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H&R Block Reports Fiscal 2025 Third Quarter Results

1. HRB reported 4% revenue growth and 5% net income growth. 2. EPS increased by 9.2% to $5.32 per share. 3. Company reaffirmed full-year 2025 outlook for revenue and earnings. 4. Share repurchases continued, $1.1B remaining in buyback program. 5. Client experience improvements driving market share in Assisted channel.

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Why Bullish?

Consistent revenue and earnings growth, along with share buybacks, indicate bullish trends. Historical patterns show similar quarterly increases lead to positive price movements.

How important is it?

The article includes strong growth metrics and a reaffirmed outlook, greatly influencing investor sentiment. Market typically reacts positively to reaffirmed annual guidance and consistent share buybacks.

Why Short Term?

Immediate positive results can influence market sentiment quickly, particularly around earnings season. Previous quarters showed price increases following strong earnings announcements.

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VITATAXHRB
— 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., May 07, 2025 (GLOBE NEWSWIRE) -- H&R Block, Inc. (NYSE: HRB) (the "Company") today released financial results1 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 operations2 increased 9.2% to $5.32, and adjusted earnings per share from continuing operations2 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.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 outstanding3. Fiscal Year 2025 Outlook Reaffirmed The Company continues to expect: Revenue to be in the range of $3.69 to $3.75 billion.EBITDA4 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 Share4 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 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. 1All amounts in this release are unaudited. Unless otherwise noted, all comparisons refer to the current period compared to the corresponding prior year period.2All 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).3Shares outstanding calculated as of April 30, 2016.4Adjusted 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. For Further Information   Investor Relations: Jordyn Eskijian, (816) 854-5674, jordyn.eskijian@hrblock.comMedia Relations: Media Desk, mediadesk@hrblock.com    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 SpruceSM                 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.

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