INTU 10-Q: Smart Summary

• Segment restructuring: Effective August 1, 2025, Intuit combined its Consumer, Credit Karma, and ProTax businesses into a single Consumer segment; certain Credit Karma selling and marketing, product development, and general and administrative expenses previously managed at the segment level are now included in other corporate expenses, and certain Global Business Solutions marketing, communications, and customer success functions were similarly moved to the platform level. As a result, for the three and six months ended January 31, 2025, expenses of $3M and $6M were reclassified from Global Business Solutions and $149M and $301M were reclassified from Consumer to other corporate expenses, respectively.
• Deferred revenue recognition: During the three and six months ended January 31, 2026, Intuit recognized revenue of $251M and $841M, respectively, that was included in deferred revenue at July 31, 2025; comparable figures for the three and six months ended January 31, 2025 were $194M and $718M from the July 31, 2024 balance. Performance obligations are generally satisfied within 12 months; the deferred revenue balance related to obligations to be satisfied after 12 months was $2M as of January 31, 2026 and $4M as of July 31, 2025.
• Concentration of credit risk: No single customer accounted for 10% or more of total net revenue in the three or six months ended January 31, 2026 or January 31, 2025, and no customer accounted for 10% or more of gross accounts receivable at January 31, 2026 or July 31, 2025.
• Seasonality: TurboTax and ProTax offerings within the Consumer segment are heavily concentrated in the November-through-April period, typically resulting in higher net revenues in the second and third fiscal quarters ending January 31 and April 30, respectively.

• Recurring fair value assets: Total assets measured at fair value on a recurring basis fell to $501M at January 31, 2026 from $3.6B at July 31, 2025, driven by a sharp decline in cash equivalents (primarily money market funds) from $1.8B to $318M and available-for-sale debt securities from $1.8B to $183M; available-for-sale securities at January 31, 2026 comprised corporate notes ($178M, Level 2) and U.S. agency securities ($5M, Level 2).
• Senior unsecured notes (Level 2 liability): At both January 31, 2026 and July 31, 2025, the total estimated fair value and carrying value of senior unsecured notes were each $5B.
• Level 3 notes receivable: Notes receivable held for sale were not material as of January 31, 2026 and the difference between amortized cost and fair value was not material; no notes receivable were held for sale at July 31, 2025. The difference between amortized cost and fair value of notes receivable held for investment was not material at either date.
• Non-marketable equity (Level 3, non-recurring): Net adjustments to long-term investments were $31M upward for the three months ended January 31, 2026 (vs. ($1M) for the prior-year quarter) and $58M upward for the six months ended January 31, 2026 (vs. ($43M) for the prior-year period); cumulative upward adjustments totaled $79M and cumulative downward adjustments totaled $27M through January 31, 2026, with carrying value rising to $127M at January 31, 2026 from $94M at July 31, 2025.

• Balance sheet totals: Total cash and cash equivalents, investments, and funds receivable and amounts held for customers declined from $11.6B fair value at July 31, 2025 to $7.4B at January 31, 2026, driven primarily by a drop in funds receivable and amounts held for customers ($7.1B to $4.4B) and a sharp reduction in investments ($1.7B to $33M).
• Available-for-sale debt securities: Total AFS securities fell from $1.8B (fair value) at July 31, 2025 to $183M at January 31, 2026, with the composition shifting away from U.S. agency securities ($1.3B to $5M) while corporate notes declined from $502M to $178M; gross unrealized gains/losses and realized gains/losses for the six months ended January 31, 2026 were not material, and no credit losses were identified as of January 31, 2026.
• Maturity profile: At January 31, 2026, $61M of AFS securities mature within one year, $70M (fair value) within two years, and $52M within three years, compared to $1.7B due within one year at July 31, 2025.
• Funds receivable and amounts held for customers: At January 31, 2026, this balance of $4.4B comprised $3.8B in restricted cash and restricted cash equivalents, $150M in restricted AFS debt securities, and $423M in funds receivable (excluded from fair value measurement); the comparable January 31, 2025 balance was $3.3B, consisting of $2.9B restricted cash and equivalents, $150M restricted AFS securities, and $277M funds receivable.

• Business loans held for investment: Intuit purchased $2.6B in principal balance of business loans from its originating bank partner during the six months ended January 31, 2026 (vs. $1.5B in the prior-year period); as of January 31, 2026, the net balance was $1.6B (vs. $1.5B as of July 31, 2025), net of an allowance for credit losses of $120M (vs. $100M as of July 31, 2025), with $255M in commitments to purchase additional loans originated on or prior to January 31, 2026.
• Consumer loans held for investment: Intuit purchased $252M in principal balance of consumer loans during the six months ended January 31, 2026 (vs. $317M in the prior-year period); the net balance was $197M as of January 31, 2026 (vs. $2M as of July 31, 2025), with $19M in purchase commitments outstanding.
• Allowance for credit losses — business loans: The allowance grew from $100M at the start of the fiscal year (July 31, 2025) to $120M at January 31, 2026, driven by $87M in provision for expected credit losses offset by $75M in charge-offs and $8M in recoveries for the six months ended January 31, 2026; the comparable prior-year ending balance was $84M on $53M provision, $36M charge-offs, and $5M recoveries.
• Notes receivable held for sale: As of January 31, 2026, the balance of notes receivable held for sale was $117M (no balance held as of July 31, 2025); total unpaid principal balance of business loans sold during the six months ended January 31, 2026 was $574M (vs. $237M in the prior-year period), with forward flow arrangements in place with expiration dates ranging from 2027 to 2029.

• Senior unsecured notes: The 2020 Notes (issued June 2020) had $1B in principal outstanding as of January 31, 2026, with proceeds at issuance of $2B net of $2M discount and $15M issuance costs; interest is payable semiannually on January 15 and July 15. The 2023 Notes (issued September 2023) had $4B in principal outstanding as of January 31, 2026, with proceeds at issuance of $4B net of $20M discount and $24M issuance costs; interest is payable semiannually on March 15 and September 15. Both series rank equally with all existing and future unsecured and unsubordinated indebtedness, are redeemable at any time subject to a make-whole premium, and were covenant-compliant as of January 31, 2026.
• Secured revolving credit facilities: At January 31, 2026, $500M was outstanding under the 2019 Secured Facility (weighted-average rate 5.03%; facility limit $500M, $300M committed; commitment term through August 31, 2027), $400M under the 2022 Secured Facility (weighted-average rate 4.78%; facility limit $500M, $400M committed; commitment term through April 30, 2027), and $300M under the 2024 Secured Facility (weighted-average rate 5.03%; facility limit $500M, all committed; commitment term through November 1, 2028); all three are non-recourse to Intuit Inc. and were covenant-compliant as of January 31, 2026.
• Unsecured credit facilities: On January 9, 2026, Intuit terminated its prior revolving credit agreement and entered into a new $2.2B unsecured revolving credit facility expiring January 9, 2031 (2026 Credit Facility), with no amounts outstanding at January 31, 2026; the facility includes a $500M swingline sublimit, a $250M letter-of-credit sublimit, and a financial covenant requiring total gross debt-to-EBITDA of no greater than 4.00 to 1.00. A separate $5.8B unsecured short-term revolving credit facility entered January 30, 2026 and maturing March 31, 2026 (to fund the TurboTax early tax refund offering) had no amounts drawn as of January 31, 2026 and was terminated effective February 26, 2026.
• Commercial paper: The program was temporarily increased to a maximum of $3.2B outstanding; no amounts were outstanding at January 31, 2026 or July 31, 2025, but as of February 26, 2026, $2.1B in commercial paper was outstanding, all scheduled to mature by March 5, 2026.

• Other current liabilities composition: Total other current liabilities rose to $810M at January 31, 2026 from $622M at July 31, 2025, driven by increases across most line items including executive deferred compensation plan liabilities ($296M vs. $248M), sales/property/and other taxes ($79M vs. $55M), reserve for returns, credits, and promotional discounts ($72M vs. $39M), and amounts due for share repurchases ($30M vs. $14M).
• Seasonality impact: Several other current liabilities balances — particularly reserves for returns, credits, and promotional discounts — are affected by the seasonality of Intuit's business.
• Other long-term obligations: Total other long-term obligations increased to $326M at January 31, 2026 from $308M at July 31, 2025, with income tax liabilities rising to $259M from $238M.
• Purchase obligations: No significant changes outside the ordinary course of business in unconditional purchase obligations during the six months ended January 31, 2026.

• Lease portfolio: Intuit holds noncancellable operating leases for office facilities with remaining terms of up to 16 years (including options reasonably certain of being exercised); subleases to third parties carry remaining terms of up to 5 years, one with a 3-year extension option.
• Lease cost: Total net lease cost was $38M for the three months ended January 31, 2026 (vs. $27M prior year) and $73M for the six months ended January 31, 2026 (vs. $58M prior year), comprising operating lease cost of $34M / $65M, variable lease cost of $6M / $12M, and sublease income of ($2M) / ($4M), respectively.
• Balance sheet: Operating lease right-of-use assets were $593M as of January 31, 2026 (vs. $541M at July 31, 2025); total operating lease liabilities were $728M ($82M current, $646M long-term) vs. $666M at July 31, 2025. Weighted-average remaining lease term was 7.7 years and weighted-average discount rate was 4.3% as of January 31, 2026.
• Future obligations and uncommenced leases: Total future minimum lease payments under noncancellable operating leases were $872M as of January 31, 2026 (present value $728M after $144M imputed interest), with noncancellable sublease proceeds of $19M through July 31, 2030 and $1M thereafter not included above; additionally, $41M in minimum lease payments relate to leases not yet commenced (expected to commence in fiscal years 2026 and 2027, with lease terms of five to 10 years).

• Effective tax rate (current periods): For both the three and six months ended January 31, 2026, the effective tax rate was approximately 20%; excluding discrete tax items primarily related to share-based compensation benefits, the adjusted rate was approximately 24% for both periods, versus the 21% federal statutory rate, with the difference driven by state income taxes and non-deductible share-based compensation, partially offset by the federal research and experimentation credit.
• Effective tax rate (prior-year periods): For the three and six months ended January 31, 2025, the effective tax rates were approximately 17% and 15%, respectively; excluding discrete items, both periods were also approximately 24% on the same driver mix.
• Excess tax benefits on share-based compensation: For the three and six months ended January 31, 2026, excess tax benefits recognized were $21M and $51M, respectively; for the three and six months ended January 31, 2025, these were $29M and $57M, respectively.
• OBBBA and unrecognized tax benefits: The One Big Beautiful Bill Act (OBBBA), enacted July 4, 2025, reinstates immediate expensing of domestic research and developmental expenditures effective in fiscal 2026 — not expected to materially impact the fiscal 2026 effective tax rate, but fiscal 2026 cash tax payments and related deferred tax asset positions are expected to decrease significantly compared to fiscal 2025; total unrecognized tax benefits at July 31, 2025 were $394M, with a favorable net income tax expense impact of $276M if recognized, and no material changes during the six months ended January 31, 2026.

• Share repurchases: During the six months ended January 31, 2026, Intuit repurchased 2.8 million shares for $1.8B, including $30M of repurchases that occurred in late January 2026 and settled in early February 2026; on August 19, 2025, the Board approved an additional $3.2B authorization, leaving $3.5B remaining at January 31, 2026.
• Dividends: During the six months ended January 31, 2026, declared quarterly cash dividends totaling $2.40 per share for a total of $684M; in February 2026, the Board declared a quarterly cash dividend of $1.20 per share payable on April 17, 2026 to stockholders of record at the close of business on April 9, 2026.
• Unrecognized compensation cost: At January 31, 2026, approximately $4B of unrecognized compensation cost remained related to non-vested RSUs and restricted stock with a weighted-average vesting period of 2.7 years, and approximately $115M related to non-vested stock options with a weighted-average vesting period of 2.8 years.
• RSU activity: RSU and restricted stock nonvested shares decreased from 9,573 thousand at July 31, 2025 to 7,611 thousand at January 31, 2026, with 398 thousand granted at a weighted-average grant date fair value of $646.22, 1,648 thousand vested at $534.25, and 712 thousand forfeited at $474.06; shares available for grant under Intuit's plans increased from 25,147 thousand to 27,630 thousand over the same period.

Legal Proceedings

• Intuit Free File Litigation (consolidated Sep 2019, dismissed May 2021): Putative class actions re free online tax prep programs consolidated in N.D. California, resolved on individual non-class basis for an amount that was not material, without admission of wrongdoing.
• Ontario (Canada) class action (filed Aug 25, 2022): Class action lawsuit filed in Ontario Superior Court of Justice related to free online tax preparation programs; status not further detailed.
• Individual arbitration demands (filed Oct 2019, settled Jan 31, 2023): All individual arbitration claims settled without admission of wrongdoing for an amount that was not material.
• FTC Actions (complaint Mar 29, 2022; final order Jan 19, 2024): FTC filed federal action and administrative complaint re Intuit marketing practices; ALJ ruled against Intuit Aug 29, 2023; FTC Commissioners affirmed and issued final order Mar 23, 2024 requiring certain marketing practices with no monetary penalties; Intuit's Fifth Circuit appeal pending.
• State attorneys general settlement (May 4, 2022, $141M): Settlement with 50 states, D.C., Los Angeles City Attorney, and Santa Clara County Counsel, admitting no wrongdoing; $141M paid to fund administrator in quarter ended January 31, 2023.

• Segment reorganization: Effective August 1, 2025, Intuit combined its Consumer, Credit Karma, and ProTax businesses into a single Consumer segment. Concurrently, certain marketing, communications, and customer success functions in Global Business Solutions were moved to the platform level, and certain data science and analytics teams were moved from the platform level to the segment level. Prior periods were recast; for the three and six months ended January 31, 2025, expenses of $3M and $6M from Global Business Solutions and $149M and $301M from Consumer were reclassified to other corporate expenses, respectively.
• Unallocated corporate items: Items excluded from segment results include share-based compensation, amortization of acquired technology, amortization of other acquired intangible assets, goodwill and intangible asset impairment charges, professional fees and transaction costs related to business combinations, restructuring charges, and unallocated corporate selling and marketing, general and administrative, and customer success expenses (including TurboTax Expert Assist, TurboTax Expert Full Service, and QuickBooks Live expert costs).
• International revenue: Total international net revenue was approximately 8% and 9% of consolidated net revenue for the three and six months ended January 31, 2026, respectively, and approximately 9% for each of the three and six months ended January 31, 2025.
• Assets: Except for goodwill and acquired intangible assets, total assets are not tracked or disclosed by reportable segment.

• Segments: Intuit operates 2 reportable segments — Global Business Solutions and Consumer — with Global Business Solutions representing 72% and Consumer representing 28% of total net revenue YTD Q2 Fiscal 2026.
• Global Business Solutions: Serves small and mid-market businesses and their accounting professionals via QuickBooks, Intuit Enterprise Suite (an AI-powered, multi-entity financial management solution for more complex businesses), and Mailchimp (marketing automation and CRM tools), plus payroll, time tracking, merchant payment processing, bill pay, checking accounts through an FDIC-member bank partner, and financing.
• Consumer segment: Encompasses TurboTax (do-it-yourself and assisted tax prep in the U.S. and Canada, including AI-enabled human expert assistance), consumer money products (early refund access, Credit Karma Money savings and checking accounts through an FDIC-member bank partner), Credit Karma (personalized recommendations for credit cards, home, auto, personal loans, and insurance; credit scores, monitoring, dispute, and building tools), and ProTax offerings (Lacerte, ProSeries, ProConnect Tax Online in the U.S.; ProFile and ProTax Online in Canada) serving professional accountants.

• AI-driven platform strategy: Intuit describes itself as having transformed from a tax and accounting platform to an AI-driven expert platform, with a strategy declared in 2019, combining proprietary data, AI capabilities, an ecosystem of applications, and a network of AI-enabled human experts to serve consumers, businesses, and accountants.
• AI agents and GenOS: The company launched AI agents providing customers a "virtual team" to automate workflows and deliver real-time insights, including agents in Intuit Enterprise Suite covering accounting, payments, finance, and project management; these are built on Intuit's proprietary Generative AI Operating System (GenOS), described as enabling rapid delivery of intelligent financial solutions.
• Three Big Bets: Intuit prioritizes three strategic focus areas: (1) done-for-you experiences via AI agents and AI-enabled human experts; (2) becoming an all-in-one platform to optimize cash flow and money management ("Accelerate Money Benefits"); and (3) serving mid-market businesses through QuickBooks Advanced, Intuit Enterprise Suite, and connected services as an all-in-one solution at lower total cost of ownership.
• Responsible AI commitment: The company states its platform is built with commitments to data privacy, security, and responsible AI governance, using "industry-leading technology and practices" and adherence to responsible AI principles.

• AI transformation: AI, including GenAI, predictive AI, and agentic AI, is transforming multiple industries, in particular financial technology, with disruptive start-ups, emerging ecosystems, and mega-platforms harnessing new technology to create personalized experiences, deliver data-driven insights, and increase speed of service.
• Competitive environment: These shifts are creating a more dynamic and highly competitive environment where customer expectations are shifting as more services become digitized and the array of choices continues to increase.

• Seasonal concentration: Within the Consumer segment, TurboTax and ProTax revenues are typically heavily concentrated in the period from November through April, resulting in higher net revenues in the second and third quarters ending January 31 and April 30, respectively.
• Forward outlook: Management expects this seasonality to continue to have a significant impact on quarterly financial results in the future.

• AI and innovation dependency: Growth strategy depends on ability to innovate and introduce emerging technologies, including AI and GenAI, to drive adoption and enter new markets, with significant resources being invested in product development, marketing, and sales capabilities.
• Talent and third-party relationships: Future success depends on attracting, retaining, and developing highly skilled employees in technical and leadership roles in a highly competitive talent environment, as well as maintaining and strengthening third-party business relationships.
• Platform security and fraud risk: As more online services are offered, risks associated with hosting, collection, use, and retention of personal customer information are increasing; fraudulent activities by malicious third parties are becoming increasingly sophisticated, including through use of AI, prompting continued investment in security measures and collaboration with state and federal governments on industry-wide anti-fraud efforts.
• Regulatory scrutiny: Operations are subject to numerous and expanding federal, state, local, and foreign laws and regulations across a broad range of subjects, with an increasingly heightened level of scrutiny in a rapidly-evolving regulatory environment.

• Key financial indicators: Management tracks revenue growth (company-wide and by reportable segment), operating income growth, earnings per share, and cash flow from operations as its most important financial indicators, supplemented by non-financial revenue drivers reported in segment discussions when material.
• Services mix: Total service revenue was $16.4B, or 87% of total revenue, in fiscal 2025, and management expects service revenue as a percentage of total revenue to grow over the long term.

• Revenue: Total revenue of $8.5B, up 18% from the same period of fiscal 2025; Global Business Solutions segment revenue of $6.2B, up 18%; Consumer segment revenue of $2.4B, up 17%.
• Profitability: Operating income of $1.4B (up 61%) and net income of $1.1B (up 71%) versus the same period of fiscal 2025; diluted net income per share of $4.06, up 72%.
• Liquidity: Cash, cash equivalents, and investments of $3.0B at period end.

• Revenue: Total net revenue for the second quarter of fiscal 2026 increased $688M, or 17%, compared with the same quarter of fiscal 2025; Global Business Solutions segment revenue increased 18% driven by Online Ecosystem revenue growth, while Consumer segment revenue increased 15% from strength in Credit Karma personal loan, credit card, and insurance verticals and TurboTax growth in assisted tax and consumer money offerings.
• Operating income: Operating income increased $262M, or 44%, compared with the same quarter of fiscal 2025, with higher revenue partially offset by increased expenses for outside services (including hosting, staffing, marketing, SaaS subscriptions and licenses) and share-based compensation.
• Net income and EPS: Net income increased $222M, or 47%, with diluted net income per share rising to $2.48 from $1.67 in the same quarter of fiscal 2025; the gain was aided by $31M in net gains on long-term investments in the current quarter versus $1M in net losses in the prior-year quarter, partially offset by higher income tax expense.

• Revenue growth: Total net revenue for the first six months of fiscal 2026 increased $1.3B, or 18%, compared with the same period of fiscal 2025; Global Business Solutions segment revenue increased 18% driven by Online Ecosystem revenue growth, while Consumer segment revenue increased 17% from strength in Credit Karma personal loan, credit card, and insurance verticals and TurboTax growth in assisted tax and consumer money offerings.
• Operating income: Operating income for the first six months of fiscal 2026 increased $525M, or 61%, compared with the same period of fiscal 2025, with revenue growth partially offset by higher expenses for outside services including hosting, staffing, marketing, share-based compensation, and SaaS subscriptions and licenses.
• Net income and EPS: Net income for the first six months of fiscal 2026 increased $471M, or 71%, compared with the same period of fiscal 2025, aided by $58M in net gains on long-term investments in the current period versus $43M in net losses in the prior-year period, partially offset by higher income tax expense; diluted net income per share increased to $4.06 from $2.36.

• Segment structure change: Effective August 1, 2025, Intuit combined its Consumer, Credit Karma, and ProTax businesses into a single Consumer segment; simultaneously, certain marketing, communications, and customer success functions in the Global Business Solutions segment were reorganized to be managed at the platform level, and certain data science and analytics teams moved from the platform level to the segment level.
• Recast of prior periods: As a result of these changes, for the three and six months ended January 31, 2025, expenses of $3M and $6M were reclassified from Global Business Solutions, and $149M and $301M were reclassified from Consumer, to other corporate expenses to conform to current presentation.
• Unallocated corporate costs: Unallocated corporate items — which include corporate selling and marketing, G&A, customer success (TurboTax Expert Assist, TurboTax Expert Full Service, QuickBooks Live), share-based compensation, amortization of acquired intangibles, impairment charges, and restructuring charges — totaled $4.8B and $4.4B for the six months ended January 31, 2026 and January 31, 2025, respectively, with the increase driven primarily by higher research and development expense, cost of service revenue, and selling and marketing expense.
• International revenue: Total international net revenue was approximately 8% and 9% of consolidated net revenue for the three and six months ended January 31, 2026, respectively, compared to approximately 9% for each of the three and six months ended January 31, 2025.

• Revenue composition: Global Business Solutions segment revenue is split between an Online Ecosystem (QuickBooks Online Accounting, QuickBooks Live, workforce solutions including QuickBooks Online Payroll and QuickBooks Time, money offerings, Mailchimp, and financing) and a Desktop Ecosystem (QuickBooks Desktop software subscriptions, desktop workforce solutions, money offerings for desktop users, and financial supplies); service revenue is primarily derived from Online Ecosystem revenue and subscription-related services, while product and other revenue is primarily derived from software license delivery, version protection updates, and payroll software updates within the Desktop Ecosystem.
• Segment growth: Total segment revenue rose $493M, or 18%, in Q2FY26 and $940M, or 18%, in the first six months of fiscal 2026 versus the same periods of fiscal 2025, driven primarily by growth in Online Ecosystem revenue.
• Online vs. Desktop split: Online Ecosystem revenue grew 21% to $2.5B in Q2FY26 (YTD: 21% to $4.8B), with QuickBooks Online Accounting up 24% to $1.2B and Online Services up 18% to $1.2B; Desktop Ecosystem grew 10% to $697M in Q2FY26 (YTD: 8% to $1.3B).
• Segment operating income: Segment operating income was $2.4B in Q2FY26 (17% increase vs. Q2FY25) and $4.7B YTD (17% increase), with operating margin at 76% of related revenue in Q2FY26 versus 77% in Q2FY25, and 77% YTD versus 78% in the prior-year period.

• Q2 fiscal 2026 Online Ecosystem revenue: Revenue increased $429M, or 21%, in the second quarter of fiscal 2026 compared with the same period of fiscal 2025, with QuickBooks Online Accounting up $240M (24%) driven by higher effective prices, customer growth, and mix-shift, and Online Services up $189M (18%) driven by money offerings (+$115M) and payroll offerings (+$82M).
• Q2 money revenue detail: The $115M increase in money revenue comprised a $64M increase in payments revenue (from payments customer growth, higher total payment volume per customer, and higher effective payments prices) and a $51M increase from QuickBooks Capital.
• First six months fiscal 2026 Online Ecosystem revenue: Revenue increased $837M, or 21%, in the first six months of fiscal 2026 compared with the same period of fiscal 2025, with QuickBooks Online Accounting up $481M (24%) and Online Services up $356M (18%) driven by money offerings (+$220M) and payroll offerings (+$149M).
• Six-month money revenue detail: The $220M increase in money revenue comprised a $122M increase in payments revenue (from payments customer growth, higher total payment volume per customer, and higher effective payments prices) and a $98M increase from QuickBooks Capital; online payroll growth in both periods was driven by mix-shift, customer growth, and higher effective prices.

• Desktop Ecosystem revenue: Increased $64M, or 10%, in the second quarter of fiscal 2026 and $103M, or 8%, in the first six months of fiscal 2026 compared with the same periods of fiscal 2025, driven by higher effective prices.
• Global Business Solutions segment operating income: Increased $351M, or 17%, in Q2 FY2026 and $683M, or 17%, in the first six months of fiscal 2026 versus the same prior-year periods, with revenue gains partially offset by increases in QuickBooks Capital cost of revenue ($32M Q2 / $55M YTD due to increased loan volume), online payments cost of revenue ($26M Q2 / $36M YTD due to increased payments volume), marketing expenses ($23M Q2 / $44M YTD), staffing expenses ($20M Q2 / $44M YTD), and outside services expenses including hosting ($13M Q2 / $29M YTD).
• Segment reorganization: Effective August 1, 2025, certain marketing, communications, and customer success functions were moved from the Global Business Solutions segment to the platform level, and certain data science and analytics teams were moved to the segment level; prior periods were recast, reclassifying $3M (Q2) and $6M (YTD) from Global Business Solutions to other corporate expenses.

• Cost of service revenue: Includes staffing costs for ongoing production support, customer support, and tax and bookkeeping experts supporting TurboTax Expert Assist, TurboTax Expert Full Service, and QuickBooks Live offerings, as well as costs for data processing and storage from cloud providers and costs related to credit score providers; as a % of service revenue, was relatively consistent in both Q2FY26 and year-to-date versus the same periods of fiscal 2025.
• Cost of product and other revenue: Includes direct costs of manufacturing and shipping or electronically downloading desktop software and financial supplies products; as a % of product and other revenue, was consistent in both Q2FY26 and year-to-date versus the same periods of fiscal 2025; costs of product revenue are expensed as incurred for delivered software with no deferral even when product revenue is deferred.
• Amortization of acquired technology: Represents amortization of developed technologies obtained through acquisitions over their useful lives; increased from $37M in Q2FY25 to $44M in Q2FY26, and from $74M year-to-date in fiscal 2025 to $88M year-to-date in fiscal 2026.

• Operating leverage: Total operating expenses as a % of total net revenue improved to 59% in Q2FY26 and 61% in YTDQ2FY26, down from 61% and 64% in the respective prior-year periods, indicating modest operating leverage across the expense base.
• Restructuring: Restructuring charges were $0 in Q2FY26 and YTDQ2FY26, compared to $4M and $13M in the prior-year periods, reflecting the wind-down of prior restructuring activity.

• Operating leverage: Total operating expenses as a % of total net revenue decreased in the second quarter of fiscal 2026 vs. the same period of fiscal 2025, as total net revenue grew $688M, or 17%, while total operating expenses rose $320M, or 13%.
• Expense drivers: The $320M increase in total operating expenses was driven by $117M in staffing expenses, $84M in marketing, $44M in outside services expenses (which includes hosting), and $39M in share-based compensation expenses.

• Operating leverage: Total operating expenses as a % of total net revenue decreased in the first six months of fiscal 2026 compared with the same period of fiscal 2025, as total net revenue grew $1.3B, or 18%, while total operating expenses grew only $599M, or 13%.
• Expense drivers: The $599M increase in total operating expenses was composed of $238M in staffing expenses, $95M in outside services expenses (including hosting), $85M in share-based compensation expenses, and $85M in marketing.

• Interest expense: Interest expense was $116M for the first six months of fiscal 2026, compared to $120M for the first six months of fiscal 2025, consisting entirely of interest on senior unsecured notes.

• Interest income: $35M in Q2FY26 vs. $34M in Q2FY25 (relatively consistent); year-to-date interest income declined from $76M to $73M due to lower average interest rates, partially offset by higher average investable balances.
• Long-term investment gains/losses: Drove the "Other" line's swing — net gains on long-term investments were $31M and $58M for the three and six months ended January 31, 2026, respectively, compared with net losses of $1M and $43M for the same periods of fiscal 2025.
• Executive deferred compensation: Net gains on plan assets of $8M in Q2FY26 (equal to Q2FY25) and $23M year-to-date vs. $12M in the prior-year period; per policy, offsetting amounts are recorded in operating expenses each period, making this line net-neutral to pre-tax income.

• Effective tax rate: The effective tax rate for both the three and six months ended January 31, 2026 was approximately 20%, compared to approximately 17% and 15% for the three and six months ended January 31, 2025, respectively; excluding discrete items primarily related to share-based compensation tax benefits, the adjusted rate was approximately 24% for all periods, with the difference from the 21% federal statutory rate driven by state income taxes and non-deductible share-based compensation, partially offset by the federal research and experimentation credit.
• Excess tax benefits: Excess tax benefits on share-based compensation recognized in the provision for income taxes were $21M and $51M for the three and six months ended January 31, 2026, respectively, versus $29M and $57M for the three and six months ended January 31, 2025, respectively.
• OBBBA — immediate expensing: The One Big Beautiful Bill Act, enacted July 4, 2025, reinstates immediate expensing of domestic research and developmental expenditures effective in fiscal 2026, which is expected to significantly reduce the company's deferred tax assets and income taxes payable for periods starting in fiscal 2026.
• Notice 2026-7 — Corporate AMT: On February 18, 2026, the U.S. Treasury and IRS issued Notice 2026-7 announcing intent to propose regulations on the Corporate Alternative Minimum Tax; the company is evaluating the impacts, which may further reduce deferred tax assets and income taxes payable in fiscal 2026, though the Notice is not expected to impact results of operations in fiscal 2026 or thereafter.

• Liquidity position: Cash, cash equivalents, and investments totaled $3B at January 31, 2026, down $1.6B (35%) from $4.6B at July 31, 2025, driven by cash used in financing activities and partially offset by cash from operations and investing activities; approximately 87% of those funds were located in the U.S. and none were restricted.
• Debt and working capital: Short-term debt rose to $749M (from $0), long-term debt declined $562M (9%) to $5.4B, and working capital fell $878M (23%) to $2.9B, with the current ratio moving to 1.3:1 from 1.4:1.
• Credit facilities: On January 9, 2026, Intuit replaced its prior credit agreement with a $2.2B unsecured revolving credit facility expiring January 9, 2031 (2026 Credit Facility); on January 30, 2026, it entered a $5.8B unsecured short-term revolving credit facility maturing March 31, 2026 to fund TurboTax early tax refund offerings — no amounts were drawn under either facility as of January 31, 2026; separately, $1.2B was outstanding under secured revolving credit facilities for small and mid-market business lending products.
• Sufficiency and capital return: Management believes available cash, investments, operating cash flows, credit facility capacity, and external financing access will be sufficient to meet operational, contractual, debt service, and capital expenditure needs for the next 12 months and the foreseeable future, with excess cash expected to be returned to stockholders via stock repurchases and cash dividends.

• Operating cash flow: Net cash provided by operating activities was $2.2B for the six months ended January 31, 2026, up $776M from $1.4B in the prior-year period.
• Investing cash flow: Investing activities generated $498M in the current period versus a use of $677M in the prior-year period, a $1.2B swing, driven by net sales and maturities of corporate and customer fund investments and sales of notes receivable, partially offset by purchases of notes receivable held for investment and other investing activity.
• Financing cash flow: Financing activities used $5.4B, $2.9B more than the $2.5B used in the prior-year period, with major uses including repurchases of common stock, payment of cash dividends and dividend rights, and payments for employee taxes withheld upon vesting of restricted stock units.
• Net decrease in cash: Cash, cash equivalents, restricted cash, and restricted cash equivalents decreased by $2.7B in the current period versus a decrease of $1.8B in the prior-year period, a $941M larger net outflow.

• Share repurchase authorization: During the first six months of fiscal 2026, the company repurchased 2.8 million shares of common stock; on August 19, 2025, the Board approved an increase of up to an additional $3.2B under the existing program, leaving $3.5B remaining in repurchase authorization as of January 31, 2026.
• Dividends declared: During the six months ended January 31, 2026, the company declared quarterly cash dividends totaling $2.40 per share of outstanding common stock for a total of $684M; in February 2026, the Board declared a quarterly cash dividend of $1.20 per share payable on April 17, 2026 to stockholders of record at the close of business on April 9, 2026.

• 2020 Notes outstanding: Of the $2B issued in June 2020, $1B remains outstanding as of January 31, 2026, consisting of $500M of 1.350% notes due July 2027 and $500M of 1.650% notes due July 2030; interest is payable semiannually on January 15 and July 15, with maximum remaining interest commitment of $47M.
• 2023 Notes outstanding: The full $4B issued in September 2023 remains outstanding, comprising $750M of 5.250% notes due September 2026, $750M of 5.125% notes due September 2028, $1.3B of 5.200% notes due September 2033, and $1.3B of 5.500% notes due September 2053; interest is payable semiannually on March 15 and September 15, with maximum remaining interest commitment of $2.6B.
• Change of control / covenant compliance: The 2020 Notes require repurchase at 101% of outstanding principal plus accrued interest upon a qualifying change of control with credit rating downgrade; both the 2020 Notes and 2023 Notes restrict creation of certain liens and sale and leaseback transactions, and Intuit was compliant with all covenants governing both sets of notes as of January 31, 2026.

• 2026 Credit Facility: On January 9, 2026, the company terminated its prior amended and restated credit agreement (dated February 5, 2024) and entered into a new $2.2B unsecured revolving credit facility expiring January 9, 2031; commitments may be increased by up to $4B in the aggregate and the maturity may be extended by one year, subject to lender approval, with sublimits of $500M for swingline loans and $250M for letters of credit.
• Interest and fees: U.S. dollar borrowings accrue at either the alternate base rate plus 0.000%–0.125% or term SOFR plus 0.700%–1.125%; foreign currency borrowings accrue at the relevant currency benchmark plus 0.700%–1.125%; the facility fee ranges from 0.050% to 0.125% per annum, with actual margins and fees tied to the company's senior long-term debt credit ratings.
• Covenants and utilization: Both the 2026 Credit Facility and the 2026 Short-Term Credit Facility require a total gross debt-to-EBITDA ratio of not greater than 4.00 to 1.00 on a rolling twelve-month basis; as of January 31, 2026, the company was compliant with all covenants under both facilities, and no amounts were outstanding under either.
• 2026 Short-Term Credit Facility: On January 30, 2026, the company entered into a $5.8B unsecured short-term revolving credit facility maturing March 31, 2026 to fund a portion of its TurboTax early tax refund offering, bearing interest at term SOFR or daily simple SOFR plus 0.875% or the alternate base rate plus 0.000%, with unused commitment fees of 0.07% per annum; the facility was terminated effective February 26, 2026.

• 2019 Secured Facility: Facility limit is $500M ($300M committed, $200M uncommitted); advances accrue interest at adjusted daily simple SOFR plus 1.25%; unused committed balance fee ranges from 0.25% to 0.75%; commitment term runs through August 31, 2027, with a final maturity date of August 31, 2028; at January 31, 2026, $500M was outstanding at a weighted-average interest rate of 5.03%, and Intuit was compliant with all covenants.
• 2022 Secured Facility: Facility limit is $500M ($400M committed, $100M uncommitted); advances accrue interest at term SOFR plus 1.1%; unused committed balance fee ranges from 0.2% to 0.4%; commitment term runs through April 30, 2027, with a final maturity date of May 1, 2028; at January 31, 2026, $400M was outstanding at a weighted-average interest rate of 4.78%, and Intuit was compliant with all covenants.
• 2024 Secured Facility: Facility limit is $500M, all committed; advances accrue interest at daily simple SOFR plus 1.15%; unused committed balance fee ranges from 0.2% to 0.4%; commitment term runs through November 1, 2028, with a final maturity date of November 1, 2029; at January 31, 2026, $300M was outstanding at a weighted-average interest rate of 5.03% (including the fee on the unused committed portion), and Intuit was compliant with all covenants.
• Structural features: All three facilities are non-recourse to Intuit Inc., each secured by cash and receivables of the respective subsidiary in excess of the amount outstanding as of January 31, 2026, and each includes financial covenants requiring the subsidiary to maintain specified financial ratios.

• Program size: In January 2026, the maximum amount of the commercial paper program was temporarily increased to $3.2B outstanding at any time, with maturities up to 397 days from the date of issuance, to support seasonal working capital needs.
• Outstanding balances: No amounts were outstanding under the program at January 31, 2026 or July 31, 2025; as of February 26, 2026, $2.1B in commercial paper was outstanding, all scheduled to mature by March 5, 2026.

• Foreign cash exposure: Of the $3B in cash, cash equivalents, and investments held as of January 31, 2026, approximately 13% was held by foreign subsidiaries, located primarily in India, Canada, Israel, and the United Kingdom.
• Repatriation tax position: The company does not expect to pay incremental U.S. taxes on repatriation; however, income tax expense has been recorded for Canada, India, and Israel withholding taxes on earnings not permanently reinvested, and withholding taxes would be payable upon any actual repatriation of foreign funds.