Intuit: The Fintech Giant Powering Small Businesses
A Deep Dive into Intuit's Business Model, Growth Strategy, and Valuation
Did you know that Intuit's QuickBooks helps manage the finances of over 7 million small businesses? Or that TurboTax handles nearly 30% of all U.S. tax returns? Intuit has become an indispensable backbone of small businesses in the American economy.
This deep dive explores how Intuit, with its iconic brands like QuickBooks, TurboTax, Credit Karma, and Mailchimp, has evolved into a fintech powerhouse. We'll analyze its growth, dissect its business model, and assess whether its stock price offers an attractive investment today.
Without further ado, let’s dive in.
Contents:
Key Facts
Business Overview
Management
Industry
Financial Analysis
Competitive Advantages, Opportunities and Risks
Valuation
Conclusion
1. Key Facts
Description: Intuit is a financial and marketing software company operating under four brands; QuickBooks, TurboTax, Credit Karma and Mailchimp. The Company serves mostly small and mid-size entities (SMEs), self-employed individuals and consumers. Its services include among others, accounting software, payroll processing, merchant payment processing, tax preparation, provision of financing, marketing automation tools, and financial marketplace for consumers.
Key Financials: From FY15 to trailing twelve months (TTM) Q2’25, Intuit achieved a revenue Compound Annual Growth Rate (CAGR) of 16%, reaching TTM revenue of $17.2 billion while its operating income increased at a CAGR of 17.4% to $4.1 billion (23.6% operating margin). Intuit has debt and lease liabilities of $6.9 billion compared to cash and short-term investments of $2.5 billion.
Price & Market Cap (as of 24 April 2025): Its market cap is $172 billion with a 52-week low of $532 and a 52-week high of $715, whereas it currently trades at $615.
Valuation: It trades at a LTM EV/EBITDA of 36x (5 Year average of 40.0x) and a LTM EV/Sales of 10.3x (5 Year average of 11.7x).
Through its brands Intuit serves approximately 100 million people. Intuit was incorporated in 1984 and became public in 1993. Since its IPO it compounded returns at 19% CAGR, becoming a 260x bagger since. As noted below, most of the exponential growth of Intuit’s returns were beyond 2015, which is the time the Company started the migration to the cloud and solely offering subscription-based services.
Source: Koyfin (affiliate link with a 20% discount for StockOpine readers)
In fact, the Company’s revenue from FY2005 to FY2015 grew at a CAGR of 7.7% while from FY15 to TTM it grew at a CAGR of 16%. Notably, over the last 20 years Intuit had only one down year and that was in 2015 where revenues declined by 1% and operating margin declined from 31% to 21% as revenues were impacted by the transition of its Desktop services from one-time license sales to subscription-based.
1. Business Overview
Intuit's core strategy revolves around creating a powerful ecosystem of interconnected financial tools for consumers and small businesses. This involves:
Platform Approach: Integrating its key products (QuickBooks, TurboTax, Credit Karma, Mailchimp) to provide a seamless user experience and cross-selling opportunities.
AI-Driven Innovation: Leveraging AI to automate tasks, provide personalized insights, and enhance the value proposition of its products.
Expanding the Ecosystem: Adding new services (e.g., payments, payroll, lending) to increase customer lifetime value. This strategy aims to not only acquire new customers but also to deepen relationships with existing ones, ultimately driving sustainable long-term growth.
Lets now delve into Intuit’s key products.
a. QuickBooks: The Engine of Intuit's Growth
QuickBooks is the core product of Intuit. Initially launched as an accounting software, it has since evolved into a comprehensive platform providing a suite of financial and management services tailored for SMEs. In fact, QuickBooks is the most popular accounting solution for SMEs in the U.S. and is recognised as a leader in the space by G2 Grid Scoring.
Source: G2.com
Intuit's strategy involves onboarding customers through its online accounting software and subsequently upselling additional services such as payroll, payments, and financing. The beauty of the attached services such as merchant payments and payroll processing, is that as Intuit’s customers become bigger, Intuit earns more fees from those services, with limited incremental cost (other than direct intercharge and processing fees).
Overall, the QuickBooks ecosystem subscriptions and its attached services (payments, payroll, etc) is estimated to be around 50% of Intuit’s total revenue growing in the range of 20% per annum.
QuickBooks Accounting
QuickBooks Accounting is the accounting software. Intuit sells QuickBooks Accounting subscriptions at multiple-tier plans according to customer needs. Within QuickBooks Online (QBO), Intuit’s cloud-based solution, Simple Start, Essential and Plus tiers are more suitable to self-employed and small businesses while the Advanced tier and the Intuit Enterprise Suite are more suitable to mid-sized entities.
Source: Intuit
Post-2015 cloud migration, QuickBooks Online experienced significant growth. By 2019, QBO had approximately 4.5 million paid subscribers, up from around 1 million in 2015. As of FY24, Intuit reported that its Online Ecosystem customers grew by 6% to reach 8.3 million. Assuming Mailchimp accounts for about 1 million subscribers and standalone services (payroll/time tracking) remain stable at 0.3 million, we estimate that QBO subscribers reached approximately 7 million in FY24, marking a 7% year-over-year growth and a CAGR of 9% since 2019.
QuickBooks Payments
QuickBooks Payments offers merchant services that are tightly integrated into the QuickBooks ecosystem. This integration streamlines reconciliations and collections for users. Intuit earns processing fees, typically around 3% for card payments. As customers scale, QuickBooks Payments scales with them. In FY24, QuickBooks Online Payments processed $124 billion in total payment volume compared to $104 billion in FY23, growing at 20% year-over-year in FY24 and 25% in FY23. In Q2’25, payment volume growth stood at 18% year-over-year. Merchant services along capital and checking accounts are part of Intuit’s “Money” Portfolio which reached revenue of $1B in FY24, growing revenue 36% year-over-year.
QuickBooks Payroll
QuickBooks Online Payroll helps companies process employee payroll and automate tax payments. It's available both as an integrated solution with QBO and as a standalone product. According to Intuit’s 2024 Investor Day, 18 million U.S. workers are paid through QuickBooks Payroll annually—significantly higher than Paychex (payroll solution for SMEs in US), which processes payroll for around 12 million employees.
In FY24, Intuit’s Payroll reached $1.1 billion in revenue, growing 23% year-over-year while total online payment volume growth in payroll was 18% in Q2. Intuit estimates a $23 billion global addressable market for its workforce solutions which includes payroll and time tracking for employees.
QuickBooks Capital
QuickBooks Capital provides small business loans by leveraging the financial data already available within customers’ QuickBooks accounts. Businesses can apply for term loans directly through Intuit or gain access to funding via third-party lending partners. In addition, the QuickBooks Line of Credit offers pre-approved, flexible borrowing up to a set limit, giving businesses added financial agility.
In FY24, QuickBooks Capital facilitated $2.4 billion in loans, marking a 28% year-over-year increase. Intuit holds a sizable portion of these loans on its balance sheet—originated both directly and through loan purchases from partners. As of fiscal year-end, net notes receivable for term loans stood at $912 million, up 20% YoY. This balance rose to $1.2 billion by Q2 FY25, up 31.6%, and now accounts for approximately 15% of Intuit’s tangible assets.
It’s important to note that these are unsecured loans which are exposing Intuit to potential credit losses, in the event of a downturn. This risk is heightened by current trade policies, where tariffs fuel recession concerns. Small businesses which are Intuit’s core lending base, are typically more vulnerable than large-sized enterprises during economic stress, making this segment particularly exposed.
Intuit Enterprise suite and QuickBooks Advanced
Launched in September 2024, Intuit Enterprise suite (IES) targets businesses with over $3 million in revenue or up to several hundred employees—an upmarket push toward the mid-market. IES is part of QuickBooks Online Ecosystem and it is offered on a subscription basis. Initial contracts have an ARPC (Average Revenue Per Customer) of ~$20K, significantly higher than the other QBO tiers. As IES is more suitable for complex workflows and is catered to mid-size entities which have lower failure rates than small entities, IES subscribers also have higher retention, boasting an 88% renewal rate compared to 82% for the overall QuickBooks Online ecosystem and 84% for Quickbooks Advanced.
Though early, this offering shows strong momentum. In fact January 2025 contract signings were 2x those of November 2024 and win rates for businesses with $10M+ revenue are 2x higher than smaller businesses. And Intuit, plans to push for more growth by hiring 200 salespeople to push the products.
Intuit estimates the larger and mid-market businesses represent a $89 billion TAM and wants to penetrate this market through its QBO Advanced and Intuit Enterprise Suite. In fact, in Q2’25, QBO Advanced and IES had 40%+ revenue growth, suggesting strong momentum in the company's efforts to serve mid-market customers.
“And that's about $100 billion in TAM, and that's where QBO Advanced, Intuit Enterprise Suite and all the services truly as a platform come in. We believe mid-market 1 day will be bigger than the entire business group. That's why we started talking about the growth rate of mid-market separately because it's an area where we're getting great traction. It's an area where we have actually more confidence today than even 5 years ago when we declared disrupting mid-market, given our expansion of our innovation on the platform but also our go-to-market. And we're not going to stop at a couple of hundred million in revenue. We believe we have so much more room. And we just have so much more confidence sitting here today than even last fall because we're in market with Intuit Enterprise Suite, and we can see how we're winning on experienced total cost of ownership and price” Sasan Goodarzi
The growth opportunity doesn’t just lie in acquiring new customers but it also comes from Intuit’s existing installed base. The company estimates that 800,000 current QuickBooks customers qualify for an upgrade to either QuickBooks Advanced or IES. Given that QuickBooks Advanced generates five times the ARPC compared to the standard QBO offering and IES delivers even higher ARPC—this presents a meaningful opportunity to drive revenue growth through customer upgrades.