SEC filing – odaterad – 0001838862-25-000007-xbrl.zip

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): February 4, 2025

H&R BLOCK, INC.
(Exact name of registrant as specified in charter)

Missouri 1-06089 44-0607856
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification No.)

One H&R Block Way , Kansas City , MO 64105
(Address of Principal Executive Offices) (Zip Code)

( 816 ) 854-3000
(Registrant's telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐      Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐      Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐      Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐      Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, without par value HRB New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02.      Results of Operations and Financial Condition.
On February 4, 2025, H&R Block, Inc. (the "Company") issued a press release regarding the Company’s results of operations for the fiscal quarter ended December 31, 2024. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01.      Financial Statements and Exhibits.
(d) Exhibits
Exhibit Number      Description
99.1      Press Release Issued February 4, 2025.
104    Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

H&R BLOCK, INC.

Date: February 4, 2025 By: /s/ Katharine M. Haynes
Katharine M. Haynes
Vice President and Corporate Secretary

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Document

Exhibit 99.1

News Release
For Immediate Release: February 4, 2025
H&R Block Reports Fiscal 2025 Second Quarter Results
— Repurchased $190 Million of Shares—
— Reaffirms Full Year Outlook —
KANSAS CITY, Mo. - H&R Block, Inc. (NYSE: HRB) (the "Company") today released financial results 1 for its fiscal 2025 second quarter ended December 31, 2024.
"I am pleased with our performance in the first half of the year," said Jeff Jones, president and chief executive officer. "We are reaffirming our fiscal 2025 outlook, and are well prepared to deliver this tax season and in the second half of the fiscal year."
Fiscal 2025 Second Quarter Results and Key Financial Metrics
"We are on track for the year and we are well positioned to deliver strong results," said Tiffany Mason, chief financial officer. "During the second quarter, we repurchased 3.2 million shares for $190 million, reflecting our confidence in the long-term value of our stock and our commitment to delivering shareholder returns."
For the second quarter, the Company delivered total revenue of $179.1 million, which was flat to the prior year. Increases in revenue from Wave and international tax preparation were offset by lower interest and fee income on Emerald Advance ® due to a decrease in loan originations.
Total operating expenses of $472.4 million increased by $25.8 million as expected, primarily due to higher tax professional and corporate wages, increased healthcare costs, an increase in occupancy costs and the timing of marketing expenses versus the prior year.
Pretax loss increased by $29.4 million to $312.3 million.
Loss per share from continuing operations 2 increased to $(1.79) from $(1.33) and adjusted loss per share from continuing operations 2 increased to $(1.73) from $(1.27), due to a higher net loss and fewer shares outstanding as a result of share repurchases, which are accretive to earnings per share on a full-year basis.

Capital Allocation
The Company reported the following related to its capital structure:
• Repurchased and retired 3.2 million shares at an aggregate price of $190.5 million, or $58.65 per share in the second quarter.
• The Company has approximately $1.1 billion remaining on its $1.5 billion share repurchase program.
Since 2016, the Company has returned more than $4.4 billion to shareholders in the form of dividends and share repurchases, buying back over 43% of its shares outstanding 3 .
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, 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 Shares outstanding calculated as of April 30, 2016.

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 second quarter 2025 results at 4:30 p.m. ET on Tuesday, February 4, 2025. To join live, participants must register at https://register.vevent.com/register/BI06a7e8ddc07544a6853995c1fe75ea2c. 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/qdeqpgfd 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 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 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

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.

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: Colby Brown, (816) 854-4559, colby.brown@hrblock.com
Jordyn Eskijian, (816) 854-5674, jordyn.eskijian@hrblock.com
Media Relations: Teri Daley, (816) 854-3787, teri.daley@hrblock.com
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,
2024 2023 2024 2023
REVENUES:
U.S. tax preparation and related services:
Assisted tax preparation $ 48,380   $ 48,342  $ 91,343   $ 87,605 
Royalties 3,499   5,454  9,351   11,155 
DIY tax preparation 13,744   13,111  16,980   16,959 
Refund Transfers 637   813  1,497   1,955 
Peace of Mind® Extended Service Plan 16,145   17,440  39,242   42,287 
Tax Identity Shield® 4,013   4,694  7,922   9,274 
Other 11,824   9,592  25,633   20,572 
Total U.S. tax preparation and related services 98,242   99,446  191,968   189,807 
Financial services:
Emerald Card® and Spruce SM
10,148   11,700  18,974   20,333 
Interest and fee income on Emerald Advance® 12,308   15,235  12,308   15,533 
Total financial services 22,456   26,935  31,282   35,866 
International 31,811   29,569  96,666   90,134 
Wave 26,561   23,133  52,964   47,076 
Total revenues $ 179,070   $ 179,083  $ 372,880   $ 362,883 
Compensation and benefits:
Field wages 81,565   77,795  149,659   140,230 
Other wages 78,731   74,671  156,066   146,769 
Benefits and other compensation 38,402   36,063  77,156   71,311 
198,698   188,529  382,881   358,310 
Occupancy 104,999   101,194  206,317   200,479 
Marketing and advertising 14,863   11,305  24,835   16,786 
Depreciation and amortization 29,195   30,107  58,026   60,332 
Bad debt 19,416   21,754  22,146   26,552 
Other 105,190   93,626  200,297   174,182 
Total operating expenses 472,361   446,515  894,502   836,641 
Other income (expense), net 2,744   5,922  14,661   15,758 
Interest expense on borrowings (21,752) (21,364) (37,599) (37,234)
Pretax loss (312,299) (282,874) (544,560) (495,234)
Income tax benefit (69,833) (93,758) (130,673) (143,245)
Net loss from continuing operations (242,466) (189,116) (413,887) (351,989)
Net loss from discontinued operations (954) (639) (2,109) (1,248)
Net loss $ (243,420) $ (189,755) $ (415,996) $ (353,237)
BASIC AND DILUTED LOSS PER SHARE:
Continuing operations $ (1.79) $ (1.33) $ (3.02) $ (2.44)
Discontinued operations (0.01) —  (0.01) (0.01)
Consolidated $ (1.80) $ (1.33) $ (3.03) $ (2.45)
WEIGHTED AVERAGE DILUTED SHARES 135,563   142,340  137,359   144,307 
Adjusted diluted EPS (1)
$ (1.73) $ (1.27) $ (2.89) $ (2.31)
EBITDA (1)
$ (261,352) $ (231,403) $ (448,935) $ (397,668)

(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, 2024 June 30, 2024

ASSETS
Cash and cash equivalents $ 320,051   $ 1,053,326 
Cash and cash equivalents - restricted 21,473   21,867 
Receivables, net 321,171   69,075 

Prepaid expenses and other current assets 114,658   95,208 
Total current assets 777,353   1,239,476 
Property and equipment, net 143,833   131,319 
Operating lease right of use assets 389,629   461,986 
Intangible assets, net 270,601   264,102 
Goodwill 783,286   785,226 
Deferred tax assets and income taxes receivable 281,694   271,658 
Other noncurrent assets 65,924   65,043 
Total assets $ 2,712,320   $ 3,218,810 
LIABILITIES AND STOCKHOLDERS’ EQUITY
LIABILITIES:
Accounts payable and accrued expenses $ 136,893   $ 155,830 
Accrued salaries, wages and payroll taxes 64,993   105,548 
Accrued income taxes and reserves for uncertain tax positions 149,255   318,830 
Current portion of long-term debt 349,611   — 
Operating lease liabilities 170,726   206,070 
Deferred revenue and other current liabilities 187,885   191,050 
Total current liabilities 1,059,363   977,328 
Long-term debt and line of credit borrowings 1,932,545   1,491,095 
Deferred tax liabilities and reserves for uncertain tax positions 292,643   291,063 
Operating lease liabilities 228,041   265,373 
Deferred revenue and other noncurrent liabilities 72,188   103,357 
Total liabilities 3,584,780   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 752,093   762,583 
Accumulated other comprehensive loss (71,762) (48,845)
Retained earnings (deficit) (908,785) 12,654 
Less treasury shares, at cost (645,650) (637,507)
Total stockholders' equity (deficiency) (872,460) 90,594 
Total liabilities and stockholders' equity $ 2,712,320   $ 3,218,810 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in 000s)
Six months ended December 31, 2024 2023

CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (415,996) $ (353,237)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 58,026   60,331 
Provision for credit losses 20,727   21,536 
Deferred taxes (1,531) (35,525)
Stock-based compensation 17,945   17,525 
Changes in assets and liabilities, net of acquisitions:
Receivables (262,348) (348,833)
Prepaid expenses, other current and noncurrent assets 2,588   (7,395)
Accounts payable, accrued expenses, salaries, wages and payroll taxes (76,806) (58,543)
Deferred revenue, other current and noncurrent liabilities (45,170) (58,520)
Income tax receivables, accrued income taxes and income tax reserves (192,340) (180,706)
Other, net (733) 1,201 
Net cash used in operating activities (895,638) (942,166)
CASH FLOWS FROM INVESTING ACTIVITIES:

Capital expenditures (49,115) (32,708)
Payments made for business acquisitions, net of cash acquired (28,017) (27,158)

Franchise loans funded (17,442) (15,491)
Payments from franchisees 971   2,747 

Other, net 6,110   1,565 
Net cash used in investing activities (87,493) (71,045)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of line of credit borrowings (100,000) (25,000)
Proceeds from line of credit borrowings 890,000   825,000 

Dividends paid (96,960) (89,854)
Repurchase of common stock, including shares surrendered (436,233) (378,709)

Other, net 1,791   4,011 
Net cash provided by financing activities 258,598   335,448 
Effects of exchange rate changes on cash (9,136) 671 
Net decrease in cash and cash equivalents, including restricted balances (733,669) (677,092)
Cash, cash equivalents and restricted cash, beginning of period 1,075,193   1,015,316 
Cash, cash equivalents and restricted cash, end of period $ 341,524   $ 338,224 
SUPPLEMENTARY CASH FLOW DATA:
Income taxes paid, net (includes payments for purchased investment tax credits) $ 62,290   $ 72,160 
Interest paid on borrowings 33,412   35,496 
Accrued additions to property and equipment 3,798   4,036 
New operating right of use assets and related lease liabilities 47,135   70,532 
Accrued dividends payable to common shareholders 50,176   45,273 

(in 000s)
Three months ended December 31, Six months ended December 31,
NON-GAAP FINANCIAL MEASURE - EBITDA 2024 2023 2024 2023

Net loss - as reported $ (243,420) $ (189,755) $ (415,996) $ (353,237)
Discontinued operations, net 954   639  2,109   1,248 
Net loss from continuing operations - as reported (242,466) (189,116) (413,887) (351,989)
Add back:
Income tax benefit (69,833) (93,758) (130,673) (143,245)
Interest expense 21,752   21,364  37,599   37,234 
Depreciation and amortization 29,195   30,107  58,026   60,332 
(18,886) (42,287) (35,048) (45,679)
EBITDA from continuing operations $ (261,352) $ (231,403) $ (448,935) $ (397,668)

(in 000s, except per share amounts)
Three months ended December 31, Six months ended December 31,
NON-GAAP FINANCIAL MEASURE - ADJUSTED EPS 2024 2023 2024 2023

Net loss from continuing operations - as reported $ (242,466) $ (189,116) $ (413,887) $ (351,989)
Adjustments:
Amortization of intangibles related to acquisitions (pretax) 10,910   12,269  22,038   24,824 
Tax effect of adjustments (1)
(2,539) (3,087) (5,184) (6,022)
Adjusted net loss from continuing operations $ (234,095) $ (179,934) $ (397,033) $ (333,187)
Diluted loss per share from continuing operations - as reported $ (1.79) $ (1.33) $ (3.02) $ (2.44)
Adjustments, net of tax 0.06   0.06  0.13   0.13 
Adjusted diluted loss per share from continuing operations $ (1.73) $ (1.27) $ (2.89) $ (2.31)

(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, free cash flow, and free cash flow yield. 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.