H&R BLOCK INC
For the period ended Mar 31, 2026. Filed May 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 6, 2026
HRB$52.69-4.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-12-31; filed 2026-02-05.
0000012659-26-000008
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsNon-GAAP Financial InformationCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsNon-GAAP Financial InformationThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 72 previous paragraphs and 73 current paragraphs.
35 unchanged; 24 reworded; 11 added; 8 removed; 5 previous and 3 current paragraphs rearranged.
Tables are not compared: 19 previous and 19 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (11)
Current report
U.S. DIY tax preparation revenues increased $0.6 million, or 0.3%, largely due to a 3.5% increase in online paid net average charge, offset by a 3.0% decrease in online paid volume.
Current report
Refund Transfer revenues increased $6.2 million, or 5.5%, primarily due to an increase in Refund Transfer volume.
Current report
International tax preparation revenues increased $9.7 million, or 16.0%, primarily due to favorable foreign currency exchange rates in Canada and Australia.
Current report
Revenues increased $150.5 million, or 5.7%, from the prior year. U.S. assisted tax preparation revenues increased $119.5 million, or 6.9%, primarily due to a 4.0% increase in net average charge combined with a 2.7% increase in company-owned tax return volumes in the current year. U.S. royalties revenue decreased $4.2 million, or 2.9%, due to lower franchise tax return volumes, which was primarily driven by franchise acquisitions. During the year we purchased franchise offices which results in increasing tax preparation revenues and decreasing royalties as the revenues and returns become company-owned after the acquisition. Through the nine months ended March 31, 2026 our total assisted tax return volume, which includes both company-owned and franchise offices, increased 0.6% from the prior year.
Current report
U.S. DIY tax preparation revenues increased $4.2 million, or 1.8%, largely due to a 3.9% increase in online paid net average charge, offset by a 2.7% decrease in online paid volume.
Current report
International revenues increased $13.4 million, or 8.5%, primarily due to favorable foreign currency exchange rates in Canada and Australia.
Current report
Technology-related expenses increased $6.2 million, or 7.1%, due to higher third-party technology and software costs.
Current report
We recorded income tax expense of $39.1 million in the current year compared to $104.6 million in the prior year. The effective tax rate for the nine months ended March 31, 2026, and 2025 was 8.1% and 25.3% respectively. The decrease in the effective tax rate was primarily attributable to the settlement of an IRS examination of our 2020 U.S. federal income tax return and related carryback claims to the 2015 through 2018 tax years. The closure of the IRS examination resulted in a discrete income tax benefit of $84.1 million, which was recorded in income tax expense. See Item 1, note 7 to the consolidated financial statements for additional discussion.
Current report
TAX SEASON UPDATE
Current report
Assisted tax return volume, which includes our company-owned and franchise operations, was flat from July 1, 2025 through April 30, 2026 compared to the prior year period. DIY online paid tax return volume from July 1, 2025 through April 30, 2026 decreased 4.2% compared to the prior year period. Our business is highly seasonal and results for the nine months ended March 31, as well as results for the period ended April 30, may not be indicative of results for the fiscal year ended June 30, 2026.
Current report
Operating Activities. Cash provided by operations totaled $586.7 million for the nine months ended March 31, 2026 compared to $429.3 million in the prior year period. The increase is primarily due to higher net income, changes in accounts payable, accrued expenses, salaries, wages and payroll taxes and accounts receivable, partially offset by taxes paid and the release of income tax reserves associated with the settlement of the IRS examination of our 2020 U.S. federal income tax return and related carryback claims to the 2015 through 2018 tax years.
Removed paragraphs (8)
Previous report
Revenues increased $19.8 million, or 11.1%, from the prior year. U.S. assisted tax preparation revenues increased $7.5 million, or 15.6%, primarily due to an increase in company-owned tax return volumes and net average charge in the current year.
Previous report
U.S. DIY tax preparation revenues increased $3.1 million, or 22.3%, primarily due to higher software downloads.
Previous report
Wave revenues increased $3.2 million, or 12.1%, due to higher accounting, invoicing, and receipts subscriptions and small business payment processing volumes.
Previous report
Consulting and outsourced services expense increased $5.9 million, or 32.0%, due to increased spend on various strategic projects.
Previous report
U.S. DIY tax preparation revenues increased $3.6 million, or 21.0%, primarily due to higher software downloads and higher paid online volume.
Previous report
Wave revenues increased $6.7 million, or 12.6%, due to higher accounting, invoicing, and receipts subscriptions and small business payment processing volumes.
Previous report
Legal expense decreased $6.7 million, or 30.8%, primarily due to lower outside legal counsel spend.
Previous report
Operating Activities. Cash used in operations totaled $970.8 million for the six months ended December 31, 2025 compared to $895.6 million in the prior year period. The increase is primarily due to changes in accrued income taxes and receivables, partially offset by deferred income taxes and a lower net loss.
Reworded paragraphs (24)
Previous wording
On August 13, 2025, Kellie J. Logerwell notified H&R Block, Inc. (the “Company”) of her intention to retire as the Company’s Vice President and Chief Accounting Officer, effective as of October 24, 2025. Ms. Logerwell was succeeded as principal accounting officer by April M. Wasleski, who most-recently served as the Company’s Director of Accounting and whose appointment as Vice President and Chief Accounting Officer became effective October 24, 2025. See our Current Report on Form 8-K filed on August 15, 2025 for more information.
Current wording
On August 13, 2025, Kellie J. Logerwell notified the Company of her intention to retire as the Company’s Vice President and Chief Accounting Officer, effective as of October 24, 2025. Ms. Logerwell was succeeded as principal accounting officer by April M. Wasleski, who most-recently served as the Company’s Director of Accounting and whose appointment as Vice President and Chief Accounting Officer became effective October 24, 2025. See our Current Report on Form 8-K filed on August 15, 2025 for more information.
Previous wording
Our subsidiaries provide assisted and do-it-yourself (DIY) tax preparation solutions through multiple channels (including in-person, online and mobile applications, virtual, and desktop software) and distribute H&R Block-branded products and services, including those of our bank partners, to the general public primarily in the United States (U.S.), Canada and Australia. Tax returns are prepared by H&R Block tax professionals in one of our company-owned or franchise offices, virtually or via an online review, or they are prepared and filed by our clients through our DIY tax solutions. We also offer small business solutions through our company-owned and franchise offices (including in-person, online and virtual) and online through Wave. We report a single segment that includes all of our continuing operations.
Current wording
Our subsidiaries provide assisted and do-it-yourself (DIY) tax preparation solutions through multiple channels (including in-person, online and mobile applications, virtual, and desktop software) and distribute H&R Block-branded products and services, including those of our bank partners, to the general public primarily in the United States (U.S.), Canada and Australia. Tax returns are either prepared by H&R Block tax professionals in one of our 6,802 company-owned or 1,814 franchise offices (as of March 31, 2026), virtually or via an online review or prepared and filed by our clients through our DIY tax solutions. We also offer small business solutions through our company-owned and franchise offices (including in-person, online and virtual) and online through Wave. We report a single segment that includes all of our continuing operations.
Previous wording
Revenues increased $29.5 million, or 7.9%, from the prior year. U.S. assisted tax preparation revenues increased $13.2 million, or 14.5%, primarily due to an increase in net average charge combined with an increase in company-owned tax return volumes in the current year.
Current wording
Revenues increased $121.0 million, or 5.3%, from the prior year. U.S. assisted tax preparation revenues increased $106.3 million, or 6.5%, primarily due to a 3.8% increase in net average charge combined with a 2.6% increase in company-owned tax return volumes in the current year. U.S. royalties revenue decreased $5.8 million, or 4.3%, due to lower franchise tax return volumes, which was primarily driven by franchise acquisitions. During the year we purchased franchise offices which results in increasing tax preparation revenues and decreasing royalties as the revenues and returns become company-owned after the acquisition. For the three months ended March 31, 2026 our total assisted tax return volume, which includes both company-owned and franchise offices, increased 0.4% from the prior year.
Previous wording
Total operating expenses increased $25.4 million, or 5.4%, from the prior year. Compensation and benefits increased $8.5 million, or 4.3%, primarily due to higher tax professional wages as a result of higher assisted revenue and higher corporate wages primarily due to salary increases. Certain wage‑related expenses are now being reported in field wages rather than other wages to better align with how costs are managed and evaluated internally. This change had no impact on total operating expenses, and prior period amounts have not been reclassified.
Current wording
Total operating expenses increased $62.5 million, or 4.8%, from the prior year. Field wages increased $44.6 million, or 8.4%, due to increased tax professional wages resulting from an increase in U.S. assisted tax preparation revenues. Certain wage‑related expenses are now being reported in field wages rather than other wages to better align with how costs are managed and evaluated internally. This change had no impact on total operating expenses, and prior period amounts have not been reclassified. Benefits and other compensation increased $6.6 million or 5.9% due primarily to higher payroll taxes, stock-based compensation and severance pay in the current year. Occupancy expense increased $7.6 million, or 6.4%, primarily due to higher lease expenses and facility repairs. Marketing and advertising expenses decreased $11.3 million, or 5.7%, due to lower online and TV advertising as well as lower customer incentive expenses.
Previous wording
Other operating expenses increased $9.0 million, or 8.5%. The components of other expenses are as follows:
Current wording
Other operating expenses increased $9.3 million, or 4.8%. The components of other expenses are as follows:
Previous wording
We recorded an income tax benefit of $77.7 million in the current year compared to $69.8 million in the prior year. The effective tax rate for the three months ended December 31, 2025, and 2024 was 24.3% and 22.4%, respectively.
Current wording
We recorded income tax expense of $167.7 million in the current year compared to $235.3 million in the prior year. The effective tax rate for the three months ended March 31, 2026, and 2025 was 16.5% and 24.6%, respectively. The decrease in the effective tax rate was primarily attributable to the settlement of an IRS examination of our 2020 U.S. federal income tax return and related carryback claims to the 2015 through 2018 tax years. The closure of the IRS examination resulted in a discrete income tax benefit of $84.1 million, which was recorded in income tax expense. See Item 1, note 7 to the consolidated financial statements for additional discussion.
Previous wording
Total operating expenses increased $13.8 million, or 1.5%, from the prior year period. Compensation and benefits increased $9.9 million, or 2.6%, primarily due to higher tax professional wages as a result of higher assisted revenue and higher corporate wages primarily due to salary increases. Certain wage‑related expenses are now being reported in field wages rather than other wages to better align with how costs are managed and evaluated internally. This change had no impact on total operating expenses, and prior period amounts have not been reclassified. Occupancy expense increased $6.1 million, or 2.9%, primarily due to higher lease expenses.
Current wording
Total operating expenses increased $76.3 million, or 3.5%, from the prior year period. Field wages increased $58.8 million, or 8.6%, due to increased tax professional wages as a result of higher U.S. assisted tax preparation revenues. Certain wage‑related expenses are now being reported in field wages rather than other wages to better align with how costs are managed and evaluated internally. This change had no impact on total operating expenses, and prior period amounts have not been reclassified. Benefits and other compensation increased $6.1 million, or 3.2%, due to higher payroll taxes, employee insurance, and severance. Occupancy expense increased $13.7 million, or 4.2%, primarily due to higher lease expenses and facility repairs. Marketing and advertising expense decreased $12.8 million, or 5.8%, due to lower online and TV advertising as well as lower customer incentives.
Previous wording
Other operating expenses decreased $3.5 million, or 1.7%. The components of other expenses are as follows:
Current wording
Other operating expenses increased $5.8 million, or 1.5%. The components of other expenses are as follows:
Previous wording
Our operations are highly seasonal and substantially all of our revenues and cash flow are generated during the period from February through April in a typical year. Therefore, we normally require the use of cash to fund losses and working capital needs, periodically resulting in a working capital deficit, during the months of May through
Current wording
Our operations are highly seasonal and substantially all of our revenues and cash flow are generated during the period from February through April in a typical year. Therefore, we normally require the use of cash to fund losses and working capital needs, periodically resulting in a working capital deficit, during the months of May through January. We typically have relied on available cash balances from the prior tax season and borrowings to meet liquidity needs.
Previous wording
DISCUSSION OF CONSOLIDATED STATEMENTS OF CASH FLOWS– The following table summarizes our statements of cash flows for the six months ended December 31, 2025 and 2024. See Item 1 for the complete consolidated statements of cash flows for these periods.
Current wording
DISCUSSION OF CONSOLIDATED STATEMENTS OF CASH FLOWS– The following table summarizes our statements of cash flows for the nine months ended March 31, 2026 and 2025. See Item 1 for the complete consolidated statements of cash flows for these periods.
Previous wording
Investing Activities. Cash used in investing activities totaled $91.9 million for the six months ended December 31, 2025 compared to $87.5 million in the prior year period. The increase is primarily due to higher payments made for business acquisitions.
Current wording
Investing Activities. Cash used in investing activities totaled $122.6 million for the nine months ended March 31, 2026 compared to $110.9 million in the prior year period. The increase is primarily due to higher payments made for business acquisitions in the current year.
Previous wording
Financing Activities. Cash provided by financing activities totaled $429.5 million for the six months ended December 31, 2025 compared to $258.6 million in the prior year period. The change is primarily due to higher net proceeds from line of credit borrowings, lower share repurchases for payroll taxes on stock-based awards, partially offset by higher dividends.
Current wording
Financing Activities. Cash used in financing activities totaled $579.5 million for the nine months ended March 31, 2026 compared to $595.5 million in the prior year period. The change is primarily due to lower share repurchases for payroll taxes on stock based awards, partially offset by higher dividends.
Previous wording
We have consistently paid quarterly dividends. Dividends paid totaled $104.6 million and$97.0 million for the six months ended December 31, 2025 and 2024, respectively. Although we have historically paid dividends and plan to continue to do so, there can be no assurances that circumstances will not change in the future that could affect our ability or decisions to pay dividends.
Current wording
We have consistently paid quarterly dividends. Dividends paid totaled $157.8 million and$147.1 million for the nine months ended March 31, 2026 and 2025, respectively. Although we have historically paid dividends and plan to continue to do so, there can be no assurances that circumstances will not change in the future that could affect our ability or decisions to pay dividends.
Previous wording
During the six months ended December 31, 2025, we repurchased $400.1 million of our common stock at an average price of $50.90 per share, excluding excise taxes in connection with such repurchases. In the prior year period, we repurchased $400.1 million of our common stock at an average price of $61.10 per share, excluding excise taxes in connection with such repurchases. Our current share repurchase program has remaining authorization of $700.0 million and does not have an expiration date.
Current wording
During the nine months ended March 31, 2026, we repurchased $400.1 million of our common stock at an average price of $50.90 per share, excluding excise taxes in connection with such repurchases. In the prior year period, we repurchased $400.1 million of our common stock at an average price of $61.10 per share, excluding excise taxes in connection with such repurchases. Our current share repurchase program has remaining authorization of $700.0 million and does not have an expiration date.
Previous wording
Capital Investment. Capital expenditures totaled $48.7 million and $49.1 million for the six months ended December 31, 2025 and 2024, respectively. Our capital expenditures relate primarily to recurring improvements to retail offices, as well as investments in computers, software and related assets. In addition to our capital
Current wording
Capital Investment. Capital expenditures totaled $67.1 million and $71.8 million for the nine months ended March 31, 2026 and 2025, respectively. Our capital expenditures relate primarily to recurring improvements to retail offices, as well as investments in computers, software and related assets. In addition to our capital expenditures, we also made payments to acquire businesses. We acquired franchisee and competitor businesses totaling $55.0 million and $35.3 million during the nine months ended March 31, 2026 and 2025, respectively. See Item 1, note 5 for additional information on our acquisitions.
Previous wording
FINANCING RESOURCES– The 2025 CLOC has capacity up to $1.5 billion and is scheduled to expire in July 2030. Proceeds under the 2025 CLOC may be used for working capital needs or for other general corporate purposes. We had an outstanding balance of$945.0 million under our 2025 CLOC and amounts available to borrow were not limited by the debt-to-EBITDA covenantas of December 31, 2025.
Current wording
FINANCING RESOURCES– The 2025 CLOC has capacity up to $1.5 billion and is scheduled to expire in July 2030. Proceeds under the 2025 CLOC may be used for working capital needs or for other general corporate purposes. We had no outstanding balance on our 2025 CLOC and amounts available to borrow were not limited by the debt-to-EBITDA covenantas of March 31, 2026.
Previous wording
CASH AND OTHER ASSETS– As of December 31, 2025, we held cash and cash equivalents, excluding restricted amounts, of $349.2 million, including $199.7 million held by our foreign subsidiaries.
Current wording
CASH AND OTHER ASSETS– As of March 31, 2026, we held cash and cash equivalents, excluding restricted amounts, of $867.0 million, including $196.7 million held by our foreign subsidiaries.
Previous wording
The impact of changes in foreign exchange rates during the period on our international cash balances resulted in a decrease of $1.1 million and $9.1 million during the six months ended December 31, 2025 and 2024, respectively.
Current wording
The impact of changes in foreign exchange rates during the period on our international cash balances resulted in a decrease of $1.1 million and $8.4 million during the nine months ended March 31, 2026 and 2025, respectively.
Previous wording
CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS – EAs are originated by Pathward. We purchase participation interests, at par, in all EAs originated by Pathward in accordance with our participation agreement. Our participation interest varies by jurisdiction. We purchased participation interests of $281.1 million during the six months ended December 31, 2025.
Current wording
CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS – EAs are originated by Pathward. We purchase participation interests, at par, in all EAs originated by Pathward in accordance with our participation agreement. Our participation interest varies by jurisdiction. For the nine months ended March 31, 2026, the principal balance of purchased participation interests for the current year totaled $283.7 million, which represents 87% of total EA volume originated by Pathward.
Previous wording
The table above reflects $2.4 billion and $1.8 billion of non-current intercompany receivables due to the Issuer from non-guarantor subsidiaries as of December 31, 2025 and June 30, 2025, respectively.
Current wording
The table above reflects $1.8 billion of non-current intercompany receivables due to the Issuer from non-guarantor subsidiaries as of March 31, 2026 and June 30, 2025.
Previous wording
We consider our non-GAAP financial measures to be performance measures and a useful metric for management and investors to evaluate and compare the ongoing operating performance of our business. We make adjustments for certain non-GAAP financial measures related to amortization of intangibles from acquisitions and goodwill impairments. We may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures.
Current wording
We consider our non-GAAP financial measures to be performance measures and a useful metric for management and investors to evaluate and compare the ongoing operating performance of our business. We make adjustments for certain non-GAAP financial measures related to material discrete tax impacts of IRS examination settlements, amortization of intangibles from acquisitions and goodwill impairments. We may
Previous wording
We measure the performance of our business using a variety of metrics, including earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations, adjusted EBITDA from continuing operations, adjusted diluted earnings per share from continuing operations, free cash flow and free cash flow yield. We also use EBITDA from continuing operations and pretax income of continuing operations, each subject to permitted adjustments, as performance metrics in incentive compensation calculations for our employees.
Current wording
We measure the performance of our business using a variety of metrics, including earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations, adjusted EBITDA from continuing operations, adjusted net income from continuing operations, adjusted diluted earnings per share from continuing operations, free cash flow, and free cash flow yield. We also use EBITDA from continuing operations and pretax income of continuing operations, each subject to permitted adjustments, as performance metrics in incentive compensation calculations for our employees.
Previous wording
The following is a reconciliation of net loss to EBITDA from continuing operations, which is a non-GAAP financial measure:
Current wording
The following is a reconciliation of net income to EBITDA from continuing operations, which is a non-GAAP financial measure:
Previous wording
This report and other documents filed with the Securities and Exchange Commission (SEC) may contain forward-looking statements. In addition, our senior management may make forward-looking statements orally to analysts, investors, the media and others. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or variation of words such as "expects," "anticipates," "intends," "plans," "believes," "commits," "seeks," "estimates," "projects," "forecasts," "targets," "would," "will," "should," "could," "may" or other similar expressions. Forward-looking statements provide management's current expectations or predictions of future conditions, events or results. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. They may include estimates of revenues, client trajectory, income, effective tax rate, earnings per share, cost savings, capital expenditures, dividends, share repurchases, liquidity, capital structure, market share, industry volumes or other financial items, descriptions of management's plans or objectives for future operations, services or products, or descriptions of assumptions underlying any of the above. They may also include the expected impact of external events beyond the Company's control, such as outbreaks of infectious
Current wording
investors, the media and others. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or variation of words such as "expects," "anticipates," "intends," "plans," "believes," "commits," "seeks," "estimates," "projects," "forecasts," "targets," "would," "will," "should," "could," "may" or other similar expressions. Forward-looking statements provide management's current expectations or predictions of future conditions, events or results. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. They may include estimates of revenues, client trajectory, income, effective tax rate, earnings per share, cost savings, capital expenditures, dividends, share repurchases, liquidity, capital structure, market share, industry volumes or other financial items, descriptions of management's plans or objectives for future operations, services or products, or descriptions of assumptions underlying any of the above. They may also include the expected impact of external events beyond the Company's control, such as outbreaks of infectious disease, severe weather events, natural or manmade disasters, or changes in the regulatory environment in which we operate.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Nine months ended March 31, 2026 compared to March 31, 2025
Current report — wording carried from elsewhere
consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures.
Current report — wording carried from elsewhere
This report and other documents filed with the Securities and Exchange Commission (SEC) may contain forward-looking statements. In addition, our senior management may make forward-looking statements orally to analysts,
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
Six months ended December 31, 2025 compared to December 31, 2024
Previous report — wording carried elsewhere
We recorded income tax benefit of $128.6 million in the current year compared to $130.7 million in the prior year. The effective tax rate for both the six months ended December 31, 2025, and 2024 was 24.0%. See Item 1, note 7 to the consolidated financial statements for additional discussion.
Previous report — wording carried elsewhere
January. We typically have relied on available cash balances from the prior tax season and borrowings to meet liquidity needs.
Previous report — wording carried elsewhere
expenditures, we also made payments to acquire businesses. We acquired franchisee and competitor businesses totaling $35.4 million and $28.0 million during the six months ended December 31, 2025 and 2024, respectively. See Item 1, note 5 for additional information on our acquisitions.
Previous report — wording carried elsewhere
disease, severe weather events, natural or manmade disasters, or changes in the regulatory environment in which we operate.