The market is rightly focused on the company's struggles in do-it-yourself tax, but it might be missing a massive and much more lucrative business taking over from within.
If you've held Intuit (INTU) stock over the past year, you're likely feeling the sting. The shares have fallen significantly, trading about 65% below their 52-week high, while the broader market has climbed. The culprit is a familiar story: the company's core do-it-yourself tax business is sputtering at the low end.
Management admits it. They're "constructively dissatisfied" with performance in the DIY segment and acknowledge they "lost on price" among the most price-sensitive filers. It's a real problem, and it's grabbing all the headlines. But what if the most important part of Intuit's story is happening somewhere else entirely?
A Much Bigger Pond
While the market obsesses over the $5 billion DIY tax market, Intuit has been quietly and aggressively moving into a much larger arena: the $37 billion assisted tax category. This is the world where people pay an expert for the confidence that their taxes are done right, and it accounts for a staggering 88% of the total market.
This isn't just a side hustle. It's a strategic takeover. The company's TurboTax Live offering, which connects filers with human experts, is rapidly becoming the main event. And the numbers show a business hitting its stride.
The Engine Ignites
According to the company, TurboTax Live revenue is expected to grow 36% this year, with customers growing 38%. That growth is so significant that the assisted offering will represent over half, 53% to be exact, of total TurboTax revenue this year. That's a massive shift, up 11 points from just last year. While one part of the tax franchise is struggling with price, the other, much larger part is booming.
This is one of several "growth engines" management points to, including its mid-market and money portfolios, that are all growing "north of 30%." The strategy appears to be a deliberate pivot toward higher-value, expert-driven services where price is less of an issue than trust and accuracy.
A Leaner Machine To Fuel The Fire
This strategic shift is happening alongside a major operational one. Intuit recently announced it is reducing its full-time workforce by 17%. While a tough decision, management frames it as a move to become a "faster, leaner and more focused company." The goal is to sharpen the cost structure to scale its growth engines and deliver on its commitment to "durable long-term growth and margin expansion." With operating margin already at a three-year peak, this move is designed to add fuel to the fire.