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NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION – The consolidated balance sheets as of March 31, 2026 and June 30, 2025, the consolidated statements of operations and comprehensive income for the three and nine months ended March 31, 2026 and 2025, the consolidated statements of cash flows for the nine months ended March 31, 2026 and 2025, and the consolidated statements of stockholders' equity for the three and nine months ended March 31, 2026 and 2025 have been prepared by the Company, without audit. In the opinion of management, all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position, results of operations, and cash flows as of March 31, 2026 and 2025 and for all periods presented, have been made.
"H&R Block," "the Company," "we," "our," and "us" are used interchangeably to refer to H&R Block, Inc., to H&R Block, Inc. and its subsidiaries, or to H&R Block, Inc.'s operating subsidiaries, as appropriate to the context.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been condensed or omitted. These consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our June 30, 2025 Annual Report on Form 10-K. All amounts presented herein as of June 30, 2025 or for the year then ended are derived from our Annual Report on Form 10-K.
MANAGEMENT ESTIMATES – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, assumptions and judgments are applied in the evaluation of contingent losses associated with pending claims and litigation, reserves for uncertain tax positions, and fair value of reporting units. Estimates have been prepared based on the best information available as of each balance sheet date. As such, actual results could differ materially from those estimates.
SEASONALITY OF BUSINESS – Our operating revenues are seasonal in nature with peak revenues typically occurring in the months of February through April. Therefore, results for interim periods are not indicative of results to be expected for the full year.
DISCONTINUED OPERATIONS – Our discontinued operations include the results of operations of Sand Canyon Corporation, previously known as Option One Mortgage Corporation, which exited its mortgage business in fiscal year 2008.
The consolidated balance sheets as of March 31, 2026 and June 30, 2025, the consolidated statements of operations and comprehensive income for the three and nine months ended March 31, 2026 and 2025, the consolidated statements of cash flows for the nine months ended March 31, 2026 and 2025, and the consolidated statements of stockholders' equity for the three and nine months ended March 31, 2026 and 2025 have been prepared by the Company, without audit. In the opinion of management, all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position, results of operations, and cash flows as of March 31, 2026 and 2025 and for all periods presented, have been made.
"H&R Block," "the Company," "we," "our," and "us" are used interchangeably to refer to H&R Block, Inc., to H&R Block, Inc. and its subsidiaries, or to H&R Block, Inc.'s operating subsidiaries, as appropriate to the context.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been condensed or omitted. These consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our June 30, 2025 Annual Report on Form 10-K. All amounts presented herein as of June 30, 2025 or for the year then ended are derived from our Annual Report on Form 10-K.
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, assumptions and judgments are applied in the evaluation of contingent losses associated with pending claims and litigation, reserves for uncertain tax positions, and fair value of reporting units. Estimates have been prepared based on the best information available as of each balance sheet date. As such, actual results could differ materially from those estimates. Our discontinued operations include the results of operations of Sand Canyon Corporation, previously known as Option One Mortgage Corporation, which exited its mortgage business in fiscal year 2008.
NOTE 2: REVENUE RECOGNITION
The majority of our revenues are from our United States (U.S.) tax services business. The following table disaggregates our U.S. revenues by major service line, with revenues from our international tax services businesses and from Wave included as separate lines:
(in 000s)
Three months ended March 31,Nine months ended March 31,
2026202520262025
Revenues:
U.S. assisted tax preparation$1,742,135 $1,635,877 $1,846,698 $1,727,220 
U.S. royalties128,182 133,961 139,139 143,312 
U.S. DIY tax preparation215,245 214,666 235,797 231,646 
Refund Transfers119,935 113,732 121,416 115,229 
Peace of Mind® Extended Service Plan14,347 15,625 54,087 54,867 
Tax Identity Shield®8,485 7,025 16,851 14,947 
Emerald Card® and SpruceSM
39,590 40,195 56,566 59,169 
Interest and fee income on Emerald Advance®15,198 14,286 28,644 26,594 
International70,119 60,438 170,498 157,104 
Wave29,871 26,717 89,506 79,681 
Other15,000 14,582 41,321 40,215 
Total revenues$2,398,107 $2,277,104 $2,800,523 $2,649,984 
Changes in the balances of deferred revenue and wages for our Peace of Mind® Extended Service Plan (POM) are as follows:
(in 000s)
POMDeferred RevenueDeferred Wages
Nine months ended March 31,2026202520262025
Balance, beginning of the period$149,302 $156,610 $19,884 $20,212 
Amounts deferred83,409 70,536 9,355 7,222 
Amounts recognized on previous deferrals(61,743)(64,885)(7,925)(8,396)
Balance, end of the period$170,968 $162,261 $21,314 $19,038 
As of March 31, 2026, deferred revenue related to POM was $171.0 million. We expect that $91.9 million will be recognized over the next twelve months, while the remaining balance will be recognized over the following five years.
As of March 31, 2026 and 2025, Tax Identity Shield® (TIS) deferred revenue was $37.6 million and $31.2 million, respectively. Deferred revenue related to TIS was $22.6 million and $21.4 million as of June 30, 2025 and 2024, respectively. All deferred revenue related to TIS will be recognized by April 2027.
The majority of our revenues are from our United States (U.S.) tax services business. The following table disaggregates our U.S. revenues by major service line, with revenues from our international tax services businesses and from Wave included as separate lines:
(in 000s)
Three months ended March 31,Nine months ended March 31,
2026202520262025
Revenues:
U.S. assisted tax preparation$1,742,135 $1,635,877 $1,846,698 $1,727,220 
U.S. royalties128,182 133,961 139,139 143,312 
U.S. DIY tax preparation215,245 214,666 235,797 231,646 
Refund Transfers119,935 113,732 121,416 115,229 
Peace of Mind® Extended Service Plan14,347 15,625 54,087 54,867 
Tax Identity Shield®8,485 7,025 16,851 14,947 
Emerald Card® and SpruceSM
39,590 40,195 56,566 59,169 
Interest and fee income on Emerald Advance®15,198 14,286 28,644 26,594 
International70,119 60,438 170,498 157,104 
Wave29,871 26,717 89,506 79,681 
Other15,000 14,582 41,321 40,215 
Total revenues$2,398,107 $2,277,104 $2,800,523 $2,649,984 
1742135000 1635877000 1846698000 1727220000 128182000 133961000 139139000 143312000 215245000 214666000 235797000 231646000 119935000 113732000 121416000 115229000 14347000 15625000 54087000 54867000 8485000 7025000 16851000 14947000 39590000 40195000 56566000 59169000 15198000 14286000 28644000 26594000 70119000 60438000 170498000 157104000 29871000 26717000 89506000 79681000 15000000 14582000 41321000 40215000 2398107000 2277104000 2277104000 2800523000 2649984000
Changes in the balances of deferred revenue and wages for our Peace of Mind® Extended Service Plan (POM) are as follows:
(in 000s)
POMDeferred RevenueDeferred Wages
Nine months ended March 31,2026202520262025
Balance, beginning of the period$149,302 $156,610 $19,884 $20,212 
Amounts deferred83,409 70,536 9,355 7,222 
Amounts recognized on previous deferrals(61,743)(64,885)(7,925)(8,396)
Balance, end of the period$170,968 $162,261 $21,314 $19,038 
149302000 156610000 19884000 20212000 83409000 70536000 9355000 7222000 61743000 64885000 7925000 8396000 170968000 162261000 21314000 19038000 171000000.0 91900000 P12M P5Y 37600000 31200000 22600000 21400000 2027
NOTE 3: EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY
EARNINGS PER SHARE – Basic and diluted earnings (loss) per share is computed using the two-class method. The two-class method is an earnings allocation formula that determines net income per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Per share amounts are computed by dividing net income (loss) from continuing operations attributable to common shareholders by the weighted average shares outstanding during each period. Diluted earnings per share excludes the impact of shares of common stock issuable upon the lapse of certain restrictions or the exercise of options to purchase 1.3 million and 0.8 million shares for the three and nine months ended March 31, 2026,
respectively, and 0.6 million and 0.5 million shares for the three and nine months ended March 31, 2025, respectively, as the effect would be antidilutive.
The computations of basic and diluted earnings per share from continuing operations are as follows:
(in 000s, except per share amounts)
Three months ended March 31,Nine months ended March 31,
2026202520262025
Net income from continuing operations attributable to shareholders$848,780 $722,928 $441,846 $309,041 
Amounts allocated to participating securities(4,250)(3,442)(2,193)(1,408)
Net income from continuing operations attributable to common shareholders$844,530 $719,486 $439,653 $307,633 
Basic weighted average common shares126,760 133,853 128,248 136,207 
Potential dilutive shares1,053 1,476 1,241 1,737 
Dilutive weighted average common shares127,813 135,329 129,489 137,944 
Earnings per share from continuing operations attributable to common shareholders:
Basic$6.66 $5.38 $3.43 $2.26 
Diluted6.61 5.32 3.40 2.23 
The decrease in the weighted average shares outstanding is due to share repurchases completed in the current and prior fiscal years.
STOCK-BASED COMPENSATION – We granted 1.0 million and 1.1 million shares, including adjustments for performance achievement and dividend equivalents, under our stock-based compensation plans during the nine months ended March 31, 2026 and 2025, respectively. Stock-based compensation expense of our continuing operations totaled $8.4 million and $22.2 million for the three and nine months ended March 31, 2026, respectively, and $7.5 million and $25.4 million for the three and nine months ended March 31, 2025, respectively. As of March 31, 2026, unrecognized compensation cost for nonvested shares and units totaled $55.3 million.
The computations of basic and diluted earnings per share from continuing operations are as follows:
(in 000s, except per share amounts)
Three months ended March 31,Nine months ended March 31,
2026202520262025
Net income from continuing operations attributable to shareholders$848,780 $722,928 $441,846 $309,041 
Amounts allocated to participating securities(4,250)(3,442)(2,193)(1,408)
Net income from continuing operations attributable to common shareholders$844,530 $719,486 $439,653 $307,633 
Basic weighted average common shares126,760 133,853 128,248 136,207 
Potential dilutive shares1,053 1,476 1,241 1,737 
Dilutive weighted average common shares127,813 135,329 129,489 137,944 
Earnings per share from continuing operations attributable to common shareholders:
Basic$6.66 $5.38 $3.43 $2.26 
Diluted6.61 5.32 3.40 2.23 
848780000 722928000 441846000 309041000 4250000 3442000 2193000 1408000 844530000 719486000 439653000 307633000 126760000 133853000 128248000 136207000 1053000 1476000 1241000 1737000 127813000 135329000 129489000 137944000 6.66 5.38 3.43 2.26 6.61 5.32 3.40 2.23 1000000.0 million 1100000 8400000 22200000 7500000 25400000 55300000
NOTE 4: RECEIVABLES
Receivables, net of their related allowance, consist of the following:
(in 000s)
As ofMarch 31, 2026June 30, 2025
Short-termLong-termShort-termLong-term
Loans to franchisees$16,438 $11,349 $7,386 $16,402 
Receivables for U.S. assisted and DIY tax preparation and related fees179,870 11,250 15,896 6,361 
H&R Block's Instant Refund® receivables
17,294 789 2,243 939 
Emerald Advance®20,101 24,219 13,899 22,816 
Software receivables from retailers7,313 — 2,582 — 
Royalties and other receivables from franchisees33,671 — 4,414 — 
Wave payment processing receivables6,274 — 1,533 — 
Other16,675 597 15,668 498 
Total$297,636 $48,204 $63,621 $47,016 
Balances presented above as short-term are included in receivables, while the long-term portions are included in other noncurrent assets in the consolidated balance sheets.
LOANS TO FRANCHISEES – Franchisee loan balances consist of term loans made primarily to finance the purchase of franchises and revolving lines of credit primarily for the purpose of funding working capital needs. Loans with a principal balance more than 90 days past due or on non-accrual status were $3.0 million and $3.1 million as of March 31, 2026 and June 30, 2025, respectively.
H&R BLOCK'S INSTANT REFUND® – H&R Block's Instant Refund® amounts are generally received from the Canada Revenue Agency within 60 days of filing the client's return, with the remaining balance collectible from the client.
We review the credit quality of our Instant Refund receivables based on pools, which are segregated by the tax return year of origination, with older years being deemed more unlikely to be repaid. We establish an allowance for credit losses at an amount that we believe reflects the receivable at net realizable value. In December of each year, we charge-off the receivables and the related allowance to an amount we believe represents the net realizable value.
Balances and amounts on non-accrual status, classified as impaired, or more than 60 days past due, by tax return year of origination, as of March 31, 2026 are as follows:
(in 000s)
Tax return year of originationBalanceMore Than 60 Days Past Due
2025$17,482 $79 
2024 and prior1,163 1,163 
18,645 $1,242 
Allowance(562)
Net balance$18,083 
EMERALD ADVANCE® – We review the credit quality of our purchased participation interests in Emerald Advance® (EA) receivables based on pools, which are segregated by the fiscal year of origination, with older years being deemed more unlikely to be repaid. We establish an allowance for credit losses at an amount that we believe reflects the receivable at net realizable value. Typically, in December of each year, we charge-off the receivables and the related allowance for EAs to an amount we believe represents the net realizable value.
Balances and amounts on non-accrual status, classified as impaired, or more than 60 days past due, by fiscal year of origination, as of March 31, 2026 are as follows:
(in 000s)
Fiscal year of originationBalanceNon-Accrual
2026$35,495 $— 
2025 and prior26,403 26,403 
61,898 $26,403 
Allowance(17,578)
Net balance$44,320 
ALLOWANCE FOR CREDIT LOSSES – Activity in the allowance for credit losses for EA and all other short-term and long-term receivables for the nine months ended March 31, 2026 and 2025 is as follows:
(in 000s)
EAsAll OtherTotal
Balances as of July 1, 2025$19,663 $45,156 $64,819 
Provision for credit losses17,578 39,945 57,523 
Charge-offs, recoveries and other(19,663)(44,803)(64,466)
Balances as of March 31, 2026$17,578 $40,298 $57,876 
Balances as of July 1, 2024$33,536 $45,327 $78,863 
Provision for credit losses19,371 36,671 56,042 
Charge-offs, recoveries and other(33,536)(45,864)(79,400)
Balances as of March 31, 2025$19,371 $36,134 $55,505 
For the nine months ended March 31, 2026, there were $19.7 million of gross charge-offs related to EAs which were originated in fiscal year 2025.
Receivables, net of their related allowance, consist of the following:
(in 000s)
As ofMarch 31, 2026June 30, 2025
Short-termLong-termShort-termLong-term
Loans to franchisees$16,438 $11,349 $7,386 $16,402 
Receivables for U.S. assisted and DIY tax preparation and related fees179,870 11,250 15,896 6,361 
H&R Block's Instant Refund® receivables
17,294 789 2,243 939 
Emerald Advance®20,101 24,219 13,899 22,816 
Software receivables from retailers7,313 — 2,582 — 
Royalties and other receivables from franchisees33,671 — 4,414 — 
Wave payment processing receivables6,274 — 1,533 — 
Other16,675 597 15,668 498 
Total$297,636 $48,204 $63,621 $47,016 
16438000 11349000 7386000 16402000 179870000 11250000 15896000 6361000 17294000 789000 2243000 939000 20101000 24219000 13899000 22816000 7313000 0 2582000 0 33671000 0 4414000 0 6274000 0 1533000 0 16675000 597000 15668000 498000 297636000 48204000 63621000 47016000 alances and amounts on non-accrual status, classified as impaired, or more than 60 days past due, by tax return year of origination, as of March 31, 2026 are as follows:
(in 000s)
Tax return year of originationBalanceMore Than 60 Days Past Due
2025$17,482 $79 
2024 and prior1,163 1,163 
18,645 $1,242 
Allowance(562)
Net balance$18,083 
Balances and amounts on non-accrual status, classified as impaired, or more than 60 days past due, by fiscal year of origination, as of March 31, 2026 are as follows:
(in 000s)
Fiscal year of originationBalanceNon-Accrual
2026$35,495 $— 
2025 and prior26,403 26,403 
61,898 $26,403 
Allowance(17,578)
Net balance$44,320 
P60D 17482000 79000 1163000 1163000 18645000 1242000 562000 18083000 P60D 35495000 0 26403000 26403000 61898000 26403000 17578000 44320000 Activity in the allowance for credit losses for EA and all other short-term and long-term receivables for the nine months ended March 31, 2026 and 2025 is as follows:
(in 000s)
EAsAll OtherTotal
Balances as of July 1, 2025$19,663 $45,156 $64,819 
Provision for credit losses17,578 39,945 57,523 
Charge-offs, recoveries and other(19,663)(44,803)(64,466)
Balances as of March 31, 2026$17,578 $40,298 $57,876 
Balances as of July 1, 2024$33,536 $45,327 $78,863 
Provision for credit losses19,371 36,671 56,042 
Charge-offs, recoveries and other(33,536)(45,864)(79,400)
Balances as of March 31, 2025$19,371 $36,134 $55,505 
19663000 45156000 64819000 17578000 39945000 57523000 19663000 44803000 64466000 17578000 40298000 57876000 33536000 45327000 78863000 19371000 36671000 56042000 33536000 45864000 79400000 19371000 36134000 55505000
NOTE 5: GOODWILL AND INTANGIBLE ASSETS
Changes in the carrying amount of goodwill for the nine months ended March 31, 2026 are as follows:
(in 000s)
GoodwillAccumulated Impairment LossesNet
Balances as of July 1, 2025$940,350 $(138,297)$802,053 
Acquisitions(1)
19,055 — 19,055 
Disposals and foreign currency changes, net(5,488)— (5,488)
Impairments— — — 
Balances as of March 31, 2026$953,917 $(138,297)$815,620 
(1)    All goodwill added during the period is expected to be tax-deductible for federal income tax reporting.
In conjunction with our annual impairment test, we tested goodwill for impairment during the quarter and did not identify any impairment.
Components of intangible assets are as follows:
(in 000s)
Gross Carrying AmountAccumulated
Amortization		Net
As of March 31, 2026:
Reacquired franchise rights$431,555 $(254,474)$177,081 
Customer relationships386,141 (305,246)80,895 
Internally-developed software121,671 (117,831)3,840 
Noncompete agreements24,476 (20,923)3,553 
Purchased technology68,100 (59,388)8,712 
Trade name5,800 (3,915)1,885 
$1,037,743 $(761,777)$275,966 
As of June 30, 2025:
Reacquired franchise rights$415,700 $(243,330)$172,370 
Customer relationships354,107 (287,067)67,040 
Internally-developed software119,959 (117,604)2,355 
Noncompete agreements23,070 (20,188)2,882 
Purchased technology68,100 (55,655)12,445 
Trade name5,800 (3,480)2,320 
$986,736 $(727,324)$259,412 
We made payments to acquire businesses totaling $55.0 million and $35.3 million during the nine months ended March 31, 2026 and 2025, respectively. The amounts and weighted-average lives of intangible assets acquired during the nine months ended March 31, 2026, including amounts capitalized related to internally-developed software, are as follows:
(dollars in 000s)
AmountWeighted-Average Life (in years)
Customer relationships$32,165 5
Reacquired franchise rights15,975 6
Internally-developed software1,770 3
Noncompete agreements1,437 5
Total$51,347 5
Amortization of intangible assets for the three and nine months ended March 31, 2026 was $12.3 million and $34.7 million respectively, compared to $11.3 million and $36.3 million for the three and nine months ended March 31, 2025. Estimated amortization of intangible assets for fiscal years ending June 30, 2026, 2027, 2028, 2029, and 2030 is $47.2 million, $44.9 million, $36.5 million, $27.6 million and $17.6 million, respectively.
Changes in the carrying amount of goodwill for the nine months ended March 31, 2026 are as follows:
(in 000s)
GoodwillAccumulated Impairment LossesNet
Balances as of July 1, 2025$940,350 $(138,297)$802,053 
Acquisitions(1)
19,055 — 19,055 
Disposals and foreign currency changes, net(5,488)— (5,488)
Impairments— — — 
Balances as of March 31, 2026$953,917 $(138,297)$815,620 
(1)    All goodwill added during the period is expected to be tax-deductible for federal income tax reporting.
940350000 138297000 802053000 19055000 19055000 5488000 5488000 0 0 953917000 138297000 815620000
Components of intangible assets are as follows:
(in 000s)
Gross Carrying AmountAccumulated
Amortization		Net
As of March 31, 2026:
Reacquired franchise rights$431,555 $(254,474)$177,081 
Customer relationships386,141 (305,246)80,895 
Internally-developed software121,671 (117,831)3,840 
Noncompete agreements24,476 (20,923)3,553 
Purchased technology68,100 (59,388)8,712 
Trade name5,800 (3,915)1,885 
$1,037,743 $(761,777)$275,966 
As of June 30, 2025:
Reacquired franchise rights$415,700 $(243,330)$172,370 
Customer relationships354,107 (287,067)67,040 
Internally-developed software119,959 (117,604)2,355 
Noncompete agreements23,070 (20,188)2,882 
Purchased technology68,100 (55,655)12,445 
Trade name5,800 (3,480)2,320 
$986,736 $(727,324)$259,412 
431555000 254474000 177081000 386141000 305246000 80895000 121671000 117831000 3840000 24476000 20923000 3553000 68100000 59388000 8712000 5800000 3915000 1885000 1037743000 761777000 275966000 415700000 243330000 172370000 354107000 287067000 67040000 119959000 117604000 2355000 23070000 20188000 2882000 68100000 55655000 12445000 5800000 3480000 2320000 986736000 727324000 259412000 55000000.0 35300000 The amounts and weighted-average lives of intangible assets acquired during the nine months ended March 31, 2026, including amounts capitalized related to internally-developed software, are as follows:
(dollars in 000s)
AmountWeighted-Average Life (in years)
Customer relationships$32,165 5
Reacquired franchise rights15,975 6
Internally-developed software1,770 3
Noncompete agreements1,437 5
Total$51,347 5
32165000 P5Y 15975000 P6Y 1770000 P3Y 1437000 P5Y 51347000 P5Y 12300000 34700000 11300000 36300000 47200000 44900000 36500000 27600000 17600000
NOTE 6: LONG-TERM DEBT
The components of long-term debt are as follows:
(in 000s)
As ofMarch 31, 2026June 30, 2025
Senior Notes, 5.250%, due October 2025
$— $350,000 
Senior Notes, 2.500%, due July 2028
500,000 500,000 
Senior Notes, 3.875%, due August 2030
650,000 650,000 
Senior Notes, 5.375%, due September 2032
350,000 — 
Debt issuance costs and discounts(9,067)(6,802)
Total long-term debt1,490,933 1,493,198 
Less: Current portion— (349,893)
Long-term portion$1,490,933 $1,143,305 
Estimated fair value of long-term debt$1,422,000 $1,437,000 
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.
UNSECURED COMMITTED LINE OF CREDIT – 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 our previous CLOC.
The 2025 CLOC provides for an unsecured senior revolving credit facility in the aggregate principal amount of $1.5 billion, which includes a $175.0 million sublimit for swingline loans and a $50.0 million sublimit for standby letters of credit. We may request increases in the aggregate principal amount of the revolving credit facility of up to $500.0 million, subject to obtaining commitments from lenders and meeting certain other conditions. The 2025 CLOC will mature on July 11, 2030, unless extended pursuant to the terms of the 2025 CLOC, at which time all outstanding amounts thereunder will be due and payable. Our 2025 CLOC includes an annual facility fee, which will vary depending on our then current credit ratings.
The 2025 CLOC is subject to various conditions, triggers, events or occurrences that could result in earlier termination and contains customary representations, warranties, covenants and events of default, including, without limitation: (1) a covenant requiring the Company to maintain a debt-to-EBITDA ratio, as defined by the 2025 CLOC agreement, calculated on a consolidated basis of no greater than (a) 3.50 to 1.00 as of the last day of each fiscal quarter ending on March 31, June 30, and September 30 of each year and (b) 4.50 to 1.00 as of the last day of each fiscal quarter ending on December 31 of each year; (2) a covenant requiring us to maintain an interest coverage ratio (EBITDA-to-interest expense) calculated on a consolidated basis of not less than 2.50 to 1.00 as of the last date of any fiscal quarter; and (3) covenants restricting our ability to incur certain additional debt, incur liens, merge or consolidate with other companies, sell or dispose of assets (including equity interests), liquidate or dissolve, engage in certain transactions with affiliates or enter into certain restrictive agreements. The 2025 CLOC includes provisions for an equity cure which could potentially allow us to independently cure certain defaults. Proceeds under the 2025 CLOC may be used for working capital needs or for other general corporate purposes. We were in compliance with these requirements as of March 31, 2026.
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, 2026.
The components of long-term debt are as follows:
(in 000s)
As ofMarch 31, 2026June 30, 2025
Senior Notes, 5.250%, due October 2025
$— $350,000 
Senior Notes, 2.500%, due July 2028
500,000 500,000 
Senior Notes, 3.875%, due August 2030
650,000 650,000 
Senior Notes, 5.375%, due September 2032
350,000 — 
Debt issuance costs and discounts(9,067)(6,802)
Total long-term debt1,490,933 1,493,198 
Less: Current portion— (349,893)
Long-term portion$1,490,933 $1,143,305 
Estimated fair value of long-term debt$1,422,000 $1,437,000 
0.05250 0 350000000 0.02500 500000000 500000000 0.03875 650000000 650000000 9067000 6802000 1490933000 1493198000 349893000 1490933000 1143305000 1422000000 1437000000 350 350 1500000000 175000000.0 50000000.0 500000000.0 3.50 4.50 2.50
NOTE 7: INCOME TAXES
We file a consolidated U.S. federal income tax return with the Internal Revenue Service (IRS) and also file income tax returns in various state, local, and foreign jurisdictions.
On July 4, 2025, H.R. 1 was signed into law. The legislation did not have a material impact on our income tax expense for the nine months ended March 31, 2026, and we do not expect it to materially impact our effective income tax rate for the fiscal year ending June 30, 2026.
Our effective income tax rate on continuing operations, including the impact of discrete tax items, was 8.1% for the nine months ended March 31, 2026, compared to 25.3% for the nine months ended March 31, 2025. Discrete tax items decreased the effective tax rate by 16.1% for the nine months ended March 31, 2026, and increased the effective tax rate by 0.9% for the nine months ended March 31, 2025. We recorded a discrete income tax benefit of $77.6 million for the nine months ended March 31, 2026, compared to a discrete income tax expense of $3.8 million for the nine months ended March 31, 2025.
The discrete income tax benefit recognized during the current year period 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. The benefit primarily reflects the release of the related unrecognized tax benefits, including reversal of accrued interest through the date of settlement. Due to the seasonality of our business, the impact of discrete tax items on our effective income tax rate for the nine months ended March 31, 2026 is greater than the expected impact on our projected full-year effective income tax rate.
Changes in gross unrecognized tax benefits for the nine months ended March 31, 2026 are as follows:
(in 000s)
Balances as of July 1, 2025$266,548 
Additions based on tax positions related to prior years528 
Reductions based on tax positions related to prior years(2,998)
Additions based on tax positions related to the current year16,998 
Reductions related to settlements with tax authorities(122,159)
Expiration of statute of limitations(1,182)
Balance as of March 31, 2026$157,735 
NOTE 7: INCOME TAXES
We file a consolidated U.S. federal income tax return with the Internal Revenue Service (IRS) and also file income tax returns in various state, local, and foreign jurisdictions.
On July 4, 2025, H.R. 1 was signed into law. The legislation did not have a material impact on our income tax expense for the nine months ended March 31, 2026, and we do not expect it to materially impact our effective income tax rate for the fiscal year ending June 30, 2026.
8.1 25.3 16.1% 0.9%
(in 000s)
Balances as of July 1, 2025$266,548 
Additions based on tax positions related to prior years528 
Reductions based on tax positions related to prior years(2,998)
Additions based on tax positions related to the current year16,998 
Reductions related to settlements with tax authorities(122,159)
Expiration of statute of limitations(1,182)
Balance as of March 31, 2026$157,735 
NOTE 8: COMMITMENTS AND CONTINGENCIES
Our U.S. and Canadian businesses offer our 100% accuracy guarantee. Assisted tax returns are covered by our 100% accuracy guarantee, whereby we will reimburse a client for penalties and interest attributable to an H&R Block error on a return. Similarly, DIY tax returns are covered by our 100% accuracy guarantee, whereby we will reimburse a client (up to a maximum of $10,000 in the U.S.) if our software makes an arithmetic error that results in payment of penalties and/or interest to the respective taxing authority that a client would otherwise not have been required to pay. Our liability related to estimated losses under the 100% accuracy guarantee was $12.4 million and $11.4 million as of March 31, 2026 and June 30, 2025, respectively. The short-term and long-term portions of this liability are included in deferred revenue and other liabilities in the consolidated balance sheets.
Liabilities related to acquisitions for (1) estimated contingent consideration based on expected financial performance of the acquired business and economic conditions at the time of acquisition and (2) estimated accrued compensation related to continued employment of key employees were $28.0 million and $29.6 million as of March 31, 2026 and June 30, 2025 respectively, with amounts recorded in deferred revenue and other liabilities. Should actual results differ from our estimates, future payments made will differ from the above estimate and any differences will be recorded in results from continuing operations.
We have contractual commitments to fund certain franchises with approved short-term lines of credit for the purpose of meeting their seasonal working capital needs. Our total obligation under these lines of credit was $22.6 million at March 31, 2026, and net of amounts drawn and outstanding, our remaining commitment to fund totaled $11.2 million.
Emerald Advance® term loans are originated by Pathward® N.A. (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.
10000 12400000 11400000 28000000.0 29600000 22600000 11200000 Refund Advance loans are originated by Pathward and offered to certain assisted U.S. tax preparation clients, based on client eligibility as determined by Pathward. We pay fees primarily based on loan size and customer type. We have provided a guarantee up to $18.0 million related to certain loans to clients prior to the IRS accepting electronic filing. At March 31, 2026 and June 30, 2025, we accrued an estimated liability of $2.2 million related to this guarantee. 18 2.2
NOTE 9: LITIGATION AND OTHER RELATED CONTINGENCIES
We are a defendant in numerous litigation and arbitration matters, arising both in the ordinary course of business and otherwise, including as described below. The matters described below are not all of the lawsuits or arbitrations to which we are subject. In some of the matters, very large or indeterminate amounts, including punitive damages, may be sought. U.S. jurisdictions permit considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction. In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. We believe that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value due to this variability in pleadings and our experience in handling and resolving numerous claims over an extended period of time.
The outcome of a matter and the amount or range of potential loss at particular points in time may be difficult to ascertain. Among other things, uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness testimony, and how courts and arbitrators will apply the law. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will view the relevant evidence and applicable law.
In addition to litigation and arbitration matters, we are also subject to other loss contingencies arising out of our business activities, including as described below.
We accrue liabilities for litigation, arbitration and other related loss contingencies and any related settlements when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. If a range of loss is estimated, and some amount within that range appears to be a better estimate than any other amount within that range, then that amount is accrued. If no amount within the range can be identified as a better estimate than any other amount, we accrue the minimum amount in the range.
For such matters where a loss is believed to be reasonably possible, but not probable, or the loss cannot be reasonably estimated, no accrual has been made. It is possible that such matters could require us to pay damages or make other expenditures or accrue liabilities in amounts that could not be reasonably estimated as of March 31, 2026. While the potential future liabilities could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known, we do not believe any such liabilities are likely to have a material adverse effect on our business and our consolidated financial position, results of operations, and cash flows. Our accrued liabilities were $13.3 million and $6.2 million as of March 31, 2026 and June 30, 2025, respectively.
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 only
represents 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.
Matters for which we are not currently able to estimate the reasonably possible loss or range of loss are not included in this range. We are often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the reasonably possible loss or range of loss, such as precise information about the amount of damages or other remedies being asserted, the defenses to the claims being asserted, discovery from other parties and investigation of factual allegations, rulings by courts or arbitrators on motions or appeals, analyses by experts, or the status or terms of any settlement negotiations.
The estimated range of reasonably possible loss is based upon currently available information and is subject to significant judgment and a variety of assumptions, as well as known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from the current estimate. As of March 31, 2026, 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.
At the end of each reporting period, we review relevant information with respect to litigation, arbitration and other related loss contingencies and update our accruals, disclosures, and estimates of reasonably possible loss or range of loss based on such reviews. Costs incurred with defending matters are expensed as incurred. Any receivable for insurance recoveries is recorded separately from the corresponding liability, and only if recovery is determined to be probable and reasonably estimable.
We believe we have meritorious defenses to the claims asserted in the various matters described in this note, and we intend to defend them vigorously. The amounts claimed in the matters are substantial, however, and there can be no assurances as to their outcomes. In the event of unfavorable outcomes, it could require modifications to our operations; in addition, the amounts that may be required to be paid to discharge or settle the matters could be substantial and could have a material adverse impact on our business and our consolidated financial position, results of operations, and cash flows.
We have received and are responding to certain governmental inquiries, class actions and mass arbitrations relating to the IRS Free File Program and other aspects of our DIY tax preparation services, including the use of pixels. An accrual related to these matters is included in our loss contingency accrual.
We are from time to time a party to litigation, arbitration and other loss contingencies not discussed herein arising out of our business operations. These matters may include actions by state attorneys general, other state regulators, federal regulators, individual plaintiffs, and cases in which plaintiffs seek to represent others who may be similarly situated.
While we cannot provide assurance that we will ultimately prevail in each instance, we believe the amount, if any, we are required to pay to discharge or settle these other matters will not have a material adverse impact on our business and our consolidated financial position, results of operations, and cash flows.
13.3 6200000
NOTE 10: SEGMENT INFORMATION
We 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 prepared by H&R Block tax professionals in one of our company-owned or franchise offices, virtually or via an online review, or they are prepared and filed by our clients through our DIY tax solutions. We also offer small business solutions through our company-owned and franchise offices (including in-person, online and virtual) and online through Wave. We report a single segment that includes all of our continuing operations. The majority of our revenues are from our U.S. tax services business.
The Company's Chief Operating Decision Maker (CODM) is our chief executive officer, who regularly reviews consolidated financial information to evaluate financial performance and allocate resources. Specifically, the CODM uses revenues, operating expenses, net income and EBITDA at a consolidated level, as key financial metrics in deciding how to reinvest to grow the business. These financial metrics are used by the CODM to make operating decisions and identify growth opportunities. The measure of segment assets is total consolidated assets as presented on the consolidated balance sheet.
The following table presents the significant revenue and expense categories included in the segment's net income from continuing operations as regularly provided to the CODM on a consolidated basis and then reconciled to net income for the three and nine months ended March 31, 2026 and 2025.
Consolidated – Financial Results(in 000s, except per share amounts)
Three months ended March 31,Nine months ended March 31,
2026202520262025
Revenues:
U.S. tax preparation and related services:
Assisted tax preparation$1,742,135 $1,635,877 $1,846,698 $1,727,220 
Royalties128,182 133,961 139,139 143,312 
DIY tax preparation215,245 214,666 235,797 231,646 
Refund Transfers119,935 113,732 121,416 115,229 
Peace of Mind® Extended Service Plan14,347 15,625 54,087 54,867 
Tax Identity Shield®8,485 7,025 16,851 14,947 
Emerald Card® and SpruceSM
39,590 40,195 56,566 59,169 
Interest and fee income on Emerald Advance®15,198 14,286 28,644 26,594 
International70,119 60,438 170,498 157,104 
Wave29,871 26,717 89,506 79,681 
Other15,000 14,582 41,321 40,215 
Total revenues$2,398,107 $2,277,104 $2,800,523 $2,649,984 
Compensation and benefits:
Field wages577,513 532,916 741,405 682,575 
Other wages78,703 74,621 230,987 230,687 
Benefits and other compensation118,151 111,575 194,802 188,731 
774,367 719,112 1,167,194 1,101,993 
Occupancy127,312 119,709 339,700 326,026 
Marketing and advertising185,388 196,667 208,725 221,502 
Depreciation and amortization31,519 29,221 90,442 87,247 
Bad debt39,806 40,479 63,827 62,625 
Other202,891 193,603 399,721 393,900 
Total operating expenses1,361,283 1,298,791 2,269,609 2,193,293 
Other income (expense), net3,941 4,554 15,077 19,215 
Interest expense on borrowings(24,307)(24,686)(65,087)(62,285)
Income from continuing operations before income taxes1,016,458 958,181 480,904 413,621 
Income taxes167,678 235,253 39,058 104,580 
Segment net income from continuing operations848,780 722,928 441,846 309,041 
Reconciliation of segment profit:
Reconciling items:
Net loss from discontinued operations(879)(598)(1,930)(2,707)
Net income$847,901 $722,330 $439,916 $306,334 
The following table presents the significant revenue and expense categories included in the segment's net income from continuing operations as regularly provided to the CODM on a consolidated basis and then reconciled to net income for the three and nine months ended March 31, 2026 and 2025.
Consolidated – Financial Results(in 000s, except per share amounts)
Three months ended March 31,Nine months ended March 31,
2026202520262025
Revenues:
U.S. tax preparation and related services:
Assisted tax preparation$1,742,135 $1,635,877 $1,846,698 $1,727,220 
Royalties128,182 133,961 139,139 143,312 
DIY tax preparation215,245 214,666 235,797 231,646 
Refund Transfers119,935 113,732 121,416 115,229 
Peace of Mind® Extended Service Plan14,347 15,625 54,087 54,867 
Tax Identity Shield®8,485 7,025 16,851 14,947 
Emerald Card® and SpruceSM
39,590 40,195 56,566 59,169 
Interest and fee income on Emerald Advance®15,198 14,286 28,644 26,594 
International70,119 60,438 170,498 157,104 
Wave29,871 26,717 89,506 79,681 
Other15,000 14,582 41,321 40,215 
Total revenues$2,398,107 $2,277,104 $2,800,523 $2,649,984 
Compensation and benefits:
Field wages577,513 532,916 741,405 682,575 
Other wages78,703 74,621 230,987 230,687 
Benefits and other compensation118,151 111,575 194,802 188,731 
774,367 719,112 1,167,194 1,101,993 
Occupancy127,312 119,709 339,700 326,026 
Marketing and advertising185,388 196,667 208,725 221,502 
Depreciation and amortization31,519 29,221 90,442 87,247 
Bad debt39,806 40,479 63,827 62,625 
Other202,891 193,603 399,721 393,900 
Total operating expenses1,361,283 1,298,791 2,269,609 2,193,293 
Other income (expense), net3,941 4,554 15,077 19,215 
Interest expense on borrowings(24,307)(24,686)(65,087)(62,285)
Income from continuing operations before income taxes1,016,458 958,181 480,904 413,621 
Income taxes167,678 235,253 39,058 104,580 
Segment net income from continuing operations848,780 722,928 441,846 309,041 
Reconciliation of segment profit:
Reconciling items:
Net loss from discontinued operations(879)(598)(1,930)(2,707)
Net income$847,901 $722,330 $439,916 $306,334 
1742135000 1635877000 1846698000 1727220000 128182000 133961000 139139000 143312000 215245000 214666000 235797000 231646000 119935000 113732000 121416000 115229000 14347000 15625000 54087000 54867000 8485000 7025000 16851000 14947000 39590000 40195000 56566000 59169000 15198000 14286000 28644000 26594000 70119000 60438000 170498000 157104000 29871000 26717000 89506000 79681000 15000000 14582000 41321000 40215000 2398107000 2277104000 2277104000 2800523000 2649984000 577513000 532916000 741405000 682575000 78703000 74621000 230987000 230687000 118151000 111575000 194802000 188731000 774367000 719112000 1167194000 1101993000 127312000 119709000 339700000 326026000 185388000 196667000 208725000 221502000 31519000 29221000 90442000 87247000 39806000 40479000 63827000 62625000 202891000 193603000 399721000 393900000 1361283000 1298791000 2269609000 2193293000 3941000 4554000 15077000 19215000 24307000 24686000 65087000 62285000 1016458000 958181000 480904000 413621000 167678000 235253000 39058000 104580000 848780000 722928000 441846000 309041000 -879000 -598000 -1930000 -2707000 847901000 722330000 439916000 306334000 false false The balance of our accumulated other comprehensive loss consists of foreign currency translation adjustments. Represents shares swapped or surrendered to us in connection with the vesting or exercise of stock-based awards.