H&R Block, Inc.

What they do

H&R Block provides assisted and do-it-yourself tax preparation through company-owned and franchise offices, online platforms, and mobile apps. It also offers financial products such as the Spruce mobile banking app and Emerald Card, plus small business solutions via Block Advisors and Wave. The company operates primarily in the U.S., Canada, and Australia and reports as a single segment.

Revenue drivers

• U.S. tax preparation and related services — Largest contributor; includes assisted tax preparation, royalties, DIY, Refund Transfers, and Peace of Mind plans. For Q3 FY2026 (quarter ended March 31, 2026), this segment generated $2.24B, up 5.1% year-over-year.
• Financial services — Includes Emerald Card and Spruce banking products and Emerald Advance interest/fee income. Q3 FY2026 revenue was $54.8M, up 0.6% year-over-year.
• International — Tax preparation services in Canada and Australia. Q3 FY2026 revenue was $70.1M, up 16.0% year-over-year.
• Wave — Small business software for bookkeeping, payroll, and payments. Q3 FY2026 revenue was $29.9M, up 11.8% year-over-year.

Recent performance

For fiscal year 2026 (ended June 30, 2026), total revenue was $3.95B, up 4.9% year-over-year. Net income from continuing operations rose 20.8% to $736.3M, and adjusted EPS from continuing operations increased 13.9% to $5.31. The company repurchased 10.5 million shares at an average price of $47.48, and raised the quarterly dividend by 10% to $0.46 per share. Operating cash flow was $838.7M for fiscal 2026, up 23% from the prior year.

Strategy

Management emphasizes an 'expert-led, technology-enabled' strategy, blending human expertise with digital tools such as AI Tax Assist. They are focused on improving client mix, accelerating testing and experimentation to scale what works, and expanding financial products like Spruce and small business solutions. The company aims to deliver disciplined capital returns through dividends and share repurchases, while investing in technology and occupancy to support growth.

Risks

• Seasonal concentration — Revenue is highly dependent on the U.S. tax season, with Q3 (January-March) generating the bulk of annual revenue; any disruption could materially impact results.
• Regulatory inquiries — The company has received governmental inquiries related to the IRS Free File Program and DIY tax services, which could lead to fines, penalties, or restrictions.
• Competitive pressure — Competes with other tax preparation firms, software providers, and fintech companies; pricing and technology changes could erode market share.
• Leverage and refinancing risk — As of June 30, 2026, long-term debt was $1.49B; future refinancing may be at higher rates, and the company must manage interest expense and liquidity.

Outlook

For fiscal year 2027, management expects revenue in the range of $4.11 to $4.16 billion and adjusted EBITDA between $1.11 and $1.14 billion. They express confidence in continued momentum from fiscal 2026 execution, with focus on revenue growth, margin expansion, and shareholder returns. The company also expects to provide further guidance on effective tax rate.