Intuit’s Q3 Earnings Report

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Alicia Katz Pollock: Hey everyone, this is Alicia Pollock from.com and welcome to this week's edition of the unofficial QuickBooks accountants podcast. This is going to be an interesting episode today, at least for some of us. I'm going to be going over into its Q3 earnings and what every number means for QuickBooks users. Now, it's actually kind of funny because when I asked my other co-hosts who wanted [00:00:30] to do this one with me, well, no one did. So I am left on my own to interpret the numbers for you. So what I did to celebrate, to get myself ready is I am wearing my Intuit t shirt, my special edition t shirt that was made back about two years ago when I helped them with their food truck project, helping create the curriculum for it. Now, I don't know if you knew this, but in California and I think in Texas, Intuit has sponsored a high school curriculum with food trucks [00:01:00] to teach kids how to run a food truck, and also how to do the finances. And so I helped do the QuickBooks training component for that project. So they gave me this special t shirt, which of course, none of you can see. It's basically plain white with the new Intuit logo and puffy letters. So it's kind of fun to kind of fun to, to, to wear. All right, but I digress. Let's go ahead and talk about the Q3 earnings. So at the end of May [00:01:30] Intuit had their Q3 call.

Alicia Katz Pollock: And so today what we're going to do is go through their third quarter earnings report for fiscal year 2026, which covers the quarter ending in April 2026. They are on a slightly different quarter schedule than most people are used to. Their fiscal year starts on August 1st, but I am going to do this a little bit differently. Instead of just saying Intuit had a good quarter or QuickBooks is growing, I want to walk through the actual earnings statistics and translate them into plain English, [00:02:00] because every number in this report tells us something and tells us where Intuit is making money. It tells us where QuickBooks is heading. It tells bookkeepers, accountants, ProAdvisor, and QuickBooks users what changes we should be preparing for. And most importantly for us, it gives us insight into how Intuit thinks. As I break down this earnings report, keep in mind that all of this is what Intuit is telling us. You're going to hear some things that you can get behind, and you're going to hear some things that you disagree with. [00:02:30] In today's episode, I'm just going to report back to you what Intuit reported in the earnings call. I'm going to save my own opinions for upcoming episodes. When we go into depth on the topics like the Pro partner program and the price increases. So let's take it from the top. Let's start with into its overall company results. Intuit reported total revenue of $8.6 $6 billion, up 10% year over year.

Alicia Katz Pollock: That means that Intuit brought in 10% [00:03:00] more revenue than it did in the same quarter last year. On the face, that's healthy growth, but the context matters. The prior quarter grew 17%, so growth slowed. For us, that means Intuit is still growing, but not every part of the company is accelerating. When that happens, management focuses more aggressively on the on the areas with the strongest momentum. In this report, those areas are QuickBooks payments, payroll, AI assisted tax, and mid-market customers [00:03:30] into its operating income was $4.7 billion, compared with $4.3 billion last year. Operating income is the profit the company makes from running the business before certain other items are factored in. So it tells us that Intuit just didn't grow revenue. It also made more profit from operations. That matters because Intuit has money to keep investing in AI, product development, enterprise sales and platform expansion. At the same time, they're also trying to run leaner. So this is not just a growth [00:04:00] story. It is a growth and efficiency story. For the full fiscal year. Until it raised revenue guidance, 21.3 billion to 21.4 billion, which would be 13 to 14% growth year over year. Guidance is management's forecast for where the year is heading. Raising guidance means Intuit expects the year to come in better than it previously projected. That tells us something important. Even though this quarter had weak spots, especially in DIY, TurboTax, and MailChimp, [00:04:30] management still sees enough strength in other parts of the business to raise the annual outlook.

Alicia Katz Pollock: Quickbooks is one of those stronger parts for the fourth quarter. Next quarter into, it expects revenue growth of 11% to 12% year over year. That's still growth, but it's still slower from the prior year's fourth quarter growth of 20%. So the practical takeaway is this Intuit is still growing, but the easy growth is not evenly distributed. That creates pressure to make more money from existing customers through pricing, [00:05:00] add ons, payroll payments, AI usage, and higher tier subscriptions. Now, let's move into the QuickBooks side of the business into its Global Business Solutions segment, which is the broader QuickBooks business, generated $3.3 billion in revenue, up 15% year over year. This segment includes QuickBooks Online Services, payments, payroll, MailChimp, and desktop related revenue. A 15% growth rate at this size is strong. This isn't a tiny product line. This [00:05:30] is a multibillion dollar business still growing double digits for QuickBooks users and ProAdvisor. The message is clear QuickBooks remains one of Intuit's most important growth engines. This does mean continued investment, continued product development, and continued pressure to move more customers into the QuickBooks ecosystem. When MailChimp is excluded. Global Business Solutions grew 17%. That tells us that MailChimp is pulling the segment average down. Without MailChimp, the core [00:06:00] QuickBooks related businesses look stronger. That's important for us because the headline number understates the health of QuickBooks. Mailchimp is the weaker piece.

Alicia Katz Pollock: Quickbooks itself is not the problem. Intuit also raised full year guidance for global business solutions to 16% growth, up from the previous guidance of 14 to 15%. This means management is more confident in QuickBooks business now than it was before. The consequence is straightforward QuickBooks is going to keep getting attention. If Intuit is raising guidance for this segment, [00:06:30] then product investment, sales effort, AI development, and ecosystem expansion are likely to stay concentrated here. Quickbooks online generated $2.5 billion in revenue, up 19% year over year. That number is huge. Quickbooks online alone generated $2.5 $5 billion in one quarter for bookkeepers and accountants. This tells us that QBO is no longer simply the online version of QuickBooks. It's the center of Intuit's small business strategy. This means more features, more [00:07:00] automation, more pricing changes, more integrations, and more incentives to keep clients inside the QBO platform. Excluding MailChimp, QBO revenue grew 22% year over year. That's one of the most important QuickBooks numbers in this whole report. At QBO size, 22% growth is really strong. It tells us the core QuickBooks online engine is still performing extremely well. The consequence is that Intuit is likely to keep building around accounting, payments, payroll advisory, [00:07:30] and AI. They're not treating QBO as a mature product to simply maintain. They are treating it as a growth platform. Now, the growth did slow from 21% last quarter to 19% this quarter. So there's still strong growth but it's a slight deceleration.

Alicia Katz Pollock: The report explains that part of the slowdown came from more new customers, starting on lower end plans like Simple Start, along with greater discounts offered to accountants doing wholesale billing. That tells us the customer's growth may [00:08:00] still be strong, but revenue per customer can be affected when more people come in through the lower cost plans or discounted accounting channels for ProAdvisor. That's worth watching, because accountant led pricing and wholesale billing are clearly part of the revenue mix. Let's focus in on Shabbos accounting. So QuickBooks online accounting revenue was 1.28 billion, up 22% year over year. This is the subscription side of QuickBooks online, the core accounting product. The growth came from three things [00:08:30] higher prices, customer growth, and customers moving into higher tier plans. And that tells us that Intuit is making more money from the bookkeeping platform itself. For clients, it means the price increases are working. We have them every single year. For bookkeepers, it means that more clients are being nudged towards higher value plans, richer features, and more complex subscriptions. The growth, however, slowed from 24% last quarter to 22% this quarter, again still strong, but it does show a slight [00:09:00] slowdown for us. The significance is that Intuit may need additional leverage to keep QBO growing at this pace. Those levers are likely to be the price increases that we just heard about. Ai features, mid-market upgrades, payroll payments, and bundled services. This is one of the reasons why the August pricing changes and packaging changes matter so much, and we are going to talk about them at length in a in a separate episode.

Alicia Katz Pollock: Now let's talk about [00:09:30] Qbo services, payments, payroll, and MailChimp. These Qbo services revenue was 1.22 billion, up 15% over last year. This category includes services surrounding Qbo payments, payroll, MailChimp. The big picture is that Intuit is earning a lot of money beyond the accounting subscription itself. The future of QuickBooks revenue is not just the monthly software fee, its payroll, its payments, its bill pay, its lending, its credit cards, and other embedded services. Excluding MailChimp, [00:10:00] QBO services grew 22%. So that tells us the services business looks much stronger without MailChimp, payroll and payments are strong. Mailchimp is the drag now for QuickBooks professionals. That tells us that Intuit's small business small business services strategy is working best when it's tied directly to money movement and payroll. Marketing automation, at least through MailChimp, isn't producing the same momentum. Quickbooks payments and bill pay volume grew 30% year over year, and [00:10:30] that's one of the most important numbers in this entire report. That's not just revenue, that's volume. It measures the amount of money moving through QuickBooks payments and bill pay, QuickBooks payments being merchant services, receiving money and bill pay sending money. This means that businesses are increasingly using QuickBooks not just to record the money transactions, but to move money as well. And that changes everything. When QuickBooks becomes the place where money moves, Intuit gets more revenue opportunities.

Alicia Katz Pollock: Payment links, [00:11:00] bill pay, merchant services, financing, lending, and cashflow tools all become part of the natural platform for bookkeepers. This means that clients are going to see more financial products offered directly inside QBO. Now, payroll growth was driven by a shift in the mix, customer growth and higher prices. This means three things are happening all at once. More customers are using payroll. Some customers are upgrading into richer payroll offerings, and Intuit is collecting more per customer. [00:11:30] So for firms, this reinforces payroll as a strategic service area, payroll advisory, payroll cleanup compliance help workforce setup and payroll workflow consulting may become even more important as Intuit continues expanding this part of the platform. Intuit also launched QuickBooks workforce as an integrated HCM suite. Hcm stands for Human Capital Management, and that's a fancy way of saying employees and workforce management tools. This means that Intuit is expanding beyond basic payroll into broader employee [00:12:00] workflows. And this matters because it moves QuickBooks further into mid-market territory. Clients may start looking at QuickBooks not just for bookkeeping and payroll, but also for employee management, workforce workflows, and HR adjacent tools. Now let's turn our attention to desktop. Desktop revenue was 788 million, which is up 6% year over year. Desktop is still producing meaningful revenue. Almost $800 million in a quarter is not small, but compared with QBO, [00:12:30] desktop is growing much more slowly. The consequence is that desktop remains financially important, especially because existing users still pay for it, but the strategic growth is clearly in QBO.

Alicia Katz Pollock: This reinforces the continued migration pressure from desktop to online. Desktop growth slowed from 10% last quarter to just 6% this quarter, and that's a meaningful slowdown. The long term message is that desktop is becoming less central to into its growth story. It may remain profitable, especially in certain customer segments, [00:13:00] but it's not where into its innovation energy is concentrated. Larger desktop customers are still valuable, but Intuit's future answer for many of those customers appears to be Intuit Enterprise Suite and QBO advanced rather than a renewed desktop first strategy. Now let's look at mid-market and enterprise suite. Revenue from QBO Advanced and Intuit Enterprise Suite grew 38% year over year. That's one of the fastest growing parts of QuickBooks, and this number matters a lot. It tells us that Intuit is [00:13:30] moving up market. The fastest growth is coming from larger, more complex businesses, not just Microbusinesses or brand new startups for ProAdvisor and consultants. This is a major opportunity. Expect more workflows, controls, permissions, reporting, automation, and enterprise style features. If your practice supports growing businesses, Intuit is building more products for that segment. This tells us where Intuit sees the richest opportunity bigger clients with more complex needs who can pay more for [00:14:00] accountants. This points towards mid-market consulting as a major growth area. Implementation, cleanup reporting, workflow design, app advisory permissions, and internal controls all become more valuable when clients are larger and more complex.

Alicia Katz Pollock: Intuit Enterprise Suite contract volume grew 37% quarter over quarter. That means EIS is adding deals quickly compared with the prior quarter. The report does note that prior quarters had grown closer to 50% sequentially, so the pace is still strong [00:14:30] but slower than before. Now Intuit is scaling is sales capacity by about 30%. That means that they're expanding the sales resources dedicated to enterprise suite. This is important because Intuit is not waiting for customers to discover Enterprise Suite organically. They're actively selling it. For accountants, that might mean more clients are approached directly by Intuit sales teams about higher tier QBO offerings, whether it's Qbo Advanced or Enterprise Suite. So make sure you have those conversations [00:15:00] with your clients proactively. Now earlier, I through MailChimp under the rug a little bit. So let's focus on MailChimp. Mailchimp revenue was down a little bit year over year. That tells us that MailChimp is not growing the way into it, likely hoped when it acquired it. And that's why the growth report keeps excluding MailChimp for accountants and bookkeepers. This means that MailChimp is not the center of the QuickBooks growth story right now. Intuit's treating MailChimp more like a profit center than revenue growth [00:15:30] driver. In other words, the reducing investment and trying to make MailChimp more profitable instead of aggressively chasing growth. Mailchimp is also seeing pressure in small business churn and new customer acquisition. That means that small business customers are either trying MailChimp and then not continuing, or they're not gaining new customers fast enough.

Alicia Katz Pollock: And it's interesting because MailChimp is struggling in the same SMB market where QuickBooks is succeeding. Now, personally, I like my MailChimp integration [00:16:00] with QuickBooks online. And so if you haven't actually connected MailChimp, remember that as a ProAdvisor, you get a discount on their services. And the higher your tier, the higher a discount you get. Now, the purpose of MailChimp is to send emails to your customers. And the benefit of MailChimp being connected to your QuickBooks is that you can take a look at your product sold and run a report and say, okay, everybody who attended my hands on training class last year. I want [00:16:30] to send them an email about this year's hands on training class. And the MailChimp QuickBooks integration makes it really easy to do that. However, it's not top of mind. It's not something that most of you. I'm actually curious how many of you in the audience have actually used that integration with MailChimp, and if you have it, that's exactly why MailChimp is struggling. All right, now let's talk about AI. Intuit's accounting AI agent is powering recommendations for more [00:17:00] than 50 million transactions each week. And this is where the AI conversation becomes really real. Ai is not just a future concept. It's already operating at scale inside into its accounting ecosystem. For bookkeepers, that means transaction categorization, anomaly detection, review workflows, cleanup assistance and recommendations.

Alicia Katz Pollock: And all of these are likely to become more automated over time. But that does not mean that bookkeepers disappear. It means that the work [00:17:30] changes. The value may shift away from entering and categorizing transactions towards reviewing, correcting, advising, training the systems, and interpreting the results. Now, everybody listening has probably gotten the email that the that there's going to be new QuickBooks prices and new SKUs or new versions that are launching in August. So when I say SKU, I mean the packages or the different versions. And so Intuit is shifting around the entire ecosystem. There [00:18:00] are some new plan names like Free and Lite. They're moving some features around in the bundles. Like there's a, the construction add on from enterprise is now going down to QBO advanced. There's additional price points, and it's changing what's included in each subscription. Now, for all of us bookkeepers and ProAdvisor, this is something that we have to prepare for. Our clients are going to ask what changed, whether they need to upgrade? Do they need to downgrade? [00:18:30] Why did their price change and whether they're still on the right plan for them? The price increases are weighed towards the higher end SKUs. So essentials is going up $10 and plus is going up from $115 to $140, and advance is going up from $275 to $340. But it's going to include additional features as part of the price, like bill pay and payroll. Now, [00:19:00] this fits into its strategy larger and more complex customers get more automation, more capability, and more workflow power, which also makes them more monetizable.

Alicia Katz Pollock: For firms, this means larger clients may need more proactive software budgeting and subscription review. And Intuit also plans to introduce consumption based pricing for AI in human intelligence services. So this is a major shift. Instead of only paying a flat monthly subscription, users may eventually pay based on how much [00:19:30] AI or expert powered capacity they consume. You know, think about it like usage based pricing, the more AI work you ask the system to do, the more you might pay. For firms using AI heavily for reporting recommendations, clean up categorization, KPI dashboards, and advisory workflows. Ai usage could eventually become a budget line item, just like a software suite or payroll fees or app subscriptions. The strongest AI adoption was among QBO advanced and plus customers, which [00:20:00] means more complex customers appear more willing to use and pay for those AI capabilities. So that's one of the reasons why the pricing has increased so much in plus and advanced. Now I want to step in. I told myself I was not going to do any commentary during this episode, but I'm kind of compelled to say it. So when I was at scaling new heights, I was part of a power breakfast with zero zero brought me in to do a head to head comparison of QuickBooks [00:20:30] online and zero. Now we chose not to do it battle style.

Alicia Katz Pollock: We chose to just, you know, feature the, the, the new tools that are in the software and highlight things that we thought you should know. But the very morning of my workshop, the email came out with the new pricing in it. So when we got to the slide with the pricing, the room just kind of like went in an uproar because my slide was wrong because these prices had now gone up as much as 20%. And everybody was [00:21:00] especially compared to zero $90 on their slide. And, you know, here we are with $340 for advanced. And I took the temperature on the room, okay. We had 100 people in the room. And I said, okay, now, all of us just spent the last year getting used to the new interface and getting comfortable in it. And everybody's kind of used to it now. But how many of you have taken the time to try out all the new features? How many of you have uploaded a contract and [00:21:30] sent it for signature? How many of you have used the customer hub to build a customer pipeline? How many of you have used the anomaly detection to look for errors in your data or trends in the company, and ask people to raise their hands? Room of 100 people. Guess how many people raise their hands? Three. And one of them was me. So in a whole room of a hundred people, only two people had explored all the new features.

Alicia Katz Pollock: So no wonder everybody was up [00:22:00] in arms about the price increase because you're actually getting more for your buck. But if you haven't actually tried and implemented all the new features, you just feel like you're getting price gouged. So with the new pricing, I strongly recommend that you kind of look around at all these different features that are in there and poke buttons that you have not poked before and see what else is in there, because you will find some features that are going to be exactly a solution for the pain point your clients are feeling, and that's where the added [00:22:30] price comes in. Now, I'm not excusing the higher prices. Personally, I think they jumped the shark a little bit on this, but they at least should have waited to raise the prices until people had started using the new features, because it doesn't work emotionally to have to pay more prices and then have to go justify the features, you should actually have started using the features and come to like and appreciate them, which then makes it reasonable for the prices to go up. So I think until it put [00:23:00] the cart before the horse. All right, I'm going to get off my soapbox. We're going to go back to the earnings report. So the next segment of the earnings report talks about accountants and ProAdvisor. Intuit has a base of 1 million accountants and 10 million business customers.

Alicia Katz Pollock: That's a huge network until it sees a connection between accountants and business customers. And they clearly believe that networking can drive growth for ProAdvisor, that's the heart of the strategy. Intuit once accounts using its platform [00:23:30] to manage their clients, and it wants that accountant network to drive more QuickBooks adoption. Now, here's something major Intuit is shifting from training accountants as partners and channels to for revenue to training accountants as customers also. And this is a big philosophical change. Historically, accountants helped recommend QuickBooks. Now Intuit wants to sell more directly to accountants as users of the platform themselves, which means [00:24:00] that we should expect more tools designed for firm operations, client management, workflow automation, reporting, AI usage, and practice monetization. In plain English, Intuit just doesn't want accountants recommending QuickBooks. It once. Accountants running their firms on QuickBooks connected tools and it wants to support us in doing so, it's going to. They're going to take our feedback and pay attention to it, put it into place, and make sure that we are happy. The AI tools that they're [00:24:30] introducing should help us take on more clients. And that's the promise that Intuit is making that automation can increase accountant capacity, because if the routine tasks become faster, firms can serve more clients without adding any additional staff and without raising their prices or lowering their prices. All right. Next topic is the workforce reduction. Dan and Matthew and I did an episode a few weeks ago about the 17% [00:25:00] labor cuts.

Alicia Katz Pollock: And so Intuit did reduce its workforce 17%, about 3000 employees, which is a major staffing cut. And management said that the goal is to simplify the organization, reduce management layers, eliminate duplicate roles, and resize MailChimp for users. The real question is what does that feel like in practice? Does it mean that there's going to be faster development because Intuit is flatter and more focused, or will it mean weaker support and fewer humans and [00:25:30] more reliance on automation? And so this is something that we're going to have to feel out over the next year. But Intuit expects about $300 million in restructuring changes related to the workforce changes. And that does mean that the layoffs and restructuring have a short term cost severance, organizational changes, related expenses hit the financial statements now, but Intuit expects savings later on. So this consequence is not just a one quarter event. Intuit is repositioning its cost structure for the future. [00:26:00] And as a shareholder, that's good. Intuit also committed to annual EPS growth earnings per share which is a profitability measure that investors care about. Intuit wants an annual EPS growth of at least the mid-teens percent over the coming years. So that creates pressure to expand margins in real life. Margin expansion comes from several places price increases, automation, cost cuts, AI [00:26:30] efficiency, reduced staffing layers, and more revenue. And for us customers, that shows up as higher prices, more paid add ons, and more automation.

Alicia Katz Pollock: All right. Next, let's talk about consumer tax and TurboTax. Customer revenue for TurboTax was $5.3 billion, up 8% year over year. And this segment includes TurboTax and Credit Karma. An 8% growth rate is positive, but it's slower than the prior quarters 15% growth. And that's one reason [00:27:00] why the report sounds disappointed. Even though Intuit still grow grew, overall, consumer tax was a weaker spot. Turbotax revenue was $4.4 billion, up 7% over last year. Turbotax grew, but not as fast as before. The prior quarter, it grew 12% and the comparable quarter last year grew 11%. So that tells us that DIY tax is under pressure, especially among price sensitive filers. For Intuit, that likely means changes to low cost tax offerings, including [00:27:30] new pricing models, and more of an effort to connect TurboTax users with Credit Karma and assisted services. All of this hit TurboTax because there were fewer filers than expected. About 2 million expected manual DIY do it yourself filers did not file. This means Intuit believes roughly 2 million people who might have filed manually simply did not file with them this season, so that reduced the pool of potential TurboTax customers. It also suggests that the low end DIY market is fragile. These are [00:28:00] customers who may be very price sensitive, inconsistent, or harder to convert into paid software users. Turbotax online paying customers were expected to grow 2%, compared with 6% last year. So paid customer growth slowed significantly.

Alicia Katz Pollock: Turbotax is still growing. Paid users, but not as quickly as it was before. That creates pressure to sell assisted tax, faster refund access and Credit Karma connected financial products. The low end do it yourself filers earning [00:28:30] under $50,000 were pressured by price, and that means customers in this income group were more likely to choose competitors based on cost. This is a warning sign for Intuit. One time promotions are not enough if customers want predictable, affordable pricing. Year over year. For us, this matters because it shows that even Intuit has limits on pricing power. Customers will pay for value, but price sensitive customers will move if the value does not feel clear. Now, TurboTax Live in assisted Tax had a [00:29:00] different experience. Turbotax Live customer count increased 38% year over year, which is very strong customer growth. And it supports one of Intuit's biggest arguments. Customers still pay for human expertise even in a world with better software and AI. That's encouraging for counters and bookkeepers. It suggests that confidence still matters. Turbotax live revenue increased 36% year over year, and revenue grew almost as fast as customer count. That means that Intuit's not just adding assisted tax users, it's monetizing them [00:29:30] successfully. For professionals, this reinforces the value of expert help customers are willing to pay when the stakes are high and when they want reassurance. Turbotax live now represents about 53% of total TurboTax revenue, up 11 points year over year, and that's a major strategic shift.

Alicia Katz Pollock: More than half of TurboTax revenue now comes from assisted tax rather than pure do it yourself. So Intuit TurboTax is no longer just a do it yourself TurboTax software company. Instead, it's [00:30:00] increasingly an expert assisted tax platform. New assisted customer growth was up 29%, not including the one time offers, which means that assisted tax is growing even without relying on promotions. And that suggests that the demand is real. Customers want help, expert review confidence and a better outcome, not just cheaper software. Turbotax labs retention was up two points year over year, which meant that more customers were coming back to use it again. Returning customers recurring [00:30:30] customers are more profitable than one time customers. And for Intuit, higher retention makes the assisted tax model more attractive. For us, it reinforces the same lesson. If clients trust expert help, they come back. Now let's turn our attention to the fourth pillar, Credit Karma. Credit karma is Intuit's program that helps with financial literacy and also financial capital for individuals and small businesses. Credit Karma's revenue was $631 million, [00:31:00] up 15% year over year. It grew, although more slowly than the prior quarters 23%. Even so, Credit Karma remains a meaningful growth contributor and is becoming more connected to TurboTax monetization. Intuit raised full year Credit Karma guidance to 19% growth, up from prior guidance of 10% to 13%, and that's a big increase in expectations. It means Credit Karma is outperforming what management previously expected.

Alicia Katz Pollock: The consequence is that Intuit will keep using Credit Karma [00:31:30] to monetize tax customers through financial products like loans, refund access, credit offers, and other personal finance tools. Customers using both Credit Karma and TurboTax have about 30% higher ARPU than TurboTax only customers. Arpu means average revenue per user, so customers who use both products generate significantly more money for Intuit than customers who only use TurboTax. And that explains why Intuit wants tighter integration with tax credit loans, refund access, and personal finance, [00:32:00] that the tax return becomes the entry point for broader financial monetization. And I also want to point out here that this is also why we are seeing financial services increasingly inside QuickBooks online, because they're powered by the same TurboTax tools. That's why when we send an estimate, they can get funding. And when you send an invoice, they're going to be able to get buy now, pay later, and we're going to have the ability to do multiple payment plans and [00:32:30] recurring payments. So a lot of the tools that we're seeing, a lot of the success of Credit Karma is showing up in our QuickBooks online. And even though you hate the pop ups all the time for these financial services, this is a major revenue stream for Intuit. And it also supports their mantra of powering prosperity around the world and creating cash flow for small businesses. Now heading back to TurboTax. A [00:33:00] third of TurboTax customers use Credit Karma linked fast refund features so that their refund speed is becoming a monetization tool.

Alicia Katz Pollock: So tax season gives Intuit a moment when their customers are thinking all about their money, and Credit karma gives Intuit a way to extend that relationship beyond the tax return. Tax filers who started in Credit Karma grew 54% year over year. That means that more people began their filing their taxes, starting with Credit Karma, than going directly [00:33:30] to TurboTax. So Credit Karma is becoming a customer acquisition channel for TurboTax, just as we're seeing the signs for QuickBooks. So this matters because Intuit can reach people earlier in their financial journey, and then move them into taxes and loans and refund products and small business services. Now, Credit Karma's growth came from several categories. Personal loans contributed nine points of growth. Auto insurance contributed five points and home loans contributed one point. That [00:34:00] tells us that Credit Karma's business depends heavily on financial product referrals. When lending and insurance markets are healthy, Credit Karma will benefit. And when those markets weaken, Credit Karma can be more exposed. All right. Last but not least is protects protects. Revenue was 278 million and flat year over year. That means that professional tax software revenue did not grow this quarter. Protects is stable but not a major growth engine right now for tax professionals. That suggests [00:34:30] that the professional tax business is steady but into its bigger tax growth story is TurboTax live and assisted consumer tax.

Alicia Katz Pollock: Intuit did raise full year pro tax guidance from 3% to 4% growth, up from prior guidance of 2 to 3%. So a modest improvement. And it doesn't mean that protection is exploding, but it does suggest that Intuit expects professional tax to grow slightly better than forecast for tax pros. This points to stability rather than major near-term disruption. [00:35:00] So final takeaway when you put all these numbers together, the story becomes pretty clear. Quickbooks is healthy. Mailchimp is weak. Do it yourself. Turbotax is under pressure. Assisted tax is strong. Payments and payroll are becoming major growth engines. Mid-market QuickBooks is growing fastest. Ai is already operating at scale. And Intuit is preparing to charge more for higher end QuickBooks and AI usage. [00:35:30] The big picture is this. Intuit is not just building bookkeeping software anymore. It's building an AI powered financial operating system for businesses, accountants, payments, payroll, tax lending, and advisory services. And whether we love that, hate that, or feel a little bit of both, these numbers tell us exactly where QuickBooks is going next. Okay, I know that was a lot to absorb. Hopefully I haven't lost you all by now. So we're going to finish up [00:36:00] with what's going on in my world. And people have been asking me for more detail about the hands on training course that I keep talking about. You know, the one that I call QBO hot. And it's different than my normal royal wise curriculum because it's not just a series of regular weekly webinars.

Alicia Katz Pollock: It's more like a college class. It meets twice a week for 12 weeks on Tuesdays and Thursdays from 9 a.m. to noon Pacific time. Now, in this class, everybody gets a copy of the consultant's [00:36:30] textbook that I wrote 600 page book. Each class will be me running the chapter while everybody watches and discusses and asks questions. Then there will be two hours of lab time where together we'll build a company. Just like if you were in a classroom. I'll demo the step while you do it too, and we'll help each other so that everybody can keep up the case study that we use is Imagine Photography, which is a retail camera store that also provides commercial photography services. You'll process sales, take payments, make deposits, [00:37:00] enter expenses, use the banking feed, reconcile and run reports to analyze activity. The class even includes sales tax inventory projects, and you'll run real payroll so that you get expert level content, too. If you have to miss a class, everything's recorded so that you can stay caught up. I would love to have our podcast listeners enroll for the class. It's not just about the best practices in QBO, it's also about a community of professionals supporting each other. So head over to Roy's dot com slash [00:37:30] hot and look for the QuickBooks Online Complete Hands on Training, or click the link in the show notes. That'll do it for this week. Thanks for joining us, and I will see you in the next one.