Profits From Intuit Are Strong. The Company Is Betting Big On Artificial Intelligence.

There was a rise in shares of Intuit INTU +1.15% in extended trading on Thursday after the company released its January quarter earnings, which were higher than expected.

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Moreover, Intuit (ticker: INTU) also announced that its Chief Financial Officer Michelle Clatterbuck will retire from the company on July 31 after serving the company for 20 years. It is expected that Sandeep Singh Aujla, who has been with the company for seven years in a variety of finance roles, will succeed her on Aug. 1.

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Revenue for the fiscal second quarter increased 14% from a year ago, to $3.04 billion, with non-GAAP earnings of $2.20 a share. According to FactSet, the analysts polled by the company were expecting $2.91 billion in revenue and non-GAAP earnings of $1.47 a share. Non-GAAP profits were expected to be between $1.41 and $1.45 per share for the company, according to its forecast.

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Stocks of Intuit rose 0.8% after the report was released.

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According to CEO Sasan Goodarzi in an interview with Trade Algo, the company "crushed the quarter," thanks to the strength of its small-business arm and the start of tax season which both contributed to a successful quarter.

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The company's small business and the self-employed group reported a 20% increase in revenue for the quarter. A rise in interest rates and tighter lending conditions for subprime and near-prime loans had a negative impact on CreditKarma's revenue, which was down 16%. Intuit's view about CreditKarma's growth over the long run remains unchanged, according to Goodarzi.

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Intuit reiterated that it expects to generate revenue of between $14.04 billion and $14.25 billion for its full fiscal year ending in July, with non-GAAP earnings per share of between $13.59 and $13.89 dollars. The company expects the company's revenue and non-GAAP earnings for the fiscal third quarter to rise between 8% and 9%, and non-GAAP earnings to be between $8.42 and $8.49 a share. The Street consensus had expected 7.9% top-line growth and profits of $8.92 a share.

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Despite Q3 guidance that topped Street expectations, Goodarzi admits it may have caused a few eyebrows to raise that the company has not raised revenue guidance for the full year despite strong Q3 guidance. The CEO explained that since the fiscal third quarter is by far the largest quarter of the fiscal year because of the timing of the tax season, the company prefers to wait until the end of that quarter before making any adjustments to its guidance. In addition, he says investors should view the full-year forecast as "de-risked" compared to the previous year's.

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A timely callout to the market's current focus on artificial intelligence appears in the company's earnings press release.

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As part of this partnership, Goodarzi says the company has partnered with OpenAI, the company that developed the ChatGPT chatbot, and will provide generative AI-based suggestions to its customers on tasks such as generating marketing messages or sending out email messages automatically via the MailChimp platform.

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“AI is fueling innovation across the company,” says Goodarzi.

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