H&R BLOCK INC 10-Q

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 6,701 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. 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 15 Table of Contents Consolidated – Financial Results (in 000s, except per share amounts) Three months ended March 31, 2025 2024 $ Change % Change Revenues: U.S. tax preparation and related services: Assisted tax preparation $ 1,635,877 $ 1,534,825 $ 101,052 6.6 % Royalties 133,961 141,915 (7,954) (5.6) % DIY tax preparation 214,666 198,570 16,096 8.1 % Refund Transfers 113,732 118,937 (5,205) (4.4) % Peace of Mind® Extended Service Plan 15,625 16,813 (1,188) (7.1) % Tax Identity Shield® 7,025 7,536 (511) (6.8) % Other 14,582 12,065 2,517 20.9 % Total U.S. tax preparation and related services 2,135,468 2,030,661 104,807 5.2 % Financial services: Emerald Card® and Spruce SM 40,195 41,160 (965) (2.3) % Interest and fee income on Emerald Advance® 14,286 21,169 (6,883) (32.5) % Total financial services 54,481 62,329 (7,848) (12.6) % International 60,438 68,264 (7,826) (11.5) % Wave 26,717 23,580 3,137 13.3 % Total revenues $ 2,277,104 $ 2,184,834 $ 92,270 4.2 % Compensation and benefits: Field wages 532,916 510,299 (22,617) (4.4) % Other wages 74,621 75,356 735 1.0 % Benefits and other compensation 111,575 99,653 (11,922) (12.0) % 719,112 685,308 (33,804) (4.9) % Occupancy 119,709 119,364 (345) (0.3) % Marketing and advertising 196,667 194,349 (2,318) (1.2) % Depreciation and amortization 29,221 30,672 1,451 4.7 % Bad debt 40,479 41,008 529 1.3 % Other 193,603 185,929 (7,674) (4.1) % Total operating expenses 1,298,791 1,256,630 (42,161) (3.4) % Other income (expense), net 4,554 5,224 (670) (12.8) % Interest expense on borrowings (24,686) (26,070) 1,384 5.3 % 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 % Net loss from discontinued operations (598) (849) 251 29.6 % Net income $ 722,330 $ 690,737 $ 31,593 4.6 % DILUTED EARNINGS PER SHARE Continuing operations $ 5.32 $ 4.87 $ 0.45 9.2 % Discontinued operations (0.01) (0.01) — ** Consolidated $ 5.31 $ 4.86 $ 0.45 9.3 % Adjusted diluted EPS (1) $ 5.38 $ 4.94 $ 0.44 8.9 % EBITDA (1) $ 1,012,088 $ 964,100 $ 47,988 5.0 % (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. 16 Q3 FY2025 Form 10-Q| H&R Block, Inc. Table of Contents Three months ended March 31, 2025 compared to March 31, 2024 Revenues increased $92.3 million, or 4.2%, from the prior ye ar. U.S. 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. U.S. 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. U.S. 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: (in 000s) 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. |Q3 FY2025 Form 10-Q 17 Table of Contents Consolidated - Financial Results (in 000s, except per share amounts) Nine months ended March 31, 2025 2024 $ Change % Change Revenues: U.S. 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 % Total U.S. 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) % EBITDA (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. 18 Q3 FY2025 Form 10-Q| H&R Block, Inc. Table of Contents Nine months ended March 31, 2025 compared to March 31, 2024 Revenues increased $102.3 million, or 4.0%, from the prior year. U.S. 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. U.S. 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. U.S. 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%. The components of other expenses are as follows: (in 000s) Nine months ended March 31, 2025 2024 $ Change % Change Consulting and outsourced services $ 72,770 $ 67,297 $ (5,473) (8.1) % Bank partner fees 32,199 28,616 (3,583) (12.5) % Client claims and refunds 18,696 17,463 (1,233) (7.1) % Employee and travel expenses 27,164 26,429 (735) (2.8) % Technology-related expenses 87,035 80,962 (6,073) (7.5) % Credit card/bank charges 76,300 71,639 (4,661) (6.5) % Insurance 12,444 8,071 (4,373) (54.2) % Legal fees and settlements 29,640 19,715 (9,925) (50.3) % Supplies 16,884 18,349 1,465 8.0 % Other 20,768 21,570 802 3.7 % $ 393,900 $ 360,111 $ (33,789) (9.4) % 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 19 Table of Contents 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, 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. See Item 1 for the complete consolidated statements of cash flows for these periods. (in 000s) Nine months ended March 31, 2025 2024 Net cash provided by (used in): Operating activities $ 429,322 $ 420,264 Investing activities (110,890) (99,643) Financing activities (595,506) (520,503) Effects of exchange rates on cash (8,429) (2,739) Net decrease in cash and cash equivalents, including restricted balances $ (285,503) $ (202,621) 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. 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. 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 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 $147.1 million and $135.1 million for the nine months ended March 31, 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. 20 Q3 FY2025 Form 10-Q| H&R Block, Inc. Table of Contents 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. In the prior year period, 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. Our current share repurchase program has remaining authorization of $1.1 billion 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. 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 $71.8 million and $53.8 million for the nine months ended March 31, 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. 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 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 Short-term Long-term Outlook Short-term Long-term Outlook Moody's P-3 Baa3 Stable P-3 Baa3 Stable 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, 2024 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. 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, 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 21 Table of Contents 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. 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, 2025 June 30, 2024 Current assets $ 74,093 $ 44,423 Noncurrent assets 1,789,807 1,778,832 Current liabilities 432,944 77,848 Noncurrent liabilities 1,148,515 1,492,211 SUMMARIZED STATEMENTS OF OPERATIONS - GUARANTOR AND ISSUER (in 000s) Nine months ended March 31, 2025 Twelve months ended June 30, 2024 Total revenues $ 104,642 $ 144,206 Income from continuing operations before income taxes 45,242 75,819 Net income from continuing operations 34,837 57,441 Net income 32,129 54,795 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. REGULATORY ENVIRONMENT There have been no material changes in our regulatory environment from what was reported in our June 30, 2024 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 22 Q3 FY2025 Form 10-Q| H&R Block, Inc. Table of Contents 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: (in 000s) 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 Discontinued operations, net 598 849 2,707 2,097 Net income from continuing operations - as reported 722,928 691,586 309,041 339,597 Add back: Income taxes 235,253 215,772 104,580 72,527 Interest expense 24,686 26,070 62,285 63,304 Depreciation and amortization 29,221 30,672 87,247 91,004 289,160 272,514 254,112 226,835 EBITDA from continuing operations $ 1,012,088 $ 964,100 $ 563,153 $ 566,432 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 Adjustments: Amortization of intangibles related to acquisitions (pretax) 11,278 12,869 33,316 37,693 Tax effect of adjustments (1) (2,927) (2,793) (8,111) (8,815) Adjusted net income from continuing operations $ 731,279 $ 701,622 $ 334,246 $ 368,475 Diluted earnings per share from continuing operations - as reported $ 5.32 $ 4.87 $ 2.23 $ 2.34 Adjustments, net of tax 0.06 0.07 0.18 0.20 Adjusted diluted earnings per share from continuing operations $ 5.38 $ 4.94 $ 2.41 $ 2.54 (1) Tax effect of adjustments is the difference between the tax provision calculated on a GAAP basis and on an adjusted non-GAAP basis. 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, H&R Block, Inc. |Q3 FY2025 Form 10-Q 23 Table of Contents 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. 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, 2024 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. 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, 2024 Annual Report on Form 10-K.