H&R Block Inc 10-Q for FY2027 Q1
H&R Block Inc (HRB)
10-Q
2026-11-09
For: 2026-09-30
View Original
Added on
November 09, 2026
About this 10-Q
H&R Block Inc filed this 10-Q on November 9, 2026, covering the quarter ended September 30, 2026 (FY2027 Q1).
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $224.34M
- up 10.2% from $203.55M a year earlier
- Net loss
- $188.48M
- compared with a net loss of $165.82M a year earlier
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 | |||||||||||
| 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
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer | |||||||
| incorporation or organization) | Identification No.) | |||||||
(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 class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
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.
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).
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)
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 October 30, 2026: 121,553,093 shares.
Form 10-Q for the Period ended September 30, 2026
Table of Contents
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS: | (unaudited, in 000s, except per share amounts) | |||||||||||||||||||||||||
| Three months ended September 30, | ||||||||||||||||||||||||||
| REVENUES: | 2026 | 2025 | ||||||||||||||||||||||||
| Service revenues | ||||||||||||||||||||||||||
| U.S. services | ||||||||||||||||||||||||||
| Tax preparation | $ | $ | ||||||||||||||||||||||||
| Small business services | ||||||||||||||||||||||||||
| Refund transfers | ||||||||||||||||||||||||||
| Tax protection and identity services | ||||||||||||||||||||||||||
| Card and related services | ||||||||||||||||||||||||||
| Other services | ||||||||||||||||||||||||||
| Total U.S. services | 138,675 | 125,617 | ||||||||||||||||||||||||
| International services | ||||||||||||||||||||||||||
| Total service revenues | ||||||||||||||||||||||||||
| Royalties and other revenues | ||||||||||||||||||||||||||
| U.S. royalties | ||||||||||||||||||||||||||
| Interest and fee income on Emerald Advance® | ||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||
| Total royalties and other revenues | ||||||||||||||||||||||||||
| Total revenues | ||||||||||||||||||||||||||
| OPERATING EXPENSES: | ||||||||||||||||||||||||||
| Costs of revenues | ||||||||||||||||||||||||||
| Field compensation and benefits | ||||||||||||||||||||||||||
| Occupancy and equipment | ||||||||||||||||||||||||||
| Technology and related expenses | ||||||||||||||||||||||||||
| General operations expenses | ||||||||||||||||||||||||||
| Total costs of revenues | ||||||||||||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||||||||||||
| Corporate compensation and benefits | ||||||||||||||||||||||||||
| Marketing and advertising | ||||||||||||||||||||||||||
| General corporate expenses | ||||||||||||||||||||||||||
| Total selling, general and administrative expenses | ||||||||||||||||||||||||||
| Total operating expenses | ||||||||||||||||||||||||||
| Other income (expense), net | ||||||||||||||||||||||||||
| Interest expense on borrowings | ||||||||||||||||||||||||||
| Loss from continuing operations before income tax benefit | ( | ( | ||||||||||||||||||||||||
| Income tax benefit | ( | ( | ||||||||||||||||||||||||
| Net loss from continuing operations | ( | ( | ||||||||||||||||||||||||
Net loss from discontinued operations, net of tax benefits of $ | ( | ( | ||||||||||||||||||||||||
| NET LOSS | $ | ( | $ | ( | ||||||||||||||||||||||
H&R Block, Inc. |Q1 FY2027 Form 10-Q | 1 | ||||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS: | (unaudited, in 000s, except per share amounts) | |||||||||||||||||||||||||
| Three months ended September 30, | ||||||||||||||||||||||||||
| BASIC AND DILUTED LOSS PER SHARE: | 2026 | 2025 | ||||||||||||||||||||||||
| Continuing operations | $ | ( | $ | ( | ||||||||||||||||||||||
| Discontinued operations | ||||||||||||||||||||||||||
| Consolidated | $ | ( | $ | ( | ||||||||||||||||||||||
| DIVIDENDS DECLARED PER SHARE | $ | $ | ||||||||||||||||||||||||
| COMPREHENSIVE LOSS: | ||||||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||||||||||||||
| Change in foreign currency translation adjustments | ( | ( | ||||||||||||||||||||||||
| Other comprehensive loss | ( | ( | ||||||||||||||||||||||||
| Comprehensive loss | $ | ( | $ | ( | ||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
2 | Q1 FY2027 Form 10-Q| H&R Block, Inc. | ||||
| CONSOLIDATED BALANCE SHEETS | (unaudited, in 000s, except share and per share amounts) | |||||||||||||
| As of | September 30, 2026 | June 30, 2026 | ||||||||||||
| ASSETS | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Cash and cash equivalents - restricted | ||||||||||||||
Receivables, less allowance for credit losses of $ | ||||||||||||||
| Prepaid expenses and other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
Property and equipment, at cost, less accumulated depreciation and amortization of $ | ||||||||||||||
| Operating lease right of use assets | ||||||||||||||
| Intangible assets, net | ||||||||||||||
| Goodwill | ||||||||||||||
| Deferred tax assets and income taxes receivable | ||||||||||||||
| Other noncurrent assets, net | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||
| LIABILITIES: | ||||||||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||||||||
| Accrued salaries, wages and payroll taxes | ||||||||||||||
| Accrued income taxes and reserves for uncertain tax positions | ||||||||||||||
| Operating lease liabilities | ||||||||||||||
| Deferred revenue and other current liabilities | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Long-term debt | ||||||||||||||
| Deferred tax liabilities and reserves for uncertain tax positions | ||||||||||||||
| Operating lease liabilities | ||||||||||||||
| Deferred revenue and other noncurrent liabilities | ||||||||||||||
| Total liabilities | ||||||||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||||||||
| STOCKHOLDERS' EQUITY: | ||||||||||||||
Common stock, no par, stated value $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Accumulated other comprehensive loss | ( | ( | ||||||||||||
| Retained earnings (deficit) | ( | |||||||||||||
Less treasury shares of | ( | ( | ||||||||||||
| Total stockholders' equity (deficiency) | ( | |||||||||||||
| Total liabilities and stockholders' equity | $ | $ | ||||||||||||
See accompanying notes to consolidated financial statements.
| H&R Block, Inc. | Q1 FY2027 Form 10-Q | 3 | ||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | (unaudited, in 000s) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Three months ended September 30, | 2026 | 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Provision for credit losses | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deferred taxes | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Changes in assets and liabilities, net of acquisitions: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Receivables | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Prepaid expenses, other current and noncurrent assets | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounts payable, accrued expenses, salaries, wages and payroll taxes | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Deferred revenue, other current and noncurrent liabilities | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income tax receivables, accrued income taxes and income tax reserves | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other, net | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net cash used in operating activities | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Capital expenditures | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payments made for business acquisitions, net of cash acquired | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Franchise loans funded | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Payments from franchisees | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other, net | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Proceeds from line of credit borrowings | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repayments of long-term debt | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Proceeds from issuance of long-term debt | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Dividends paid | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock, including shares surrendered | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other, net | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net cash used in financing activities | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Effects of exchange rate changes on cash | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net decrease in cash and cash equivalents, including restricted balances | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SUPPLEMENTARY CASH FLOW DATA: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income taxes paid | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest paid on borrowings | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accrued additions to property and equipment | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| New operating right of use assets and related lease liabilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accrued dividends payable to common shareholders | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
4 | Q1 FY2027 Form 10-Q| H&R Block, Inc. | ||||
| CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY | (amounts in 000s, except per share amounts) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss(1) | Retained Earnings (Deficit) | Treasury Stock | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balances as of July 1, 2026 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based awards exercised or vested | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of treasury shares(2) | — | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase and retirement of common shares | ( | ( | ( | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared - $ | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balances as of September 30, 2026 | $ | $ | $ | ( | $ | ( | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (amounts in 000s, except per share amounts) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss(1) | Retained Earnings (Deficit) | Treasury Stock | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balances as of July 1, 2025 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based awards exercised or vested | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisition of treasury shares(2) | — | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Repurchase and retirement of common shares | ( | ( | ( | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Cash dividends declared - $ | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balances as of September 30, 2025 | $ | $ | $ | ( | $ | ( | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
(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.
H&R Block, Inc. |Q1 FY2027 Form 10-Q | 5 | ||||
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION – The consolidated balance sheets as of September 30, 2026 and June 30, 2026, the consolidated statements of operations and comprehensive loss for the three months ended September 30, 2026 and 2025, the consolidated statements of cash flows for the three months ended September 30, 2026 and 2025, and the consolidated statements of stockholders' equity for the three months ended September 30, 2026 and 2025 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 September 30, 2026 and 2025 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, 2026 Annual Report on Form 10-K. All amounts presented herein as of June 30, 2026 or for the year then ended are derived from our Annual Report on Form 10-K.
Beginning in the first quarter of fiscal year 2027, the Company revised the presentation of service revenues, royalty and other revenues, costs of revenues, and selling, general and administrative expenses captions in its consolidated statements of operations and related footnotes to better align with how management views and operates the business. Revenue is disaggregated by major revenue stream while operating expenses, which are unable to be allocated to individual revenue streams, are disaggregated by major expense categories in our consolidated statement of operations. Prior-period amounts have been reclassified to conform to the current-period presentation. The revised presentation did not affect the Company’s accounting policies or previously reported net income, comprehensive income, earnings per share, financial position, or cash flows.
We have updated our revenue recognition disclosures previously included in Note 1 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended June 30, 2026 to reflect the revised presentation of revenues in our consolidated statements of operations. Additionally, we have provided a description of the costs included in each operating expense caption. The revised presentation and related updates to our disclosures do not affect the timing or measurement of revenue recognition. The updated disclosures are presented below.
REVENUE RECOGNITION – Revenue is recognized when a contract has been established with a customer and when we satisfy the performance obligations by the transfer of a service or product to the customer. Revenue is the amount of consideration we expect to receive for our services and products and excludes sales taxes. The majority of our services and products have multiple performance obligations. We have certain services for which, the various performance obligations are generally provided simultaneously at a point in time, and revenue is recognized at that time. We have certain services and products where we have multiple performance obligations that are provided at various points in time. For these services and products, we allocate the transaction price to the various performance obligations based on relative standalone selling prices and recognize the revenue when the respective performance obligations have been satisfied. We have determined that our contracts do not contain a significant financing component.
Revenues consist of assisted and online tax preparation revenues, fees for electronic filing, small business services, revenues from Refund Transfers, tax protection and identity services, card and related services, royalties, and interest and fee income on Emerald Advance®.
Assisted tax preparation. Services include tax preparation and electronic filing or printing of the completed tax return and are recorded in U.S. tax preparation and International services, as applicable. Revenues from tax preparation and printing for clients that choose to print and mail their returns, are recognized when a completed return is accepted by the customer, generally at payment. Revenues for electronic filing are recognized when the return is electronically filed.
6 | Q1 FY2027 Form 10-Q| H&R Block, Inc. | ||||
DIY tax preparation. Revenues include fees for online and for electronic filing or printing and are recorded in U.S. tax preparation and International services, as applicable. Revenues for desktop tax preparation software is included in Other revenues. Revenues for online software and printing for clients that choose to print and mail their returns, are recognized when the customer uses the software to complete a return and the completed return is accepted by the customer. Revenues for desktop software are recognized when the software is sold to the end user. Revenues for electronic filing are recognized when the return is electronically filed.
Small business services. Revenues primarily consist of accounting, bookkeeping, payroll processing and consulting fees as well as fees received to process small business payment transactions. Revenues from accounting, bookkeeping, payroll processing and consulting services, are recognized when the services are accepted by the customer, and revenues for small business payment transactions are recognized upon authorization of the transaction. Revenues are included in U.S. small business services or International services, as applicable.
Refund Transfers. Revenues, which are recorded in U.S. refund transfers, are recognized when the Internal Revenue Service (IRS) filing acknowledgment is received and the bank account is established at our bank partner, Pathward®, N.A. (Pathward), a wholly-owned subsidiary of Pathward Financial, Inc.
Peace of Mind® Extended Service Plan. Revenues are initially deferred and recognized over the term of the plan, based on the historical pattern of actual claims paid, as claims paid represent the transfer of Peace of Mind® Extended Service Plan (POM) services to the customer. The plan is effective for the life of the tax return, which can be up to six years; however, the majority of claims are incurred in years two and three after the sale of POM. POM has multiple performance obligations where we represent our clients if they are audited by a taxing authority, and assume the cost, subject to certain limits, of additional taxes owed by a client resulting from errors attributable to H&R Block. Incremental wages are also deferred and recognized over the term of the plan, in conjunction with the revenues earned. POM revenues for company-owned offices are recorded in U.S. tax protection and identity services and International services, as applicable, and POM insurance premiums for franchise offices are recorded within U.S. other services.
Tax Identity Shield®. Revenues are initially deferred and are recognized as the various services are provided to the client, either by us or a third party, throughout the term of the contract, which generally ends on April 30th of the following year. Tax Identity Shield® (TIS) has multiple performance obligations where we provide clients assistance in helping protect their tax identity and access to services to help restore their tax identity, if necessary. Protection services include a daily scan of the dark web for personal information, a monthly scan for the client's social security number in credit header data, notifying clients if their information is detected on a tax return filed through H&R Block, obtaining additional IRS identity protections when eligible, and in our Plus plan, an identity health score which provides insight into the likelihood of future identity fraud. TIS revenues are recorded in U.S. tax protection and identity services.
Emerald Card® and SpruceSM. Revenues consist of interchange income from the use of debit cards and fees paid by cardholders. Interchange income is a fee paid by merchants to our bank partner through the card networks. Revenues associated with Emerald Card® and SpruceSM are recognized based on card network authorization of cardholder transactions and recorded in U.S. card and related services.
Royalties. Revenues are based on contractual percentages of franchise gross receipts and are generally recorded in the period in which the services are provided by the franchisee to the customer. Royalties on POM are initially deferred and recognized over the term of the plan, based on the historical pattern of actual claims paid. Royalties are recorded in U.S. royalties and Other revenues as applicable.
Interest and fee income on Emerald Advance®. Interest income is recorded over the life of the loan and late fees are recorded when the loan becomes 15 days past due.
OPERATING EXPENSES – Operating expenses are classified as either costs of revenues or selling, general and administrative expenses based on the nature and function of the underlying costs. Costs of revenues primarily consist of expenses directly associated with the delivery and support of all products and services and operation of our office network and are not directly attributable to individual revenue streams, while selling, general and administrative expenses primarily consist of costs associated with corporate support functions, marketing activities and other general corporate activities.
H&R Block, Inc. |Q1 FY2027 Form 10-Q | 7 | ||||
Field compensation and benefits. Expenses consist primarily of salaries, incentive compensation, payroll taxes and employee benefits for tax professionals and other employees who support our field operations and the delivery of our products and services.
Occupancy and equipment. Expenses consist primarily of lease and other rent expense for our office locations, office-related expenses, and depreciation of equipment and capitalized software related to the delivery of our products and services.
Technology and related expenses. Expenses consist primarily of costs incurred to acquire, develop, operate, host, secure, connect, support or access technology and technology infrastructure used in our operations and the delivery of our products and services. Technology and related expenses also include costs of third-party platforms and technology-enabled infrastructure.
General operations expenses. Expenses consist primarily of banking and payment processing costs and bad debt expense. General operations expenses also include outsourced services, client claims and refunds, field associate travel and related expenses, and other costs associated with supporting our products, services and operations.
Corporate compensation and benefits. Expenses consist primarily of salaries, incentive compensation, payroll taxes and employee benefits for employees in corporate and administrative functions.
Marketing and advertising. Expenses consist primarily of advertising, media, promotional, production and other costs incurred to market our brand, products and services and acquire and retain clients.
General corporate expenses. Expenses consist primarily of consulting fees and legal fees and settlements. General corporate expenses also include amortization of acquired intangible assets, corporate associate travel and related expenses, insurance costs, and other costs associated with corporate and administrative activities.
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.
NOTE 2: REVENUE RECOGNITION
Revenue is disaggregated by major revenue stream on the consolidated statements of operations. The majority of our revenues are from our United States (U.S.) tax services business.
Changes in the balances of deferred revenue and wages for POM are as follows:
| (in 000s) | ||||||||||||||||||||||||||
| POM | Deferred Revenue | Deferred Wages | ||||||||||||||||||||||||
| Three months ended September 30, | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| Balance, beginning of the period | $ | $ | $ | $ | ||||||||||||||||||||||
| Amounts deferred | ||||||||||||||||||||||||||
| Amounts recognized on previous deferrals | ( | ( | ( | ( | ||||||||||||||||||||||
| Balance, end of the period | $ | $ | $ | $ | ||||||||||||||||||||||
8 | Q1 FY2027 Form 10-Q| H&R Block, Inc. | ||||
As of September 30, 2026, deferred revenue related to POM was $135.2 million. We expect that $88.8 million will be recognized over the next twelve months , while the remaining balance will be recognized over the following five years .
Changes in the balances of deferred revenue for TIS are as follows:
| (in 000s) | ||||||||||||||||||||||||||
| TIS | Deferred Revenue | |||||||||||||||||||||||||
| Three months ended September 30, | 2026 | 2025 | ||||||||||||||||||||||||
| Balance, beginning of the period | $ | 28,175 | $ | 22,577 | ||||||||||||||||||||||
| Amounts deferred | 278 | 268 | ||||||||||||||||||||||||
| Amounts recognized on previous deferrals | (5,598) | (4,121) | ||||||||||||||||||||||||
| Balance, end of the period | $ | $ | ||||||||||||||||||||||||
All deferred revenue related to TIS will be recognized by April 2027 .
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 2.1 and 2.7 million shares for the three months ended September 30, 2026, and 2025, respectively, as the effect would be antidilutive due to the net loss from continuing operations during the periods.
The computations of basic and diluted earnings (loss) per share from continuing operations are as follows:
| (in 000s, except per share amounts) | ||||||||||||||||||||||||||
| Three months ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Net loss from continuing operations attributable to shareholders | $ | ( | $ | ( | ||||||||||||||||||||||
| Amounts allocated to participating securities | ( | ( | ||||||||||||||||||||||||
| Net loss from continuing operations attributable to common shareholders | $ | ( | $ | ( | ||||||||||||||||||||||
| Basic weighted average common shares | ||||||||||||||||||||||||||
| Potential dilutive shares | ||||||||||||||||||||||||||
| Dilutive weighted average common shares | ||||||||||||||||||||||||||
| Loss per share from continuing operations attributable to common shareholders: | ||||||||||||||||||||||||||
| Basic | $ | ( | $ | ( | ||||||||||||||||||||||
| Diluted | ( | ( | ||||||||||||||||||||||||
The decrease in the weighted average shares outstanding is due to share repurchases completed in the current and prior fiscal years.
H&R Block, Inc. |Q1 FY2027 Form 10-Q | 9 | ||||
NOTE 4: RECEIVABLES
Receivables, net of their related allowance, consist of the following:
| (in 000s) | ||||||||||||||||||||||||||
| As of | September 30, 2026 | June 30, 2026 | ||||||||||||||||||||||||
| Short-term | Long-term | Short-term | Long-term | |||||||||||||||||||||||
| U.S. tax preparation and software receivables | $ | $ | $ | $ | ||||||||||||||||||||||
| Small business services receivables | ||||||||||||||||||||||||||
| U.S. Emerald Advance® | ||||||||||||||||||||||||||
| Card and related services receivables | ||||||||||||||||||||||||||
| Loans to franchisees | ||||||||||||||||||||||||||
| Royalties and other franchise-related receivables | ||||||||||||||||||||||||||
H&R Block's Instant Refund® receivables | ||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
Balances presented above as short-term are included in receivables, while the long-term portions are included in other noncurrent assets, net in the consolidated balance sheets.
LOANS TO FRANCHISEES – Franchisee loan balances consist of term loans made primarily to finance the purchase of franchises and short-term 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 $3.5 million and $2.5 million as of September 30, 2026 and June 30, 2026, respectively.
H&R BLOCK'S INSTANT REFUND® – H&R Block's Instant Refund® ("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 classified as impaired, or more than 60 days past due, by tax return year of origination, as of September 30, 2026 are as foll ows:
| (in 000s) | ||||||||||||||
| Tax return year of origination | Balance | More Than 60 Days Past Due | ||||||||||||
| 2025 | $ | $ | ||||||||||||
| 2024 and prior | ||||||||||||||
| $ | ||||||||||||||
| Allowance | ( | |||||||||||||
| Net balance | $ | |||||||||||||
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
10 | Q1 FY2027 Form 10-Q| H&R Block, Inc. | ||||
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 September 30, 2026 are as follows:
| (in 000s) | ||||||||||||||
| Fiscal year of origination | Balance | Non-Accrual | ||||||||||||
| 2026 | $ | $ | ||||||||||||
| 2025 and prior | ||||||||||||||
| $ | ||||||||||||||
| Allowance | ( | |||||||||||||
| Net balance | $ | |||||||||||||
ALLOWANCE FOR CREDIT LOSSES – Activity in the allowance for credit losses for EA and all other short-term and long-term receivables for the three months ended September 30, 2026 and 2025 is as follows:
| (in 000s) | ||||||||||||||||||||||||||||||||||||||
| EAs | All Other | Total | ||||||||||||||||||||||||||||||||||||
| Balances as of July 1, 2026 | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Provision for credit losses | ||||||||||||||||||||||||||||||||||||||
| Charge-offs, recoveries and other | ( | ( | ||||||||||||||||||||||||||||||||||||
| Balances as of September 30, 2026 | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Balances as of July 1, 2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Provision for credit losses | ||||||||||||||||||||||||||||||||||||||
| Charge-offs, recoveries and other | ( | ( | ||||||||||||||||||||||||||||||||||||
| Balances as of September 30, 2025 | $ | $ | $ | |||||||||||||||||||||||||||||||||||
NOTE 5: GOODWILL AND INTANGIBLE ASSETS
Changes in the carrying amount of goodwill for the three months ended September 30, 2026 are as follows:
| (in 000s) | |||||||||||||||||||||||
| Goodwill | Accumulated Impairment Losses | Net | |||||||||||||||||||||
| Balances as of July 1, 2026 | $ | $ | ( | $ | |||||||||||||||||||
Acquisitions(1) | — | ||||||||||||||||||||||
| Disposals and foreign currency changes, net | ( | — | ( | ||||||||||||||||||||
| Impairments | — | ||||||||||||||||||||||
| Balances as of September 30, 2026 | $ | $ | ( | $ | |||||||||||||||||||
(1) All goodwill added during the period is expected to be tax-deductible for federal income tax reporting.
We test goodwill for impairment annually as of February 1, or more frequently if events occur or circumstances change which would, more likely than not, reduce the fair value of a reporting unit below its carrying value.
H&R Block, Inc. |Q1 FY2027 Form 10-Q | 11 | ||||
Components of intangible assets are as follows:
| (in 000s) | ||||||||||||||||||||
| Gross Carrying Amount | Accumulated Amortization | Net | ||||||||||||||||||
| As of September 30, 2026: | ||||||||||||||||||||
| Reacquired franchise rights | $ | $ | ( | $ | ||||||||||||||||
| Customer relationships | ( | |||||||||||||||||||
| Internally-developed software | ( | |||||||||||||||||||
| Noncompete agreements | ( | |||||||||||||||||||
| Purchased technology | ( | |||||||||||||||||||
| Trade name | ( | |||||||||||||||||||
| $ | $ | ( | $ | |||||||||||||||||
| As of June 30, 2026: | ||||||||||||||||||||
| Reacquired franchise rights | $ | $ | ( | $ | ||||||||||||||||
| Customer relationships | ( | |||||||||||||||||||
| Internally-developed software | ( | |||||||||||||||||||
| Noncompete agreements | ( | |||||||||||||||||||
| Purchased technology | ( | |||||||||||||||||||
| Trade name | ( | |||||||||||||||||||
| $ | $ | ( | $ | |||||||||||||||||
We made payments to acquire businesses totaling $10.3 million and $5.1 million during the three months ended September 30, 2026 and 2025, respectively. The amounts and weighted-average lives of intangible assets acquired during the three months e nded September 30, 2026, including amounts capitalized related to internally-developed software, are as follows:
| (dollars in 000s) | ||||||||||||||
| Amount | Weighted-Average Life (in years) | |||||||||||||
| Customer relationships | $ | |||||||||||||
| Reacquired franchise rights | ||||||||||||||
| Internally-developed software | ||||||||||||||
| Noncompete agreements | ||||||||||||||
| Total | $ | |||||||||||||
Amortization of intangible assets for the three months ended September 30, 2026 was $12.5 million compared to $11.1 million for the three months ended September 30, 2025. Estimated amortization of intangible assets for fiscal years ending June 30, 2027, 2028, 2029, 2030, and 2031 is $48.0 million, $40.0 million, $30.7 million, $19.7 million and $11.5 million, respectively.
12 | Q1 FY2027 Form 10-Q| H&R Block, Inc. | ||||
NOTE 6: LONG-TERM DEBT
The components of long-term debt are as follows:
| (in 000s) | ||||||||||||||
| As of | September 30, 2026 | June 30, 2026 | ||||||||||||
Senior Notes, | ||||||||||||||
Senior Notes, | ||||||||||||||
Senior Notes, 5.375%, due September 2032 | 350,000 | 350,000 | ||||||||||||
| Debt issuance costs and discounts | ( | ( | ||||||||||||
| Total long-term debt | ||||||||||||||
| Estimated fair value of long-term debt | $ | $ | ||||||||||||
UNSECURED COMMITTED LINE OF CREDIT – Our unsecured committed line of credit (2025 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 2025 CLOC will mature on July 11, 2030, unless extended pursuant to the terms of the 2025 CLOC, at which time all outstanding amounts thereunder will be due and payable. Our 2025 CLOC includes an annual facility fee, which will vary depending on our then current credit ratings.
The 2025 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 2025 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 2025 CLOC includes provisions for an equity cure which could potentially allow us to independently cure certain defaults. Proceeds under the 2025 CLOC may be used for working capital needs or for other general corporate purposes. We were in compliance with these requirements as of September 30, 2026.
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.
Our effective tax rate for continuing operations, including the effects of discrete tax items, was 21.9% and 23.6% for the three months ended September 30, 2026 and 2025, respectively.
H&R Block, Inc. |Q1 FY2027 Form 10-Q | 13 | ||||
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. Similarly, DIY tax returns are covered by our 100% accuracy guarantee, whereby we will reimburse a client (up to a maximum of $10,000 in the U.S.) 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 $9.2 million and $11.0 million as of September 30, 2026 and June 30, 2026, 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 $29.8 million and $26.6 million as of September 30, 2026 and June 30, 2026 respectively, with amounts recorded in deferred revenue and other liabilities. Non-cash contingent consideration recorded during the three months ended September 30, 2026 was $3.8 million. 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 $16.9 million at September 30, 2026, and net of amounts drawn and outstanding, our remaining commitment to fund totaled $10.7 million.
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 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 September 30, 2026. 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
14 | Q1 FY2027 Form 10-Q| H&R Block, Inc. | ||||
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 $20.1 million and $18.4 million as of September 30, 2026 and June 30, 2026, 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 September 30, 2026, 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.
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.
H&R Block, Inc. |Q1 FY2027 Form 10-Q | 15 | ||||
NOTE 10: SEGMENT INFORMATION
We provide assisted and DIY tax preparation solutions through multiple channels (including in-person, online and mobile applications, virtual, and desktop software) and distribute H&R Block-branded services and products, including those of our bank partners, to the general public primarily in the U.S., Canada and Australia. Tax returns are prepared by H&R Block tax professionals in one of our company-owned or franchise offices, virtually or via an online review, or they are 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. The majority of our revenues are from our U.S. tax services business.
The Company's Chief Operating Decision Maker (CODM) is our chief executive officer, who regularly reviews consolidated financial information to evaluate financial performance and allocate resources. Specifically, the CODM uses revenues, operating expenses, net income and EBITDA at a consolidated level, as key financial metrics in deciding how to reinvest to grow the business. These financial metrics are used by the CODM to make operating decisions and identify growth opportunities. The measure of segment assets is total consolidated assets as presented on the consolidated balance sheet.
The following table presents the significant revenue and expense categories included in the segment's net income from continuing operations as regularly provided to the CODM on a consolidated basis and then reconciled to net income for the three months ended September 30, 2026 and 2025.
16 | Q1 FY2027 Form 10-Q| H&R Block, Inc. | ||||
| Consolidated – Financial Results | (in 000s, except per share amounts) | |||||||||||||||||||||||||
| Three months ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| REVENUES: | ||||||||||||||||||||||||||
| Service revenues | ||||||||||||||||||||||||||
| U.S. services | ||||||||||||||||||||||||||
| Tax preparation | $ | $ | ||||||||||||||||||||||||
| Small business services | ||||||||||||||||||||||||||
| Refund transfers | ||||||||||||||||||||||||||
| Tax protection and identity services | ||||||||||||||||||||||||||
| Card and related services | ||||||||||||||||||||||||||
| Other services | ||||||||||||||||||||||||||
| International services | ||||||||||||||||||||||||||
| U.S. royalties | ||||||||||||||||||||||||||
| Interest and fee income on Emerald Advance® | ||||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||||
| Total revenues | ||||||||||||||||||||||||||
| Operating Expenses: | ||||||||||||||||||||||||||
| Costs of revenues | ||||||||||||||||||||||||||
| Field compensation and benefits | ||||||||||||||||||||||||||
| Occupancy and equipment | ||||||||||||||||||||||||||
| Technology and related expenses | ||||||||||||||||||||||||||
| General operations expenses | ||||||||||||||||||||||||||
| Total costs of revenues | ||||||||||||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||||||||||||
| Corporate compensation and benefits | ||||||||||||||||||||||||||
| Marketing and advertising | 8,342 | |||||||||||||||||||||||||
| General corporate expenses | ||||||||||||||||||||||||||
| Total selling, general and administrative expenses | 136,565 | |||||||||||||||||||||||||
| Total operating expenses | ||||||||||||||||||||||||||
| Other income (expense), net | ||||||||||||||||||||||||||
| Interest expense on borrowings | ||||||||||||||||||||||||||
| Loss from continuing operations before income tax benefit | ( | ( | ||||||||||||||||||||||||
| Income tax benefit | ( | ( | ||||||||||||||||||||||||
| Segment net loss from continuing operations | ( | ( | ||||||||||||||||||||||||
| Reconciliation of segment profit: | ||||||||||||||||||||||||||
| Reconciling items: | ||||||||||||||||||||||||||
| Net loss from discontinued operations | ( | ( | ||||||||||||||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||||||||||||||
H&R Block, Inc. |Q1 FY2027 Form 10-Q | 17 | ||||
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Our subsidiaries provide assisted and DIY tax preparation solutions through multiple channels (including in-person, online and mobile applications, virtual, and desktop software) and distribute H&R Block-branded services and products, including those of our bank partners, to the general public primarily in the U.S., Canada and Australia. Tax returns are either prepared by H&R Block tax professionals in one of our company-owned or franchise offices, 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.
FINANCIAL RESULTS OVERVIEW
| (in 000s, except per share amounts) | ||||||||||||||||||||||||||
| Three months ended September 30, | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
| Total revenues | $ | 224,336 | $ | 203,551 | $ | 20,785 | 10.2 | % | ||||||||||||||||||
| Total operating expenses | $ | 456,229 | $ | 410,582 | $ | (45,647) | (11.1) | % | ||||||||||||||||||
| Pretax loss | $ | (240,855) | $ | (216,331) | $ | (24,524) | (11.3) | % | ||||||||||||||||||
| Net loss from continuing operations | $ | (188,127) | $ | (165,368) | $ | (22,759) | (13.8) | % | ||||||||||||||||||
Adjusted net loss from continuing operations(1) | $ | (172,116) | $ | (157,181) | $ | (14,935) | (9.5) | % | ||||||||||||||||||
| Net loss | $ | (188,478) | $ | (165,819) | $ | (22,659) | (13.7) | % | ||||||||||||||||||
EBITDA(1) | $ | (193,126) | $ | (170,007) | $ | (23,119) | (13.6) | % | ||||||||||||||||||
Adjusted EBITDA(1) | $ | (185,175) | $ | (170,007) | $ | (15,168) | (8.9) | % | ||||||||||||||||||
Diluted loss per share from continuing operations(1) | $ | (1.53) | $ | (1.26) | $ | (0.27) | (21.4) | % | ||||||||||||||||||
Adjusted diluted loss per share from continuing operations(1) | $ | (1.40) | $ | (1.20) | $ | (0.20) | (16.7) | % | ||||||||||||||||||
| Weighted average shares outstanding | 123,077 | 131,387 | (8,310) | (6.3) | % | |||||||||||||||||||||
(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.
18 | Q1 FY2027 Form 10-Q| H&R Block, Inc. | ||||
Three months ended September 30, 2026 compared to September 30, 2025
Revenues
The components of revenue include:
| (in 000s) | ||||||||||||||||||||||||||
| Three months ended September 30, | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| U.S. services | ||||||||||||||||||||||||||
| Tax preparation | $ | 54,467 | $ | 51,867 | $ | 2,600 | 5.0 | % | ||||||||||||||||||
| Small business services | 34,896 | 31,047 | 3,849 | 12.4 | % | |||||||||||||||||||||
| Refund transfers | 844 | 843 | 1 | 0.1 | % | |||||||||||||||||||||
| Tax protection and identity services | 34,320 | 29,180 | 5,140 | 17.6 | % | |||||||||||||||||||||
| Card and related services | 7,679 | 7,852 | (173) | (2.2) | % | |||||||||||||||||||||
| Other services | 6,469 | 4,828 | 1,641 | 34.0 | % | |||||||||||||||||||||
| International services | 74,813 | 66,494 | 8,319 | 12.5 | % | |||||||||||||||||||||
| U.S. royalties | 5,683 | 5,849 | (166) | (2.8) | % | |||||||||||||||||||||
| Interest and fee income on Emerald Advance® | — | — | — | ** | ||||||||||||||||||||||
| Other | 5,165 | 5,591 | (426) | (7.6) | % | |||||||||||||||||||||
| Total revenues | $ | 224,336 | $ | 203,551 | $ | 20,785 | 10.2 | % | ||||||||||||||||||
U.S. tax preparation revenues increased $2.6 million, or 5.0%, primarily due to an increase in net average charge in the current year. Desktop software revenue, which is included in "Other" is included in U.S. consumer DIY tax preparation below. The components of U.S. tax preparation and software revenue include:
| (in 000s) | ||||||||||||||||||||||||||
| Three months ended September 30, | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
| U.S. consumer assisted tax preparation | $ | 30,742 | $ | 29,796 | $ | 946 | 3.2 | % | ||||||||||||||||||
| U.S. consumer DIY tax preparation and software | 2,994 | 2,945 | 49 | 1.7 | % | |||||||||||||||||||||
| Total U.S. consumer tax preparation and software | 33,736 | 32,741 | 995 | 3.0 | % | |||||||||||||||||||||
| U.S. small business assisted tax preparation | 20,628 | 18,848 | 1,780 | 9.4 | % | |||||||||||||||||||||
| U.S. small business DIY tax preparation | 694 | 800 | (106) | (13.3) | % | |||||||||||||||||||||
| Total U.S. small business tax preparation | 21,322 | 19,648 | 1,674 | 8.5 | % | |||||||||||||||||||||
| Total U.S. tax preparation and software | $ | 55,058 | $ | 52,389 | $ | 2,669 | 5.1 | % | ||||||||||||||||||
U.S. small business services revenues increased $3.8 million, or 12.4% due to higher accounting, invoicing and receipts subscriptions and small business payments processing volumes.
U.S. tax protection and identity services revenues increased $5.1 million, or 17.6% primarily due to changes in amortization rates and higher POM and TIS volumes.
International services revenues increased $8.3 million, or 12.5% due primarily to favorable foreign currency exchange rates in Australia.
H&R Block, Inc. |Q1 FY2027 Form 10-Q | 19 | ||||
Operating Expenses
Total operating expenses increased $45.6 million, or 11.1%, from the prior year.
Field compensation and benefits increased $19.3 million, or 23.3% primarily due to our previously announced seasonal office leadership transition which eliminated approximately 200 positions throughout the organization with severance and related costs totaling $8.0 million, and increased tax professional wages associated with certain strategic initiatives and higher international services revenue. Certain wage-related expenses are now being reported in field compensation and benefits rather than corporate compensation and benefits to better align with how costs are managed and evaluated internally. This change had no impact on total operating expenses, and prior period amounts have not been reclassified.
The components of occupancy and equipment expense include:
| (in 000s) | ||||||||||||||||||||||||||
| Three months ended September 30, | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
| Lease and other rent expenses | $ | 69,641 | $ | 66,702 | $ | (2,939) | (4.4) | % | ||||||||||||||||||
| Office-related expenses | 42,684 | 39,828 | (2,856) | (7.2) | % | |||||||||||||||||||||
| Depreciation of equipment | 19,942 | 17,944 | (1,998) | (11.1) | % | |||||||||||||||||||||
| Total occupancy and equipment | $ | 132,267 | $ | 124,474 | $ | (7,793) | (6.3) | % | ||||||||||||||||||
Occupancy and equipment increased $7.8 million, or 6.3% due to an increase in the number of leased offices, higher rent, repairs and other office-related expenses.
Technology and related expenses increased by $2.9 million, or 9.6% due to higher cloud-related technology spend.
The components of general operations expenses include:
| (in 000s) | ||||||||||||||||||||||||||
| Three months ended September 30, | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
| Banking and payment processing | $ | 19,854 | $ | 19,042 | $ | (812) | (4.3) | % | ||||||||||||||||||
| Bad debt | 4,639 | 2,205 | (2,434) | (110.4) | % | |||||||||||||||||||||
| Other | 18,648 | 15,581 | (3,067) | (19.7) | % | |||||||||||||||||||||
| Total general operations expenses | $ | 43,141 | $ | 36,828 | $ | (6,313) | (17.1) | % | ||||||||||||||||||
Marketing and advertising expense increased $3.2 million, or 38.6% due to lower vendor refunds for expired customer incentives and higher online advertising.
The components of general corporate expenses include:
| (in 000s) | ||||||||||||||||||||||||||
| Three months ended September 30, | 2026 | 2025 | $ Change | % Change | ||||||||||||||||||||||
| Consulting fees | $ | 9,475 | $ | 6,860 | $ | (2,615) | (38.1) | % | ||||||||||||||||||
| Legal fees and settlements | 6,937 | 3,462 | (3,475) | (100.4) | % | |||||||||||||||||||||
| Other | 18,024 | 15,036 | (2,988) | (19.9) | % | |||||||||||||||||||||
| Total general corporate expenses | $ | 34,436 | $ | 25,358 | $ | (9,078) | (35.8) | % | ||||||||||||||||||
Legal and professional fees increased $3.5 million, primarily due to higher outside counsel spend and higher legal settlement accruals in the current year. Consulting fees increased $2.6 million, or 38.1%, primarily due to consulting costs that support our strategic priorities.
We recorded income tax benefit of $52.7 million in the current year compared to $51.0 million in the prior year. The effective tax rate for the three months ended September 30, 2026, and 2025 was 21.9% and 23.6%, respectively.
20 | Q1 FY2027 Form 10-Q| H&R Block, Inc. | ||||
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 September 30, 2026 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 three months ended September 30, 2026 and 2025. See Item 1 for the complete consolidated statements of cash flows for these periods.
| (in 000s) | ||||||||||||||||||||
| Three months ended September 30, | 2026 | 2025 | ||||||||||||||||||
| Net cash used in: | ||||||||||||||||||||
| Operating activities | $ | (358,456) | $ | (356,838) | ||||||||||||||||
| Investing activities | (35,665) | (20,926) | ||||||||||||||||||
| Financing activities | (171,411) | (225,025) | ||||||||||||||||||
| Effects of exchange rates on cash | (623) | (2,949) | ||||||||||||||||||
| Net decrease in cash and cash equivalents, including restricted balances | $ | (566,155) | $ | (605,738) | ||||||||||||||||
Operating Activities. Cash used in operations totaled $358.5 million for the three months ended September 30, 2026 compared to $356.8 million in the prior year period. The increase is primarily due to higher net loss, and an increase in other assets, offset by lower income taxes paid.
Investing Activities. Cash used in investing activities totaled $35.7 million for the three months ended September 30, 2026 compared to $20.9 million in the prior year period. The increase is primarily due to higher capital expenditures and higher payments made for business acquisitions in the current year.
Financing Activities. Cash used in financing activities totaled $171.4 million for the three months ended September 30, 2026 compared to $225.0 million in the prior year period. The change is primarily due to lower repurchases of common stock, offset by lower proceeds from line of credit borrowings.
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 $52.6 million and $50.2 million for the three months ended September 30, 2026 and 2025, 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.
H&R Block, Inc. |Q1 FY2027 Form 10-Q | 21 | ||||
During the three months ended September 30, 2026, we repurchased $100.3 million of our common stock at an average price of $45.68 per share, excluding excise taxes in connection with such repurchases. In the prior year period, we repurchased $400.1 million of our common stock at an average price of $50.90 per share, excluding excise taxes in connection with such repurchases. Our current share repurchase program has remaining authorization of $500.0 million 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 $20.8 million and $13.2 million for the three months ended September 30, 2026 and 2025, 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 $10.3 million and $5.1 million during the three months ended September 30, 2026 and 2025, respectively. See Item 1, note 5 for additional information on our acquisitions.
FINANCING RESOURCES – The 2025 CLOC has capacity up to $1.5 billion and is scheduled to expire in July 2030. Proceeds under the 2025 CLOC may be used for working capital needs or for other general corporate purposes. We had no outstanding balance on our 2025 CLOC and amounts available to borrow were not limited by the debt-to-EBITDA covenant as of September 30, 2026.
The following table provides ratings for debt issued by Block Financial LLC (Block Financial) as of September 30, 2026 and June 30, 2026:
| As of | September 30, 2026 | June 30, 2026 | ||||||||||||||||||||||||||||||||||||
| Short-term | Long-term | Outlook | Short-term | Long-term | Outlook | |||||||||||||||||||||||||||||||||
| Moody's | P-3 | Baa3 | Stable | P-3 | Baa3 | Stable | ||||||||||||||||||||||||||||||||
| S&P | A-2 | BBB | Stable | A-2 | BBB | Stable | ||||||||||||||||||||||||||||||||
Other than described above, there have been no material changes in our borrowings from those reported as of June 30, 2026 in our Annual Report on Form 10-K.
CASH AND OTHER ASSETS – As of September 30, 2026, we held cash and cash equivalents, excluding restricted amounts, of $390.5 million, including $250.6 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 September 30, 2026.
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 $0.6 million and $2.9 million during the three months ended September 30, 2026 and 2025, respectively.
CONTRACTUAL OBLIGATIONS AND COMMERCIAL COMMITMENTS – In September 2026, we amended our Program Management Agreement with Pathward, N.A. to extend its term through June 30, 2030. There have been no other material changes in our contractual obligations and commercial commitments from those reported in our June 30, 2026 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.
22 | Q1 FY2027 Form 10-Q| H&R Block, Inc. | ||||
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 of | September 30, 2026 | June 30, 2026 | ||||||||||||
| Current assets | $ | 39,383 | $ | 32,872 | ||||||||||
| Noncurrent assets | 1,860,579 | 1,878,969 | ||||||||||||
| Current liabilities | 75,792 | 85,795 | ||||||||||||
| Noncurrent liabilities | 1,497,886 | 1,495,419 | ||||||||||||
| SUMMARIZED STATEMENTS OF OPERATIONS - GUARANTOR AND ISSUER | (in 000s) | |||||||||||||
| Three months ended September 30, 2026 | Twelve months ended June 30, 2026 | |||||||||||||
| Total revenues | $ | 8,320 | $ | 123,960 | ||||||||||
| Income from continuing operations before income taxes | 5,003 | 55,541 | ||||||||||||
| Net income from continuing operations | 3,852 | 42,766 | ||||||||||||
| Net income | 3,502 | 40,044 | ||||||||||||
The table above reflects $1.8 billion of non-current intercompany receivables due to the Issuer from non-guarantor subsidiaries as of both September 30, 2026 and June 30, 2026.
REGULATORY ENVIRONMENT
There have been no material changes in our regulatory environment from what was reported in our June 30, 2026 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, goodwill impairments, severance and related costs of discrete strategic initiatives, and material discrete tax impacts of IRS examination settlements. We may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures.
We measure the performance of our business using a variety of metrics, including earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations, adjusted EBITDA from continuing operations, adjusted net income from continuing operations, adjusted diluted earnings per share from continuing operations, free cash flow, and free cash flow yield. We also use EBITDA from continuing operations and pretax income of continuing operations, each subject to permitted adjustments, as performance metrics in incentive compensation calculations for our employees.
H&R Block, Inc. |Q1 FY2027 Form 10-Q | 23 | ||||
The following is a reconciliation of net loss to EBITDA and adjusted EBITDA from continuing operations, which are non-GAAP financial measures:
| (in 000s) | ||||||||||||||||||||||||||
| Three months ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Net loss - as reported | $ | (188,478) | $ | (165,819) | ||||||||||||||||||||||
| Discontinued operations, net | 351 | 451 | ||||||||||||||||||||||||
| Net loss from continuing operations - as reported | (188,127) | (165,368) | ||||||||||||||||||||||||
| Add back: | ||||||||||||||||||||||||||
| Income tax benefit | (52,728) | (50,963) | ||||||||||||||||||||||||
| Interest expense | 15,538 | 17,402 | ||||||||||||||||||||||||
| Depreciation and amortization | 32,191 | 28,922 | ||||||||||||||||||||||||
| (4,999) | (4,639) | |||||||||||||||||||||||||
| EBITDA from continuing operations | $ | (193,126) | $ | (170,007) | ||||||||||||||||||||||
| Severance and related costs of discrete strategic initiatives | 7,951 | — | ||||||||||||||||||||||||
| Adjusted EBITDA from continuing operations | $ | (185,175) | $ | (170,007) | ||||||||||||||||||||||
The following is a reconciliation of our results from continuing operations to our adjusted results from continuing operations, which are non-GAAP financial measures:
| (in 000s, except per share amounts) | ||||||||||||||||||||||||||
| Three months ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | |||||||||||||||||||||||||
| Net loss from continuing operations - as reported | $ | (188,127) | $ | (165,368) | ||||||||||||||||||||||
| Adjustments: | ||||||||||||||||||||||||||
| Amortization of intangibles related to acquisitions (pretax) | 12,250 | 10,979 | ||||||||||||||||||||||||
| Severance and related costs of discrete strategic initiatives (pretax) | 7,951 | — | ||||||||||||||||||||||||
Tax effect of pretax adjustments (1) | (4,190) | (2,792) | ||||||||||||||||||||||||
| Adjusted net loss from continuing operations | $ | (172,116) | $ | (157,181) | ||||||||||||||||||||||
| Diluted loss per share from continuing operations - as reported | $ | (1.53) | $ | (1.26) | ||||||||||||||||||||||
| Adjustments, net of tax | 0.13 | 0.06 | ||||||||||||||||||||||||
| Adjusted diluted loss per share from continuing operations | $ | (1.40) | $ | (1.20) | ||||||||||||||||||||||
(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, 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
24 | Q1 FY2027 Form 10-Q| H&R Block, Inc. | ||||
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, 2026 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 Estimates" of our Annual Report on Form 10-K for the fiscal year ended June 30, 2026.
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, 2026 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 September 30, 2026 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, 2026 Annual Report on Form 10-K.
H&R Block, Inc. |Q1 FY2027 Form 10-Q | 25 | ||||
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 September 30, 2026 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) | |||||||||||||||||||||||
| July 1 - July 31 | 915 | $ | 40.89 | 912 | $ | 562,700 | ||||||||||||||||||||
| August 1 - August 31 | 925 | $ | 50.54 | 678 | $ | 528,722 | ||||||||||||||||||||
| September 1 - September 30 | 686 | $ | 47.82 | 606 | $ | 499,999 | ||||||||||||||||||||
| 2,526 | $ | 46.31 | 2,196 | |||||||||||||||||||||||
(1)We purchased approximately 330 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
On August 14, 2026, Dara S. Redler, Chief Legal and Administrative Officer, adopted a Rule 10b5-1 plan (Plan) intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. Ms. Redler’s Plan provides for the sale of up to 8,000 shares of the Company’s common stock, pursuant to the terms of the Plan. The Plan expires on August 13, 2027, or upon the earlier completion of all authorized transactions under such Plan.
No other 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 during the three months ended September 30, 2026.
26 | Q1 FY2027 Form 10-Q| H&R Block, Inc. | ||||
ITEM 6. EXHIBITS
The following exhibits are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K:
| 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 | ||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | ||||
H&R Block, Inc. |Q1 FY2027 Form 10-Q | 27 | ||||
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/ Curtis A. Campbell | ||
| Curtis A. Campbell | ||
| President and Chief Executive Officer | ||
| November 9, 2026 | ||
| /s/ Tiffany L. Mason | ||
| Tiffany L. Mason | ||
| Chief Financial Officer | ||
| November 9, 2026 | ||
| /s/ April M. Wasleski | ||
| April M. Wasleski | ||
| Chief Accounting Officer | ||
| November 9, 2026 | ||
28 | Q1 FY2027 Form 10-Q| H&R Block, Inc. | ||||
Exhibit 10.1
FIFTH AMENDMENT TO
PROGRAM MANAGEMENT AGREEMENT
THIS FIFTH AMENDMENT TO PROGRAM MANAGEMENT AGREEMENT (this
“Fifth Amendment”), dated as of September 29, 2026 (the “Fifth Amendment Effective Date”), is made by and between Emerald Financial Services, LLC, a Delaware limited liability company (“EFS”), and Pathward, N.A. (f/k/a MetaBank, N.A.), a national banking association (“Pathward”) and amends that certain Program Management Agreement, dated as of August 5, 2020, as amended by the First Amendment, Second Amendment, Third Amendment, and Fourth Amendment (collectively, the “Fourth Amended PMA”).
RECITALS
A.The Parties desire to amend the Fourth Amended PMA in the manner set forth in this Fifth Amendment (the Fourth Amended PMA, as amended by this Fifth Amendment, is referred to herein as the “PMA”).
AGREEMENT
ACCORDINGLY, in consideration of the mutual covenants and agreements of the Parties contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:
1.Definitions. Capitalized terms not otherwise defined in this Fifth Amendment have the meanings set forth in the Fourth Amended PMA. In addition, Section 1.1 of the Fourth Amended PMA is amended by either replacing the following terms (for terms that were previously defined in the Fourth Amended PMA), or inserting the following new defined terms (for terms that were not previously defined in the Fourth Amended PMA), as applicable, in each case in alphabetical order:
“Fifth Amendment” has the meaning set forth in the Recitals of this Fifth Amendment.
“Fifth Amendment Effective Date” means the date set forth in the Preamble of this Fifth Amendment.
2.Refund Advance Product Schedule. Schedule E (Refund Advance Product Schedule) is amended and restated as set forth in the revised Schedule E attached hereto.
3.Extension of Term of the PMA. The term of the Fourth Amended PMA is hereby extended by three (3) years, by amending Section 13.1 to delete the words “end on June 30, 2027” and inserting in lieu thereof the words “end on June 30, 2030”.
4.Additional Termination Right of EFS. The Fourth Amended PMA is hereby amended by adding the following new Section 13.5:
13.5 Banking Charter Termination Right. If EFS or any of its Affiliates obtains or acquires a banking charter, then EFS, in its sole discretion and upon six (6) months’ prior notice to Pathward, may terminate any Product Schedule or may choose to offer one or more of the Financial Products through its affiliate bank, and the Parties will cooperate in good faith to
amend the Agreement accordingly; provided, that this termination right shall not apply to Schedule E (Refund Advance) and the related provisions of the Agreement.
5.Banking Charter Exception to Pathward’s Exclusivity. The Fourth Amended PMA is hereby amended by adding the following new subsection as Section 5.2(b)(vi):
(vi) upon six (6) months’ prior notice to Pathward, offer financial products or services directly through EFS and its Affiliates if either EFS or any Affiliate obtains or acquires a banking charter; provided that (A) this exception does not apply to the exclusivity provided in Section 5.2(a)(iii) as it relates to Refund Advance, (B) such offerings do not materially impair Pathward’s ability to collect payment on Refund Advances, and (C) any planned transition of a Financial Product (other than Refund Advance) to an affiliate bank during or after the term of the Agreement shall be conducted in accordance with the procedures described in Article 14.
6.Amendment of Fourth Amended PMA. The terms and provisions set forth in this Fifth Amendment will modify and supersede the Sections specifically identified herein as well as all inconsistent terms and provisions set forth in the Fourth Amended PMA. The table of contents of the Fourth Amended PMA, and all cross references to Sections of the Fourth Amended PMA amended or added by this Fifth Amendment, are amended accordingly. All references in the Fourth Amended PMA or this Fifth Amendment to the “Agreement” will be deemed to refer to the PMA. Except as amended by this Fifth Amendment, all other terms and conditions of the Fourth Amended PMA are hereby ratified and remain in full force and effect.
7.Interpretation. Each Party acknowledges that its legal counsel participated in the drafting of this Fifth Amendment, and that this Fifth Amendment has been fully reviewed and negotiated by the Parties and their respective counsel. Accordingly, in interpreting this Fifth Amendment, no weight will be placed upon which Party or its counsel drafted the provision being interpreted.
8.Governing Law. This Fifth Amendment and all rights and obligations hereunder, including matters of construction, validity and performance, will be governed by and construed in accordance with the laws of the State of New York, without regard to its conflict of laws provisions.
9.Counterparts. This Fifth Amendment may be executed in one or more counterparts (including by electronic transmission), each of which will be deemed to be an original copy of this Fifth Amendment and all of which, when taken together, will be deemed to constitute one and the same Fifth Amendment.
[Remainder of page intentionally blank; signature page follows]
IN WITNESS WHEREOF, the Parties have duly executed this Fifth Amendment as of the date first written above.
EMERALD FINANCIAL SERVICES, LLC
By: /s/ John Thompson
Name: John Thompson
Title: Vice President
PATHWARD, N.A.
By: /s/ Will Sowell
Name: Will Sowell
Title: Chief Customer Office
Exhibit 22
LIST OF GUARANTOR AND ISSUER SUBSIDIARIES
As of September 30, 2026, H&R Block, Inc. was the guarantor and Block Financial LLC was the issuer of the following:
•Senior Notes, 2.500%, due July 2028
•Senior Notes, 3.875%, due August 2030
•Senior Notes, 5.375%, due September 2032
•Fifth Amended and Restated Credit and Guarantee Agreement (CLOC)
Exact Name of Issuer Subsidiary Jurisdiction of Formation
Block Financial LLC Delaware
Exhibit 31.1
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Curtis A. Campbell, Chief Executive Officer, certify that:
1. I have reviewed this quarterly report on Form 10-Q of H&R Block, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
| Date: | November 9, 2026 | /s/ Curtis A. Campbell | |||||||||
| Curtis A. Campbell | |||||||||||
| Chief Executive Officer H&R Block, Inc. | |||||||||||
Exhibit 31.2
CERTIFICATION PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Tiffany L. Mason, Chief Financial Officer, certify that:
1. I have reviewed this quarterly report on Form 10-Q of H&R Block, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
| Date: | November 9, 2026 | /s/ Tiffany L. Mason | |||||||||
| Tiffany L. Mason | |||||||||||
| Chief Financial Officer H&R Block, Inc. | |||||||||||
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of H&R Block, Inc. (the “Company”) on Form 10‑Q for the fiscal quarter ended September 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Curtis A. Campbell, Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ Curtis A. Campbell | ||
| Curtis A. Campbell Chief Executive Officer H&R Block, Inc. | ||
| November 9, 2026 | ||
Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the quarterly report of H&R Block, Inc. (the “Company”) on Form 10‑Q for the fiscal quarter ended September 30, 2026 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Tiffany L. Mason, Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
| /s/ Tiffany L. Mason | ||
| Tiffany L. Mason Chief Financial Officer H&R Block, Inc. | ||
| November 9, 2026 | ||