Intuit is known for developing accounting and tax-filing software. People and businesses assign these workflows only to trusted entities because the downside risk is a potentially lengthy IRS audit. Most people are too busy to risk an audit and will not switch bookkeeping or accounting software. They will pay up and ensure their filings are in order.
This high switching cost is the key moat that has enabled Intuit to become one of the world's largest software vendors. Intuit has grown its revenue YoY for 30 of the last 31 years. The one year its revenue dropped was due to an accounting change.
Intuit has grown its revenue from ~$540M in 1996 to $21.4B in 2026. This is a 13% revenue CAGR over 30 years. The stock has collapsed anyway due to AI fears. It is down ~55% this year and down ~66% from its peak of $814. It is currently trading at ~12x the FY27 earnings guidance. Over the last 10 years, it traded closer to ~50x trailing earnings.
This has been a phenomenal business. The key question we ask ourselves in this report is whether Intuit will continue to do well in the coming years or if AI has finally breached INTU’s moat.
Key business segments
Intuit has 5 key businesses:
QuickBooks (54% of revenue): this is accounting software for small businesses in the US. Intuit offers a variety of services around the core accounting ledger, such as payroll, payments, bill payments, and loans. This is called money services and is a $3.6B business.
TurboTax (25% of revenue): This is the segment Intuit is known for. It is INTU’s consumer business and helped file ~39 million US tax returns. It has both DIY (do-it-yourself) and assisted tax-filing (Live) segments. Live now accounts for more than half of TurboTax revenue ($2.8B, +37%), and, by our estimate, the DIY side shrank by ~14%.
Credit Karma (12% of revenue): it gives people free credit scores, and lenders pay Intuit when members open a credit card or take out a loan. About 1 in 9 US credit card and personal loan originations now pass through it.
Mailchimp (6% of revenue): an email marketing tool that Intuit bought for about ~$12B in 2021. This is a cash cow, but INTU hasn’t been able to grow it despite repeated efforts. Management has missed three deadlines (which they guided to) to return it to growth.
ProTax (3% of revenue): INTU’s professional tax software, sold to accounting firms and tax preparers to file their clients’ returns.
Why is it down?
In early February, Anthropic released AI agents for office work, and software stocks sold off. INTU was down 31% year-to-date by February 6. The stock is down because Intuit is a software company. Other reasons are listed below, but the core issue is that the market expects INTU’s moat to be breached in the medium term.
Losing customers at the lower end: in May’26, management said it ‘lost on price’ with DIY tax filers. The stock fell 20% the next day. INTU has lost share among DIY and free filers.
Lower growth guided for FY27: In Aug’26, INTU guided revenue growth of just 9-10% for FY27. It also cut the 3-year growth target for its QuickBooks business from 15%-20% to 10%-15%. Management has not said so, but we think this is the first sign of AI affecting growth.
Strategy change due to AI’s threat: Two years ago, management sounded very different. In May 2024, when asked why TurboTax did not compete for low-end filers, the CEO said: ‘We're not interested in pursuing those customers, when they simply are bouncing between platforms.’ In August 2026, he said: ‘Price is now the number one reason customers leave TurboTax.’ Credit Karma Tax is now live for all Credit Karma members, with a free federal return and a $15 state return.
Can AI do your taxes? Can it be your accountant?
AI can’t do taxes or perform accounting tasks reliably yet. But as it becomes smarter, the scope for disruption will widen. AI-enabled tax and accounting experts will be much more productive than before. The amount of accounting or tax filings will not increase at the same rate. This means that INTU may not be able to charge the prices it charges now. Operating margins are likely to fall.
In tests conducted by TaxCalcBench (a public test), the leading AI got only 32% of returns correct in mid 2025 and ~62% in June 2026. This is impressive, but AI is still wrong 38% of the time.
On AccountingBench (mid-2025), the best models stayed above 95% accuracy for the first few months, then mistakes started piling up.
AI's current inaccuracy gives INTU time to innovate and protect its turf. But the writing is on the wall.
The Moat of each segment
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