8-K – 2026-02-03 – q2fy26earningrelease.htm

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EX-99.1
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q2fy26earningrelease.htm
EX-99.1

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Exhibit 99.1

News Release
For Immediate Release: February 3, 2026

H&R Block Reports Fiscal 2026 Second Quarter Results
— Revenue Increased 11% —
— Reaffirms Full Year Outlook —

KANSAS CITY, Mo. - H&R Block, Inc. (NYSE: HRB) (the "Company") today released financial results 1 for its fiscal 2026 second quarter ended December 31, 2025.
"Across the business, we've made tangible improvements this season, whether receiving assistance from a tax professional or filing using our award-winning online tax product," said Curtis Campbell, president and chief executive officer. "We are elevating the value we deliver through expert‑led, technology‑enabled experiences that are increasingly supported by thoughtful AI integration. In a year of heightened uncertainty for many filers, our client‑first strategy and disciplined execution keep us focused on durable growth and long‑term value."
Fiscal 2026 Second Quarter Results and Key Financial Metrics
"We delivered double‑digit revenue growth in the quarter and reaffirmed our full‑year outlook, reflecting the strength of our year-to-date performance," said Tiffany Mason, chief financial officer. "The performance across Assisted, DIY, and Wave demonstrates solid execution, and our financial fundamentals and commitment to disciplined capital allocation position us to deliver meaningful long‑term value."
The Company reminds readers that its business is highly seasonal, and second quarter results consistently reflect this pattern. Historically, this period contributes modestly to annual revenue and typically generates a net loss.
For the second quarter, the Company delivered total revenue of $198.9 million, an increase of $19.8 million, or 11.1%, versus the prior year. The increase was primarily the result of higher volume and net average charge (NAC) in the assisted category, strong growth in Wave subscription revenue and payments volume, and increased DIY software sales.
Total operating expenses of $497.7 million increased by $25.4 million, or 5.4%, as expected, versus the prior year. The increase was primarily due to higher field wages as a result of higher assisted revenue and increased consulting costs.
Net loss from continuing operations improved by $0.9 million, or 0.4%, to ($241.6) million.
1 All amounts in this release are unaudited. Unless otherwise noted, all comparisons refer to the current period compared to the corresponding prior year period.

Loss per share from continuing operations 2 increased 6.7% to ($1.91), and adjusted loss per share from continuing operations 2 increased 6.4% to ($1.84), due to fewer shares outstanding as a result of share repurchases, partially offset by an improved net loss.

Capital Allocation
The Company reported the following related to its capital structure:
• Year to date, the Company has returned $507.7 million to shareholders in the form of dividends and share repurchases.
• The Company has approximately $700 million remaining on its $1.5 billion share repurchase program.
Fiscal Year 2026 Outlook Reaffirmed
The Company continues to expect:
• Revenue to be in the range of $3.875 to $3.895 billion.
• EBITDA 3 to be in the range of $1.015 to $1.035 billion.
• Effective tax rate to be approximately 25%.
• Adjusted Diluted Earnings Per Share 3 to be in the range of $4.85 to $5.00.
Conference Call
The Company will host a conference call for analysts and investors to discuss second quarter 2026 results at 4:30 p.m. ET on Tuesday, February 3, 2026. To join live, participants must register at https://register-conf.media-server.com/register/BI4f5e380c7eac4ff797fe8d672ac49bf4. Once registered, the participant will receive a dial-in number and unique PIN to access the call. Please join approximately 5 minutes prior to the scheduled start time.
The call, along with a presentation for viewing, will also be webcast in a listen-only format for the media and general public. The webcast can be accessed directly at https://edge.media-server.com/mmc/p/c4dfnsou/lan/en/ and will be available for replay 2 hours after the call is concluded and continuing for 90 days.
About H&R Block
H&R Block, Inc. (NYSE: HRB) provides help and inspires confidence in its clients and communities everywhere through global tax preparation services, financial products, and small-business solutions. The company blends digital innovation with human expertise and care as it helps people get the best outcome at tax time and also be better with money using its mobile banking app, Spruce. Through Block Advisors and Wave, the company helps small-business owners thrive with year-round bookkeeping, payroll, advisory, and payment processing solutions. For more information, visit H&R Block News.

About Non-GAAP Financial Information
This press release and the accompanying tables include non-GAAP financial information. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with generally accepted accounting principles, please see the section of the accompanying tables titled "Non-GAAP Financial Information."
2 All per share amounts are based on fully diluted shares at the end of the corresponding period. The Company reports non-GAAP financial measures of performance, including adjusted earnings per share (EPS), earnings before interest, tax, depreciation, and amortization (EBITDA) from continuing operations, free cash flow, and free cash flow yield, which it considers to be useful metrics for management and investors to evaluate and compare the ongoing operating performance of the Company. See "About Non-GAAP Financial Information" below for more information regarding financial measures not prepared in accordance with generally accepted accounting principles (GAAP).
3 Adjusted Diluted Earnings Per Share (EPS) and earnings before interest, tax, depreciation, and amortization (EBITDA) from continuing operations are non-GAAP financial measures. Future period non-GAAP outlook includes adjustments for items not indicative of our core operations, which may include, without limitation, items described in the below section titled “Non-GAAP Financial Information” and in the accompanying tables. Such adjustments may be affected by changes in ongoing assumptions and judgments, as well as nonrecurring, unusual, or unanticipated charges, expenses or gains, or other items that may not directly correlate to the underlying performance of our business operations. The exact amounts of these adjustments are not currently determinable but may be significant. It is therefore not practicable to provide the comparable GAAP measures or reconcile this non-GAAP outlook to the most comparable GAAP measures.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or variation of words such as "expects," "anticipates," "intends," "plans," "believes," "commits," "seeks," "estimates," "projects," "forecasts," "targets," "would," "will," "should," "goal," "could" or "may" or other similar expressions. Forward-looking statements provide management's current expectations or predictions of future conditions, events or results. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. They may include estimates of revenues, client trajectory, income, effective tax rate, earnings per share, cost savings, capital expenditures, dividends, share repurchases, liquidity, capital structure, market share, industry volumes or other financial items, descriptions of management’s plans or objectives for future operations, products or services, or descriptions of assumptions underlying any of the above. They may also include the expected impact of external events beyond the Company’s control, such as outbreaks of infectious disease, severe weather events, natural or manmade disasters, or changes in the regulatory environment in which we operate. All forward-looking statements speak only as of the date they are made and reflect the Company's good faith beliefs, assumptions and expectations, but they are not guarantees of future performance or events. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions, factors, or expectations, new information, data or methods, future events or other changes, except as required by law. By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause such differences include, but are not limited to a variety of economic, competitive and regulatory factors, many of which are beyond the Company's control, that are described in our Annual Report on Form 10-K for the most recently completed fiscal year in the section entitled "Risk Factors" and additional factors we may describe from time to time in other filings with the Securities and Exchange Commission. You may get such filings for free at our website at https://investors.hrblock.com. In addition, factors that may cause the Company’s actual estimated effective tax rate to differ from estimates include the Company’s actual results from operations compared to current estimates, future discrete items, changes in interpretations and assumptions the Company has made, future actions of the Company, or increases in applicable tax rates in jurisdictions where the Company operates. You should understand that it is not possible to predict or identify all such factors and, consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

For Further Information

Investor Relations: Jessica Hazel, (816) 854-4214, jessica.hazel@hrblock.com
Media Relations: Media Desk, mediadesk@hrblock.com

TABLES FOLLOW

FINANCIAL RESULTS (unaudited, in 000s - except per share amounts)
Three months ended December 31, Six months ended December 31,
2025 2024 2025 2024
REVENUES:
U.S. tax preparation and related services:
Assisted tax preparation $ 55,919   $ 48,380  $ 104,563   $ 91,343 
Royalties 5,108   3,499  10,957   9,351 
DIY tax preparation 16,807   13,744  20,552   16,980 
Refund Transfers 638   637  1,481   1,497 
Peace of Mind® Extended Service Plan 16,231   16,145  39,740   39,242 
Tax Identity Shield® 4,244   4,013  8,366   7,922 
Other 12,845   11,824  26,321   25,633 
Total U.S. tax preparation and related services 111,792   98,242  211,980   191,968 
Financial services:
Emerald Card® and Spruce SM
9,124   10,148  16,976   18,974 
Interest and fee income on Emerald Advance® 13,446   12,308  13,446   12,308 
Total financial services 22,570   22,456  30,422   31,282 
International 34,718   31,811  100,379   96,666 
Wave 29,785   26,561  59,635   52,964 
Total revenues $ 198,865   $ 179,070  $ 402,416   $ 372,880 
Compensation and benefits:
Field wages 94,177   81,565  163,892   149,659 
Other wages 73,005   78,731  152,284   156,066 
Benefits and other compensation 39,989   38,402  76,651   77,156 
207,171   198,698  392,827   382,881 
Occupancy 109,592   104,999  212,388   206,317 
Marketing and advertising 14,995   14,863  23,337   24,835 
Depreciation and amortization 30,001   29,195  58,923   58,026 
Bad debt 21,816   19,416  24,021   22,146 
Other 114,169   105,190  196,830   200,297 
Total operating expenses 497,744   472,361  908,326   894,502 
Other income (expense), net 3,034   2,744  11,136   14,661 
Interest expense on borrowings (23,378) (21,752) (40,780) (37,599)
Pretax loss (319,223) (312,299) (535,554) (544,560)
Income tax benefit (77,657) (69,833) (128,620) (130,673)
Net loss from continuing operations (241,566) (242,466) (406,934) (413,887)
Net loss from discontinued operations (600) (954) (1,051) (2,109)
Net loss $ (242,166) $ (243,420) $ (407,985) $ (415,996)
BASIC AND DILUTED LOSS PER SHARE:
Continuing operations $ (1.91) $ (1.79) $ (3.16) $ (3.02)
Discontinued operations (0.01) (0.01) (0.01) (0.01)
Consolidated $ (1.92) $ (1.80) $ (3.17) $ (3.03)
WEIGHTED AVERAGE DILUTED SHARES 126,566   135,563  128,976   137,359 
Adjusted diluted EPS (1)
$ (1.84) $ (1.73) $ (3.03) $ (2.89)
EBITDA (1)
$ (265,844) $ (261,352) $ (435,851) $ (448,935)

(1) All non-GAAP measures are results from continuing operations. See " Non-GAAP Financial Information " for a reconciliation of non-GAAP measures.

CONSOLIDATED BALANCE SHEETS (unaudited, in 000s - except per share data)
As of December 31, 2025 June 30, 2025

ASSETS
Cash and cash equivalents $ 349,194   $ 983,277 
Cash and cash equivalents - restricted 19,662   19,862 
Receivables, net 352,480   63,621 

Prepaid expenses and other current assets 120,442   95,788 
Total current assets 841,778   1,162,548 
Property and equipment, net 149,554   135,068 
Operating lease right of use assets 488,082   521,215 
Intangible assets, net 271,054   259,412 
Goodwill 815,618   802,053 
Deferred tax assets and income taxes receivable 300,074   317,691 
Other noncurrent assets 63,850   65,911 
Total assets $ 2,930,010   $ 3,263,898 
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Accounts payable and accrued expenses $ 145,801   $ 144,046 
Accrued salaries, wages and payroll taxes 74,262   107,375 
Accrued income taxes and reserves for uncertain tax positions 44,897   296,244 
Current portion of long-term debt —   349,893 
Operating lease liabilities 200,653   209,203 
Deferred revenue and other current liabilities 189,216   191,849 
Total current liabilities 654,829   1,298,610 
Long-term debt and line of credit borrowings 2,435,379   1,143,305 
Deferred tax liabilities and reserves for uncertain tax positions 298,986   306,134 
Operating lease liabilities 299,003   322,847 
Deferred revenue and other noncurrent liabilities 64,891   104,106 
Total liabilities 3,753,088   3,175,002 
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Common stock, no par, stated value $.01 per share 1,565   1,644 
Additional paid-in capital 768,531   766,998 
Accumulated other comprehensive loss (51,338) (47,755)
Retained earnings (deficit) (904,840) 12,061 
Less treasury shares, at cost (636,996) (644,052)
Total stockholders' equity (deficiency) (823,078) 88,896 
Total liabilities and stockholders' equity $ 2,930,010   $ 3,263,898 

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in 000s)
Six months ended December 31, 2025 2024

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (407,985) $ (415,996)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 58,923   58,026 
Provision for credit losses 21,144   20,727 
Deferred taxes 18,723   (1,531)
Stock-based compensation 13,799   17,945 
Changes in assets and liabilities, net of acquisitions:
Receivables (300,004) (262,348)
Prepaid expenses, other current and noncurrent assets (2,290) 2,588 
Accounts payable, accrued expenses, salaries, wages and payroll taxes (44,968) (76,806)
Deferred revenue, other current and noncurrent liabilities (49,863) (45,170)
Income tax receivables, accrued income taxes and income tax reserves (276,943) (192,340)
Other, net (1,324) (733)
Net cash used in operating activities (970,788) (895,638)
CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures (48,735) (49,115)
Payments made for business acquisitions, net of cash acquired (35,366) (28,017)

Franchise loans funded (15,051) (17,442)
Payments from franchisees 6,016   971 

Other, net 1,211   6,110 
Net cash used in investing activities (91,925) (87,493)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of line of credit borrowings (30,000) (100,000)
Proceeds from line of credit borrowings 975,000   890,000 
Repayments of long-term debt (350,000) — 
Proceeds from issuance of long-term debt 346,980   — 

Dividends paid (104,551) (96,960)
Repurchase of common stock, including shares surrendered (412,645) (436,233)

Other, net 4,752   1,791 
Net cash provided by financing activities 429,536   258,598 
Effects of exchange rate changes on cash (1,106) (9,136)
Net decrease in cash and cash equivalents, including restricted balances (634,283) (733,669)
Cash, cash equivalents and restricted cash, beginning of period 1,003,139   1,075,193 
Cash, cash equivalents and restricted cash, end of period $ 368,856   $ 341,524 
SUPPLEMENTARY CASH FLOW DATA:
Income taxes paid, net (includes payments for purchased investment tax credits) $ 129,250   $ 62,290 
Interest paid on borrowings 35,135   33,412 
Accrued additions to property and equipment 3,117   3,798 
New operating right of use assets and related lease liabilities 85,455   47,135 
Accrued dividends payable to common shareholders 53,215   50,176 

(in 000s)
Three months ended December 31, Six months ended December 31,
NON-GAAP FINANCIAL MEASURE - EBITDA 2025 2024 2025 2024

Net loss - as reported $ (242,166) $ (243,420) $ (407,985) $ (415,996)
Discontinued operations, net 600   954  1,051   2,109 
Net loss from continuing operations - as reported (241,566) (242,466) (406,934) (413,887)
Add back:
Income tax benefit (77,657) (69,833) (128,620) (130,673)
Interest expense 23,378   21,752  40,780   37,599 
Depreciation and amortization 30,001   29,195  58,923   58,026 
(24,278) (18,886) (28,917) (35,048)
EBITDA from continuing operations $ (265,844) $ (261,352) $ (435,851) $ (448,935)

(in 000s, except per share amounts)
Three months ended December 31, Six months ended December 31,
NON-GAAP FINANCIAL MEASURE - ADJUSTED EPS 2025 2024 2025 2024

Net loss from continuing operations - as reported $ (241,566) $ (242,466) $ (406,934) $ (413,887)
Adjustments:
Amortization of intangibles related to acquisitions (pretax) 11,252   10,910  22,231   22,038 
Tax effect of adjustments (1)
(2,444) (2,539) (5,236) (5,184)
Adjusted net loss from continuing operations $ (232,758) $ (234,095) $ (389,939) $ (397,033)
Diluted loss per share from continuing operations - as reported $ (1.91) $ (1.79) $ (3.16) $ (3.02)
Adjustments, net of tax 0.07   0.06  0.13   0.13 
Adjusted diluted loss per share from continuing operations $ (1.84) $ (1.73) $ (3.03) $ (2.89)

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

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, and free cash flow. We also use EBITDA from continuing operations and pretax income from continuing operations, each subject to permitted adjustments, as performance metrics in incentive compensation calculations for our employees.