H&R BLOCK INC
For the period ended Mar 31, 2025. Filed May 7, 2025.
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, 2025 · Filed May 7, 2025
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 2024-12-31; filed 2025-02-06.
0001838862-25-000011
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsNon-GAAP Financial InformationCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-07.
0001605297-25-000005
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 65 previous paragraphs and 69 current paragraphs.
32 unchanged; 24 reworded; 9 added; 7 removed; 2 previous and 4 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 (9)
Current report
Revenues increased $92.3 million, or 4.2%, from the prior year. U.S. assisted tax preparation revenues increased $101.1 million, or 6.6%, due to a 5.0% increase in net average charge combined with a 1.5% increase in company-owned tax return volumes in the current year. U.S. royalty revenue decreased $8.0 million, or 5.6%, 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, 2025 our total assisted tax return volume, which includes both company-owned and franchise offices, decreased 0.6% from the prior year.
Current report
U.S. DIY tax preparation revenues increased $16.1 million, or 8.1%, primarily due to an 8.9% increase in online paid net average charge and higher desktop software sales, offset by slightly lower online paid volumes.
Current report
International tax preparation revenues decreased $7.8 million, or 11.5%, primarily due to lower tax return volumes in Canada combined with unfavorable foreign currency exchange rates.
Current report
Total operating expenses increased $42.2 million, or 3.4%, from the prior year. Field wages increased $22.6 million, or 4.4%, due to higher tax professional wages in the current year primarily due to the increase in company-owned volumes. Benefits and other compensation increased $11.9 million, or 12.0%, due to higher payroll taxes and 401K match in the current year.
Current report
Revenues increased $102.3 million, or 4.0%, from the prior year. U.S. assisted tax preparation revenues increased $104.8 million, or 6.5%, primarily due to a 5.0% increase in net average charge combined with a 1.4% increase in company-owned tax return volumes in the current year. U.S. royalty revenue decreased $9.8 million, or 6.4%, primarily 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, 2025 our total assisted tax return volume, which includes both company-owned and franchise offices, decreased 0.6% from the prior year.
Current report
U.S. DIY tax preparation revenues increased $16.1 million, or 7.5%, primarily due to a 8.4% increase in online paid net average charge and higher desktop software sales, partially offset by lower online paid volumes.
Current report
Interest and fee income on Emerald Advance® revenues decreased $10.1 million, or 27.5%, primarily due to a decrease in EA loans originated in the current year. Wave revenues increased $9.0 million, or 12.8%, due to higher accounting, invoicing and receipts subscriptions and small business payments processing volumes.
Current report
Assisted tax return volume, which includes our company-owned and franchise operations, decreased 0.8% from July 1, 2024 through April 30, 2025 compared to the prior year period. DIY online paid tax return volume from July 1, 2024 through April 30, 2025, decreased 0.3% 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, 2025.
Current report
Operating Activities. Cash provided by operations totaled $429.3 million for the nine months ended March 31, 2025 compared to $420.3 million in the prior year period. The increase is primarily due to changes in accounts payable and accounts receivable, partially offset by a lower net income in the current year.
Removed paragraphs (7)
Previous report
International tax preparation revenues increased $2.2 million, or 7.6%, primarily due to higher tax return volumes in Australia combined with favorable foreign currency exchange rates. Wave revenues increased $3.4 million, or 14.8%, due to higher accounting, invoicing and receipts subscriptions and small business payments processing volumes.
Previous report
Total operating expenses increased $25.8 million, or 5.8%, from the prior year. Field wages increased $3.8 million, or 4.8%, due to higher tax professional wages in the current year. Other wages increased $4.1 million, or 5.4%, due to higher corporate wages primarily due to salary increases. Occupancy expense increased $3.8 million, or 3.8%, primarily due to higher lease and office-related expenses. Marketing and advertising expense increased $3.6 million, or 31.5%, primarily due to the timing of advertising and lower vendor refunds for expired customer incentives in the current year.
Previous report
Other income (expense), net decreased $3.2 million, or 53.7%, primarily due to higher foreign currency losses and lower interest income in the current year.
Previous report
Revenues increased $10.0 million, or 2.8%, from the prior year. U.S. assisted tax preparation revenues increased $3.7 million, or 4.3%, primarily due to an increase in net average charge.
Previous report
Peace of Mind® revenue decreased $3.0 million, or 7.2%, due to lower prior year sales of Peace of Mind®. Peace of Mind® revenues are initially deferred and recognized over the term of the plan. Other revenues increased $5.1 million, or 24.6%, primarily due to higher bookkeeping fees. Interest and fee income on Emerald Advance® revenues decreased $3.2 million, or 20.8%, primarily due to a decrease in EA loans originated in the current year.
Previous report
International revenues increased $6.5 million, or 7.2%, primarily due to higher tax return volumes in Australia combined with favorable foreign currency exchange rates. Wave revenues increased $5.9 million, or 12.5%, due to higher accounting, invoicing and receipts subscriptions and small business payments processing volumes.
Previous report
Operating Activities. Cash used in operations totaled $895.6 million for the six months ended December 31, 2024 compared to $942.2 million in the prior year period. The change is primarily due to lower EA loans originated in the current year and changes in deferred taxes, partially offset by a higher net loss in the current year.
Reworded paragraphs (24)
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 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.
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 6,701 company-owned or 2,013 franchise offices (as of March 31, 2025), 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 of $179.1 million were flat compared to the prior year. Interest and fee income on Emerald Advance® revenues decreased $2.9 million, or 19.2%, primarily due to a decrease in EA loans originated in the current year.
Current wording
Interest and fee income on Emerald Advance® revenues decreased $6.9 million, or 32.5%, primarily due to a decrease in EA loans originated in the current year.
Previous wording
Other operating expenses increased $11.6 million, or 12.4%. The components of other expenses are as follows:
Current wording
Other operating expenses increased $7.7 million, or 4.1%. The components of other expenses are as follows:
Previous wording
We recorded an income tax benefit of $69.8 million in the current year compared to $93.8 million in the prior year. The effective tax rate for the three months ended December 31, 2024, and 2023 was 22.4% and 33.1%, respectively.
Current wording
We recorded an income tax expense of $235.3 million in the current year compared to $215.8 million in the prior year. The effective tax rate for the three months ended March 31, 2025, and 2024 was 24.6% and 23.8%, respectively.
Previous wording
Total operating expenses increased $57.9 million, or 6.9%, from the prior year period. Field wages increased $9.4 million, or 6.7%, due to higher tax professional wages in the current year. Other wages increased $9.3 million, or 6.3%, primarily due to higher corporate wages due to salary increases in the current year. Benefits and other compensation increased $5.8 million, or 8.2%, due to higher employee insurance and severance pay in the current year. Occupancy expense increased $5.8 million, or 2.9%, primarily due to higher lease and office-related expenses. Marketing and advertising expense increased $8.0 million, or 48.0%, due to the timing of advertising and lower vendor refunds for expired customer incentives in the current year.
Current wording
Total operating expenses increased $100.0 million, or 4.8%, from the prior year period. Field wages increased $32.0 million, or 4.9%, due to higher tax professional wages in the current year primarily due to the increase in company-owned volumes. Other wages increased $8.6 million, or 3.9%, primarily due to higher corporate wages due to salary increases in the current year. Benefits and other compensation increased $17.8 million, or 10.4%, due to higher payroll taxes, 401K match and higher employee insurance in the current year. Marketing and advertising expense increased $10.4 million, or 4.9%, due to the higher spend and lower vendor refunds for expired customer incentives in the current year.
Previous wording
Other operating expenses increased $26.1 million, or 15.0%. The components of other expenses are as follows:
Current wording
Other operating expenses increased $33.8 million, or 9.4%. The components of other expenses are as follows:
Previous wording
Legal expense increased $13.2 million primarily due to higher outside legal counsel spend.
Current wording
Legal expense increased $9.9 million, or 50.3%, primarily due to higher outside legal counsel spend.
Previous wording
We recorded income tax expense of $130.7 million in the current year compared to $143.2 million in the prior year. The effective tax rate for the six months ended December 31, 2024, and 2023 was 24.0% and 28.9%, respectively. See Item 1, note 7 to the consolidated financial statements for additional discussion.
Current wording
We recorded income tax expense of $104.6 million in the current year compared to $72.5 million in the prior year. The effective tax rate for the nine months ended March 31, 2025, and 2024 was 25.3% and 17.6%, respectively. See Item 1, note 7 to the consolidated financial statements for additional discussion.
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, 2024 and 2023. 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, 2025 and 2024. See Item 1 for the complete consolidated statements of cash flows for these periods.
Previous wording
Investing Activities. Cash used in investing activities totaled $87.5 million for the six months ended December 31, 2024 compared to $71.0 million in the prior year period. The change is primarily due to higher capital expenditures in the current year.
Current wording
Investing Activities. Cash used in investing activities totaled $110.9 million for the nine months ended March 31, 2025 compared to $99.6 million in the prior year period. The change is primarily due to higher capital expenditures, partially offset by lower payments made for business acquisitions in the current year.
Previous wording
Financing Activities. Cash provided by financing activities totaled $258.6 million for the six months ended December 31, 2024 compared to $335.4 million in the prior year period. The change is primarily due to higher repurchases of common stock in the current year.
Current wording
Financing Activities. Cash used in financing activities totaled $595.5 million for the nine months ended March 31, 2025 compared to $520.5 million in the prior year period. The change is primarily due to higher repurchases of common stock and dividends in the current year.
Previous wording
We have consistently paid quarterly dividends. Dividends paid totaled$97.0 million and$89.9 million for the six months ended December 31, 2024 and 2023, 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$147.1 million and$135.1 million for the nine months ended March 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.
Previous wording
On August 15, 2024, the Board of Directors approved a $1.5 billion share repurchase program. The repurchase program does not have an expiration date and replaced the previously existing share repurchase program. During the six months ended December 31, 2024, 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. In the prior year period, we repurchased $350.1 million of our common stock at an average price of $43.66 per share, excluding excise taxes in connection with such repurchases. Our current share repurchase program has remaining authorization of $1.1 billion and does not have an expiration date.
Current wording
On August 15, 2024, the Board of Directors approved a $1.5 billion share repurchase program. The repurchase program does not have an expiration date and replaced the previously existing share repurchase program. During the nine months ended March 31, 2025, 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. In the prior year period, we repurchased $350.1 million of our common stock at an average price of $43.66 per share, excluding excise taxes in connection with such repurchases. Our current share repurchase program has remaining authorization of $1.1 billion and does not have an expiration date.
Previous wording
Share repurchases may be effectuated through open market transactions, some of which may be effectuated under SEC Rule 10b5-1. The Company may cancel, suspend, or extend the period for the purchase of shares at any
Current wording
Share repurchases may be effectuated through open market transactions, some of which may be effectuated under SEC Rule 10b5-1. The Company may cancel, suspend, or extend the period for the purchase of shares at any time. Any repurchases will be funded primarily through available cash and cash from operations. Although we may continue to repurchase shares, there is no assurance that we will purchase up to the full Board authorization.
Previous wording
Capital Investment. Capital expenditures totaled $49.1 million and $32.7 million for the six months ended December 31, 2024 and 2023, 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 $28.0 million and $27.2 million during the six months ended December 31, 2024 and 2023, respectively. See Item 1, note 5 for additional information on our acquisitions.
Current wording
Capital Investment. Capital expenditures totaled $71.8 million and $53.8 million for the nine months ended March 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 expenditures, we also made payments to acquire businesses. We acquired franchisee and competitor businesses totaling $35.3 million and $43.2 million during the nine months ended March 31, 2025 and 2024, respectively. See Item 1, note 5 for additional information on our acquisitions.
Previous wording
FINANCING RESOURCES– The CLOC has capacity up to $1.5 billion and is scheduled to expire in June 2026. Proceeds under the CLOC may be used for working capital needs or for other general corporate purposes. We had an outst anding balance of$790.0 million under our CLOC and amounts available to borrow were not limited by the debt-to-EBITDA covenant as of December 31, 2024.
Current wording
FINANCING RESOURCES– The CLOC has capacity up to $1.5 billion and is scheduled to expire in June 2026. Proceeds under the CLOC may be used for working capital needs or for other general corporate purposes. We had no outstanding balance under our CLOC and amounts available to borrow were not limited by the debt-to-EBITDA covenant as of March 31, 2025.
Previous wording
CASH AND OTHER ASSETS– As of December 31, 2024, we held cash and cash equivalents, excluding restricted amounts, of $320.1 million, including $158.6 million held by our foreign subsidiaries.
Current wording
CASH AND OTHER ASSETS– As of March 31, 2025, we held cash and cash equivalents, excluding restricted amounts, of $772.9 million, including $153.0 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 $9.1 million during the six months ended December 31, 2024 and in an increase of $0.7 million during the six months ended December 31, 2023.
Current wording
The impact of changes in foreign exchange rates during the period on our international cash balances resulted in a decrease of $8.4 million during the nine months ended March 31, 2025 and in a decrease of $2.7 million during the nine months ended March 31, 2024.
Previous wording
CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS – The Company entered into an agreement to purchase federal Investment tax credits (“ITC”). During the six months ended December 31, 2024, we paid $22.9 million for ITCs. As of December 31, 2024, the Company has a remaining commitment to purchase additional ITCs, for approximately $80.0 million if certain conditions set forth in the agreement are satisfied, with the final closing payment anticipated to occur by June 30, 2025.
Current wording
CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS – The Company entered into an agreement to purchase federal Investment tax credits (ITC). During the nine months ended March 31, 2025, we paid $22.9 million for ITCs. As of March 31, 2025, the Company has a remaining commitment to purchase additional ITCs, for
Previous wording
Effective October 18, 2024, we amended our Program Management Agreement (PMA) with Pathward®, N.A to extend the term of the PMA for two years until June 30, 2027. We purchased participation interests in EAs of $257.9 million during the six months ended December 31, 2024. See Item 1, note 8 for additional information on our commitments.
Current wording
Effective October 18, 2024, we amended our Program Management Agreement (PMA) with Pathward®, N.A to extend the term of the PMA for two years until June 30, 2027. We purchased participation interests in EAs of $260.6 million during the nine months ended March 31, 2025. See Item 1, note 8 for additional information on our commitments.
Previous wording
The table above reflects $2.3 billion and $1.7 billion of non-current intercompany receivables due to the Issuer from non-guarantor subsidiaries as of December 31, 2024 and June 30, 2024, respectively.
Current wording
The table above reflects $1.7 billion of non-current intercompany receivables due to the Issuer from non-guarantor subsidiaries as of March 31, 2025 and June 30, 2024.
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
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 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,
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Nine months ended March 31, 2025 compared to March 31, 2024
Current report — wording carried from elsewhere
approximately $75.1 million if certain conditions set forth in the agreement are satisfied, with the final closing payment anticipated to occur by June 30, 2025.
Current report — wording carried from elsewhere
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
Current report — wording carried from elsewhere
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 previous paragraphs (2)
Previous report — wording carried elsewhere
Six months ended December 31, 2024 compared to December 31, 2023
Previous report — wording carried elsewhere
time. Any repurchases will be funded primarily through available cash and cash from operations. Although we may continue to repurchase shares, there is no assurance that we will purchase up to the full Board authorization.