SEC filing – odaterad – 0001605297-25-000003-xbrl.zip

Document

Exhibit 99.1

News Release
For Immediate Release: May 7, 2025
H&R Block Reports Fiscal 2025 Third Quarter Results
— Delivered Revenue Growth of 4%, Net Income Growth of 5%, and EPS Growth of 9% —
— Improved Volume and Market Share Trends in Assisted Channel Through April 30 —
— Reaffirms Full Year 2025 Outlook —
KANSAS CITY, Mo. - H&R Block, Inc. (NYSE: HRB) (the "Company") today released financial results 1 for its fiscal 2025 third quarter ended March 31, 2025.
"Today we are reaffirming our FY25 outlook," said Jeff Jones, president and chief executive officer. "Our transformation continues to gather momentum and deliver results. We meaningfully enhanced the new client experience this season, driving higher client satisfaction scores and improving volume and market share trends in the Assisted channel."
Fiscal 2025 Third Quarter Results and Key Financial Metrics
"In the Assisted channel, we struck a healthy balance of price, volume, and mix in the quarter which is a testament to our redesigned client experience and our unwavering commitment to delivering value for our clients," said Tiffany Mason, chief financial officer. "I remain confident in our ability to continue driving significant value as we have a resilient business with strong financial fundamentals, consistent cash flow generation, and a shareholder-friendly capital return practice."
Total revenue of $2.3 billion increased by $92.3 million, or 4.2%, versus prior year. The increase was the result of an increase in overall net average charge (NAC), and higher company-owned return volumes in the U.S, partially offset by lower international revenue, and lower interest and fee income on Emerald Advance.
Total operating expenses of $1.3 billion increased by $42.2 million or 3.4%, primarily due to higher tax professional wages and benefits as a result of the increase in company-owned return volume.
Net income from continuing operations increased $31.3 million, or 4.5% to $722.9 million.
Earnings per share from continuing operations 2 increased 9.2% to $5.32, and adjusted earnings per share from continuing operations 2 increased 8.9% to $5.38, due to higher net income and fewer shares outstanding from share repurchases.

Capital Allocation
The Company reported the following related to its capital structure:
• As previously announced, a quarterly cash dividend of $0.375 per share will be paid on July 3, 2025 to shareholders of record as of June 4, 2025. H&R Block has paid quarterly dividends consecutively since the Company became public in 1962.
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.
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, and free cash flow 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 Shares outstanding calculated as of April 30, 2016.

• In the first and second quarters of fiscal 2025, the company repurchased 6.5 million shares at an aggregate price of $400 million, or $61.10 per share.
• The Company has approximately $1.1 billion remaining on its $1.5 billion share repurchase program.
Since 2016, the Company has returned more than $4.5 billion to shareholders in the form of dividends and share repurchases, buying back over 43% of its shares outstanding 3 .
Fiscal Year 2025 Outlook Reaffirmed
The Company continues to expect:
• Revenue to be in the range of $3.69 to $3.75 billion.
• EBITDA 4 to be in the range of $975 million to $1.02 billion.
• Effective tax rate to be approximately 13%, resulting in a one-time benefit to EPS of approximately 50 cents.
• Adjusted Diluted Earnings Per Share 4 to be in the range of $5.15 to $5.35.
Conference Call
The Company will host a conference call for analysts and investors to discuss third quarter 2025 results at 4:30 p.m. ET on Wednesday, May 7, 2025. To join live, participants must register at https://register-conf.media-server.com/register/BI6c8ca5ffb9a24eecba80c3c3a79d2043. 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/wfx9997r 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."
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

4 Adjusted Diluted EPS and 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.

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: Jordyn Eskijian, (816) 854-5674, jordyn.eskijian@hrblock.com
Media Relations: Media Desk, mediadesk@hrblock.com

TABLES FOLLOW

FINANCIAL RESULTS (unaudited, in 000s - except per share amounts)
Three months ended March 31, Nine months ended March 31,
2025 2024 2025 2024
REVENUES:
U.S. tax preparation and related services:
Assisted tax preparation $ 1,635,877   $ 1,534,825  $ 1,727,220   $ 1,622,430 
Royalties 133,961   141,915  143,312   153,070 
DIY tax preparation 214,666   198,570  231,646   215,529 
Refund Transfers 113,732   118,937  115,229   120,892 
Peace of Mind® Extended Service Plan 15,625   16,813  54,867   59,100 
Tax Identity Shield® 7,025   7,536  14,947   16,810 
Other 14,582   12,065  40,215   32,637 
Total U.S. tax preparation and related services 2,135,468   2,030,661  2,327,436   2,220,468 
Financial services:
Emerald Card® and Spruce SM
40,195   41,160  59,169   61,493 
Interest and fee income on Emerald Advance® 14,286   21,169  26,594   36,702 
Total financial services 54,481   62,329  85,763   98,195 
International 60,438   68,264  157,104   158,398 
Wave 26,717   23,580  79,681   70,656 
Total revenues $ 2,277,104   $ 2,184,834  $ 2,649,984   $ 2,547,717 
Compensation and benefits:
Field wages 532,916   510,299  682,575   650,529 
Other wages 74,621   75,356  230,687   222,125 
Benefits and other compensation 111,575   99,653  188,731   170,964 
719,112   685,308  1,101,993   1,043,618 
Occupancy 119,709   119,364  326,026   319,843 
Marketing and advertising 196,667   194,349  221,502   211,135 
Depreciation and amortization 29,221   30,672  87,247   91,004 
Bad debt 40,479   41,008  62,625   67,560 
Other 193,603   185,929  393,900   360,111 
Total operating expenses 1,298,791   1,256,630  2,193,293   2,093,271 
Other income (expense), net 4,554   5,224  19,215   20,982 
Interest expense on borrowings (24,686) (26,070) (62,285) (63,304)
Pretax income 958,181   907,358  413,621   412,124 
Income taxes 235,253   215,772  104,580   72,527 
Net income from continuing operations 722,928   691,586  309,041   339,597 
Net loss from discontinued operations (598) (849) (2,707) (2,097)
Net income $ 722,330   $ 690,737  $ 306,334   $ 337,500 
DILUTED EARNINGS PER SHARE
Continuing operations $ 5.32   $ 4.87  $ 2.23   $ 2.34 
Discontinued operations (0.01) (0.01) (0.02) (0.02)
Consolidated $ 5.31   $ 4.86  $ 2.21   $ 2.32 
WEIGHTED AVERAGE DILUTED SHARES 135,329   141,540  137,944   144,594 
Adjusted diluted EPS (1)
$ 5.38   $ 4.94  $ 2.41   $ 2.54 
EBITDA (1)
$ 1,012,088   $ 964,100  $ 563,153   $ 566,432 

(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 March 31, 2025 June 30, 2024

ASSETS
Cash and cash equivalents $ 772,946   $ 1,053,326 
Cash and cash equivalents - restricted 16,744   21,867 
Receivables, net 352,398   69,075 

Prepaid expenses and other current assets 104,450   95,208 
Total current assets 1,246,538   1,239,476 
Property and equipment, net 146,456   131,319 
Operating lease right of use assets 417,197   461,986 
Intangible assets, net 270,007   264,102 
Goodwill 785,936   785,226 
Deferred tax assets and income taxes receivable 308,989   271,658 
Other noncurrent assets 69,888   65,043 
Total assets $ 3,245,011   $ 3,218,810 
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Accounts payable and accrued expenses $ 243,754   $ 155,830 
Accrued salaries, wages and payroll taxes 269,849   105,548 
Accrued income taxes and reserves for uncertain tax positions 346,733   318,830 
Current portion of long-term debt 349,787   — 
Operating lease liabilities 173,902   206,070 
Deferred revenue and other current liabilities 205,778   191,050 
Total current liabilities 1,589,803   977,328 
Long-term debt and line of credit borrowings 1,142,890   1,491,095 
Deferred tax liabilities and reserves for uncertain tax positions 337,634   291,063 
Operating lease liabilities 252,630   265,373 
Deferred revenue and other noncurrent liabilities 114,892   103,357 
Total liabilities 3,437,849   3,128,216 
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS’ EQUITY:
Common stock, no par, stated value $.01 per share 1,644   1,709 
Additional paid-in capital 758,821   762,583 
Accumulated other comprehensive loss (71,317) (48,845)
Retained earnings (deficit) (236,909) 12,654 
Less treasury shares, at cost (645,077) (637,507)
Total stockholders' equity (deficiency) (192,838) 90,594 
Total liabilities and stockholders' equity $ 3,245,011   $ 3,218,810 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in 000s)
Nine months ended March 31, 2025 2024

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 306,334   $ 337,500 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 87,247   91,004 
Provision for credit losses 56,042   61,359 
Deferred taxes (12,503) (58,223)
Stock-based compensation 25,420   25,310 
Changes in assets and liabilities, net of acquisitions:
Receivables (335,605) (348,106)
Prepaid expenses, other current and noncurrent assets (7,504) (18,037)
Accounts payable, accrued expenses, salaries, wages and payroll taxes 240,246   223,045 
Deferred revenue, other current and noncurrent liabilities 20,684   12,483 
Income tax receivables, accrued income taxes and income tax reserves 50,049   93,961 
Other, net (1,088) (32)
Net cash provided by operating activities 429,322   420,264 
CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures (71,784) (53,831)
Payments made for business acquisitions, net of cash acquired (35,323) (43,163)

Franchise loans funded (21,455) (18,815)
Payments from franchisees 11,478   12,884 

Other, net 6,194   3,282 
Net cash used in investing activities (110,890) (99,643)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of line of credit borrowings (1,950,000) (1,025,000)
Proceeds from line of credit borrowings 1,950,000   1,025,000 

Dividends paid (147,136) (135,127)
Repurchase of common stock, including shares surrendered (436,516) (379,018)

Other, net (11,854) (6,358)
Net cash used in financing activities (595,506) (520,503)
Effects of exchange rate changes on cash (8,429) (2,739)
Net decrease in cash and cash equivalents, including restricted balances (285,503) (202,621)
Cash, cash equivalents and restricted cash, beginning of period 1,075,193   1,015,316 
Cash, cash equivalents and restricted cash, end of period $ 789,690   $ 812,695 
SUPPLEMENTARY CASH FLOW DATA:
Income taxes paid, net (includes payments for purchased investment tax credits) $ 65,505   $ 35,888 
Interest paid on borrowings 63,251   66,464 
Accrued additions to property and equipment 2,448   1,477 
New operating right of use assets and related lease liabilities 135,372   139,872 
Accrued dividends payable to common shareholders 50,194   44,648 

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

Net income - as reported $ 722,330   $ 690,737  $ 306,334   $ 337,500 
Discontinued operations, net 598   849  2,707   2,097 
Net income from continuing operations - as reported 722,928   691,586  309,041   339,597 
Add back:
Income taxes 235,253   215,772  104,580   72,527 
Interest expense 24,686   26,070  62,285   63,304 
Depreciation and amortization 29,221   30,672  87,247   91,004 
289,160   272,514  254,112   226,835 
EBITDA from continuing operations $ 1,012,088   $ 964,100  $ 563,153   $ 566,432 

(in 000s, except per share amounts)
Three months ended March 31, Nine months ended March 31,
NON-GAAP FINANCIAL MEASURE - EBITDA 2025 2024 2025 2024

Net income from continuing operations - as reported $ 722,928   $ 691,586  $ 309,041   $ 339,597 
Adjustments:
Amortization of intangibles related to acquisitions (pretax) 11,278   12,869  33,316   37,693 
Tax effect of adjustments (1)
(2,927) (2,793) (8,111) (8,815)
Adjusted net income from continuing operations $ 731,279   $ 701,622  $ 334,246   $ 368,475 
Diluted earnings per share from continuing operations - as reported $ 5.32   $ 4.87  $ 2.23   $ 2.34 
Adjustments, net of tax 0.06   0.07  0.18   0.20 
Adjusted diluted earnings per share from continuing operations $ 5.38   $ 4.94  $ 2.41   $ 2.54 

(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.