Shares declined 6.5% following the earnings release, reflecting investor disappointment with notably slower new customer growth and a cautious outlook on accelerating market share, despite solid revenue and margin expansion.
- Full year revenue increased 14%, with operating margin expansion supporting 20% growth in GAAP and non-GAAP EPS.
- Big Bets (assisted tax, money, mid-market) grew 34% and accounted for 30% of total revenue, illustrating strength in these segments.
- Total online paying customers increased just 3% year-over-year, a deceleration of approximately 2 points from the prior year, highlighting challenges in new customer acquisition.
- Mid-market revenue grew 39%, driven mainly by upgrades and desktop migrations rather than new customer acquisition.
- Management flagged a deliberate strategic shift to accelerate new-to-franchise growth via QuickBooks Free and Lite, signaling prior execution shortfalls in customer acquisition.
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