Intuit's August Pivot: Can Usage-Based Pricing Rekindle Investor Confidence After 49% Rout?

Intuit posts record profit but shares crash 20% as it shifts to consumption-based AI pricing, cuts 17% of jobs. Analysts divided; consensus price target implies near-doubling.

The numbers tell a story of operational strength that borders on the remarkable. Intuit delivered a record net profit of $3.06 billion in its third fiscal quarter, adjusted earnings per share of $12.80 topped the consensus estimate of $12.48, and revenue climbed 10% to $8.56 billion. Management raised full-year guidance, calling for revenue between $21.34 billion and $21.37 billion and adjusted earnings of $23.80 to $23.85 per share.

Yet none of that prevented the stock from crashing 20% in a single session, with turnover surging to 11 million shares — more than double the daily average. At €275.00, the shares have now shed 61% from their 52-week peak and sit just above the year's low of €264.40. The market is clearly looking past the current quarter and fixating on what the company is doing to its business model.

The catalyst for the sell-off is a radical strategic overhaul that kicks in during August. Intuit is abandoning traditional flat-rate subscriptions in favor of a consumption-based pricing model for its AI-powered services. "We will implement price adjustments in the upper portfolio range that reflect the increased customer value," management explained on the earnings call. The company is already running AI agents through more than 50 million transactions per week, and the new pricing aims to capture more of that value directly. Whether customers accept the shift will be tested almost immediately.

To fund this transformation, Intuit is slashing 17% of its workforce — about 3,000 full-time positions — and shuttering its offices in Reno and Woodland Hills. Product managers and designers are disproportionately affected as the company flattens its management layers. The restructuring will cost $300 million to $340 million, most of it in the current quarter. U.S. employees will be let go on July 31, receiving 16 weeks of base salary plus two weeks for each year of service.

Meanwhile, the core business segments continue to fire on all cylinders. Credit Karma posted a 15% revenue gain to $631 million, powered by personal loans, auto insurance and mortgages. QuickBooks Online Accounting expanded 22%, and the higher-end QuickBooks Online Advanced and Intuit Enterprise Suite surged 38%. Global Business Solutions revenue rose 15% to $3.3 billion, with the online ecosystem up 19%.

Analysts are sharply divided on how to value the stock after the rout. Twenty-four still rate it a buy, seven say hold, and a lone voice recommends selling. The consensus price target of €546 implies a near-doubling from current levels. Morgan Stanley's Keith Weiss maintains an "Overweight" rating and calls Intuit his top pick in large-cap software, with a target of €580. Freedom Capital, however, downgraded the stock from "Strong Buy" to "Hold" — a telling shift from the same firm that was bullish above €700.

Technically, the stock is severely oversold. The relative strength index sits at 30.8, a level that has historically preceded a bounce. Resistance on any recovery is likely at the 50-day moving average of €346 and the 200-day average of €477. But the near-term direction may hinge more on macro data than on company-specific news. This week brings the second estimate of first-quarter GDP, April income and spending figures, consumer confidence, durable goods orders and the Federal Reserve's preferred inflation gauge. Higher interest rate expectations would further pressure software valuations, while consumer trends feed directly into demand for Intuit's tax and credit products.

The company has also secured multi-year partnerships with Anthropic and OpenAI to embed their models into its tax and financial platforms. The next major milestone is the investor day on September 17, where management will have to demonstrate that the usage-based pricing model can indeed reverse the slide. Until then, the €264.40 52-week low remains the critical line of defense — and the market's patience is wearing thin.