• H&R Block Reports Fiscal 2025 Second Quarter Results

    来源: Nasdaq GlobeNewswire / 04 2月 2025 16:05:01   America/New_York

    — Repurchased $190 Million of Shares—

    — Reaffirms Full Year Outlook —

    KANSAS CITY, Mo., Feb. 04, 2025 (GLOBE NEWSWIRE) -- H&R Block, Inc. (NYSE: HRB) (the "Company") today released financial results1 for its fiscal 2025 second quarter ended December 31, 2024.

    "I am pleased with our performance in the first half of the year," said Jeff Jones, president and chief executive officer. "We are reaffirming our fiscal 2025 outlook, and are well prepared to deliver this tax season and in the second half of the fiscal year."

    Fiscal 2025 Second Quarter Results and Key Financial Metrics
    "We are on track for the year and we are well positioned to deliver strong results," said Tiffany Mason, chief financial officer. "During the second quarter, we repurchased 3.2 million shares for $190 million, reflecting our confidence in the long-term value of our stock and our commitment to delivering shareholder returns."

    For the second quarter, the Company delivered total revenue of $179.1 million, which was flat to the prior year. Increases in revenue from Wave and international tax preparation were offset by lower interest and fee income on Emerald Advance® due to a decrease in loan originations.

    Total operating expenses of $472.4 million increased by $25.8 million as expected, primarily due to higher tax professional and corporate wages, increased healthcare costs, an increase in occupancy costs and the timing of marketing expenses versus the prior year.

    Pretax loss increased by $29.4 million to $312.3 million.

    Loss per share from continuing operations2 increased to $(1.79) from $(1.33) and adjusted loss per share from continuing operations2 increased to $(1.73) from $(1.27), due to a higher net loss and fewer shares outstanding as a result of share repurchases, which are accretive to earnings per share on a full-year basis.

    Capital Allocation

    The Company reported the following related to its capital structure:

    • Repurchased and retired 3.2 million shares at an aggregate price of $190.5 million, or $58.65 per share in the second quarter.
    • The Company has approximately $1.1 billion remaining on its $1.5 billion share repurchase program.

    Since 2016, the Company has returned more than $4.4 billion to shareholders in the form of dividends and share repurchases, buying back over 43% of its shares outstanding3.

    Fiscal Year 2025 Outlook Reaffirmed

    The Company continues to expect:

    • Revenue to be in the range of $3.69 to $3.75 billion.
    • EBITDA4 to be in the range of $975 million to $1.02 billion.
    • Effective tax rate to be approximately 13%, resulting in a one-time benefit to EPS of approximately 50 cents.
    • Adjusted Diluted Earnings Per Share4 to be in the range of $5.15 to $5.35.

    Conference Call

    The Company will host a conference call for analysts and investors to discuss second quarter 2025 results at 4:30 p.m. ET on Tuesday, February 4, 2025. To join live, participants must register at https://register.vevent.com/register/BI06a7e8ddc07544a6853995c1fe75ea2c. Once registered, the participant will receive a dial-in number and unique PIN to access the call. Please join approximately 5 minutes prior to the scheduled start time.

    The call, along with a presentation for viewing, will also be webcast in a listen-only format for the media and general public. The webcast can be accessed directly at https://edge.media-server.com/mmc/p/qdeqpgfd and will be available for replay 2 hours after the call is concluded and continuing for 90 days.

    About H&R Block

    H&R Block, Inc. (NYSE: HRB) provides help and inspires confidence in its clients and communities everywhere through global tax preparation services, financial products, and small-business solutions. The company blends digital innovation with human expertise and care as it helps people get the best outcome at tax time, and be better with money using its mobile banking app, Spruce. Through Block Advisors and Wave, the company helps small-business owners thrive with year-round bookkeeping, payroll, advisory, and payment processing solutions. For more information, visit H&R Block News.

    About Non-GAAP Financial Information

    This press release and the accompanying tables include non-GAAP financial information. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with generally accepted accounting principles, please see the section of the accompanying tables titled "Non-GAAP Financial Information."

    Forward-Looking Statements

    This press release contains forward-looking statements within the meaning of the securities laws. 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," "goal," "could" or "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, market share, industry volumes or other financial items, descriptions of management’s plans or objectives for future operations, products or services, 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 and regulatory factors, many of which are beyond the Company's control, that are described in our Annual Report on Form 10-K for the most recently completed fiscal year in the section entitled "Risk Factors" and additional factors we may describe from time to time in other filings with the Securities and Exchange Commission. You may get such filings for free at our website at https://investors.hrblock.com. In addition, factors that may cause the Company’s actual estimated 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, or increases in applicable tax rates in jurisdictions where the Company operates. You should understand that it is not possible to predict or identify all such factors and, consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

    1 All amounts in this release are unaudited. Unless otherwise noted, all comparisons refer to the current period compared to the corresponding prior year period.
    2 All per share amounts are based on fully diluted shares at the end of the corresponding period. The Company reports non-GAAP financial measures of performance, including adjusted earnings per share (EPS), earnings before interest, tax, depreciation, and amortization (EBITDA) from continuing operations, free cash flow, and free cash flow yield, which it considers to be useful metrics for management and investors to evaluate and compare the ongoing operating performance of the Company. See "About Non-GAAP Financial Information" below for more information regarding financial measures not prepared in accordance with generally accepted accounting principles (GAAP).
    3 Shares outstanding calculated as of April 30, 2016.
    4 Adjusted Diluted EPS and EBITDA from continuing operations are non-GAAP financial measures. Future period non-GAAP outlook includes adjustments for items not indicative of our core operations, which may include, without limitation, items described in the below section titled “Non-GAAP Financial Information” and in the accompanying tables. Such adjustments may be affected by changes in ongoing assumptions and judgments, as well as nonrecurring, unusual, or unanticipated charges, expenses or gains, or other items that may not directly correlate to the underlying performance of our business operations. The exact amounts of these adjustments are not currently determinable but may be significant. It is therefore not practicable to provide the comparable GAAP measures or reconcile this non-GAAP outlook to the most comparable GAAP measures.

    For Further Information
       
    Investor Relations: Colby Brown, (816) 854-4559, colby.brown@hrblock.com
      Jordyn Eskijian, (816) 854-5674, jordyn.eskijian@hrblock.com
    Media Relations: Teri Daley, (816) 854-3787, teri.daley@hrblock.com
      Media Desk, mediadesk@hrblock.com
       


    FINANCIAL RESULTS (unaudited, in 000s - except per share amounts)
      Three months ended December 31, Six months ended December 31,
       2024   2023   2024   2023 
    REVENUES:        
    U.S. tax preparation and related services:        
    Assisted tax preparation $             48,380   $48,342  $             91,343   $87,605 
    Royalties                   3,499    5,454                    9,351    11,155 
    DIY tax preparation                 13,744    13,111                  16,980    16,959 
    Refund Transfers                       637    813                    1,497    1,955 
    Peace of Mind® Extended Service Plan                 16,145    17,440                  39,242    42,287 
    Tax Identity Shield®                   4,013    4,694                    7,922    9,274 
    Other                 11,824    9,592                  25,633    20,572 
    Total U.S. tax preparation and related services                 98,242    99,446                191,968    189,807 
    Financial services:        
    Emerald Card® and SpruceSM                 10,148    11,700                  18,974    20,333 
    Interest and fee income on Emerald Advance®                 12,308    15,235                  12,308    15,533 
    Total financial services                 22,456    26,935                  31,282    35,866 
    International                 31,811    29,569                  96,666    90,134 
    Wave                 26,561    23,133                  52,964    47,076 
    Total revenues $           179,070   $179,083  $           372,880   $362,883 
    Compensation and benefits:        
    Field wages                 81,565    77,795                149,659    140,230 
    Other wages                 78,731    74,671                156,066    146,769 
    Benefits and other compensation                 38,402    36,063                  77,156    71,311 
                    198,698    188,529                382,881    358,310 
    Occupancy               104,999    101,194                206,317    200,479 
    Marketing and advertising                 14,863    11,305                  24,835    16,786 
    Depreciation and amortization                 29,195    30,107                  58,026    60,332 
    Bad debt                 19,416    21,754                  22,146    26,552 
    Other               105,190    93,626                200,297    174,182 
    Total operating expenses               472,361    446,515                894,502    836,641 
    Other income (expense), net                   2,744    5,922                  14,661    15,758 
    Interest expense on borrowings                (21,752)  (21,364)                (37,599)  (37,234)
    Pretax loss              (312,299)  (282,874)              (544,560)  (495,234)
    Income tax benefit                (69,833)  (93,758)              (130,673)  (143,245)
    Net loss from continuing operations              (242,466)  (189,116)              (413,887)  (351,989)
    Net loss from discontinued operations                     (954)  (639)                  (2,109)  (1,248)
    Net loss $          (243,420) $(189,755) $          (415,996) $(353,237)
    BASIC AND DILUTED LOSS PER SHARE:        
    Continuing operations $                (1.79) $(1.33) $                (3.02) $(2.44)
    Discontinued operations                    (0.01)  —                     (0.01)  (0.01)
    Consolidated $                (1.80) $(1.33) $                (3.03) $(2.45)
    WEIGHTED AVERAGE DILUTED SHARES               135,563    142,340                137,359    144,307 
    Adjusted diluted EPS (1) $                (1.73) $(1.27) $                (2.89) $(2.31)
    EBITDA (1) $          (261,352) $(231,403) $          (448,935) $(397,668)
                     

    (1) All non-GAAP measures are results from continuing operations. See "Non-GAAP Financial Information" for a reconciliation of non-GAAP measures.

    CONSOLIDATED BALANCE SHEETS (unaudited, in 000s - except per share data)
    As of December 31, 2024 June 30, 2024
         
    ASSETS    
    Cash and cash equivalents $                  320,051   $1,053,326 
    Cash and cash equivalents - restricted                        21,473    21,867 
    Receivables, net                      321,171    69,075 
    Prepaid expenses and other current assets                      114,658    95,208 
    Total current assets                      777,353    1,239,476 
    Property and equipment, net                      143,833    131,319 
    Operating lease right of use assets                      389,629    461,986 
    Intangible assets, net                      270,601    264,102 
    Goodwill                      783,286    785,226 
    Deferred tax assets and income taxes receivable                      281,694    271,658 
    Other noncurrent assets                        65,924    65,043 
    Total assets $               2,712,320   $3,218,810 
    LIABILITIES AND STOCKHOLDERS’ EQUITY    
    LIABILITIES:    
    Accounts payable and accrued expenses $                  136,893   $155,830 
    Accrued salaries, wages and payroll taxes                        64,993    105,548 
    Accrued income taxes and reserves for uncertain tax positions                      149,255    318,830 
    Current portion of long-term debt                      349,611    — 
    Operating lease liabilities                      170,726    206,070 
    Deferred revenue and other current liabilities                      187,885    191,050 
    Total current liabilities                   1,059,363    977,328 
    Long-term debt and line of credit borrowings                   1,932,545    1,491,095 
    Deferred tax liabilities and reserves for uncertain tax positions                      292,643    291,063 
    Operating lease liabilities                      228,041    265,373 
    Deferred revenue and other noncurrent liabilities                        72,188    103,357 
    Total liabilities                   3,584,780    3,128,216 
    COMMITMENTS AND CONTINGENCIES    
    STOCKHOLDERS’ EQUITY:    
    Common stock, no par, stated value $.01 per share                          1,644    1,709 
    Additional paid-in capital                      752,093    762,583 
    Accumulated other comprehensive loss                      (71,762)  (48,845)
    Retained earnings (deficit)                    (908,785)  12,654 
    Less treasury shares, at cost                    (645,650)  (637,507)
    Total stockholders' equity (deficiency)                    (872,460)  90,594 
    Total liabilities and stockholders' equity $               2,712,320   $3,218,810 
         
         


    CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in 000s)
    Six months ended December 31,  2024   2023 
         
    CASH FLOWS FROM OPERATING ACTIVITIES:    
    Net loss $                (415,996) $(353,237)
    Adjustments to reconcile net loss to net cash used in operating activities:    
    Depreciation and amortization                        58,026    60,331 
    Provision for credit losses                        20,727    21,536 
    Deferred taxes                        (1,531)  (35,525)
    Stock-based compensation                        17,945    17,525 
    Changes in assets and liabilities, net of acquisitions:    
    Receivables                    (262,348)  (348,833)
    Prepaid expenses, other current and noncurrent assets                          2,588    (7,395)
    Accounts payable, accrued expenses, salaries, wages and payroll taxes                      (76,806)  (58,543)
    Deferred revenue, other current and noncurrent liabilities                      (45,170)  (58,520)
    Income tax receivables, accrued income taxes and income tax reserves                    (192,340)  (180,706)
    Other, net                           (733)  1,201 
    Net cash used in operating activities                    (895,638)  (942,166)
    CASH FLOWS FROM INVESTING ACTIVITIES:    
    Capital expenditures                      (49,115)  (32,708)
    Payments made for business acquisitions, net of cash acquired                      (28,017)  (27,158)
    Franchise loans funded                      (17,442)  (15,491)
    Payments from franchisees                             971    2,747 
    Other, net                          6,110    1,565 
    Net cash used in investing activities                      (87,493)  (71,045)
    CASH FLOWS FROM FINANCING ACTIVITIES:    
    Repayments of line of credit borrowings                    (100,000)  (25,000)
    Proceeds from line of credit borrowings                      890,000    825,000 
    Dividends paid                      (96,960)  (89,854)
    Repurchase of common stock, including shares surrendered                    (436,233)  (378,709)
    Other, net                          1,791    4,011 
    Net cash provided by financing activities                      258,598    335,448 
    Effects of exchange rate changes on cash                        (9,136)  671 
    Net decrease in cash and cash equivalents, including restricted balances                    (733,669)  (677,092)
    Cash, cash equivalents and restricted cash, beginning of period                   1,075,193    1,015,316 
    Cash, cash equivalents and restricted cash, end of period $                  341,524   $338,224 
    SUPPLEMENTARY CASH FLOW DATA:    
             
    Income taxes paid, net (includes payments for purchased investment tax credits) $                    62,290   $72,160 
    Interest paid on borrowings                        33,412    35,496 
    Accrued additions to property and equipment                          3,798    4,036 
    New operating right of use assets and related lease liabilities                        47,135    70,532 
    Accrued dividends payable to common shareholders                        50,176    45,273 
         


    (in 000s)
      Three months ended December 31, Six months ended December 31,
    NON-GAAP FINANCIAL MEASURE - EBITDA  2024   2023   2024   2023 
             
    Net loss - as reported $          (243,420) $(189,755) $          (415,996) $(353,237)
    Discontinued operations, net                       954    639                    2,109    1,248 
    Net loss from continuing operations - as reported              (242,466)  (189,116)              (413,887)  (351,989)
    Add back:        
    Income tax benefit                (69,833)  (93,758)              (130,673)  (143,245)
    Interest expense                 21,752    21,364                  37,599    37,234 
    Depreciation and amortization                 29,195    30,107                  58,026    60,332 
                     (18,886)  (42,287)                (35,048)  (45,679)
    EBITDA from continuing operations $          (261,352) $(231,403) $          (448,935) $(397,668)
             
             


    (in 000s, except per share amounts)
      Three months ended December 31, Six months ended December 31,
    NON-GAAP FINANCIAL MEASURE - ADJUSTED EPS  2024   2023   2024   2023 
             
    Net loss from continuing operations - as reported $          (242,466) $(189,116) $          (413,887) $(351,989)
    Adjustments:        
    Amortization of intangibles related to acquisitions (pretax)                 10,910    12,269                  22,038    24,824 
    Tax effect of adjustments (1)                  (2,539)  (3,087)                  (5,184)  (6,022)
    Adjusted net loss from continuing operations $          (234,095) $(179,934) $          (397,033) $(333,187)
    Diluted loss per share from continuing operations - as reported $                (1.79) $(1.33) $                (3.02) $(2.44)
    Adjustments, net of tax                     0.06    0.06                      0.13    0.13 
    Adjusted diluted loss per share from continuing operations $                (1.73) $(1.27) $                (2.89) $(2.31)
             

    (1)Tax effect of adjustments is the difference between the tax provision calculated on a GAAP basis and on an adjusted non-GAAP basis.

    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 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 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 from continuing operations, each subject to permitted adjustments, as performance metrics in incentive compensation calculations for our employees.


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