Q3 earnings: AI-led beats from Zoom and Intuit, retail split, and S&P 500 tracking 13.4% EPS growth
Updated: Today, 5:32 AM GMT+8
The pulse
With 95% of S&P 500 companies reported as of Nov. 21, blended EPS growth is tracking 13.4% for Q3. That's well above the 7.9% EPS growth analysts expected on Sept. 30.
Revenue is doing the heavy lifting. Blended sales growth is tracking 8.4%, the highest since Q3 2022. Health Care, Financials, and Consumer Discretionary are leading the charge. Source: FactSet.
The "Magnificent Seven" delivered 18.4% EPS growth, the lowest for the group since Q1 2023, dragged by a sharp EPS miss at Meta ($1.05 vs. $6.72).
Company highlights
Zoom beat across the board and raised FY guidance as AI adoption moved higher. Q3 revenue hit $1.22B (vs. $1.21B est.), GAAP EPS was $1.52 (vs. $1.44 est.). Enterprise revenue rose 6.1% to $741.4M, Online grew 2% to $488.4M. Management lifted FY revenue to $4.852B-$4.857B and EPS to $5.95-$5.97, and added a $1B buyback.
CEO Eric Yuan cited "meaningful" adoption of AI Companion 3.0 and strong traction in AI-first customer experience deals. The read-through: AI features are now a clear attach driver and a pricing lever.
Intuit posted a clean beat: EPS $1.59 on revenue $3.9B (vs. $1.26 and $3.7B est.). The company guided Q2 revenue growth to 14%-15%, above consensus, supported by AI-driven automation across TurboTax, Credit Karma, and QuickBooks. A new multi-year deal with OpenAI (> $100M) will power AI agents that execute tasks end-to-end. Watch for customer adoption and gross margin mix as these agents scale.
Agilent topped revenue at $1.86B (vs. $1.83B est.) and guided FY2026 sales to $7.3B-$7.4B, slightly above the Street midpoint. Demand for lab tools and diagnostics remains firm as pharma ramps R&D amid shifting U.S. trade policies. Adjusted EPS landed at $1.59 (vs. $1.58 est.).
Prosus nearly doubled adjusted H1 EBITDA to $423M from $213M, with revenue up 22% to $3.6B. The company is leaning in as an operator across e-commerce: a $1.3B deal for French classifieds platform La Centrale, early interest in Germany's Mobile.de, and fresh investments in India's Rapido ($350M) and Ixigo ($146M). In LatAm, iFood added a stake in CRMBonus and is reportedly in advanced talks to acquire Alelo for $905M.
Gap rallied on a strong quarter and a tighter playbook. Same-store sales: Gap +7%, Old Navy +6%, Banana Republic +4%, while Athleta fell 11% as it works through a reset. Management lifted the low end of FY revenue guidance to 1.7%-2.0% growth. The CEO said the company is "winning across income cohorts."
BJ's Wholesale Club beat on EPS at $1.16 (vs. $1.10 est.) with revenue of $5.35B. Comparable club sales rose 1.1% y/y, ex-gas +1.8%. Membership fee income rose 9.8% to $126.3M, and digitally enabled sales grew 30%. FY outlook moved higher on membership strength.
Bath & Body Works cut its outlook and said the brand needs a reset. Q3 net sales fell 1% to $1.59B, with EPS of $0.37 below expectations. Q4 sales are expected to be down high single digits; FY EPS guided to at least $2.83 vs. the prior Street view of $3.33. The CEO flagged the need for more efficacy, ingredient-led products, modern packaging, and stronger storytelling.
Walmart noted consumer behavior is "very consistent," with Q3 same-store sales up 4.5%. Value and convenience remain the key draw.
VinFast posted a wider loss as it spends to grow and signed two new loan facilities totaling $250M. The company is shifting focus toward Asian markets while facing heavy competition and pricing pressure.
What's next
Retail read-through continues with upcoming reports from Abercrombie & Fitch, Dick's Sporting Goods, and Burlington Stores. Across tech and industrials, watch Dell, Workday, HP Inc., Deere, and Pony AI for demand signals into year-end budgets.
Portfolio takeaways
- AI monetization is showing up in P&L. For software, track AI feature attach, net revenue retention, and gross margin mix. Zoom and Intuit both pointed to real adoption and pricing power.
- Lab tools steady. Agilent's print suggests R&D and diagnostics spend is intact. Watch order growth vs. consumables mix to gauge durability.
- Consumer barbell persists. Value channels (Walmart, BJ's) keep gaining share, while specialty discretionary (Bath & Body Works) is under pressure. Lean into membership economics and recurring revenue.
- EV caution. Loss-making scale-ups taking on new debt (VinFast) face margin and liquidity risk in a price-competitive market.
- Breadth beyond mega-cap tech. With the "Mag 7" growth rate cooling, Health Care, Financials, and Consumer Discretionary are adding more of the index-level earnings growth.
Data sources and tools
- FactSet earnings and revenue trends: FactSet Earnings Insight
- Consensus and estimate data: LSEG
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