H&R Block, Inc. Q2 FY2026 earnings call

Core tax season focus is on client-centricity, reducing friction, and addressing tax law complexity. Improvements include scaling Second Look as a core new client experience component, enhancing DIY solutions with AI Tax Assist and free services for new clients, and equipping tax pros with AI-enabled assistant and tools for consistent outcomes. Long-term growth plans involve client center strategy, elevating as trusted adviser with technology, integrating Wave into small business, and using AI as an enabler.

In the second quarter, revenue was $199 million, a 11% increase year-over-year. This was driven by higher Assisted tax prep volume, net average charge, double-digit wage growth, and higher DIY software sales. Company-owned offices had strong demand for tax prep services with improved conversion. Wave delivered strong results in its high-margin subscription product and increased payments volume. Total operating expenses were $498 million, a 5% increase due to higher field wages and consulting costs. Q2 EBITDA loss was $266 million, net loss from continuing operations was $242 million, adjusted loss per share was $1.84. Full year outlook: revenue between $3.875 billion and $3.895 billion, EBITDA between $1.015 billion and $1.035 billion, effective tax rate ~25%, adjusted EPS between $4.85 and $5.

Reaffirming fiscal 2026 outlook with revenue, EBITDA, effective tax rate, and adjusted EPS ranges. Contemplates industry growth in line with historical norms, emphasis on Assisted and paid DIY, expanding small business contribution, and prudent capital allocation.

Q: Impact of partial government shutdown on tax season?

A: No material impact.

Q: Trends in first 10 days of tax season?

A: Early, but confident in preparedness and multiyear strategy.

Q: Assisted taking share from DIY?

A: Expect tailwind from tax law complexity.

Q: Price increases?

A: Low single-digit across Assisted and DIY.

Q: Tax season peaks and refund amounts?

A: Industry has slower starts, some clients may get larger refunds but early to confirm.

Q: Assisted share loss and AI impact on DIY?

A: Making progress on Assisted share, AI seen as enabler not threat.

Q: Industry growth drivers?

A: Tailwind from tax law complexity, but 1% growth is historical.

Q: Marketing approach and consulting costs?

A: Focus on high lifetime value customers, consulting costs for strategic sourcing to drive savings