H&R Block Q4 Earnings Call Highlights

Fiscal 2026 performance was strong: Revenue rose 4.9% to $3.95 billion, adjusted EPS increased 13.9% to $5.31, and EBITDA grew 8.3% to $1.06 billion, supported by higher pricing, improved client conversion and retention, and Wave’s double-digit growth. H&R Block is emphasizing higher-value clients and technology: Assisted-tax conversion improved 200 basis points and retention rose 190 basis points, while AI tools such as Second Look and AI Tax Assist increased client engagement. The company also plans to expand its advisory-focused service model for the 2027 tax season. Management issued a positive fiscal 2027 outlook and increased shareholder returns: It expects revenue of $4.11 billion-$4.16 billion and adjusted EPS of $6.04-$6.24, raised the quarterly dividend 10% to $0.46 per share, and plans approximately $400 million in additional share repurchases. H&R Block NYSE: HRB reported fiscal 2026 revenue growth of 4.9% and adjusted earnings-per-share growth of 13.9%, as the tax-preparation company cited improved client conversion, retention and demand from more complex filers. For the fiscal year, revenue totaled $3.95 billion, while EBITDA increased 8.3% to $1.06 billion. Adjusted diluted EPS rose to $5.31, compared with the prior year, and adjusted net income was $688 million. Net income from continuing operations was $736 million, or $5.69 per share. Chief Financial Officer Tiffany Mason said revenue growth was led by higher net average charge and company-owned volume in U.S. assisted tax preparation, international revenue growth and continued momentum at small-business platform Wave. Wave posted its second consecutive year of double-digit revenue growth, supported by paid professional-tier subscriptions and higher payments volume. Operating expenses increased 3.6% to $3.04 billion, primarily reflecting higher tax-professional wages, occupancy costs and technology-related expenses. EBITDA margin expanded by 80 basis points during the year. Client Trends and Technology Initiatives President and Chief Executive Officer Curtis Campbell said the company maintained share in the assisted tax-preparation category after two years of improving trends. Conversion improved by 200 basis points, which Campbell described as the largest single-year improvement in H&R Block’s recorded history, while client retention increased 190 basis points. Campbell said the company is emphasizing clients with more complex financial needs and higher lifetime value rather than pursuing transaction-oriented volume. The share of H&R Block clients within its target household adjusted gross income range of $50,000 to $200,000 increased to 50% from 38% over the past several years, according to the company. The company also highlighted its “Second Look” offering, which reviews up to three prior years of returns for new clients to identify potential missed opportunities. New clients receiving Second Look returned at a rate more than 600 basis points above clients who did not receive the service, Campbell said. H&R Block has automated the process using newer artificial-intelligence capabilities and is working toward offering it to nearly all new assisted clients. Technology initiatives included the rollout of Sidekick, an AI assistant for tax professionals, and AI Tax Assist for paid do-it-yourself filers. AI Tax Assist supported 4.2 million client interactions during the season and drove nearly twice the engagement recorded a year earlier, Campbell said. Management said it views AI as a tool to enhance professional.