SEC Form 10-Q filed by H&R Block Inc.

5/9/24 4:48:29 PM ET

$HRB

Other Consumer Services

Consumer Discretionary

Get the next $HRB alert in real time by email

hrb-20240331

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


(Mark One)
☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	March 31, 2024
OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to

Commission file number 1-06089

H&R Block, Inc.

(Exact name of registrant as specified in its charter)


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

One H&R Block Way, Kansas City, Missouri 64105

(Address of principal executive offices, including zip code)

(816) 854-3000

(Registrant's telephone number, including area code)

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer ☑ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ 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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

The number of shares outstanding of the registrant's Common Stock, without par value, at the close of business on April 30, 2024: 139,529,924 shares.

Table of Contents

Form 10-Q for the Period ended March 31, 2024

Table of Contents


	PART I
Item 1.	Consolidated Statements of Operations and Comprehensive Income Three and nine months ended March 31, 2024 and 2023	1
	Consolidated Balance Sheets As of March 31, 2024 and June 30, 2023	2
	Consolidated Statements of Cash Flows Nine months ended March 31, 2024 and 2023	3
	Consolidated Statements of Stockholders' Equity Three and nine months ended March 31, 2024 and 2023	4
	Notes to Consolidated Financial Statements	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	25
	PART II
Item 1.	Legal Proceedings	26
Item 1A.	Risk Factors	26
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	26
Item 4.	Mine Safety Disclosures	26
Item 5.	Other Information	26
Item 6.	Exhibits	27
	Signatures	28

Table of Contents

PART I FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME:					(unaudited, in 000s, except per share amounts)
	Three months ended March 31,				Nine months ended March 31,
	2024		2023		2024		2023
REVENUES:
Service revenues	$	1,993,556	$	1,885,035	$	2,314,363	$	2,191,794
Royalty, product and other revenues	191,278		208,614		233,354		248,245
	2,184,834		2,093,649		2,547,717		2,440,039
OPERATING EXPENSES:
Costs of revenues	926,008		883,686		1,485,193		1,442,693
Selling, general and administrative	330,622		345,461		608,078		625,158
Total operating expenses	1,256,630		1,229,147		2,093,271		2,067,851

Other income (expense), net	5,224		13,224		20,982		21,020
Interest expense on borrowings	(26,070)		(22,298)		(63,304)		(57,107)
Income from continuing operations before income taxes	907,358		855,428		412,124		336,101
Income taxes	215,772		209,351		72,527		78,254
Net income from continuing operations	691,586		646,077		339,597		257,847
Net loss from discontinued operations, net of tax benefits of $254, $792, $627 and $1,920	(849)		(2,648)		(2,097)		(6,418)
NET INCOME	$	690,737	$	643,429	$	337,500	$	251,429
BASIC EARNINGS PER SHARE:
Continuing operations	$	4.94	$	4.22	$	2.37	$	1.65
Discontinued operations	(0.01)		(0.01)		(0.01)		(0.04)
Consolidated	$	4.93	$	4.21	$	2.36	$	1.61
DILUTED EARNINGS PER SHARE:
Continuing operations	$	4.87	$	4.14	$	2.34	$	1.62
Discontinued operations	(0.01)		(0.02)		(0.02)		(0.04)
Consolidated	$	4.86	$	4.12	$	2.32	$	1.58




DIVIDENDS DECLARED PER SHARE	$	0.32	$	0.29	$	0.96	$	0.87
COMPREHENSIVE INCOME:
Net income	$	690,737	$	643,429	$	337,500	$	251,429



Change in foreign currency translation adjustments	(9,882)		402		(9,237)		(22,636)
Other comprehensive income (loss)	(9,882)		402		(9,237)		(22,636)
Comprehensive income	$	680,855	$	643,831	$	328,263	$	228,793

See accompanying notes to consolidated financial statements.


H&R Block, Inc. \|Q3 FY2024 Form 10-Q			1

Table of Contents


CONSOLIDATED BALANCE SHEETS	(unaudited, in 000s, except share and per share amounts)
As of	March 31, 2024		June 30, 2023
ASSETS
Cash and cash equivalents	$	794,617	$	986,975
Cash and cash equivalents - restricted	18,078		28,341
Receivables, less allowance for credit losses of $56,180 and $55,502	346,784		59,987

Prepaid expenses and other current assets	105,873		112,183
Total current assets	1,265,352		1,187,486
Property and equipment, at cost, less accumulated depreciation and amortization of $884,321 and $846,177	139,542		130,015
Operating lease right of use assets	392,091		438,299
Intangible assets, net	277,218		277,043
Goodwill	787,634		775,453
Deferred tax assets and income taxes receivable	287,810		211,391
Other noncurrent assets	63,675		52,571
Total assets	$	3,213,322	$	3,072,258
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable and accrued expenses	$	247,109	$	159,901
Accrued salaries, wages and payroll taxes	238,864		95,154
Accrued income taxes and reserves for uncertain tax positions	351,721		271,800

Operating lease liabilities	185,396		205,391
Deferred revenue and other current liabilities	220,466		206,536
Total current liabilities	1,243,556		938,782
Long-term debt	1,490,570		1,488,974
Deferred tax liabilities and reserves for uncertain tax positions	277,957		264,567
Operating lease liabilities	214,990		240,543
Deferred revenue and other noncurrent liabilities	116,055		107,328
Total liabilities	3,343,128		3,040,194
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, no par, stated value $0.01 per share, 800,000,000 shares authorized, shares issued of 170,915,771 and 178,935,578	1,709		1,789
Additional paid-in capital	753,605		770,376
Accumulated other comprehensive loss	(46,336)		(37,099)
Retained deficit	(200,296)		(48,677)
Less treasury shares, at cost, of 31,388,403 and 32,785,658	(638,488)		(654,325)
Total stockholders' equity (deficiency)	(129,806)		32,064
Total liabilities and stockholders' equity	$	3,213,322	$	3,072,258

See accompanying notes to consolidated financial statements.


2			Q3 FY2024 Form 10-Q\| H&R Block, Inc.

Table of Contents


CONSOLIDATED STATEMENTS OF CASH FLOWS	(unaudited, in 000s)
Nine months ended March 31,	2024		2023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	337,500	$	251,429
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	91,004		98,660
Provision for credit losses	61,359		49,174
Deferred taxes	(58,223)		6,685
Stock-based compensation	25,310		26,785

Changes in assets and liabilities, net of acquisitions:

Receivables	(348,106)		(237,395)
Prepaid expenses, other current and noncurrent assets	(18,037)		(17,438)

Accounts payable, accrued expenses, salaries, wages and payroll taxes	223,045		122,025

Deferred revenue, other current and noncurrent liabilities	12,483		22,054

Income tax receivables, accrued income taxes and income tax reserves	93,961		179,692
Other, net	(32)		(3,285)
Net cash provided by operating activities	420,264		498,386
CASH FLOWS FROM INVESTING ACTIVITIES:



Capital expenditures	(53,831)		(56,661)
Payments made for business acquisitions, net of cash acquired	(43,163)		(47,740)



Franchise loans funded	(18,815)		(21,566)
Payments from franchisees	12,884		14,963

Other, net	3,282		9,717
Net cash used in investing activities	(99,643)		(101,287)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of line of credit borrowings	(1,025,000)		(970,000)
Proceeds from line of credit borrowings	1,025,000		970,000




Dividends paid	(135,127)		(133,762)
Repurchase of common stock, including shares surrendered	(379,018)		(365,852)

Other, net	(6,358)		(5,973)
Net cash used in financing activities	(520,503)		(505,587)
Effects of exchange rate changes on cash	(2,739)		(7,880)
Net decrease in cash and cash equivalents, including restricted balances	(202,621)		(116,368)
Cash, cash equivalents and restricted cash, beginning of period	1,015,316		1,050,713
Cash, cash equivalents and restricted cash, end of period	$	812,695	$	934,345
SUPPLEMENTARY CASH FLOW DATA:
Income taxes paid (received), net	$	35,888	$	(110,028)
Interest paid on borrowings	66,464		59,429


Accrued additions to property and equipment	1,477		4,378
New operating right of use assets and related lease liabilities	139,872		131,949
Accrued dividends payable to common shareholders	44,648		44,163

See accompanying notes to consolidated financial statements.


H&R Block, Inc. \| Q3 FY2024 Form 10-Q			3

Table of Contents


CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY					(amounts in 000s, except per share amounts)
	Common Stock			Additional Paid-in Capital	Accumulated Other Comprehensive Loss(1)		Retained Deficit		Treasury Stock			Total Stockholders’ Equity
	Shares	Amount									Shares			Amount
Balances as of July 1, 2023	178,936	$	1,789		$	770,376	$	(37,099)	$	(48,677)	(32,786)	$	(654,325)		$	32,064
Net loss	—	—			—		—		(163,482)		—	—			(163,482)
Other comprehensive loss	—	—			—		(10,914)		—		—	—			(10,914)
Stock-based compensation	—	—			6,211		—		—		—	—			6,211
Stock-based awards exercised or vested	—	—			(34,226)		—		(3,220)		1,867	37,348			(98)
Acquisition of treasury shares(2)	—	—			—		—		—		(823)	(28,464)			(28,464)
Repurchase and retirement of common shares	(3,265)	(32)			(1,927)		—		(131,341)		—	—			(133,300)


Cash dividends declared - $0.32 per share	—	—			—		—		(46,901)		—	—			(46,901)
Balances as of September 30, 2023	175,671	$	1,757		$	740,434	$	(48,013)	$	(393,621)	(31,742)	$	(645,441)		$	(344,884)
Net loss	—	—			—		—		(189,755)		—	—			(189,755)
Other comprehensive income	—	—			—		11,559		—		—	—			11,559
Stock-based compensation	—	—			9,270		—		—		—	—			9,270
Stock-based awards exercised or vested	—	—			(165)		—		(46)		348	7,087			6,876
Acquisition of treasury shares(2)	—	—			—		—		—		(3)	(125)			(125)
Repurchase and retirement of common shares	(4,755)	(48)			(2,805)		—		(217,467)		—	—			(220,320)


Cash dividends declared - $0.32 per share	—	—			—		—		(45,273)		—	—			(45,273)
Balances as of December 31, 2023	170,916	$	1,709		$	746,734	$	(36,454)	$	(846,162)	(31,397)	$	(638,479)		$	(772,652)
Net income	—	—			—		—		690,737		—	—			690,737
Other comprehensive loss	—	—			—		(9,882)		—		—	—			(9,882)
Stock-based compensation	—	—			7,140		—		—		—	—			7,140
Stock-based awards exercised or vested	—	—			(269)		—		(223)		16	300			(192)
Acquisition of treasury shares(2)	—	—			—		—		—		(7)	(309)			(309)



Cash dividends declared - $0.32 per share	—	—			—		—		(44,648)		—	—			(44,648)
Balances as of March 31, 2024	170,916	$	1,709		$	753,605	$	(46,336)	$	(200,296)	(31,388)	$	(638,488)		$	(129,806)

(1) The balance of our accumulated other comprehensive loss consists of foreign currency translation adjustments.

(2) Represents shares swapped or surrendered to us in connection with the vesting or exercise of stock-based awards.

See accompanying notes to consolidated financial statements.


4			Q3 FY2024 Form 10-Q\| H&R Block, Inc.

Table of Contents



					(amounts in 000s, except per share amounts)
	Common Stock			Additional Paid-in Capital	Accumulated Other Comprehensive Loss(1)		Retained Earnings (Deficit)		Treasury Stock			Total Stockholders’ Equity
	Shares	Amount									Shares			Amount
Balances as of July 1, 2022	193,571	$	1,936		$	772,182	$	(21,645)	$	120,405	(33,641)	$	(661,247)		$	211,631
Net loss	—	—			—		—		(168,421)		—	—			(168,421)
Other comprehensive loss	—	—			—		(32,345)		—		—	—			(32,345)
Stock-based compensation	—	—			5,630		—		—		—	—			5,630
Stock-based awards exercised or vested	—	—			(15,276)		—		(742)		805	15,839			(179)
Acquisition of treasury shares(2)	—	—			—		—		—		(341)	(15,432)			(15,432)
Repurchase and retirement of common shares	(4,927)	(49)			(2,907)		—		(216,813)		—	—			(219,769)


Cash dividends declared - $0.29 per share	—	—			—		—		(46,100)		—	—			(46,100)
Balances as of September 30, 2022	188,644	$	1,887		$	759,629	$	(53,990)	$	(311,671)	(33,177)	$	(660,840)		$	(264,985)
Net loss	—	—			—		—		(223,579)		—	—			(223,579)
Other comprehensive income	—	—			—		9,307		—		—	—			9,307
Stock-based compensation	—	—			9,544		—		—		—	—			9,544
Stock-based awards exercised or vested	—	—			421		—		(209)		52	1,023			1,235
Acquisition of treasury shares(2)	—	—			—		—		—		(2)	(79)			(79)
Repurchase and retirement of common shares	(3,241)	(33)			(1,911)		—		(128,409)		—	—			(130,353)


Cash dividends declared - $0.29 per share	—	—			—		—		(44,569)		—	—			(44,569)
Balances as of December 31, 2022	185,403	$	1,854		$	767,683	$	(44,683)	$	(708,437)	(33,127)	$	(659,896)		$	(643,479)
Net income	—	—			—		—		643,429		—	—			643,429
Other comprehensive income	—	—			—		402		—		—	—			402
Stock-based compensation	—	—			7,830		—		—		—	—			7,830
Stock-based awards exercised or vested	—	—			(244)		—		(213)		13	265			(192)
Acquisition of treasury shares(2)	—	—			—		—		—		(6)	(219)			(219)



Cash dividends declared - $0.29 per share	—	—			—		—		(44,163)		—	—			(44,163)
Balances as of March 31, 2023	185,403	$	1,854		$	775,269	$	(44,281)	$	(109,384)	(33,120)	$	(659,850)		$	(36,392)

(1) The balance of our accumulated other comprehensive loss consists of foreign currency translation adjustments.

(2) Represents shares swapped or surrendered to us in connection with the vesting or exercise of stock-based awards.

See accompanying notes to consolidated financial statements.


H&R Block, Inc. \|Q3 FY2024 Form 10-Q			5

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION – The consolidated balance sheets as of March 31, 2024 and June 30, 2023, the consolidated statements of operations and comprehensive income for the three and nine months ended March 31, 2024 and 2023, the consolidated statements of cash flows for the nine months ended March 31, 2024 and 2023, and the consolidated statements of stockholders' equity for the three and nine months ended March 31, 2024 and 2023 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, 2024 and 2023 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, 2023 Annual Report on Form 10-K. All amounts presented herein as of June 30, 2023 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 arising from our discontinued mortgage business, contingent losses associated with pending claims and litigation, reserves for uncertain tax positions, fair value of reporting units, and related matters. 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 (including its subsidiaries, collectively, SCC), which exited its mortgage business in fiscal year 2008. See note 9 for additional information on loss contingencies related to our discontinued operations.


6			Q3 FY2024 Form 10-Q\| H&R Block, Inc.

Table of Contents

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,
	2024		2023		2024		2023
Revenues:
U.S. assisted tax preparation	$	1,534,825	$	1,453,049	$	1,622,430	$	1,530,577
U.S. royalties	141,915		150,163		153,070		161,337
U.S. DIY tax preparation	198,570		167,022		215,529		182,330
Refund Transfers	118,937		117,384		120,892		120,210
Peace of Mind® Extended Service Plan	16,813		16,750		59,100		58,840
Tax Identity Shield®	7,536		8,720		16,810		19,237
Emerald Card® and SpruceSM	41,160		44,358		61,493		68,448
Interest and fee income on Emerald Advance®	21,169		33,750		36,702		47,267
International	68,264		69,417		158,398		156,297
Wave	23,580		22,064		70,656		66,651
Other	12,065		10,972		32,637		28,845
Total revenues	$	2,184,834	$	2,093,649	$	2,547,717	$	2,440,039

Changes in the balances of deferred revenue and wages for our Peace of Mind® Extended Service Plan (POM) are as follows:


							(in 000s)
POM	Deferred Revenue				Deferred Wages
Nine months ended March 31,	2024		2023		2024		2023
Balance, beginning of the period	$	167,257	$	173,486	$	21,828	$	19,495
Amounts deferred	72,369		76,231		8,324		8,451
Amounts recognized on previous deferrals	(68,445)		(67,276)		(8,324)		(7,084)
Balance, end of the period	$	171,181	$	182,441	$	21,828	$	20,862

As of March 31, 2024, deferred revenue related to POM was $171.2 million. We expect that $96.4 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, 2024 and 2023, Tax Identity Shield® (TIS) deferred revenue was $31.6 million and $33.3 million, respectively. Deferred revenue related to TIS was $25.2 million and $25.8 million as of June 30, 2023 and 2022, respectively. All deferred revenue related to TIS will be recognized by April 2025.

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 one thousand and 0.2 million shares for the three and nine months ended March 31, 2024,


H&R Block, Inc. \|Q3 FY2024 Form 10-Q			7

Table of Contents

respectively, and 0.7 million and 0.6 million shares for the three and nine months ended March 31, 2023, 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,
	2024		2023		2024		2023
Net income from continuing operations attributable to shareholders	$	691,586	$	646,077	$	339,597	$	257,847
Amounts allocated to participating securities	(2,788)		(2,822)		(1,350)		(1,064)
Net income from continuing operations attributable to common shareholders	$	688,798	$	643,255	$	338,247	$	256,783

Basic weighted average common shares	139,525		152,281		142,724		155,249
Potential dilutive shares	2,015		3,280		1,870		3,239
Dilutive weighted average common shares	141,540		155,561		144,594		158,488

Earnings per share from continuing operations attributable to common shareholders:
Basic	$	4.94	$	4.22	$	2.37	$	1.65
Diluted	4.87		4.14		2.34		1.62

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 1.7 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, 2024 and 2023, respectively. Stock-based compensation expense of our continuing operations totaled $7.8 million and $25.3 million for the three and nine months ended March 31, 2024, respectively, and $8.9 million and $26.8 million for the three and nine months ended March 31, 2023, respectively. As of March 31, 2024, unrecognized compensation cost for nonvested shares and units totaled $49.5 million.

NOTE 4: RECEIVABLES

Receivables, net of their related allowance, consist of the following:


(in 000s)
As of	March 31, 2024				June 30, 2023
	Short-term		Long-term		Short-term		Long-term
Loans to franchisees	$	17,454	$	16,922	$	6,344	$	19,206
Receivables for U.S. assisted and DIY tax preparation and related fees	187,579		8,360		11,061		6,824
H&R Block's Instant Refund® receivables	24,184		1,048		8,499		414
Emerald Advance®	53,978		11,875		10,834		7,089
Software receivables from retailers	9,957		—		1,650		—
Royalties and other receivables from franchisees	35,293		—		3,416		—
Wave payment processing receivables	2,165		—		964		—
Other	16,174		1,777		17,219		1,108
Total	$	346,784	$	39,982	$	59,987	$	34,641


8			Q3 FY2024 Form 10-Q\| H&R Block, Inc.

Table of Contents

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. As of March 31, 2024 and June 30, 2023, loans with a principal balance more than 90 days past due, or on non-accrual status, are not material.

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, 2024 are as follows:


			(in 000s)

Tax return year of origination	Balance		More Than 60 Days Past Due
2023	$	23,736	$	—
2022 and prior	2,426		2,426

	26,162		$	2,426
Allowance	(930)
Net balance	$	25,232

EMERALD ADVANCE® – Historically, Emerald Advance® lines of credit (EA LOCs) have been offered to clients in our offices from mid-November through mid-January. If the borrower met certain criteria as agreed in the loan terms, the line of credit could be utilized year-round (Revolving Loan). In fiscal year 2024, EAs are being offered as term loans (EA TLs), and we discontinued EA LOCs, including the Revolving Loans. EA TLs are due on March 31, whereas, EA LOCs were required to be paid down to zero by February 15 in the prior year. See note 8 for discussion of the new EA TL.

We review the credit quality of our purchased participation interests in 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 EA LOCs, excluding Revolving Loans, to an amount we believe represents the net realizable value. However, due to the discontinuation of EA LOCs, we charged-off the receivables and the related allowance of 2023 EA LOCs and


H&R Block, Inc. \|Q3 FY2024 Form 10-Q			9

Table of Contents

Revolving Loans during the quarter ended September 30, 2023 to an amount that we believe represents 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, 2024 are as follows:


(in 000s)
Fiscal year of origination	Balance		Non-Accrual
2024 – Term loans	$	77,595	$	—
2023 and prior – Lines of credit and Revolving Loans	8,941		8,941

	86,536		$	8,941
Allowance	(20,683)
Net balance	$	65,853

ALLOWANCE FOR CREDIT LOSSES – Activity in the allowance for credit losses for our EA and all other short-term and long-term receivables for the nine months ended March 31, 2024 and 2023 is as follows:


(in 000s)
	EAs		All Other		Total
Balances as of July 1, 2023	$	27,386	$	35,108	$	62,494
Provision for credit losses	21,011		40,348		61,359
Charge-offs, recoveries and other	(27,714)		(37,455)		(65,169)
Balances as of March 31, 2024	$	20,683	$	38,001	$	58,684
Balances as of July 1, 2022	$	26,141	$	51,126	$	77,267
Provision for credit losses	16,702		32,472		49,174
Charge-offs, recoveries and other	(14,814)		(51,081)		(65,895)
Balances as of March 31, 2023	$	28,029	$	32,517	$	60,546

Gross charge-offs of EAs were $27.7 million for the nine months ended March 31, 2024, of which $15.4 million related to EA LOCs originated in fiscal year 2023 and $12.3 million related to Revolving Loans.

NOTE 5: GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill for the nine months ended March 31, 2024 are as follows:


(in 000s)
	Goodwill		Accumulated Impairment Losses		Net
Balances as of July 1, 2023	$	913,750	$	(138,297)	$	775,453

Acquisitions(1)	18,929		—		18,929
Disposals and foreign currency changes, net	(6,748)		—		(6,748)
Impairments	—		—		—
Balances as of March 31, 2024	$	925,931	$	(138,297)	$	787,634

(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.


10			Q3 FY2024 Form 10-Q\| H&R Block, Inc.

Table of Contents

Components of intangible assets are as follows:


(in 000s)
	Gross Carrying Amount		Accumulated Amortization		Net
As of March 31, 2024:
Reacquired franchise rights	$	403,242	$	(224,204)	$	179,038
Customer relationships	385,290		(318,502)		66,788
Internally-developed software	133,289		(128,487)		4,802
Noncompete agreements	44,158		(41,148)		3,010
Franchise agreements	19,201		(19,201)		—
Purchased technology	122,700		(102,165)		20,535
Trade name	5,800		(2,755)		3,045
	$	1,113,680	$	(836,462)	$	277,218
As of June 30, 2023:
Reacquired franchise rights	$	392,452	$	(212,495)	$	179,957
Customer relationships	351,695		(301,062)		50,633
Internally-developed software	133,380		(120,054)		13,326
Noncompete agreements	42,596		(39,617)		2,979
Franchise agreements	19,201		(18,668)		533
Purchased technology	122,700		(96,565)		26,135
Trade name	5,800		(2,320)		3,480
	$	1,067,824	$	(790,781)	$	277,043

We made payments to acquire businesses totaling $43.2 million and $47.7 million during the nine months ended March 31, 2024 and 2023, respectively. The amounts and weighted-average lives of intangible assets acquired during the nine months ended March 31, 2024 are as follows:


(dollars in 000s)
	Amount		Weighted-Average Life (in years)

Customer relationships	$	34,084	5
Reacquired franchise rights	10,856		5
Noncompete agreements	1,581		5
Total	$	46,521	5

Amortization of intangible assets for the three and nine months ended March 31, 2024 was $15.0 million and $46.2 million, respectively, compared to $17.8 million and $54.7 million for the three and nine months ended March 31, 2023, respectively. Estimated amortization of intangible assets for fiscal years ending June 30, 2024, 2025, 2026, 2027, and 2028 is $61.1 million, $42.8 million, $33.1 million, $26.5 million and $18.7 million, respectively.


H&R Block, Inc. \|Q3 FY2024 Form 10-Q			11

Table of Contents

NOTE 6: LONG-TERM DEBT

The components of long-term debt are as follows:


			(in 000s)
As of	March 31, 2024		June 30, 2023
Senior Notes, 5.250%, due October 2025	$	350,000	$	350,000
Senior Notes, 2.500%, due July 2028	500,000		500,000
Senior Notes, 3.875%, due August 2030	650,000		650,000

Debt issuance costs and discounts	(9,430)		(11,025)
Total long-term debt	1,490,570		1,488,975
Less: Current portion	—		—
Long-term portion	$	1,490,570	$	1,488,975
Estimated fair value of long-term debt	$	1,381,000	$	1,339,000

Our unsecured committed line of credit (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 CLOC will mature on June 11, 2026, unless extended pursuant to the terms of the CLOC, at which time all outstanding amounts thereunder will be due and payable. Our CLOC includes an annual facility fee, which will vary depending on our then current credit ratings.

The 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 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 CLOC includes provisions for an equity cure which could potentially allow us to independently cure certain defaults. Proceeds under the 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, 2024.

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, 2024.

NOTE 7: INCOME TAXES

We file a consolidated federal income tax return in the U.S. with the Internal Revenue Service (IRS) and file tax returns in various state, local, and foreign jurisdictions.

We had gross unrecognized tax benefits of $245.8 million and $240.1 million as of March 31, 2024 and June 30, 2023, respectively. The gross unrecognized tax benefits increased by $5.7 million during the nine months ended March 31, 2024. We believe it is reasonably possible that the balance of unrecognized tax benefits could decrease by approximately $121.8 million within the next twelve months. The anticipated decrease is due to the expiration of statutes of limitations and anticipated closure of various matters currently under examination or in appeals. For such matters where a change in the balance of unrecognized tax benefits is not yet deemed reasonably possible, no estimate has been included.

Our effective tax rate for continuing operations, including the effects of discrete tax items, was 17.6% and 23.3% for the nine months ended March 31, 2024 and 2023, respectively. Discrete items decreased the effective tax rate


12			Q3 FY2024 Form 10-Q\| H&R Block, Inc.

Table of Contents

by 6.3% and 1.3% for the nine months ended March 31, 2024, and 2023, respectively. Discrete income tax benefits of $26.0 million and $4.2 million were recorded in the nine months ended March 31, 2024 and 2023, respectively. The discrete tax benefit recorded in the current period primarily resulted from settlements with tax authorities and statute of limitations expirations. The discrete tax benefit recorded in the prior period primarily resulted from state statute of limitations expirations. The impact discrete tax items have on our tax rate through the third quarter are slightly exaggerated versus the impact discrete tax items have on the full fiscal year tax rate.

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. DIY tax returns are covered by our 100% accuracy guarantee, whereby we will reimburse a client up to a maximum of $10,000 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 $13.6 million and $15.8 million as of March 31, 2024 and June 30, 2023, 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 $27.9 million and $18.3 million as of March 31, 2024 and June 30, 2023 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 $21.3 million at March 31, 2024, and net of amounts drawn and outstanding, our remaining commitment to fund totaled $9.9 million.

Effective October 20, 2023, we amended the Program Management Agreement and entered into a new participation agreement related to EA TLs originated by Pathward®, N.A. (Pathward). In fiscal year 2024, EAs are being offered as term loans and we discontinued EA LOCs. EA TLs are interest bearing with principal and interest due in full on March 31, and there are no annual fees or required monthly payments. EA TLs are offered to clients in our offices, in November and December, in amounts of $350 to $1,300. We continue to purchase a 90% participation interest in each loan made by Pathward in accordance with the participation agreement. We purchased participation interests of $346.3 million during the nine months ended March 31, 2024.

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, 2024, we accrued an estimated liability of $1.4 million related to this guarantee, compared to $0.8 million at March 31, 2023.

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.


H&R Block, Inc. \|Q3 FY2024 Form 10-Q			13

Table of Contents

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, 2024. 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 $5.2 million and $0.2 million as of March 31, 2024 and June 30, 2023, 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, 2024, 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.


14			Q3 FY2024 Form 10-Q\| H&R Block, Inc.

Table of Contents

LITIGATION, CLAIMS OR OTHER LOSS CONTINGENCIES PERTAINING TO CONTINUING OPERATIONS –

On February 23, 2024, the Federal Trade Commission (FTC) filed an administrative complaint before the FTC alleging unfair or deceptive business acts or practices in connection with certain aspects of our DIY tax preparation services. A hearing before an administrative law judge (ALJ) of the FTC is scheduled for October 23, 2024. We filed a complaint in federal court in the Western District of Missouri challenging the constitutionality of the ALJ’s removal protections and seeking to enjoin the ALJ’s participation in the adjudication of the matter, which remains pending. We have also received and are responding to certain governmental inquiries and other matters 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.

DISCONTINUED MORTGAGE OPERATIONS – Although SCC ceased its mortgage loan origination activities in December 2007 and sold its loan servicing business in April 2008, SCC or the Company has been and may in the future be, subject to litigation and other loss contingencies, including indemnification and contribution claims, pertaining to SCC's mortgage business activities that occurred prior to such termination and sale.

Parties, including underwriters, depositors, and securitization trustees, have been, remain, or may in the future be, involved in lawsuits, threatened lawsuits, or settlements related to securitization transactions in which SCC participated. A variety of claims are alleged in these matters, including violations of federal and state securities laws and common law fraud, breaches of representations and warranties, or violations of statutory requirements. SCC has received notices of potential indemnification or contribution obligations relating to such matters. Additional lawsuits against the parties to the securitization transactions may be filed in the future, and SCC may receive additional notices of potential indemnification, contribution or similar obligations with respect to existing or new lawsuits or settlements of such lawsuits or other claims. We have not concluded that a loss related to any of these potential indemnification or contribution claims is probable, nor have we accrued a liability related to any of these claims.

It is difficult to predict either the likelihood of new matters being initiated or the outcome of existing matters. In many of these matters it is not possible to estimate a reasonably possible loss or range of loss due to, among other things, the inherent uncertainties involved in these matters and the indeterminate damages sought. If the amount that SCC is ultimately required to pay with respect to loss contingencies, together with payment of SCC's related administration and legal expense, exceeds SCC's net assets, the creditors of SCC, other potential claimants, or a bankruptcy trustee if SCC were to file or be forced into bankruptcy, may attempt to assert claims against us for payment of SCC's obligations. Claimants also may attempt to assert claims against or seek payment directly from the Company even if SCC's assets exceed its liabilities. SCC's principal assets, as of March 31, 2024, total approximately $271 million and consist of an intercompany note receivable. We believe our legal position is strong on any potential corporate veil-piercing arguments; however, if this position is challenged and not upheld, it could have a material adverse effect on our business and our consolidated financial position, results of operations, and cash flows.

OTHER – 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.


H&R Block, Inc. \|Q3 FY2024 Form 10-Q			15

Table of Contents

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Our subsidiaries provide assisted and do-it-yourself (DIY) tax preparation solutions through multiple channels (including in-person, online and mobile applications, virtual, and desktop software) and distribute H&R Block-branded products and services, including those of our bank partners, to the general public primarily in the United States (U.S.), Canada and Australia. Tax returns are either prepared by H&R Block tax professionals in one of our 6,643 company-owned or 2,168 franchise offices (as of March 31, 2024), virtually or via an internet review or prepared and filed by our clients through our DIY tax solutions. We also offer small business solutions through our company-owned and franchise offices and online through Wave. We report a single segment that includes all of our continuing operations.


16			Q3 FY2024 Form 10-Q\| H&R Block, Inc.

Table of Contents


Consolidated – Financial Results			(in 000s, except per share amounts)
Three months ended March 31,	2024		2023		$ Change		% Change
Revenues:
U.S. tax preparation and related services:
Assisted tax preparation	$	1,534,825	$	1,453,049	$	81,776	5.6	%
Royalties	141,915		150,163		(8,248)		(5.5)	%
DIY tax preparation	198,570		167,022		31,548		18.9	%
Refund Transfers	118,937		117,384		1,553		1.3	%
Peace of Mind® Extended Service Plan	16,813		16,750		63		0.4	%
Tax Identity Shield®	7,536		8,720		(1,184)		(13.6)	%
Other	12,065		10,972		1,093		10.0	%
Total U.S. tax preparation and related services	2,030,661		1,924,060		106,601		5.5	%
Financial services:
Emerald Card® and SpruceSM	41,160		44,358		(3,198)		(7.2)	%
Interest and fee income on Emerald Advance®	21,169		33,750		(12,581)		(37.3)	%
Total financial services	62,329		78,108		(15,779)		(20.2)	%
International	68,264		69,417		(1,153)		(1.7)	%
Wave	23,580		22,064		1,516		6.9	%
Total revenues	$	2,184,834	$	2,093,649	$	91,185	4.4	%
Compensation and benefits:
Field wages	510,299		480,779		(29,520)		(6.1)	%
Other wages	75,356		73,503		(1,853)		(2.5)	%
Benefits and other compensation	99,653		100,368		715		0.7	%
	685,308		654,650		(30,658)		(4.7)	%
Occupancy	119,364		118,111		(1,253)		(1.1)	%
Marketing and advertising	194,349		210,508		16,159		7.7	%
Depreciation and amortization	30,672		32,313		1,641		5.1	%
Bad debt	41,008		34,273		(6,735)		(19.7)	%
Other	185,929		179,292		(6,637)		(3.7)	%
Total operating expenses	1,256,630		1,229,147		(27,483)		(2.2)	%
Other income (expense), net	5,224		13,224		(8,000)		(60.5)	%
Interest expense on borrowings	(26,070)		(22,298)		(3,772)		(16.9)	%
Pretax income	907,358		855,428		51,930		6.1	%
Income taxes	215,772		209,351		(6,421)		(3.1)	%
Net income from continuing operations	691,586		646,077		45,509		7.0	%
Net loss from discontinued operations	(849)		(2,648)		1,799		67.9	%
Net income	$	690,737	$	643,429	$	47,308	7.4	%
DILUTED EARNINGS PER SHARE
Continuing operations	$	4.87	$	4.14	$	0.73	17.6	%
Discontinued operations	(0.01)		(0.02)		0.01		50.0	%
Consolidated	$	4.86	$	4.12	$	0.74	18.0	%




Adjusted diluted EPS(1)	$	4.94	$	4.20	$	0.74	17.6	%
EBITDA (1)	$	964,100	$	910,039	$	54,061	5.9	%

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


H&R Block, Inc. \|Q3 FY2024 Form 10-Q			17

Table of Contents

Three months ended March 31, 2024 compared to March 31, 2023

Revenues increased $91.2 million, or 4.4%, from the prior year. U.S. assisted tax preparation revenues increased $81.8 million, or 5.6%, due to a 4.4% increase in net average charge combined with higher company-owned tax return volumes in the current year. U.S. royalty revenue decreased $8.2 million, or 5.5%, due to lower franchise tax return volumes. During the year we purchased franchise offices which results in increasing tax preparation revenues and decreasing royalties as the revenues and returns become company-owned after the acquisition. For the three months ended March 31, 2024 our total assisted tax return volume, which includes both company-owned and franchise offices, decreased 1.1% from the prior year.

U.S. DIY tax preparation revenues increased $31.5 million, or 18.9%, primarily due to an 8.9% increase in online paid returns combined with a 10.3% increase in paid net average charge compared to the prior year.

Interest and fee income on Emerald Advance® (EA) decreased $12.6 million, or 37.3%, due to lower customer fees under the new EA term loan, partially offset by higher interest income in the current year due to the increase in EA loans and a later due date for the loans than the prior year.

Total operating expenses increased $27.5 million, or 2.2%, from the prior year. Field wages increased $29.5 million, or 6.1%, due to higher wages in the current year primarily due to the increase in company-owned volumes. Marketing and advertising expense decreased $16.2 million, or 7.7%, primarily due to the timing of television advertising in the current year compared to the prior year. Bad debt expense increased $6.7 million, or 19.7%, primarily due to an increase in Refund Transfers and higher bad debt rates in the current year.

Other operating expenses increased $6.6 million, or 3.7%. The components of other expenses are as follows:


							(in 000s)
Three months ended March 31,	2024		2023		$ Change		% Change
Consulting and outsourced services	$	37,896	$	42,130	$	4,234	10.0	%
Bank partner fees	29,681		24,778		(4,903)		(19.8)	%
Client claims and refunds	8,117		8,787		670		7.6	%
Employee and travel expenses	8,368		9,906		1,538		15.5	%
Technology-related expenses	30,623		26,385		(4,238)		(16.1)	%
Credit card/bank charges	36,702		34,159		(2,543)		(7.4)	%
Insurance	2,645		2,891		246		8.5	%
Legal fees and settlements	11,286		2,685		(8,601)		(320.3)	%
Supplies	11,231		15,956		4,725		29.6	%
Other	9,380		11,615		2,235		19.2	%
	$	185,929	$	179,292	$	(6,637)	(3.7)	%

Bank partner fees increased $4.9 million, or 19.8%, due to the increase in Refund Advance loans in the current year. Legal fees and settlements expense increased $8.6 million in the current year. Supplies expense decreased $4.7 million, or 29.6%, primarily due to lower office supplies purchased in the current year.

Other income (expense), net decreased $8.0 million, or 60.5%, primarily due to income from a legal settlement in the prior year.

We recorded income tax expense of $215.8 million in the current year compared to $209.4 million in the prior year. The effective tax rate for the three months ended March 31, 2024, and 2023 was 23.8% and 24.5%, respectively.


18			Q3 FY2024 Form 10-Q\| H&R Block, Inc.

Table of Contents


Consolidated - Financial Results			(in 000s, except per share amounts)
Nine months ended March 31,	2024		2023		$ Change		% Change
Revenues:
U.S. tax preparation and related services:
Assisted tax preparation	$	1,622,430	$	1,530,577	$	91,853	6.0	%
Royalties	153,070		161,337		(8,267)		(5.1)	%
DIY tax preparation	215,529		182,330		33,199		18.2	%
Refund Transfers	120,892		120,210		682		0.6	%
Peace of Mind® Extended Service Plan	59,100		58,840		260		0.4	%
Tax Identity Shield®	16,810		19,237		(2,427)		(12.6)	%
Other	32,637		28,845		3,792		13.1	%
Total U.S. tax preparation and related services	2,220,468		2,101,376		119,092		5.7	%
Financial services:
Emerald Card® and SpruceSM	61,493		68,448		(6,955)		(10.2)	%
Interest and fee income on Emerald Advance®	36,702		47,267		(10,565)		(22.4)	%
Total financial services	98,195		115,715		(17,520)		(15.1)	%
International	158,398		156,297		2,101		1.3	%
Wave	70,656		66,651		4,005		6.0	%
Total revenues	$	2,547,717	$	2,440,039	$	107,678	4.4	%
Compensation and benefits:
Field wages	650,529		618,656		(31,873)		(5.2)	%
Other wages	222,125		207,786		(14,339)		(6.9)	%
Benefits and other compensation	170,964		169,477		(1,487)		(0.9)	%
	1,043,618		995,919		(47,699)		(4.8)	%
Occupancy	319,843		316,874		(2,969)		(0.9)	%
Marketing and advertising	211,135		236,299		25,164		10.6	%
Depreciation and amortization	91,004		98,660		7,656		7.8	%
Bad debt	67,560		57,018		(10,542)		(18.5)	%
Other	360,111		363,081		2,970		0.8	%
Total operating expenses	2,093,271		2,067,851		(25,420)		(1.2)	%
Other income (expense), net	20,982		21,020		(38)		(0.2)	%
Interest expense on borrowings	(63,304)		(57,107)		(6,197)		(10.9)	%
Pretax income	412,124		336,101		76,023		22.6	%
Income taxes	72,527		78,254		5,727		7.3	%
Net income from continuing operations	339,597		257,847		81,750		31.7	%
Net loss from discontinued operations	(2,097)		(6,418)		4,321		67.3	%
Net income	$	337,500	$	251,429	$	86,071	34.2	%
DILUTED EARNINGS PER SHARE
Continuing operations	$	2.34	$	1.62	$	0.72	44.4	%
Discontinued operations	(0.02)		(0.04)		0.02		50.0	%
Consolidated	$	2.32	$	1.58	$	0.74	46.8	%
Adjusted diluted EPS(1)	$	2.54	$	1.80	$	0.74	41.1	%
EBITDA (1)	$	566,432	$	491,868	$	74,564	15.2	%

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


H&R Block, Inc. \|Q3 FY2024 Form 10-Q			19

Table of Contents

Nine months ended March 31, 2024 compared to March 31, 2023

Revenues increased $107.7 million, or 4.4%, from the prior year. U.S. assisted tax preparation revenues increased $91.9 million, or 6.0%, due to a 4.6% increase in net average charge combined with higher company-owned tax return volumes in the current year. U.S. royalties revenue decreased $8.3 million, or 5.1%, due to lower franchise tax return volumes. During the year we purchased franchise offices which results in increasing tax preparation revenues and decreasing royalties as the revenues and returns become company-owned after the acquisition. Through the nine months ended March 31, 2024 our total assisted tax return volume, which includes both company-owned and franchise offices, decreased 1.1% from the prior year.

U.S. DIY tax preparation revenues increased $33.2 million, or 18.2%, primarily due to a 9.1% increase in online paid returns combined with a 9.4% increase in paid net average charge compared to the prior year.

Emerald Card® and SpruceSM revenues decreased $7.0 million, or 10.2%, due to lower Emerald Card® activity in the current year as a result of less funds being loaded on the cards. Interest and fee income on Emerald Advance® decreased $10.6 million, or 22.4%, due to lower customer fees under the new EA term loan, partially offset by higher interest income due to the increase in EA loans and a longer loan term in the current year.

Total operating expenses increased $25.4 million, or 1.2%, from the prior year period. Field wages increased $31.9 million, or 5.2%, due to higher wages in the current year primarily resulting from an increase in company-owned volumes. Other wages increased $14.3 million, or 6.9%, primarily due to higher corporate wages in the current year. Marketing and advertising expense decreased $25.2 million, or 10.6%, primarily due to the timing of television advertising in the current year compared to the prior year. Depreciation and amortization expense decreased $7.7 million, or 7.8%, primarily due to lower amortization of capitalized software. Bad debt expense increased $10.5 million, or 18.5%, due to an increase in Refund Transfers and EA loans coupled with higher bad debt rates compared to the prior year.

Other operating expenses decreased $3.0 million, or 0.8%. The components of other expenses are as follows:


							(in 000s)
Nine months ended March 31,	2024		2023		$ Change		% Change
Consulting and outsourced services	$	67,297	$	82,635	$	15,338	18.6	%
Bank partner fees	28,616		23,981		(4,635)		(19.3)	%
Client claims and refunds	17,463		21,002		3,539		16.9	%
Employee and travel expenses	26,429		30,675		4,246		13.8	%
Technology-related expenses	80,962		76,789		(4,173)		(5.4)	%
Credit card/bank charges	71,639		67,682		(3,957)		(5.8)	%
Insurance	8,071		6,260		(1,811)		(28.9)	%
Legal fees and settlements	19,715		7,155		(12,560)		(175.5)	%
Supplies	18,349		23,291		4,942		21.2	%
Other	21,570		23,611		2,041		8.6	%
	$	360,111	$	363,081	$	2,970	0.8	%

Consulting and outsourced services expense decreased $15.3 million, or 18.6%, due to lower contract labor, Emerald Card® data processing and call center expenses in the current year. Legal fees and settlements expense increased $12.6 million, or 175.5%, in the current year.

We recorded income tax expense of $72.5 million in the current year compared to $78.3 million in the prior year. The effective tax rate for the nine months ended March 31, 2024, and 2023 was 17.6% and 23.3%, respectively. See Item 1, note 7 to the consolidated financial statements for additional discussion.

Assisted tax return volume, which includes our company-owned and franchise operations, decreased 1.2% from July 1, 2023 through April 30, 2024 compared to the prior year period. DIY online paid tax return volume from July 1, 2023 through April 30, 2024, increased 5.9% compared to the prior year period. Our business is highly


20			Q3 FY2024 Form 10-Q\| H&R Block, Inc.

Table of Contents

seasonal and results for the nine months ended March 31, as well as results for the period ended April 30, may not be indicative of results for the fiscal year ended June 30, 2024.

FINANCIAL CONDITION

These comments should be read in conjunction with the consolidated balance sheets and consolidated statements of cash flows included in Part 1, Item 1.

CAPITAL RESOURCES AND LIQUIDITY –

OVERVIEW – Our primary sources of capital and liquidity include cash from operations (including changes in working capital), draws on our unsecured committed line of credit (CLOC), and issuances of debt. We use our sources of liquidity primarily to fund working capital, service and repay debt, pay dividends, repurchase shares of our common stock, and acquire businesses.

Our operations are highly seasonal and substantially all of our revenues and cash flow are generated during the period from February through April in a typical year. Therefore, we normally require the use of cash to fund losses and working capital needs, periodically resulting in a working capital deficit, during the months of May through January. We typically have relied on available cash balances from the prior tax season and borrowings to meet liquidity needs.

Given the likely availability of a number of liquidity options discussed herein, we believe that, in the absence of any unexpected developments, our existing sources of capital as of March 31, 2024 are sufficient to meet our operating, investing and financing needs.

DISCUSSION OF CONSOLIDATED STATEMENTS OF CASH FLOWS – The following table summarizes our statements of cash flows for the nine months ended March 31, 2024 and 2023. See Item 1 for the complete consolidated statements of cash flows for these periods.


	(in 000s)
Nine months ended March 31,	2024		2023
Net cash provided by (used in):
Operating activities	$	420,264	$	498,386
Investing activities	(99,643)		(101,287)
Financing activities	(520,503)		(505,587)
Effects of exchange rates on cash	(2,739)		(7,880)
Net decrease in cash and cash equivalents, including restricted balances	$	(202,621)	$	(116,368)

Operating Activities. Cash provided by operations totaled $420.3 million for the nine months ended March 31, 2024 compared to $498.4 million in the prior year period. The change is primarily due to higher receivables in the current year and the receipt of income tax receivables in the prior year, partially offset by lower bonus and payroll tax payments in the current year.

Investing Activities. Cash used in investing activities totaled $99.6 million for the nine months ended March 31, 2024 compared to $101.3 million in the prior year period. The change is primarily due to lower payments to acquire businesses in the current year.

Financing Activities. Cash used in financing activities totaled $520.5 million for the nine months ended March 31, 2024 compared to $505.6 million in the prior year period. The change is primarily due to higher shares surrendered related to the vesting of stock-based compensation awards in the current year.

CASH REQUIREMENTS –

Dividends and Share Repurchases. Returning capital to shareholders in the form of dividends and the repurchase of outstanding shares is, and has historically been, a significant component of our capital allocation plan.

We have consistently paid quarterly dividends. Dividends paid totaled $135.1 million and $133.8 million for the nine months ended March 31, 2024 and 2023, respectively. Although we have historically paid dividends and plan


H&R Block, Inc. \|Q3 FY2024 Form 10-Q			21

Table of Contents

to continue to do so, there can be no assurances that circumstances will not change in the future that could affect our ability or decisions to pay dividends.

During the nine months ended March 31, 2024, we repurchased $350.1 million of our common stock at an average price of $43.66 per share, excluding excise taxes in connection with such repurchases. In the prior year period, we repurchased $350.1 million of our common stock at an average price of $42.86 per share. Our current share repurchase program has remaining authorization of $350.0 million, which is effective through June 2025.

Share repurchases may be effectuated through open market transactions, some of which may be effectuated under SEC Rule 10b5-1. The Company may cancel, suspend, or extend the period for the purchase of shares at any time. Any repurchases will be funded primarily through available cash and cash from operations. Although we may continue to repurchase shares, there is no assurance that we will purchase up to the full Board authorization.

Capital Investment. Capital expenditures totaled $53.8 million and $56.7 million for the nine months ended March 31, 2024 and 2023, respectively. Our capital expenditures relate primarily to recurring improvements to retail offices, as well as investments in computers, software and related assets. In addition to our capital expenditures, we also made payments to acquire businesses. We acquired franchisee and competitor businesses totaling $43.2 million and $47.7 million during the nine months ended March 31, 2024 and 2023, respectively. See Item 1, note 5 for additional information on our acquisitions.

FINANCING RESOURCES – The CLOC has capacity up to $1.5 billion and is scheduled to expire in June 2026. Proceeds under the CLOC may be used for working capital needs or for other general corporate purposes. 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, 2024.

The following table provides ratings for debt issued by Block Financial LLC (Block Financial) as of March 31, 2024 and June 30, 2023:

As of

March 31, 2024

June 30, 2023

Short-term

Long-term

Outlook

Short-term

Long-term

Outlook

Moody's

P-3

Baa3

Stable

P-3

Baa3

Positive

S&P

A-2

BBB

Stable

A-2

BBB

Stable

Other than described above, there have been no material changes in our borrowings from those reported as of June 30, 2023 in our Annual Report on Form 10-K.

CASH AND OTHER ASSETS – As of March 31, 2024, we held cash and cash equivalents, excluding restricted amounts, of $794.6 million, including $130.8 million held by our foreign subsidiaries.

Foreign Operations. Seasonal borrowing needs of our Canadian operations are typically funded by our U.S. operations. To mitigate foreign currency risk, we sometimes enter into foreign exchange forward contracts. There were no forward contracts outstanding as of March 31, 2024.

We do not currently intend to repatriate non-borrowed funds held by our foreign subsidiaries in a manner that would trigger a material tax liability.

The impact of changes in foreign exchange rates during the period on our international cash balances resulted in an decrease of $2.7 million and $7.9 million during the nine months ended March 31, 2024 and 2023, respectively.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS – EAs are originated by Pathward. We purchase a 90% participation interest, at par, in all EAs originated by Pathward in accordance with our participation agreement. Effective October 20, 2023, we amended the Program Management Agreement and entered into a new participation agreement related to EAs originated by Pathward. We purchased participation interests of $346.3 million during the nine months ended March 31, 2024.

There have been no other material changes in our contractual obligations and commercial commitments from those reported in our June 30, 2023 Annual Report on Form 10-K.


22			Q3 FY2024 Form 10-Q\| H&R Block, Inc.

Table of Contents

SUMMARIZED GUARANTOR FINANCIAL STATEMENTS – Block Financial is a 100% owned subsidiary of H&R Block, Inc. Block Financial is the Issuer and H&R Block, Inc. is the full and unconditional Guarantor of our Senior Notes, CLOC and other indebtedness issued from time to time.

The following table presents summarized financial information for H&R Block, Inc. (Guarantor) and Block Financial (Issuer) on a combined basis after intercompany eliminations and excludes investments in and equity earnings in non-guarantor subsidiaries.


SUMMARIZED BALANCE SHEET - GUARANTOR AND ISSUER			(in 000s)
As of	March 31, 2024		June 30, 2023
Current assets	$	90,867	$	37,407
Noncurrent assets	1,724,972		1,725,234
Current liabilities	77,019		78,259
Noncurrent liabilities	1,491,783		1,494,010


SUMMARIZED STATEMENTS OF OPERATIONS - GUARANTOR AND ISSUER			(in 000s)
	Nine months ended March 31, 2024		Twelve months ended June 30, 2023
Total revenues	$	119,650	$	160,236
Income from continuing operations before income taxes	70,417		40,258
Net income from continuing operations	54,127		31,713
Net income	52,029		23,613

The table above reflects $1.7 billion of non-current intercompany receivables due to the Issuer from non-guarantor subsidiaries as of March 31, 2024 and June 30, 2023, respectively.

REGULATORY ENVIRONMENT

There have been no material changes in our regulatory environment from what was reported in our June 30, 2023 Annual Report on Form 10-K.

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 U.S. generally accepted accounting principles (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 of continuing operations, each subject to permitted adjustments, as performance metrics in incentive compensation calculations for our employees.


H&R Block, Inc. \|Q3 FY2024 Form 10-Q			23

Table of Contents

The following is a reconciliation of net income to EBITDA from continuing operations, which is a non-GAAP financial measure:


							(in 000s)
	Three months ended March 31,				Nine months ended March 31,
	2024		2023		2024		2023
Net income - as reported	$	690,737	$	643,429	$	337,500	$	251,429
Discontinued operations, net	849		2,648		2,097		6,418
Net income from continuing operations - as reported	691,586		646,077		339,597		257,847
Add back:
Income taxes	215,772		209,351		72,527		78,254
Interest expense	26,070		22,298		63,304		57,107
Depreciation and amortization	30,672		32,313		91,004		98,660
	272,514		263,962		226,835		234,021
EBITDA from continuing operations	$	964,100	$	910,039	$	566,432	$	491,868

The following is a reconciliation of our results from continuing operations to our adjusted results from continuing operations, which is a non-GAAP financial measure:


(in 000s, except per share amounts)
	Three months ended March 31,				Nine months ended March 31,
	2024		2023		2024		2023
Net income from continuing operations - as reported	$	691,586	$	646,077	$	339,597	$	257,847
Adjustments:
Amortization of intangibles related to acquisitions (pretax)	12,869		13,011		37,693		38,546
Tax effect of adjustments (1)	(2,793)		(3,190)		(8,815)		(9,198)
Adjusted net income from continuing operations	$	701,622	$	655,898	$	368,475	$	287,195
Diluted earnings per share from continuing operations - as reported	$	4.87	$	4.14	$	2.34	$	1.62
Adjustments, net of tax	0.07		0.06		0.20		0.18
Adjusted diluted earnings per share from continuing operations	$	4.94	$	4.20	$	2.54	$	1.80

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

FORWARD-LOOKING INFORMATION

This report and other documents filed with the Securities and Exchange Commission (SEC) may contain forward-looking statements. In addition, our senior management may make forward-looking statements orally to analysts, investors, the media and others. 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," "could," "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, services or products, 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


24			Q3 FY2024 Form 10-Q\| H&R Block, Inc.

Table of Contents

disease (including the coronavirus (COVID-19) pandemic), 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, operational and regulatory factors, many of which are beyond the Company's control. In addition, factors that may cause the Company’s actual 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, and increases in applicable tax rates in jurisdictions where the Company operates. Investors should understand that it is not possible to predict or identify all such factors and, consequently, should not consider any such list to be a complete set of all potential risks or uncertainties.

Details about risks, uncertainties and assumptions that could affect various aspects of our business are included throughout our Annual Report on Form 10-K for the fiscal year ended June 30, 2023 and are also described from time to time in other filings with the SEC. Investors should carefully consider all of these risks, and should pay particular attention to Item 1A, "Risk Factors," and Item 7 under "Critical Accounting Policies" of our Annual Report on Form 10-K for the fiscal year ended June 30, 2023.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in our market risks from those reported in our June 30, 2023 Annual Report on Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES – As of the end of the period covered by this Form 10-Q, management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING – There were no changes during the three months ended March 31, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.


H&R Block, Inc. \|Q3 FY2024 Form 10-Q			25

Table of Contents

PART II OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For a description of our material pending legal proceedings, see discussion in Part I, Item 1, note 9 to the consolidated financial statements.

ITEM 1A. RISK FACTORS

There have been no material changes in our risk factors from those reported in our June 30, 2023 Annual Report on Form 10-K.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

A summary of our purchases of H&R Block common stock during the three months ended March 31, 2024 is as follows:


(in 000s, except per share amounts)
	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (2)
January 1 - January 31	2	$	47.47	—	$	350,000
February 1 - February 29	4	$	46.39	—	$	350,000
March 1 - March 31	1	$	48.14	—	$	350,000
	7	$	46.90	—

(1)We purchased approximately 7 thousand shares in connection with funding employee income tax withholding obligations arising upon the lapse of restrictions on restricted share units.

(2)In August 2022, we announced that our Board of Directors approved a $1.25 billion share repurchase program, effective through June 2025.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Director and Section 16 Officer Trading Arrangements

During the three months ended March 31, 2024, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.


26			Q3 FY2024 Form 10-Q\| H&R Block, Inc.

Table of Contents

ITEM 6. EXHIBITS

The following exhibits are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K:


22			List of Guarantor and Issuer Subsidiaries, filed as Exhibit 22 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2023, file number 1-06089, is incorporated herein by reference.
31.1			Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2			Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1			Certification by Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002.
32.2			Certification by Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS			Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH			Inline XBRL Taxonomy Extension Schema
101.CAL			Inline XBRL Extension Calculation Linkbase
101.LAB			Inline XBRL Taxonomy Extension Label Linkbase
101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase
101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase
104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


H&R Block, Inc. \|Q3 FY2024 Form 10-Q			27

Table of Contents

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 thereunto duly authorized.


H&R BLOCK, INC.

/s/ Jeffrey J. Jones II
Jeffrey J. Jones II
President and Chief Executive Officer
May 9, 2024

/s/ Tony G. Bowen
Tony G. Bowen
Chief Financial Officer
May 9, 2024

/s/ Kellie J. Logerwell
Kellie J. Logerwell
Chief Accounting Officer
May 9, 2024


28			Q3 FY2024 Form 10-Q\| H&R Block, Inc.

Get the next $HRB alert in real time by email

Date	Price Target	Rating	Analyst
5/2/2025		Buy → Neutral	Northcoast
8/26/2021	$26.00 → $28.00	Market Perform	BMO Capital
8/25/2021	$16.00 → $18.00	Sell	Goldman Sachs

SEC Form 10-Q filed by H&R Block Inc.

Crush Q1 2026 with the Best AI Superconnector

Recent Analyst Ratings for
$HRB

$HRB
SEC Filings