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SEC filingRevenue growth of 18% driven by Global Business Solutions and Consumer segments, with operating income up 61%.
For the first six months of fiscal 2026, Intuit reported total net revenue of $8.5 billion, an increase of 18% compared to the same period of fiscal 2025. Operating income rose 61% to $1.4 billion, driven by the revenue growth partially offset by higher expenses. Net income increased 71% to $1.1 billion, and diluted EPS grew 72% to $4.06 from $2.36. The operating margin expanded to 16.3% from 11.9%, a 440 bps improvement. Revenue growth was broad-based, with Global Business Solutions up 18% and Consumer up 17%. Expenses increased 13% to $5.2 billion, primarily due to staffing, outside services, share-based compensation, and marketing costs.
Global Business Solutions segment revenue grew 18% to $6.2 billion, driven by 21% growth in Online Ecosystem revenue. QuickBooks Online Accounting revenue increased 24% due to higher effective prices, customer growth, and mix-shift. Online Services revenue rose 18%, led by money offerings (up $220 million) and payroll offerings (up $149 million). Desktop Ecosystem revenue grew 8% due to higher effective prices. Segment operating income increased 17% to $4.7 billion, with operating margin of 77%, down slightly from 78% due to higher costs for QuickBooks Capital and payments.
Consumer segment revenue increased 17% to $2.4 billion, driven by Credit Karma (up 25% to $1.3 billion) and TurboTax (up 10% to $779 million). Credit Karma growth was led by personal loan, credit card, and insurance verticals. TurboTax growth came from assisted tax and consumer money offerings. Segment operating income increased 21% to $1.5 billion, with operating margin improving to 62% from 60%, despite higher marketing expenses.
Management highlighted the seasonality of the Consumer segment, noting that TurboTax and ProTax revenue is concentrated in the November through April period. The company expects this seasonal pattern to continue. No specific forward guidance was provided in the MD&A section. Strategic priorities include delivering done-for-you experiences through AI agents, accelerating money benefits for customers, and fueling success for mid-market businesses. The company continues to invest in product development, marketing, and sales capabilities to drive growth.
Operating cash flow of $2,207M significantly exceeded net income of $1,139M, indicating strong cash generation quality. The primary non-cash adjustments were share-based compensation ($1,064M), amortization of intangibles ($330M), and depreciation ($88M). Working capital was a net use of $623M, driven by a $645M increase in accounts receivable and a $165M decrease in accrued compensation, partially offset by a $119M increase in deferred revenue and a $134M increase in other liabilities.
Capital expenditures (capex) were $84M, representing a modest 3.8% of operating cash flow, reflecting low capital intensity. Free cash flow (not explicitly stated) would approximate $2,123M (CFO minus capex). Capital returns were substantial: $1,787M in share repurchases and $682M in dividends, totaling $2,469M, which exceeded estimated free cash flow, indicating reliance on financing activities or cash reserves.
Investing activities provided $498M, largely due to net maturities of corporate and customer fund investments ($1,641M maturities vs. $115M purchases) and net principal repayments on notes receivable ($1,812M) exceeding originations ($2,885M). Financing activities used $5,409M, primarily from a $2,756M net change in funds receivable/payable and $1,787M in treasury stock purchases.
Anomalies: The large net change in funds receivable and funds payable ($2,756M use) is a significant financing outflow, likely related to customer fund activities. The provision for credit losses ($105M) and originations of notes receivable ($2,885M) highlight the company's lending activities within its platform.