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DATE

Tuesday, Aug. 11, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Vice President, Investor Relations - Jessica Hazel
• President and Chief Executive Officer - Curtis A. Campbell
• Chief Financial Officer - Tiffany L. Mason

TAKEAWAYS

• Total Revenue -- $3.95 billion, growing 4.9% driven by higher net average charge and company-owned volume in U.S. assisted tax preparation.
• Adjusted EBITDA -- $1.06 billion, increasing 8.3% and resulting in 80 basis points of margin expansion.
• Adjusted EPS -- $5.31, representing 13.9% growth, which was helped by higher adjusted net income and a 7.9% reduction in shares outstanding.
• U.S. Assisted Tax Preparation Revenue -- $2.56 billion, reflecting 2% volume growth and a 4.1% increase in net average charge.
• DIY Tax Preparation Revenue -- $384.6 million, staying relatively flat as the company focused on attracting higher lifetime value clients over total volume.
• Wave Revenue -- $122.7 million, marking a second consecutive year of double-digit growth led by Pro-Tier subscriptions and higher payments volume.
• International Revenue -- $265.4 million, benefiting from favorable exchange rates and performance in Australia and Canada.
• Free Cash Flow -- $756 million, providing liquidity to execute capital allocation priorities including dividends and buybacks.
• Share Repurchases -- $500.3 million, used to retire approximately 10.5 million shares at an average price of $47.48 per share.
• Quarterly Dividend -- $0.46 per share, representing a 10% increase and the ninth consecutive year of dividend raises.
• Client Conversion and Retention -- Conversion improved 200 basis points while the retention rate increased 190 basis points compared to the previous year.
• Client Mix -- Clients in the target household income range of $50,000 to $200,000 increased to 50% of the total client base, up from 38% in prior years.
• Product Attachment -- 550 basis point increase, supported by the introduction of client experience monitors and technology-enabled exploration of services.
• AI Interactions -- 4.2 million client interactions supported by AI Tax Assist for DIY filers, representing a nearly twofold increase in engagement year over year.
• Net Average Charge -- Growth of 4.1% in the assisted category, comprised of a 3% price increase and a 1% improvement in client mix.
• Operating Expenses -- $3.04 billion, an increase of 3.6% primarily due to higher field wages from increased volume and higher occupancy and technology costs.
• Fiscal 2027 Revenue Guidance -- $4.11 billion to $4.16 billion, assuming the company maintains or grows market share in the assisted category.
• Fiscal 2027 Adjusted EBITDA Guidance -- $1.11 billion to $1.14 billion, reflecting expected continued discipline in cost management.
• Fiscal 2027 Adjusted EPS Guidance -- $6.04 to $6.24, based on projected net income growth and planned share repurchases of approximately $400 million.
• Fiscal 2027 Tax Rate Guidance -- Approximately 23%, representing a return to normalized levels after a one-time non-cash tax benefit in fiscal 2026.
• Franchise Acquisitions -- $58 million, used to buy back 160 franchise locations compared to 124 acquisitions in the prior year.
• Severance Charge -- $8.3 million, incurred in the first quarter of fiscal 2027 as part of a transition from seasonal to year-round office leadership.

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RISKS

• Mason stated, "Historically, industry growth has correlated with job growth. So our outlook reflects that backdrop," as the company expects industry growth to moderate from its typical 1% rate due to slowing non-farm payroll growth.

SUMMARY

Management reported the strongest financial results for H&R Block, Inc. (HRB +1.61%) in five years, highlighted by revenue growth of 4.9% and EBITDA margin expansion. The company is executing its Blocknext strategic roadmap, transitioning from a transactional tax preparation model to a consultative advisory model focused on higher lifetime value clients. This strategic shift is supported by significant investments in generative AI and a structural transition toward year-round field leadership to ensure service consistency. Management noted that higher client retention and conversion rates demonstrate that the expert-led, technology-enabled strategy is improving business quality. For fiscal 2027, the company expects continued growth and plans to return capital through a 10% dividend increase and $400 million in share repurchases.

• CEO Campbell attributed record conversion gains to technology, stating, "Conversion improved 200 basis points this season, which we believe is the largest single year improvement in our recorded history."
• The company is expanding a new consultative service model to a full designated market area following successful pilot tests in five offices that resulted in higher client satisfaction.
• Management confirmed that AI tools like Sidekick are intended to "amplify expertise, not replace it," by automating administrative tasks to allow tax professionals more time for advisory services.
• Second Look retention rates were 600 basis points higher for clients receiving the service, leading the company to automate the process to increase adoption among new assisted clients.
• The transition to a year-round office leadership model is designed to develop talent and deepen local community presence to compete more effectively against independent tax providers.
• CEO Campbell noted that a shift in client demographics toward those with investment income and small business needs is strengthening the durability and economics of the business.
• The company expects to maintain its assisted category market share even as industry growth moderates due to slowing job growth trends.

INDUSTRY GLOSSARY

• NAC: Net Average Charge, the average fee earned by the company per tax return processed.
• Spruce: A mobile banking application launched by the company to provide financial products to clients.
• Wave: A subsidiary providing accounting, invoicing, and payment solutions for small businesses.
• Second Look: A service where tax professionals review a client's past three years of tax returns for missed deductions or credits.
• Blocknext: The company's multiyear strategic roadmap focused on digital transformation and small business growth.
• Sidekick: An internal generative AI tool designed to assist tax professionals in navigating complex tax questions.
• DMA: Designated Market Area, a geographic region where the company tests and scales specific operating models.

Full Conference Call Transcript

Operator: Thank you for standing by, and welcome to H&R Block Fourth Quarter Fiscal Year 26 Earnings Conference Call. Currently, all participants are in a listen-only mode. After the speakers' presentation, there will be a Q&A session. To ask a question from the queue, you may press star 1, 1 again. I would now like to hand the call over to Jessica Hazel. Vice President, Investor Relations. Please go ahead.

Jessica Hazel: Thank you. Good afternoon, and welcome to H&R Block's fiscal 2026 financial results conference call. Joining me today are Curtis A. Campbell, our president and chief executive officer and Tiffany L. Mason, our chief financial officer. Earlier today, we issued a press release and presentation which can be downloaded or viewed live on our website at investors.hrblock.com. Our call is being broadcast and webcast live and a replay of the webcast will be available for 90 days. Before we begin, I would like to remind listeners that comments made by management may include forward looking statements within the meaning of federal securities laws.

These statements involve material risks and uncertainties, and actual results could differ from those projected in any forward looking due to numerous factors. For a description of these risks and uncertainties, please see H&R Block's annual report on Form 10-K and quarterly reports on Form 10-Q as updated periodically with our other SEC filings. Please note some metrics we will discuss today are presented on a non GAAP basis. We have reconciled the comparable GAAP and non GAAP figures in the appendix of our presentation. Finally, the content of this call contains time sensitive information accurate only as of today 08/11/2026.

H&R Block undertakes no obligation to revise or otherwise update any statements to reflect events or circumstances after the date of this call. I will now turn it over to Curtis.

Curtis A. Campbell: Good afternoon, everyone, and thank you for joining us. Fiscal 26 was a meaningful year for H and R Block. We delivered strong results, made significant progress against our strategic priorities and continued to strengthen the quality of the business. Revenue increased 4.9%, EBITDA increased 8.3% and adjusted EPS increased 13.9%. The growth we delivered this year was meaningfully stronger than what was achieved in recent years. We also generated strong cash flow, and returned $714 million to shareholders through dividends and share repurchases. What matters most is what drove those results. We converted more clients to completion, We retain more clients.

We continue to improve the quality of our client base, and we made meaningful progress against the initiatives that matter most to the long term durability of the business. Taken together, fiscal 2026 strengthened our belief that the strategy is working and that H&R Block is on the right path. The results we delivered this year and the evidence behind them give us greater confidence that we can further accelerate long term shareholder value. Over the past several quarters, we have shared elements of the long term strategy we are executing across H&R Block.

Fiscal 26 marked our first full year executing that strategy, And over the coming quarters, you will hear more about where we are headed, and the opportunities we have in front of us. We look back on the year, what stands out most is the evidence that our expert led technology enabled strategy is showing up in stronger client outcomes and stronger business performance. 1 of the clearest proof points we saw this year was in the assisted category. After 2 consecutive years of improving trends, we maintained share in the assisted category in 2026.

That matters because it demonstrates that the actions we are taking to bolster the client experience are helping strengthen our competitive position in our largest business. We also saw clear evidence that clients are responding to the changes we made to improve the experience. Conversion improved 200 basis points this season, which we believe is the largest single year improvement in our recorded history. That improvement was a result of deliberate refinements across the customer journey supported by automation and product enhancements that help create a more personalized experience with fewer friction points. We saw the same pattern in retention. The rate at which clients return this season increased 190 basis points.

And second look continues to be a strong proof point. New clients who received second look returned at a rate more than 600 basis points higher than those that did not. that is because second look delivers something clients value deeply. Expertise beyond current tax year preparation, confidence that H&R Block is working on their behalf to find every dollar they deserve, and a relationship with a trusted tax pro who has their interest in mind, not only in tax season, but throughout the year. We also continue to see evidence that technologies enhancing rather than replacing the expertise that differentiates H and R Block.

This season, we expanded the use of AI and automation across the business to help tax pros focus more of their time on delivering advice, judgment, and client support. Sidekick, our AI tax pro assistant, launched across our offices and saw strong adoption throughout the season. While AI Tax Assist for Pay DIY filers, supported 4.2 million client interactions and drove nearly 2x the level of engagement we saw a year ago. We also automated and significantly expanded second look. Allowing us to bring those benefits to more clients while helping tax pros focus on the returns with the greatest opportunity.

Together, these advances reinforce an important aspect of our strategy, using technology to scale expertise, and deliver better outcomes for clients. Taken together, these results reinforce our confidence that our strategy is working. We are seeing stronger client outcomes. Improving business quality, and growing evidence that are expert led technology enabled strategy is translating into better performance. That combination is strengthening the durability of the business today while creating a stronger foundation for future growth. A major part of our strategy is continuing to win with more complex, higher lifetime value clients. We are not focused on growth for the sake of volume alone.

We are focused on attracting and retaining the type of clients that strengthen both the durability and economics of our business. We continue to see that shift in fiscal 26. More complex clients engaged with H&R Block at higher rates, and our client mix continues to move towards the segment we have been intentionally focused on. Over the last few years, the percent of clients falling within our target household AGI range of $50 thousand to $200 thousand has increased from 38% of our clients to 50%.

Today, we are serving a higher percentage of clients with investment income small business and sole proprietor needs, and increasingly diverse income streams. that is important because it shows we are not only targeting these relationships, we are succeeding in attracting them. Research tells us that clients with more complex financial lives value assistance, expertise, and trusted advice. This is exactly where H&R Block stands apart. Our brand, tax expertise, omnichannel model, and growing technology capabilities allows us to serve these clients in ways that are increasingly relevant to their needs. We will continue to lean into these consumer groups rather than pursue lower lifetime value transaction oriented clients because volume alone does not create durable economic value.

As a result, we will continue to improve the quality of the business. These relationships create more opportunities to serve clients over time, support stronger retention, improving the long-term economics of our client base. Our omnichannel model is becoming an even greater competitive advantage because it is built around a simple idea. Clients do not all need the same level of assistance. And their needs change over time. Some clients want to prepare their return entirely on their own. Others want occasional guidance through tools like AI tax assist. Some want the assurance and accountability that comes from tax pro review, and others prefer more guided support from a tax pro via virtual, in office experiences.

Our advantage is that we can meet clients where they are and provide the level of assistance they need when they need it. As their needs evolve, we are there every step of the way for them. We believe that flexibility is becoming increasingly important as technology changes how clients engage. Technology can simplify tasks and make assistance more accessible while human expertise provides the judgment, advice, and confidence that technology alone cannot We are not building separate digital and expert led experiences. We are strengthening an integrated omnichannel model that operates at scale. Where technology and human expertise work together to deliver the right level of assistance the way each client prefers. that is an important distinction.

We are not trying to bulk technology onto a fragmented service model or bolt experts onto a digital model. We are building on a foundation that allows clients to live across DIY, virtual, and in person experiences while receiving the level of assistance that is right for them. We believe our ability to combine expertise and technology across the different needs clients have becoming an increasingly important differentiator and expanding our opportunity for long term growth. We saw additional evidence of this throughout the season. Clients engaged with technology enabled assistance at scale through AI Tax Assist.

At the same time, Sidekick helped tax pros navigate complex tax questions more efficiently while client experience monitors allow clients to explore products and services independently. Contributing to a 550-basis point increase in product attachment. These are practical examples of our omnichannel model in action. Using technology to make assistance more accessible for clients while allowing our tax pros to focus on the expertise, judgment, and advice that matter most. The progress we have discussed so far has strengthened our confidence in our strategy and helped us identify where to move faster. The greatest change happening at H&R Block is not any single initiative. it is a different way of operating.

Back in May, I shared that we ran more than 150 experiments during the season. Exponentially more than in prior years. As we continue executing our strategy, we are experimenting more. We are learning faster and using those learnings to make better decisions about where to scale. That matters because it increases the velocity at which we can improve the client experience. Strengthen execution, and focus resources behind the ideas that are showing the greatest potential. This is an important part of building a more durable growth engine and accelerating progress against our strategy. We are not guessing at what could happen. We are testing in real world conditions learning from the results, and scaling what works.

That approach gives us greater confidence in the choices we are making, allows us to move faster when evidence supports it, and helps us advance our long term strategy with greater discipline. Just as importantly, we are still in the early stages of what this approach can unlock. The progress we saw this year has increased our confidence that there are meaningful opportunities ahead, and we expect the pace of learning experimentation, and innovation to continue accelerating. I would like to share 2 examples that show how this operating model is translating learning into meaningful progress. The first example is the work that we are doing to test the more consultative expert led, technology enabled client experience.

In 5 pilot offices this past tax season, we delivered a client experience that felt less transactional and more advisory focused on strengthening the client relationship and creating incremental value both during and beyond the annual tax filing event. In these pilot offices, we saw higher client satisfaction. Stronger beliefs in our expertise and value, and increased engagement beyond tax season. These were not data points alone. We heard it directly from clients. 1 client told us, I did not know taxes could be this easy. Another said, this guidance will really make a difference for my business. Those comments matter because they reinforce a broader belief we have at H&R Block.

As technology reduces the effort required to prepare a return, the value of expertise judgment, and trusted advice increases. They also reinforce our belief that clients value a trusted relationship that extends beyond the tax return itself. We can deliver this experience because behind the scenes, technology is handling more of the administrative work allowing our tax pros to spend less time collecting and entering information and more time providing guidance, planning, and advice. Based on what we learned last tax season, we are expanding this model to a full designated market area for tax season 2027.

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. To enable this experience, we are transforming how work gets done inside our offices, by automating away the mechanical aspects of tax prep. From using AI to eliminate manual data entry, to automating the initial review of prior year returns, we are creating more capacity for tax pros to focus on delivering a personalized, trusted assistance clients value most. The second example of how we are transforming is the evolution of our field leadership model.

1 of our clearest learnings was the critical role year round leadership plays in developing associates, reinforcing service standards, delivering a more consistent client experience. These learnings gave us confidence to move faster on changes that will support future phases of our strategy. As part of that effort, we are making an enterprise transition from a seasonal office leadership model to a year round office leadership model supported by area experienced leaders who manage a small number of offices focused on developing talent, coaching associates, driving greater consistency throughout the field. We believe in delivering more consistent and consultative client experiences across full-time leaders who are present not just during tax season, but throughout the year.

These leaders will also help deepen our presence in local communities, helping us compete more effectively against independent providers. We are also streamlining supporting functions to better enable our field teams, increase consistency of execution, and accelerate our ability to scale what is working across the organization. These 2 examples although different in detail, reflect the same principle When testing gives us strong evidence, we act on it. That discipline allows us to accelerate progress against our strategy, reduce execution risk, and build a faster moving organization capable of compounding progress over time. Looking back at the year, what gives us confidence is not simply the results we achieved, but the evidence behind them.

We are delivering stronger client outcomes, attracting higher lifetime value clients, building a more differentiated competitive position and seeing increasing proof that our strategy is working. Just as importantly, we are becoming a faster learning organization. Our ability to test, learn, adapt, and scale what works continues to improve. Giving us greater confidence where we invest where we accelerate, and how we create value. We are still early in the journey, but we believe H&R Block is better positioned today than it has been in many years. We have a clear strategy. compelling opportunities ahead, and significant runway to further strengthen the business deepen client relationships, and create long term shareholder value.

And with that, I will turn the call over to Tiffany.

Tiffany L. Mason: Thank you, Curtis, and good afternoon, everyone. In fiscal 2026, we delivered our strongest financial performance of the past 5 years. Revenue and EBITDA growth as well as margin expansion all accelerated. Which reflects a year of successful execution and progress against our strategy. For the fiscal year, we delivered revenue of $3.95 billion an increase of 4.9% over the prior year. This increase was primarily driven by higher net average charge or NAC and company owned volume in US assisted tax preparation. Growth in international revenue, and another year of small business momentum at Wave. As Curtis shared, we strengthened the quality of our business and, as a result, maintained share in our largest category.

This was supported by higher conversion, better retention, and a mixed shift towards more complex clients who value confidence and expert judgment. We also continue to benefit from our ability to make low single-digit pricing adjustments. While offering a strong value proposition to our clients. In the assistant category overall, we were pleased by our progress this year toward a healthier balance of volume, price, and mix. Which remains a key element of our strategy. Wave, an important component of our small business strategy, had another very productive year. This marked Wave's second consecutive year of double digit revenue growth driven by our paid Pro-Tier subscriptions and higher payments volume.

Taken together, we believe these top line results reflect a healthy and improving business. Total operating expenses for the fiscal year were $3.04 billion, an increase of 3.6% over the prior year. This increase was primarily due to higher tax professional wages, as a result of the better company owned return volumes and an increase in occupancy costs and technology related expenses. Fiscal 26 EBITDA was $1.06 billion, an increase of 8.3% over the prior year resulting in 80 basis points of EBITDA margin expansion. Our effective tax rate for the fiscal year was 14% compared to 22% in the prior year.

As a reminder, during the third quarter, we recognized an $84.1 million 1-time noncash tax benefit related to the resolution of an IRS examination, which reduced income tax expense and provided a $0.65 benefit to earnings per share. Net income from continuing operations was $736 million and earnings per share from continuing operations $5.69. Adjusted net income was $688 million. Adjusted earnings per share were $5.31, an increase of 13.9% over the prior year. This increase was driven by fewer shares outstanding as a result of share repurchases, and higher adjusted net income. Turning to our capital structure and disciplined capital allocation practices.

Our liquidity position remains strong, supported by the significant and stable free cash flow generation of our business. This year, we generated $756 million of free cash flow. Representing a meaningful increase year over year and reflecting the strength of our operating model and the quality of our earnings. This cash flow provided flexibility to execute against our capital allocation priorities. During the year, we repurchased and retired approximately 10.5 million shares representing 7.9% of shares outstanding at an aggregate cost of $500 million In fiscal 26, we returned a total of $714 million to shareholders in the form of dividends and share repurchases.

We remain committed to investing in the business growing the dividend, and returning excess capital to shareholders through share repurchases. We believe this disciplined approach to capital allocation continues to drive meaningful long term shareholder value. Now turning to our fiscal 27 outlook. I will begin with the key assumptions underlying our expectations for the year. We expect industry growth to moderate relative to the historical norm of approximately 1%. While unemployment rates remain stable, job growth has slowed. Historically, industry growth has correlated with job growth. So our outlook reflects that backdrop.

Despite this softer industry backdrop, the meaningful progress we delivered in fiscal 26 and the continued progress against our strategy gives us confidence in our market position heading into 2027. We remain focused on achieving a healthier balance of volume, price, and mix supported by ongoing enhancements to the client experience, and serving clients with increasingly complex needs. At the low end of our revenue outlook, we assume we will maintain a assisted category market share while at the high end, we assume assisted category market share growth. We will also continue to acquire franchise locations when opportunities arise at attractive EBITDA multiples.

And we expect growth in small business services as we continue to enhance how we bring together our expert advice, product suite, and digital capabilities to comprehensively serve small business owners. With regard to expenses, our outlook assumes continued discipline in managing our cost structure. At the same time, we expect to increase our level of investment in fiscal 27 to support our strategic priorities. As Curtis discussed, we are scaling initiatives that have demonstrated promising results through testing. And accelerating efforts where evidence has strengthened our confidence in the opportunity ahead.

These investments support the next phase of our strategy, and include efforts such as the expansion of our consultative client experience and technologies that enable greater automation of tax preparation and related workflows. Our continued focus on disciplined cost management allows us to make these investments and still maintain our long term financial algorithm. As a result of these and other assumptions, our outlook for fiscal 2027 is revenue in the range of $4.11 to $4.16 billion adjusted EBITDA in the range of $1.11 to $1.14 billion, an effective tax rate of approximately 23%, and adjusted diluted earnings per share in the range of $6.14 to $6.24.

1 additional expense item to note as you review the outlook we provided today in our earnings release. The transition that Curtis discussed from a seasonal office leadership model to a year round model, and the streamlining of support functions, all to better enable our field teams has resulted in an approximately $8.3 million severance charge in the first quarter of fiscal 27. This amount has been excluded from our outlook. Durable cash flows remain 1 of the defining strengths of our business.

And we expect fiscal 27 to be another strong year of free cash flow generation We will continue to use this cash flow to invest in the business, grow the dividend, and return excess capital to shareholders through share repurchases. Consistent with that commitment, today, the board approved a 10% increase in our quarterly dividend to $0.46 per share. We are proud that H&R Block has paid quarterly dividends consecutively since becoming public in 1.96 thousand. Additionally, our fiscal 27 outlook contemplates approximately $400 million of share repurchases. With a plan to execute throughout the entire year subject to market conditions. We have approximately $600 million remaining under our current $1.5 billion share repurchase authorization.

Taken together, these inputs underpin our fiscal 27 outlook and reinforce our focus on disciplined execution of our strategy. We entered the new fiscal year with momentum, confidence in our strategy, and a compelling financial profile that enables us to invest in strategic priorities grow profitability, and continue to deliver value to shareholders. With that, I will turn it back over to Curtis for closing remarks.

Curtis A. Campbell: Thank you, Tiffany. Results this year reflect the progress we have made executing our strategy. We exceeded financial expectations, further elevated the client experience, and continued to strengthen the durability of our business. The evidence we saw throughout the year from stronger conversion and retention to continued improvement in the quality of our client base reinforces our confidence that the strategy is working and that H&R Block is well positioned for the future. We have an exciting year ahead, and I look forward to sharing our Q1 results in November and providing a deeper look at our strategy, execution priorities and longer term value creation framework at our Investor Day in December. Thank you for your time and your support.

And with that, operator, we will open the line for questions.

Operator: Thank you. As a reminder, to ask a question, you will need to press 1, 1 on your telephone. To remove yourself from the queue, you may press 1, 1 again. Our first question comes from the line of Scott Schneeberger of Oppenheimer and Company. Please go ahead, Scott.

Scott Schneeberger: Thanks very much, and congratulations. Really good looking tax year. Curtis, could we talk about obviously, conversion, retention, complexity, very good for you. Can we talk about where those can go? I mean, mentioned conversion of record. What is the opportunity in front of you? I guess we will hear more at investor Day in these categories, but you had a nice year. The kind of guide that we are looking at this year, which is similar to what you delivered financially. This year just ended on what you have coming up, can that persist at that level or farther on these drivers? Thanks.

Curtis A. Campbell: Thank you for the question. Hope to see you in December. I know that we have talked in the past about our Blocknext strategy. that is important to us. We talked quite a bit in the prepared remarks. About our transition from a transactional experience that we deliver to a consultative experience that we deliver. To give everybody that is listening a little bit of history. I think this is important as we think about the H&R Block journey. When you think about the journey, it is important for us to think about as a company what business are we actually in? And H&R Block has been around for 70 years doing tax preparation.

If you dig underneath that and spend enough time with our clients, Scott, and folks, really quickly discover that what clients are looking for is trust and confidence. that is the key currency in the space that we operate in. As a part of that, we stepped back as an organization and we define what we would then call our ideal state. So what is the future look like for H and R Block? We are this level of trust and confidence for every customer that engages with us. And that future is different than what it has been historically for H and R Block.

As a part of that, we identify what that would look like And then we sat down as an organization and we identified what the critical assumptions would be that would be required for us to deliver against that. And that allowed us to create a strategic roadmap that takes us from today to tomorrow. That strategic road map, as we will talk about in Investor Day, cuts across multiple phases. 1 of the early phases of that journey is us focused on transforming the work that our tax pros do.

So you heard me talk a lot about in the last earnings call and in the prepared remarks about transforming the work that our tax pros do and shifting that from transactional tax preparation, consists of data collection and data entry to more consultative engagement. And that is really in our sweet spot when you think about the fact that we have been around for 70 years We do almost 20 million tax returns a year. there is really no other player in the US that has the access to the data that we do, that is got the footprint that we do, that is got the relationship in all the communities across America.

So phase 1 is that tech is that technical transformation. The other thing that I talked about in the prepared remarks was the transformation of our field leadership. In order for us to deliver this consultative experience, we need to make sure that we have the system support system around our tax pros to enable that. So we are shifting from having seasonal field leadership to having full time field leadership. And by doing that, we have more hands on the ground, more focus in every office we can ensure that our tax pros are delivering the experience that we want. So all those things give us confidence this is just the beginning of the journey.

So we are really excited about the fact that we saw record results this year. But once again, this is the first phase in this transformation for H and R Block, really focused on delivering that trust and confidence that is important to our clients. Hope to see you this summer.

Scott Schneeberger: Appreciate that, Curtis. Yeah. For my follow-up, up, I am curious. The big beautiful bill can you speak now that we are in the look-back period? What type of impact did that have on this past year? And tax season? And what do you anticipate in year 2 of in 2027?

Curtis A. Campbell: Yeah. it is a great question. And once again, everybody listening, I will just share some data points here. When you look at the tax law changes from last tax season, really 3 major things resulted in from those changes. Number 1, increase in the number of taxpayers receiving a refund. That went up by 6%. that is a really big number in our industry. If you also take a look at the average refund amount, that also went up almost 12%. that is a really big number as well.

And then if you combine that with the fact that the bal-dues, so the balance due to the IRS decreased, That gave taxpayers more confidence that they could do tax on their own. Typically, when we see that in the tax industry, DIY gets a little bit of a tailwind. What I will just remind everybody of is if you look at the assisted space, that represents over 55% of the market. And it has for many years. So at H&R Block, we remain incredibly confident in assisted and we believe that is going to continue to maintain and strengthen the industry both this year and moving forward.

Scott Schneeberger: Great. Thanks. I will turn it over.

Operator: Thank you. Thank you. Our next question comes from the line of George Tong of Goldman Sachs. Please go ahead, George.

George: Hi. Thanks. Good afternoon. You mentioned your goal of maintaining mark share for assisted at the low end of the guide and out at the midpoint and at the higher end of the guide. Can you share your thoughts on how you expect to perform in the DIY category? For the upcoming tax season?

Curtis A. Campbell: Yeah. Hey, George Tong. Nice to see you. And, hopefully, everything is going well in the West Coast. A couple of things that I do want to emphasize to answer your question. 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. A couple additional data points around that. When you look at our DIY mix between paid and free that improved 140 basis points. We also delivered DIY growth in AGI bands of $100 thousand or more which is important. All these things connect back to our focus on more complex filers.

Now when you take a look at that and you also take a look at the things that are very unique to H and R Block, With our focus on our omnichannel engagement model, also saw a favorable migration from clients from DIY into assisted as their need for more assistance evolved. That reflects the strength of our omnichannel model. Now, I will also share that DIY remains an important entry point within that model We do not manage the business to optimize for DIY volume in isolation. And I think if you were to also step back and look at the DIY industry, in the DIY space, at its very low end,.

Customers often focus on the lowest price or free offerings. And these customers are typically the most transient with the lowest retention and the lowest lifetime value who often move to a new provider the moment a lower price shows up. So when you think about our focus as we emphasized on my prepared remarks, it is on the clients who value assistance, trust, and guidance. Those are the clients for us that have the longest and strongest lifetime value.

George: Got it. that is very helpful. And you mentioned the need to increase investments in the upcoming year as you position the business to be less transactional, more advisory. Can you talk about the specific buckets where you intend to spend and invest and perhaps quantify how much is going into each of those buckets. For example, compensation, platform, technology, etcetera.

Tiffany L. Mason: Hey, George Tong. Thanks for the question. So just to give you a few examples, and some of these were woven throughout Curtis's and in my prepared remarks. We talked about our consultative client experience and some of the testing that we did in tax season 2026. And those proof of concept offices and our ability to roll those to a DMA in tax season 2027. So that is 1 area of investment. that is primarily an investment in labor and training. So that is part of what we are looking to invest in fiscal 27. We are also investing in technology. That technology allows us to do more automation of tax preparation as well as related workflows.

So that is entirely a technology investment. Then the last example I would give you is around our small business strategy. And we have been hard at work integrating our Wave platform into our broader small business initiative and working to make sure that we have a unified small business strategy that supports our small business customers. We know that is a great growth opportunity for us. And so that is, again, investment in technology and making sure that we have that unified approach. I am not going to quantify each of those buckets of investment. I know something you are looking for, but that is something that we will spend more time talking about over the next quarters.

Thanks for the question, though. And I think, obviously, we are very proud of the fact that we can maintain our long term algorithm and, at the same time, make the investments. I think a testament to the work that we are doing internally to drive cost out in other parts of the business and still be able to invest where we need to accelerate our strategy.

George: Got it. Thanks very much. Thanks, George Tong.

Operator: Thank you. Our next question comes from the line of Thomas Wendler of Stephens Inc. Please go ahead, Thomas.

Thomas: Hey, good afternoon, everyone. Great quarter. Happy to see it. Just wanted to kick things off with a question on second look. It has higher retention. You maybe give us a little bit of color on the utilization of second look during this quarter?

Curtis A. Campbell: Thomas, welcome. We are happy to have you. I hope I see you in December. Great question. So let me give you a little bit of background on second look. Second Look has been around for many years. But, historically, we have struggled because second look was very, very manual. It required tax pros to do quite a bit of work. And because it required tax pros to do a lot of work, tax pros were not very eager to offer second look to new clients. Now for everybody listening, let me just explain once again what Second Look is. So Second Look is a service that we offer at H&R Block. it is unique. To new clients.

And for new clients, we can take a look at their last 3 years of tax returns. To look for any untapped missed opportunities. And when we find those untapped missed opportunities, our retention rate for those clients goes up significantly. For those clients, it feels like sound money. that is a great service for new clients moving in. Over the last 18 months, we spent quite a bit of time automating second look, leveraging some of the newer AI capabilities that we have access to now.

So instead of having, you know, a small population of our new assisted clients opt into Second Look, we have a much higher percentage of people opting in with the goal of every 1 of our assisted clients that are new getting second look. We are not quite there yet, but we are getting fairly close without me sharing the specific numbers. Does that help, Thomas?

Thomas: Yep. Does that help? Happy to address it. Okay. I appreciate the color there. And then for my second question here, could you maybe just speak to the success you saw on the international front this quarter?

Tiffany L. Mason: It looks a little bit better than expectations. Thomas, I would be happy to do that. I will tell you, keep in mind that the tax seasons for Canada and Australia are different. So Australia's tax season runs July through October. Canada's tax season looks more akin to the US, not exactly the same, but more akin to the US. So keep in mind there is different tax seasons. Canada had a good tax season. Though, you know, not as strong as would have liked just given some of the changes in regulation with the CRA. So I would say most of the benefit that we saw in fiscal 2026 actually was a benefit from favorable FX rates.

Though the Canadian tax season was good. Relative to our expectation, not great, and Australia had a very nice tax season, very nice end to their tax season overall, but that was earlier in the year. So a little bit of color there on international performance.

Thomas: Perfect. Thank you for all the color. And, yeah, looking forward to seeing everyone during the Investor Day. Thanks, Thomas. Thanks for having me. See you there.

Operator: Thank you.

Kartik Mehta: Our next question comes from the line of Kartik Mehta of Northcoast Research. Hey. Good evening. Curtis, maybe if you could provide some thoughts on pricing as we go into next season. I think you said you wanted a little bit more balance on obviously, the price and volume. Metrics. So I am wondering if you think you would be able to achieve the same level of price, or do you think that mix will be a little bit different?

Tiffany L. Mason: Hey, Kartik. Great to hear from you. So let me start by just saying we were really pleased with our price volume and mix performance in fiscal 2026. I said that in my prepared remarks, maybe just to give you a little bit more color. If I think about the assisted, channel for just a minute, Volume in the assisted channel was up 2%. NAC was up 4.1% in fiscal 26. And NAC, you will know you will remember, is a mix of price and mix. Price was up about 3%, and mix was up 1%.

So when we think about price volume and mix for assisted, it was that nice healthy balance. that is what we have been striving to with our team for the last couple of years, and we struck that nice balance. that is a concerted effort of ours, and we continue to strike that balance and have that plan going forward. We continue to have pricing power in the, in the industry. We continue to plan for low single digit price increases as we think about fiscal 27, and that is what certainly baked into and inherent in our guidance that we gave today for this next upcoming year.

Curtis A. Campbell: Kartik. And then, Curtis, just a follow-up. You talked about maybe 150-plus tests. As you look into next fiscal year, how many of those tests do you think you will actually implement? How many do you think you will repeat? And I am assuming there will be new ones as well. Yep. Thank you, Kartik, and go Browns as you get prepared for the NFL season. Thank you. Yes, sir. When you think about our velocity of tests, as I mentioned to you, quite a bit, it was fairly low before I joined H and R Block. And 1 of our biggest currencies is business leaders. is learnings.

And what helps us is we have got a clear vision of what the future looks like. We have got a very clear vision of what we think the ideal state client experience looks like. And earlier on the call, described these critical assumptions. These are the big, big questions that we have to answer as an organization to be able to deliver that ideal state client experience. that is going to focus us on running as many or more experiments in the next fiscal year. And just like I shared in my prepared remarks, not every experiment we run is gonna prove to be successful. every experiment we run will 100% deliver learnings.

And we leverage those learnings to refine and improve experiences. I will give you 1 example. So this past tax season, we ran in 5 pilot offices, across the network an experience that was much different than our typical experience at H&R Block. I talked quite a bit about the importance of a shifting from transactional experiences to consultative experiences. And in those 5 offices, the focus of the engagement with clients was purely around a relational consultative experience. And we leverage improvements in workflow and capabilities and technology to remove the manual effort from our tax folks.

So think about the data entry and data collection and then leverage other technology insights and data that allows our tax pros to show up as experts and the guide for clients and provide guidance and advice. I visited most of these offices, Kartik. I will tell you, you know, a lot of folks that are typically fairly well off they spend thousands of dollars every year with CPAs. And they spent thousands of dollars with CPAs with the hope of getting some level of trusted advice, consultation, and guidance on what the future looks like. And once again, at H&R Block, we do not think that should reside just with wealthy people.

As you think about our future, especially when it comes to our ideal state, we are looking to democratize those experiences and make them available to Main Street America. And the amount of positive feedback that we got at those 5 offices was just it was incredible. That gave us confidence to scale from those 5 offices into a full DMA for 2027.

Now when we scale into a full DMA, Kartik, I expect for us to get more learning because what we are trying to learn there is what it is going to take for us to do with that broader scale with the goal of this eventually becoming how we do, what we do at H&R Block, and how we deliver the experience to every customer that engages with us. So I expect the rate of experimentation, not to slow down. it is probably gonna increase moving forward. But all of it is in service to our ideal state. And block next.

Kartik Mehta: Okay. Thank you so much. Appreciate it. Yes, sir.

Operator: Thank you.

Alexander Paris: Our next question comes from the line of Alexander Paris of Barrington Research. Hi, guys. Thanks for taking my questions, and I will add my congratulations to a nice finish to the fiscal year. Thanks, Alexander. I have a couple of questions about the underlying assumptions for fiscal 27 guidance. And I appreciate all the color that you give in the press release and on the prepared comments. But it looks like at the midpoint, if I did my math right, revenue of about 4.8% growth EBITDA, 6.4%, and adjusted EPS, 15.6%.

Can you remind us all and me specifically the long term growth algorithm has there been any change to the long term growth algorithm over the last few years?

Tiffany L. Mason: Sure, Alexander. I would be happy to So you are you are in the ballpark in terms of the midpoint of our outlook. The long term growth algorithm suggests that revenue can grow 3% to 6%. That EBITDA will grow at 1.5x the rate of revenue growth, and that EPS will grow double digit. That long term algorithm is predicated on an industry that is low growth. So operating in that low growth industry. Upside from strategic programs that allow us to grow higher into the range that 3% to 6% revenue range, that we can continue to take low single-digit pricing and that we can continue to get about 1% from franchise acquisitions.

So as you think about our guide for this fiscal year, and even what we were able to accomplish, frankly, in fiscal 26, Obviously, you know, we are we are seeing the low the impact of an industry that is slow growing, and we are seeing the fruits from our strategic initiatives start to pay dividends. I answered in 1 of the earlier questions around opportunities for margin expansion. We are balancing taking cost out of our cost base, and doing the hard work of making that a reality, while at the same time investing in strategic initiatives that help us further our road map relative to Blocknext, the strategy that we are deploying.

And, you know, we are just at the beginning innings of that, but we are making good progress. So the fact that we were able to deliver 80 basis points of margin expansion in fiscal 26 and that we are guiding to an additional, at the midpoint, call it, 50 basis points of margin expansion in fiscal 2027 is I think, those are really good examples of us being on our way to delivering that algorithm over the next few years. So, hopefully, that helps, but happy to provide any additional color should you need it.

Alexander Paris: No. that is great. And then going back to the assumptions, you said industry growth to moderate from the typical 1% growth rate. Do you still expect growth in the industry in fiscal 27? Given the dynamics of the employment market?

Tiffany L. Mason: Yes. We do. And so maybe just to maybe just to double click on that for a minute. So, yes, we still expect growth in the industry. Moderate is the operative word for sure. And the reason we say moderate is simply because unemployment rates are stable. You know, the unemployment rate, most recent news headline is 4.1% for the current calendar year. But job growth has slowed, and we have seen, you know, non farm payroll slow. Last year, the prediction is it will slow again this year.

And so if you think about that, obviously, we have a base level of filing volume because it seems the unemployment rate is stable, folks are working, they are they are filing their taxes. But if jobs growth is slowing, then the growth in the industry, growth of new filings, is where the lack of growth is stemming from. So we just expect moderation. We do not expect a decline or stagnation, and that is what underpins our outlook.

So we start with that, and then we build on top of that expectation for industry growth what think we can achieve with our own execution obviously, we had great execution last year, we think that continues as we get deeper into our strategy. And start to achieve some of the things that Curtis talked about in his prepared remarks today.

Alexander Paris: that is great. And I am not looking at my spreadsheet, but what about what are your expectations about the breakdown in industry growth between assisted and DIY? Same as it usually is, a little slower on assisted, a little faster on DIY, and then what would be your expectation at H&R Block for your own assisted versus DIY?

Tiffany L. Mason: Yeah. it is a it is a great question. I think of circle back to Curtis's earlier comment, and that is that we believe assisted is going to continue to maintain its strength as the leading category within the tax prep industry. Fair enough.

Alexander Paris: And then lastly, an opportunistic franchise acquisitions, which is 1 of the assumptions. You there was an outlay of about $58 million for those acquisitions in fiscal 26, and that was up from $36 million. $58 million versus $36 million. Do you expect a similar level of franchise acquisition activity in fiscal 27?

Tiffany L. Mason: Yeah. So as you know, that is a that is core part of our long term algorithm. In fiscal 26, we did 160 franchise buybacks That compares to about 124 franchise buybacks in the previous year. Those are opportunistic. We do those when we have franchisees who do not have a generational succession plan. So they ebb and flow as those opportunities arise. We will do somewhere probably in the range of 100 or so, 100 to 1 and 25. But again, opportunistically, and that is certainly embedded in our guide that we that we provided today.

Alexander Paris: Great. Think I have 1 more question, but I am I am forgetting it right now. I will just get it on our follow-up conversation. Thank you very much for taking my questions. I appreciate the additional color. Okay. Thanks, Alexander.

Operator: Thank you. Our next question comes from the line of Scott Schneeberger of Oppenheimer and Company. Your line is open, Scott.

Scott Schneeberger: Thanks very much. Just 1 follow-up. Curtis, I think it is a good time Could you please speak earlier in this year, we had an issue with an AI trade that went against the tax preparation companies. Could you please outline why this should not be impacting H and R Block? And some of what you are doing internally but also, just some of why it is it is an overdone, an overdone viewpoint. Thank you.

Curtis A. Campbell: Yeah. Happy to definitely spend some time on that. I will give you H&R Block's perspective. Believe that we are uniquely positioned to win an AI driven tax industry. And our belief is that we can seamlessly blend AI capabilities with our 70 years of human expertise and accountability in ways that frankly, others cannot. We believe that we proved that in our 5 office tests. We will expand that as we move into a DMA. And I hope everybody listening knows this, but I will just emphasize this. When you think about tax preparation, tax preparation is incredibly high stakes. Most Americans, this is their biggest paycheck of the year.

So if you were to talk to most Americans and ask them, like, what are the 3 things that you would want nothing to do with? My guess would be those 3 answers would be, number 1, going to the dentist. I had to do that the other week. And getting a cavity drilled out. that is not fun. If you live in California or Texas, going to the DMV is never fun, folks. And the last thing is getting audited by the IRS. Nobody wants those things. So when you think about the stakes, they are super, super high.

And when stakes are super high, especially with more complex clients, and once again, we are focused on more complex clients, They are typically seeking confidence, judgment, accountability. And in those cases, AI alone, they cannot fulfill the task because the risk is too high. So AI alone is not sufficient. Now I know that we mentioned this a couple of times. I will just reiterate this. When you look historically at the industry that we operate in, 55% or more of taxpayers continue to seek assistance and not because tax preparation is a calculation. it is because the stakes are high. it is because they are seeking judgment, confidence, and trust.

As we think about AI, we think about AI at H&R Block as being a tailwind. It enables us to deliver more of that trust and confidence. As I look back on the work that we have done in this first phase of our Blocknext strategy, a lot of it was focused on automating the manual tax preparation task. So think about data collection and data entry. For us, that is step 1. We have to automate that. For tax pros to spend enough time to focus on a consultative engagement. As we think about the future, it is our belief that H&R Block is structurally advantaged, especially in the environment that we exist in today.

Again, we go back to the 70 years that we built on trust, judgment, and accountability. And we lean into the fact that at H&R Block, we use AI to amplify expertise, not replace it. that is our position around AI. We have proved that we could leverage it multiple times during this tax season. it is going to be a core part of what we do. We are not leveraging to replace people. We are using it to amplify trust and confidence through our people. Is that helpful?

Scott Schneeberger: that is great. Thanks, Curtis. Appreciate it.

Operator: Thank you. Good question. I would now like to turn the conference back to Jessica Hazel for closing remarks. Madam?

Jessica Hazel: Thank you, everyone, for joining us today. We appreciate your support, and we look forward to reconnecting with you again soon.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.