $8.56 billion, surpassing the consensus forecast of $8.54 billion with a 10% year-over-year increase — representing a deceleration from the 15% expansion recorded during the comparable quarter last year.
Fiscal year projections received an upward revision. 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 metrics exceeding previous guidance and analyst expectations.
Despite exceeding expectations, the workforce reduction announcement triggered significant selling pressure. Management disclosed anticipated restructuring expenses of $300 million to $340 million, with the majority concentrated in the fourth quarter.
Chief Executive Sasan Goodarzi addressed questions regarding artificial intelligence’s influence on the decision directly. “This is not an AI layoff,” he stated. “Frankly, I think we overuse that as a reason to communicate across the industry.” He characterized the initiative as positioning Intuit to operate more efficiently and with greater agility.
His clarification holds significance. Numerous technology companies have attributed artificial intelligence as a factor behind recent employment reductions. Data from Layoffs.fyi indicates 111,173 technology sector employees have been laid off through 2026 — approaching the 124,201 total recorded for the entire year of 2025. Companies including Meta, Cloudflare, and Snap have implemented workforce reductions during this period.
TurboTax Encounters Headwinds
Not all metrics showed improvement. Intuit lowered its full-year TurboTax revenue projection to a range of $5.277 billion to $5.282 billion, down from the previous forecast of $5.305 billion to $5.330 billion.
Goodarzi explained that total IRS filing volumes are expected to decline nearly 30 basis points during this tax season — approximately 2 million below broader economic projections and representing the most significant industry-wide contraction since the post-pandemic period.
TurboTax Live filing volumes increased 38% year-over-year, though intensive promotional campaigns reduced average revenue per unit by 1%. The growth rate also decelerated from the 47% expansion observed in the previous year.
Artificial Intelligence Positioned as Growth Driver
Chief Financial Officer Sandeep Aujla rejected the notion that AI-related disruption is appropriately reflected in current valuation. “Customers buy confidence, not code,” he emphasized, highlighting that customers allocate at least seven times more spending on accounting and tax professionals compared to software purchases alone.
Aujla characterized artificial intelligence as “a clear net tailwind” for operations, referencing Intuit’s proprietary database developed from decades of taxpayer information — capabilities he suggested generic AI solutions cannot duplicate.
The Consumer business unit, encompassing TurboTax and Credit Karma, generated revenue of $5.3 billion, representing 8% growth.
Morgan Stanley analyst Keith Weiss observed the third-quarter performance “failed to provide the positive catalyst” markets anticipated from TurboTax Live expansion but described current valuation as “very undemanding” when measured against long-term earnings growth capabilities.
Intuit executed $1.6 billion in share repurchases during the quarter and secured board authorization for an additional $8 billion buyback program. The board declared a quarterly dividend of $1.20 per share, marking a 15% year-over-year increase.
INTU stock has declined approximately 42% during 2026.
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