What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-08-15 compared with 2024-08-15 · 130 added, 85 removed, 829 unchanged (21% of the section changed)

16 unchanged sentences

/s/ Jeffrey J.

Jones II /s/ Tony G.

Jones II Tony G.

Jones II /s/ Tiffany L.

Jones II Tiffany L.

President and Chief Executive Officer Chief Financial Officer

25 unchanged sentences

Accordingly, management must determine the appropriate allocation of income to each of these jurisdictions based on transfer pricing analyses of comparable companies and predictions of future economic conditions.

H&R Block, Inc.

| 2025 Form 10-K

Transfer pricing terms and conditions may be scrutinized by local tax authorities during an audit and any resulting changes may impact the mix of earnings in countries with differing statutory tax rates.

1 unchanged sentence

For each position, management considers all applicable information including relevant tax laws, the taxing authorities’ potential position, management’s tax return position, and the possible settlement outcomes to determine the amount of liability to record.

H&R Block, Inc.

| 2024 Form 10-K

of the tax law in applying the arm’s length standard to intercompany transactions and scrutiny by local tax authorities.

We identified the Company’s determination of uncertain tax positions measured in accordance with the Company’s transfer pricing policies as a critical audit matter because of the significant judgment in the application of the tax law in applying the arm’s-length standard to intercompany transactions and scrutiny by local tax authorities.

The significant level of judgment increases the uncertainty in evaluating the valuation of tax balances, including any uncertain tax positions that relate to the Company’s transfer pricing.

17 unchanged sentences

The estimated fair value of the Wave reporting unit exceeded its carrying value as of the measurement date and, therefore, no impairment was recognized.

2025 Form 10-K | H&R Block, Inc.

We identified the Company's goodwill impairment assessment for the Wave reporting unit as of the measurement date as a critical audit matter because of the significant judgments made by management to estimate the fair value of Wave.

1 unchanged sentence

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the forecasts of future revenues and operating margins ("forecasts") and selection of market multiples of comparable publicly traded companies and the discount rate for the Wave reporting unit included the following, among others:

2024 Form 10-K | H&R Block, Inc.

Our audit procedures related to the forecasts of future revenues and operating margins ("forecasts"), selection of market multiples of comparable publicly traded companies, and the discount rate for the Wave reporting unit included the following, among others:

• We tested the effectiveness of the control over management’s evaluation and determination of estimates and assumptions related to the forecast of future revenues and operating margins and selection of market multiples of comparable publicly traded companies and the discount rate.

1 unchanged sentence

• We evaluated the reasonableness of management’s revenue and operating margin forecasts by comparing the forecasts to (1) the Company's historical revenue growth and operating margin rates, (2) internal communications to management and the Board of Directors, (3) forecasted information included in industry reports, applicable market data, and guideline public company information, and (4) underlying analyses detailing business strategies and growth plans.

• With the assistance of our fair value specialists, we evaluated the discount rate, including testing the mathematical accuracy of the calculations, developing a range of independent estimates, and comparing those to the discount rate selected by management.

• With the assistance of our fair value specialists, we evaluated the market multiples, including comparing the reporting unit’s growth and profitability to the guideline public companies, testing the underlying source information and mathematical accuracy of the calculations, and comparing the multiples selected by management to the guideline companies.

• We tested the source information underlying the determination of the discount rate.

• With the assistance of our fair value specialists, we performed the following:

◦ Evaluated the valuation methodologies

◦ Tested the mathematical accuracy of the discount rate calculations

◦ Evaluated the market multiples, including comparing the reporting unit’s growth and profitability to the guideline public companies, testing the underlying source information and mathematical accuracy of the calculations, and comparing the multiples selected by management to the guideline companies.

/s/ Deloitte & Touche LLP

60 unchanged sentences

Change in foreign currency translation adjustments 1,090 ( 11,746 ) ( 15,454 )

Other comprehensive loss ( 11,746 ) ( 15,454 ) ( 21,733 )

Other comprehensive income (loss) 1,090 ( 11,746 ) ( 15,454 )

Comprehensive income $ 606,863 $ 583,571 $ 538,246

23 unchanged sentences

Accrued income taxes and reserves for uncertain tax positions 296,244 318,830

Current portion of long-term debt 349,893 —

Operating lease liabilities 209,203 206,070

11 unchanged sentences

Accumulated other comprehensive loss ( 47,755 ) ( 48,845 )

Retained earnings (deficit) 12,654 ( 48,677 )

Retained earnings 12,061 12,654

Less treasury shares, at cost, of 30,420,033 and 31,324,609

31 unchanged sentences

Proceeds from line of credit borrowings 1,950,000 1,025,000 970,000

Repayments of long-term debt — — ( 500,000 )

Dividends paid ( 197,330 ) ( 179,775 ) ( 177,925 )

7 unchanged sentences

SUPPLEMENTARY CASH FLOW DATA:

Income taxes paid (received), net $ 131,173 $ ( 45,539 ) $ 31,689

Income taxes paid (received), net (includes payments for purchased investment tax credits) $ 226,820 $ 131,173 $ ( 45,539 )

Interest paid on borrowings 74,639 75,694 69,554

34 unchanged sentences

Net income — — — — 605,773 — — 605,773

Other comprehensive loss — — — ( 11,746 ) — — — ( 11,746 )

Other comprehensive income — — — 1,090 — — — 1,090

Stock-based compensation — — 31,132 — — — — 31,132

19 unchanged sentences

Intercompany transactions and balances have been eliminated.

DISCONTINUED OPERATIONS – Our discontinued operations include the results of operations of Sand Canyon Corporation, previously known as Option One Mortgage Corporation (including its subsidiaries, collectively, SCC), which exited its mortgage business in fiscal year 2008.

DISCONTINUED OPERATIONS – Our discontinued operations include the results of operations of Sand Canyon Corporation, previously known as Option One Mortgage Corporation, which exited its mortgage business in fiscal year 2008.

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

116 unchanged sentences

Improvements to Reportable Segment Disclosures,” which requires companies to disclose significant segment expenses that are regularly provided to the chief operating decision maker.

ASU 2023-07 will be effective for annual periods beginning in fiscal year 2025 and interim periods beginning in fiscal year 2026.

ASU 2023-07 must be applied retrospectively to all prior periods presented in the financial statements.

We adopted ASU 2023-07 during the year ended June 30, 2025, and retrospectively applied to all periods presented.

The requirements of this ASU are disclosure-related and did not have an impact on our statement of operations or balance sheet.

See note 13 .

In December 2023, the FASB issued Accounting Standards Update No.

2023-09 (ASU 2023-09), “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures,” which requires companies to consistently categorize and disclose more detailed information about the income tax rate reconciliation and income taxes paid.

The new disclosures include specific categories in the rate reconciliation, income taxes paid by federal, state, and foreign jurisdiction, and disaggregated pretax income and income tax expense between domestic and foreign jurisdictions.

ASU 2023-09 will be effective for annual periods beginning in fiscal year 2026 and will be applied on a prospective basis with the option to apply the standard retrospectively.

2025 Form 10-K | H&R Block, Inc.

75 unchanged sentences

Franchisee loan balances consist of term loans made primarily to finance the purchase of franchises and short-term lines of credit primarily for the purpose of funding seasonal working capital needs.

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

Loans with a principal balance more than 90 days past due or on non-accrual status were $3.1 million and $1.1 million as of June 30, 2025 and June 30, 2024, respectively.

The credit quality of these receivables is assessed at origination at an individual franchisee level.

26 unchanged sentences

H&R Block Emerald Advance® .

Historically, Emerald Advance® lines of credit have been offered to clients in our offices from mid-November through mid-January.

If the borrower met certain criteria as agreed in the loan terms, the line of credit could be utilized year-round (Revolving Loan).

In fiscal year 2024, EAs were offered as term loans, and we discontinued EA lines of credit, including the Revolving Loans.

EA lines of credit required an annual paydown on February 15, and any amounts unpaid were placed on non-accrual status as of March 1.

EA term loans are offered by our bank partner to clients, in November and December, in amounts of $350 to $1,300.

EA term loans are interest bearing with principal and interest due in full on March 31, late fees assessed as of April 14, and any amounts unpaid are placed on non-accrual status as of April 30.

EA term loans are offered by our bank partner.

We purchase participation interests in their loans, as discussed further in note 10 .

3 unchanged sentences

We establish an allowance for credit losses at an amount that we believe reflects the receivable at net realizable value.

Typically, in December of each year, we charge-off the receivables and the related allowance for EA lines of credit, excluding Revolving Loans, to an amount we believe represents the net realizable value.

However, due to the discontinuation of EA lines of credit, we charged-off the receivables and the related allowance of EA lines of credit and Revolving Loans during the quarter ended September 30, 2023 to an amount that we believe represents net realizable value.

H&R Block, Inc.

| 2024 Form 10-K

In December of each year, we charge-off the receivables and the related allowance for EA term loans 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 fiscal year of origination as of June 30, 2025, are as follows:

1 unchanged sentence

2025 $ 33,723 $ 33,723

2023 and prior – Lines of credit and Revolving Loans 7,916 7,916

2024 and prior 22,655 22,655

56,378 $ 56,378

1 unchanged sentence

Net balance $ 36,715

H&R Block, Inc.

| 2025 Form 10-K

Allowance for Credit Losses.

11 unchanged sentences

Balances as of June 30, 2025 $ 19,663 $ 45,156 $ 64,819

Gross charge-offs of EAs were $27.7 million for the year ended June 30, 2024, of which $15.4 million related to EA lines of credit originated in fiscal year 2023 and $12.3 million related to Revolving Loans.

For the year ended June 30, 2025, there were $33.5 million of gross charge-offs related to EAs which were originated in fiscal year 2024.

PROPERTY AND EQUIPMENT

9 unchanged sentences

The carrying value of long-lived assets held outside the U.S., which is comprised of property and equipment, totaled $ 20.9 million and $ 20.0 million as of June 30, 2025 and 2024 respectively.

2024 Form 10-K | H&R Block, Inc.

GOODWILL AND INTANGIBLE ASSETS

13 unchanged sentences

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

2025 Form 10-K | H&R Block, Inc.

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.

15 unchanged sentences

Noncompete agreements 21,977 ( 19,494 ) 2,483

Franchise agreements 19,201 ( 18,668 ) 533

Purchased technology 70,100 ( 51,432 ) 18,668

3 unchanged sentences

Estimated amortization of intangible assets for fiscal years 2026 , 2027, 2028, 2029 and 2030 is $ 42.0 million, $ 35.3 million, $ 27.0 million, $ 18.4 million and $ 8.8 million, respectively.

H&R Block, Inc.

| 2024 Form 10-K

We made payments to acquire businesses totaling $ 35.5 million, $ 43.4 million and $ 48.2 million during the fiscal years ended June 30, 2025, 2024 and 2023, respectively.

The amounts and weighted-average lives of assets acquired during fiscal year 2024 are as follows:

The amounts and weighted-average lives of assets acquired during fiscal year 2025, including amounts capitalized related to internally-developed software, are as follows:

(dollars in 000s)

2 unchanged sentences

Reacquired franchise rights 11,738 6

Internally-developed software 2,305 3

Noncompete agreements 1,259 5

Total $ 43,014 5

H&R Block, Inc.

| 2025 Form 10-K

LONG-TERM DEBT

16 unchanged sentences

We may request increases in the aggregate principal amount of the revolving credit facility of up to $ 500.0 million, subject to obtaining commitments from lenders and meeting certain other conditions.

The CLOC will mature on June 11, 2026, unless extended pursuant to the terms of the CLOC, at which time all outstanding amounts thereunder will be due and payable.

Our CLOC includes an annual facility fee, which will vary depending on our then current credit ratings.

Our CLOC includes an annual facility fee, which will vary depending on our then current credit ratings and was scheduled to expire on June 11, 2026.

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

Other material terms remain substantially unchanged from our existing CLOC.

The CLOC is subject to various conditions, triggers, events or occurrences that could result in earlier termination and contains customary representations, warranties, covenants and events of default, including, without limitation:

7 unchanged sentences

OTHER INFORMATION – The aggregate payments required to retire long-term debt are $ 350.0 million in fiscal year 2026, $ 500.0 million in fiscal year 2029 and $ 650.0 million in fiscal year 2031.

2024 Form 10-K | H&R Block, Inc.

STOCK-BASED COMPENSATION

1 unchanged sentence

Stock-based compensation expense and related tax items are as follows:

2025 Form 10-K | H&R Block, Inc.

Year ended June 30, 2025 2024 2023

29 unchanged sentences

This cost is expected to be recognized over a weighted-average period of two years .

H&R Block, Inc.

| 2024 Form 10-K

When valuing our performance-based share units on the grant date, we typically estimate the expected volatility using historical volatility for H&R Block, Inc.

5 unchanged sentences

The following assumptions were used to value performance-based share units using the Monte Carlo valuation model during the periods:

H&R Block, Inc.

| 2025 Form 10-K

Year ended June 30, 2025 2024 2023

1 unchanged sentence

10.17% - 157.11%

24.80 % - 163.58 %

Expected term 3 years 3 years 3 years

8 unchanged sentences

On November 7, 2022, the IRS commenced their examination of our 2020 tax return and related carryback claims to tax years 2015 through 2018.

federal income tax returns for tax years 2014 and prior are closed.

federal income tax returns for tax years 2021, 2019, and 2014 and prior are closed.

Although the outcome of tax audits is always uncertain, we believe that adequate amounts of tax, interest, and penalties have been provided for in the accompanying consolidated financial statements for any adjustments that might be incurred due to federal, state, local or foreign audits.

38 unchanged sentences

| 2025 Form 10-K

We account for income taxes under the asset and liability method, which requires us to record deferred income tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying value of existing assets and liabilities and their respective tax basis.

In the United States, on July 4, 2025, H.R.

1 was signed into law.

Among other provisions, the legislation reinstates immediate expensing for domestic research and experimental expenditures, extends 100% bonus depreciation for qualified property placed in service beginning January 20, 2025, and makes certain other provisions of the Tax Cuts and Jobs Act permanent.

We are evaluating the impacts of this legislation and will reflect its impact in our financial statements in fiscal year 2026.

At this time, we are unable to reasonably estimate the financial impact of these changes.

We account for income taxes under the asset and liability method, which requires us to record deferred income tax assets and liabilities for future tax conseq uences attributable to differences between the financial statement carrying value of existing assets and liabilities and their respective tax basis.

Deferred taxes are determined separately for each tax-paying component within each tax jurisdiction based on provisions of enacted tax law.

5 unchanged sentences

Deferred tax assets:

Accrued expenses $ 3,796 $ 2,540

Deferred revenue 33,435 50,944

4 unchanged sentences

Federal tax benefits related to state unrecognized tax benefits 31,061 26,841

Property and equipment 2,260 —

Internally developed software 84,301 15,063

Intangibles - intellectual property 61,138 71,367

Other 22,121 6,056

Valuation allowance ( 18,538 ) ( 16,569 )

3 unchanged sentences

Lease right of use assets ( 128,204 ) ( 115,128 )

Property and equipment — ( 1,421 )

Income tax method change — ( 1,018 )

Intangibles ( 43,879 ) ( 51,398 )

13 unchanged sentences

Balance, end of the year $ 18,538 $ 16,569 $ 57,566

Our valuation allowance on deferred tax assets has a net decrease of $ 41.0 million during the current period.

The $ 4.6 million of additions charged to costs and expenses were due to net operating loss deferred tax assets generated by current year foreign and domestic losses that we do not expect to utilize in future years.

This increase is offset by a $ 45.6 million decrease for adjustments to certain foreign net operating losses utilized in the current fiscal year or for adjustments to net operating losses that are no longer available due to expiration.

Of the net $ 41.0 million decrease in valuation allowance, $ 21.6 million impacted the effective tax rate due to state and foreign net operating losses we were able to utilize in the current period or now expect to utilize in future periods.

The remaining $ 19.4 million decrease in valuation allowance was offset by decreases to net operating loss deferred tax assets and therefore did not impact the effective tax rate.

Certain of our subsidiaries file stand-alone returns in various state, local and foreign jurisdictions, and others join in filing consolidated or combined returns in such jurisdictions.

Our valuation allowance on deferred tax assets has a net increase of $ 2.0 million during the current period.

The $ 4.2 million of additions charged to costs is primarily related to foreign tax credits that we do not expect to utilize in future years.

The increase is offset by a $ 2.2 million decrease to our valuation allowance balance for adjustments related to certain domestic and foreign net operating losses utilized in the current fiscal year and changes in future projections of net operating loss utilization.

Certain of our subsidiaries file stand-alone returns in various sta te, local and foreign jurisdictions, and others join in filing consolidated or combined returns in such jurisdictions.

As of June 30, 2025, we had net operating losses of $ 38.9 million in various states and foreign jurisdictions.

20 unchanged sentences

For such matters where a change in the balance of unrecognized tax benefits is not yet deemed reasonably possible, no estimate has been included.

H&R Block, Inc.

| 2024 Form 10-K

Interest and penalties, if any, accrued on the unrecognized ta x benefits are reflected in income tax expense.

The total gross interest recorded to income tax expense for periods ending June 30, 2025, 2024 and 2023 totaled $ 1.4 million, $ 14.1 million and $ 10.1 million, respectively.

The total penalties, if any, recorded for the same periods were immaterial.

The total penalties, if any, recorded for the same periods

H&R Block, Inc.

| 2025 Form 10-K

were immaterial.

The total gross interest and penalties accrued as of June 30, 2025 and 2024 totaled $ 44.7 million and $ 42.0 million, respectively.

2 unchanged sentences

Assisted tax returns are covered by our 100% accuracy guarantee, whereby we will reimburse a client for penalties and interest attributable to an H&R Block error on a return.

DIY tax returns are covered by our 100% accuracy guarantee, whereby we will reimburse a client up to a maximum of $ 10,000 , if our software makes an arithmetic error that results in payment of penalties and/or interest to the respective taxing authority that a client would otherwise not have been required to pay.

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 $ 11.4 million and $ 14.1 million as of June 30, 2025 and 2024, respectively.

1 unchanged sentence

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 $ 29.6 million and $ 26.9 million as of June 30, 2025 and 2024, respectively, with amounts recorded in deferred revenue and other liabilities.

These liabilities will be settled within the nine years.

These liabilities will be settled within the next ten years.

Should actual results differ from our estimates, future payments made will differ from the above estimate and any differences will be recorded in results from continuing operations.

We have contractual commitments to fund certain franchises with approved short-term lines of credit for the purpose of meeting their seasonal working capital needs.

Our total oblig ation under these lines of credit was $ 0.4 million as of June 30, 2024, and net of amounts drawn and outstanding, our remaining commitment to fund totaled $ 0.2 million.

In March 2020, the U.S.

government enacted the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to provide economic and other relief as a result of the COVID-19 pandemic.

The CARES Act includes, among other items, provisions relating to refundable employee retention payroll tax credits.

Due to the complex nature of the employee retention credit computations, we deferred benefits related to these credits until both the receipt of the benefit and the resolution of the uncertainties, including, but not limited to, the completion of any potential audit or examination, or the ex piration of the related statute of limitations.

As of June 30, 2023, we had deferred $ 15.4 million relat ed to these credits which were recorded in deferred revenue and other current liabilities.

D ue to the expiration of the statute of limitations, w e recognized the deferred credits during fiscal year 2024 as an offset to related operating expenses.

Our total obligation under these lines of credit was $ 0.4 million as of June 30, 2025, and net of amounts drawn and outstanding, our remaining commitment to fund totaled $ 0.2 million.

We are self-insured for certain risks, including employer provide d medical benefits, workers' compensation, property, general liability, tax errors and omissions, and claims related to POM.

3 unchanged sentences

Included in deferred revenue and other liabilities is $ 9.0 million and $10.1 million as of June 30, 2025 and 2024, respectively, reflecting our obligation under this plan.

Effective October 20, 2023, we amended the Program Management Agreement and entered into a new participation agreement related to EA term loans originated by Pathward.

In fiscal year 2024, EAs were offered as term loans and we discontinued EA lines of credit.

We continue to purchase a 90 % participation interest in each loan made by Pathward in accordance with the participation agreement.

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

We purchase participation interests, at par, in all EAs originated by Pathward in accordance with our participation agreement.

Our participation interest varies by jurisdiction.

During fiscal year 2025, our purchased participation interests represented 87% of total EA volume originated by Pathward.

See note 4 for additional information about these balances.

2 unchanged sentences

We pay fees primarily based on loan size and customer type.

2024 Form 10-K | H&R Block, Inc.

We have provided a guarantee up to $18.0 million related to certain loans to clients prior to the IRS accepting electronic filing.

6 unchanged sentences

A loss on POM would be recognized if the sum of expected costs for services exceeded unearned revenue.

2025 Form 10-K | H&R Block, Inc.

O ur lease costs and other information related to operating leases consisted of the following:

16 unchanged sentences

LITIGATION AND OTHER RELATED CONTINGENCIES

We are a defendant in numerous litigation and arbitration matters, arising both in the ordinary course of business and otherwise, including as described below.

We are a respondent in numerous litigation and arbitration matters, arising both in the ordinary course of business and otherwise, including as described below.

The matters described below are not all of the lawsuits or arbitrations to which we are subject.

In some of the matters, very large or indeterminate amounts, including punitive damages, may be sought.

jurisdictions permit considerable variation in the assertion of monetary damages or other relief.

Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction.

In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters.

We believe that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value due to this variability in pleadings and our experience in handling and resolving numerous claims over an extended period of time.

H&R Block, Inc.

| 2024 Form 10-K

Various jurisdictions and arbitration forums permit considerable variation in the assertion of monetary damages or other relief.

The jurisdictions or forums 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 or forum.

In addition, the jurisdictions or forums may permit claimants to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction or forum for similar matters.

We believe that the monetary relief which may be specified in a lawsuit or arbitration matter bears little relevance to its merits or disposition value due to this variability in pleadings and our experience in handling and resolving numerous claims over an extended period of time.

The outcome of a matter and the amount or range of potential loss at particular points in time may be difficult to ascertain.

Among other things, uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness testimony, and how courts and arbitrators will apply the law.

Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will view the relevant evidence and applicable law.

Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will view the relevant evidence, circumstances, and applicable law.

In addition to litigation and arbitration matters, we are also subject to other loss contingencies arising out of our business activities, including as described below.

We accrue liabilities for litigation, arbitration, and other related loss contingencies and any related settlements when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated.

If a range of loss is estimated, and some amount within that range appears to be a better estimate than any other amount within that range, then that amount is accrued.

If a range of loss is estimated, and some amount within that range appears to be a better estimate than any other

H&R Block, Inc.

| 2025 Form 10-K

amount within that range, then that amount is accrued.

If no amount within the range can be identified as a better estimate than any other amount, we accrue the minimum amount in the range.

18 unchanged sentences

in addition, the amounts that may be required to be paid to discharge or settle the matters could be substantial and could have a material adverse impact on our business and our consolidated financial position, results of operations, and cash flows.

2024 Form 10-K | H&R Block, Inc.

On February 23, 2024, the Federal Trade Commission (FTC) filed an administrative complaint before the FTC alleging unfair or deceptive business acts or practices in connection with certain aspects of our DIY tax preparation services.

A hearing before an administrative law judge (ALJ) of the FTC is scheduled for October 23, 2024.

We filed a complaint in federal court in the Western District of Missouri challenging the constitutionality of the ALJ’s removal protections and seeking to enjoin the ALJ’s participation in the adjudication of the matter.

The federal court denied our motion for a preliminary injunction on August 1, 2024.

We filed an appeal with the Eighth Circuit Court of Appeals, which is pending.

We have also received and are responding to certain governmental inquiries and other matters relating to the IRS Free File Program and other aspects of our DIY tax preparation services, including the use of pixels.

We have received and are responding to certain governmental inquiries, class actions, and mass arbitrations relating to the IRS Free File Program and other aspects of our DIY tax preparation services, including the use of pixels.

An accrual related to these matters is included in our loss contingency accrual.

We are from time to time a party to litigation, arbitration, and other loss contingencies not discussed herein arising out of our business operations.

These matters may include actions by state attorneys general, other state regulators, federal regulators, individual plaintiffs, and cases in which plaintiffs seek to represent others who may be similarly situated.

These matters may include actions by state attorneys general, other state regulators, federal regulators, individual claimants, and cases in which claimants seek to represent others who may be similarly situated.

While we cannot provide assurance that we will ultimately prevail in each instance, we believe the amount, if any, we are required to pay to discharge or settle these other matters will not have a material adverse impact on our business and our consolidated financial position, results of operations, and cash flows.

2025 Form 10-K | H&R Block, Inc.

SEGMENT INFORMATION

We provide assisted and DIY tax preparation solutions through multiple channels (including in-person, online and mobile applications, virtual, and desktop software) and distribute H&R Block-branded services and products, including those of our bank partners, to the general public primarily in the U.S., Canada and Australia.

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

The majority of our revenues are from our U.S.

tax services business.

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.

Specifically, the CODM uses revenues, operating expenses, net income and EBITDA at a consolidated level, as key financial metrics in deciding how to reinvest to grow the business through our strategic imperatives of Block Experience, Financial Products and Small Business.

These financial metrics are used by the CODM to make operating decisions and identify growth opportunities.

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

H&R Block, Inc.

| 2025 Form 10-K

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 years ended June 30, 2025 , 2024 and 2023:

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

Year ended June 30, 2025 2024 2023

tax preparation and related services:

Assisted tax preparation $ 2,413,229 $ 2,274,835 $ 2,167,138

Royalties 192,877 204,802 210,631

DIY tax preparation 383,738 349,812 314,758

Refund Transfers 137,526 142,249 143,310

Peace of Mind® Extended Service Plan 87,326 93,087 95,181

Tax Identity Shield® 29,920 33,386 38,265

Emerald Card® and Spruce SM

72,888 76,093 84,651

Interest and fee income on Emerald Advance® 28,958 40,933 47,554

International 246,993 247,123 235,131

Wave 109,222 96,472 90,314

Other 58,318 51,555 45,252

Total revenues $ 3,760,995 $ 3,610,347 $ 3,472,185

Compensation and benefits:

Field wages 927,360 869,002 841,742

Other wages 306,999 298,819 273,850

Benefits and other compensation 250,729 228,723 220,530

1,485,088 1,396,544 1,336,122

Occupancy 438,868 432,461 428,167

Marketing and advertising 285,800 277,747 286,255

Depreciation and amortization 116,827 121,784 130,501

Bad debt 74,584 91,523 60,401

Other 531,858 485,011 482,041

Total operating expenses 2,933,025 2,805,070 2,723,487

Other income (expense), net 31,546 36,125 35,492

Interest expense on borrowings (78,113) (79,080) (72,978)

Income from continuing operations before income taxes 781,403 762,322 711,212

Income taxes 171,953 164,359 149,412

Segment net income from continuing operations $ 609,450 $ 597,963 $ 561,800

Reconciliation of segment profit:

Reconciling items:

Net loss from discontinued operations ( 3,677 ) (2,646) (8,100)

Net income $ 605,773 $ 595,317 $ 553,700

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

1 unchanged sentence

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-K

Item 8. Financial Statements and Supplementary Data