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Item 1. Financial Statements

2026-05-06 compared with 2026-02-05 · 123 added, 83 removed, 421 unchanged (33% of the section changed)

FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS:

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME:

(unaudited, in 000s, except per share amounts)

Three months ended December 31, Six months ended December 31,

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

2026 2025 2026 2025

8 unchanged sentences

Interest expense on borrowings ( 24,307 ) ( 24,686 ) ( 65,087 ) ( 62,285 )

Loss from continuing operations before income tax benefit ( 319,223 ) ( 312,299 ) ( 535,554 ) ( 544,560 )

Income tax benefit ( 77,657 ) ( 69,833 ) ( 128,620 ) ( 130,673 )

Net loss from continuing operations ( 241,566 ) ( 242,466 ) ( 406,934 ) ( 413,887 )

Income from continuing operations before income taxes 1,016,458 958,181 480,904 413,621

Income taxes 167,678 235,253 39,058 104,580

Net income from continuing operations 848,780 722,928 441,846 309,041

Net loss from discontinued operations, net of tax benefits of $ 263 , $ 180 , $ 576 , and $ 811

( 879 ) ( 598 ) ( 1,930 ) ( 2,707 )

NET LOSS $ ( 242,166 ) $ ( 243,420 ) $ ( 407,985 ) $ ( 415,996 )

BASIC AND DILUTED LOSS PER SHARE:

NET INCOME $ 847,901 $ 722,330 $ 439,916 $ 306,334

BASIC EARNINGS PER SHARE:

Continuing operations $ 6.66 $ 5.38 $ 3.43 $ 2.26

1 unchanged sentence

Consolidated $ 6.66 $ 5.37 $ 3.41 $ 2.24

DILUTED EARNINGS PER SHARE:

Continuing operations $ 6.61 $ 5.32 $ 3.40 $ 2.23

Discontinued operations ( 0.01 ) ( 0.01 ) ( 0.02 ) ( 0.02 )

Consolidated $ 6.60 $ 5.31 $ 3.38 $ 2.21

DIVIDENDS DECLARED PER SHARE $ 0.42 $ 0.375 $ 1.26 $ 1.125

COMPREHENSIVE LOSS:

Net loss $ ( 242,166 ) $ ( 243,420 ) $ ( 407,985 ) $ ( 415,996 )

COMPREHENSIVE INCOME:

Net income $ 847,901 $ 722,330 $ 439,916 $ 306,334

Change in foreign currency translation adjustments ( 4,008 ) 445 ( 7,591 ) ( 22,472 )

Other comprehensive income (loss) ( 4,008 ) 445 ( 7,591 ) ( 22,472 )

Comprehensive loss $ ( 236,441 ) $ ( 272,454 ) $ ( 411,568 ) $ ( 438,913 )

Comprehensive income $ 843,893 $ 722,775 $ 432,325 $ 283,862

See accompanying notes to consolidated financial statements.

3 unchanged sentences

share and per share amounts)

As of December 31, 2025 June 30, 2025

As of March 31, 2026 June 30, 2025

Cash and cash equivalents $ 867,008 $ 983,277

20 unchanged sentences

Total current liabilities 1,294,413 1,298,610

Long-term debt and line of credit borrowings 2,435,379 1,143,305

Long-term debt 1,490,933 1,143,305

Deferred tax liabilities and reserves for uncertain tax positions 187,707 306,134

15 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in 000s)

Six months ended December 31, 2025 2024

Nine months ended March 31, 2026 2025

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss $ ( 407,985 ) $ ( 415,996 )

Adjustments to reconcile net loss to net cash used in operating activities:

Net income $ 439,916 $ 306,334

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 90,442 87,247

9 unchanged sentences

Other, net ( 1,972 ) ( 1,088 )

Net cash used in operating activities ( 970,788 ) ( 895,638 )

Net cash provided by operating activities 586,717 429,322

CASH FLOWS FROM INVESTING ACTIVITIES:

13 unchanged sentences

Other, net ( 6,009 ) ( 11,854 )

Net cash provided by financing activities 429,536 258,598

Net cash used in financing activities ( 579,481 ) ( 595,506 )

Effects of exchange rate changes on cash ( 1,070 ) ( 8,429 )

38 unchanged sentences

Balances as of December 31, 2025 156,506 $ 1,565 $ 768,531 $ ( 51,338 ) $ ( 904,840 ) ( 29,748 ) $ ( 636,996 ) $ ( 823,078 )

Net income — — — — 847,901 — — 847,901

Other comprehensive loss — — — ( 4,008 ) — — — ( 4,008 )

Stock-based compensation — — 8,379 — — — — 8,379

Stock-based awards exercised or vested — — ( 38 ) — ( 293 ) 3 45 ( 286 )

Acquisition of treasury shares (2)

— — — — — ( 1 ) ( 41 ) ( 41 )

Cash dividends declared - $ 0.42 per share

— — — — ( 53,239 ) — — ( 53,239 )

Balances as of March 31, 2026 156,506 $ 1,565 $ 776,872 $ ( 55,346 ) $ ( 110,471 ) ( 29,746 ) $ ( 636,992 ) $ ( 24,372 )

Q3 FY2026 Form 10-Q| H&R Block, Inc.

27 unchanged sentences

Balances as of December 31, 2024 164,367 $ 1,644 $ 752,093 $ ( 71,762 ) $ ( 908,785 ) ( 30,523 ) $ ( 645,650 ) $ ( 872,460 )

Net income — — — — 722,330 — — 722,330

Other comprehensive income — — — 445 — — — 445

Stock-based compensation — — 7,424 — — — — 7,424

Stock-based awards exercised or vested — — ( 696 ) — ( 260 ) 41 856 ( 100 )

Acquisition of treasury shares (2)

— — — — — ( 6 ) ( 283 ) ( 283 )

Cash dividends declared - $ 0.375 per share

— — — — ( 50,194 ) — — ( 50,194 )

Balances as of March 31, 2025 164,367 $ 1,644 $ 758,821 $ ( 71,317 ) $ ( 236,909 ) ( 30,488 ) $ ( 645,077 ) $ ( 192,838 )

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

5 unchanged sentences

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION – The consolidated balance sheets as of December 31, 2025 and June 30, 2025, the consolidated statements of operations and comprehensive loss for the three and six months ended December 31, 2025 and 2024, the consolidated statements of cash flows for the six months ended December 31, 2025 and 2024, and the consolidated statements of stockholders' equity for the three and six months ended December 31, 2025 and 2024 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 December 31, 2025 and 2024 and for all periods presented, have been made.

BASIS OF PRESENTATION – The consolidated balance sheets as of March 31, 2026 and June 30, 2025, the consolidated statements of operations and comprehensive income for the three and nine months ended March 31, 2026 and 2025, the consolidated statements of cash flows for the nine months ended March 31, 2026 and 2025, and the consolidated statements of stockholders' equity for the three and nine months ended March 31, 2026 and 2025 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, 2026 and 2025 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.

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revenues by major service line, with revenues from our international tax services businesses and from Wave included as separate lines:

Three months ended December 31, Six months ended December 31,

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

2026 2025 2026 2025

14 unchanged sentences

POM Deferred Revenue Deferred Wages

Six months ended December 31, 2025 2024 2025 2024

Nine months ended March 31, 2026 2025 2026 2025

Balance, beginning of the period $ 149,302 $ 156,610 $ 19,884 $ 20,212

2 unchanged sentences

Balance, end of the period $ 170,968 $ 162,261 $ 21,314 $ 19,038

As of December 31, 2025, deferred revenue related to POM was $ 107.7 million.

As of March 31, 2026, deferred revenue related to POM was $ 171.0 million.

W e expect that $ 91.9 million will be recognized over the next twelve months , while the remaining balance will be recognized over the following five years .

As of December 31, 2025 and 2024, Tax Identity Shield® (TIS) deferred revenue was $ 14.9 million and $ 14.1 million, respectively.

As of March 31, 2026 and 2025, Tax Identity Shield® (TIS) deferred revenue was $ 37.6 million and $ 31.2 million, respectively.

Deferred revenue related to TIS was $ 22.6 million and $ 21.4 million as of June 30, 2025 and 2024, respectively.

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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 2.4 million shares for the three and six months ended December 31, 2025 and 2.7 million

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 1.3 million and 0.8 million shares for the three and nine months ended March 31, 2026,

H&R Block, Inc.

|Q3 FY2026 Form 10-Q

shares for the three and six months ended December 31, 2024, as the effect would be antidilutive due to the net loss from continuing operations during the periods.

The computations of basic and diluted earnings (loss) per share from continuing operations are as follows:

respectively, and 0.6 million and 0.5 million shares for the three and nine months ended March 31, 2025, 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 December 31, Six months ended December 31,

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

2026 2025 2026 2025

Net loss from continuing operations attributable to shareholders $ ( 241,566 ) $ ( 242,466 ) $ ( 406,934 ) $ ( 413,887 )

Net income from continuing operations attributable to shareholders $ 848,780 $ 722,928 $ 441,846 $ 309,041

Amounts allocated to participating securities ( 4,250 ) ( 3,442 ) ( 2,193 ) ( 1,408 )

Net loss from continuing operations attributable to common shareholders $ ( 241,844 ) $ ( 242,706 ) $ ( 407,474 ) $ ( 414,356 )

Net income from continuing operations attributable to common shareholders $ 844,530 $ 719,486 $ 439,653 $ 307,633

Basic weighted average common shares 126,760 133,853 128,248 136,207

1 unchanged sentence

Dilutive weighted average common shares 127,813 135,329 129,489 137,944

Loss per share from continuing operations attributable to common shareholders:

Earnings per share from continuing operations attributable to common shareholders:

Basic $ 6.66 $ 5.38 $ 3.43 $ 2.26

1 unchanged sentence

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 0.9 million and 1.1 million shares, including adjustments for performance achievement and dividend equivalents, under our stock-based compensation plans during the six months ended December 31, 2025 and 2024, respectively.

Stock-based compensation expense of our continuing operations totaled $ 7.6 million and $13.8 million for the three and six months ended December 31, 2025, respectively, and $ 9.2 million and $17.9 million for the three and six months ended December 31, 2024, respectively.

As of December 31, 2025, unrecognized compensation cost for nonvested shares and units totaled $ 62.9 million.

STOCK-BASED COMPENSATION – We granted 1.0 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, 2026 and 2025, respectively.

Stock-based compensation expense of our continuing operations totaled $ 8.4 million and $ 22.2 million for the three and nine months ended March 31, 2026, respectively, and $ 7.5 million and $ 25.4 million for the three and nine months ended March 31, 2025, respectively.

As of March 31, 2026, unrecognized compensation cost for nonvested shares and units totaled $ 55.3 million.

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

As of December 31, 2025 June 30, 2025

As of March 31, 2026 June 30, 2025

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

13 unchanged sentences

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.

Loans with a principal balance more than 90 days past due or on non-accrual status were $3.0 million and $3.1 million as of December 31, 2025 and June 30, 2025, respectively.

Loans with a principal balance more than 90 days past due or on non-accrual status were $3.0 million and $3.1 million as of March 31, 2026 and June 30, 2025, respectively.

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.

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In December of each year, we charge-off the receivables and the related allowance to an amount we believe represents the net realizable value.

B alances and amounts on non-accrual status, classified as impaired, or more than 60 days past due, by tax return year of origination, as of December 31, 2025 are as foll ows:

B alances 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, 2026 are as foll ows:

Tax return year of origination Balance More Than 60 Days Past Due

2 unchanged sentences

18,645 $ 1,242

Allowance ( 562 )

Net balance $ 18,083

2 unchanged sentences

Typically, in December of each year, we charge-off the receivables and the related allowance for EAs 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 fiscal year of origination, as of December 31, 2025 are as follows:

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, 2026 are as follows:

Fiscal year of origination Balance Non-Accrual

6 unchanged sentences

|Q3 FY2026 Form 10-Q

ALLOWANCE FOR CREDIT LOSSES – Activity in the allowance for credit losses for EA and all other short-term and long-term receivables for the six months ended December 31, 2025 and 2024 is as follows:

ALLOWANCE FOR CREDIT LOSSES – Activity in the allowance for credit losses for EA and all other short-term and long-term receivables for the nine months ended March 31, 2026 and 2025 is as follows:

EAs All Other Total

2 unchanged sentences

Charge-offs, recoveries and other ( 19,663 ) ( 44,803 ) ( 64,466 )

Balances as of December 31, 2025 $ 19,893 $ 1,780 $ 21,673

Balances as of March 31, 2026 $ 17,578 $ 40,298 $ 57,876

Balances as of July 1, 2024 $ 33,536 $ 45,327 $ 78,863

1 unchanged sentence

Charge-offs, recoveries and other ( 33,536 ) ( 45,864 ) ( 79,400 )

Balances as of December 31, 2024 $ 19,109 $ 1,393 $ 20,502

For the six months ended December 31, 2025, there were $19.7 million of gross charge-offs related to EAs which were originated in fiscal year 2025.

Balances as of March 31, 2025 $ 19,371 $ 36,134 $ 55,505

For the nine months ended March 31, 2026, there were $19.7 million of gross charge-offs related to EAs which were originated in fiscal year 2025.

GOODWILL AND INTANGIBLE ASSETS

Changes in the carrying amount of goodwill for the six months ended December 31, 2025 are as follows:

Changes in the carrying amount of goodwill for the nine months ended March 31, 2026 are as follows:

Goodwill Accumulated Impairment Losses Net

4 unchanged sentences

Impairments — — —

Balances as of December 31, 2025 $ 953,915 $ ( 138,297 ) $ 815,618

Balances as of March 31, 2026 $ 953,917 $ ( 138,297 ) $ 815,620

(1) All goodwill added during the period is expected to be tax-deductible for federal income tax reporting.

We test goodwill for impairment annually as of February 1, or more frequently if events occur or circumstances change which would, more likely than not, reduce the fair value of a reporting unit below its carrying value.

In conjunction with our annual impairment test, we tested goodwill for impairment during the quarter and did not identify any impairment.

Q3 FY2026 Form 10-Q| H&R Block, Inc.

2 unchanged sentences

Amortization Net

As of December 31, 2025:

As of March 31, 2026:

Reacquired franchise rights $ 431,555 $ ( 254,474 ) $ 177,081

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$ 986,736 $ ( 727,324 ) $ 259,412

We made payments to acquire businesses totaling $ 35.4 million and $ 28.0 million during the six months ended December 31, 2025 and 2024, respectively.

The amounts and weighted-average lives of intangible assets acquired during the six months e nded December 31, 2025, including amounts capitalized related to internally-developed software, a re as follows:

We made payments to acquire businesses totaling $ 55.0 million and $ 35.3 million during the nine months ended March 31, 2026 and 2025, respectively.

The amounts and weighted-average lives of intangible assets acquired during the nine months e nded March 31, 2026, including amounts capitalized related to internally-developed software, a re as follows:

(dollars in 000s)

5 unchanged sentences

Total $ 51,347 5

Amortization of intangible assets for the three and six months ended December 31, 2025 was $ 11.3 million and $22.4 million respectively, compared to $ 12.1 million and $25.0 million for the three and six months ended December 31, 2024.

Amortization of intangible assets for the three and nine months ended March 31, 2026 was $ 12.3 million and $ 34.7 million respectively, compared to $ 11.3 million and $ 36.3 million for the three and nine months ended March 31, 2025.

Estimated amortization of intangible assets for fiscal years ending June 30, 2026, 2027, 2028, 2029, and 2030 is $ 47.2 million, $ 44.9 million, $ 36.5 million, $ 27.6 million and $ 17.6 million, respectively.

3 unchanged sentences

The components of long-term debt are as follows:

As of December 31, 2025 June 30, 2025

As of March 31, 2026 June 30, 2025

Senior Notes, 5.250 %, due October 2025

5 unchanged sentences

Senior Notes, 5.375%, due September 2032

Committed line of credit borrowings 945,000 —

Debt issuance costs and discounts ( 9,067 ) ( 6,802 )

19 unchanged sentences

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

We were in compliance with these requirements as of December 31, 2025.

We were in compliance with these requirements as of March 31, 2026.

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, 2026 .

Q3 FY2026 Form 10-Q| H&R Block, Inc.

We had an outstanding balance of $ 945.0 million under our 2025 CLOC and amounts available to borrow were not limited by the debt-to-EBITDA covenant as of December 31, 2025 .

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 file a consolidated U.S.

federal income tax return with the Internal Revenue Service (IRS) and also file income tax returns in various state, local, and foreign jurisdictions.

On July 4, 2025, H.R.

1 was signed into law.

The legislation did not have a material impact on our tax benefit for the six months ended December 31, 2025, and we do not expect it to materially change our effective income tax rate for the fiscal year ending June 30, 2026.

Our effective tax rate for continuing operations, including the effects of discrete tax items, was 24.0% for both the six months ended December 31, 2025 and 2024.

Consistent with prior years, our pretax loss for the six months ended December 31, 2025 is expected to be offset by income in our third and fourth quarters due to the established pattern of seasonality in our primary business operations.

As such, management has determined that it is more-likely-than-not that realization of tax benefits recorded in our financial statements will occur within our fiscal year.

The amount of tax benefit recorded for the six months ended December 31, 2025 reflects management’s estimate of the annual effective tax rate applied to year-to-date loss from continuing operations adjusted for the tax impact of discrete items for the periods presented.

The legislation did not have a material impact on our income tax expense for the nine months ended March 31, 2026, and we do not expect it to materially impact our effective income tax rate for the fiscal year ending June 30, 2026.

Our effective income tax rate on continuing operations, including the impact of discrete tax items, was 8.1 % for the nine months ended March 31, 2026, compared to 25.3 % for the nine months ended March 31, 2025.

Discrete tax items decreased the effective tax rate by 16.1% for the nine months ended March 31, 2026, and increased the effective tax rate by 0.9% for the nine months ended March 31, 2025.

We recorded a discrete income tax benefit of $77.6 million for the nine months ended March 31, 2026, compared to a discrete income tax expense of $3.8 million for the nine months ended March 31, 2025.

The discrete income tax benefit recognized during the current year period was primarily attributable to the settlement of an IRS examination of our 2020 U.S.

federal income tax return and related carryback claims to the 2015 through 2018 tax years.

The closure of the IRS examination resulted in a discrete income tax benefit of $84.1 million, which was recorded in income tax expense.

The benefit primarily reflects the release of the related unrecognized tax benefits, including reversal of accrued interest through the date of settlement.

Due to the seasonality of our business, the impact of discrete tax items on our effective income tax rate for the nine months ended March 31, 2026 is greater than the expected impact on our projected full-year effective income tax rate.

Changes in gross unrecognized tax benefits for the nine months ended March 31, 2026 are as follows:

Balances as of July 1, 2025 $ 266,548

Additions based on tax positions related to prior years 528

Reductions based on tax positions related to prior years (2,998)

Additions based on tax positions related to the current year 16,998

Reductions related to settlements with tax authorities (122,159)

Expiration of statute of limitations (1,182)

Balance as of March 31, 2026 $ 157,735

COMMITMENTS AND CONTINGENCIES

2 unchanged sentences

Similarly, DIY tax returns are covered by our 100% accuracy guarantee, whereby we will reimburse a client (up to a maximum of $ 10,000 in the U.S.) 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 $ 10.9 million and $ 11.4 million as of December 31, 2025 and June 30, 2025, respectively.

Our liability related to estimated losses under the 100% accuracy guarantee was $ 12.4 million and $ 11.4 million as of March 31, 2026 and June 30, 2025, 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 $ 36.9 million and $ 29.6 million as of December 31, 2025 and June 30, 2025 respectively, with amounts recorded in deferred revenue and other liabilities.

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 $ 28.0 million and $ 29.6 million as of March 31, 2026 and June 30, 2025 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.

H&R Block, Inc.

|Q3 FY2026 Form 10-Q

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 $ 21.9 million at December 31, 2025, and net of amounts drawn and outstanding, our remaining commitment to fund totaled $ 5.9 million.

Our total obligation under these lines of credit was $ 22.6 million at March 31, 2026, and net of amounts drawn and outstanding, our remaining commitment to fund totaled $ 11.2 million.

Emerald Advance® term loans are originated by Pathward® N.A.

1 unchanged sentence

Our participation interest varies by jurisdiction.

At December 31, 2025, the principal balance of purchased participation interests for the current year totaled $281.1 million, which represents 87% of total EA volume originated by Pathward.

For the nine months ended March 31, 2026, the principal balance of purchased participation interests for the current year totaled $283.7 million, which represents 87% of total EA volume originated by Pathward.

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, 2026 and June 30, 2025, we accrued an estimated liability of $ 2.2 million related to this guarantee.

LITIGATION AND OTHER RELATED CONTINGENCIES

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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

H&R Block, Inc.

|Q2 FY2026 Form 10-Q

permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction.

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.

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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 December 31, 2025.

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, 2026.

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 $ 10.0 million and $ 6.2 million as of December 31, 2025 and June 30, 2025, respectively.

Our accrued liabilities were $ 13.3 million and $ 6.2 million as of March 31, 2026 and June 30, 2025, 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.

This aggregate range only

Q3 FY2026 Form 10-Q| H&R Block, Inc.

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.

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The matters underlying the estimated range will change from time to time, and actual results may vary significantly from the current estimate.

As of December 31, 2025, 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.

As of March 31, 2026, 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.

2 unchanged sentences

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

Q2 FY2026 Form 10-Q| H&R Block, Inc.

can be no assurances as to their outcomes.

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;

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tax services business.

H&R Block, Inc.

|Q3 FY2026 Form 10-Q

The Company's Chief Operating Decision Maker (CODM) is our chief executive officer, who regularly reviews consolidated financial information to evaluate financial performance and allocate resources.

2 unchanged sentences

The measure of segment assets is total consolidated assets as presented on the consolidated balance sheet.

The following table presents the significant revenue and expense categories included in the segment's net income from continuing operations as regularly provided to the CODM on a consolidated basis and then reconciled to net income for the three and six months ended December 31, 2025 and 2024.

H&R Block, Inc.

|Q2 FY2026 Form 10-Q

Q3 FY2026 Form 10-Q| H&R Block, Inc.

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

Three months ended December 31, Six months ended December 31,

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

2026 2025 2026 2025

26 unchanged sentences

Interest expense on borrowings ( 24,307 ) ( 24,686 ) ( 65,087 ) ( 62,285 )

Loss from continuing operations before income taxes ( 319,223 ) ( 312,299 ) ( 535,554 ) ( 544,560 )

Income tax benefit ( 77,657 ) ( 69,833 ) ( 128,620 ) ( 130,673 )

Segment net loss from continuing operations ( 241,566 ) ( 242,466 ) ( 406,934 ) ( 413,887 )

Income from continuing operations before income taxes 1,016,458 958,181 480,904 413,621

Income taxes 167,678 235,253 39,058 104,580

Segment net income from continuing operations 848,780 722,928 441,846 309,041

Reconciliation of segment profit:

1 unchanged sentence

Net loss from discontinued operations ( 879 ) ( 598 ) ( 1,930 ) ( 2,707 )

Net loss $ ( 242,166 ) $ ( 243,420 ) $ ( 407,985 ) $ ( 415,996 )

Q2 FY2026 Form 10-Q| H&R Block, Inc.

Net income $ 847,901 $ 722,330 $ 439,916 $ 306,334

H&R Block, Inc.

|Q3 FY2026 Form 10-Q

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 1. Financial Statements