What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-11-06 compared with 2025-05-07 · 98 added, 170 removed, 153 unchanged (64% of the section changed)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RECENT DEVELOPMENTS

On July 11, 2025, we entered into a Fifth Amended and Restated Credit and Guarantee Agreement (2025 CLOC), which amended and restated our Fourth Amended and Restated Credit and Guarantee Agreement, extended the scheduled maturity date to July 11, 2030, maintained the aggregate principal amount of $1.5 billion, and revised the interest rate table.

All other material terms remain substantially unchanged from the Fourth Amended and Restated Credit and Guarantee Agreement.

See our Current Report on Form 8-K filed on July 15, 2025 for additional information.

On August 7, 2025, Jeffrey J.

Jones II notified the Board of Directors of the Company of his intention to retire as President and Chief Executive Officer of the Company, effective as of December 31, 2025.

Jones will also retire from the Board of Directors, effective on December 31, 2025.

On August 8, 2025, the Board appointed Curtis A.

Campbell, currently the Company's President, Global Consumer Tax and Chief Product Officer, to succeed Mr.

Jones as President and Chief Executive Officer, effective immediately upon Mr.

Jones’ retirement.

See our Current Report on Form 8-K filed on August 11, 2025 for more information.

On August 13, 2025, Kellie J.

Logerwell notified H&R Block, Inc.

(the “Company”) of her intention to retire as the Company’s Vice President and Chief Accounting Officer, effective as of October 24, 2025.

Logerwell was succeeded as principal accounting officer by April M.

Wasleski, who most-recently served as the Company’s Director of Accounting and whose appointment as Vice President and Chief Accounting Officer became effective October 24, 2025.

See our Current Report on Form 8-K filed on August 15, 2025 for more information.

On August 26, 2025, we issued $350.0 million of 5.375% Senior Notes due September 15, 2032 (2032 Senior Notes).

The 2032 Senior Notes are not redeemable by the bondholders prior to maturity, although we have the right to redeem some or all of these notes at any time, at specified redemption prices.

The net proceeds from the 2032 Senior Notes will be used for general corporate purposes, which includes, among other uses, the redemption of the $350.0 million in principal outstanding of our 5.250% notes due October 2025 (2025 Senior Notes).

We redeemed our 2025 Senior Notes at 100% of the principal amount, plus accrued and unpaid interest, on September 19, 2025.

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 6,701 company-owned or 2,013 franchise offices (as of March 31, 2025), virtually or via an online review or prepared and filed by our clients through our DIY tax solutions.

Tax returns are prepared by H&R Block tax professionals in one of our company-owned or franchise offices, virtually or via an online review, or they are prepared and filed by our clients through our DIY tax solutions.

We also offer small business solutions through our company-owned and franchise offices (including in-person, online and virtual) and online through Wave.

We report a single segment that includes all of our continuing operations.

H&R Block, Inc.

|Q3 FY2025 Form 10-Q

Q1 FY2026 Form 10-Q| H&R Block, Inc.

Consolidated – Financial Results (in 000s, except per share amounts)

Three months ended March 31, 2025 2024 $ Change % Change

Three months ended September 30, 2025 2024 $ Change % Change

tax preparation and related services:

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Interest expense on borrowings (17,402) (15,847) (1,555) (9.8) %

Pretax income 958,181 907,358 50,823 5.6 %

Income taxes 235,253 215,772 (19,481) (9.0) %

Net income from continuing operations 722,928 691,586 31,342 4.5 %

Pretax loss (216,331) (232,261) 15,930 6.9 %

Income tax benefit (50,963) (60,840) (9,877) (16.2) %

Net loss from continuing operations (165,368) (171,421) 6,053 3.5 %

Net loss from discontinued operations (451) (1,155) 704 61.0 %

Net income $ 722,330 $ 690,737 $ 31,593 4.6 %

DILUTED EARNINGS PER SHARE

Net loss $ (165,819) $ (172,576) $ 6,757 3.9 %

BASIC AND DILUTED LOSS PER SHARE:

Continuing operations $ (1.26) $ (1.23) $ (0.03) (2.4) %

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See " Non-GAAP Financial Information " at the end of this item for a reconciliation of non-GAAP measures.

Q3 FY2025 Form 10-Q| H&R Block, Inc.

Three months ended March 31, 2025 compared to March 31, 2024

Revenues increased $92.3 million, or 4.2%, from the prior ye ar.

assisted tax preparation revenues increased $101.1 million , or 6.6%, due to a 5.0% increase in net average charge combined with a 1.5% increase in company-owned tax return volumes in the current year.

royalty revenue decreased $8.0 million, or 5.6%, due to lower franchise tax return volumes which was primarily driven by franchise acquisitions.

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, 2025 our total assisted tax return volume, which includes both company-owned and franchise offices, decreased 0.6% from the prior year.

DIY tax preparation revenues increased $16.1 million, or 8.1%, primarily due to an 8.9% increase in online paid net average charge and higher desktop software sales, offset by slightly lower online paid volumes.

Interest and fee income on Emerald Advance® revenues decreased $6.9 million, or 32.5%, primarily due to a decrease in EA loans originated in the current year.

International tax preparation revenues decreased $7.8 million, or 11.5%, primarily due to lower tax return volumes in Canada combined with unfavorable foreign currency exchange rates.

Total operating expenses increased $42.2 million, or 3.4%, from the prior year.

Field wages increased $22.6 million, or 4.4%, due to higher tax professional wages in the current year primarily due to the increase in company-owned volumes.

Benefits and other compensation increased $11.9 million, or 12.0%, due to higher payroll taxes and 401K match in the current year.

Other operating expenses increased $7.7 million, or 4.1%.

The components of other expenses are as follows:

Three months ended March 31, 2025 2024 $ Change % Change

Consulting and outsourced services $ 38,887 $ 37,896 $ (991) (2.6) %

Bank partner fees 30,836 29,681 (1,155) (3.9) %

Client claims and refunds 8,420 8,117 (303) (3.7) %

Employee and travel expenses 8,552 8,368 (184) (2.2) %

Technology-related expenses 34,472 30,623 (3,849) (12.6) %

Credit card/bank charges 39,605 36,702 (2,903) (7.9) %

Insurance 4,644 2,645 (1,999) (75.6) %

Legal fees and settlements 7,986 11,286 3,300 29.2 %

Supplies 10,407 11,231 824 7.3 %

Other 9,794 9,380 (414) (4.4) %

$ 193,603 $ 185,929 $ (7,674) (4.1) %

We recorded an income tax expense of $235.3 million in the current year compared to $215.8 million in the prior year.

The effective tax rate for the three months ended March 31, 2025, and 2024 was 24.6% and 23.8%, respectively.

H&R Block, Inc.

|Q1 FY2026 Form 10-Q

Consolidated - Financial Results (in 000s, except per share amounts)

Nine months ended March 31, 2025 2024 $ Change % Change

tax preparation and related services:

Assisted tax preparation $ 1,727,220 $ 1,622,430 $ 104,790 6.5 %

Royalties 143,312 153,070 (9,758) (6.4) %

DIY tax preparation 231,646 215,529 16,117 7.5 %

Refund Transfers 115,229 120,892 (5,663) (4.7) %

Peace of Mind® Extended Service Plan 54,867 59,100 (4,233) (7.2) %

Tax Identity Shield® 14,947 16,810 (1,863) (11.1) %

Other 40,215 32,637 7,578 23.2 %

tax preparation and related services 2,327,436 2,220,468 106,968 4.8 %

Financial services:

Emerald Card® and Spruce SM

59,169 61,493 (2,324) (3.8) %

Interest and fee income on Emerald Advance® 26,594 36,702 (10,108) (27.5) %

Total financial services 85,763 98,195 (12,432) (12.7) %

International 157,104 158,398 (1,294) (0.8) %

Wave 79,681 70,656 9,025 12.8 %

Total revenues $ 2,649,984 $ 2,547,717 $ 102,267 4.0 %

Compensation and benefits:

Field wages 682,575 650,529 (32,046) (4.9) %

Other wages 230,687 222,125 (8,562) (3.9) %

Benefits and other compensation 188,731 170,964 (17,767) (10.4) %

1,101,993 1,043,618 (58,375) (5.6) %

Occupancy 326,026 319,843 (6,183) (1.9) %

Marketing and advertising 221,502 211,135 (10,367) (4.9) %

Depreciation and amortization 87,247 91,004 3,757 4.1 %

Bad debt 62,625 67,560 4,935 7.3 %

Other 393,900 360,111 (33,789) (9.4) %

Total operating expenses 2,193,293 2,093,271 (100,022) (4.8) %

Other income (expense), net 19,215 20,982 (1,767) (8.4) %

Interest expense on borrowings (62,285) (63,304) 1,019 1.6 %

Pretax income 413,621 412,124 1,497 0.4 %

Income taxes 104,580 72,527 (32,053) (44.2) %

Net income from continuing operations 309,041 339,597 (30,556) (9.0) %

Net loss from discontinued operations (2,707) (2,097) (610) (29.1) %

Net income $ 306,334 $ 337,500 $ (31,166) (9.2) %

DILUTED EARNINGS PER SHARE

Continuing operations $ 2.23 $ 2.34 $ (0.11) (4.7) %

Discontinued operations (0.02) (0.02) — — %

Consolidated $ 2.21 $ 2.32 $ (0.11) (4.7) %

Adjusted diluted EPS (1)

$ 2.41 $ 2.54 $ (0.13) (5.1) %

$ 563,153 $ 566,432 $ (3,279) (0.6) %

(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.

Q3 FY2025 Form 10-Q| H&R Block, Inc.

Nine months ended March 31, 2025 compared to March 31, 2024

Revenues increased $102.3 million, or 4.0%, from the prior year.

assisted tax preparation revenues increased $104.8 million, or 6.5%, primarily due to a 5.0% increase in net average charge combined with a 1.4% increase in company-owned tax return volumes in the current year.

royalty revenue decreased $9.8 million, or 6.4%, primarily due to lower franchise tax return volumes which was primarily driven by franchise acquisitions.

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, 2025 our total assisted tax return volume, which includes both company-owned and franchise offices, decreased 0.6% from the prior year.

DIY tax preparation revenues increased $16.1 million, or 7.5%, primarily due to a 8.4% increase in online paid net average charge and higher desktop software sales, partially offset by lower online paid volumes.

Interest and fee income on Emerald Advance® revenues decreased $10.1 million, or 27.5%, primarily due to a decrease in EA loans originated in the current year.

Wave revenues increased $9.0 million, or 12.8%, due to higher accounting, invoicing and receipts subscriptions and small business payments processing volumes.

Total operating expenses increased $100.0 million, or 4.8%, from the prior year period.

Field wages increased $32.0 million, or 4.9%, due to higher tax professional wages in the current year primarily due to the increase in company-owned volumes.

Other wages increased $8.6 million, or 3.9%, primarily due to higher corporate wages due to salary increases in the current year.

Benefits and other compensation increased $17.8 million, or 10.4%, due to higher payroll taxes, 401K match and higher employee insurance in the current year.

Marketing and advertising expense increased $10.4 million, or 4.9%, due to the higher spend and lower vendor refunds for expired customer incentives in the current year.

Other operating expenses increased $33.8 million, or 9.4%.

Three months ended September 30, 2025 compared to September 30, 2024

Revenues increased $9.7 million, or 5.0%, from the prior ye ar.

assisted tax preparation revenues increased $5.7 million , or 13.2%, due to an increase in net average charge and company-owned tax return volumes in the current year.

Wave revenues increased $3.4 million, or 13.1%, due to higher accounting, invoicing, and receipts subscriptions and small business payment processing volumes.

Total operating expenses decreased $11.6 million, or 2.7%, from the prior year.

Field wages increased $1.6 million, or 2.4%, due to higher preseason and tax professional wages in the current year.

Other wages increased $1.9 million, or 2.5% due to higher corporate wages due to salary increases.

Benefits and other compensation decreased $2.1 million, or 5.4% primarily due to lower stock-based compensation expense.

Occupancy expense increased $1.5 million, or 1.5%, primarily due to higher lease expenses.

Marketing and advertising expense decreased $1.6 million, or 16.3%, due to higher vendor refunds for expired customer incentives and lower online advertising.

Other operating expenses decreased $12.4 million, or 13.1%.

The components of other expenses are as follows:

Nine months ended March 31, 2025 2024 $ Change % Change

Three months ended September 30, 2025 2024 $ Change % Change

Consulting and outsourced services $ 13,157 $ 15,444 $ 2,287 14.8 %

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$ 82,661 $ 95,107 $ 12,446 13.1 %

Legal expense increased $9.9 million, or 50.3%, primarily due to higher outside legal counsel spend.

We recorded income tax expense of $104.6 million in the current year compared to $72.5 million in the prior year.

The effective tax rate for the nine months ended March 31, 2025, and 2024 was 25.3% and 17.6%, 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 0.8% from July 1, 2024 through April 30, 2025 compared to the prior year period.

DIY online paid tax return volume from July 1, 2024 through April 30, 2025, decreased 0.3% compared to the prior year period.

Our business is highly 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, 2025.

H&R Block, Inc.

|Q3 FY2025 Form 10-Q

Consulting and outsourced services expense decreased $2.3 million, or 14.8%, due to lower call center expenses.

Technology-related expenses increased by $1.8 million, or 7.5%, due to higher cloud-related technology spend.

Legal expenses decreased $11.0 million primarily due to lower outside legal counsel spend in the current year.

We recorded an income tax benefit of $51.0 million in the current year compared to $60.8 million in the prior year.

The effective tax rate for the three months ended September 30, 2025, and 2024 was 23.6% and 26.2%, respectively.

FINANCIAL CONDITION

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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.

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

Q1 FY2026 Form 10-Q| H&R Block, Inc.

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, 2025 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, 2025 and 2024.

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 September 30, 2025 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 three months ended September 30, 2025 and 2024.

See Item 1 for the complete consolidated statements of cash flows for these periods.

Nine months ended March 31, 2025 2024

Three months ended September 30, 2025 2024

Net cash provided by (used in):

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Operating Activities.

Cash provided by operations totaled $429.3 million for the nine months ended March 31, 2025 compared to $420.3 million in the prior year period.

The increase is primarily due to changes in accounts payable and accounts receivable, partially offset by a lower net income in the current year.

Cash used in operations totaled $356.8 million for the three months ended September 30, 2025 compared to $328.6 million in the prior year period.

The increase is primarily due to changes in accrued income taxes and other current liabilities, partially offset by a lower net loss.

Investing Activities.

Cash used in investing activities totaled $110.9 million for the nine months ended March 31, 2025 compared to $99.6 million in the prior year period.

The change is primarily due to higher capital expenditures, partially offset by lower payments made for business acquisitions in the current year.

Cash used in investing activities totaled $20.9 million for the three months ended September 30, 2025 compared to $26.4 million in the prior year period.

The decrease is primarily due to lower capital expenditures.

Financing Activities.

Cash used in financing activities totaled $595.5 million for the nine months ended March 31, 2025 compared to $520.5 million in the prior year period.

The change is primarily due to higher repurchases of common stock and dividends in the current year.

Cash used in financing activities totaled $225.0 million for the three months ended September 30, 2025 compared to $284.5 million in the prior year period.

The change is primarily due to proceeds from line of credit borrowings partially offset by higher repurchases of common stock.

CASH REQUIREMENTS –

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We have consistently paid quarterly dividends.

Dividends paid totaled $147.1 million and $135.1 million for the nine months ended March 31, 2025 and 2024, respectively.

Dividends paid totaled $50.2 million and $44.7 million for the three months ended September 30, 2025 and 2024, respectively.

Although we have historically paid dividends and plan 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.

Q3 FY2025 Form 10-Q| H&R Block, Inc.

On August 15, 2024, the Board of Directors approved a $1.5 billion share repurchase program.

The repurchase program does not have an expiration date and replaced the previously existing share repurchase program.

During the nine months ended March 31, 2025, we repurchased $400.1 million of our common stock at an average price of $61.10 per share, excluding excise taxes in connection with such repurchases.

During the three months ended September 30, 2025, we repurchased $400.1 million of our common stock at an average price of $50.90 per share, excluding excise taxes in connection with such repurchases.

In the prior year period, we repurchased $209.6 million of our common stock at an average price of $63.51 per share, excluding excise taxes in connection with such repurchases.

Our current share repurchase program has remaining authorization of $1.1 billion and does not have an expiration date.

Our current share repurchase program has remaining authorization of $700.0 million and does not have an expiration date.

Share repurchases may be effectuated through open market transactions, some of which may be effectuated under SEC Rule 10b5-1.

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Capital Investment.

Capital expenditures totaled $71.8 million and $53.8 million for the nine months ended March 31, 2025 and 2024, respectively.

Capital expenditures totaled $13.2 million and $18.7 million for the three months ended September 30, 2025 and 2024, 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 $35.3 million and $43.2 million during the nine months ended March 31, 2025 and 2024, respectively.

We acquired franchisee and competitor businesses

H&R Block, Inc.

|Q1 FY2026 Form 10-Q

totaling $5.1 million and $5.9 million during the three months ended September 30, 2025 and 2024, 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.

FINANCING RESOURCES – The 2025 CLOC has capacity up to $1.5 billion and is scheduled to expire in July 2030.

Proceeds under the 2025 CLOC may be used for working capital needs or for other general corporate purposes.

We had n o outstanding balance under our CLOC and amounts available to borrow were not limited by the debt-to-EBITDA covenant as of March 31, 2025.

Our Senior Notes due in October 2025 (2025 Senior Notes) are classified as a current liability as of March 31, 2025.

We are considering various financing options in regard to the maturing 2025 Senior Notes and anticipate these options will provide adequate liquidity to fund the cash requirements at or prior to maturity.

The following table provides ratings for debt issued by Block Financial LLC (Block Financial) as of March 31, 2025 and June 30, 2024:

As of March 31, 2025 June 30, 2024

We had an outstanding balance of $245.0 million under our 2025 CLOC and amounts available to borrow were not limited by the debt-to-EBITDA covenant as of September 30, 2025.

On August 26, 2025, we issued the 2032 Senior Notes.

We intend to use the net proceeds from the 2032 Senior Notes for general corporate purposes, which may include, among other uses, redeeming the 2025 Senior Notes.

We redeemed our 2025 Senior Notes at 100% of the principal amount, plus accrued and unpaid interest, on September 19, 2025.

The following table provides ratings for debt issued by Block Financial LLC (Block Financial) as of September 30, 2025 and June 30, 2025:

As of September 30, 2025 June 30, 2025

Short-term Long-term Outlook Short-term Long-term Outlook

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Other than described above, there have been no material changes in our borrowings from those reported as of June 30, 2025 in our Annual Report on Form 10-K.

CASH AND OTHER ASSETS – As of March 31, 2025, we held cash and cash equivalents, excluding restricted amounts, of $772.9 million, including $153.0 million held by our foreign subsidiaries.

CASH AND OTHER ASSETS – As of September 30, 2025, we held cash and cash equivalents, excluding restricted amounts, of $376.4 million, including $213.1 million held by our foreign subsidiaries.

Foreign Operations.

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To mitigate foreign currency risk, we sometimes enter into foreign exchange forward contracts.

There were no forward contracts outstanding as of March 31, 2025.

There were no forward contracts outstanding as of September 30, 2025.

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

The impact of changes in foreign exchange rates during the period on our international cash balances resulted in a decrease of $8.4 million during the nine months ended March 31, 2025 and in a decrease of $2.7 million during the nine months ended March 31, 2024.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS – The Company entered into an agreement to purchase federal Investment tax credits (ITC).

During the nine months ended March 31, 2025, we paid $22.9 million for ITCs.

As of March 31, 2025, the Company has a remaining commitment to purchase additional ITCs, for

H&R Block, Inc.

|Q3 FY2025 Form 10-Q

approximately $75.1 million if certain conditions set forth in the agreement are satisfied, with the final closing payment anticipated to occur by June 30, 2025.

Effective October 18, 2024, we amended our Program Management Agreement (PMA) with Pathward®, N.A to extend the term of the PMA for two years until June 30, 2027.

We purchased participation interests in EAs of $260.6 million during the nine months ended March 31, 2025.

See Item 1, note 8 for additional information on our commitments.

There have been no other material changes in our contractual obligations and commercial commitments from those reported in our June 30, 2024 Annual Report on Form 10-K.

The impact of changes in foreign exchange rates during the period on our international cash balances resulted in a decrease of $2.9 million during the three months ended September 30, 2025 and in an increase of $3.2 million during the three months ended September 30, 2024.

CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS – Except as described in Recent Developments related to the 2025 CLOC, the 2032 Senior Notes issuance and the 2025 Senior Notes redemption, there have been no other material changes in our contractual obligations and commercial commitments from those reported in our June 30, 2025 Annual Report on Form 10-K.

SUMMARIZED GUARANTOR FINANCIAL STATEMENTS – Block Financial is a 100% owned subsidiary of H&R Block, Inc.

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SUMMARIZED BALANCE SHEET - GUARANTOR AND ISSUER (in 000s)

As of March 31, 2025 June 30, 2024

As of September 30, 2025 June 30, 2025

Current assets $ 40,457 $ 38,254

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Noncurrent liabilities 1,741,597 1,148,806

Q1 FY2026 Form 10-Q| H&R Block, Inc.

SUMMARIZED STATEMENTS OF OPERATIONS - GUARANTOR AND ISSUER (in 000s)

Nine months ended March 31, 2025 Twelve months ended June 30, 2024

Three months ended September 30, 2025 Twelve months ended June 30, 2025

Total revenues $ 8,766 $ 126,240

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Net income 6,221 41,443

The table above reflects $1.7 billion of non-current intercompany receivables due to the Issuer from non-guarantor subsidiaries as of March 31, 2025 and June 30, 2024.

The table above reflects $2.0 billion and $1.8 billion of non-current intercompany receivables due to the Issuer from non-guarantor subsidiaries as of September 30, 2025 and June 30, 2025, respectively.

REGULATORY ENVIRONMENT

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We may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures.

Q3 FY2025 Form 10-Q| H&R Block, Inc.

operations, adjusted diluted earnings per share from continuing operations, free cash flow and free cash flow yield.

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.

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

Three months ended March 31, Nine months ended March 31,

2025 2024 2025 2024

Net income - as reported $ 722,330 $ 690,737 $ 306,334 $ 337,500

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

Three months ended September 30,

Net loss - as reported $ (165,819) $ (172,576)

Discontinued operations, net 451 1,155

Net income from continuing operations - as reported 722,928 691,586 309,041 339,597

Income taxes 235,253 215,772 104,580 72,527

Net loss from continuing operations - as reported (165,368) (171,421)

Income tax benefit (50,963) (60,840)

Interest expense 17,402 15,847

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EBITDA from continuing operations $ (170,007) $ (187,583)

H&R Block, Inc.

|Q1 FY2026 Form 10-Q

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,

2025 2024 2025 2024

Net income from continuing operations - as reported $ 722,928 $ 691,586 $ 309,041 $ 339,597

Three months ended September 30,

Net loss from continuing operations - as reported $ (165,368) $ (171,421)

Amortization of intangibles related to acquisitions (pretax) 10,979 11,128

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(2,792) (2,645)

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

Adjusted net loss from continuing operations $ (157,181) $ (162,938)

Diluted loss per share from continuing operations - as reported $ (1.26) $ (1.23)

Adjustments, net of tax 0.06 0.06

Adjusted diluted earnings per share from continuing operations $ 5.38 $ 4.94 $ 2.41 $ 2.54

Adjusted diluted loss per share from continuing operations $ (1.20) $ (1.17)

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

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All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements.

H&R Block, Inc.

|Q3 FY2025 Form 10-Q

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 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 disease, severe weather events, natural or manmade disasters, or changes in the regulatory environment in which we operate.

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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, 2025 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, 2024.

Investors should carefully consider all of these risks, and should pay

Q1 FY2026 Form 10-Q| H&R Block, Inc.

particular attention to Item 1A, "Risk Factors," and Item 7 under "Critical Accounting Estimates" of our Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis