(Bloomberg) -- Intuit Inc. posted strong revenue growth following the end of the US tax season, suggesting the financial software company is finding success offering users more expensive services.
Fiscal third-quarter revenue increased 15% to $7.8 billion, the company said Thursday in a statement. Analysts, on average, estimated $7.6 billion, according to data compiled by Bloomberg. The period that ended April 30 — including tax season — is the most critical for the maker of TurboTax and other finance software. Profit, excluding some items, was $11.65 a share, compared with analysts’ average projection of $10.96.
Intuit has been working to cater its tax software to those with more complicated situations, especially people who had used traditional accountants. The company has also marketed more artificial intelligence features in its products.
For the full year, Intuit raised its revenue outlook to about $18.7 billion. In February, it gave a forecast for as much as $18.3 billion. Adjusted profit will be as much as $20.12 a share, also an increase from the previous forecast.
While the results show promise, they also suggest some issues with the company’s user base. Eight million people are expected to use TurboTax for free this year to file their taxes, a drop of about 2 million from a year ago, the Mountain View, California-based company said. Turbotax’s total share of IRS tax returns will decline about 1 percentage point, Intuit said.
Investors have been anxious about Intuit shedding lower-paying customers who use software to complete their own taxes, wrote Keith Weiss, an analyst at Morgan Stanley, ahead of the results. Even free users are important to Intuit as many of them start paying for services in subsequent years. The company also reported a drop in such users last year.
The shares gained about 2% in extended trading after closing at $666.07 in New York. The stock has climbed 6% this year through the close.
Some of the customers who left TurboTax may have used a free alternative online service from the Internal Revenue Service, which was available in a limited number of states for the second straight year. Still, the federal program’s future is uncertain as the Trump administration has made deep cuts to the IRS, and the Associated Press has reported the administration plans to eliminate the free tax service.
Intuit has long lobbied against efforts by the government to provide software for people to complete their tax returns online, calling it unnecessary because private companies offer it for free. Daniel Jester, an analyst at BMO Capital Markets, wrote that given “signals from the government that the IRS program may not be continued in 2026, we think sentiment around the durability of growth in Intuit’s tax business could meaningfully improve.”