H&R BLOCK INC
For the period ended Sep 30, 2026. Filed Nov 9, 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.
Sep 30, 2026 · Filed Nov 9, 2026
HRB$50.98-3.2%Stored close · as of Nov 9, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0000012659-26-000017
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsNon-GAAP Financial InformationCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-09.
0000012659-26-000036
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 73 previous paragraphs and 65 current paragraphs.
30 unchanged; 17 reworded; 17 added; 22 removed; 4 previous and 1 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 (17)
Current report
FINANCIAL RESULTS OVERVIEW
Current report
Revenues
Current report
The components of revenue include:
Current report
U.S. tax preparation revenues increased $2.6 million, or 5.0%, primarily due to an increase in net average charge in the current year. Desktop software revenue, which is included in "Other" is included in U.S. consumer DIY tax preparation below. The components of U.S. tax preparation and software revenue include:
Current report
U.S. small business services revenues increased $3.8 million, or 12.4% due to higher accounting, invoicing and receipts subscriptions and small business payments processing volumes.
Current report
U.S. tax protection and identity services revenues increased $5.1 million, or 17.6% primarily due to changes in amortization rates and higher POM and TIS volumes.
Current report
Operating Expenses
Current report
Total operating expenses increased $45.6 million, or 11.1%, from the prior year.
Current report
Field compensation and benefits increased $19.3 million, or 23.3% primarily due to our previously announced seasonal office leadership transition which eliminated approximately 200 positions throughout the organization with severance and related costs totaling $8.0 million, and increased tax professional wages associated with certain strategic initiatives and higher international services revenue. Certain wage-related expenses are now being reported in field compensation and benefits rather than corporate compensation and benefits 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 report
The components of occupancy and equipment expense include:
Current report
Occupancy and equipment increased $7.8 million, or 6.3% due to an increase in the number of leased offices, higher rent, repairs and other office-related expenses.
Current report
Technology and related expenses increased by $2.9 million, or 9.6% due to higher cloud-related technology spend.
Current report
The components of general operations expenses include:
Current report
Marketing and advertising expense increased $3.2 million, or 38.6% due to lower vendor refunds for expired customer incentives and higher online advertising.
Current report
The components of general corporate expenses include:
Current report
Legal and professional fees increased $3.5 million, primarily due to higher outside counsel spend and higher legal settlement accruals in the current year. Consulting fees increased $2.6 million, or 38.1%, primarily due to consulting costs that support our strategic priorities.
Current report
Operating Activities. Cash used in operations totaled $358.5 million for the three months ended September 30, 2026 compared to $356.8 million in the prior year period. The increase is primarily due to higher net loss, and an increase in other assets, offset by lower income taxes paid.
Removed paragraphs (22)
Previous report
RECENT DEVELOPMENTS
Previous report
On July 11, 2025, we entered into a Fifth Amended and Restated Credit and Guarantee Agreement (2025 CLOC), which amended and restated our Fourth Amended and Restated Credit and Guarantee Agreement, extended the scheduled maturity date to July 11, 2030, maintained the aggregate principal amount of $1.5 billion, and revised the interest rate table. All other material terms remain substantially unchanged from the Fourth Amended and Restated Credit and Guarantee Agreement. See our Current Report on Form 8-K filed on July 15, 2025 for additional information.
Previous report
On August 7, 2025, Jeffrey J. Jones II notified the Board of Directors of the Company of his intention to retire as President and Chief Executive Officer of the Company, effective as of December 31, 2025. Mr. Jones retired from the Board of Directors, effective on December 31, 2025. On August 8, 2025, the Board appointed Curtis A. Campbell, the Company's President, Global Consumer Tax and Chief Product Officer, to succeed Mr. Jones as President and Chief Executive Officer, effective immediately upon Mr. Jones’ retirement. See our Current Report on Form 8-K filed on August 11, 2025 for more information.
Previous report
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 report
On August 26, 2025, we issued $350.0 million of 5.375% Senior Notes due September 15, 2032 (2032 Senior Notes). The 2032 Senior Notes are not redeemable by the bondholders prior to maturity, although we have the right to redeem some or all of these notes at any time, at specified redemption prices. The net proceeds from the 2032 Senior Notes were used for general corporate purposes, which includes, among other uses, the redemption of the $350.0 million in principal outstanding of our 5.250% notes due October 2025 (2025 Senior Notes). We redeemed our 2025 Senior Notes at 100% of the principal amount, plus accrued and unpaid interest, on September 19, 2025.
Previous report
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 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.
Previous report
Refund Transfer revenues increased $6.2 million, or 5.5%, primarily due to an increase in Refund Transfer volume.
Previous report
International tax preparation revenues increased $9.7 million, or 16.0%, primarily due to favorable foreign currency exchange rates in Canada and Australia.
Previous report
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 report
Other operating expenses increased $9.3 million, or 4.8%. The components of other expenses are as follows:
Previous 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.
Previous 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.
Previous report
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 report
Other operating expenses increased $5.8 million, or 1.5%. The components of other expenses are as follows:
Previous report
Technology-related expenses increased $6.2 million, or 7.1%, due to higher third-party technology and software costs.
Previous 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.
Previous report
TAX SEASON UPDATE
Previous 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.
Previous 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.
Previous report
On August 26, 2025, we issued the 2032 Senior Notes. We redeemed our 2025 Senior Notes at 100% of the principal amount, plus accrued and unpaid interest, on September 19, 2025.
Previous report
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.
Reworded paragraphs (17)
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 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.
Current wording
Our subsidiaries provide assisted and DIY tax preparation solutions through multiple channels (including in-person, online and mobile applications, virtual, and desktop software) and distribute H&R Block-branded services and products, including those of our bank partners, to the general public primarily in the U.S., Canada and Australia. Tax returns are either prepared by H&R Block tax professionals in one of our company-owned or franchise offices, 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
International revenues increased $13.4 million, or 8.5%, primarily due to favorable foreign currency exchange rates in Canada and Australia.
Current wording
International services revenues increased $8.3 million, or 12.5% due primarily to favorable foreign currency exchange rates in Australia.
Previous 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.
Current wording
We recorded income tax benefit of $52.7 million in the current year compared to $51.0 million in the prior year. The effective tax rate for the three months ended September 30, 2026, and 2025 was 21.9% and 23.6%, respectively.
Previous 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.
Current wording
DISCUSSION OF CONSOLIDATED STATEMENTS OF CASH FLOWS– The following table summarizes our statements of cash flows for the three months ended September 30, 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 $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.
Current wording
Investing Activities. Cash used in investing activities totaled $35.7 million for the three months ended September 30, 2026 compared to $20.9 million in the prior year period. The increase is primarily due to higher capital expenditures and higher payments made for business acquisitions in the current year.
Previous 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.
Current wording
Financing Activities. Cash used in financing activities totaled $171.4 million for the three months ended September 30, 2026 compared to $225.0 million in the prior year period. The change is primarily due to lower repurchases of common stock, offset by lower proceeds from line of credit borrowings.
Previous 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.
Current wording
We have consistently paid quarterly dividends. Dividends paid totaled $52.6 million and$50.2 million for the three months ended September 30, 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 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.
Current wording
During the three months ended September 30, 2026, we repurchased $100.3 million of our common stock at an average price of $45.68 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 $50.90 per share, excluding excise taxes in connection with such repurchases. Our current share repurchase program has remaining authorization of $500.0 million and does not have an expiration date.
Previous 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.
Current wording
Capital Investment. Capital expenditures totaled $20.8 million and $13.2 million for the three months ended September 30, 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 $10.3 million and $5.1 million during the three months ended September 30, 2026 and 2025, respectively. See Item 1, note 5 for additional information on our acquisitions.
Previous 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.
Current wording
CASH AND OTHER ASSETS– As of September 30, 2026, we held cash and cash equivalents, excluding restricted amounts, of $390.5 million, including $250.6 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 $8.4 million during the nine months ended March 31, 2026 and 2025, respectively.
Current wording
The impact of changes in foreign exchange rates during the period on our international cash balances resulted in a decrease of $0.6 million and $2.9 million during the three months ended September 30, 2026 and 2025, respectively.
Previous wording
Except as described in Recent Developments related to the 2025 CLOC, the 2032 Senior Notes issuance and the 2025 Senior Notes redemption, there have been no other material changes in our contractual obligations and commercial commitments from those reported in our June 30, 2025 Annual Report on Form 10-K.
Current wording
CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS – In September 2026, we amended our Program Management Agreement with Pathward, N.A. to extend its term through June 30, 2030. There have been no other material changes in our contractual obligations and commercial commitments from those reported in our June 30, 2026 Annual Report on Form 10-K.
Previous 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.
Current wording
The table above reflects $1.8 billion of non-current intercompany receivables due to the Issuer from non-guarantor subsidiaries as of both September 30, 2026 and June 30, 2026.
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 material discrete tax impacts of IRS examination settlements, amortization of intangibles from acquisitions and goodwill impairments. We may
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 amortization of intangibles from acquisitions, goodwill impairments, severance and related costs of discrete strategic initiatives, and material discrete tax impacts of IRS examination settlements. We may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures.
Previous wording
The following is a reconciliation of net income to EBITDA from continuing operations, which is a non-GAAP financial measure:
Current wording
The following is a reconciliation of net loss to EBITDA and adjusted EBITDA from continuing operations, which are non-GAAP financial measures:
Previous wording
The following is a reconciliation of our results from continuing operations to our adjusted results from continuing operations, which is a non-GAAP financial measure:
Current wording
The following is a reconciliation of our results from continuing operations to our adjusted results from continuing operations, which are non-GAAP financial measures:
Previous 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.
Current 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
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
disease, severe weather events, natural or manmade disasters, or changes in the regulatory environment in which we operate.
Rearranged previous paragraphs (4)
Previous report — wording carried elsewhere
(1)All non-GAAP measures are results from continuing operations. See "Non-GAAP Financial Information" at the end of this item for a reconciliation of non-GAAP measures.
Previous report — wording carried elsewhere
Nine months ended March 31, 2026 compared to March 31, 2025
Previous report — wording carried elsewhere
consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures.
Previous report — wording carried 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,