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H&R Block
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#3430
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$4.07 B
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๐Ÿ‡บ๐Ÿ‡ธ United States
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๐Ÿ’ผ Professional services๐Ÿ’ณ Financial services
Categories
  1. H&R Block
  2. Quarterly Reports (10-Q)
  3. Financial Year FY2025 Q3

H&R Block - 10-Q quarterly report FY2025 Q3


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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
March 31, 2025
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-06089

H&R Block, Inc.
(Exact name of registrant as specified in its charter)
Missouri44-0607856
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification No.)
One H&R Block Way, Kansas City, Missouri 64105
(Address of principal executive offices, including zip code)
(816) 854-3000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, without par valueHRBNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☑     No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☑     No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one)
Large accelerated filer ☑           Accelerated filer ☐         Non-accelerated filer ☐          Smaller reporting company ☐ Emerging growth company ☐
    
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐    No  ☑
The number of shares outstanding of the registrant's Common Stock, without par value, at the close of business on April 30, 2025: 133,880,414 shares.


Table of Contents

Form 10-Q for the Period ended March 31, 2025
Table of Contents
PART I
Consolidated Statements of Operations and Comprehensive Income
    Three and nine months ended March 31, 2025 and 2024
1
Consolidated Balance Sheets
         As of March 31, 2025 and June 30, 2024
2
Consolidated Statements of Cash Flows
    Nine months ended March 31, 2025 and 2024
3
Consolidated Statements of Stockholders' Equity
    Three and nine months ended March 31, 2025 and 2024
4
6
Management's Discussion and Analysis of Financial Condition and Results of Operations
15
24
24
PART II
24
24
25
25
25
25
26
27


Table of Contents
PART I    FINANCIAL INFORMATION
ITEM 1.    FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME:(unaudited, in 000s, except per share amounts)
Three months ended March 31,Nine months ended March 31,
2025202420252024
REVENUES:
Service revenues$2,099,481 $1,993,556 $2,434,220 $2,314,363 
Royalty, product and other revenues177,623 191,278 215,764 233,354 
2,277,104 2,184,834 2,649,984 2,547,717 
OPERATING EXPENSES:
Costs of revenues969,392 926,008 1,553,182 1,485,193 
Selling, general and administrative329,399 330,622 640,111 608,078 
Total operating expenses1,298,791 1,256,630 2,193,293 2,093,271 
Other income (expense), net4,554 5,224 19,215 20,982 
Interest expense on borrowings(24,686)(26,070)(62,285)(63,304)
Income from continuing operations before income taxes958,181 907,358 413,621 412,124 
Income taxes235,253 215,772 104,580 72,527 
Net income from continuing operations722,928 691,586 309,041 339,597 
Net loss from discontinued operations, net of tax benefits of $180, $254, $811 and $627
(598)(849)(2,707)(2,097)
NET INCOME$722,330 $690,737 $306,334 $337,500 
BASIC EARNINGS PER SHARE:
Continuing operations$5.38 $4.94 $2.26 $2.37 
Discontinued operations(0.01)(0.01)(0.02)(0.01)
Consolidated$5.37 $4.93 $2.24 $2.36 
DILUTED EARNINGS PER SHARE:
Continuing operations$5.32 $4.87 $2.23 $2.34 
Discontinued operations(0.01)(0.01)(0.02)(0.02)
Consolidated$5.31 $4.86 $2.21 $2.32 
DIVIDENDS DECLARED PER SHARE$0.375 $0.32 $1.125 $0.96 
COMPREHENSIVE INCOME:
Net income$722,330 $690,737 $306,334 $337,500 
Change in foreign currency translation adjustments445 (9,882)(22,472)(9,237)
Other comprehensive income (loss)445 (9,882)(22,472)(9,237)
Comprehensive income$722,775 $680,855 $283,862 $328,263 
See accompanying notes to consolidated financial statements.










H&R Block, Inc. |Q3 FY2025 Form 10-Q
1
Table of Contents
CONSOLIDATED BALANCE SHEETS(unaudited, in 000s, except 
share and per share amounts)
As ofMarch 31, 2025June 30, 2024
ASSETS
Cash and cash equivalents$772,946 $1,053,326 
Cash and cash equivalents - restricted16,744 21,867 
Receivables, less allowance for credit losses of $49,315 and $61,182
352,398 69,075 
Prepaid expenses and other current assets104,450 95,208 
Total current assets1,246,538 1,239,476 
Property and equipment, at cost, less accumulated depreciation and amortization of $864,681 and $838,814
146,456 131,319 
Operating lease right of use assets417,197 461,986 
Intangible assets, net270,007 264,102 
Goodwill785,936 785,226 
Deferred tax assets and income taxes receivable308,989 271,658 
Other noncurrent assets69,888 65,043 
Total assets$3,245,011 $3,218,810 
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable and accrued expenses$243,754 $155,830 
Accrued salaries, wages and payroll taxes269,849 105,548 
Accrued income taxes and reserves for uncertain tax positions346,733 318,830 
Current portion of long-term debt349,787 — 
Operating lease liabilities173,902 206,070 
Deferred revenue and other current liabilities205,778 191,050 
Total current liabilities1,589,803 977,328 
Long-term debt and line of credit borrowings1,142,890 1,491,095 
Deferred tax liabilities and reserves for uncertain tax positions337,634 291,063 
Operating lease liabilities252,630 265,373 
Deferred revenue and other noncurrent liabilities114,892 103,357 
Total liabilities3,437,849 3,128,216 
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, no par, stated value $0.01 per share, 800,000,000 shares authorized, shares issued of 164,367,434 and 170,915,771
1,644 1,709 
Additional paid-in capital758,821 762,583 
Accumulated other comprehensive loss(71,317)(48,845)
Retained earnings (deficit)(236,909)12,654 
Less treasury shares, at cost, of 30,487,639 and 31,324,609
(645,077)(637,507)
Total stockholders' equity (deficiency)(192,838)90,594 
Total liabilities and stockholders' equity$3,245,011 $3,218,810 
See accompanying notes to consolidated financial statements.
2
Q3 FY2025 Form 10-Q| H&R Block, Inc.
Table of Contents
CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited, in 000s)
Nine months ended March 31,20252024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$306,334 $337,500 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization87,247 91,004 
Provision for credit losses56,042 61,359 
Deferred taxes(12,503)(58,223)
Stock-based compensation25,420 25,310 
Changes in assets and liabilities, net of acquisitions:
Receivables(335,605)(348,106)
Prepaid expenses, other current and noncurrent assets(7,504)(18,037)
Accounts payable, accrued expenses, salaries, wages and payroll taxes240,246 223,045 
Deferred revenue, other current and noncurrent liabilities20,684 12,483 
Income tax receivables, accrued income taxes and income tax reserves50,049 93,961 
Other, net(1,088)(32)
Net cash provided by operating activities429,322 420,264 
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(71,784)(53,831)
Payments made for business acquisitions, net of cash acquired(35,323)(43,163)
Franchise loans funded(21,455)(18,815)
Payments from franchisees11,478 12,884 
Other, net6,194 3,282 
Net cash used in investing activities(110,890)(99,643)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of line of credit borrowings(1,950,000)(1,025,000)
Proceeds from line of credit borrowings1,950,000 1,025,000 
Dividends paid(147,136)(135,127)
Repurchase of common stock, including shares surrendered(436,516)(379,018)
Other, net(11,854)(6,358)
Net cash used in financing activities(595,506)(520,503)
Effects of exchange rate changes on cash(8,429)(2,739)
Net decrease in cash and cash equivalents, including restricted balances(285,503)(202,621)
Cash, cash equivalents and restricted cash, beginning of period1,075,193 1,015,316 
Cash, cash equivalents and restricted cash, end of period$789,690 $812,695 
SUPPLEMENTARY CASH FLOW DATA:
Income taxes paid, net (includes payments for purchased investment tax credits)$65,505 $35,888 
Interest paid on borrowings63,251 66,464 
Accrued additions to property and equipment2,448 1,477 
New operating right of use assets and related lease liabilities135,372 139,872 
Accrued dividends payable to common shareholders50,194 44,648 
See accompanying notes to consolidated financial statements.
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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY(amounts in 000s, except per share amounts)
Common StockAdditional
Paid-in
Capital
Accumulated Other
Comprehensive
Loss(1)
Retained
Earnings
(Deficit)		Treasury StockTotal
Stockholders’
Equity
SharesAmountSharesAmount
Balances as of July 1, 2024170,916 $1,709 $762,583 $(48,845)$12,654 (31,325)$(637,507)$90,594 
Net loss— — — — (172,576)— — (172,576)
Other comprehensive income— — — 6,117 — — — 6,117 
Stock-based compensation— — 7,463 — — — — 7,463 
Stock-based awards exercised or vested— — (23,990)— (2,611)1,319 26,848 247 
Acquisition of treasury shares(2)
— — — — — (567)(35,882)(35,882)
Repurchase and retirement of common shares(3,301)(33)(1,980)— (209,708)— — (211,721)
Cash dividends declared - $0.375 per share
— — — — (52,307)— — (52,307)
Balances as of September 30, 2024167,615 $1,676 $744,076 $(42,728)$(424,548)(30,573)$(646,541)$(368,065)
Net loss— — — — (243,420)— — (243,420)
Other comprehensive loss— — — (29,034)— — — (29,034)
Stock-based compensation— — 9,156 — — — — 9,156 
Stock-based awards exercised or vested— — 810 — (245)54 1,144 1,709 
Acquisition of treasury shares(2)
— — — — — (4)(253)(253)
Repurchase and retirement of common shares(3,248)(32)(1,949)— (190,396)— — (192,377)
Cash dividends declared - $0.375 per share
— — — — (50,176)— — (50,176)
Balances as of December 31, 2024164,367 $1,644 $752,093 $(71,762)$(908,785)(30,523)$(645,650)$(872,460)
Net income— — — — 722,330 — — 722,330 
Other comprehensive income— — — 445 — — — 445 
Stock-based compensation— — 7,424 — — — — 7,424 
Stock-based awards exercised or vested— — (696)— (260)41 856 (100)
Acquisition of treasury shares(2)
— — — — — (6)(283)(283)
Cash dividends declared - $0.375 per share
— — — — (50,194)— — (50,194)
Balances as of March 31, 2025164,367 $1,644 $758,821 $(71,317)$(236,909)(30,488)$(645,077)$(192,838)
(1) The balance of our accumulated other comprehensive loss consists of foreign currency translation adjustments.
(2) Represents shares swapped or surrendered to us in connection with the vesting or exercise of stock-based awards.
See accompanying notes to consolidated financial statements.


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(amounts in 000s, except per share amounts)
Common StockAdditional
Paid-in
Capital
Accumulated Other
Comprehensive
Loss(1)
Retained
Earnings
(Deficit)		Treasury StockTotal
Stockholders’
Equity
SharesAmountSharesAmount
Balances as of July 1, 2023178,936 $1,789 $770,376 $(37,099)$(48,677)(32,786)$(654,325)$32,064 
Net loss— — — — (163,482)— — (163,482)
Other comprehensive loss— — — (10,914)— — — (10,914)
Stock-based compensation— — 6,211 — — — — 6,211 
Stock-based awards exercised or vested— — (34,226)— (3,220)1,867 37,348 (98)
Acquisition of treasury shares(2)
— — — — — (823)(28,464)(28,464)
Repurchase and retirement of common shares(3,265)(32)(1,927)— (131,341)— — (133,300)
Cash dividends declared - $0.32 per share
— — — — (46,901)— — (46,901)
Balances as of September 30, 2023175,671 $1,757 $740,434 $(48,013)$(393,621)(31,742)$(645,441)$(344,884)
Net loss— — — — (189,755)— — (189,755)
Other comprehensive income— — — 11,559 — — — 11,559 
Stock-based compensation— — 9,270 — — — — 9,270 
Stock-based awards exercised or vested— — (165)— (46)348 7,087 6,876 
Acquisition of treasury shares(2)
— — — — — (3)(125)(125)
Repurchase and retirement of common shares(4,755)(48)(2,805)— (217,467)— — (220,320)
Cash dividends declared - $0.32 per share
— — — — (45,273)— — (45,273)
Balances as of December 31, 2023170,916 $1,709 $746,734 $(36,454)$(846,162)(31,397)$(638,479)$(772,652)
Net income— — — — 690,737 — — 690,737 
Other comprehensive loss— — — (9,882)— — — (9,882)
Stock-based compensation— — 7,140 — — — — 7,140 
Stock-based awards exercised or vested— — (269)— (223)16 300 (192)
Acquisition of treasury shares(2)
— — — — — (7)(309)(309)
Cash dividends declared - $0.32 per share
— — — — (44,648)— — (44,648)
Balances as of March 31, 2024170,916 $1,709 $753,605 $(46,336)$(200,296)(31,388)$(638,488)$(129,806)
(1) The balance of our accumulated other comprehensive loss consists of foreign currency translation adjustments.
(2) Represents shares swapped or surrendered to us in connection with the vesting or exercise of stock-based awards.
See accompanying notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS             (unaudited)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION – The consolidated balance sheets as of March 31, 2025 and June 30, 2024, the consolidated statements of operations and comprehensive income for the three and nine months ended March 31, 2025 and 2024, the consolidated statements of cash flows for the nine months ended March 31, 2025 and 2024, and the consolidated statements of stockholders' equity for the three and nine months ended March 31, 2025 and 2024 have been prepared by the Company, without audit. In the opinion of management, all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position, results of operations, and cash flows as of March 31, 2025 and 2024 and for all periods presented, have been made.
"H&R Block," "the Company," "we," "our," and "us" are used interchangeably to refer to H&R Block, Inc., to H&R Block, Inc. and its subsidiaries, or to H&R Block, Inc.'s operating subsidiaries, as appropriate to the context.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been condensed or omitted. These consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our June 30, 2024 Annual Report on Form 10-K. All amounts presented herein as of June 30, 2024 or for the year then ended are derived from our Annual Report on Form 10-K.
MANAGEMENT ESTIMATES – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, assumptions and judgments are applied in the evaluation of contingent losses associated with pending claims and litigation, reserves for uncertain tax positions, and fair value of reporting units. Estimates have been prepared based on the best information available as of each balance sheet date. As such, actual results could differ materially from those estimates.
SEASONALITY OF BUSINESS – Our operating revenues are seasonal in nature with peak revenues typically occurring in the months of February through April. Therefore, results for interim periods are not indicative of results to be expected for the full year.
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.
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NOTE 2: REVENUE RECOGNITION
The majority of our revenues are from our United States (U.S.) tax services business. The following table disaggregates our U.S. revenues by major service line, with revenues from our international tax services businesses and from Wave included as separate lines:
(in 000s)
Three months ended March 31,Nine months ended March 31,
2025202420252024
Revenues:
U.S. assisted tax preparation$1,635,877 $1,534,825 $1,727,220 $1,622,430 
U.S. royalties133,961 141,915 143,312 153,070 
U.S. DIY tax preparation214,666 198,570 231,646 215,529 
Refund Transfers113,732 118,937 115,229 120,892 
Peace of Mind® Extended Service Plan15,625 16,813 54,867 59,100 
Tax Identity Shield®7,025 7,536 14,947 16,810 
Emerald Card® and SpruceSM
40,195 41,160 59,169 61,493 
Interest and fee income on Emerald Advance®14,286 21,169 26,594 36,702 
International60,438 68,264 157,104 158,398 
Wave26,717 23,580 79,681 70,656 
Other14,582 12,065 40,215 32,637 
Total revenues$2,277,104 $2,184,834 $2,649,984 $2,547,717 
Changes in the balances of deferred revenue and wages for our Peace of Mind® Extended Service Plan (POM) are as follows:
(in 000s)
POMDeferred RevenueDeferred Wages
Nine months ended March 31,2025202420252024
Balance, beginning of the period$156,610 $167,257 $20,212 $21,828 
Amounts deferred70,536 72,369 7,222 8,324 
Amounts recognized on previous deferrals(64,885)(68,445)(8,396)(8,324)
Balance, end of the period$162,261 $171,181 $19,038 $21,828 
As of March 31, 2025, deferred revenue related to POM was $162.3 million. We expect that $91.8 million will be recognized over the next twelve months, while the remaining balance will be recognized over the following five years.
As of March 31, 2025 and 2024, Tax Identity Shield® (TIS) deferred revenue was $31.2 million and $31.6 million, respectively. Deferred revenue related to TIS was $21.4 million and $25.2 million as of June 30, 2024 and 2023, respectively. All deferred revenue related to TIS will be recognized through April 2026.
NOTE 3: EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY
EARNINGS PER SHARE – Basic and diluted earnings (loss) per share is computed using the two-class method. The two-class method is an earnings allocation formula that determines net income per share for each class of common stock and participating security according to dividends declared and participation rights in undistributed earnings. Per share amounts are computed by dividing net income (loss) from continuing operations attributable to common shareholders by the weighted average shares outstanding during each period. Diluted earnings per share excludes the impact of shares of common stock issuable upon the lapse of certain restrictions or the exercise of options to purchase 0.6 million and 0.5 million shares for the three and nine months ended March 31, 2025,
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respectively, and one thousand and 0.2 million shares for the three and nine months ended March 31, 2024, respectively, as the effect would be antidilutive.
The computations of basic and diluted earnings per share from continuing operations are as follows:
(in 000s, except per share amounts)
Three months ended March 31,Nine months ended March 31,
2025202420252024
Net income from continuing operations attributable to shareholders$722,928 $691,586 $309,041 $339,597 
Amounts allocated to participating securities(3,442)(2,788)(1,408)(1,350)
Net income from continuing operations attributable to common shareholders$719,486 $688,798 $307,633 $338,247 
Basic weighted average common shares133,853 139,525 136,207 142,724 
Potential dilutive shares1,476 2,015 1,737 1,870 
Dilutive weighted average common shares135,329 141,540 137,944 144,594 
Earnings per share from continuing operations attributable to common shareholders:
Basic$5.38 $4.94 $2.26 $2.37 
Diluted5.32 4.87 2.23 2.34 
The decrease in the weighted average shares outstanding is due to share repurchases completed in the current and prior fiscal years.
STOCK-BASED COMPENSATION – We granted 1.1 million and 1.7 million shares, including adjustments for performance achievement and dividend equivalents, under our stock-based compensation plans during the nine months ended March 31, 2025 and 2024, respectively. Stock-based compensation expense of our continuing operations totaled $7.5 million and $25.4 million for the three and nine months ended March 31, 2025, respectively, and $7.8 million and $25.3 million for the three and nine months ended March 31, 2024, respectively. As of March 31, 2025, unrecognized compensation cost for nonvested shares and units totaled $50.8 million.
NOTE 4: RECEIVABLES
Receivables, net of their related allowance, consist of the following:
(in 000s)
As ofMarch 31, 2025June 30, 2024
Short-termLong-termShort-termLong-term
Loans to franchisees$17,267 $17,979 $5,917 $16,498 
Receivables for U.S. assisted and DIY tax preparation and related fees221,510 9,282 18,440 5,332 
H&R Block's Instant Refund® receivables
24,162 808 2,947 207 
Emerald Advance®22,385 22,635 17,867 21,360 
Software receivables from retailers11,097 — 1,029 — 
Royalties and other receivables from franchisees32,394 — 5,808 — 
Wave payment processing receivables1,801 — 1,078 — 
Other21,782 612 15,989 427 
Total$352,398 $51,316 $69,075 $43,824 
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Balances presented above as short-term are included in receivables, while the long-term portions are included in other noncurrent assets in the consolidated balance sheets.
LOANS TO FRANCHISEES – Franchisee loan balances consist of term loans made primarily to finance the purchase of franchises and revolving lines of credit primarily for the purpose of funding working capital needs. Loans with a principal balance more than 90 days past due or on non-accrual status were $2.2 million and $1.1 million as of March 31, 2025 and June 30, 2024, respectively.
H&R BLOCK'S INSTANT REFUND® – H&R Block's Instant Refund® amounts are generally received from the Canada Revenue Agency within 60 days of filing the client's return, with the remaining balance collectible from the client.
We review the credit quality of our Instant Refund receivables based on pools, which are segregated by the tax return year of origination, with older years being deemed more unlikely to be repaid. We establish an allowance for credit losses at an amount that we believe reflects the receivable at net realizable value. In December of each year, we charge-off the receivables and the related allowance to an amount we believe represents the net realizable value.
Balances and amounts on non-accrual status, classified as impaired, or more than 60 days past due, by tax return year of origination, as of March 31, 2025 are as follows:
(in 000s)
Tax return year of originationBalanceMore Than 60 Days Past Due
2024$24,713 $— 
2023 and prior1,027 1,027 
25,740 $1,027 
Allowance(770)
Net balance$24,970 
EMERALD ADVANCE® – We review the credit quality of our purchased participation interests in Emerald Advance® (EA) receivables based on pools, which are segregated by the fiscal year of origination, with older years being deemed more unlikely to be repaid. 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 EAs to an amount we believe represents the net realizable value.
Balances and amounts on non-accrual status, classified as impaired, or more than 60 days past due, by fiscal year of origination, as of March 31, 2025 are as follows:
(in 000s)
Fiscal year of originationBalanceNon-Accrual
2025$40,017 $— 
2024 and prior24,374 24,374 
64,391 $24,374 
Allowance(19,371)
Net balance$45,020 
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ALLOWANCE FOR CREDIT LOSSES – Activity in the allowance for credit losses for EA and all other short-term and long-term receivables for the nine months ended March 31, 2025 and 2024 is as follows:
(in 000s)
EAsAll OtherTotal
Balances as of July 1, 2024$33,536 $45,327 $78,863 
Provision for credit losses19,371 36,671 56,042 
Charge-offs, recoveries and other(33,536)(45,864)(79,400)
Balances as of March 31, 2025$19,371 $36,134 $55,505 
Balances as of July 1, 2023$27,386 $35,108 $62,494 
Provision for credit losses21,011 40,348 61,359 
Charge-offs, recoveries and other(27,714)(37,455)(65,169)
Balances as of March 31, 2024$20,683 $38,001 $58,684 
For the nine months ended March 31, 2025, there were $33.5 million of gross charge-offs related to EAs which were originated in fiscal year 2024.
NOTE 5: GOODWILL AND INTANGIBLE ASSETS
Changes in the carrying amount of goodwill for the nine months ended March 31, 2025 are as follows:
(in 000s)
GoodwillAccumulated Impairment LossesNet
Balances as of July 1, 2024$923,523 $(138,297)$785,226 
Acquisitions(1)
15,374 — 15,374 
Disposals and foreign currency changes, net(14,664)— (14,664)
Impairments— — — 
Balances as of March 31, 2025$924,233 $(138,297)$785,936 
(1)    All goodwill added during the period is expected to be tax-deductible for federal income tax reporting.
In conjunction with our annual impairment test, we tested goodwill for impairment during the quarter and did not identify any impairment.
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Components of intangible assets are as follows:
(in 000s)
Gross Carrying AmountAccumulated
Amortization		Net
As of March 31, 2025:
Reacquired franchise rights$415,419 $(239,452)$175,967 
Customer relationships358,442 (286,040)72,402 
Internally-developed software124,420 (122,357)2,063 
Noncompete agreements23,190 (20,081)3,109 
Purchased technology70,100 (56,099)14,001 
Trade name5,800 (3,335)2,465 
$997,371 $(727,364)$270,007 
As of June 30, 2024:
Reacquired franchise rights$403,955 $(228,157)$175,798 
Customer relationships331,435 (270,245)61,190 
Internally-developed software122,673 (119,610)3,063 
Noncompete agreements21,977 (19,494)2,483 
Purchased technology70,100 (51,432)18,668 
Trade name5,800 (2,900)2,900 
$955,940 $(691,838)$264,102 
We made payments to acquire businesses totaling $35.3 million and $43.2 million during the nine months ended March 31, 2025 and 2024, respectively. The amounts and weighted-average lives of intangible assets acquired during the nine months ended March 31, 2025, including amounts capitalized related to internally-developed software, are as follows:
(dollars in 000s)
AmountWeighted-Average Life (in years)
Customer relationships$27,435 5
Reacquired franchise rights11,649 6
Internally-developed software1,949 3
Noncompete agreements1,254 5
Total$42,287 5
Amortization of intangible assets for the three and nine months ended March 31, 2025 was $11.3 million and $36.3 million, respectively, compared to $15.0 million and $46.2 million for the three and nine months ended March 31, 2024, respectively. Estimated amortization of intangible assets for fiscal years ending June 30, 2025, 2026, 2027, 2028, and 2029 is $47.6 million, $41.5 million, $34.7 million, $26.5 million and $18.1 million, respectively.
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NOTE 6: LONG-TERM DEBT
The components of long-term debt are as follows:
(in 000s)
As ofMarch 31, 2025June 30, 2024
Senior Notes, 5.250%, due October 2025
$350,000 $350,000 
Senior Notes, 2.500%, due July 2028
500,000 500,000 
Senior Notes, 3.875%, due August 2030
650,000 650,000 
Debt issuance costs and discounts(7,323)(8,905)
Total long-term debt1,492,677 1,491,095 
Less: Current portion(349,787)— 
Long-term portion$1,142,890 $1,491,095 
Estimated fair value of long-term debt$1,422,000 $1,391,000 
Our unsecured committed line of credit (CLOC) provides for an unsecured senior revolving credit facility in the aggregate principal amount of $1.5 billion, which includes a $175.0 million sublimit for swingline loans and a $50.0 million sublimit for standby letters of credit. 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.
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: (1) a covenant requiring the Company to maintain a debt-to-EBITDA ratio, as defined by the CLOC agreement, calculated on a consolidated basis of no greater than (a) 3.50 to 1.00 as of the last day of each fiscal quarter ending on March 31, June 30, and September 30 of each year and (b) 4.50 to 1.00 as of the last day of each fiscal quarter ending on December 31 of each year; (2) a covenant requiring us to maintain an interest coverage ratio (EBITDA-to-interest expense) calculated on a consolidated basis of not less than 2.50 to 1.00 as of the last date of any fiscal quarter; and (3) covenants restricting our ability to incur certain additional debt, incur liens, merge or consolidate with other companies, sell or dispose of assets (including equity interests), liquidate or dissolve, engage in certain transactions with affiliates or enter into certain restrictive agreements. The CLOC includes provisions for an equity cure which could potentially allow us to independently cure certain defaults. Proceeds under the CLOC may be used for working capital needs or for other general corporate purposes. We were in compliance with these requirements as of March 31, 2025.
We had no outstanding balance under our CLOC and amounts available to borrow were not limited by the debt-to-EBITDA covenant as of March 31, 2025.
NOTE 7: INCOME TAXES
We file a consolidated federal income tax return in the U.S. with the Internal Revenue Service (IRS) and file tax returns in various state, local, and foreign jurisdictions.
We had gross unrecognized tax benefits of $284.0 million and $251.8 million as of March 31, 2025 and June 30, 2024, respectively. The gross unrecognized tax benefits increased by $32.2 million during the nine months ended March 31, 2025. The increase is primarily related to various current federal and state tax positions expected to be taken in our income tax returns. We believe it is reasonably possible that the balance of unrecognized tax benefits could decrease by approximately $148.4 million within the next twelve months. The anticipated decrease is due to the expiration of statutes of limitations, anticipated closure of various tax matters currently under examination, and settlements with tax authorities. For such matters where a change in the balance of unrecognized tax benefits is not yet deemed reasonably possible, no estimate has been included.

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Our effective tax rate for continuing operations, including the effects of discrete tax items, was 25.3% and 17.6% for the nine months ended March 31, 2025 and 2024, respectively. Discrete items increased the effective tax rate by 0.9% for the nine months ended March 31, 2025 and decreased the effective tax rate by 6.3% for the nine months ended March 31, 2024. Discrete income tax expense of $3.8 million and benefit of $26.0 million were recorded in the nine months ended March 31, 2025, and 2024, respectively. The discrete tax expense recorded in the current period primarily resulted from interest expense on uncertain tax positions, partially offset by benefits related to investment tax credit purchases and stock-based compensation vesting. The discrete tax benefit recorded in the prior period primarily resulted from settlements with taxing authorities and state statute of limitations expirations. The impact discrete tax items have on our tax rate through the third quarter are slightly exaggerated versus the impact discrete tax items have on the full fiscal year tax rate.
NOTE 8: COMMITMENTS AND CONTINGENCIES
Our U.S. and Canadian businesses offer our 100% accuracy guarantee. 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. Our liability related to estimated losses under the 100% accuracy guarantee was $11.3 million and $14.1 million as of March 31, 2025 and June 30, 2024, respectively. The short-term and long-term portions of this liability are included in deferred revenue and other liabilities in the consolidated balance sheets.
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 $32.4 million and $26.9 million as of March 31, 2025 and June 30, 2024 respectively, with amounts recorded in deferred revenue and other liabilities. 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 obligation under these lines of credit was $21.0 million at March 31, 2025, and net of amounts drawn and outstanding, our remaining commitment to fund totaled $9.1 million.
During the nine months ended March 31, 2025, the Company entered into an agreement to purchase federal investment tax credits (ITC), if certain conditions are met. 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 approximately $75.1 million if certain conditions set forth in the agreement are satisfied, with the final payment anticipated to occur by June 30, 2025.
Emerald Advance® term loans are originated by Pathward®, N.A. (Pathward). We purchase participation interests, at par, in all EAs originated by Pathward in accordance with our participation agreement. Our participation interest varies by jurisdiction. At March 31, 2025, the principal balance of purchased participation interests for the current year totaled $260.6 million, which represents 87% of total EA volume originated by Pathward.
Refund Advance loans are originated by Pathward and offered to certain assisted U.S. tax preparation clients, based on client eligibility as determined by Pathward. We pay fees primarily based on loan size and customer type. We have provided a guarantee up to $18.0 million related to certain loans to clients prior to the IRS accepting electronic filing. At March 31, 2025, we accrued an estimated liability of $2.4 million related to this guarantee, compared to $1.4 million at June 30, 2024.
NOTE 9: 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. 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. U.S. jurisdictions permit considerable variation in the assertion of monetary
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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.
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.
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 no amount within the range can be identified as a better estimate than any other amount, we accrue the minimum amount in the range.
For such matters where a loss is believed to be reasonably possible, but not probable, or the loss cannot be reasonably estimated, no accrual has been made. It is possible that such matters could require us to pay damages or make other expenditures or accrue liabilities in amounts that could not be reasonably estimated as of March 31, 2025. While the potential future liabilities could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known, we do not believe any such liabilities are likely to have a material adverse effect on our business and our consolidated financial position, results of operations, and cash flows. Our accrued liabilities were $5.5 million and $7.2 million as of March 31, 2025 and June 30, 2024, respectively.
Our estimate of the aggregate range of reasonably possible losses includes (1) matters where a liability has been accrued and there is a reasonably possible loss in excess of the amount accrued for that liability, and (2) matters where a liability has not been accrued but we believe a loss is reasonably possible. This aggregate range only represents those losses as to which we are currently able to estimate a reasonably possible loss or range of loss. It does not represent our maximum loss exposure.
Matters for which we are not currently able to estimate the reasonably possible loss or range of loss are not included in this range. We are often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the reasonably possible loss or range of loss, such as precise information about the amount of damages or other remedies being asserted, the defenses to the claims being asserted, discovery from other parties and investigation of factual allegations, rulings by courts or arbitrators on motions or appeals, analyses by experts, or the status or terms of any settlement negotiations.
The estimated range of reasonably possible loss is based upon currently available information and is subject to significant judgment and a variety of assumptions, as well as known and unknown uncertainties. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from the current estimate. As of March 31, 2025, we believe the estimate of the aggregate range of reasonably possible losses in excess of amounts accrued, where the range of loss can be estimated, is not material.
At the end of each reporting period, we review relevant information with respect to litigation, arbitration and other related loss contingencies and update our accruals, disclosures, and estimates of reasonably possible loss or range of loss based on such reviews. Costs incurred with defending matters are expensed as incurred. Any receivable for insurance recoveries is recorded separately from the corresponding liability, and only if recovery is determined to be probable and reasonably estimable.
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We believe we have meritorious defenses to the claims asserted in the various matters described in this note, and we intend to defend them vigorously. The amounts claimed in the matters are substantial, however, and there can be no assurances as to their outcomes. In the event of unfavorable outcomes, it could require modifications to our operations; 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.
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.
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.
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.
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Consolidated – Financial Results(in 000s, except per share amounts)
Three months ended March 31,20252024$ Change% Change
Revenues:
U.S. tax preparation and related services:
Assisted tax preparation$1,635,877 $1,534,825 $101,052 6.6 %
Royalties133,961 141,915 (7,954)(5.6)%
DIY tax preparation214,666 198,570 16,096 8.1 %
Refund Transfers113,732 118,937 (5,205)(4.4)%
Peace of Mind® Extended Service Plan15,625 16,813 (1,188)(7.1)%
Tax Identity Shield®7,025 7,536 (511)(6.8)%
Other14,582 12,065 2,517 20.9 %
Total U.S. tax preparation and related services2,135,468 2,030,661 104,807 5.2 %
Financial services:
Emerald Card® and SpruceSM
40,195 41,160 (965)(2.3)%
Interest and fee income on Emerald Advance®14,286 21,169 (6,883)(32.5)%
Total financial services54,481 62,329 (7,848)(12.6)%
International60,438 68,264 (7,826)(11.5)%
Wave26,717 23,580 3,137 13.3 %
Total revenues$2,277,104 $2,184,834 $92,270 4.2 %
Compensation and benefits:
Field wages532,916 510,299 (22,617)(4.4)%
Other wages74,621 75,356 735 1.0 %
Benefits and other compensation111,575 99,653 (11,922)(12.0)%
719,112 685,308 (33,804)(4.9)%
Occupancy119,709 119,364 (345)(0.3)%
Marketing and advertising196,667 194,349 (2,318)(1.2)%
Depreciation and amortization29,221 30,672 1,451 4.7 %
Bad debt40,479 41,008 529 1.3 %
Other193,603 185,929 (7,674)(4.1)%
Total operating expenses1,298,791 1,256,630 (42,161)(3.4)%
Other income (expense), net4,554 5,224 (670)(12.8)%
Interest expense on borrowings(24,686)(26,070)1,384 5.3 %
Pretax income958,181 907,358 50,823 5.6 %
Income taxes235,253 215,772 (19,481)(9.0)%
Net income from continuing operations722,928 691,586 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.
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Three months ended March 31, 2025 compared to March 31, 2024
Revenues increased $92.3 million, or 4.2%, from the prior year. 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 $7.7 million, or 4.1%. The components of other expenses are as follows:
(in 000s)
Three months ended March 31,20252024$ Change% Change
Consulting and outsourced services$38,887 $37,896 $(991)(2.6)%
Bank partner fees30,836 29,681 (1,155)(3.9)%
Client claims and refunds8,420 8,117 (303)(3.7)%
Employee and travel expenses8,552 8,368 (184)(2.2)%
Technology-related expenses34,472 30,623 (3,849)(12.6)%
Credit card/bank charges39,605 36,702 (2,903)(7.9)%
Insurance4,644 2,645 (1,999)(75.6)%
Legal fees and settlements7,986 11,286 3,300 29.2 %
Supplies10,407 11,231 824 7.3 %
Other9,794 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 $215.8 million in the prior year. The effective tax rate for the three months ended March 31, 2025, and 2024 was 24.6% and 23.8%, respectively.
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Consolidated - Financial Results(in 000s, except per share amounts)
Nine months ended March 31,20252024$ Change% Change
Revenues:
U.S. tax preparation and related services:
Assisted tax preparation$1,727,220 $1,622,430 $104,790 6.5 %
Royalties143,312 153,070 (9,758)(6.4)%
DIY tax preparation231,646 215,529 16,117 7.5 %
Refund Transfers115,229 120,892 (5,663)(4.7)%
Peace of Mind® Extended Service Plan54,867 59,100 (4,233)(7.2)%
Tax Identity Shield®14,947 16,810 (1,863)(11.1)%
Other40,215 32,637 7,578 23.2 %
Total U.S. tax preparation and related services2,327,436 2,220,468 106,968 4.8 %
Financial services:
Emerald Card® and SpruceSM
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 services85,763 98,195 (12,432)(12.7)%
International157,104 158,398 (1,294)(0.8)%
Wave79,681 70,656 9,025 12.8 %
Total revenues$2,649,984 $2,547,717 $102,267 4.0 %
Compensation and benefits:
Field wages682,575 650,529 (32,046)(4.9)%
Other wages230,687 222,125 (8,562)(3.9)%
Benefits and other compensation188,731 170,964 (17,767)(10.4)%
1,101,993 1,043,618 (58,375)(5.6)%
Occupancy326,026 319,843 (6,183)(1.9)%
Marketing and advertising221,502 211,135 (10,367)(4.9)%
Depreciation and amortization87,247 91,004 3,757 4.1 %
Bad debt62,625 67,560 4,935 7.3 %
Other393,900 360,111 (33,789)(9.4)%
Total operating expenses2,193,293 2,093,271 (100,022)(4.8)%
Other income (expense), net19,215 20,982 (1,767)(8.4)%
Interest expense on borrowings(62,285)(63,304)1,019 1.6 %
Pretax income413,621 412,124 1,497 0.4 %
Income taxes104,580 72,527 (32,053)(44.2)%
Net income from continuing operations309,041 339,597 (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.
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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 $33.8 million, or 9.4%. The components of other expenses are as follows:
(in 000s)
Nine months ended March 31,20252024$ Change% Change
Consulting and outsourced services$72,770 $67,297 $(5,473)(8.1)%
Bank partner fees32,199 28,616 (3,583)(12.5)%
Client claims and refunds18,696 17,463 (1,233)(7.1)%
Employee and travel expenses27,164 26,429 (735)(2.8)%
Technology-related expenses87,035 80,962 (6,073)(7.5)%
Credit card/bank charges76,300 71,639 (4,661)(6.5)%
Insurance12,444 8,071 (4,373)(54.2)%
Legal fees and settlements29,640 19,715 (9,925)(50.3)%
Supplies16,884 18,349 1,465 8.0 %
Other20,768 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.
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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 31,20252024
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.
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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 no 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 ofMarch 31, 2025
June 30, 2024
Short-termLong-termOutlookShort-termLong-termOutlook
Moody'sP-3Baa3StableP-3Baa3Stable
S&PA-2BBBStableA-2BBBStable
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
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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 ofMarch 31, 2025June 30, 2024
Current assets$74,093 $44,423 
Noncurrent assets1,789,807 1,778,832 
Current liabilities432,944 77,848 
Noncurrent liabilities1,148,515 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 taxes45,242 75,819 
Net income from continuing operations34,837 57,441 
Net income32,129 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
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Q3 FY2025 Form 10-Q| H&R Block, Inc.
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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,
2025202420252024
Net income - as reported$722,330 $690,737 $306,334 $337,500 
Discontinued operations, net598 849 2,707 2,097 
Net income from continuing operations - as reported722,928 691,586 309,041 339,597 
Add back:
Income taxes235,253 215,772 104,580 72,527 
Interest expense24,686 26,070 62,285 63,304 
Depreciation and amortization29,221 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,
2025202420252024
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 tax0.06 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,
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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.
ITEM 4.     CONTROLS AND PROCEDURES
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES – As of the end of the period covered by this Form 10-Q, management, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING – There were no changes during the three months ended March 31, 2025 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II    OTHER INFORMATION
ITEM 1.     LEGAL PROCEEDINGS
For a description of our material pending legal proceedings, see discussion in Part I, Item 1, note 9 to the consolidated financial statements.
ITEM 1A.    RISK FACTORS
There have been no material changes in our risk factors from those reported in our June 30, 2024 Annual Report on Form 10-K.
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Q3 FY2025 Form 10-Q| H&R Block, Inc.
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ITEM 2.    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
A summary of our purchases of H&R Block common stock during the three months ended March 31, 2025 is as follows:
(in 000s, except per share amounts)
Total Number of
Shares Purchased (1)
Average
Price Paid
per Share
Total Number of Shares
Purchased as Part of
Publicly Announced Plans 
or Programs (2)
Maximum Dollar Value of
Shares that May Yet Be
Purchased Under the Plans 
or Programs (2)
January 1 - January 314 $55.23 — $1,100,000 
February 1 - February 282 $54.43 — $1,100,000 
March 1 - March 31— $— — $1,100,000 
6 $55.05 — 
(1)We purchased approximately 6 thousand shares in connection with funding employee income tax withholding obligations arising upon the lapse of restrictions on restricted share units.
(2)On August 15, 2024, we announced that our Board of Directors approved a $1.5 billion share repurchase program. The repurchase program does not have an expiration date.
ITEM 3.    DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.    MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5.    OTHER INFORMATION
Director and Section 16 Officer Trading Arrangements
During the three months ended March 31, 2025, no director or Section 16 officer adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.



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ITEM 6.    EXHIBITS
The following exhibits are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K:
List of Guarantor and Issuer Subsidiaries, filed as Exhibit 22 to the Company’s Annual Report on Form 10-K for the year ended June 30, 2024, file number 1-06089, is incorporated herein by reference.
Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Certification by Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002.
Certification by Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH
Inline XBRL Taxonomy Extension Schema
101.CAL
Inline XBRL Extension Calculation Linkbase
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
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Q3 FY2025 Form 10-Q| H&R Block, Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
H&R BLOCK, INC.
/s/ Jeffrey J. Jones II
Jeffrey J. Jones II
President and Chief Executive Officer
May 7, 2025
/s/ Tiffany L. Mason
Tiffany L. Mason
Chief Financial Officer
May 7, 2025
/s/ Kellie J. Logerwell
Kellie J. Logerwell
Chief Accounting Officer
May 7, 2025

H&R Block, Inc. |Q3 FY2025 Form 10-Q
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