H&R Block : Q3 FY2025 Slide Presentation

‌H& R BLOCK Q3 FY25 Financial Results Conference Call

Q3 FY25

Financial Results Conference Call

May 7, 2025

‌H& R BLOCK Q3 FY25 Financial Results Conference Call

Jordyn Eskijian

Program Manager, Investor Relations & ESG

‌H& R BLOCK

Q3 FY25 Financial Results Conference Call

Safe Harbor Statement

Forward-Looking Statement

This presentation contains forward-looking statements within the meaning of the securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or variation of words such as "expects," "anticipates," "intends," "plans," "believes," "commits," "seeks," "estimates," "projects," "forecasts," "targets," "would," "will," "should," "goal," "could," "may," or other similar expressions. Forward-looking statements provide management's current expectations or predictions of future conditions, events or results. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. They may include estimates of revenues, client trajectory, income, effective tax rate, earnings per share, cost savings, capital expenditures, dividends, share repurchases, liquidity, capital structure, market share, industry volumes, or other financial items, descriptions of management's plans or objectives for future operations, products or services, or descriptions of assumptions underlying any of the above. They may also include the expected impact of external events beyond the Company's control, such as outbreaks of infectious disease, severe weather events, natural or manmade disasters, or changes in the regulatory environment in which we operate. All forward-looking statements speak only as of the date they are made and reflect the Company's good faith beliefs, assumptions and expectations, but they are not guarantees of future performance or events. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions, factors, or expectations, new information, data or methods, future events or other changes, except as required by law. By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause such differences include, but are not limited to a variety of economic, competitive, and regulatory factors, many of which are beyond the Company's control, that are described in our Annual Report on Form 10-K for the most recently completed fiscal year in the section entitled "Risk Factors" and additional factors we may describe from time to time in other filings with the Securities and Exchange Commission. You may get such filings for free at our website at https://http://investors.hrblock.com. In addition, factors that may cause the Company's actual effective tax rate to differ from estimates include the Company's actual results from operations compared to current estimates, future discrete items, changes in interpretations and assumptions the Company has made, future actions of the Company, and increases in applicable tax rates in jurisdictions where the Company operates. You should understand that it is not possible to predict or identify all such factors and, consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

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Q3 FY25 Financial Results Conference Call

Safe Harbor Statement

Non-GAAP Measures

We refer to certain Non-GAAP financial measures in this presentation, including adjusted earnings per share (EPS), earnings before interest, taxes, depreciation, and amortization (EBITDA), and free cash flow, which management believes provide additional meaningful information regarding the Company's performance and financial strength. All non-GAAP financial measures in this presentation are from continuing operations. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with accounting principles generally accepted in the United States (GAAP). Because these measures are not measures of financial performance under GAAP and are susceptible to varying calculations, they may not be comparable to similarly titled measures for other companies. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP, please refer to the tables accompanying this presentation and previously filed press releases posted on our investor relations website at https://investors.hrblock.com.

Market, Industry, and Operational Tax Data

The data included in this presentation regarding the tax preparation services industry, including trends in the market and the Company's position and the position of its competitors within this industry, are based on the Company's estimates, which have been derived from management's knowledge and experience in the industry, and information obtained from customers, trade and business organizations, internal research, publicly available information, industry publications and surveys and other contacts in the industry. The Company has also cited information compiled by industry publications, governmental agencies and publicly available sources. Although the Company believes these third-party sources to be reliable, it has not independently verified the data obtained from these sources and it cannot assure you of the accuracy or completeness of the data. Estimates of market size and relative positions in a market are difficult to develop and inherently uncertain and the Company cannot assure you that it is accurate. Accordingly, you should not place undue weight on the industry and market share data presented in this presentation.

Unless otherwise noted, year-over-year comparisons of our operational tax metrics are calculated as July 1, 2024 - April 30, 2025 compared to the corresponding prior year.

H&R Block is not a bank. Bank products and services are offered by Pathward, N.A.

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‌H& R BLOCK Q3 FY25 Financial Results Conference Call

Jeff Jones

President & Chief Executive Officer

‌H& R BLOCK

Q3 FY25 Financial Results Conference Call

Strong Q3 Results as Transformation Continues

Q3 results:

• 4% Revenue growth

• 5% EBITDA1 growth

• 9% EPS2 growth

FY25 Outlook

reaffirmed

1 Please see the safe harbor statement at the beginning of this presentation for information on non-GAAP financial measures. A reconciliation of EBITDA to the most comparable GAAP measure can be found in the Appendix.

2All per share amounts are from continuing operations and based on weighted average fully diluted shares at the end of the corresponding period.

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‌H& R BLOCK

Q3 FY25 Financial Results Conference Call

Tax Industry: Clients Seek Help and Expertise

HRB is the Assisted category leader

Volume grew ~1%,

as anticipated

At the Industry level:

Assisted

category

+170 bps

DIY

More clients waiting until closer to the deadline to file

HRB saw record high volumes in recent history the final two days of tax season

category

+90 bps

Shift from DIY to Assisted underscores the importance of human help and expertise

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‌H& R BLOCK

Q3 FY25 Financial Results Conference Call

Assisted: Improved volume and share trends

Redesigned Assisted client experience to:

1 Convert more clients

2 Improve retention

How?

• Improved tax pro matching algorithm

• Introduced new steps to ensure tax pros better understood client needs, managed expectations

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Q3 FY25 Financial Results Conference Call

Assisted: Improved volume and share trends

• Increased client conversion for second consecutive year

• Boosted customer satisfaction scores

• More appointments set for next tax season

Second Look ®

• Unique among nationwide preparers, free to new clients

• Uncovers missed deductions and credits from prior years

• 10x increase in new clients participating1

• Demonstrates tax pro expertise

1 Calculated year over year January 1 - April 30, 2025.

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Q3 FY25 Financial Results Conference Call

Assisted: Improved volume and share trends

• HRB's trusted brand is a competitive differentiator

• Strong local value proposition

• Attracting and serving more complex clients with higher LTV

For the third consecutive year:

• Client growth in each segment >$80K of income

• Fastest growing segment clients

>$100K of income

Shift toward Assisted shows desire for expert help and value

HRB has a proven track record of serving those needs

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‌H& R BLOCK

Q3 FY25 Financial Results Conference Call

DIY: Disciplined focus on paid clients

Q3 DIY Revenue

+8%

Higher customer satisfaction across all dimensions

Paid NAC through 4/30

+9%

More than half of growth from mix shift to more complex SKUs

Online paid volume essentially flat

HRB disciplined in unprecedented promotional environment

Note: A breakdown of free and paid DIY filing volume can be found in the Appendix of this presentation.

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‌H& R BLOCK

Q3 FY25 Financial Results Conference Call

DIY: Disciplined focus on paid clients

AI Tax Assist

• Expanded knowledge base, driving higher user engagement and satisfaction

• +13ppt conversion among clients who used the tool1

• Powerful value prop and competitive differentiator

  Tax Pro Review

  
  
  

• Delivered another year of growth

• Reaffirming value and demand for professional expertise

  MyBlock

  H&R Block's mobile app and digital front door

  • 24% increase in clients served fully virtually1

  • Reflects clients' growing preference for convenience and expert help

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    1 Calculated year over year January 1 - April 30, 2025.

    ‌H& R BLOCK

    Q3 FY25 Financial Results Conference Call

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    Block Horizons

    
    
    

    ‌H& R BLOCK

    Q3 FY25 Financial Results Conference Call

    Continued Opportunity in Small Business

    In Q3:

    

    

    

    High single-digit revenue growth in Assisted Small Business tax

    Improved conversion from fourfold increase in custom DIY experiences (from 5 to 20)

    Double-digit revenue growth in bookkeeping and payroll

    In Q3:

    • Key priorities of accelerating revenue growth and driving profitability remain unchanged

    • Momentum in high-margin subscription product, ProTier

     +13% revenue growth

    
    
    

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    ‌H& R BLOCK

    Q3 FY25 Financial Results Conference Call

    
    
    

    Financial Products Improve Clients' Well-Being

    From launch through 4/30/25:

    700K

    sign ups

    up ~50% from PY

    ~50%

    of deposits

    non-tax

    related

    • Engaging clients year-round

    • Highly effective cross-selling efforts

      of new clients

      ~90%

      completed

      a tax return

      with Block1

    • Access to federal refund up to 5 days early

    • Users of the Smart Tax Refund feature saved an average of 26% of their tax refund, surpassing the recommended 15%.

Note: Banking accounts established at, and debit card issued by, Pathward®, N.A., Member FDIC, pursuant to license by Mastercard®. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated.

1Calculated year over year January 1 - April 30, 2025.

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‌H& R BLOCK Q3 FY25 Financial Results Conference Call

Jeff Jones

President & Chief Executive Officer

‌H& R BLOCK Q3 FY25 Financial Results Conference Call

Tiffany Mason

Chief Financial Officer

‌H& R BLOCK

Q3 FY25 Financial Results Conference Call

H&R Block Investment Thesis

Stable Industry

• Business model tied to essential tax prep services

• Consumer tax industry has grown at a 1% CAGR for decades

• Steadfast & resilient

National Scale & Strong Brand Recognition

• ~9K company and franchise offices

• 60K expert tax pros and robust DIY offering

• Strategic investments in Block Horizons imperatives to support innovation and growth

Compelling Financial Profile

• Consistent, strong free cash flow1

• Solid balance sheet and liquidity profile

• Disciplined capital allocation strategy

1 Free cash flow is a non-GAAP financial measure. Free cash flow is defined as net cash provided by operating activities less capital expenditures. The Company believes free cash flow is useful to investors as an indication of the strength of the Company and its ability to generate cash and to evaluate the Company's cash generation ability relative to competitors. It should not be

inferred that the entire free cash flow amount is available for discretionary expenditures. 18

‌H& R BLOCK

Q3 FY25 Financial Results Conference Call

Q3 FY25	Q3 FY24	Change
$2,277.1	$2,184.8	4.2%
$1,298.8	$1,256.6	(3.4%)
$24.7	$26.1	5.3%
$722.9	$691.6	4.5%
$1,012.1	$964.1	5.0%
$5.32	$4.87	9.2%
$5.38	$4.94	8.9%
24.6%	23.8%

Q3 FY25 Financial Results

In millions, except per share amounts

Revenue

Operating Expenses Interest Expense

Net Income EBITDA1

Earnings Per Share1

Adjusted Earnings Per Share1

Effective Tax Rate

Note: All amounts are unaudited and represent results from continuing operations.

1 All share amounts are based on weighted average fully diluted shares over the corresponding period. EBITDA and adjusted EPS are non-GAAP financial measures. Please see the safe harbor statement at the beginning of this presentation for information on non-GAAP financial measures. A reconciliation of EBITDA and adjusted EPS to the most comparable GAAP measures can be found in the Appendix.

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‌H& R BLOCK

Q3 FY25 Financial Results Conference Call

Steadfast & Strong Capital Allocation Practices

Disciplined strategy focused on funding the business and supporting shareholder returns

In Q1 & Q2 FY25:

Repurchased

$400M, ~5% of the float

~$1.1B remaining on

$1.5B share repurchase authorization

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‌H& R BLOCK

Q3 FY25 Financial Results Conference Call

FY25 Outlook Reaffirmed

Assumptions:











Typical industry growth of ~1%

Maintain market share in overall tax category

Low single-digit price increases

Wave and Small Business contribute to revenue growth

Opportunistic franchise repurchases

	FY25 Outlook
Revenue	$3.69 - $3.75B
EBITDA1	$975M - $1.02B
Adjusted EPS1	$5.15 - $5.35*
Effective Tax Rate	13%* * Anticipated one-time benefit to EPS of ~$0.50 in FY25.

1 EBITDA and adjusted EPS from continuing operations are non-GAAP financial measures. Future period non-GAAP outlook includes adjustments for items not indicative of our core operations, which may include, without limitation, items described in the Appendix. Such adjustments may be affected by changes in ongoing assumptions and judgments, as well as nonrecurring, unusual, or unanticipated charges, expenses or gains, or other items that may not directly correlate to the underlying performance of our business operations. The exact amounts of these adjustments are not currently determinable but may be significant. It is therefore not practicable to provide the comparable GAAP measures or reconcile this non-GAAP outlook to the most comparable GAAP measures. Please see the safe harbor statement at the beginning of this presentation for

information on non-GAAP financial measures. 21

‌H& R BLOCK Q3 FY25 Financial Results Conference Call

Jeff Jones

President & Chief Executive Officer

Q&A

‌H& R BLOCK Q3 FY25 Financial Results Conference Call

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Appendix

‌H& R BLOCK Q3 FY25 Financial Results Conference Call

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