H&R Block — Fiscal 2027 First Quarter Earnings Summary

Financial Performance:

• Total revenue increased 10.2% year-over-year to $224.3 million for the quarter ended September 30, 2026, compared to $203.6 million in the prior year period.
• Revenue growth was driven by increases in international services, tax protection and identity services, small business services, and U.S. tax preparation revenues.
• Total operating expenses rose 11.1% year-over-year to $456.2 million from $410.6 million, primarily due to higher field compensation and benefits, increased general corporate expenses, and higher occupancy and equipment costs.
• Net loss from continuing operations increased 13.8% to $188.1 million, or $1.53 per share, compared to a net loss of $165.4 million, or $1.26 per share, in the prior year.
• Adjusted net loss from continuing operations increased 9.5% to $172.1 million, or $1.40 per share, compared to $157.2 million, or $1.20 per share, in the prior year.
• The company recognized $8.0 million in severance and related costs associated with a seasonal office leadership transition, excluded from adjusted results.
• Cash and cash equivalents decreased to $390.5 million as of September 30, 2026, from $958.7 million as of June 30, 2026.
• Long-term debt stood at $1,492.1 million as of September 30, 2026, compared to $1,491.5 million as of June 30, 2026.
• Net cash used in operating activities was $358.5 million for the quarter.

Guidance and Future Outlook:

• The company reaffirmed its fiscal 2027 outlook, expecting revenue between $4.11 billion and $4.16 billion.
• Adjusted EBITDA is expected to be between $1.11 billion and $1.14 billion.
• The effective tax rate is expected to be approximately 23%.
• Adjusted Diluted Earnings Per Share is expected to be between $6.04 and $6.24.

Business Segments and Product Lines:

• U.S. tax preparation revenue increased to $54.5 million from $51.9 million in the prior year.
• Small business services revenue increased to $34.9 million from $31.0 million in the prior year.
• International services revenue increased to $74.8 million from $66.5 million in the prior year.
• Tax protection and identity services revenue increased to $34.3 million from $29.2 million in the prior year.
• U.S. consumer tax preparation and software revenue totaled $33.7 million, up from $32.7 million in the prior year.
• U.S. small business tax preparation revenue totaled $21.3 million, up from $19.6 million in the prior year.

Other Key Points:

• The Board of Directors declared a quarterly cash dividend of $0.46 per share, payable on January 6, 2027, to shareholders of record as of December 3, 2026.
• The company repurchased and retired 2.2 million shares at an aggregate price of $100.3 million ($45.68 per share) during the first quarter.
• Approximately $500 million remains available under the $1.5 billion share repurchase program.
• Year-to-date, the company returned $156.9 million to shareholders through dividends and share repurchases.
• Since 2016, the company has returned more than $5.3 billion to shareholders and bought back over 49% of its shares outstanding.
• The business remains highly seasonal, with the first quarter historically contributing modestly to annual revenue and typically generating a net loss.