Intuit’s quarterly forecasts disappoint as delayed promotions curb growth

Intuit on Thursday forecast second-quarter revenue and earnings below Wall Street estimates, indicating that its artificial intelligence efforts will take longer to pay off and that a planned change in the timing of TurboTax will curb growth.

The company’s shares fell nearly 5 percent in extended trading.

Intuit’s consumer group, which serves individuals, is expected to see a single-digit decline in second-quarter revenue due to a delay in the promotion of the desktop version of TurboTax, its software widely used by Americans to file taxes.

The company said the delay would only impact the current quarter and reiterated its full-year forecast for double-digit revenue growth.

Intuit offers financial products, including personal finance portal Credit Karma, marketing platform Mailchimp and accounting software suite QuickBooks, that help small businesses manage their finances.

The company’s shares fell 5.1% on Tuesday after the Washington Post reported that President-elect Donald Trump’s government efficiency team is considering creating a free tax-filing app.

“I am personally communicating with the new leaders and the new administration,” Chief Executive Sasan Goodarzi told Reuters.

“And as we’ve always said, yet another free tax software won’t have any impact because free (software) is already available to all Americans,” he added.

Intuit expects second-quarter revenue to be between $3.81 billion and $3.84 billion, compared with an estimate of $3.87 billion, according to data compiled by LSEG.

Quarterly adjusted earnings per share are forecast to be between $2.55 and $2.61, below estimates of $3.20.

On Wednesday, the company made its generative AI financial assistant tool, Intuit Assist, generally available to QuickBooks Online users in the United States. Intuit launched an artificial intelligence tool last year to help customers make financial decisions when using its products.

“The current easy quarter indicates a pause until customers better understand the ROI of AI,” said Zeus Kerravala, principal analyst at ZK Research.

First-quarter revenue of $3.28 billion beat estimates of $3.14 billion, and adjusted earnings of $2.50 per share beat estimates of $2.35.