What was the impact of the 'Big Beautiful Bill' (tax law changes) on the past tax season, and what is anticipated for FY27?

Curtis Campbell noted that tax law changes resulted in a 6% increase in taxpayers receiving refunds and a nearly 12% increase in average refund amounts. This typically gives DIY a tailwind by increasing taxpayer confidence to do taxes on their own. However, the assisted space, representing over 55% of the market, is expected to maintain its strength. “When you look at the tax law changes from last tax season, really 3 major things resulted in -- from those changes. Number one, the increase in the number of taxpayers receiving a refund, that went up by 6%. That's a really big number in our industry. If you also take a look at the average refund amount that also went up almost 12%.”

What are the expectations for DIY category performance in the upcoming tax season, given the focus on assisted market share?

Curtis Campbell emphasized that H&R Block's DIY strategy focuses on attracting more complex, higher lifetime value clients, rather than optimizing for volume alone. He highlighted an improved DIY mix towards paid and higher AGI bands, and noted favorable client migration from DIY to assisted, showcasing the strength of their omnichannel model. He also pointed out that low-end DIY customers are often transient with low lifetime value. “not all DIY market share is created equal. And at H&R Block, our focus is on attracting and retaining more complex clients with higher lifetime value rather than pursuing transactional volume.”

Can the company quantify the specific buckets of increased investment for FY27, such as compensation, platform, and technology?

Tiffany Mason provided examples of investment areas for FY27, including expanding the consultative client experience (primarily labor and training), technology for automation of tax preparation workflows, and integrating the Wave platform for a unified small business strategy. She did not quantify specific amounts for each bucket but noted the company's ability to maintain its long-term financial algorithm while making these strategic investments. “We talked about our consultative client experience and some of the testing that we did in tax season '26, and these proofs-of-concept offices and our ability to roll those to a DMA in tax season '27 so that's one area of investment. That's primarily an investment in labor and training.”

HRB

H&R Block (HRB) Q4 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q4 FY26)· Consumer Discretionary· Aug 11, 2026

Source: earnings call transcript

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

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

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

Category	Target	Timeline	Confidence
Revenue	$4.11 billion to $4.16 billion high materiality	FY27	High
Adjusted EBITDA	$1.11 billion to $1.14 billion high materiality	FY27	High
Effective Tax Rate	approximately 23% medium materiality	FY27	High
Adjusted Diluted Earnings Per Share	$6.04 and to $6.24 high materiality	FY27	High
Share Repurchases	approximately $400 million medium materiality	FY27	High
Quarterly Dividend Increase	10% increase to $0.46 per share medium materiality	Q1 · FY27	High
Assisted Category Market Share	maintain (low end of revenue outlook) \| growth (high end of revenue outlook) high materiality	FY27	High
Industry Growth	moderate relative to the historical norm of approximately 1% high materiality	FY27	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
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	—	—

Product announcements

Product	Type	Timeline	Details
Consultative Client Experience Model	expansion	Tax Season '27
Year-Round Office Leadership Model	expansion	Enterprise transition

Risks & headwinds

Moderating Industry Growth FY27

expected to moderate from historical 1% norm

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

Severance costs Q1 FY27

$8.3 million

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

Slowing job growth FY27

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

Consultative Client Experience DMA Rollout

Tax Season '27

Current 5 pilot offices in FY26

Target Successful 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.

Find out whether HRB delivers this. Inve re-checks your case every morning.

Q&A highlights

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 read 4 chapters

Detailed narrative

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.

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.

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.

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.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.