Intuit Inc. (NasdaqGS: INTU) shares jumped Wednesday, lifting software and financial technology sector-related exchange traded funds after the financial software company topped expectations and provided positive guidance.
On Wednesday, the iShares Expanded Tech-Software Sector ETF (IGV) increased 2.9% and the Global X FinTech ETF (NasdaqGM: FINX) advanced 2.7%.
Meanwhile, Intuit shares rose 8.2%. INTU makes up 8.0% of FINX’s underlying portfolio and 6.2% of IGV.
Intuit Inc., the global technology platform known for software products like TurboTax, QuickBooks, Mint, Credit Karma, and Mailchimp revealed better-than-expected top- and bottom-line results in the third quarter as the addition of Mailchimp and growth in QuickBooks boosted revenue, according to the Dow Jones Newswire.
The results for the three months ended April 30 come despite economic pressures on the company’s millions of small business customers. The software maker generated a net income of $1.79 billion, or $6.28 per share, for the quarter ended April 30, compared to a net income of $1.46 billion, or $5.30 per share, in the same period year-over-year. Additionally, the adjusted earnings per share were $7.65, compared to analysts’ expectations of $7.54.
The company is also raising its fiscal 2022 guidance following its strong top- and bottom-line results.
“We are confident in our strategy and execution across the company as we become the global AI-driven expert platform powering the prosperity of consumers and small businesses,” Sasan Goodarzi, Intuit’s chief executive officer, said in a press release. “We had another strong quarter, and we are raising Intuit’s revenue and operating income guidance for fiscal year 2022.”
Intuit CEO Goodarzi told Barron’s that while consumers are certainly affected by rising inflation from higher gas and food prices, American consumers remain “really healthy.” The slower employment growth at larger companies is even helping some of Intuit’s target smaller customer base that have been struggling with staffing shortages for the past 18 months. Goodarzi also added that small businesses are engaged in a “flight to digitization” to better manage cash flows, which further benefits Intuit’s software services.
While there are lingering after effect concerns about inflation, Goodarzi believed that Intuit has a substantial recurring revenue business model. “The numbers gave us confidence to raise guidance,” Goodarzi said.
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