Will Intuit's stock-based compensation exceed 11% of revenue in Q2 FY2026?

FY2025 annual SBC was $1,968M on $18,831M revenue (10.4%). Quarterly SBC averages ~$492M if evenly distributed. Q1 FY2026 non-GAAP/GAAP EPS premium of 110% (vs 48% annual) suggests SBC is running at elevated levels. Q2 is the seasonally weakest revenue quarter (pre-tax season, GBSG-heavy), likely ~$4.0-4.2B. At ~$492M SBC against ~$4.1B revenue, the ratio would be ~12%, well above 11%. Active AI/ML hiring adds upward SBC pressure. The denominator effect from weak Q2 revenue structurally favors exceeding 11%.

The 10.4% annual figure blends strong and weak revenue quarters. Q2 (Nov-Jan) is Intuit's weakest, meaning the quarterly SBC-to-revenue ratio in Q2 was likely already above 11% in FY2025. Two offsetting factors: (1) Q1 may have been grant-heavy (annual refresh timing in tech), which could mean Q2 has lower absolute SBC; (2) but ongoing amortization of prior grants creates a floor on quarterly SBC. The 60bps gap from 10.4% to 11.0% is small enough that seasonal denominator effects alone likely push Q2 above threshold. Probability moderate-high but discounted for grant timing uncertainty.

Scenario modeling: Q2 FY2026 revenue likely ~$4.0-4.3B (seasonal trough with 12-13% growth guidance). FY2025 SBC of $1,968M implies ~$492M/quarter average. With AI/ML hiring expansion, FY2026 quarterly SBC may be $520-540M. At $530M/$4.1B = 12.9%, well above threshold. Even conservative case: $490M/$4.3B = 11.4%, still above 11%. The only path to NO requires either a meaningful drop in absolute SBC (unlikely given hiring) or a Q2 revenue blowout above $4.5B (possible but not base case). The structural seasonal effect strongly favors YES.

The math is fairly straightforward. Annual SBC of 10.4% blends the seasonally strong tax quarters (Q3/Q4 fiscal) with weak pre-tax quarters (Q1/Q2). Q2 is the revenue trough. Even flat SBC of ~$492M against a seasonally weak Q2 revenue of ~$4.1B yields ~12%. SBC below 11% would require either absolute SBC dropping to ~$450M or less (a 9% decline from the quarterly average) or Q2 revenue exceeding $4.5B (which would imply ~18%+ YoY growth in a pre-tax-season quarter). Neither scenario is the base case. This should resolve YES.

The annual 10.4% could be misleading because it blends strong and weak quarters. Tax season (Q3/Q4 fiscal) has substantially higher revenue, pulling the annual ratio down. Q2, being weak on revenue, naturally has a higher SBC ratio. This is a strong structural argument for YES. Against: SBC may not be evenly distributed -- if equity grant refreshes are front-loaded to Q1 (common in fiscal year-start), Q2 could have lower absolute SBC. But ongoing amortization of multi-year grants creates a floor on quarterly SBC, limiting how much it can decline quarter-to-quarter. Probability moderately high.

This question is fundamentally about seasonal denominator effects combined with SBC trajectory. SBC expense is relatively stable quarter-to-quarter because it is amortized expense from prior grants plus ongoing new grants. Revenue is highly seasonal for Intuit, with Q2 (Nov-Jan) being the trough. The FY2025 annual ratio of 10.4% masks that Q2 FY2025 was very likely already above 11%, meaning this is asking whether a pre-existing pattern continues. With SBC growing from AI/ML hiring and revenue following its normal seasonal pattern, Q2 FY2026 SBC above 11% is the most probable outcome.

Annual SBC at 10.4% of revenue, Q2 is seasonally weak for revenue, and AI hiring is increasing SBC. The denominator effect from weak Q2 revenue makes exceeding 11% highly probable. Simple math: ~$492M SBC against ~$4.1B revenue = ~12%.

10.4% annual average means weaker revenue quarters already exceed 11%. Q2 is the weakest quarter for Intuit revenue. SBC amortization keeps absolute SBC relatively stable. Revenue would need to be exceptionally strong (~$4.5B+) to keep ratio below 11%. YES is the base case.

SBC is relatively stable quarter-to-quarter while Intuit's revenue is highly seasonal. Q2 (Nov-Jan) is pre-tax season and the lowest revenue quarter. The 10.4% annual figure inherently means some quarters are above and some below. Q2 being the weakest revenue quarter makes it the most likely to exceed 11%. With SBC growing from AI/ML hiring, Q2 FY2026 should exceed 11%.