Earnings Call Transcript - HRB Q4 2024

Operator, Operator

Thank you for standing by, and welcome to H&R Block's Fourth Quarter Fiscal Year 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. I would now like to hand the call over to Michaella Gallina, Vice President, Investor Relations. Please go ahead.

Michaella Gallina, Vice President, Investor Relations

Thank you, operator. Good afternoon, everyone, and welcome to H&R Block’s fiscal year 2024 financial results conference call. Joining me today are Jeff Jones, our President and Chief Executive Officer, and Tony Bowen, our Chief Financial Officer. Earlier today, we issued a press release and presentation, which can be downloaded or viewed live on our website at investors.hrblock.com. Our call is being broadcast and webcast live, and a replay of the webcast will be available for 90 days. Before we begin, I’d like to remind listeners that comments made by management may include forward-looking statements. These statements involve material risks and uncertainties, and actual results could differ from those projected due to numerous factors. For a description of these risks, please see H&R Block's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, as updated periodically with our other SEC filings. Please note, some metrics we’ll discuss today are presented on a non-GAAP basis. We’ve reconciled the comparable GAAP and non-GAAP figures in the appendix of our presentation. Finally, the content of this call contains time-sensitive information accurate only as of today, August 15, 2024. H&R Block undertakes no obligation to revise or otherwise update any statements to reflect events or circumstances after the date of this call. With that, I will now turn it over to Jeff.

Jeff Jones, President and CEO

Good afternoon, everyone, and thanks for joining us today. We will begin by sharing our results for the full fiscal year and the progress we continue to make on our Block Horizons imperatives; then Tony will discuss our financial performance and outlook for fiscal ‘25, and then we’ll open it up for Q&A. Beginning with our fiscal ‘24 results, I am pleased that we were able to deliver another year of revenue growth, EBITDA that grows even faster, and double-digit EPS growth. Our DIY business continued its momentum with market share gains for the second consecutive year. Performance was driven by paid client and NAC growth, as well as ongoing strength in our Tax Pro Review product. I was pleased with how quickly we were able to launch AI Tax Assist, which resulted in higher new client conversion, and our customer satisfaction scores remained strong. In Assisted, our brand continued to resonate with higher-value clients, and we grew NAC; trends in Assisted small business tax also remained positive this year. In addition, we’re continuing to drive value for shareholders through our capital allocation practice. In fact, today we announced another 17% increase to our quarterly dividend, as well as a new repurchase authorization of $1.5 billion, which replaces the prior authorization. Since 2016, we have increased the dividend by 88% and repurchased more than 40% of shares outstanding. Looking to fiscal ‘25, we feel well-positioned to deliver for clients and shareholders; and Tony will share more about our outlook in a moment. But first, let me turn to our Block Horizons strategy, where we continue to make important progress in all three of our strategic imperatives. Starting with Small Business, we had another good year in tax, delivering revenue growth in the mid-single digits. NAC grew 3%, entity trends remained strong, and bookkeeping and payroll had another year of double-digit growth. Our centralized fulfillment model alongside our dedicated sales team have driven services client conversion, and we continue to see a lot of opportunity ahead. Turning to Wave, I’m pleased with the progress that has been made in the last year on our key priorities to accelerate revenue growth and drive profitability. You’ll recall we recently launched a new paid subscription solution, called Pro-Tier. This, along with our paid receipt product, are both designed to further empower small business owners to manage their business better. These products have been performing better than anticipated. For the full year, revenue growth was 7%. We continue to improve the losses in the business and expect ongoing positive trends in FY ‘25. Moving on to our Financial Products imperative, we are pleased with the growth of our mobile banking platform, Spruce, and its performance in both the Assisted and DIY channels this season. Since launch through June 30, Spruce has 476,000 sign-ups and we are nearing a milestone of $1 billion in customer deposits. We are pleased to see positive deposit trends, with nearly 50% coming from non-tax sources this year. Last month, deposits increased 60% year-over-year. We are excited about new innovations that will be rolling out in the coming months, and our team is focused on acquiring users in and out of the tax season. Now let’s turn to Block Experience, which is all about blending digital tools with human expertise and care. We feel great about how we’re positioned to serve clients however they want to be served, fully virtual to fully in person and everywhere in between. In DIY, our strategy continues to deliver, and we’re pleased with the results. As I mentioned, we had meaningful growth in paid clients and NAC, which translated to strong revenue growth of 11% this year. AI Tax Assist performed well, and we’re excited about our gen-AI use cases which have the potential to drive future efficiencies and cost savings. We look forward to continuing this momentum in fiscal year ’25. In the Assisted channel, we were pleased with our NAC growth, improved client satisfaction scores, and success in attracting and serving higher-value clients. We’re clear about where we can improve the experience for clients, and recently welcomed Curtis Campbell as President of Global Consumer Tax and Chief Product Officer, who has more than ten years of tax industry experience. His impact is already being felt across the organization and I’m excited about his leadership. Over the last few years, we’ve made significant strides in our products, services, and features through our Block Horizons plan, and I’m feeling very good about our positioning for fiscal year ‘25. Before I turn things over to Tony to share more about our financial performance and outlook, I want to take a moment to thank him for his incredible tenure at H&R Block. As we shared on the Q2 call, Tony made the personal decision to retire after a 20-year career with Block. Tony has been an integral part of our company, playing a key role in our growth, transformation, and success. His financial acumen, strategic insights, and industry experience have been invaluable to our team. During his tenure, Tony helped us navigate through numerous challenges and opportunities, ensuring that we remain on strong financial footing. He began his career with H&R Block as a Senior Treasury Analyst and has since held multiple executive roles. Under his leadership as CFO, we have returned more than $3.9 billion to shareholders. His impact on H&R Block will be felt for years to come. On behalf of the entire Block family and our Board of Directors, I want to extend our gratitude to Tony for his years of service and leadership, and we wish him all the best in his retirement and future endeavors. As you may have seen in our announcement last week, I am pleased to share that we have hired Tony’s successor. Tiffany Mason brings a proven track record of financial leadership in consumer services, retail, and franchising, which are all critical to our business. She most recently served as EVP and CFO at Driven Brands, a high-growth auto services company, where she drove strong organic and inorganic growth and led the company through a successful IPO. Prior to that, Tiffany spent 13 years at Lowe’s, a Fortune 50 omni-channel home improvement retailer. Tony and Tiffany are working closely together to ensure a seamless transition, and she will officially step into the role of CFO on September 13th. In addition, as we continue to transform H&R Block into an agile and innovative company that delivers more value to our clients, associates, and shareholders. I’ve also added another key member to our senior leadership team. Scott Manuel joined last week as Chief Strategy and Operations Officer and reports directly to me. Within his role, Scott is overseeing functions essential to driving our long-term enterprise strategy and improving our execution. Scott has a long history of delivering customer-centric innovation in complex and dynamic environments – he’s an accomplished engineer, has worked in large-scale companies and private equity, across industries, and is steeped in artificial intelligence. I’m thrilled to have Curtis, Tiffany, and Scott join the already strong Senior Leadership Team. With that, Tony, I will now turn it over to you.

Tony Bowen, Chief Financial Officer

Thank you, Jeff. It's been an incredible journey, and I'm deeply grateful for the career I’ve had at H&R Block. First and foremost, I want to thank our finance department and associates, whose hard work and commitment have been instrumental in driving our success. I also want to extend my gratitude to our Board of Directors, shareholders, and investors for their support and trust. As I look back on my time with the company, I'm immensely proud of what we have accomplished together. I’m confident that Block will continue to drive value for shareholders in the years to come. With that, I will now turn to our fiscal year ‘24 results. We delivered $3.6 billion of revenue, an increase of 4% or $138 million, primarily due to a higher net average charge and company-owned volumes in the Assisted category, combined with greater online paid returns at a higher net average charge in DIY, partially offset by lower Emerald Card activity in the current year. Total operating expenses in the year were $2.8 billion, an increase of 3% or $82 million, primarily due to higher labor costs and bad debt expense, partially offset by lower consulting and outsourced services. Interest expense was $79 million, an increase of 8% over the prior year due to higher draws on our line of credit and the higher rate environment. Pretax income was $762 million, an increase of $51 million, or 7%, primarily due to higher revenues in the current year. Our effective tax rate was 21.6% for the full year versus 21% in the prior year. Turning to EBITDA, we delivered $963 million, compared to $915 million in the prior year, an increase of more than 5%. We are pleased with another year of growing EBITDA faster than revenue. Earnings per share from continuing operations increased from $3.56 to $4.14, or 16%, while adjusted earnings per share from continuing operations increased from $3.82 to $4.41, or 15%. In FY ‘24, we acquired a total of 158 franchise offices. We feel great about franchisees’ willingness to sell to us and are pleased with how this strategy supports our longer-term revenue and earnings growth. As Jeff shared, our capital allocation story remains strong. Regardless of year-to-year nuances, our disciplined approach drives meaningful value for shareholders. We produce significant and stable cash flow, pay a growing dividend, and buy back a material number of shares. We also today announced a 17% increase in our quarterly dividend to $37.5 per share. Since 2016, we’ve increased the dividend by 88%. In FY ‘24, we completed $350 million of share repurchases at an average price of $43.66; and today we are pleased to announce a new share repurchase authorization of $1.5 billion. Since 2016, we have repurchased more than $2.3 billion, retiring over 89 million shares, or more than 40% of shares outstanding at an average price of $26.74. Now turning to our FY ‘25 outlook. Let me begin with context around the assumptions we’ve made. First, we believe the industry growth next year will be in line with historical trends, or about 1%. Second, we assume that we will maintain market share in the overall tax category, but our goal, of course, is always to grow share. Third, we expect to continue taking low-single digit price, which we successfully executed again this year with customer satisfaction scores remaining strong. Fourth, we expect Wave and Small Business to continue to be revenue growth drivers, and lastly, we will continue to repurchase franchise locations opportunistically. As a result, our outlook for FY ‘25 is for revenue to be in the range of $3.69 billion to $3.75 billion. EBITDA to be in the range of $975 million to $1.02 billion. EPS to be in the range of $5.15 to $5.35, which will benefit from an unusually low effective tax rate of approximately 13%. The tax rate is positively impacted due to the anticipated closure of various matters under examination and the expiration of statute of limitations. We expect this to contribute approximately 50 cents to EPS in fiscal year ‘25. As we shared, we have multiple levers to drive annual revenue growth in our targeted range of 3% to 6%; and we believe we can leverage our cost structure for EBITDA to outpace revenue, while utilizing share repurchase to grow EPS even faster. All-in-all, we are well positioned for fiscal ’25 and beyond. In closing, it has been an honor to serve as CFO, and I look forward to seeing the company's continued success in the years to come. With that, I will now turn it back over to Jeff for some closing remarks.

Jeff Jones, President and CEO

Thank you, Tony. As I reflect on all that we have accomplished, I am grateful for our associates and team. Every day, we strive to deliver on our purpose of providing help and inspiring confidence in our clients and communities everywhere. I would like to extend a sincere and meaningful thank you to our tax professionals, our franchisees, and our associates who make our success possible. I am looking forward to all we will accomplish in the next year and sharing our Q1 results in November. Now, operator, we will open the line for questions.

Operator, Operator

Our first question comes from the line of Kartik Mehta of Northcoast Research.

Kartik Mehta, Analyst

Hey, good afternoon. First of all, Tony, it was a pleasure working with you, the best of luck in your retirement.

Tony Bowen, Chief Financial Officer

Thanks, Kartik.

Kartik Mehta, Analyst

Hey, Jeff. Welcome. Jeff, if you look at FY '25 and over the next tax season and kind of compared to this tax season, what changes do you think that Block needs to make sure that you maintain your market share on the Assisted side?

Jeff Jones, President and CEO

Thank you, Kartik. There’s no doubt about it, and I touched on this during our last call regarding the opportunity I recognized last year while observing office execution and Assisted services. We have a significant number of clients who are opting for our brand. They are scheduling appointments and coming into the office, but we didn't meet their expectations adequately. Our primary focus for the entire team as we approach 2025 is to enhance the client experience, manage expectations more effectively, and help clients grasp the value we offer. Ultimately, we aim to deliver on that promise. We’re particularly emphasizing new clients since we see even greater potential with those who are engaging with us for the first time and may not fully understand how the H&R Block process works. There are many initiatives across various teams that are being addressed, but this is the main priority for everyone in the upcoming year.

Kartik Mehta, Analyst

And then, Tony, just on free cash flow. Obviously, your free cash flow this year was much higher than net income. I'm assuming depreciation will be higher than CapEx again next year. But any other changes on the operating cash flow line that might impact free cash flow next year?

Tony Bowen, Chief Financial Officer

No. I mean you're right. The depreciation and amortization continues to exceed CapEx, which is why we're generating more than 100% of free cash flow relative to net income. So that trend should continue. As you know, FY '23 with unusually high free cash flow because of some tax benefits that we got. But this year, I'd say it was more of a normal year. Free cash flow as defined by cash flow from operations, less CapEx is north of $650 million. And I think that's a pretty good run rate number for us going forward.

Kartik Mehta, Analyst

Thanks. Appreciate it.

Tony Bowen, Chief Financial Officer

Thanks, Kartik.

Operator, Operator

Thank you. Our next question comes from the line of Scott Schneeberger of Oppenheimer & Co.

Scott Schneeberger, Analyst

Thank you very much. Good afternoon, Tony, I'll miss you as well. Wishing you all the best. I promise I'll get a question to you. But to start, Jeff, on a high level, looking ahead to next year, could you provide some insights on your expectations? The next earnings call will likely coincide with the election, and I'm interested in your thoughts on the political landscape and how it could impact the anticipated 1% growth for the industry. Could you also compare the candidates and any other factors you believe may affect the upcoming tax season? I'll have a quick follow-up after that. Thank you.

Jeff Jones, President and CEO

I'll leave the compare and contrast candidates for the political pundits. I mean, we absolutely have been in this business long enough to be through many election cycles and just have never really seen an election itself impact the tax filing season. And so it will happen. And then as we get into whatever happens in terms of who wins, whatever policy changes they may make and how that trickles down and impacts the consumer, I mean we certainly aren't trying to predict that, but that's where it really starts to potentially have an impact, positively potentially on the business as well. So as we think about the season, Tony mentioned, we expect it to be a more normal season. Each year, there's always a little something that pops up. I think we've proven a great ability to respond to whatever those things are. 1099-Ks have been on the agenda for a couple of years, we're ready. If it happens, it's not built into the plan. We don't know if it will happen. So that does hang out there, and we'll wait and see. But otherwise, we're most focused on what can we best do to serve our customers and how do we build the best products and experiences to win more people to the brand.

Scott Schneeberger, Analyst

Thank you, Jeff. I have one more question for you before I turn to Tony. Kartik inquired about the market share opportunities in Assisted and what actions you can take in that area. You've made significant progress in market share within do-it-yourself over the past couple of years. Is this momentum sustainable? What strategies are you implementing to maintain that position? Thank you.

Jeff Jones, President and CEO

Well, it's been a couple of years of really nice performance, as you said. And the key always starts with having an excellent product, an experience that is easy for the consumer and we feel very good about the product. Of course, there's always things we want to do every year to make it better and better, but that's always the starting point. We have to deliver great value and price competitively, we're doing that. That's obviously a more dynamic conversation as the season unfolds, and we see competitive moves. And then the third thing is we continue to be very aggressive about going after dissatisfied TurboTax clients. We've made that very easy to switch. We have been very aggressive in how we market against them. You should expect us to follow that recipe but not take anything for granted.

Scott Schneeberger, Analyst

Thank you. I appreciate that. Tony, congratulations once again. My question is regarding margin expansion. It seems like there was some progress this year. You mentioned that EBITDA is growing faster than revenue, and the guidance for next year suggests that the expectations are aligned. As you transition to Tiffany, what potential for margin expansion do you see in the coming years, and what factors could influence that? Thank you.

Tony Bowen, Chief Financial Officer

Thanks, Scott, and I really appreciate working with you over the years. So we've delivered pretty consistently EBITDA growing faster than revenue for a number of years, and we've talked about if we can hit that 3% plus revenue number, EBITDA can grow over the long term, 1.5 times that rate, and I think that just takes advantage of the cost structure, takes advantage of us managing expenses, trying to drive productivity, figuring out ways to invest in the business by taking out costs in other places. And as you said, margin has expanded several years in a row, and I think it will continue. We guided to, obviously, top line growth again in '25. We guided to EBITDA growing faster than the revenue and EPS growing even faster. So the model is working. There's always year-over-year specific nuances one year over another. This year, we have some ERC credits that we got the benefit of in ‘24 that aren’t continuing in ‘25. So that has EBITDA being a little bit lower on a year-over-year basis, but it’s still outpacing revenue when you look at the guidance range. So overall, the model is still working. Inflation has moderated versus what we saw kind of coming out of the pandemic. So that’s obviously helpful. We’re still seeing things like merit increases and rent go up, but some of those other things like supplies and utilities that were kind of out of control for a few years are now kind of more normal rates. So the model is working, and I think it will continue to work for the foreseeable future.

Jeff Jones, President and CEO

Great. Thanks, Scott.

Tony Bowen, Chief Financial Officer

Thanks, Scott.

Operator, Operator

Thank you. Our next question comes from the line of George Tong of Goldman Sachs.

George Tong, Analyst

Hi. Thanks. Good morning, or good afternoon. I would also like to extend the thanks and congrats to Tony. Best wishes ahead.

Tony Bowen, Chief Financial Officer

Thank you, George. I appreciate it.

George Tong, Analyst

Yeah. So you mentioned looking at the outlook, industry volumes, you're expecting to be up 1%. Can you break that down into expectations for the Assisted and DIY categories? How fast do you expect both of those to grow in the 2025 tax season?

Tony Bowen, Chief Financial Officer

Yeah. I mean, I don't think our expectations for this upcoming season are different than what we would have thought over the last several years. Obviously, this most recent one was a little bit unusual because of the California extension causing some rebound this most recent tax season. But I think going into next year, we expect DIY to grow a little bit faster than Assisted. I think that's consistent with the longer-term trend. Overall industry growth of 1%, probably means DIY growing a couple of percent, Assisted slightly up. I think that's been our mantra for a long time. And I think over the year-to-year, you might have slight nuances, but over the longer term, that's been the trend.

George Tong, Analyst

Okay. That's helpful. Regarding the goal to maintain market share, how much is that influenced by overall tax volumes compared to individually Assisted and DIY? In other words, do you anticipate gaining market share in DIY? Is that the base case reflected in the guidance? And does the guidance also assume that Assisted market share remains stable?

Tony Bowen, Chief Financial Officer

Yeah. I think we start with we want to make sure we maintain overall share. We want to ensure that we're serving as many customers as the category is growing. And obviously, we did that in this most recent year. So that's a starting place. I mean obviously, given the trends in our Assisted business over the last few years, we know that that's more of a headwind and DIY has got a lot of tailwind. So that wouldn't be surprising. But as Jeff said, we're making a lot of changes and focus in the Assisted channel to try to get back to flat share. So it's definitely the goal, but it's not a current expectation. Overall share being flat across the tax category is the base expectation.

George Tong, Analyst

Got it. That's helpful. And just one more quick follow-up on initiatives to drive higher or stable or higher market share in Assisted. I know last year, trying to maintain market share was a big area of focus for Assisted and you've tried a number of initiatives. I guess, how will the approach this year be different than last year? Given last year, you had such a big focus on maintaining market share in Assisted as well.

Jeff Jones, President and CEO

Yes, you're right. We did make progress last year by slowing the decline among EITC filers, which is encouraging. However, that progress isn’t sufficient. One of our major focuses this year is converting more of the new clients who start with us. As I've mentioned, the customer journey is critical. Some of the reasons clients didn’t follow through last year were because they were new to Block and didn’t fully grasp how the process worked. We didn’t effectively communicate and welcome them to our brand, which reflects a failure in execution. Our team is now focusing on improving the client experience throughout the tax preparation process, particularly for new clients, which we recognize as a priority area.

George Tong, Analyst

Very helpful. Thanks very much.

Jeff Jones, President and CEO

Thanks, George.

Tony Bowen, Chief Financial Officer

Thank you, George.

Operator, Operator

Thank you. Our next question comes from the line of Alex Paris of Barrington Research.

Alexander Paris, Analyst

Hi, guys. Can you hear me?

Tony Bowen, Chief Financial Officer

We got you.

Jeff Jones, President and CEO

Yes.

Alexander Paris, Analyst

Good. Thank you. I'd like to add my congratulations to Tony. We'll definitely miss you and just wanted to say to Tiffany, who I'm sure is listening. We look forward to working with you.

Tony Bowen, Chief Financial Officer

Thank you, Alex. It's been a pleasure. So you've been great over the years.

Alexander Paris, Analyst

Yeah, same here. Thank you. So just to dive a little bit more into the fiscal 2025 guidance. You basically have revenue growth at 3%, EBITDA growth at 4% and adjusted EPS growth at about 8%. So the first question is, what sort of assumption do you have for share repurchases in fiscal 2025?

Tony Bowen, Chief Financial Officer

Yeah. I mean, obviously, we don't share the specific number that we're targeting. But obviously, we've assumed some share repurchase, which is obviously driving EPS benefit. Obviously, some of the share repurchase we did even in '24 gives a benefit going into '25 as well. But I think you should expect us to be on a trend that's similar to what we've done in the last several years. Obviously, we try to be opportunistic and take advantage of volatility in the stock price, which naturally happens over time. But I think our approach will be very consistent with what you've seen in the last several years.

Alexander Paris, Analyst

Great. And then seasonally, refresh my memory, you do more of your share repurchasing in the first half of the fiscal year?

Tony Bowen, Chief Financial Officer

That's right. We typically come out of this call and have a focus on it, so in Q1 and into Q2. And we do that for a couple of reasons. One is we get a better EPS benefit, the earlier we buy it in the year. Secondly, we're typically in blackout a lot of time during tax season. So for that reason, we try to do most of it in the first half of the year. That isn't always the case. There have been years where we've done 10b5-1 programs that we've executed during tax season. We've done open market purchases coming out of tax season. So it's not always the case, but generally, we try to do it in the first half of the year.

Alexander Paris, Analyst

Great. Thank you. And then regarding the long-term growth algorithm. For fiscal 2025, you're kind of at the low end of that revenue range. I assume there's some conservatism built into that. Adjusted EBITDA is definitely growing or EBITDA is growing faster than revenue. But I think you said it earlier and perhaps in response to a question, you have some ERC numbers that are not going to repeat this year versus last year. Is that the entire explanation for the slightly lower EBITDA growth rate than I would expect? But with all that said, I just want to be clear. I realize your guidance is above consensus. So just a little bit more.

Tony Bowen, Chief Financial Officer

The employee retention credit has had an impact of about $15 million, which significantly boosted EBITDA, although there will be a roll-off in 2024. We aim to set achievable numbers, and even at the lower end of our range, the top line is still within expectations. The upper limit of our EBITDA guidance exceeds $1 billion, which is a remarkable achievement. Additionally, EPS has improved due to the much lower tax rate I mentioned earlier. We've surpassed $4 in EPS, whether adjusted or on a GAAP basis, and we are now guiding for a number over $5, even accounting for the tax rate benefits. Overall, we are pleased with the progress. While there are year-over-year P&L variations, the overall trend continues to move upward.

Alexander Paris, Analyst

Even with that expected one-time $0.50 per share gain as a result of the tax benefit, the adjusted EPS guidance, excluding that benefit, is still above consensus. I wanted to ask you about that tax benefit. Is there a particular quarter that you expect that to hit? Or is that going to hit evenly over the four quarters?

Tony Bowen, Chief Financial Officer

No, it will hit in a particular quarter once we've resolved the open audit and kind of the statutes expire. We're not exactly sure which quarter that will be yet. Could be Q2, could be later in the year, but it will definitely happen, we believe, in the fiscal year, which is why we included it in the guidance range.

Alexander Paris, Analyst

Got you. So the way you answered that question, it's unlikely in Q1. It's going to be Q2 or later in the year?

Tony Bowen, Chief Financial Officer

It's possible, but we don't have complete control over when that will happen. However, we expect it to occur by the end of the fiscal year.

Alexander Paris, Analyst

And then I think my last question for you is California. You got a little benefit in fiscal '24 because of the extended deadline from April 15 to October 15, as I recall. How much does that contribute to that extra bolus of revenue from California? Because I'm assuming you got two boluses of revenue from California last fall and then the spring. What’s the grow-over for fiscal 2025 because of that?

Tony Bowen, Chief Financial Officer

Yeah. I mean maybe the way to think about it is how much it drove the industry volume. And as you saw, the Assisted category is probably up about 1 point more because of that California extension in the prior year. So you think that’s driving 1 point of volume. But obviously, not all of that is – that doesn’t equal 1 point of revenue. So it’s probably 75% of that from a revenue perspective. So three quarters of 1 point of revenue, about 1 point of industry tax prep volume.

Alexander Paris, Analyst

Great. Super helpful, guys. Thanks, again.

Tony Bowen, Chief Financial Officer

Thank you.

Operator, Operator

I would now like to turn the conference back to Michaella Gallina for closing remarks.

Michaella Gallina, Vice President, Investor Relations

Thanks, Latif, and thanks, everyone for joining us. We look forward to speaking with you next quarter.

Operator, Operator

And this concludes today's conference call. Thank you for participating. You may now disconnect.