Core Insights - Spruce, a mobile banking app by H&R Block, launched the Saving Surge Sweepstakes to promote financial health among Americans, offering nearly $5,000 in prizes over six months [1][2] - The initiative aims to address the financial vulnerability of 70% of Americans, providing tools for effective money management [2][5] - Participants can earn entries by engaging in saving behaviors, with monthly prizes awarded to encourage consistent saving habits [3][4] Initiative Details - The Saving Surge Sweepstakes runs from September 1, 2025, to February 28, 2026, allowing Spruce customers to earn up to five entries each month through actions like auto-transfers and $10 deposits [3][10] - Monthly winners will receive direct deposits into their Spruce Savings Account, with one winner receiving $500 and three others receiving $100 [3][8] Financial Tools and Features - Spruce offers features such as a Watchlist Budget Tracker and high-yield savings accounts with a 3.50% APY, designed to reinforce positive financial behaviors [4][11] - The collaboration with Commonwealth aims to enhance financial security for vulnerable populations, leveraging Spruce's tools to make saving engaging and rewarding [5][14] Organizational Background - H&R Block provides tax preparation services and financial products, integrating digital innovation with personal expertise through the Spruce app [12] - Commonwealth is a nonprofit focused on building financial security for low- to moderate-income individuals, having helped over 2 million people save nearly $8 billion [14] - BlackRock's Emergency Savings Initiative supports the movement by promoting savings strategies for low- to moderate-income individuals [15]

Core Insights - H&R Block reported a revenue growth of 4.2% for fiscal 2025, reaching a total revenue of $3.8 billion, driven by increased net average charge and higher company-owned return volumes [4][23] - The company returned $600 million to shareholders through dividends and share repurchases, with a 12% increase in quarterly dividends [1][10] - Earnings per share from continuing operations rose by 6.8% to $4.42, while adjusted earnings per share increased by 5.7% to $4.66 [6][28] Financial Performance - Total operating expenses increased by 4.6% to $2.9 billion, primarily due to higher compensation, marketing, and technology costs [5][23] - Net income from continuing operations grew by 1.9% to $609.5 million [5][23] - The company repurchased approximately 6.5 million shares, representing 4.7% of shares outstanding, at an aggregate price of $400.1 million [10][22] Capital Allocation - H&R Block has consistently paid quarterly dividends since going public in 1962, returning over $4.5 billion to shareholders since 2016 [9][10] - The Board of Directors announced an increase in the quarterly dividend to $0.42 per share, marking eight consecutive annual increases [10][22] Strategic Outlook - The company aims to enhance client engagement, expand its small business reach, and leverage technology and AI for improved efficiencies [3][4] - For fiscal year 2026, H&R Block expects revenue in the range of $3.875 to $3.895 billion and adjusted diluted earnings per share between $4.85 and $5.00 [16][10]

Core Insights - Jeffrey J. Jones II will retire as President and CEO of H&R Block on December 31, 2025, and will remain on the Board until then, transitioning to a Strategic Advisor role until September 2026 [1][6] - Curtis Campbell, currently President of Global Consumer Tax and Chief Product Officer, will succeed Jones as CEO starting January 1, 2026 [1][5] Company Performance and Leadership - Under Jones' leadership since 2017, H&R Block has introduced innovative strategies such as Upfront Transparent Pricing and AI Tax Assist, contributing to significant brand growth and relevance [2][3] - The company increased its quarterly dividend by approximately 70% and repurchased about 40% of its shares, returning over $4.0 billion in capital to shareholders [2] - During Jones' tenure, H&R Block's stock price rose by 123%, and its market capitalization increased from $5.5 billion to $7.4 billion [2] Succession Planning - Campbell's appointment as CEO-elect follows a comprehensive succession-planning process, receiving unanimous support from the Board of Directors [5][6] - Jones expressed confidence in Campbell's ability to continue the company's transformation and sustainable revenue growth [4][5] Community Engagement and Culture - Jones initiated community impact programs such as Make Every Block Better and Fund Her Future, enhancing the company's commitment to community connections and support for small businesses [3] - H&R Block has been recognized for its high associate engagement and was featured in a Harvard Business School case study for its transformation efforts [3] Curtis Campbell's Background - Campbell has extensive experience in the tax industry, having held executive roles at Capital One, Intuit, and Amazon Web Services, and previously served as President and CEO of TaxAct [9][8] - He joined H&R Block in May 2024 and has been leading customer-centric strategies and product management excellence [8]

Core Insights - H&R Block has appointed Jason Lenhart as Senior Vice President and Chief Technology Officer, and Monika Mehrotra as Senior Vice President, Operations & Technology, to enhance its transformation and financial services [1][2]. Leadership Appointments - Jason Lenhart will lead engineering teams to develop scalable, product-driven solutions, leveraging his previous experience at JetBlue where he oversaw software development [2]. - Monika Mehrotra will manage financial products operations, fraud prevention, and global systems, bringing her experience from TransUnion to drive efficiency and innovation [4]. Educational Background - Jason Lenhart holds a Bachelor of Science in Mechanical Engineering from the University of Tennessee, Knoxville, and a Master of Science in Computer Science from Drexel University [3]. - Monika Mehrotra has a Bachelor of Technology in Computer Science from the Institute of Engineering and Technology in India and an MBA in Finance from the University of Chicago Booth School of Business [5]. Company Overview - H&R Block provides global tax preparation services, financial products, and small-business solutions, combining digital innovation with human expertise [7].

Company Performance - H&R Block, Inc. (HRB) stock has gained 17.5% over the past year, outperforming the industry's 32% decline and the Zacks S&P 500 composite's 13.2% growth [1] - In the third quarter of fiscal 2025, H&R Block reported adjusted earnings of $5.38 per share, beating the Zacks Consensus Estimate by 5.1% and increasing 8.9% year-over-year [2] - Total revenues for the same quarter were $2.28 billion, slightly exceeding the Zacks Consensus Estimate by 1.4% and reflecting a 4.2% year-over-year increase [2] Revenue Growth Drivers - The growth in assisted tax preparation revenue is attributed to a surge in net average charges and higher company-owned tax return volumes [3] - The contribution of the assisted tax preparation segment to total revenue has increased from approximately 60% in fiscal year 2022 to 63% in fiscal year 2024, with revenue rates rising by 3.5% and 5% in fiscal 2023 and 2024, respectively [3] Mobile Banking Platform - H&R Block's mobile banking platform, Spruce, has nearly 476,000 sign-ups and is approaching $1 billion in customer deposits as of June 2024 [4] - Close to 50% of fiscal 2024 deposits came from non-tax sources, indicating strong trends in the first quarter of fiscal 2025 [4] Technological Innovations - The incorporation of AI Tax Assist, a generative AI-powered technology, has boosted DIY tax preparation revenues, contributing nearly $350 million, or about 10% of total revenue, with an 11% increase from the previous year [5] - Collaboration with OpenAI is expected to enhance AI Tax Assist, attracting more customers and further boosting revenue [5] Competitive Landscape - The company operates in a highly competitive industry, necessitating continuous innovation and differentiation while managing costs effectively [6] - The need for investment in technology and talent to maintain a competitive edge complicates the balance between growth and profitability [6] Liquidity Position - H&R Block's current ratio at the end of the third quarter of fiscal 2025 was 0.78, lower than the industry's 0.92, indicating a decline of 30.8% from the previous year due to increased current debt [7] - A current ratio below 1 signals inefficiency in meeting short-term obligations [7]

Financial Data and Key Metrics Changes - For the third quarter, the company reported revenue of $2.3 billion, an increase of 4.2% year over year [25] - EBITDA grew by 5% to $1 billion, while net income from continuing operations increased by 4.5% to $722.9 million [26] - Earnings per share from continuing operations rose by 9.2% to $5.32, with adjusted earnings per share increasing by 8.9% to $5.38 [26] Business Line Data and Key Metrics Changes - The assisted channel saw a shift in client behavior, with a 170 basis point growth compared to 90 basis points in the DIY segment [8] - DIY revenue grew by 8% year over year, with paid net average charge (NAC) at $81.55, up 9% from the previous year [12][13] - Assisted small business tax performed well, delivering high single-digit revenue growth [17] Market Data and Key Metrics Changes - The overall industry volume grew approximately 1%, with a noted shift from DIY to assisted services [7] - The company improved its volume and market share trends year over year in the assisted channel [9] - The company reported a decline of 0.8% in total assisted volumes, contrasting with the broader industry volume growth of around 1.7% [58] Company Strategy and Development Direction - The company is focused on enhancing the client experience in the assisted channel to improve conversion and retention [9] - There is a strategic emphasis on serving more complex clients with higher lifetime value [12] - The company continues to invest in its business, grow dividends, and return excess capital to shareholders through share repurchases [27] Management's Comments on Operating Environment and Future Outlook - Management noted that clients are increasingly seeking expert help during uncertain times, leading to a shift towards assisted services [6][8] - The company reiterated its fiscal 2025 outlook, expecting revenue in the range of $3.69 billion to $3.75 billion and EBITDA between $975 million and $1.02 billion [28] - The effective tax rate is expected to be approximately 13%, lower than historical levels, providing a one-time benefit to EPS [28] Other Important Information - The company has a strong capital allocation strategy, having repurchased $400 million worth of shares and acquired 123 franchise locations this fiscal year [27] - The mobile banking platform, Spruce, has seen over 700,000 sign-ups, a nearly 50% increase compared to the prior year [19] Q&A Session Summary Question: Why is the assisted segment growing faster than DIY? - Management indicated that during uncertain times, consumers seek help, leading to a shift towards assisted services [34] Question: Was there a difference in volume between early and late season? - Management confirmed that the season started slow but ended strong, with record volumes in the last two days [36] Question: What accounted for the decline in franchise operations? - Management explained that the decline was primarily due to franchise buybacks, not an absolute decline in volume [42][66] Question: How did the competitive landscape change this year? - Management noted that a major competitor spent significantly on promotions, but this did not impact their performance [60] Question: What was the impact of filing extensions on volumes? - Management acknowledged some migration of volumes from Q3 to Q4 due to extensions but did not expect a material impact on guidance [70]

Financial Data and Key Metrics Changes - The company reported revenue of $2.3 billion, an increase of 4.2% year over year, driven by higher net average charge (NAC) in the U.S. and greater company-owned assisted return volume [25][26] - EBITDA grew by 5% to $1 billion, while net income from continuing operations increased by 4.5% to $722.9 million [26][29] - Earnings per share (EPS) from continuing operations rose by 9.2% to $5.32, with adjusted EPS increasing by 8.9% to $5.38 due to higher net income and fewer shares outstanding from share repurchases [26][29] Business Line Data and Key Metrics Changes - The assisted channel saw a shift in client behavior, with a 170 basis point growth compared to 90 basis points in the DIY segment, indicating a preference for assisted services [7][8] - DIY revenue grew by 8% year over year, with a strong NAC of $81.55, up 9% from the previous year, reflecting a mix shift to more complex SKUs [13][14] - Assisted small business tax performed well, delivering high single-digit revenue growth, while year-round bookkeeping and payroll services achieved double-digit revenue growth [18][19] Market Data and Key Metrics Changes - The overall industry volume grew approximately 1%, with a notable shift from DIY to assisted services as clients sought expert help [7][8] - The company experienced record high volumes in tax offices during the final two days of the tax season, reflecting a trend of clients filing closer to deadlines [8][9] Company Strategy and Development Direction - The company is focused on enhancing the client experience through improved tax pro matching algorithms and automated services, aiming to increase client retention and conversion [9][11] - The strategic focus remains on paid filers and those free filers who have the potential to convert to paid clients, ensuring capital is used effectively to drive financial returns [15][47] - The company continues to invest in its mobile banking platform, Spruce, which has seen significant growth in sign-ups and deposits, indicating a commitment to improving financial well-being for clients [20][21] Management's Comments on Operating Environment and Future Outlook - Management noted that the current economic backdrop has led consumers to seek trusted support for their tax and financial needs, reinforcing the company's value proposition [21][24] - The company reiterated its fiscal 2025 outlook, expecting revenue in the range of $3.69 billion to $3.75 billion and EBITDA between $975 million and $1.02 billion, with a lower effective tax rate providing a one-time benefit to EPS [29][30] Other Important Information - The company completed share repurchases totaling $400 million, retiring 6.5 million shares, and has approximately $1.1 billion remaining on its share repurchase program [28][29] - The company is committed to maintaining a strong capital allocation strategy, prioritizing investments in the business, growing dividends, and returning excess capital to shareholders [24][29] Q&A Session Summary Question: Why is the assisted segment growing faster than DIY? - Management noted that during uncertain times, consumers seek expert help, leading to a shift towards assisted services [33][34] Question: Was there a difference in volume between early and late tax season? - Management confirmed that the season started slow but ended strong, with record volumes in the last two days [35][36] Question: What accounted for the decline in franchise operations? - The decline was primarily due to franchise buybacks, with franchise locations performing well overall [38][61] Question: How did the competitive landscape change this year? - Management acknowledged that a major competitor increased spending on promotions, but this did not significantly impact their performance [55][56] Question: What is the impact of filing extensions on volumes? - Extensions due to weather events caused some migration of volumes from Q3 to Q4, but overall impact was not material to guidance [64][65] Question: What is the company's policy regarding dividends? - The company has a dividend payout ratio that is reviewed annually by the board, with a focus on reinvesting in the business first [68][70]

Core Insights - H&R Block reported a revenue growth of 4% for the third quarter of fiscal 2025, with total revenue reaching $2.3 billion, an increase of $92.3 million compared to the previous year [3][4] - Net income from continuing operations rose by 4.5% to $722.9 million, while earnings per share (EPS) increased by 9.2% to $5.32 [4][5] - The company reaffirmed its full-year fiscal 2025 outlook, expecting revenue between $3.69 billion and $3.75 billion and adjusted diluted EPS in the range of $5.15 to $5.35 [9][7] Financial Performance - Total operating expenses increased by 3.4% to $1.3 billion, primarily due to higher wages and benefits for tax professionals [4][20] - The company achieved a net income growth of $31.3 million, reflecting strong financial fundamentals and consistent cash flow generation [4][3] - Adjusted earnings per share from continuing operations increased by 8.9% to $5.38, driven by higher net income and a reduction in shares outstanding due to share repurchases [5][27] Capital Allocation - Since 2016, H&R Block has returned over $4.5 billion to shareholders through dividends and share repurchases, buying back more than 43% of its outstanding shares [6][8] - A quarterly cash dividend of $0.375 per share is scheduled for payment on July 3, 2025, to shareholders of record as of June 4, 2025 [8][19] Market Trends - The company noted improved volume and market share trends in the Assisted channel, attributed to enhancements in the client experience [3][4] - The increase in revenue was partly due to higher company-owned return volumes in the U.S., despite lower international revenue and interest income [3][4]

Group 1 - H&R Block, Inc. will report its fiscal 2025 third quarter results on May 7, 2025, after the market close [1] - A conference call for analysts, institutional investors, and shareholders is scheduled for 4:30 p.m. Eastern time on the same day to discuss the results and provide a business update [2] - The conference call will be available in a listen-only format for the media and public via a webcast, which will also be accessible for replay for 90 days [3] Group 2 - H&R Block provides global tax preparation services, financial products, and small-business solutions, combining digital innovation with human expertise [4] - The company offers a mobile banking app, Spruce, to help clients manage their finances better [4] - H&R Block supports small-business owners through services like bookkeeping, payroll, advisory, and payment processing via Block Advisors and Wave [4]

Company Announcement - H&R Block, Inc. will report its fiscal 2025 third quarter results on May 7, 2025, after the market close [1] - A conference call for analysts, institutional investors, and shareholders is scheduled for 4:30 p.m. Eastern time on the same day to discuss the results and provide a business update [2] - The conference call will be available in a listen-only format for the media and public via a webcast, which will also be accessible for replay for 90 days after the call [3] Company Overview - H&R Block provides global tax preparation services, financial products, and small-business solutions, combining digital innovation with human expertise [4] - The company offers a mobile banking app, Spruce, to help clients manage their finances better and supports small-business owners with services like bookkeeping and payroll through Block Advisors and Wave [4] Contact Information - For investor relations, Jordyn Eskijian can be contacted at (816) 854-5674 or via email [5] - Media inquiries can be directed to the Media Desk via email [5]