Intuit Shares Drop 7.5% in 2023 Amid Lower-Than-Expected Tax Season Revenue
Intuit's 2023 tax season revenue falls short of projections, causing a significant share price decline and raising concerns over IRS's potential free tax filing system.
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Highlights
- Intuit's 2023 tax season revenue missed analyst expectations.
- Shares plunged 7.5% following the earnings announcement.
- CEO Sasan Goodarzi cautioned about the IRS possibly enabling free direct electronic tax filing, which could disrupt third-party providers.
Shares of Intuit (NASDAQ: INTU), the company behind TurboTax, declined 7.5% on Wednesday after reporting fiscal third quarter 2023 revenue of $6.02 billion, a 6.9% increase but below analyst forecasts. Despite this, earnings per share reached $8.92, surpassing estimates.
The company anticipates a 2% decrease in total IRS tax returns filed and a 0.75% reduction in do-it-yourself tax filings for the full fiscal year. This decline is attributed to fewer filers seeking pandemic-related stimulus and tax credits compared to previous years.
Nevertheless, CEO Sasan Goodarzi raised the company’s revenue, operating income, and EPS guidance for 2023. He also highlighted concerns about the IRS potentially offering free, direct electronic tax filing to Americans, a move that could cost taxpayers billions and impact Intuit’s business model. This initiative stems from the $80 billion IRS modernization funding included in the Inflation Reduction Act of 2022, with recent directives from Treasury Secretary Janet Yellen to advance prototype testing.
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