H&R BLOCK INC (HRB)

CIK: 0000012659. SIC: 7200 Services-Personal Services. Latest 10-K as of: 2025-08-15.

SIC breadcrumb: Services > SIC Major Group 72 > SIC 7200 Services-Personal Services

SEC company page: https://www.sec.gov/edgar/browse/?CIK=12659. Latest filing source: 0001605297-25-000016.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2025-08-15. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000012659.json. Derived margins are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Missing metrics are omitted rather than fabricated.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-06. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000012659.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0000012659-26-000017.

Extracted between Part I Item 2 and the next Item 3/4 or Part II heading after HTML sanitization. Confidence: high. Filing date: 2026-05-06. Report date: 2026-03-31.

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RECENT DEVELOPMENTS

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.

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.

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.

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.

RESULTS OF OPERATIONS

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.

18

Q3 FY2026 Form 10-Q| H&R Block, Inc.

Table of Contents

Consolidated – Financial Results

(in 000s, except per share amounts)

Three months ended March 31,

2026

2025

$ Change

% Change

Revenues:

U.S. tax preparation and related services:

Assisted tax preparation

$

1,742,135 

$

1,635,877 

$

106,258 

6.5 

%

Royalties

128,182 

133,961 

(5,779)

(4.3)

%

DIY tax preparation

215,245 

214,666 

579 

0.3 

%

Refund Transfers

119,935 

113,732 

6,203 

5.5 

%

Peace of Mind® Extended Service Plan

14,347 

15,625 

(1,278)

(8.2)

%

Tax Identity Shield®

8,485 

7,025 

1,460 

20.8 

%

Other

15,000 

14,582 

418 

2.9 

%

Total U.S. tax preparation and related services

2,243,329 

2,135,468 

107,861 

5.1 

%

Financial services:

Emerald Card® and SpruceSM

39,590 

40,195 

(605)

(1.5)

%

Interest and fee income on Emerald Advance®

15,198 

14,286 

912 

6.4 

%

Total financial services

54,788 

54,481 

307 

0.6 

%

International

70,119 

60,438 

9,681 

16.0 

%

Wave

29,871 

26,717 

3,154 

11.8 

%

Total revenues

$

2,398,107 

$

2,277,104 

$

121,003 

5.3 

%

Compensation and benefits:

Field wages

577,513 

532,916 

(44,597)

(8.4)

%

Other wages

78,703 

74,621 

(4,082)

(5.5)

%

Benefits and other compensation

118,151 

111,575 

(6,576)

(5.9)

%

774,367 

719,112 

(55,255)

(7.7)

%

Occupancy

127,312 

119,709 

(7,603)

(6.4)

%

Marketing and advertising

185,388 

196,667 

11,279 

5.7 

%

Depreciation and amortization

31,519 

29,221 

(2,298)

(7.9)

%

Bad debt

39,806 

40,479 

673 

1.7 

%

Other

202,891 

193,603 

(9,288)

(4.8)

%

Total operating expenses

1,361,283 

1,298,791 

(62,492)

(4.8)

%

Other income (expense), net

3,941 

4,554 

(613)

(13.5)

%

Interest expense on borrowings

(24,307)

(24,686)

379 

1.5 

%

Pretax income

1,016,458 

958,181 

58,277 

6.1 

%

Income taxes

167,678 

235,253 

67,575 

28.7 

%

Net income from continuing operations

848,780 

722,928 

125,852 

17.4 

%

Net loss from discontinued operations

(879)

(598)

(281)

(47.0)

%

Net income

$

847,901 

$

722,330 

$

125,571 

17.4 

%

DILUTED EARNINGS PER SHARE

Continuing operations

$

6.61 

$

5.32 

$

1.29 

24.2 

%

Discontinued operations

(0.01)

(0.01)

— 

— 

%

Consolidated

$

6.60 

$

5.31 

$

1.29 

24.3 

%

Adjusted diluted EPS(1)

$

6.02 

$

5.38 

$

0.64 

11.9 

%

EBITDA (1)

$

1,072,284 

$

1,012,088 

$

60,196 

5.9 

%

(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.

H&R Block, Inc. |Q3 FY2026 Form 10-Q

19

Table of Contents

Three months ended March 31, 2026 compared to March 31, 2025

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.

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.

Refund Transfer revenues increased $6.2 million, or 5.5%, primarily due to an increase in Refund Transfer volume.

International tax preparation revenues increased $9.7 million, or 16.0%, primarily due to favorable foreign currency exchange rates in Canada and Australia.

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.

Other operating expenses increased $9.3 million, or 4.8%. The components of other expenses are as follows:

(in 000s)

Three months ended March 31,

2026

2025

$ Change

% Change

Consulting and outsourced services

$

39,046 

$

38,887 

$

(159)

(0.4)

%

Bank partner fees

34,030 

30,836 

(3,194)

(10.4)

%

Client claims and refunds

8,655 

8,420 

(235)

(2.8)

%

Employee and travel expenses

7,993 

8,552 

559 

6.5 

%

Technology-related expenses

37,076 

34,472 

(2,604)

(7.6)

%

Credit card/bank charges

41,856 

39,605 

(2,251)

(5.7)

%

Insurance

3,664 

4,644 

980 

21.1 

%

Legal fees and settlements

10,294 

7,986 

(2,308)

(28.9)

%

Supplies

11,353 

10,407 

(946)

(9.1)

%

Other

8,924 

9,794 

870 

8.9 

%

$

202,891 

$

193,603 

$

(9,288)

(4.8)

%

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.

20

Q3 FY2026 Form 10-Q| H&R Block, Inc.

Table of Contents

Consolidated - Financial Results

(in 000s, except per share amounts)

Nine months ended March 31,

2026

2025

$ Change

% Change

Revenues:

U.S. tax preparation and related services:

Assisted tax preparation

$

1,846,698 

$

1,727,220 

$

119,478 

6.9 

%

Royalties

139,139 

143,312 

(4,173)

(2.9)

%

DIY tax preparation

235,797 

231,646 

4,151 

1.8 

%

Refund Transfers

121,416 

115,229 

6,187 

5.4 

%

Peace of Mind® Extended Service Plan

54,087 

54,867 

(780)

(1.4)

%

Tax Identity Shield®

16,851 

14,947 

1,904 

12.7 

%

Other

41,321 

40,215 

1,106 

2.8 

%

Total U.S. tax preparation and related services

2,455,309 

2,327,436 

127,873 

5.5 

%

Financial services:

Emerald Card® and SpruceSM

56,566 

59,169 

(2,603)

(4.4)

%

Interest and fee income on Emerald Advance®

28,644 

26,594 

2,050 

7.7 

%

Total financial services

85,210 

85,763 

(553)

(0.6)

%

International

170,498 

157,104 

13,394 

8.5 

%

Wave

89,506 

79,681 

9,825 

12.3 

%

Total revenues

$

2,800,523 

$

2,649,984 

$

150,539 

5.7 

%

Compensation and benefits:

Field wages

741,405 

682,575 

(58,830)

(8.6)

%

Other wages

230,987 

230,687 

(300)

(0.1)

%

Benefits and other compensation

194,802 

188,731 

(6,071)

(3.2)

%

1,167,194 

1,101,993 

(65,201)

(5.9)

%

Occupancy

339,700 

326,026 

(13,674)

(4.2)

%

Marketing and advertising

208,725 

221,502 

12,777 

5.8 

%

Depreciation and amortization

90,442 

87,247 

(3,195)

(3.7)

%

Bad debt

63,827 

62,625 

(1,202)

(1.9)

%

Other

399,721 

393,900 

(5,821)

(1.5)

%

Total operating expenses

2,269,609 

2,193,293 

(76,316)

(3.5)

%

Other income (expense), net

15,077 

19,215 

(4,138)

(21.5)

%

Interest expense on borrowings

(65,087)

(62,285)

(2,802)

(4.5)

%

Pretax income

480,904 

413,621 

67,283 

16.3 

%

Income taxes

39,058 

104,580 

65,522 

62.7 

%

Net income from continuing operations

441,846 

309,041 

132,805 

43.0 

%

Net loss from discontinued operations

(1,930)

(2,707)

777 

28.7 

%

Net income

$

439,916 

$

306,334 

$

133,582 

43.6

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted between Item 7 and the next Item 7A/8 heading after HTML sanitization. Confidence: high. Filing date: 2025-08-15. Report date: 2025-06-30.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

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 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.

A summary of our fiscal year 2025 results is as follows:

•Revenue increased $150.6 million, or 4.2%, largely due to increases in U.S. company-owned net average charge and tax return volume coupled with increases in DIY online paid net average charge. These increases were partially offset by lower interest and fee income on Emerald Advance® due to a decrease in EA loans originated.

•Operating expenses increased $128.0 million, or 4.6%, due to higher compensation and benefits, marketing, consulting, technology, and legal costs, partially offset by lower bad debt.

•Pretax income increased $19.1 million, or 2.5%.

•Net income from continuing operations of $609.5 million increased 1.9% from the prior year.

•EBITDA(1) of $976.3 million increased $13.2 million, or 1.4%.

•Diluted earnings per share from continuing operations increased $0.28, or 6.8%, and adjusted diluted earnings per share from continuing operations(1) increased $0.25, or 5.7%.

(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.

24

2025 Form 10-K | H&R Block, Inc.

Consolidated – Financial Results

(in 000s, except per share amounts)

Year ended June 30,

2025

2024

$ Change

% Change

Revenues:

U.S. tax preparation and related services:

Assisted tax preparation

$

2,413,229 

$

2,274,835 

$

138,394 

6.1 

%

Royalties

192,877 

204,802 

(11,925)

(5.8)

%

DIY tax preparation

383,738 

349,812 

33,926 

9.7 

%

Refund Transfers

137,526 

142,249 

(4,723)

(3.3)

%

Peace of Mind® Extended Service Plan

87,326 

93,087 

(5,761)

(6.2)

%

Tax Identity Shield®

29,920 

33,386 

(3,466)

(10.4)

%

Other

58,318 

51,555 

6,763 

13.1 

%

Total U.S. tax preparation and related services

3,302,934 

3,149,726 

153,208 

4.9 

%

Financial services:

Emerald Card® and SpruceSM

72,888 

76,093 

(3,205)

(4.2)

%

Interest and fee income on Emerald Advance®

28,958 

40,933 

(11,975)

(29.3)

%

Total financial services

101,846 

117,026 

(15,180)

(13.0)

%

International

246,993 

247,123 

(130)

(0.1)

%

Wave

109,222 

96,472 

12,750 

13.2 

%

Total revenues

$

3,760,995 

$

3,610,347 

$

150,648 

4.2 

%

Compensation and benefits:

Field wages

927,360 

869,002 

(58,358)

(6.7)

%

Other wages

306,999 

298,819 

(8,180)

(2.7)

%

Benefits and other compensation

250,729 

228,723 

(22,006)

(9.6)

%

1,485,088 

1,396,544 

(88,544)

(6.3)

%

Occupancy

438,868 

432,461 

(6,407)

(1.5)

%

Marketing and advertising

285,800 

277,747 

(8,053)

(2.9)

%

Depreciation and amortization

116,827 

121,784 

4,957 

4.1 

%

Bad debt

74,584 

91,523 

16,939 

18.5 

%

Other

531,858 

485,011 

(46,847)

(9.7)

%

Total operating expenses

2,933,025 

2,805,070 

(127,955)

(4.6)

%

Other income (expense), net

31,546 

36,125 

(4,579)

(12.7)

%

Interest expense on borrowings

(78,113)

(79,080)

967 

1.2 

%

Income from continuing operations before income taxes

781,403 

762,322 

19,081 

2.5 

%

Income taxes

171,953 

164,359 

(7,594)

(4.6)

%

Net income from continuing operations

609,450 

597,963 

11,487 

1.9 

%

Net loss from discontinued operations

(3,677)

(2,646)

(1,031)

(39.0)

%

Net income

$

605,773 

$

595,317 

$

10,456 

1.8 

%

DILUTED EARNINGS PER SHARE:

Continuing operations

$

4.42 

$

4.14 

$

0.28 

6.8 

%

Discontinued operations

(0.03)

(0.02)

(0.01)

(50.0)

%

Consolidated

$

4.39 

$

4.12 

$

0.27 

6.6 

%

Adjusted diluted EPS(1)

$

4.66 

$

4.41 

$

0.25 

5.7 

%

EBITDA(1)

$

976,343 

$

963,186 

$

13,157 

1.4 

%

(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.

H&R Block, Inc. | 2025 Form 10-K

25

FISCAL YEAR 2025 COMPARED TO FISCAL YEAR 2024

Revenues increased $150.6 million, or 4.2%, from the prior year. U.S. assisted tax preparation revenues increased $138.4 million, or 6.1%, due to a 5.1% increase in net average charge combined with a 1.0% increase in company-owned tax return volumes in the current year. U.S. royalties revenue decreased $11.9 million, or 5.8%, 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. During the year ended June 30, 2025 our total assisted tax return volume, which includes both company-owned and franchise offices, decreased 0.9% from the prior year.

U.S. DIY tax preparation revenues increased $33.9 million, or 9.7%, due to a 9.8% increase in paid net average charge and higher desktop software revenues compared to the prior year.

Interest and fee income on Emerald Advance® decreased $12.0 million, or 29.3%, due to a decrease in EA loans originated during the current year. Wave revenues increased $12.8 million, or 13.2%, due to higher accounting, invoicing and receipts subscriptions and small business payments processing volumes.

Total operating expenses increased $128.0 million, or 4.6%, from the prior year. Field wages increased $58.4 million, or 6.7%, due to higher tax professional wages in the current year primarily resulting from an increase in U.S. assisted tax preparation revenues. Other wages increased $8.2 million, or 2.7%, due to higher corporate wages due to salary increases in the current year. Benefits and other compensation increased $22.0 million, or 9.6%, due to higher employee insurance, severance pay and payroll taxes in the current year.

Marketing and advertising expense increased $8.1 million, or 2.9%, primarily due to higher advertising agency and customer incentive expenses. Bad debt expense decreased $16.9 million, or 18.5%, due to lower EA bad debt rates coupled with a decrease in EA loans originated during the current year.

Other operating expenses increased $46.8 million, or 9.7%. The components of other expenses are as follows:

(in 000s)

Year ended June 30,

2025

2024

$ Change

% Change

Consulting and outsourced services

$

104,003 

$

92,737 

$

(11,266)

(12.1)

%

Bank partner fees

32,152 

28,856 

(3,296)

(11.4)

%

Client claims and refunds

27,422 

25,623 

(1,799)

(7.0)

%

Employee and travel expenses

35,646 

33,473 

(2,173)

(6.5)

%

Technology-related expenses

119,241 

108,694 

(10,547)

(9.7)

%

Credit card/bank charges

109,202 

102,377 

(6,825)

(6.7)

%

Insurance

17,225 

12,075 

(5,150)

(42.7)

%

Legal fees and settlements

37,819 

28,536 

(9,283)

(32.5)

%

Supplies

20,777 

23,090 

2,313 

10.0 

%

Other

28,371 

29,550 

1,179 

4.0 

%

$

531,858 

$

485,011 

$

(46,847)

(9.7)

%

Consulting and outsourced services expense increased $11.3 million, or 12.1%, due to higher Emerald Card® data processing and spend related to various strategic projects. Technology-related expenses increased by $10.5 million, or 9.7%, due to higher cloud-related technology spend. Legal fees and settlements expense increased $9.3 million, primarily due to higher outside counsel spend in the current year.

We recorded income tax expense of $172.0 million in the current year compared to $164.4 million in the prior year. The increase is due to higher pretax income and effective tax rate in the current year. The effective tax rate for the year ended June 30, 2025, and 2024 was 22.0% and 21.6%, respectively. See Item 8, note 9 to the consolidated financial statements for additional discussion.

FISCAL YEAR 2024 COMPARED TO FISCAL YEAR 2023

The comparison of fiscal year 2024 to 2023 has been omitted from this Form 10-K, but can be found in our Form 10-K for the fiscal year ended June 30, 2024, filed on August 15, 2024.

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2025 Form 10-K | H&R Block, Inc.

FINANCIAL CONDITION

These comments should be read in conjunction with the consolidated balance sheets and consolidated statements of cash flows included in Item 8.

CAPITAL RESOURCES AND LIQUIDITY –

OVERVIEW – Our primary sources of capital and liquidity include cash from operations (including changes in working capital), draws on our CLOC, and issuances of debt. We use our sources of liquidity primarily to fund working capital, service and repay debt, pay dividends, repurchase shares of our common stock, and acquire businesses.

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, from May through January. We typically have relied on available cash balances from the prior tax season and borrowings to meet liquidity needs.

Given the likely availability of a number of liquidity options discussed herein, we believe that in the absence of any unexpected developments, our existing sources of capital as of June 30, 2025 are sufficient to meet our future operating and financing needs.    

DISCUSSION OF CONSOLIDATED STATEMENTS OF CASH FLOWS – The following table summarizes our statements of cash flows for fiscal year 2025 and 2024. See Item 8 for the complete consolidated statements of cash flows for these periods.

(in 000s)

Year ended June 30,

2025

2024

Net cash provided by (used in):

Operating activities

$

680,883 

$

720,860 

Investing activities

(105,373)

(93,858)

Financing activities

(647,443)

(564,311)

Effects of exchange rates on cash

(121)

(2,814)

Net increase (decrease) in cash and cash equivalents, including restricted balances

$

(72,054)

$

59,877 

    Operating Activities. Cash provided by operating activities totaled $680.9 million for the year ended June 30, 2025 compared to $720.9 million in the prior year period. The decrease is primarily due to changes in income tax reserves and accounts payable.

    Investing Activities. Cash used in investing activities totaled $105.4 million for the year ended June 30, 2025 compared to $93.9 million for the prior year period. The increase is primarily due to higher capital expenditures, partially offset by lower payments made for business acquisitions in the current year.

    Financing Activities. Cash used in financing activities totaled $647.4 million for the year ended June 30, 2025 compared to $564.3 million for the prior year period. The increase is primarily due to higher repurchases of common stock and dividends in the current year.

    CASH REQUIREMENTS –

    Dividends and Share Repurchase. Returning capital to shareholders in the form of dividends and the repurchase of outstanding shares has historically been a significant component of our capital allocation plan.

    We have consistently paid quarterly dividends. Dividends paid totaled $197.3 million and $179.8 million in the years ended June 30, 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.

H&R Block, Inc. | 2025 Form 10-K

27

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 year ended June 30, 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, 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.

Share repurchases are subject to prevailing market prices, may be made in open market transactions (some of which may be effectuated under SEC Rule 10b5-1) and remain subject to the discretion of our Board of Directors. The Company may cancel or suspend the repurchase of shares at any time. Any repurchases will be funded primarily through available cash and cash from operations. There can be no assurance that we will repurchase any shares.

The following table summarizes our shares outstanding, shares repurchased, and annual dividends per share:

(in 000s, except per share amounts)

Year ended June 30,

2025

2024

2023

Shares outstanding

133,947 

139,591 

146,150 

Shares repurchased

6,549 

8,020 

14,635 

Dividends declared per share

$

1.50 

$

1.28 

$

1.16 

    Capital Investment. Capital expenditures totaled $82.0 million and $63.7 million for the years ended June 30, 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 franchise and competitor businesses totaling $35.5 million and $43.4 million during the years ended June 30, 2025 and 2024, respectively. See Item 8, note 6 for additional information on our acquisitions.

Contractual Obligations and Commercial Commitments. 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 are party to many contractual obligations involving commitments to make payments to third parties, which may impact our short-term and long-term liquidity and capital resource needs. Our contractual obligations primarily consist of operating leases, contingent acquisition payments, and long-term debt and related interest payments. See Item 8, note 7, 10, and 11 to the consolidated financial statements for additional information.

    FINANCING RESOURCES – During fiscal year 2025, our existing CLOC had capacity of up to $1.5 billion and was scheduled to expire in June 2026. On July 11, 2025, we entered into a Fifth Amended and Restated Credit and Guarantee Agreement, which amended and restated our existing CLOC, extended the scheduled maturity date to July 11, 2030, maintained the aggregate principal amount of $1.5 billion, and revised the interest rate table. Other material terms remain substantially unchanged from the Fourth Amended and Restated Credit and Guarantee Agreement. Proceeds under the CLOC may be used for working capital needs or for other general corporate purposes. We were in compliance with our CLOC covenants as of June 30, 2025. As of June 30, 2025, amounts available to borrow under the CLOC were not limited by the debt-to-EBITDA covenant. We had no balance outstanding under our CLOC as of June 30, 2025.

    See Item 8, note 7 to the consolidated financial statements for discussion of our CLOC and Senior Notes, including discussion of the amendment and restatement of our CLOC effective July 11, 2025.

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2025 Form 10-K | H&R Block, Inc.

The following table provides ratings for debt issued by Block Financial LLC (Block Financial) as of June 30, 2025 and 2024:

As of

June 30, 2025

June 30, 2024

Short-term

Long-term

Outlook

Short-term

Long-term

Outlook

Moody's

P-3

Baa3

Stable

P-3

Baa3

Stable

S&P

A-2

BBB

Stable

A-2

BBB

Stable

CASH AND OTHER ASSETS – As of June 30, 2025, we held cash and cash equivalents, excluding restricted amounts, of $983.3 million, including $205.9 million held by our foreign subsidiaries.

Foreign Operations. Seasonal borrowing needs of our Canadian operations are typically funded by our U.S. operations. To mitigate foreign currency risk, we sometimes enter into foreign exchange forward contracts. There were no forward contracts outstanding as of June 30, 2025.

We do not currently intend to repatriate non-borrowed funds held by our foreign subsidiaries in a manner that would trigger a tax liability.

The impact of changes in foreign exchange rates during the period on our international cash balances resulted in a decrease of $0.1 million and $2.8 million during the years ended June 30, 2025 and 2024, respectively.

SUMMARIZED GUARANTOR FINANCIAL STATEMENTS – Block Financial is a 100% owned indirect subsidiary of H&R Block, Inc. Block Financial is the Issuer and H&R Block, Inc. is the full and unconditional Guarantor of our Senior Notes, CLOC and other indebtedness issued from time to time.

The following table presents summarized financial information for H&R Block, Inc. (Guarantor) and Block Financial (Issuer) on a combined basis after intercompany eliminations and excludes investments in and equity earnings in non-guarantor subsidiaries.

SUMMARIZED BALANCE SHEET

(in 000s)

As of June 30, 2025

GUARANTOR AND ISSUER

Current assets

$

38,254 

Noncurrent assets

1,836,847 

Current liabilities

432,139 

Noncurrent liabilities

1,148,806 

SUMMARIZED STATEMENTS OF OPERATIONS

(in 000s)

Year ended June 30, 2025

GUARANTOR AND ISSUER

Total revenues

$

126,240 

Income from continuing operations before income taxes

58,596 

Net income from continuing operations

45,120 

Net income

41,443 

The table above reflects $1.8 billion of non-current intercompany receivables due to the Issuer from non-guarantor subsidiaries.

H&R Block, Inc. | 2025 Form 10-K

29

CRITICAL ACCOUNTING ESTIMATES

We consider the estimates discussed below to be critical to understanding our financial statements, as they require the use of significant judgment and estimation in order to measure, at a specific point in time, matters that are inherently uncertain. Specific methods and assumptions for these critical accounting estimates are described in the following paragraphs. We have reviewed and discussed each of these estimates with the Audit Committee of our Board of Directors. For all of these estimates, we caution that future events rarely develop precisely as forecasted and estimates routinely require adjustment and may require material adjustment.

See Item 8, note 1 to the consolidated financial statements for discussion of our significant accounting policies.

LITIGATION AND OTHER RELATED CONTINGENCIES –

Nature of Estimates Required. We accrue liabilities related to certain legal matters for which we believe it is probable that a loss has been incurred and the amount of such loss can be reasonably estimated. Assessing the likely outcome of pending or threatened litigation or other related loss contingencies, including the amount of potential loss, if any, is highly subjective. 

Assumptions and Approach Used. We are subject to pending or threatened litigation and other related loss contingencies, which are described in Item 8, note 12 to the consolidated financial statements. It is our policy to routinely assess the likelihood of any adverse judgments or outcomes related to legal matters, as well as ranges of probable losses. A determination of the amount of the liability required to be accrued, if any, for these contingencies is made after analysis of each known issue and an analysis of historical experience. In cases where we have concluded that a loss is only reasonably possible or remote, or is not reasonably estimable, no liability is accrued.

Sensitivity of Estimate to Change. It is reasonably possible that pending or future litigation and other related loss contingencies may vary from the amounts accrued. Our estimate of the aggregate range of reasonably possible losses includes (1) matters where a liability has been accrued and there is a reasonably possible loss in excess of the amount accrued for that liability, and (2) matters where a liability has not been accrued but we believe a loss is reasonably possible. This aggregate range represents only those losses as to which we are currently able to estimate a reasonably possible loss or range of loss. It does not represent our maximum loss exposure. As of June 30, 2025, we believe the estimate of the aggregate range of reasonably possible losses in excess of amounts accrued, where the range of loss can be estimated, is not material.

However, our judgments on whether a loss is probable, reasonably possible, or remote, and our estimates of probable loss amounts may differ from actual results due to difficulties in predicting changes in or interpretations of, laws, predicting the outcome of court trials, arbitration hearings, settlement discussions and related activity, predicting the outcome of class certification actions, and numerous other uncertainties. Due to the number of claims which are periodically asserted against us, and the magnitude of damages sought in those claims, actual losses in the future may significantly differ from our current estimates.

Our accrued liabilities for litigation and other related contingencies are disclosed in Item 8, note 12 to the consolidated financial statements.

INCOME TAXES – UNCERTAIN TAX POSITIONS –

Nature of Estimates Required. The income tax laws of jurisdictions in which we operate are complex and subject to different interpretations by the taxpayer and applicable government taxing authorities. Income tax returns filed by us are based on our interpretation of these rules. The amount of income taxes we pay is subject to ongoing audits by federal, state and foreign tax authorities, which may result in proposed assessments, including interest or penalties. We accrue a liability for unrecognized tax benefits arising from uncertain tax positions reflecting our judgment as to the ultimate resolution of the applicable issues.

Assumptions and Approach Used. Differences between a tax position taken or expected to be taken in our tax returns and the amount of benefit recorded in our financial statements result in uncertain tax positions. Uncertain tax positions are recorded in the balance sheet as either a liability or reductions to recorded tax assets as applicable. Our uncertain tax positions arise from items such as apportionment of income for state purposes, transfer pricing, and the deductibility of intercompany transactions. We evaluate each uncertain tax position based

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2025 Form 10-K | H&R Block, Inc.

on its technical merits. For each position, we consider all applicable information including relevant tax laws, the taxing authorities' potential position, our tax return position, and the possible settlement outcomes to determine the amount of liability to record. In making this determination, we assume the tax authority has all relevant information at its disposal.

Sensitivity of Estimate to Change. Our assessment of the technical merits and measurement of tax benefits associated with uncertain tax positions is subject to a high degree of judgment and estimation. Actual results may differ from our current judgments due to a variety of factors, including changes in law, interpretations of law by taxing authorities that differ from our assessments, changes in the jurisdictions in which we operate and results of routine tax examinations. We believe we have adequately provided for any reasonably foreseeable outcomes related to these matters. However, our future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved, or when statutes of limitation on potential assessments expire. As a result, our effective tax rate may fluctuate on a quarterly basis.

A schedule of changes in our uncertain tax positions during the last three years is included in Item 8, note 9 to the consolidated financial statements.

GOODWILL –

Nature of Estimates Required. We test goodwill for impairment annually as of February 1 or more frequently if events occur or circumstances change which would, more likely than not, reduce the fair value of a reporting unit below its carrying value. We first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If, based on a review of qualitative factors, it is more likely than not that the fair value of a reporting unit is less than its carrying value, we perform a quantitative analysis. Our goodwill impairment analysis utilizes both income and market approaches, which includes revenue and expense forecasts, selection of market multiples of comparable publicly traded companies and selection of a discount rate, all of which are highly subjective. 

Assumptions and Approach Used. Our goodwill impairment analysis is performed at the reporting unit level. Our valuation methods include a discounted cash flow model for the income approach and the guideline public company method for the market approach. The income approach requires significant management judgment with respect to revenue and expense forecasts and selection of an appropriate discount rate. The market approach requires significant assumptions related to the selection of comparable publicly traded companies and the market multiples. Changes in projections or assumptions could materially affect our estimate of reporting unit fair values. The use of different assumptions could increase or decrease estimated discounted future operating cash flows and could affect our conclusion regarding the existence or amount of potential impairment.

Sensitivity of Estimate to Change. Estimates of fair value may be adversely impacted by declining economic conditions and changes in the industries and markets in which we operate. Additionally, if future operating results of our reporting units are below our current modeled expectations, fair value estimates may decline. Any of these factors could result in future impairments, and those impairments could be significant.

A schedule of changes in our goodwill balances, including any impairment charges, is included in Item 8, note 6 to the consolidated financial statements.

NEW ACCOUNTING PRONOUNCEMENTS

See Item 8, note 1 to the consolidated financial statements for any recently issued accounting pronouncements.

REGULATORY ENVIRONMENT

The federal government, various state, local, provincial and foreign governments, and some self-regulatory organizations have enacted statutes and ordinances, or adopted rules and regulations, regulating many aspects of our business. These aspects include, but are not limited to, commercial income tax return preparation, income tax courses, the electronic filing of income tax returns, the offering of RTs and RAs, privacy and data security, consumer protection, marketing and advertising, artificial intelligence, franchising, antitrust and competition, sales methods, and financial services and products. Regulatory attention in the area of financial services and products may in the future impact our program, our contractual arrangements with our bank partner or other partners, or the offering of financial services and products to our clients. We work to comply with those laws that are

H&R Block, Inc. | 2025 Form 10-K

31

applicable to us or our services or products, and we continue to monitor developments in the regulatory environment in which we operate.

See further discussion of these items in our Item 1A. Risk Factors under "Legal and Regulatory Risks" of this Form 10-K.

From time to time, we receive inquiries from governmental authorities regarding the applicability of laws to our services and products and other matters relating to our business. We cannot predict what effect future laws, changes in interpretations of existing laws or the results of future governmental inquiries with respect to services and products or other matters relating to our business may have on our consolidated financial position, results of operations and cash flows. We have received certain governmental inquiries related to the IRS Free File Program and our DIY tax preparation services. We may also be subject to future inquiries or other proceedings regarding these programs or other aspects of our business. Regulatory inquiries may result in us incurring additional expense, diversion of management's attention, adverse judgments, settlements, fines, penalties, injunctions or other relief. See additional discussion of legal matters in Item 8, note 12 to the consolidated financial statements.

NON-GAAP FINANCIAL INFORMATION

Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Because these measures are not measures of financial performance under GAAP and are susceptible to varying calculations, they may not be comparable to similarly titled measures for other companies.

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.

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.

The following is a reconciliation of net income to EBITDA from continuing operations, which is a non-GAAP financial measure:

(in 000s)

Year ended

June 30, 2025

June 30, 2024

Net income - as reported

$

605,773 

$

595,317 

Discontinued operations, net

3,677 

2,646 

Net income from continuing operations - as reported

609,450 

597,963 

Add back:

Income taxes

171,953 

164,359 

Interest expense

78,113 

79,080 

Depreciation and amortization

116,827 

121,784 

366,893 

365,223 

EBITDA from continuing operations

$

976,343 

$

963,186 

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2025 Form 10-K | H&R Block, Inc.

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:

(in 000s, except per share amounts)

Year ended

June 30, 2025

June 30, 2024

Net income from continuing operations - as reported

$

609,450 

$

597,963 

Adjustments:

Amortization of intangibles related to acquisitions (pretax)

44,673 

50,835 

Tax effect of adjustments(1)

(10,865)

(11,751)

Adjusted net income from continuing operations

$

643,258 

$

637,047 

Diluted earnings per share from continuing operations - as reported

$

4.42 

$

4.14 

Adjustments, net of tax

0.24 

0.27 

Adjusted diluted earnings per share from continuing operations

$

4.66 

$

4.41 

(1) The tax effect of adjustments is the difference between the tax provision calculation on a GAAP basis and on an adjusted non-GAAP basis.