Hello, everyone, and welcome back. For those in the audience that don't know me, my name is Taylor McGinnis, and I head up the SMIDCAP application SaaS space here at UBS. And in this next session, we have Intuit, and more specifically the CEO, Sasan. So, Sasan, thanks so much for being here.
Thank you so much for having me.
Perfect. Before we get started, just to let anyone know, if you have a question, you can enter them into the app, and then I'll try to save some time at the end to address those. So with that, Sasan, should we kick it off?
Yes, let's do it.
Perfect. Lots and lots to talk about with Intuit. There's lots of exciting things going on, but I think most topical, at least as of late, amongst the investor conversations that we've had, is the OpenAI partnership, so could you talk a little bit more about the structure of that partnership? How do OpenAI and Intuit both benefit in this? Is it as simple as Intuit has a great top-of-funnel opportunity? OpenAI has this multi-year partnership where Intuit's investing in OpenAI. Maybe you can just talk through the key opportunities.
Sure, sure. Well, first of all, we're really excited about the partnership. And the premise of it is we want it to be where the eyeballs are. And so the essence of the relationship is such that OpenAI, they're an agnostic platform. They want to make sure that if a consumer or a business is in there asking questions about anything, whether it's fitness, medical, that they get an answer that's very objective. There are a few areas and a few categories where they have been looking for a very deep partnership based on what's important to their customers. We happen to be in that category. And in essence, anything to do with accounting, tax, bookkeeping, money. So if you're a consumer looking to build your credit score, you have questions around taxes, refund.
If you're a business that's looking to grow your business and manage your cash flow, they wanted a partnership where they can deliver very deep, personalized experiences versus what today are good answers, but they're generic. And that's where the premise of the partnership came in. And so the way it works is actually quite simple. If you are a customer and you are asking questions around financial management, any of the topics that I just mentioned, more than likely Intuit will show up. And the experience is with Intuit. The relationship is with Intuit. And so if you're asking questions about taxes, refund, what the consumer is going to see is Intuit TurboTax. And when they click on it, they're in the Intuit TurboTax app. And so because that's how we can deliver personalized experiences.
Because as you can imagine in the world that we live in, accuracy, security, privacy matters a lot. And so in essence, the experience and the relationship is with the Intuit app, whether it's Intuit QuickBooks, Mailchimp, Credit Karma, or TurboTax. And it's a huge opportunity for OpenAI because customers can remain in ChatGPT. But when it comes to things that they care deeply about, they can get personalized answers inclusive of human intelligence. And so our experts can show up right within ChatGPT, but the relationship is with the Intuit app. For us, it's a great partnership because it's a huge new customer growth opportunity because you have 800 million active weekly users in OpenAI. And it's a great opportunity for us to expand who we serve. And the principles for us was the customer relationship and the experience needs to be with us.
The data and models have to be protected. It has to be within our platform. And it's a big win-win for the company. So we're excited and stay tuned. We're going to be launching in the weeks and months to come. And it should be a great opportunity for consumers and businesses.
Perfect. And another big investor focus is what OpenAI and a lot of these model providers do next, right? So there's one concern that do these model providers start to create their own AI agents or AI solutions and start to push into the application layer? I think this partnership's very interesting. And it begs the question on, does OpenAI actually benefit more from partnering with the SaaS companies as opposed to going head-to-head potentially in the future? So I'd love to get your thoughts on that, number one. And then number two, maybe you could talk about the scope of the $100 million multi-year investment with OpenAI. Is that just for frontier models? Does that include other AI solutions? Any color, I think you could give there would be helpful.
I actually love the question because if I could, I'll just start with market structure. I mean, if you think about what is it that we do, we deal with people's most personal financial information, right? It's taxes, it's accounting, it's bookkeeping, it's money. And the market structure is such that people spend a lot of money on people helping them with those things. And so human intelligence matters a lot. And what we do isn't just about a few LLMs. It's actually about data, it's data services, it's protection, it's accuracy, it's trust. And it's bringing the human intelligence to the forefront for customers.
And I think that's why this partnership with OpenAI is so important and why it was also important to them is because they get to deliver something that requires accuracy and confidence right within ChatGPT with a brand that's extremely well-known and takes customer trust and accuracy and security very, very seriously. So that's why this is such a win-win. And as we more broadly think about what's possible with LLMs, what we do is far bigger than what an LLM can do because domain expertise, data, security, a lot of what I've mentioned matters a lot. With all of that said, we have invested heavily in our own Intuit financial large language models. It's part of our AI platform because domain expertise matters. And our LLMs have agency and authority to deliver against the experiences that I was just talking about.
And then we will, depending on the experience, use other LLMs. So we were big users of open source as an example. And with OpenAI, part of the partnership is continuing to invest more in their frontier models as one of several external LLMs that we'll use. And we're excited about what's possible because we get to team with them closely. We get to co-create together. And I think it's an opportunity for us to just be where the eyeballs are and serve the prosperity of consumers and businesses. So we're excited about it.
Perfect. And let's dive a bit deeper into Intuit's own AI ambitions and goals it has set. So Intuit has its own AI agents. So can you talk a little bit about how adoption is trending, maybe compared to your initial expectations? And if you were to guess, when do you think we get widespread production use, adoption of these AI agents?
Yeah. I love the questions that you're asking. For us, AI agents is just one element. And I'll come back to your question. The whole platform that we have built is based on data, AI, and HI. And for us, human intelligence matters a lot because if you think about consumers and businesses, they spend a lot of money on experts to help them with taxes, to help them with accounting, to help them with advice, to help them with bookkeeping, to help them with money management. I would make it sort of a similar parallel to technology as an enhancer for nurses and doctors as technology as an enhancer for financial management. And so for us, the use of AI and HI is very important.
So today, we have over a $2 billion business that's all HI and AI growing at almost 50%, which is TurboTax Live and QuickBooks Live. That is a huge sort of beachhead for us in terms of an example of how AI and HI is working. In terms of AI agents more particularly and what we launched four months ago, we have over 2.8 million customers that are using our virtual team of AI agents. So we launched, as you know, a payments AI agent, accounting AI agent. And customers don't care about AI agents. What they care about is do the work for me, get me paid faster, make sure my books are right, make sure my accounting is right. And the way we've launched these AI agents is they're connected to human agents, a real live expert that can help.
And so we have 2.8 million customers using it in four months. Our repeat usage is over 80% in the last four months. And the two most popular AI agents are our payments AI agent and it's our accounting AI agent. Our AI accounting agent is saving customers over 12 hours a month. That's dramatic because it has a real profound impact on profitability and growth. And it can hand off a thing that it's working on to a human expert, which is important because then the customer has confidence. We get to monetize it. The payments AI agent, those customers that are using it are getting paid five days early. So these are, if you think about it, these are tangible impact.
The more time passes, the more we continue to optimize these experiences. We're going to get to a world, which is our vision, and that is done-for-you experiences. We are helping you from lead to cash, manage your growth, manage your cash flow, manage your experiences. We believe that technology will always have a dead end, which is where our human intelligence comes in. We have over 13,000 experts that sit on the platform, on the AI platform, and are there to serve customers. The adoption of both of those matters a lot.
Perfect. So the early usage trends sound really constructive and really positive. In terms of how that's translating to the P&L, any early indication that you're seeing this translate into additional upsell opportunities, direct monetization opportunities, increased retention? How, I guess, are you seeing that evolve? Not to throw too many questions at you, but you also introduced Intuit Accountant Suite. So maybe you could just talk a little bit about that product and also the monetization opportunity there.
I would say everything on the platform that's been fueled by data and AI has created several huge growth vectors for us that we're experiencing today. And I think over time, it will just accelerate. One is mid-market. Our mid-market business, which is all built, it's a native AI-driven ERP platform serving larger businesses, is growing at 40%. That's a new growth vector for Intuit. The second is what we talked about earlier, which is disrupting the assisted segment. That's a $2 billion business growing 47%. And our penetration into that addressable market is like a couple of percent. That's a huge growth vector. And the third one, which is actually fueled by a lot of our AI investments, is our money portfolio, which is payments, bill pay, line of credit is growing at 36%. And it's $1.5 billion.
So you start adding these new growth vectors, multiple billion-dollar businesses growing at 40%-50%. All of it is fueled by data and AI. And the way we think about it is not just our customers adopting AI agents because customers don't care about AI agents. What they care about is grow my top line, grow my profitability, get the work done for me. And that's what's really fueling our growth. And I just think we're sort of at the beginning of the next growth curve.
Yeah. So let's talk about that next growth curve because another top investor question that we get is Intuit put out ambitions to potentially get to 20% growth by 2030. So how do you get there? So maybe you could just unpack some of the growth drivers that you're most excited about.
Yeah. It'll come down to three things for us and executing on all of those three things in a sustained fashion. In no particular order, it's mid-market. Last year and last quarter, mid-market grew 40%, and we need to sustain that. That's almost a third of our total addressable market. Our penetration is a couple of percent. We win on experience, price, and total cost of ownership. So we have a, and if you go out and talk to customers that are using our Intuit Enterprise platform, I think you'll hear their excitement and the impact that it's having to their bottom line. Mid-market is a massive opportunity and continuing to grow that. The second is assisted tax. We need to sustain the growth that we're experiencing.
And then third is the combination of all of our AI and HI innovation drives adoption of our services like money, like payroll, as an example. And those three things, sustaining that at the level that it's growing today, we grew last fiscal year, we grew 16%. And anything is possible.
Perfect. So focusing in on the Global Business Solution Group, so revenue growth last quarter was 18%, really strong, and I think stronger than what some of the investor expectations out there were. So part of that strength came from the accounting side. There was nice acceleration there. I think some of that was due to price timing. When you look at some of the other businesses and online services, there was a little bit of a decel, Mailchimp. It sounds like it's still on this ramp to recovery. So when we think about durability of that business going forward over the next couple of quarters, how would you characterize the potential for that? And then also too, what could be some of the drivers that could be catalysts, right, for growth durability as we think about the remainder of the year?
Yeah. Just to build on the essence of your question, if you break down our overall online growth just from last quarter, it grew 20%. Accounting grew 25%, and services grew 17%. And if you exclude Mailchimp, it actually grew 26%. Really, the big drivers of it is one is as we bring on larger mid-market customers, there is a lag from when it shows up in accounting revenue and then when it shows up in services because first they come onto our financial management platform, which shows up in accounting revenue. But then over time, we're able to get them to use all of our money services and our payroll services. So really, the biggest driver of both adoption of money and payroll is all the work that we've been doing around AI and HI.
And specifically, what I mean by that is the more we do the work for customers, the more we digitize and pay their bills for them with their permission, the more we help them understand they have access to line of credit, the more we help them with payroll at the point of need and do it for them, the more they adopt our services, which is what we're starting to see more so than even before. And HI. So QuickBooks Live is how it shows up when we report. That was up 61% in terms of customer growth. Anytime there's a human attached to our platform, the use of our services goes up. And so those are the largest drivers of just sustainability of the growth.
And as I said earlier, when we really hum on all three cylinders, mid-market, adoption of AI and HI, and of course, separately assisted tax, that's what's going to sustain the growth.
Yeah. So knowing that mid-market is crucial for this strategy, let's talk a little bit about IES. So in the customer feedback that we've picked up initially, I know you and I were talking about this earlier. It's been pretty constructive. And there's obviously a big opportunity for Intuit to be the consolidator across payments, money, and additional adjacencies. So are we at the point where IES is prime time, ready to go? Is it possible that we could see momentum pick up even more than what we've seen to date? And are there any additional steps that Intuit needs to take to further unlock this growth opportunity?
Yeah. So IES, just as a reminder, we launched it a year ago, September. So we're sort of 14 months in. And I love the traction that it's getting, particularly because of the word of mouth from customers. And you all did a great study talking to customers. So what you said is more important than what I'm about to say because it's customer back. With all of that said, sort of 14 months in, we have an enormous opportunity to accelerate penetration of this $90 billion TAM because we now have proof that we win on experience, price, and total cost of ownership. Forrester did a study that our customers are seeing a 300% ROI over a three-year period, at least based on the first year on the platform. It's projected to be 300%. And it's driven by one third of it is revenue growth.
The other third is efficiency. The last third is they're just paying less. They're paying us more, but they're spending less because they're using less apps. And so the way we accelerate that to get to your question is three things: awareness, it's continued platform innovation, and our accountant partnerships. We're just starting with awareness. I mean, we were just at the Faith Conference in New York. We're starting to get out to conferences where the CFOs are to get the word out. That's just an example. The second is our platform innovation is now industry-specific because if you're wealth management, if you're real estate, if you're a construction company, you want to see yourself in the platform. You want to be able to see KPIs, dashboards, segment reporting that's specific to your industry. We're accelerating our launches in those areas.
And third is, as you know, we've been. I spent a lot of my time with large accountant firms, as does my team. And they're very important, the larger firms particularly, because they're PE-backed, most of them. They have pressure to grow. And we have an opportunity to digitize not only their practice, but help them digitize the businesses that they serve. And the partnerships that we're announcing with them are very important in the medium and long term because we have an opportunity to then take their 15 practices that they have, the businesses that they serve, and digitize all of them with something that is easy to use and very, very price competitive. So those are the three levers to accelerated growth. And I think momentum should only pick up as we look ahead.
Perfect. Moving to Mailchimp, that's been an area where growth has been a little slower more recently. You still have ambitions to accelerate that to double-digit growth exiting this year. I think when we talk with some investors, I think there was a little bit of confusion in terms of what has been some of the headwinds related to growth. It sounded like maybe it was more down-market. It sounds like the recovery, at least of the last earnings call, might be a little bit more driven up-market and some of the increased demand you guys are seeing there. So can you just unpack for us what has been some of the source of pressure that you've seen within that business? And what's going to be the unlock to getting to double-digit growth as we exit this year?
Yeah, for sure. First of all, I'll start with the obvious, which is the performance has been disappointing. And it's a drag on our growth. And we have every intention of changing that. With that said, it's actually really simple. The biggest issue in Mailchimp is customers that pay less than $200 a month. We're actually seeing great impact and growth with larger customers, but it's such a small part of the base that it doesn't yet show up in growth. But the singular issue is customers that pay less than $200 a month. And specifically, it's immediate access and speed to value.
And so a lot of the launches that we have that we just had in the last quarter that we have in the coming quarters is to go after, for instance, a real tangible benefit. If I'm a small business, I want to see the reporting and the segmentation and the data and the data analytics instantly when I get up and running within the first three to five days. So those are the very specific things that we're going after to reduce the attrition. If our attrition was at acceptable levels, this would be a double-digit growing business today. So that's what we're going after is customers that pay less than $200. And our expectation is that we'll see the growth ramp up sort of in the back half of the year, particularly in the fourth quarter.
Perfect. Appreciate all that clarity. That was really helpful. Let's talk TurboTax. So last year, TurboTax Live, the assisted category had a breakout year. I think the comment that you gave on the earnings call was, "You're the most bullish you've ever been on this upcoming tax season." So can you just unpack what's driving that optimism? And as you look at last year, the 40%-47% more specifically, year-over-year growth that you saw on Live, I think a big investor question that we get is, "How sustainable could that be going into this year? Do you have enough incremental opportunities to continue to lift growth?" So what are your thoughts there as well too?
Yeah. It's amazing. There's only a couple of things people remembered from our last earnings, well, this was one of them, and so I'm glad that landed, and it was very authentic. First of all, there's no silver bullet. This is an accumulation of all the work that we have done, and as I look at, we had a lot of momentum the last couple of weeks of tax season last year, so we're always at work for tax season. We never stop, and we scaled a number of big things at the end of last tax season, particularly in the assisted category and what we launched within Credit Karma, and we had a lot of momentum coming out of tax season.
So that coupled with all the innovation that we've put in place, messaging, positioning, packaging, and the innovation for the assisted segment, which we just tested in what we call our October peak, the volumes are not the same, but they're enough to really run water through the pipes, gives us a lot of confidence that we can sustain growth. And to answer your question, I think this will be a question, by the way, if we're on this same stage five years from now, you'll be asking the same question, which is, "How can you sustain that growth?" It's an important reminder that just in tax, people spend over $35 billion to have others do their taxes for them, both consumer and business. And we have a $2 billion business growing 47%. So we're just at the tip of the spear in terms of what's possible.
The penetration is still very low. And based on all the work that we've done, marketing, positioning, packaging, and the experience improvements, I think this is something we can sustain for some time to come.
Yeah. And so thinking about the DIY part of the business, how much of the assisted success that you saw last year was converting the DIY base into that assisted category? And the reason I ask is because I think it helps frame the opportunity, what you're chasing today, what that ultimately might evolve into to the extent that you could start to penetrate that assisted category more. So one, that being the first question. And then the second question is, as you think about Intuit's ability to maintain its share within the DIY base, any new initiatives this year that you think would be meaningful to that as well?
Yeah. It's a great question because it's the source behind our strategy to be one platform where you can do taxes yourself, we'll do it with you, or we'll do all of it for you. And all of that is integrated deeply into the Credit Karma platform where we have 43 million monthly active users. And that's important as a starting point because you have millions of customers in the past that loved TurboTax, but they would have a change in their life, and then they would leave to go to the assisted segment. And even within the assisted segment, there's more than 10 million churn where I may not like the experience you delivered last year if you're a mom-and-pop shop pro, and I may go somewhere else. And so now our platform takes advantage of all of that.
And so, to your question, our growth last year, it's an and. It came from not only customers that had a life change and wanted the confidence and the expertise that went to TurboTax Live, but also just brand new customers, new to the franchise that came from the assisted segment. And that's really our sweet spot. That's our formula, which is to be there for customers and grow with them as their life changes, where in the past we would lose those millions of customers. Now they can grow with us, and to be disruptive to the assisted segment that today is very manual, very time-consuming, not transparent in pricing. And now you can get it done virtually with a great experience. And I think that is what's going to sustain the growth moving forward.
To answer your question specifically about DIY, I think we're very well positioned to serve customers in DIY. One of the things that I think is a shock to many when I share it is the biggest consumers of expertise and expert help is Gen Z. And so the fact that we have made expert help available to DIY, and we can monetize how we give you early access to your refund and what to do with your refund is a monetizable event for us. And it gives us the ability to continue to maintain our 85% + share in DIY. So I feel like we're positioned really well for DIY. The big opportunity is assisted.
Perfect. You mentioned it briefly earlier, but can you comment on how Credit Karma ties into all of this and how Credit Karma continues to benefit from your efforts on the tax side? But then also too, zooming out more broadly, it sounds like there has been great execution on the Credit Karma side. We've seen that in the numbers. You've seen that in the share gains that you guys have talked about on the earnings call. It sounds like there's still runway left to go there. So maybe you can unpack that a little bit more too.
Yeah. I'll actually start with the zoom out, which is we bought Credit Karma ultimately to have a platform that consumers can engage year-round. And when it's tax time, their taxes are done for them or we'll do it for them. That was the whole purpose of Credit Karma. And so the reason Credit Karma is performing better is because of all the innovation that we've done, leveraging data, AI to deliver personalized experiences on an ongoing basis. And that's why when you look at Credit Karma performance, the majority of it is just very good execution by the team. With that said, TurboTax and integration of TurboTax into Credit Karma plays a very critical role. Last year, Credit Karma contributed about a point of growth in TurboTax. We would just expect that to grow over time. It's the whole reason we bought the business is deep integration.
Perfect, and as we wrap up 2025 and all investors in the audience are trying to think about 2026, I know Intuit gets great data on overall SMB health. I'm sure you're talking to customers constantly. So what's the vibe out there? How are customers thinking about spend going into next year relative to what we saw this past year?
As a reminder, we serve 100 million customers, right? 10 million of them are businesses, and the businesses that we serve, we're not concentrated in any particular industry. We serve a lot of different industries. That's important context before I answer the question. I would use the word stability. With businesses, profits are stable. Now, there are certain industries like lending and real estate that are lower profits, industries like manufacturing and insurance that are stronger profits, but overall, I would use the word stable, and consumers, listen, the job market is still strong, and credit balances are up, credit scores are down, but consumers are still spending. They're just very particular what they're spending on, so I would expect stability going into next year. At least it's what we see with our data.
Perfect. Okay. With that, we're out of time. So we'll leave it there. Thank you so much, Sasan. Let's give him a round of applause. Thanks, everyone, for listening in.
Thank you for having me.
Of course.