Intuit's Q1 revenue jumps 18% to $3.9 billion, driven by AI strategies and strong consumer engagement, reinforcing confidence in fiscal 2026 outlook.

I'll turn the call over to Kim Watkins, Intuit's Vice President of Investor Relations. Ms. Watkins.

Thanks, Leo. Good afternoon and welcome to Intuit's first quarter fiscal 2026 conference call. I'm here with Intuit's CEO Sasan Ghadarzi and our CFO Sandeep Ajla. 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 10K for fiscal 2025 and our other SEC filings. All of those documents are available on the investor relations page of Intuit's website@intuit.com We assume no obligation to update any forward looking statement. Some of the numbers in these remarks are presented on a non generally availableAP basis. We've reconciled the comparable generally availableAP and non generally availableAP 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.

Thanks, Kim. And thanks to all of you for joining us today. We delivered an outstanding quarter with Q1 revenue growth of 18% reflecting the exceptional momentum we have across the company. Our AI driven expert platform strategy is fueling strong growth by helping businesses manage from lead to cash and consumers, from credit building to wealth building all in one place. We're becoming the system of intelligence leveraging data, data services, AI and human intelligence, wHIch we will refer to as artificial general intelligence (AGI) that everyone depends on to power their prosperity and fuel growth. We're doubling down on the three big bets we shared at Investor Day wHIch represent our largest future growth opportunities. First, we're delivering done for you experiences with AI and HI where customers never lift a finger but are always in control. Second, we're accelerating by putting money at the center. Last month at Intuit Connect, our flagsHIp event that reaches the leading accounting firms and mid market businesses. We brought to life the power of our AI driven expert platform strategy. We showcased our all in one business platform where a team of AI agents and AI enabled human experts automate tasks, work workflows, business functions and provide a single pane of glass for customers, KPIs and dashboards all in one place. We also shared the strong early impact of our AI Agents delivering Just after four months in market we marked the one year anniversary of Intuit's Enterprise Suite, our AI native ERP platform that is disrupting the mid market. We're proud of the massive advancements we've made including serving industry specific needs and building more sopHIsticated go to market motions, including partnering with accounting firms to add new customers to our platform. We introduced Intuit Intelligence, a revolutionary system of intelligence where customers can ask anytHIng. For example, customers can ask questions like how can I accelerate revenue in the next six months? How can I improve margins? Can you show me how to lower my cost of goods sold? And can you add the performance of my top sales reps to my dashboard Using customers data and any external data they wish to upload, Intuit Intelligence delivers accurate, personalized and actionable answers and will execute on a customer's behalf or hand off to a human expert. We have thousands of customers in beta and plan to be a GA soon. And finally we unveiled Intuit Accountant Suite, an AI native offering that will transform accounting firms efficiency and effectiveness in managing their clients, firm and workforce all to fuel their success. The suite provides client management and collaboration, multi service delivery, business planning and team management all in one place. Soon we'll be launcHIng more advanced capacity planning, productivity and collaboration capabilities and over time firms can integrate to other functions. THIs is a game changer and significantly deepens our partnersHIp with accountants feeling faster mid market penetration and for accountants it drives tech stack consolidation and efficiency for their firm and encourages them to migrate clients to QuickBooks Online Advanced and Intuit's Enterprise Suite. Attendees walked away from Intuit Connect, blown away by the amount of innovation in the last year and a clear message that we are well positioned to fuel their growth. We're continuing to see momentum with our virtual team of AI agents with 2.8 million customers leveraging these agents to do the work for them. Our accounting agent is saving customers up to 12 hours a month and our payments agent helps customers get paid on average five days faster. We recently launched a payroll agent that automates tasks that typically take mid market businesses two to three hours to complete each month, such as collecting hours directly from employees, spotting anomalies and generating insights and sending customers a ready to approve draft of their payroll via text. We also launched a sales tax agent wHIch automatically helps businesses stay compliant. The combination of AI and HI is resonating with QuickBooks Live customer growth of 61% in Q1 zooming out, it's now clear we are delivering done for you experiences with AI and HI that will eventually do everytHIng for our customers. Powering their growth, saving them time and money and consolidating their tech stack. We're making strong progress across our all in one platform wHIch includes accelerating money benefits by putting more money at the center of everytHIng we do. We saw total online payment volume for our payments and bill Pay customers grow 29% reflecting continued momentum helping our customers get paid faster and better manage their cash flow. Turning to mid market, we continue to make strong progress serving larger and more complex customers with approximately 40% growth for online ecosystem revenue for QuickBooks Online Advanced and Intuit enterprise suite in Q1 Mid Market customers are over digitized with their data trapped in a number of applications that take too much time and money to manage. Our offerings help businesses acHIeve their growth goals by automating complex tasks, workflows and functions and delivering insights and recommendations all in one place. Our AI native ERP platform is disrupting the legacy way of managing their business and the ROI is clear with a Forrester study estimating that customers can see nearly 300% return on investment over three years when using Intuit's Enterprise Suite. THIs value proposition is resonating. For example, a large customer with over 200 entities that we signed in Q4 quickly realized the value of our platform and expanded their contract to include an additional 46 entities in Q1. In aggregate, the total number of IES contracts at the end of the quarter and was nearly 50% HIgher than it was at the end of Q4. We're also seeing early momentum with our Accountant PartnersHIp strategy to bring new customers to Intuit's Enterprise Suite. As a result of our partnersHIp with Aprio, a top 25 business advisory and accounting firm, we've already signed several new customers in multiple verticals. Earlier tHIs month we also signed Accountant PartnersHIps with Cherry Beckert, a top 25 advisory, tax and assurance firm with clients across 14 industries Raymond, a top 40 professional advisory firm that provides accounting, assurance and other business services to clients across 11 industries and Hogan Taylor, a top 100 advisory, tax, accounting assurance and technology firm with clients across seven industries. We have many other opportunities of similar scale in the pipeline. Turning to our consumer platform, Our AI driven expert platform is delivering done for you experiences for consumers from credit building to wealth building to make smarter financial decisions year round with confidence, we're seeing strong momentum in the areas that matter most with TurboTax Live revenue growth of 51% in Q1 reflecting continued strength as we concluded the 2024 tax season. Credit Karma had a strong quarter in fiscal year 2025. We saw a several point increase in share of member originations for personal loans and credit cards and we believe share gains continued in Q1 as members and partners find value in our platform. These strong results and the introduction of significant innovation with Done for you experiences. AI powered local expertise and faster access to money show the power of one consumer platform. Our Done for you innovations include Credit Spark, where everyday payments build your credit score as well as several agentic AI assistants. For example, our Debt Assistant will craft and deliver personalized debt pay down plan. Our Refund Assistant will give a personalized recommendation when the customer receives their tax refund to pay down debt, build an emergency fund, build credit or invest for the future. And with our Tax Assistant, consumers who answer easy quick questions in credit karma year round can have up to 80% of their taxes ready to go at tax time. We're also expanding our AI powered local presence, making local expertise more accessible than ever with a larger service footprint as customers are five times more likely to book up with a pro witHIn 50 miles. THIs local presence will also help us further scale business tax wHIch grew 3x last year. With our virtual or in person filing and consultation options, we're offering the best experience, price and speed the money. THIs is data, AI and HR powering prosperity for consumers and businesses. One of our superpowers is experimenting and learning from our customers and then scaling what works. The results from more than 300 tests we ran in Q1 bolster our confidence in our strategy to win. We're excited about the growth potential for our all in one consumer platform with an untapped opportunity to penetrate the $142 billion consumer TAM. We have significant momentum across the company and are obsessively focused on execution with HIgh velocity and feeling the success of our customers. Intuit's brightest days are ahead of us. Let me now hand it over to Sandeep.

Thanks Hassan. We delivered a strong first quarter of fiscal 2026 across the company. Our first quarter results include revenue of $3.9 billion, up 18%, GAAP operating income of $534 million versus $271 million last year, non GAAP operating income of $1.3 billion versus 953 million last year, GAAP diluted earnings per share of $1.59 compared to $0.70 a year ago and non GAAP diluted earnings per share of $3.34 versus $2.50 last year, reflecting our overall disciplined approach to managing the business, including continued AI efficiencies. Turning to the business segments, starting with the Global Business Solutions Group, we continue to make progress serving businesses with our all in one platform and delivering done for you experiences with expertise. Global Business Solutions Group revenue grew 18% during the quarter or 20% excluding Mailchimp, while online ecosystem revenue grew 21% in Q1 or 25% excluding Mailchimp. This includes approximately 40% growth for 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%. We saw robust growth in both online accounting and online services in Q1. QuickBooks Online accounting revenue grew 25% from higher factor prices, customer growth and mix shift Online services revenue grew 17% in Q1 or 26% excluding Mailchimp. This growth was driven by money, which includes payments capital and bill pay as well as payroll. Within Money revenue growth in the quarter reflects payments revenue growth which was driven by customer growth and increase in total payment volume per customer and higher effective pricing as well as QuickBooks Capital revenue growth. Total online payments volume including bill pay grew 29% in Q1, reflecting our continued momentum in payments and adoption of our BillPay offering. All in payment volume growth excluding BillPay was 18%, relatively consistent with the range we've seen over the last several quarters. Within Payroll Revenue growth in the quarter reflects mix shift customer growth and higher effective prices. Within mailchimp revenue was down slightly versus a year ago in line with our expectations for the quarter. We continue to target double digit growth for Mailchimp exiting fiscal 2026. We are seeing strong results from a mid market sales team within mailchimp with several recent larger customer wins as well as increasing retention rates in the mid market segment. We are continuing to invest more in go to market for these higher value customers and beginning to increase broader go to market spend to drive acquisition of smaller customers. Turning to Desktop, desktop ecosystem revenue grew 6% in Q1 and QuickBooks Desktop enterprise revenue grew in the low double digits in Q1. We expect desktop ecosystem revenue to grow low single digits in fiscal 2026. Turning to our consumer platform, we are pleased with our strong momentum. Q1 revenue grew 21% driven by Credit Karma revenue which grew 27%. TurboTax revenue grew 6% and Protex revenue grew 15%. Within Credit Karma. The revenue growth reflects continued momentum with our members and partners. On a product basis, personal loans accounted for 13 points of growth, credit cards accounted for 10 points and auto insurance for 3 points. Looking ahead, the results from more than 300 go to market and product experience tests run during Q1 bolster our confidence in our strategy to win this upcoming tax season. We are excited about the opportunity ahead for our all in one consumer platform powered by AI, human intelligence and data to empower customers to take year round control of their finances from credit building to wealth building while driving monetization for Intuit. 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 $3.7 billion in cash and investments and $6.1 billion in debt on our balance sheet. We repurchased $851 million of stock during the first quarter 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 January 16, 2026. This represents a 15% increase versus last year. Moving on to Guidance we are reaffirming our fiscal 2026 guidance. This 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% of 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 Comet growth of 10 to 13% and ProTech's growth of 2 to 3% 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 second quarter of fiscal 2026 includes total company revenue growth of 14 to 15%, GAAP earnings per share of $1.76 to $1.81 and non GAAP earnings per share of $3.63 to $3.68. You can find our full fiscal 2026 and Q2 guidance details in our press release and on our fact sheet. Before I turn it over to Sasan, I want to share that Kim Watkins had made the decision to leave Intuit to pursue a new opportunity outside the company and this will be her last earnings call. I want to take a moment to thank her for her tremendous contributions and partnership over the years. She's built a strong, highly respected investor relations team and has strengthened our relationships with the investment community in meaningful ways. Jeff Kogler, who has been a key part of the team, will step in as acting head of ir. We're deeply grateful for all that Kim has done and wish her the very best in the next chapter. With that, I'll turn it back over to Sasan.

Great. Thank you, Sandeep. We are well on our way to becoming the system of intelligence enabling financial success for consumers, businesses and accountants. Given our early bets on AI, our low penetration of our large $300 billion TAM, the significant investments we've made in the last decade, and our momentum, we are well positioned to power the prosperity of our customers and win in the era of AI. Let's now open it up to your questions.

Thank you, ladies and gentlemen. If you would like to ask a question, please press Star. then the number one on your telephone keypad. If you would like to withdraw your question, please press Star two. Please limit yourself to one question. We'd like to get to as many people as we can.

Thank you.

We'll take our first question from Kirk Matern of Evercore isi. Please go ahead.

Yeah, thanks very much for taking the question, guys, and congrats on a nice start to the year. And Kim, congrats on your next venture. So, Sasan, the question for you, a lot of questions from clients this week on the Open Air arrangement and deal you announced. Can you just give us a little. Bit more color on, if there's any sort of revenue share as. Part of this deal? You know, I think there's also some questions about sort of how data, you. Know, obviously you guys, you know, have. Always been very protective of customer data. How does that stay, you know, within Intuit? As people are now using Intuit Solutions within OpenAI, can you give us maybe a little bit more color on those aspects of the new partnership? Thanks.

Yeah, thank you for your question. First of all, I'd just start by saying it's an absolutely game changing partnership and everything starts with people and the relationships to make any long term partnership work. And the relationship with OpenAI is really magnificent. With that said, the way to think about this before I get to the specifics of your question is this is a huge opportunity for us to accelerate new customer growth. You have 800 million weekly active users that are engaging within the platform and we have an opportunity to power their prosperity. Now, to answer your question, I'll just break it very quickly into three buckets. Experience data and models and economics. On the experience front, what happens today is when customers are asking questions about getting access to financial Products like cards, loans, building their credit score, how do I grow my business? They get good yet generic answers that will change tomorrow. And the way it's going to change is that our Intuit apps will be deeply integrated within ChatGPT, Which means tomorrow you get the power of all of the Intuit platform and apps within ChatGPT, And the experience, which I can get into a lot more detail if you all wish, will be game changing because we'll know who you are and we will be able to leverage the power of our data and all of our models to be able to deliver experiences that are very personalized to you, just like the experiences you get when you're within an Intuit app today. So the experience will be absolutely game changing for consumers and businesses and truly power their actions, their insights within ChatGPT, the second on data and models, nothing changes from what we do today. They will be customers will be engaging within the Intuit app. They'll be within the Intuit four walls. We will continue to train our Intuit large language models with the customer's data. Our data privacy, security and privacy principles are unchanged and that's very important because one of the game changing elements that OpenAI is excited about is the fact that customers will be able to get accurate, secure answers that are personalized all within ChatGPT, So that's on the data and models. Nothing has unchanged from the way we operate today. On the economics, it is as the economics are today. There's no revenue share and so the economics that we enjoy today when we directly work with customers, we will enjoy tomorrow. And I'll just end with, you know, we're really excited about the partnership by having access and working side by side with OpenAI team to have access to their frontier models. Because as you know, our Intuit large language models are what gets trained by the customer's data does not leave our four walls. But it also has the agency and authority to deliver the experiences and use other models. And we're excited about acceleration of the use of some of their models that the R LLMs will put in place. So I think those would be the headlines Kirk that I would share. That's great.

Thanks very much. Congrats on the quarter. Yep, very welcome.

We'll move next to Siti Panagrahi of Mizuho. Please go ahead, your line is open.

Thank you. Congrats again on a great start to this year. I wanted to dig into the mid market Sasan, which is one of your drivers driver for the aspirational goal to accelerate growth. Growth first on IES side it's been a year and you had 250 sales set. How's the productivity has been going on and any plan to add more headcounts to this mid market? And also the partnership you announced, when should we start seeing that translate to revenue?

Yeah, thanks for the question, Siddhi. I'll break it down into three things. Awareness, our platform, innovation and accountants. First and foremost, we're just starting to press on the gas with awareness in terms of showing up to conferences. We were just at the FATE conference in New York, we were everywhere to raise awareness because as much success as we've had, very few people still know about Intuit Enterprise Suite and what a disruptive AI driven and AI native ERP platform that it is. So we're doing a lot around awareness. One element is conferences, webinars to really get the word out there. The second is the platform. Innovation is just accelerating and it's having a dramatic impact with customers now across many verticals starting to refer us to customers like them. Whether it's wealth management, whether it's dentists, whether it's construction. The impact from our innovation and now beginning to customize and Launch vertical specific KPIs and dashboards is incredibly important and incredibly powerful. And more than ever we win on experience, price and total cost of ownership. And the third is around accountants. We're just getting that flywheel going. And in fact we redirected a number of our internal sales folks above and beyond the 250 that you referred to, which I'll get to in a moment, that really are providing coverage across our large accounting firms. And what you should look at is these are really bets to come. We expect acceleration from these large partnerships that we've announced and many that are in the works to contribute to the back half of the year and into next year. We're actually not counting on that. But it's an important point to put out there, which is this is where the network effect comes in. Because we had the largest firms at Intuit's Connect and we and I personally have been meeting with these large firms and they're blown away by our innovation and how they can use our platform to be able to drive accelerated growth. And our productivity is significantly improving when we look at the last several quarters and we would expect to start adding more headcount in the coming quarters. So those would be the way I would break down the answer to your question. We're really excited and bullish about what's possible.

We'll move next to Brad Zelnick of Deutsche Bank. Please go ahead. Your line is open.

Great.

Thanks so much and my congrats And Kim, congrats on a fantastic run. It's been great and look forward to your next chapter for you. Can you talk us through any of the learnings that came out of this. Extension season on tax and those might be applied to the season ahead. And maybe for Sandeep, we saw the. Announcements around the Turbo Tax office footprint expanding, which seems to clearly reflect leaning. In on local search. How are you thinking about the investments necessary to sustain 15% to 20% assisted growth this year? And maybe how do they compare to last year?

Thanks so much. I'll get us started and then I'll let Sandeep take over on your question. First of all, Brad, I've been with the company 20 plus years. I've never been more bullish than the season we're about to step into. And the reason is all of the innovation across the platform we ran as we Talked about earlier, 300 significant experiments from platform innovation to go to market tests inclusive of a lot of what we're doing to show up locally, wHIch is the question you asked a moment ago for Sandeep. And just across what's possible for consumer tax and business tax. We are incredibly bullish. And the bullishness comes from really three fronts. One, a lot of the work that we've done around data and AI that makes us far simpler and easier for folks to get their taxes done and gain early access to their money to the innovation end to end to deliver a great experience at a great price for those that use the prior year assisted method from how we're leveraging data and AI concierge to greet customers to get them immediately connected to a live expert where most of the work is done already by the time they get to the expert to doing a lot of the work for the expert, where the expert really becomes sort of a concierge that you would walk up to at Four Seasons. That's really about the service that they provide, how they make you feel wHIle we ultimately deliver excellent service. And the power of going from 400 locations that we showed up to 600 and then the 20 stores that we talked about with one flagsHIp store that's going to be in New York is about showing up locally and it's also about shaping the market around the fact that we truly have AI plus HI and these are once the one opens up in New York, I'd encourage you all to go into it because I tHInk you'll want to sit there and have some coffee. It's tech forward, it's friendly, it's warm and by the way, money in your pockets quickly. So I'll end with where I started before Sandeep takes over, wHIch is I have not been tHIs bullish going into tax season given the amazing work of the team.

Hey Brad, it's Sandeep. On local is key to winning in assistant as we have shared that our we see that customers convert five times better when there's a local expert within a 50 mile radius of their location. And we are planning 600 expert locations so that's up from 400 last year. And as Hassan mentioned, a unique flagship store in New York City. This is all part of our strategy of ensuring that we are showing up in key high density areas and covering a majority of the tax filing population in the United States. And this showing up local we know really extends the trust people have in the brand. It drives adoption. And our tests also show that 39% of full service customers prefer zero touch approach to engagement. So it's really more about driving that trust in terms of our investments. Our approach to showing up local is truly asset-light and it's scalable without long term commitments. The rent, the operating expenses costs here are relatively small and and they're all included in part in our guidance that we gave earlier today. Thank you both, very welcome.

We'll move next to Keith Weiss of Morgan Stanley. Please go ahead. Your line is open.

Excellent. Thank you guys for taking the question. Congratulations on a really strong start to the fiscal year. And I'll add my congratulations to Kim Watkins. Truly has been a great partner to the financial community. So congratulations and best of luck on the new endeavors. You guys had a really solid quarter. We saw it in the global business solutions. There's a lot of concern out there about the health of the overall US consumer. And I know you guys get a lot of signal so can you help us walk through if any of your signal turned or if this was more so intuit just doing very well in what could be a shaky environment. Help us get a little bit more confidence about the durability of these types of results throughout the year.

Yeah, Keith, thank you for the question. I'll actually tag team this with Sandeep. I would say two things. One, what we see in our data across 100 million consumers and 10 million plus businesses that we serve is stability. To provide more specifics, you know, profits and cash flows are stable and up. One of the things Sandeep and I and the team looks a lot at is Payroll hours worked and payroll hours worked are actually up. And as you can imagine, you know, we're not concentrated in any particular industry, so we see a lot of industries. So if you double-click, you know, you see things like IT services, construction, manufacturing that are actually up quite nicely compared to the year prior. And then you see places like real estate and lending that are down compared to the prior year, not significantly, but down. And so it's industry specific, but when you look at the aggregate of what we serve, they're quite successful. That's from what we see in the data. I think the second thing that I'll just end with is a lot of it is also our platform and really what the platform is doing to fuel the success of businesses of all types. If you remember, one of the things that we shared at Investor day was that businesses that are on our platform are nearly 20 points more successful in terms of how they thrive, their profits versus those that are not on our platform. So our platform is having a real impact on the livelihood of businesses.

Hey Keith, let me build a little bit on Sasan's point. One thing. As you know, of course we keep a keen eye on the macro environment. But what also gives us confidence in addition to the stability that we're seeing in the broader environment is the resilience of the Intuit business. Our offerings are not just nice to have, they are a must have. And in the 40 years that we've been around, we've historically seen that when the economy is tougher, our products become more critical. And just also add on and highlight. The stats from within our platform is you saw that our charge volumes was up 29% with bill pay up 18% excluding bill pay on our credit commerce side, we continue to see strong engagement with our partners. So both the macro data within the platform and also just how the business perform continues to give us confidence in the stability and the opportunity that lays ahead.

Thanks so much, guys.

You're welcome.

We'll move next to Mark Murphy of J.P. morgan. Your line is open. Please go ahead.

Thank you so much. Congrats on the great results and also to Kim in your future endeavors. Sasan. The credit karma market share gains of several points in loan original originations and credit card issuance are pretty staggering because the size of those markets is just utterly vast. Could you speak to whether you see ongoing Runway to continue that type of motion where you're chipping away a couple few points of share every year? Maybe by leveraging the TurboTax customer base and that data, maybe by leveraging QuickBooks and the cash flow data has to be of interest to lenders. And at the end of the day, do you think you can create a more holistic financial health score than the traditional providers have?

Yeah. Mark, thank you for your question. I actually love the nature of your question. I would lead with the following. I think now you're seeing the TurboTax Credit Karma platform coming together at work. And you know, the thing that I would just also add to everything that you just shared around the market share increases is that Credit Karma contributed to an entire point of growth in TurboTax last season. And that's just over time, only going to get larger. And it speaks because of what we are doing. Customer back to help them with problems like getting access to financial products that are right for them, helping them with how to manage their debt and with our debt assistant actually helping them what they should pay down first, second and third, what they should do with their refund and just being in their life on an ongoing basis, that's how you take market share. So that's the first point I would make. The second point, which is a more specific point, is this is data AI and all of our credit models at work. As you all know, one element of our AI capabilities is Lightbox, where financial institutions have put their credit models, their proprietary credit models as part of Lightbox. And we are able to leverage their credit models to be able to deliver personalized experiences. That's a game changer. And now we have more and more financial institutions that are now putting their credit models as part of Lightbox. They don't do that with anybody else. They trust into it. It helps drive growth for them and it delivers personalized experiences for us. And so I'll end with sort of the essence of the question that you asked. We're just getting started. We have Runway and we're just getting started in terms of what's possible to do as a platform and even access to money. And how we can monetize money offerings is yet to come. So we're excited about what's possible.

Thank you. You're very welcome.

We'll move next to Daniel Jester of BMO Capital Markets. Your line is open. Great.

Thank you for taking my question and. Also pass along my congrats to Kim. Best of luck on Mailchimp. Appreciate the additional color on the progress. That has been made there. Specifically in the middle market. As we think about the re acceleration. To double digits by year end, is. That something that could be accomplished solely through middle market improvement or does this. Have to broaden out and also include some of the smaller customers coming back. To the fold as well. Thank you.

Thank you.

Hey Daniel. On Mailchimp, we've taken a number of strategic steps that I feel really confident about. As you mentioned, we have scaled the mid market sales team to build upon the momentum we have in that segment. We've improved the product experience and the onboarding flow across all customer segments and now we're scaling up the go to market efforts. And those efforts, in addition to adding to the mid market sales team is dialing up the marketing on the platform which we had dialed down while we were working on the product fixed. In. In terms of getting to double digit. It takes a mix of both customers across smaller customers as well as the mid market customers. We have good momentum and it's really going to be around early calendar year and springtime that we'll have a solid read on the mill chimp progress.

Okay, thank you very much.

We'll move next to Alex Zukin of Wolff Research. Your line is open. Please go ahead.

Hey guys, thanks for taking the questions and I apologize for the background noise. I guess maybe can you speak to. Some of the margin leverage and efficiencies. That we're seeing from deploying, some increasing AI leverage and just any other efficiencies that you're seeing that are durable given continued outperformance on margins here that we're seeing now for I think like the third or fourth straight quarter. Anything you can add there would be super helpful.

Hey Alex, we continue to feel really confident about the ability as an organization to continue to scale margin. That comes not just from efficiency but the way we run the business. Leaning on economies of scale, being disciplined about when and how and where we are allocating our capital to maximize the ROI on it and of course complementing our workforce with AI technology to truly unleash their productivity. Areas that we continue to see strong improvement are across our technology organization, using AI to improve the productivity of the salesforce, our time to market with how we are rolling out code across our customer success organization. As you know, a lot of that work is rules based, super applicable for the AI to help complement those areas and then across our entire organization, whether it's in finance, whether it's legal, hr, you name it, using AI to unleash the productivity of our employee base. What you should continue to hold us accountable to is the discipline that we have demonstrated over the past multiple years. That same discipline continues. And it's not just about the AI efficiencies, but it's all about the learning, the culture of seeing what worked and where we lean in. Marketing. We did marketing last year. There's many tests that work and we scale them. There are other things that didn't work and we shut them off. That's a discipline you should all continue to hold us accountable to.

Excellent. I just want to give a big Shout out to Kim. It's been a true pleasure working with you and can't wait to see where your next adventure takes you. Thank you so much.

Thank you, Alex.

We'll move next to Cash Rangan of Goldman Sachs. Your line is open.

Hard to follow Alex Zukin, but I'm going to try my best. So I add my congrats to. Kim but also to Jeff. Incoming. He's been waiting for a while, so well deserved promotion. The question for you, Sasan, is the delta and growth rates between accounting, which certainly is very, very strong, and online services. Sort of a wider delta than what I would. Maybe some of it has to do with mailchimp in there. I remember the good old days into it. Online services would typically grow faster than accounting because of the payroll payment tax, that sort of thing. Is there a break in that pattern. That explains this performance and that since you're getting going with ies, maybe there's a bit of a heavy accounting finance emphasis and maybe these services will follow suit in the future. If you can just help me understand the cycle of what you're going through, that'll be great. And since it's my last intuit call, I wish you many successes in your journeys ahead.

Thank you. Hey Kash, it's Sandeep. Let me take this one. You know, we continue to see tremendous opportunity across money and payroll offerings on our platform. It's a key part of our addressable market and it's a key part of the $90 billion addressable market that we have on mid market as well. The deceleration that you are referring to is really due to pricing. That was a contribution in the last four quarters and now we are lapping that across both payments and payroll. We continue to see strong momentum in our core business. And I would point you to the charge volumes. 18% overall, 29% bill pay. And we're seeing improved adoption of services across both small and mid sized businesses. As you pointed out, with some of these things it takes a while for those volumes to ramp up as they're shifting their service providers. Furthermore, the innovation that we're rolling out, whether it's our agents, whether it's the new QuickBooks user interface. They provide us more opportunities to build upon the strength we have in platform adoption services over time. So I would not read too much into that deceleration. We are quite excited about the opportunity that lays ahead.

And Cass, we wish you an amazing retirement.

Thank you so much. Much appreciated. Here's to the drone head.

We'll move next to Ramo Lenshau of Barclays. Your line is open. Please go ahead.

Hey, thanks. And following cash is always an honor. And Kim, all the best for you as well. Quick question for me was on Credit Karma you talked about credit card loan is driving it, auto insurance a little bit. How do you think about it in terms of the health of the consumer? Hasan, you talked a little bit about it earlier, but Credit Karma has been performing a lot better than you guided for several quarters now. Like how confident are you about what you're seeing there? Thank you.

Yeah, let me start with one element and I'll tag team this with Sandeep. And actually it's really important to leverage this opportunity for everyone to make a really a broader point. Credit Karma is working because of all the innovation that we've done, customer back and the integration with TurboTax. So if you really think about the 45 million monthly active users, the fact that they engage more than five times a month and the fact that we now can help them with so many things more compared to when we first bought Credit Karma. When the member has the opportunity to understand what to do with their debt, to get access to financial products like credit cards, personal loans, insurance, when they can get their taxes done, get help with what they can do with their money, get early access to that money, that customer then engages more and engages more because of the trusted benefits and the insights that they're getting, but also the fact that things are personalized and we're doing it for them. And so that is what helps us then be able to accelerate taking market share that Sandeep and I talked about earlier. So that's a really important element to think about. It's not just about the health of the consumer. It's actually about what we are now doing for the consumer that is so far more advantageous for the consumer versus where we were just even a year ago to two years ago. And from just a health perspective, credit scores and balances are generally stable. Credit scores over the last several years have for the near prime customers and subprime customers have gone down 10 plus points but they sort of stabilized. And credit balances and credit card balances although higher for gen Z by 20 to 30% now versus a couple of years ago. They've generally stabilized. So that's what we see from a consumer health perspective. But I think the most important is the innovation that I talked about earlier. Let me just also invite Sandeep to add a few thoughts.

Rima, the only thing additional I would double down on is the innovation that we're driving across the platform is that innovation that's helping our partners see better ROI of the spend on our platform, which is why we we continue to take share. That's a tailwind into the business driven by innovation. Also, from a consumer point of view, if the economy does get to a place where the consumer is under pressure, they'll be looking to a trusted platform to understand where they can consolidate debt on personal loans. Keep in mind some of these near prime customers, if they apply for a credit card where they get dinged, they could become subprimed. And this is where our innovation, such as Lightbox gives the customer the utmost confidence of their odds of getting approved. These are are all innovations that are key to driving confidence and allowing us to continue to take share regardless of the macro environment. Okay, very clear. Thank you, Voltaire. You're very welcome.

We'll move next to Michael Turin of Wells Fargo Securities. Please go ahead. Your line is open.

Hey, great. Thanks so much. Appreciate you taking the questions. Just a quick two parter on the numbers if I may. In terms of the QBO strength you mentioned, price is a leading factor there. So just any commentary you can add on how we should think about the shape of pricing contribution on that line throughout the rest of the fiscal year? And then on margin, fiscal Q1 was very strong, 2Q was a touch lower than we were maybe modeling. So can you just also speak to expense timing and whether there are marketing specific impacts to consider between those quarters as we're updating our forecast. Thank you.

Yeah, absolutely. Hey Michael, Sandeep, on the QBO side, we continue to see our innovation resonate with the customer. And even after we did the price changes and the lineup innovation this Last. July, we saw that our customer attrition again came in below our expectations. Just highlighting how the pricing power we have, as well as how well the innovation truly is resonating with our customers. And when we see some of this innovation, such as 45% of our customers telling us that they're saving up to 12 hours a month, that's a meaningful increase in the productivity of getting paid five days faster, that's a meaningful increase to the net working capital. So these are I would highlight these as areas where we're driving innovation and it's resonating pricing contribution is relatively consistent throughout the four quarters. And the other thing I'll point out on QBO is the momentum we have as opponent with a 40% revenue growth in IES as well as in QBO advance that is a contributor to the accounting line on the online ecosystem. The second part of your question was around margin. So a couple of things I would point out there. If you look across the first half, we are actually ahead of what the street expectations were on our margin and what we solve for is for the full year. And I continue to feel really confident in our ability to deliver on our commitments for the full year. There's always things any one quarter. For example, we learned from our consumer marketing this past year that allowed us to really hone in the timing of the spend between Q1 and Q2 to really maximize that ROI. So it's really our continued discipline and spend management making sure we're maximizing the money that we're driving with our spend that drove some of that shift. But look across the first half and you'll see that we are nicely ahead of consensus on both revenue as well as ebit.

Appreciate all the details there. Thank you. Absolutely.

We'll move next to Steve Enders of Citi. Your line is open. Please go ahead.

Okay, great. Thanks for taking the question here and congrats to Kim as well. I guess I want to ask on the in person, I guess TurboTax experience that you're rolling out here, I guess what's the, I guess hope or what's the kind of view of maybe how that changes, you know, I guess the types of customers or you know, could change the dynamics going through tax season here. Yeah, thanks for your question. A couple of things I would say this is really the strategy which is very consistent with what we've been talking about for several years, is to show up where the eyeballs are. And the notion of being in 600 locations, addresses and 20 stores, one of them being in a flagship in New York is actually to be seen when you do search, whether it's through an AI app or Google or any other platform that we show up locally. So that's a huge part of the strategy in terms of the type of customers, the same customers that we serve today. This is about reach and it's about access. Because what we have found is when we engage a customer and a customer finds us and we find the customer and we are where the customer is, we Win hands down based on experience, price, and then access to money. So this is just based on our incredible progress last year, the incredible results last year. What you're seeing is we're just doubling down on winning in the assisted segment. And this is one key how to do just that. Thanks for taking the question. Yep, you're welcome.

We'll move next to Brent Thill of Jefferies. Your line is open. Please go ahead.

Thank you. This is John. On behalf of Brent. Still, one question. One of the advantages of Intuits platform is the ability to consolidate the dozens. Of apps for small businesses. I just wanted to see if you could talk about the progress there and then maybe compare between the small businesses versus the mid market. Are you reaching the potential?

Thank you. Yeah, thank you for your question. It is really the essence of why we are winning. When you look at smaller businesses, they could have between three to 10 apps. When you look at larger businesses, they can have between 25 to 30 apps. And there's a real issue with that now more than ever, where customers are spending more time trying to figure out what's going on in their business. Across all of these apps, they're actually spending more money than they did before and they're getting less value because they may have fallen in love with three, four apps. But then when they zoom out, they don't know what's going on in their business. And that's really been our strategy of a platform that helps customers from lead to cash, but also a platform that does everything for customers. This is the power of data, AI and hi and ultimately being able to do everything for our customers. And so the, you know, the acceleration that we are seeing across the board and particularly in mid market, and when you look at the results that we just talked about, which is online, you know, growing 20%, you've got mid market growing at 40%. This is actually more and more customers, and particularly the larger ones that see the value of having everything in one place. One, because we can do the work for them, they get a better experience. But two, they may pay us more, and more than likely they actually do, but they're actually spending a lot less. And that's a game changer for customers. And I think we're just based on all of our capabilities at the beginning of that cycle. It's another reason why you are seeing an accelerated set of partnership announcements with accountants, because they actually see not only us being able to partner with them to help digitize their firm through the Intuit accountant suite, which is a revolutionary platform. We've launched, but also what we can do together to really digitize the clients that they serve. Because when clients use a lot of apps, it drives accountants crazy. And so this really is where the network effect comes in. Thank you very much.

Yep, you're very welcome.

We'll move next to Brad Sills of Bank of America. Your line is open. Please go ahead.

Oh, great. Thank you so much. And I'll echo the congratulations to Kim on your next move. So many great agents in QuickBooks. There's accounting agent, payments, customer finance. The list just keeps going. Have you seen any one in particular or any use cases that you're seeing traction? And what would customers say as to kind of the roi, some of the savings here? Are there any that have started surprised you that gosh, these are actually more effective than we thought and driving more value? And then what would that say about your kind of confidence in your ability to monetize these? Obviously now it's through premium Mix, but eventually through separate SKUs.

Thank you. Yeah, thank you for the question. I actually love the nature of the question. Let me start with just zoom out first and then I'll answer your specific question. The biggest thing that we continue to learn from customers is I need help for you to do it for me and with me. Because if you think about businesses of any size, unless they're an enterprise, they do not have all the resources that comes with an enterprise to do data analytics to help. You know, they don't have a large marketing team sitting around, a large finance team sitting around, a large data analytics team sitting around. They need help in terms of how to run their business. And really that's where the power of our platform comes in, which is an assistant that is right by their side that can help them with making decisions, can do the work for them, can do the work with them. And by the way, when technology runs out of capacity, which it always will, that's where our human intelligence comes into play. So fundamentally customer backed, this is really, really important for customers, which has helped me get things done. It's by the way, why they are always seeking for advice in these AI apps. To get more specific, I'll just remind us with all of the AI agents, we've been in market for about four months, which means there is a lot more improvements, enhancements and adoption. But what we've seen in four months is one, the discovery and repeat engagement since we've launched is over 80%. And the two areas that are having the largest traction is the payments AI agent and it's the accounting AI agent. That's why we've cited the stats where with the use of accounting agent folks are saving 12 hours a month, which is significant. And it's not just the time savings, it's actually the accuracy and the insights that they get. The second is the customers that are getting paid five days earlier and four months in market. That's actually quite remarkable because we're learning literally every day in terms of how to make these more effective. Customers don't care about AI agents. They care about get the work done for me and that's really where I think the best is yet to come.

Very exciting. Thank you Suzanne. Yep, thank you.

We'll move next to Taylor McGinnis of UBS. Your line is open. Please go ahead.

Yeah, thanks for taking my question and Kim, appreciate all the help these last couple years and wishing you all the best. So I'd like to unpack the strength of the 2Q revenue guide with a later start to the tax season this year and also a tougher credit comp. I think it would be helpful if you could just offer some additional color on the drivers of growth. So are there any segments where you're expecting growth to be more durable with the levels that we saw in 1Q or higher than implied in the full year guide? Thanks so much.

Hey Tanner, in terms of the Q2 guide, it is a continuation of us continue to execute on our strategy. The momentum that we saw in fiscal 25 carried into fiscal 26. You saw the Q1 results and you're seeing this in our Q2 guidance. We expect momentum to continue its strength in GBSG online. We continue to expect strength in mid market, continue to expect the CK offering to resonate with both partners and consumers. And on the turbotax side we're expecting similar to last several years that the IRS opens up towards the end of January. So that's our expectation going in A couple of things that I would point out that we do expect desktop to start decelerating in the second half as we go from the 6% we saw in Q1. Likely we'll be near the mid single digits for Q2 but then decelerate in the second half. And on a CK in the second half of the fiscal year the comps do get harder as we lap the prior year strong performance. But in the areas that are the key growth vectors for the company, you should expect us to continue to execute and continue to build upon the momentum.

Super helpful. Thank you guys so much.

Hello Taylor.

We'Ll move next to Arjun Bhatia of William Blair and Company. Your line is open. Please go ahead.

Perfect. Thank you so much. Sasan, if I can just go back to the OpenAI partnership for a second. I know this is just about to come live, but I'm curious if you would just venture to take a guess on when you think customers would use intuit apps inside ChatGPT versus when they would use kind of core or use Intuit within your own applications and use your Intuit intelligence capabilities, which also have sort of natural language answers. And I'm wondering if, in your perspective, if that makes a difference at all or if your goal is kind of just to drive, increase engagement and maybe that drives more attach of services and agentic adoption and all the other good things that come with increased usage.

Yeah. Thank you for your question. You know, I'll start by saying companies that win will be companies that are. That have platforms and that they are where the eyeballs are. And that's really what we're doing with, with this partnership with ChatGPT. It's really, for us, it doesn't matter whether a customer comes directly to using our platform or we are where they are within an AI app, in this case ChatGPT, because as I mentioned earlier, one, they get personalized experiences right within ChatGPT. Two, they're in using our apps. And so the accuracy, safety, privacy is all protected. It's unchanged. And we get to enjoy the economics that we enjoy today. So what we care about is actually being where the customer is and making it easy for the customer to have the experiences that they need to have in terms of, you know, only time will tell. We're going to. We being OpenAI and Intuit are going to absolutely nail this experience. It's going to be an amazing experience. And only time will tell relative to, you know, how much customers are, you know, at the end of the day, they're using an Intuit app. Whether they're using it within ChatGPT or they're directly coming to us, it really doesn't matter. And I think only time will tell what the customer behaviors are. The good news is we're positioned for wherever the customers are, and that's what's exciting about this partnership.

Perfect. That makes a lot of sense. Thank you.

Yep, you're very welcome. All right, I think that's all of the questions. Hey, before we end, I also want to thank Kim. She has been an amazing partner for all of us internally, and she's made us better. And we are so fortunate to have had the opportunity, Kim, to work with you and the best of luck in your next chapter. And you're going to miss all of our amazing earnings call going forward, but we'll see you on the other side. And for everybody that joined, thank you for your time. We'll talk to you next quarter. Bye, everybody.

Ladies and gentlemen, thank you for participating. Thank you for participating. This concludes today's conference call.