Intuit Inc at Goldman Sachs Communacopia & Technology Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Kasthuri Rangan - Goldman Sachs - Analyst : The past couple of years have been remarkable for Intuit. Big breakthroughs. You had the mid-market assisted tax, AI, et cetera. As you take stock

Question: Kasthuri Rangan - Goldman Sachs - Analyst : Have I told you the story that -- it's a very short one. When Sasan became the CEO, he and I went to see clients. I think we were the first to go marketing with. All we talked about was AI, 2018. In case Sasan, you're listening, you know the trip. It was all about AI, before AI became a thing.

Question: Kasthuri Rangan - Goldman Sachs - Analyst : Got it. We will definitely get into the AI thing. But before that, at a high level, what is your pulse on the small business environment? We've heard in the past few weeks, the jobs added. That data didn't look particularly great. And the economists like to think that 80,000 jobs added, it's about stable sign. And a couple of years ago, we're adding a couple of hundred thousand. Now it's like well below the trend line. Does that -- is there a relevance to Intuit, how closely do you watch that? But more importantly, as you take a step back and look at the lens of your small business ecosystem, what do you see that's out there? And how would you characterize the strength of the small business ecosystem?

Question: Kasthuri Rangan - Goldman Sachs - Analyst : Yeah. It's been you could characterize that the macro has been the number one thing in the last -- since 2021 unwound, and we had this wave of optimism that resulted in big growth rates and extended tech buying cycles. 2022, 2023, 2024, 2025, we're still asking macro question, right? I hope one day, we'll be asking no macro question, just talking micro like 2021 was. And 2020 in some sense, right, after we had the vaccine, it was just back to the fundamentals. But the one thing that I have always admired about Intuit, this goes back to the days of not only Sasan as CEO, but his predecessor Brad Smith, is that we don't control what we don't control, we control what we control, chart out your destiny. And one of the things that haven't covered Intuit as a company and admiring it from the outside for the better part of 15, 16 years, I think I first met Brad, in 2008, just at the bottom of the wordwide financial crisis. There's always been resiliency, right? And that's manifest in -- when you look at the mid-market opportunity, right, the one that you're about to have that's been characterized as a $89 billion, $90 billion give or take mid-market opportunity. We've seen great statistics from QBO Advanced IES, which was launched last year. That's doing quite well. As you continue to scale up market, remind us again, in the interest of messaging, what is the white space that is opening up for Intuit? And I have a follow-up question about ARPU, ARPC, et cetera?

Question: Kasthuri Rangan - Goldman Sachs - Analyst : Because I hear from clients. they don't believe it. But what is mid-market, and it's a formula that is in their view, broken because there was a formula of adding subs at a certain ARPU. And now you're going upmarket and our ARPC is going up and unit growth has slowed down, something is wrong.

Question: Kasthuri Rangan - Goldman Sachs - Analyst : Yeah. I think -- and I've described to investors is a few concentric circles. So you got a very -- outermost circle would be the circle of small businesses and then QBO Advanced, the next concentric circle inside and then IES. The value is higher and higher as you go closer to the center?

Question: Kasthuri Rangan - Goldman Sachs - Analyst : By the way, Intuit has their financial Analyst Day, I think in a couple of --

Question: Kasthuri Rangan - Goldman Sachs - Analyst : Next Thursday. It's one of my favorite analyst days because you have packed information insights. The slides are just a work of art. And the coolest thing is that during the break, there will be snacks and such served by the staff but made by your customers. All sourced from your customers. It's such so cool that small businesses, what they contribute and how you showcase what is it that they do actually.

Question: Kasthuri Rangan - Goldman Sachs - Analyst : Yeah. Last year, when we had Sasan, you did talk about the leadership offset that you guys had, and you mentioned that Bill was at the leadership conference last year. Did you have any other public software CEO types this time.

Question: Kasthuri Rangan - Goldman Sachs - Analyst : He talks a big thing about AI. AI is AI is big super theme, right?

Question: Kasthuri Rangan - Goldman Sachs - Analyst : Yeah.

Question: Kasthuri Rangan - Goldman Sachs - Analyst : He's probably egging you on to go even faster with AI, anf you're moving quite fast.

Question: Kasthuri Rangan - Goldman Sachs - Analyst : Great. Let's then talk about the story transition from unit growth to ARPU growth. And that's a completely different world. How should investors think about the trade-off moving away from a unit-driven model, high attrition to more value more better retention, better lifetime value, talk more about that?

Question: Kasthuri Rangan - Goldman Sachs - Analyst : Yeah. I tell clients, small business is a big business for Intuit. And I think I've made the observation last year, and Sasan corrected me and said, your small business is as big as ServiceNow and growing about as fast and he said, growing 2 percentage points faster. So people don't realize that there is a ServiceNow inside of Intuit in terms of revenue size and growth rate and perhaps even an operating margin composition, right? I know you don't disaggregate the businesses.

Question: Kasthuri Rangan - Goldman Sachs - Analyst : So when you look at the road ahead, what I wanted to ask, what does the competition look like? I mean, I remember a point in time when I was a junior analyst in the mid- to late '90s, the senior analysts are very busy covering the large cap ERP companies. They said Kash, you're the junior guy. You're going to cover mid-market ERP. And there were like 9 or 10 companies. Marcam, MAPICS, JD Edwards, SSA Technologies, and that's just right off the time. There were a dozen more or maybe half a dozen more. They don't exist anymore. So part of me says that's an opportunity. And since the 25 years ago, that space has changed. There are younger companies here, digital natives and so on and so forth. But those -- the supply of ERP companies has gone just gone. But are you seeing any competition? And how wide open is this? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 10, 2025 / 5:50PM, INTU.OQ - Intuit Inc at Goldman Sachs Communacopia & Technology Conference

Question: Kasthuri Rangan - Goldman Sachs - Analyst : Generally even investors here going up market, like, margin compression. How are you able to balance the incremental -- the hugely incremental growth opportunity with higher-value customers, but maybe also higher value to acquire those customers. Is that -- how do you look at that equation?

Question: Kasthuri Rangan - Goldman Sachs - Analyst : Got it. The retention rate also has to be meaningfully higher, mid-market businesses versus small because the attrition, it's not that they don't want to use a software with it . They're going out of business, that obsolescence risk of a business is much lower in the mid-market, I would assume.

Question: Kasthuri Rangan - Goldman Sachs - Analyst : Sandeep, do you end up displacing any known ERP companies? Are you starting to butt into displacement opportunities?

Question: Kasthuri Rangan - Goldman Sachs - Analyst : Got it. Then moving on to TurboTax Live. Amazing. I mean what an incredible quarter that was, right? If there was one quarter that made it like a really firm solidification of a trend, it was --

Question: Kasthuri Rangan - Goldman Sachs - Analyst : Yeah. It was incredible. It grew 47%. Obviously, you cannot sustain this kind of growth rate. But I just wanted to dig behind the cover of what drove this performance? And what is it about -- is it just a product market fit, a maturity, trustworthiness? What caused the business to inflect this quarter? Because you've been honored for like years and years and years.

Question: Kasthuri Rangan - Goldman Sachs - Analyst : Got it. So let's talk about the AI vision, the forward-looking side of it, where you're on the offense completely understood. I want you to talk about how you're using AI within the product suite in tax to gain more efficiencies, automation, unlock new ways of having customers onboarded to the platform quicker. On the flip side of the coin, what I do hear from investors is, yeah, I mean, TaxGPT, why would not somebody just have GPT absorb the tax code of the United States and why would I not be able to, with PDF documentation and support, throw my stuff into this and have it do my taxes?

Question: Kasthuri Rangan - Goldman Sachs - Analyst : Wait, 80% of your developers are using --

Question: Kasthuri Rangan - Goldman Sachs - Analyst : Which tool are they using, Sandeep?

Question: Kasthuri Rangan - Goldman Sachs - Analyst : But 40% improvement in productivity, that's great. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 10, 2025 / 5:50PM, INTU.OQ - Intuit Inc at Goldman Sachs Communacopia & Technology Conference

Question: Kasthuri Rangan - Goldman Sachs - Analyst : How are you able to give $90 million in savings?

Question: Kasthuri Rangan - Goldman Sachs - Analyst : From saving not having to add as many head count or --

Question: Kasthuri Rangan - Goldman Sachs - Analyst : And the way I explain it to my clients is that for $50, $60, $70, whatever the price point is, it's very high reward to risk ratio using TurboTax as opposed to trying to do it on your own with some GPT?

Question: Kasthuri Rangan - Goldman Sachs - Analyst : Yes. I remember when we hosted Sasan, this was many, many years ago, we got into disrupting the assisted category. And I was ashamed to admit to him and we're on a public webcast. I know this, but it's probably going to be listened to. But I said, well you will not believe how much we have to pay to an outside accountant who uses TurboTax, but to do our taxes. And he said, we're going to do it with AI one day. And I will quote you a price without even knowing how much you pay for your tax attorney, and you will say yes to that price. I'm not going to say what that price is and he said what the price was, and I said, yes, I would take it. And it looks like that day is not too far off that you can have very complicated tax returns be addressed by TurboTax. That's higher, way higher ARPC. And you are playing in a -- I'll ask you to answer the TAM question. How big is the TAM for TurboTax?

Question: Kasthuri Rangan - Goldman Sachs - Analyst : I guess that's one of my projects in retirement to figure out how to do this with TurboTax.

Question: Kasthuri Rangan - Goldman Sachs - Analyst : On that note, thank you so much for your perspectives. It's always fun to engage with you on a conversation about Intuit because it's such a cool company. And I wish you much success in the years ahead and on your path to becoming a 2x, 3x of your current size. In fact Sasan told me in 2018 that when he'd becomes CEO, yeah, my goal is to -- he mentioned a multiple, and you have overshot that goal. So congrats to him and to you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 10, 2025 / 5:50PM, INTU.OQ - Intuit Inc at Goldman Sachs Communacopia & Technology Conference

Question: Kasthuri Rangan - Goldman Sachs - Analyst : Round of applause for Sandeep.