What changed in this filing

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Item 1. Business

2024-08-15 compared with 2023-08-17 · 67 added, 72 removed, 129 unchanged (52% of the section changed)

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We blend digital innovation with human expertise and care to help people get the best outcome at tax time and also be better with money by using our mobile banking app, Spruce℠.

Through Block Advisors and Wave, we help small-business owners thrive with year-round bookkeeping, payroll, advisory and payment processing solutions.

H&R Block, Inc.

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11.4 million U.S.

tax returns (1)

assisted tax returns (1)

and our clients filed

3.8 million DIY online paid tax returns (1)

which contributed to our consolidated revenues of

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$0.12, or 10.3%, per share from the prior year.

Tax returns prepared includes tax returns prepared in U.S.

company and franchise office locations, virtually,

and through our DIY solutions.

assisted tax returns prepared includes tax returns prepared in U.S.

company-owned and franchise operations, including virtual returns.

An assisted tax return is defined as a current or prior year individual or business tax return that has been accepted by the client.

A DIY online paid return is defined as a current year individual or business tax return that has been accepted by the client.

(2) See " Non-GAAP Financial Information " in Item 7 for a reconciliation of non-GAAP measures.

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FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

We report a single segment that includes all of our continuing operations, which includes tax preparation, small business services, and financial services and products.

See discussion below.

During fiscal year 2021, we introduced Block Horizons, our five year strategy that will leverage our human expertise and technological infrastructure to deliver growth by driving tax solution innovation, helping small businesses to thrive, and support individuals where they need the most help with money.

Small Business

During fiscal year 2023 small business assisted tax improved client satisfaction metrics, and continued to focus on helping small business clients beyond tax.

We launched an entity formation tool to allow small business customers to take advantage of benefits that may come from incorporating, and while early, our bookkeeping and payroll services are gaining traction.

Wave is our one-stop money management platform for small business owners.

Our top two priorities at Wave are accelerating revenue growth and driving long term profitability.

Financial Products

In January 2023, we introduced Spruce SM , our mobile banking platform, to our assisted clients for the first time.

Since the launch of Spruce SM through June 30, 2023, we have had 300 thousand signups and $334 million dollars in customer deposits.

Spruce SM is committed to helping clients be better with money, and we are seeing progress towards that goal.

During the year, we launched new features enabling clients to easily set up direct deposit within the app with just a few clicks and build healthy spending habits.

Thousands of clients have engaged with the tools within the app, and feedback indicates that features give them the visibility and control they have been missing in their financial lives.

From here, we are working to improve how we acquire clients both in and out of the tax season.

Block Experience

Block Experience is all about blending technology and digital tools with human expertise and care to serve clients however they want to be served:

fully virtual to fully in person and everything in between.

We have been successful in driving digital adoption by leveraging the MyBlock app features such as uploading documents, approving returns online, and utilizing virtual chat.

This year, more than 30% of assisted clients used a virtual tool during their tax preparation experience within our company-owned offices.

We provide assisted and do-it-yourself (DIY) tax return 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 also offer small business financial solutions through our company-owned and franchise offices and online through Wave.

Major revenue sources include fees earned for tax preparation via our assisted and DIY channels, royalties from franchisees, and fees from related services and products.

H&R Block, Inc.

| 2023 Form 10-K

We 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 services and products, 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 company-owned or franchise offices, 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.

TAX PREPARATION SERVICES

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These tax professionals provide assistance to our clients either in person or virtually in a number of ways.

Clients can come into an office, digitally "drop off" their documents for their tax professional, approve their return online, have a tax professional review a return they prepared themselves through Tax Pro Review or get their questions answered as they complete their own return through Online Assist.

Clients can come into an office, digitally "drop off" their documents for their tax professional, approve their return online, or have a tax professional review a return they prepared themselves through Tax Pro Review ® .

Our online software may be accessed through our website at www.hrblock.com or in a mobile application, while our desktop software may be purchased online and through third-party retail stores.

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 tax return.

Our generative AI powered technology, AI Tax Assist, and human help was offered to clients who prepared a paid DIY online return in the current year at no additional charge.

Assisted tax returns are covered by our 100% accu racy guarantee, whereby we will reimburse a client for penalties and interest attributable to an H&R Block error on a tax 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 the client would otherwise not have been required to pay.

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In the U.S., our franchisees pay us approximately 30% of gross tax return preparation and related service revenues as a franchise royalty.

H&R Block, Inc.

| 2024 Form 10-K

OTHER OFFERINGS

During fiscal year 2024, we also offered U.S.

clients a number of additional services, including Refund Transfers (RT), our Peace of Mind® Extended Service Plan (POM), H&R Block Emerald Prepaid Mastercard® (Emerald Card ® ), H&R Block Emerald Advance® Lines of Credit (EA), Tax Identity Shield® (TIS), Refund Advances (RA), and small business financial solutions.

For our Canadian clients, we also offer POM, H&R Block's Instant Refund SM , H&R Block Pay With Refund®, and small business financial solutions.

clients a number of additional services, including Refund Transfers (RT), our Peace of Mind® Extended Service Plan (POM), H&R Block Emerald Prepaid Mastercard® (Emerald Card ® ), Spruce SM , H&R Block Emerald Advance® (EA) term loans, Tax Identity Shield® (TIS), Refund Advances (RA), and small business financial solutions.

For our Canadian clients, we also offer POM, H&R Block's Instant Refund ® , H&R Block Pay With Refund®, and small business financial solutions.

Refund Transfers.

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clients and $3,000 CAD for Canadian clients with respect to the federal, state/provincial and local tax returns we prepared for applicable clients during the taxable year protected by POM.

H&R Block Emerald Prepaid Mastercard®.

The Emerald Card ® enables clients to receive their tax refunds from the IRS directly on a prepaid debit card, or to direct RT, EA or RA proceeds to the card.

The card can be used for everyday purchases, bill payments and ATM withdrawals anywhere Debit Mastercard ® (Mastercard is a registered trademark of Mastercard International Incorporated) is accepted.

Additional funds can be added to the card year-round, such as through direct deposit or at participating retail reload providers, and the Emerald Card ® can be added to clients' mobile wallets.

We distribute the Emerald Card ® issued by our bank partner.

H&R Block Emerald Advance® Lines of Credit.

EAs are lines of credit offered to clients in our offices, from mid-November through mid-January, in amounts up to $1,000.

If the borrower meets certain criteria as agreed in the loan terms, the line of credit can be utilized year-round.

In addition to the required monthly payments, borrowers

2023 Form 10-K | H&R Block, Inc.

may elect to pay down balances on EAs with their tax refunds.

These lines of credit are offered by our bank partner, and we subsequently purchase a participation interest in all EAs originated by our bank partner.

H&R Block Emerald Prepaid Mastercard® and Spruce SM .

The Emerald Card ® and Spruce SM debit card can be used for everyday purchases, bill payments and ATM withdrawals anywhere Debit Mastercard ® (Mastercard is a registered trademark of Mastercard International Incorporated) is accepted.

Clients can receive their tax refunds and direct RT, EA or RA proceeds directly onto an Emerald Card ® or into their Spruce SM account.

Additional funds can be added to the Emerald Card ® and to Spruce SM year-round, such as through direct deposit or at participating retail reload providers.

The Emerald Card® and Spruce SM debit card can be added to clients' mobile wallets.

We distribute the Emerald Card ® and the Spruce SM debit card issued by our bank partner.

H&R Block Emerald Advance® Term Loans.

EA term loans are offered by our bank partner to clients in our offices, 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, and there are no annual fees or required monthly payments.

Tax Identity Shield®.

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In tax season 2024, RAs were offered in amounts of $250, $500, $750, $1,250 and $3,500, based on client eligibility as determined by our bank partner.

H&R Block's Instant Refund SM .

H&R Block's Instant Refund®.

Our Canadian operations advance refunds due to certain clients from the Canada Revenue Agency (CRA), for a fee.

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Small Business Financial Solutions.

Our Block Advisors certified tax professionals provide small businesses with financial expertise in taxes, bookkeeping and payroll through our office network.

Our Block Advisors small business certified tax professionals provide small businesses with financial expertise in taxes, bookkeeping and payroll through our office network (including in-person, online and virtual).

Wave provides small business owners with an online solution to manage their finances, including payment processing, payroll and bookkeeping services.

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

SEASONALITY OF BUSINESS

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COMPETITIVE CONDITIONS

We provide assisted and DIY tax preparation services and products, as well as small business financial solutions, and face substantial competition in and across each category from tax return preparation firms and software providers, accounting firms, independent tax preparers, and certified public accountants.

We provide assisted and DIY tax preparation services and products, as well as small business financial solutions, and face substantial competition in and across each category, including from tax return preparation firms, software providers, accounting firms, independent tax preparers, certified public accountants and governmental organizations, including the IRS, state and foreign tax authorities.

We are one of the largest providers of tax return preparation solutions and electronic filing services in the U.S., Canada, and Australia with 23.8 million returns filed by or through H&R Block in fiscal year 2024.

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Fulfilling our Purpose extends to helping and inspiring confidence in our associates.

We are committed to our associates’ total well-being—physical, mental, financial, career, team and community.

We remain committed to our associates’ total well-being — physical, mental, financial, career, team, and community.

Together, when we balance these components, we achieve personal, team, and organizational strength.

These commitments extend to both our year-round and seasonal associates.

We had approxima tely 4,200 regular full-time associates as of June 30, 2024.

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The highest number of persons we employed during the fiscal year ended June 30, 2024, including seasonal associates, was approximately 70,900.

H&R Block, Inc.

| 2023 Form 10-K

Associate Engagement.

We administer an annual survey to all associates to better understand their levels of engagement and identify areas where we can improve.

In previous years, we compared our scores against a global benchmark, which is the average of thousands of companies.

This year we aspirationally changed our benchmark from the global benchmark to the top 25th percentile of the global benchmark to challenge our associates and leaders and to yield reports that are easier for leaders to identify opportunities to take action.

Across the company, over half of culture and engagement questions measured were at or above the top 25th percentile of the global benchmark.

We are pleased with our overall employee satisfaction score which continues on an upward trend.

This year, individual leaders at all levels have begun formally creating and monitoring culture and engagement-related goals to continue our upward trajectory.

We compare our scores to the top 25th percentile of the global benchmark to challenge our associates and leaders and to yield reports that are easier for leaders to identify opportunities to take action.

Across the company, over 40% of culture and engagement questions measured were at or above the top 25th percentile of the global benchmark.

We are pleased with our overall employee satisfaction score which currently meets the Top 25 benchmark.

Individual leaders at all levels create and monitor culture and engagement-related goals.

Compensation and Benefits.

Our compensation programs are designed to attract and retain top talent that act boldly, demand high standards, crave tough problems and value winning as a team.

Our total rewards programs are designed to attract and retain top talent by supporting what associates need to be their authentic selves.

Our equitable and comprehensive benefits offerings provide access to benefits to help both regular and seasonal associates plan for the health and security of their families.

H&R Block provides comprehensive medical insurance to our associates, and extends the opportunity for medical insurance to our seasonal workforce who satisfy the eligibility guidelines of the Affordable Care Act.

H&R Block offers comprehensive mental and behavioral health support through robust well-being programs, ensuring regular associates and their families have access to therapists, coaching, and holistic mental health services.

To thank our associates for their resiliency and hard work, each year H&R Block takes an “Annual Reboot” – a paid week of time off offered during the first week of July – as an important time for our associates to disconnect, recharge, and reboot.

H&R Block also provides comprehensive medical insurance to our associates and extends the opportunity for medical insurance to our seasonal workforce who satisfy the eligibility guidelines of the Affordable Care Act.

Subject to meeting eligibility requirements, associates can also choose to participate in the H&R Block Retirement Savings Plan 401(k) and Employee Stock Purchase Plan.

Collectively, these programs promote and support the physical, mental, financial, and community well-being of our associates.

H&R Block, Inc.

| 2024 Form 10-K

Training and Development.

We offer a variety of development opportunities for our associates, including in-person classes, online courses, assessments, and a learning library.

Our tax professionals receive extensive annual tax training on topics including recent tax code changes and filing practices, and we offer additional education opportunities for tax professionals to enhance their knowledge and skills.

Our people are the number one enabler for living our Purpose, and we recognize the importance of attracting, developing, and retaining top talent.

Our goal is to provide continuous development opportunities to our associates in order to help them grow both personally and professionally.

We do this through a robust offering of programs, educational courses, and learning journeys offered virtually and in person.

Our expertise is delivered each year through our tax professional network.

H&R Block tax professionals receive extensive annual tax training on topics including recent tax code changes and filing practices, and we offer additional education opportunities for tax professionals to enhance their knowledge and skills.

In preparation for the upcoming tax season, our tax professionals receive training on H&R Block products, soft skills, and tax office best practices.

Diversity, Inclusion and Belonging.

We continually evaluate our management approaches to improving diversity and inclusion, which includes looking at how we can provide a sense of belonging in the workplace for our associates.

We believe taking care of our associates significantly increases their job satisfaction and is instrumental to the company’s ongoing success.

We materialized these efforts through our Belonging@Block program which is a council of associates from multiple departments across the organization with the responsibility to represent and improve our diverse and inclusive culture.

We have continued to grow our membership in diversity and inclusion groups focusing on LGBTQ+, neurodiversity, young professionals, veterans, women, and Black associates.

We have also extended our diversity and inclusion efforts to support supplier diversity, enhancement of our Racial Equity Action Plan, and the development of a program that supports technology talent diversity.

We also remain committed to building a Connected Culture—one in which trust, care, and connections are how we work together as we continue to create an environment where everyone feels safe to bring their authentic self to work every day and feels like they belong as part of a larger team.

Our people are the number one enabler for living our Purpose and we value our associates by offering various talent development opportunities, tax training and support, and regularly assessing compensation policies and data to ensure pay equity.

To thank our associates and protect against heightened stress, burnout, and uncertainty, we have implemented ‘The Annual Reboot,’ a paid week of time off offered during the first week of July to disconnect and recharge.

Because of our efforts to foster a culture of belonging, we are consistently recognized as a top employer in many different categories.

These resources ultimately enable us to continue enhancing our services and better our client experience.

At H&R Block, we foster a culture of belonging, where every voice is heard and our associates feel safe, included, and inspired.

We are committed to a fair and respectful workplace culture, free of discrimination;

and we work to foster a Connected Culture that ensures all associates have a strong sense of belonging across the organization.

Connected Culture is a relationship centered principle at H&R Block that puts associates and clients at the heart of our strategic focus.

It creates an environment of clear accountability, partnership, and trust – all focused on common goals, allowing for accelerated business and personal progress.

Relationships are at the heart of how we work with each other, our customers, and in our communities.

In the workplace we are committed to creating an environment where everyone feels they belong, and we believe that our commitment to diversity and inclusion makes us a stronger, more successful company.

We continually reflect on our management approaches to improve the workplace, including discussions with our Board of Directors, to review how we can provide a sense of belonging within the company for our associates - what we call Belonging@Block.

One of the many ways we work to foster a Connected Culture across the organization for all associates to connect, support, motivate, and inspire is through our associate-led Belonging Groups focusing on LGBTQ+, neurodiversity, young professionals, veterans, women, Black, and Hispanic/Latino/a/x associates.

SERVICE MARKS AND TRADEMARKS

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

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

INFORMATION ABOUT OUR EXECUTIVE OFFICERS (as of June 30, 2024)

Jones II , 56, became our President and Chief Executive Officer in October 2017 and was our President and Chief Executive Officer-Designate from August 2017 to October 2017.

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Tax Services Finance from May 2013 through April 2016.

He will be retiring effective September 13, 2024.

Logerwell , 54, became our Chief Accounting Officer in July 2016.

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She also held various legal roles of increasing responsibility with The Coca-Cola Company from September 2001 until December 2018.

Campbell , 51, became our President, Global Consumer Tax and Chief Product Officer in June 2024.

Prior to that, he served as the Chief Executive Officer of TaxAct where he ran TaxAct from 2018 until it was sold by Blucora, Inc.

He continued to lead TaxAct after the sale until 2023.

Prior to TaxAct, Mr.

Campbell served Capital One Financial Corporation as Managing Vice President of Consumer Auto from 2017 to 2018.

He also served in Vice President roles at Intuit Inc, leading Product Management and Strategy from 2014 to 2017.

AVAILABILITY OF REPORTS AND OTHER INFORMATION

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

What changed 10-K

Item 1. Business