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    HRB
    Earnings call· Jun 2026(Q4 FY26)

    H&R BLOCK Q4 FY26 earnings call HRB

    Aug 11, 2026 Source

    Executive summary

    H&R Block Q4 FY26 — Strong Financial Performance and Strategic Progress

    H&R Block delivered strong FY26 results, driven by its expert-led, technology-enabled strategy, which improved client conversion and retention. The company is focused on attracting higher lifetime value clients and expanding its consultative service model, supported by increased investments in technology and year-round field leadership. This approach is expected to accelerate progress and drive long-term shareholder value despite a moderating industry growth outlook.

    Highlights

    5

    • Revenue increased 4.9% to $3.95 billion in FY26.

    • Adjusted EPS increased 13.9% to $5.31 in FY26.

    • EBITDA increased 8.3% to $1.06 billion in FY26, with 80 bps margin expansion.

    • Client conversion improved 200 basis points, the largest single-year improvement in recorded history.

    • Returned $714 million to shareholders through dividends and share repurchases in FY26.

    Concerns

    2

    • Industry growth expected to moderate from historical 1% norm in FY27 due to slowed job growth.

    • A $8.3 million severance charge is expected in Q1 FY27 related to the leadership model transition.

    Guidance & targets

    8
    CategoryTargetConfidence
    Revenue
    $4.11 billion to $4.16 billion
    high materiality
    High
    Adjusted EBITDA
    $1.11 billion to $1.14 billion
    high materiality
    High
    Effective Tax Rate
    approximately 23%
    medium materiality
    High
    Adjusted Diluted Earnings Per Share
    $6.04 and to $6.24
    high materiality
    High
    Share Repurchases
    approximately $400 million
    medium materiality
    High
    Quarterly Dividend Increase
    10% increase to $0.46 per share
    medium materiality
    High
    Assisted Category Market Share
    maintain (low end of revenue outlook) | growth (high end of revenue outlook)
    high materiality
    High
    Industry Growth
    moderate relative to the historical norm of approximately 1%
    high materiality
    Medium

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Assisted Tax Preparation
    Volume was up 2%, and Net Average Charge (NAC) was up 4.1% (3% from price, 1% from mix), reflecting a healthy balance of volume, price, and mix. Maintained market share in the assisted category.
    NAC: 4.1% increasePrice: 3% increaseMix: 1% increaseMarket Share: Maintained in 2026
    		—2% (volume)——
    Wave (Small Business)
    Achieved double-digit revenue growth for the second consecutive year, driven by paid Pro tier subscriptions and higher payments volume.
    Growth Driver: Paid Pro tier subscriptionsGrowth Driver: Higher payments volume
    		—double-digit growth——

    Operational metrics

    30
    Total Operating Expenses
    $3.04 billion3.6% increase YoY
    FY26

    Primarily due to higher tax professional wages, increased occupancy costs, and technology-related expenses.

    Effective Tax Rate
    14%vs 22% in prior year
    FY26

    Reduced by an $84.1 million one-time non-cash tax benefit from an IRS examination resolution, which provided a $0.65 benefit to EPS.

    Net Income from Continuing Operations
    $736 million
    FY26
    Adjusted Net Income
    $688 million
    FY26
    Shares Repurchased
    10.5 million shares7.9% of shares outstanding
    FY26

    Shares were retired.

    Capital Returned to Shareholders
    $714 million
    FY26
    Remaining Share Repurchase Authorization
    $600 millionout of $1.5 billion total authorization
    as of Q4 FY26
    Severance Charge
    $8.3 million
    Q1 FY27

    Related to the transition from a seasonal to year-round office leadership model and streamlining support functions. Excluded from FY27 outlook.

    Client Conversion
    200 basis pointslargest single year improvement in recorded history
    this season

    Result of deliberate refinements across the customer journey, supported by automation and product enhancements.

    Client Retention Rate
    190 basis points
    this season
    Second Look Client Retention
    600 basis points highervs those who did not receive Second Look
    this season

    For new clients who received Second Look.

    AI Tax Assist Client Interactions
    4.2 millionnearly double the engagement YoY
    this season

    Supported paid DIY filers.

    Clients in Target AGI Range ($50k-$200k)
    50%up from 38% previously
    FY26

    Reflects focus on more complex clients with higher lifetime value.

    Product Attachment
    550 basis points
    this season

    Attributed to client experience monitors allowing independent exploration of products and services.

    Experiments Run
    more than 150exponentially more than prior years
    this season

    Part of building a more durable growth engine and accelerating progress.

    Taxpayers Receiving Refund
    6%increase
    last tax season

    Result of tax law changes.

    Average Refund Amount
    12%increase
    last tax season

    Result of tax law changes.

    DIY Mix (Paid vs Free)
    140 basis pointsimproved
    this season

    Reflects focus on attracting more complex filers.

    DIY Growth in AGI Bands
    $100,000 or moregrowth
    this season

    Important for attracting more complex filers.

    Franchise Buybacks
    160vs 124 in prior year
    FY26

    Opportunistic acquisitions when franchisees lack succession plans.

    Franchise Buybacks
    100 to 125
    FY27

    Expected range, done opportunistically.

    Industry Growth (Historical Norm)
    1%
    historical

    Expected to moderate in FY27.

    Unemployment Rate
    4.1%stable
    current calendar year

    Despite stability, job growth has slowed, impacting industry growth.

    Long-Term Revenue Growth Algorithm
    3% to 6%
    long-term

    Predicated on low-growth industry, strategic programs, low single-digit pricing, and 1% from franchise acquisitions.

    Long-Term EBITDA Growth Algorithm
    1.5x revenue growth
    long-term
    Long-Term EPS Growth Algorithm
    double digit
    long-term
    Revenue Growth
    4.8%midpoint of guidance
    FY27
    EBITDA Growth
    6.4%midpoint of guidance
    FY27
    Adjusted EPS Growth
    15.6%midpoint of guidance
    FY27
    Franchise Acquisitions Outlay
    $58 millionup from $36 million
    FY26

    Industry KPIs

    6
    MetricValueDetails
    EPS$5.31USD
    Revenue$3.95 billionUSD
    Net income$736 millionUSD
    Market shareMaintained
    Adjusted EBITDA ebita$1.06 billionUSD
    Share buyback capital return$714 millionUSD

    Product announcements

    2
    ProductTypeDetails
    Consultative Client Experience Modelexpansion
    Year-Round Office Leadership Modelexpansion

    Risks & headwinds

    3
    Moderating Industry GrowthFY27

    expected to moderate from historical 1% norm

    Mitigation: Focus on strategic initiatives, client experience enhancements, and serving complex clients to outperform the market.

    Severance costsQ1 FY27

    $8.3 million

    Mitigation: Related to strategic transition to year-round leadership model; excluded from adjusted outlook.

    Slowing job growthFY27

    nonfarm payroll slow last year, prediction is it will slow again this year

    Mitigation: Impacts growth of new tax filings; company expects to offset with strategic execution.

    What to watch in Q1 FY27

    5

    Consultative Client Experience DMA Rollout

    Tax Season '27
    Current5 pilot offices in FY26
    TargetSuccessful expansion to a full DMA

    Why it matters

    Verifies the scalability and effectiveness of the new client experience model, which is central to the Block Next strategy.

    Based on what we learned last tax season, we are expanding this model to a full designated market area for tax season '27. This will allow us to further test and refine the operating model, technology, talent and workflows needed to deliver this experience consistently and at scale.

    Q&A highlights

    6

    Given the record improvements in conversion and retention, what is the future opportunity, and can these drivers persist at the same level?

    Curtis Campbell explained that the record results are just the beginning of a multi-phase transformation under the 'Block Next' strategy. The focus is on transitioning tax professionals from transactional to consultative roles, supported by year-round field leadership. This aims to deliver trust and confidence, which is the key currency in the tax space, and democratize advisory experiences for Main Street America.

    “This is just the beginning of the journey.”

    asked by Scott Schneeberger · answered by Curtis Campbell

    2 min read4 chapters

    Detailed Narrative

    01

    Strategic Transformation and Client Focus

    H&R Block is undergoing a strategic transformation, shifting its client experience from transactional to consultative. This involves leveraging technology to automate administrative tasks, allowing tax professionals to dedicate more time to providing advice and judgment. A new year-round field leadership model is being implemented to replace seasonal leadership, ensuring consistent service delivery, talent development, and deeper community presence. The company is intentionally targeting more complex, higher lifetime value clients, with the percentage of clients in the $50,000 to $200,000 AGI range increasing from 38% to 50%, aiming to enhance business durability and economics.

    02

    Omnichannel Model and Technology Integration

    The company's omnichannel model integrates DIY, virtual, and in-person experiences, providing clients with flexible assistance options. Technology, including AI Tax Assist for paid DIY filers (4.2 million interactions, nearly double engagement YoY) and Sidekick for tax professionals, is crucial. These tools enhance accessibility and efficiency, while human expertise provides the judgment and confidence that technology alone cannot, reinforcing H&R Block's differentiated competitive position.

    03

    Experimentation and Learning Culture

    H&R Block significantly increased its experimentation efforts, conducting over 150 tests during the past season, an exponential increase from prior years. This approach fosters faster learning, adaptation, and scaling of successful initiatives, contributing to a more durable growth engine and accelerating strategic progress. The company is testing a consultative client experience in a full designated market area for Tax Season '27, expanding from 5 pilot offices, based on positive client feedback and increased satisfaction.

    04

    AI Strategy and Competitive Advantage

    H&R Block views Artificial Intelligence as a tailwind, using it to amplify human expertise rather than replace it. In the high-stakes tax preparation industry, where clients seek confidence, judgment, and accountability, AI alone is insufficient. AI tools automate manual tasks like data collection and entry, freeing tax professionals to focus on consultative roles. This strategy aims to leverage AI to enhance trust and confidence through human interaction, positioning H&R Block as structurally advantaged.

    AI-generated summary of the company’s earnings call. Not investment advice.