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Date
Tuesday, Feb. 3, 2026 at 4:30 p.m. ET
Call participants
- President and Chief Executive Officer — Curtis Campbell
- Chief Financial Officer — Jessica Hazel
- Chief Operating Officer — Tiffany Mason
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Takeaways
- Shareholder capital return -- $508 million returned in the first half of the fiscal year via dividends and share repurchases.
- Share repurchase capacity -- Approximately $700 million remains authorized on the current program.
- Revenue guidance -- Full-year projected between $3.875 billion and $3.895 billion, reaffirmed.
- EBITDA guidance -- Full-year outlook between $1.015 billion and $1.035 billion.
- Adjusted EPS outlook -- Range of $4.85 to $5 for the full year.
- Effective tax rate -- Guidance for about 25% for the full year.
- Industry volume growth assumption -- Management expects 1% growth, consistent with historical averages.
- Assisted vs. DIY share dynamics -- Management expects a tailwind from the One Big Beautiful bill, with assisted expected to take approximately 20 basis points of share from DIY.
- Price increases -- Low single-digit price increases expected in both assisted and DIY channels.
- Small business contribution -- Management expects expanding small business revenues to be a meaningful growth driver in fiscal 2026 and subsequent periods.
- Franchise acquisitions -- Continued pursuit of franchise acquisitions at attractive EBITDA multiples cited as a targeted capital use.
- AI-driven initiatives -- CEO Campbell highlighted the embedding of "AI-enabled tax pro assistance," automation of workflows, and optimization of assisted virtual experiences as current-year focus areas.
- Consulting engagement -- CFO Mason noted the completion of a strategic sourcing consulting engagement in the first half, with expected sustainable cost savings to be reinvested in growth initiatives.
Summary
H&R Block (HRB 3.93%) reaffirmed its full-year outlook for revenue, EBITDA, adjusted EPS, and effective tax rate, while emphasizing a disciplined capital return to shareholders and the available authorization for further share repurchases. Management detailed targeted growth areas, including small business and technology-driven improvements in assisted services, and confirmed execution of cost-efficiency initiatives and franchise acquisition plans. The company expects mild industry growth, low single-digit pricing increases, and a modest shift in market share toward assisted filings, supported by ongoing changes in tax complexity.
- CFO Mason said, "the high end assumes we hold share in the assistant category," clarifying that expectations include possible stabilization of assisted share loss if operational improvements succeed.
- Management does not foresee a material impact from potential government shutdowns, citing preparedness developed over decades of operation.
- CEO Campbell stated, "Yes. It's really, really early, but I would say that I expect, depending on the client, there to be a portion of their client base that does receive a bigger refund. You know this, look at the standard deduction, that's up $750. Incremental changes with the tips income deduction, the overtime pay deduction, the new senior deduction. Increase in default deduction are, in some cases, pretty big moves. Depending on who you are as a taxpayer, you could see a slightly higher refund. Perfect. Thank you very much. It's too early for us to share data that confirms what we're seeing, but I would expect that to be the case," referencing anticipated refund increases tied to recent tax law changes.
- Marketing spending is expected to remain consistent with historical levels, with a refined focus on customer lifetime value and digital engagement strategies involving AI tools.
Industry glossary
- Assisted: Tax preparation services where clients work directly with H&R Block professionals, distinct from self-guided online solutions (DIY).
- DIY (Do-It-Yourself): Digital tax preparation platforms enabling customers to file taxes without direct professional assistance.
- One Big Beautiful Bill: Internal reference used by H&R Block to describe recent substantial tax legislation introducing heightened filing complexity for taxpayers.
- AI-enabled tax pro assistance: Technology initiative providing H&R Block tax professionals with real-time artificial intelligence support for process automation and decision enhancement.
Full Conference Call Transcript
Jessica Hazel: This dynamic is reflected in the $0.11 year-over-year increase in adjusted loss per share, even as our net loss improved. Our disciplined approach to capital allocation continues to drive meaningful value for our shareholders. We generate significant, stable cash flow, and expect this year to be no different. We then invest in the business, grow the dividend, and return excess capital to shareholders through share repurchases. In the first half of this fiscal year, we have returned $508 million to shareholders in the form of dividends and share repurchases. We have approximately $700 million remaining on our current share repurchase program.
Turning to our full year outlook, we are reaffirming the following ranges as provided in today's earnings release: Revenue between $3.875 billion and $3.895 billion, EBITDA between $1.015 billion and $1.035 billion, an effective tax rate of approximately 25%, and adjusted EPS between $4.85 and $5.
Our outlook continues to contemplate certain key assumptions: First, industry growth in line with historical norms, or about 1%; continued emphasis on achieving a healthier balance of volume, price, and mix over time; the strategic prioritization of assisted and paid DIY, the two areas that deliver the strongest lifetime value for H&R Block; an expanding contribution from small business as a meaningful revenue driver in fiscal 2026 and beyond; and continued franchise acquisitions when opportunities arise at attractive EBITDA multiples, which remains a prudent and value-accretive use of capital.
Taken together, these inputs underpin our fiscal 2026 outlook and reinforce our focus on disciplined execution of our strategy, which we believe positions us well to continue delivering meaningful value for our shareholders. With that, I'll turn it back over to Curtis for closing remarks.
Curtis Campbell: Thanks, Tiffany. Our priorities are clear: focused on the client, equipping our tax pros to build trust and deliver meaningful outcomes at every turn. Coupled with products designed for clarity, confidence, and convenience, we focus on meeting clients where they are, on their terms. Combining disciplined execution with a commitment to progress, we're positioning H&R Block, Inc. for lasting growth. I am confident in our team's ability to adapt, deliver, and strengthen our company for the future. Thank you for your continued trust and partnership. Now, operator, we will open up the line for questions.
Operator: Star 11 on your telephone, and wait for your name to be announced. To withdraw your question, please press 11 again. Please stand by while we compile the Q and A roster. Our first question comes from Alex Paris with Barrington Research. Your line is open.
Alex Paris: Hi, guys. Thanks for taking my call. Congrats on the better-than-expected off-season quarter.
Jessica Hazel: Thanks, Alex.
Curtis Campbell: Yeah. How are you doing, Alex? Thank you for the question. So, Yeah. I'll go ahead and jump in. We don't see any material impact from the government shutdown, and I'll remind everybody that Block has been in business for seventy years, so we are not unfamiliar with government shutdowns. Our tax pros are prepared to guide our clients through any uncertainty, especially any connected to the one big beautiful bill.
Alex Paris: Gotcha. And then, you know, again, it's very early in the tax season. But any trends to note out of the first ten days or so?
Curtis Campbell: It's early in the tax season without a doubt. So e-file opened up last Monday. Tiffany talked about this, but we expect the industry to grow at approximately 1% this year. I'll tell you, I'm confident in the work the teams have done to prepare for this season. I mentioned in my prepared remarks, we're focused on executing not just for the season, but we're also focused on testing and experimenting with new capabilities and experiences that are connected to our multiyear strategy that we'll share more about as we go throughout the year.
I also want to highlight, Alex, a couple of important changes that we made: the second look to scale it, the work we've done to embed AI-enabled tax pro assistance into the tools of our tax pros, advancements we've made to TPR, the work we've done to optimize our assisted virtual experience, and especially the training our tax pros have to help clients navigate any uncertainty due to the one big beautiful bill. I feel like we're well positioned for the season.
Alex Paris: Yeah. No. Sounds like it. One of the other things I think we talked about in the call is you expect, not only normal growth, 1% ish, you know, for tax filing this year. But also, that assisted should, take some share from DIY again, say, to the tune of about 20 basis points. Any change in that expectation? You know, perhaps driven by one big, beautiful bill, and increased complexity.
Curtis Campbell: No. We'd expect the tailwind from the One Big Beautiful bill. What we have historically seen is when there's significant tax complexity, it drives clients to seek assistance.
Alex Paris: And you're still thinking low single-digit price increases across both assisted and DIY?
Curtis Campbell: That's correct.
Alex Paris: Great. Alright. Well, thank you for that. I appreciate it. Good luck on the balance of the season. We'll have checkpoints between now and then, and I'll get back in the queue.
Curtis Campbell: Thank you, Alex.
Operator: Thank you. Our next question comes from Kartik Mehta with Northcoast Research. Your line is open.
Kartik Mehta: Hey. Good evening. Curtis, as you look at this tax season, are you anticipating similar behavior to last year in terms of the peaks, or do you think the One Big Beautiful Bill will change that in any way?
Curtis Campbell: Hey, Kartik. How are you doing? Thanks for your question. You know this, what we've seen over the last several years is slower starts to the season from an industry perspective, I wouldn't expect that to change. Without a doubt, the one big beautiful bill will drive uncertainty. Don't think that it's going to dramatically change taxpayer behavior other than the fact that they may reach out for assistance more. But I don't think that's going to change the timing of which they reach out to get their taxes done.
Kartik Mehta: And then, Curtis, I know it's early, but have you seen a change in the refund amount? Is that know, the expectation is that it'll be larger than last year. Have you is that come to fruition?
Curtis Campbell: Yes. It's really, really early, but I would say that I expect, depending on the client, there to be a portion of their client base that does receive a bigger refund. You know this, look at the standard deduction, that's up $750. Incremental changes with the tips income deduction, the overtime pay deduction, the new senior deduction. Increase in default deduction are, in some cases, pretty big moves. Depending on who you are as a taxpayer, you could see a slightly higher refund. Perfect. Thank you very much. It's too early for us to share data that confirms what we're seeing, but I would expect that to be the case.
Kartik Mehta: Okay. Thank you. I appreciate that.
Curtis Campbell: Thanks, Kartik.
Operator: Thank you. Our next question comes from George Tong with Goldman Sachs. Your line is open.
Sammy for George Tong: Hi, this is Sammy on for George. Given expectations for greater complexity and a shift towards the assisted filing this tax season, what's driving your outlook for assisted share loss rather than stabilization or even gain since this type of environment is your strength?
Curtis Campbell: Yeah. Let me jump in on this one. What's important to understand is why our market share hasn't consistently grown in assisted. I start with a CEO perspective. We've got names of clients that choose to with us every year. And we lose far too many in our mid to lower funnel. This comes down to, at the end of the day, us understanding why. We've spent quite a bit of time over the last six months examining every aspect of the client journey in our assisted business, and the same thing for our tax pros, examining every step of the journey for tax pros as they work to engage with our clients.
A large portion of the reason why we've had some challenges is a significant amount of manual processes that are dependent on our tax pros to operate consistently at a high level. As I mentioned in my prepared remarks, we're focused on leveraging technology to reduce that manual non-value-added work. We believe this will help automate workflows, ensure consistent funnel management, and at the end of the day, deliver a better client experience. Our clients care about confidence, convenience, and the way they get every dollar they deserve. Enabling tax pros via technology ensures that. This journey will be multi-year, not overnight, but we believe it's the best for improving client experience at Block.
Tiffany Mason: And just to clarify, we've been chipping away at assisted share loss over the last couple tax seasons, That's point number one. Number two, for our full-year outlook, the high end assumes we hold share in the assistant category. That’s top of guidance, and I want to make that point clear today.
Sammy for George Tong: Got it. Implementing AI tools like AI Assist, is that a long-term threat to the assisted business if DIY becomes easier?
Curtis Campbell: Thank you for your question. We don't think so. Meeting clients where they are makes blended experiences important. DIY clients can connect with pros when facing uncertainty, aligning with our multiyear strategy.
Sammy for George Tong: Got it. Helpful. Thank you.
Operator: Thank you. As a reminder, to ask a question or reenter the queue, please press Again, that is 11 to ask a question. Our next question comes from Scott Schneeberger with Oppenheimer. Your line is open.
Scott Schneeberger: Thanks very much. Good afternoon. Curtis and or Tiffany, with the 1% industry volume growth, what drivers might lead to upside or downside as you look out over the season? Thanks.
Tiffany Mason: Hi, Scott. Thanks for the question. Surely, 1% industry growth is historical. For both channels, especially assisted, we expect a positive shift due to the One Big Beautiful Bill. Any larger refunds might modestly boost growth, but I anticipate no outsized impact. So, 1% seems right and is reflected in guidance.
Scott Schneeberger: Okay. Thanks, Tiffany. On marketing approach this year? Timing and spending nuances year over year, if you care to share. Thanks.
Curtis Campbell: Sure. No big change in historical marketing spending. But focus this season is on meeting customers where they are, highest lifetime value. Expertise of tax pros navigating complexity is in TV commercials, digital ads. Connecting AI impacts marketing as consumer behavior shifts toward AI engine optimization, not just SEO.
Jessica Hazel: From H&R Block’s perspective, AI as an enabler of significant client and pro experience improvements. AI tools like the AI-tax pro assistant, streamlining manual processes, and enhancing experiences, aim for pros to build relationships, guidance, and coaching. Clients choose assisted for confidence, trust, judgment, not just math. Fifty-five percent consistently seek assistance, seeing AI as an opportunity, not a disruptor.
Scott Schneeberger: Great. Thank you, Curtis. Tiffany, on increased consulting costs year over year, will that continue?
Tiffany Mason: Thanks, Scott. Engaged a consulting firm for strategic sourcing to drive cost efficiency. This engagement completed first half of the year, will yield sustainable savings to reinvest in strategic growth areas. This was all in our outlook, no step changes.
Scott Schneeberger: Understood. Alright. Thanks very much.
Curtis Campbell: Thanks, Scott.
Operator: Thank you. I’m showing no further questions at this time. I would now like to turn it back to Jessica Hazel for closing remarks.
Jessica Hazel: Thank you, everyone, for joining us today. Look forward to reconnecting with you soon.