Core Insights - H&R Block, Inc. reported an adjusted loss of $1.20 per share in Q1 of fiscal 2026, which was better than the Zacks Consensus Estimate of a loss of $1.40 per share and a year-ago loss of $1.17 per share [1][8] - Total revenues reached $203.6 million, exceeding the Zacks Consensus Estimate by 2.1% and reflecting a year-over-year increase of 5.03% [1][8] Financial Performance - Revenues from U.S. tax preparation and related services were $100.19 million, up 6.9% year over year [3] - Financial services revenues totaled $7.85 million, marking a year-over-year decline of 11.04% [3] - International revenues increased by 1.2% to $65.7 million, while Wave revenues jumped 13% to $29.85 million [3] Guidance and Outlook - H&R Block expects fiscal 2026 adjusted EPS in the range of $4.85-$5.00, with the midpoint of $4.925 below the Zacks Consensus Estimate of $4.94 [2] - The company anticipates revenues for fiscal 2026 to be between $3.875 billion and $3.895 billion, with the midpoint of $3.885 billion slightly above the Zacks Consensus Estimate of $3.88 billion [5] - Expected EBITDA for fiscal 2026 is between $1.015 billion and $1.035 billion, with an effective tax rate of approximately 25% [5] Balance Sheet - H&R Block ended the quarter with cash and cash equivalents of $376.4 million and long-term debt of $1.73 billion, up from $1.14 billion at the end of June 2025 [4] - The company utilized $356.8 million in cash for operating activities, with capital expenditures of $13.19 million [4]

Core Insights - H&R Block reported revenue of $203.55 million for the quarter ended September 2025, marking a year-over-year increase of 5% and a surprise of +2.06% over the Zacks Consensus Estimate of $199.44 million [1] - The company reported an EPS of -$1.20, which is a slight decline from -$1.17 a year ago, but exceeded the consensus EPS estimate of -$1.40 by +14.29% [1] Revenue Breakdown - U.S. assisted tax preparation revenue was $48.64 million, surpassing the average estimate of $44.05 million, with a year-over-year increase of +13.2% [4] - U.S. royalties revenue was $5.85 million, slightly above the average estimate of $5.61 million, showing a year-over-year decrease of -0.1% [4] - U.S. DIY tax preparation revenue was $3.75 million, slightly below the estimate of $3.79 million, but represented a year-over-year increase of +15.7% [4] - International revenue reached $65.66 million, marginally exceeding the average estimate of $65.62 million, with a year-over-year increase of +1.2% [4] - Tax Identity Shield revenue was $4.12 million, above the estimate of $3.95 million, reflecting a year-over-year increase of +5.5% [4] - Emerald Card and Spruce revenue was $7.85 million, below the average estimate of $9.2 million, indicating a year-over-year decline of -11% [4] - Peace of Mind Extended Service Plan revenue was $23.51 million, slightly above the average estimate of $23.29 million, with a year-over-year increase of +1.8% [4] - Other revenue was $13.48 million, below the estimate of $14.37 million, showing a year-over-year decrease of -2.4% [4] - Wave revenue was $29.85 million, exceeding the average estimate of $28.22 million, with a year-over-year increase of +13.1% [4] - Refund Transfers revenue was $0.84 million, slightly below the average estimate of $0.86 million, reflecting a year-over-year decline of -2% [4] Stock Performance - H&R Block shares returned +0.3% over the past month, compared to the Zacks S&P 500 composite's +1.3% change, indicating that the stock may perform in line with the broader market in the near term [3]

Core Insights - The article discusses the importance of enabling Javascript and cookies in browsers to prevent access issues [1] - It highlights that ad-blockers may interfere with website functionality, suggesting users disable them for a better experience [1] Summary by Categories - **Technical Requirements** - Users are advised to enable Javascript and cookies in their browsers to ensure proper website functionality [1] - The presence of ad-blockers can lead to access restrictions, prompting a recommendation to disable them [1]

Financial Data and Key Metrics Changes - The company achieved a revenue growth of 5% in the first quarter, generating $204 million in total revenue, an increase of $10 million over the prior year [6][10] - EBITDA improved by 9.4% compared to the prior year, with a first quarter EBITDA loss of $170 million, an improvement of $18 million [6][8] - The effective tax rate decreased to 23.6% from 26.2% in the prior year, contributing to a net loss from continuing operations of $165 million, representing a 3.5% improvement [8][10] - Approximately $455 million was returned to shareholders through dividends and share repurchases, bringing the cumulative total of capital return since 2016 to nearly $5 billion [9][10] Business Line Data and Key Metrics Changes - The U.S. assisted business saw higher volumes and net average charges, contributing to the overall revenue growth [6][7] - WAVE continued to experience double-digit growth, particularly in its high-margin subscription product, Pro Tier [6][7] Market Data and Key Metrics Changes - The U.S. consumer tax preparation total addressable market (TAM) is estimated between $20 billion and $25 billion, while the small business TAM is over $100 billion [12][13] - The market is split roughly 55% assisted and 45% DIY, with assisted services projected to gain further market share in 2026 [16] Company Strategy and Development Direction - The company plans to focus on more complex paid filers who demonstrate stronger loyalty and value additional services [13][14] - Investments will continue in improving customer experience and innovating products, such as the Second Look offering and Spruce for financial wellness [14][15] - The company aims to leverage technology and AI to enhance customer experience and operational efficiency [15][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the upcoming tax season, with no indications of a late start despite potential complexities from new tax legislation [30][31] - The company remains cautiously optimistic about the impact of the new tax bill, expecting it to serve as a tailwind for the assisted business [31][32] - The leadership transition is seen as smooth, with a strong belief in the company's potential for long-term value creation [18] Other Important Information - The company reported a disciplined approach to capital allocation, including a 12% increase in dividends announced in August [9][10] - The leadership team is aligned on key themes for future growth, emphasizing the importance of meeting customer needs through various channels [15][17] Q&A Session Summary Question: Changes in marketing and operations in Assisted to stem share losses - Management highlighted investments in the Second Look service and AI to improve productivity and client outcomes [22][23] Question: Pricing strategy in DIY and its impact on margins and market share - The pricing strategy remains consistent with prior years, expecting low single-digit price increases across both channels [24] Question: Anticipated complexity from the new tax bill and government shutdown impact - Management indicated no expected delays for the tax season and expressed optimism about the new tax bill serving as a tailwind [30][31] Question: AI differentiation and addressing threats - AI is viewed as an opportunity to enhance client experiences and optimize operations, with ongoing developments in AI Tax Assist [34] Question: Marketing to free customers versus those likely to pay - The focus is on understanding consumer cohorts to effectively reach those likely to convert to paying clients [35][36]

Core Insights - H&R Block reported Q3 CY2025 results that exceeded Wall Street's revenue expectations, with sales increasing by 5% year-on-year to $203.6 million [1] - The company anticipates full-year revenue to be approximately $3.89 billion, aligning closely with analysts' estimates [1] - The non-GAAP loss per share was $1.20, which was 11.3% better than analysts' consensus estimates [1] Company Overview - H&R Block, founded in 1955, specializes in tax preparation and offers professional tax assistance and financial solutions to individuals and small businesses [4] Revenue Growth - The company has experienced a sluggish annualized revenue growth of 5.3% over the last five years, which is below the standard for the consumer discretionary sector [5] - Recent performance indicates a slowdown in demand, with an annualized revenue growth of 4.2% over the last two years, also below the five-year trend [6] Financial Highlights - Revenue for Q3 was $203.6 million, surpassing analyst estimates of $200.6 million, reflecting a 5% year-on-year growth [7] - Adjusted EPS was -$1.20, beating analyst estimates of -$1.35 by 11.3% [7] - Adjusted EBITDA was -$170 million, better than the expected -$202.8 million, with an EBITDA margin of -83.5% [7] - The company reaffirmed its full-year revenue guidance of $3.89 billion and adjusted EPS guidance of $4.93 [7] - EBITDA guidance for the full year is set at $1.03 billion, consistent with analyst expectations [7] - The operating margin improved to -106%, up from -118% in the same quarter last year [7] - Free cash flow was reported at -$370 million, compared to -$347.3 million in the same quarter last year [7] - Market capitalization stands at $6.47 billion [7]

Financial Performance - The net loss for the three months ended September 30, 2025, was $165,819, compared to a net loss of $172,576 for the same period in 2024, indicating an improvement of about 3.9%[13] - Total revenues for the three months ended September 30, 2025, were $203.6 million, an increase of 5.3% compared to $193.8 million for the same period in 2024[22] - The segment net income from continuing operations for Q1 FY2026 was a loss of $165,368,000, compared to a loss of $171,421,000 in Q1 FY2025, showing an improvement of 3.1%[68] - Total operating expenses decreased to $410,582,000 in Q1 FY2026 from $422,141,000 in Q1 FY2025, a reduction of 2.8%[68] - The company incurred a loss from continuing operations before income taxes of $216,331,000 for Q1 FY2026, compared to a loss of $232,261,000 in Q1 FY2025[68] Assets and Liabilities - As of September 30, 2025, total assets decreased to $2,621,322, down from $3,263,898 as of June 30, 2025, representing a decline of approximately 19.6%[11] - Total current liabilities decreased to $739,551 as of September 30, 2025, from $1,298,610 as of June 30, 2025, a decrease of about 43.1%[11] - The company’s long-term debt increased to $1,734,962 as of September 30, 2025, from $1,143,305 as of June 30, 2025, an increase of approximately 51.7%[11] - The company’s retained earnings (deficit) stood at $(609,299,000) as of September 30, 2025, compared to $12,061,000 as of June 30, 2025[11] - The company had an outstanding balance of $245.0 million under its 2025 committed line of credit as of September 30, 2025[44] Cash Flow - Cash and cash equivalents decreased significantly to $376,410 as of September 30, 2025, from $983,277 as of June 30, 2025, a reduction of approximately 61.7%[11] - The company reported cash used in operating activities of $356,838 for the three months ended September 30, 2025, compared to $328,581 for the same period in 2024, reflecting an increase of approximately 8.6%[13] - The company declared cash dividends of $0.42 per share, totaling $54,343 for the quarter[14] Revenue Streams - U.S. assisted tax preparation revenues rose to $48.6 million, up 13.1% from $43.0 million in the prior year[22] - Assisted tax preparation revenue increased to $48.644 million in Q1 FY2026 from $42.963 million in Q1 FY2025, representing a growth of 12.4%[68] Deferred Revenue and Liabilities - As of September 30, 2025, deferred revenue related to the Peace of Mind® Extended Service Plan was $123.9 million, with $83.7 million expected to be recognized over the next twelve months[22] - The company expects to recognize all deferred revenue related to Tax Identity Shield® by April 2026, with a balance of $18.7 million as of September 30, 2025[23] - Liabilities related to the 100% accuracy guarantee were $10.4 million as of September 30, 2025, down from $11.4 million as of June 30, 2025[48] - Estimated contingent consideration liabilities related to acquisitions were $30.6 million as of September 30, 2025, compared to $29.6 million as of June 30, 2025[49] Stock and Compensation - The company granted 0.8 million shares under stock-based compensation plans during the three months ended September 30, 2025, with an expense of $6.2 million[27] - Stock-based compensation expense for Q1 FY2026 was $6.2 million, down from $8.7 million in Q1 FY2025[27] Other Financial Metrics - The effective tax rate for continuing operations was 23.6% for the three months ended September 30, 2025, down from 26.2% in the same period of 2024[46] - The allowance for credit losses for Emerald Advance® as of September 30, 2025, was $19.7 million, unchanged from the previous quarter[34] - The company made payments to acquire businesses totaling $5.1 million during the three months ended September 30, 2025, compared to $5.9 million in the same period of 2024[37]

Financial Performance - H&R Block announced a 12% increase to its quarterly dividend in August[28] - The company repurchased 7.9 million shares for $400 million, retiring approximately 6% of outstanding shares[29] - H&R Block reaffirms its FY26 outlook with revenue projected between $3.875 billion and $3.895 billion, and adjusted EPS between $4.85 and $5.00[33] - The company anticipates an effective tax rate of approximately 25% for FY26[33] Strategic Initiatives - H&R Block is finalizing tax season plans, incorporating learnings from the previous year[12] - The company focuses on strengthening marketing messaging, personalizing experiences, and optimizing the sales funnel[15] - H&R Block aims to enhance the client experience in retail and DIY channels, reducing friction and increasing conversion from marketing demand[15] - Key products like Second Look, AI Tax Assist, Tax Pro Review, and Spruce are being leveraged to deliver value and differentiation[15] Market Focus - H&R Block is prioritizing growth among more complex, higher lifetime value filers[53] - The company aims to meet customers where they are, both digitally and in person, combining trusted human expertise with innovation[72]

Financial Performance - Total revenue for Q1 FY2026 was $203.6 million, an increase of $9.7 million or 5.0% year-over-year[3] - Net loss from continuing operations improved by $6.1 million or 3.5% to ($165.4) million[4] - Net loss for the three months ended September 30, 2025, was $165,819, compared to a net loss of $172,576 for the same period in 2024, showing an improvement of about 3.9%[14] - EBITDA from continuing operations for Q3 2025 was $(170,007), an improvement from $(187,583) in Q3 2024, indicating a reduction in losses of approximately 9.4%[15] - Adjusted diluted loss per share from continuing operations was $(1.20) for Q3 2025, compared to $(1.17) for Q3 2024, reflecting a slight increase in loss per share of about 2.6%[15] Shareholder Returns - The company repurchased and retired 7.9 million shares at an aggregate price of $400 million, averaging $50.90 per share[9] - H&R Block has returned nearly $5.0 billion to shareholders since 2016 through dividends and share repurchases, buying back 47% of its shares outstanding[5] Future Projections - The company expects revenue for FY2026 to be in the range of $3.875 to $3.895 billion[9] - Adjusted diluted earnings per share for FY2026 is projected to be in the range of $4.85 to $5.00[9] - EBITDA for FY2026 is expected to be in the range of $1.015 billion to $1.035 billion[9] - The effective tax rate is anticipated to be approximately 25%[9] Operating Expenses and Assets - Operating expenses decreased by $11.6 million or 2.7% to $410.6 million, primarily due to lower legal fees and settlements[4] - Total assets decreased to $2,621,322, down from $3,263,898 as of June 30, 2025, representing a decline of approximately 19.6%[13] - Total current liabilities decreased to $739,551 from $1,298,610, a reduction of about 43.2%[13] - Long-term debt increased to $1,734,962 from $1,143,305, representing an increase of approximately 51.8%[13] Cash Flow - Cash and cash equivalents at the end of the period were $397,401, down from $439,017 at the end of Q3 2024, a decrease of approximately 9.5%[14] - Net cash used in operating activities was $(356,838) for Q3 2025, compared to $(328,581) for Q3 2024, indicating an increase in cash outflow of about 8.6%[14] - Capital expenditures for Q3 2025 were $(13,188), down from $(18,735) in Q3 2024, a decrease of approximately 29.5%[14] - Proceeds from line of credit borrowings amounted to $245,000, with repayments of long-term debt totaling $(350,000) during the same period[14] Seasonal Business Model - H&R Block's first quarter results reflect the company's highly seasonal business model, typically generating a net loss during this period[2]

Core Insights - H&R Block, Inc. reported a strong start to fiscal 2026 with a 5.0% increase in revenue compared to the previous year, totaling $203.6 million [4][3] - The company returned $455 million to shareholders through dividends and share repurchases, reaffirming its commitment to delivering shareholder value [3][6] - The leadership transition to Curtis Campbell is expected to support the company's ongoing transformation and future performance [2] Financial Performance - Total revenue for the first quarter was $203.6 million, an increase of $9.7 million or 5.0% year-over-year, driven by higher net average charges and increased volume in the Assisted category [4][3] - Operating expenses decreased by $11.6 million or 2.7% to $410.6 million, primarily due to lower legal fees and settlements [5] - The net loss from continuing operations improved by $6.1 million or 3.5% to ($165.4) million, with loss per share from continuing operations increasing by 2.4% to ($1.26) [5][19] Capital Allocation - The company repurchased and retired 7.9 million shares at an aggregate price of $400 million, or $50.90 per share, during the first quarter [7] - Since 2016, H&R Block has returned nearly $5.0 billion to shareholders through dividends and share repurchases, buying back 47% of its shares outstanding [6] Fiscal Year 2026 Outlook - H&R Block expects revenue to be in the range of $3.875 to $3.895 billion and EBITDA to be between $1.015 billion and $1.035 billion for fiscal 2026 [8][14] - The company plans to pay a quarterly cash dividend of $0.42 per share on January 6, 2026, to shareholders of record as of December 4, 2025 [7]

Core Insights - H&R Block has announced the 2025 application period for the Emerald Advance Loan, a fixed-rate short-term loan available from November 3 to December 31, 2025, with amounts ranging from $350 to $1,500 [1][4]. Loan Features - The Emerald Advance Loan aims to reduce financial stress during the holiday season, offering a convenient application process and flexible repayment options [2]. - There is no annual fee or monthly payments required; borrowers must repay the loan by March 31, 2026 [2][4]. - The loan has an Annual Percentage Rate (APR) of 35.9% [4]. Application Process - Customers can apply for the loan at participating H&R Block offices or online, with approved applicants able to access funds quickly via an Emerald Card or Spruce account [3][4]. Company Overview - H&R Block, Inc. provides tax preparation services, financial products, and small-business solutions, combining digital innovation with human expertise [6]. - The company also offers a mobile banking app, Spruce, to help clients manage their finances better [6]. Partner Information - The Emerald Advance Loan is originated by Pathward, N.A., a national bank focused on increasing financial access and availability [7].