2024 Annual Report
Block Horizons 2025 Long Term Growth Strategy
Financial Highlights:
Three Strategic Imperatives:
Build direct, valuable
relationships with
small business owners
through Block Advisors
and Wave; as well as by
providing services such as
bookkeeping and payroll
Small Business
1
New solutions and
experiences to create
confidence and help ease
the financial burden, such
as our mobile banking
platform, Spruce
Financial Products
2
Blending technology and
digital tools with human
expertise and care to serve
clients however they want
to be served: fully in
person to fully online and
everything in between
Block Experience
3
2024 Annual Report
Another year of
revenue growth,
EBITDA1 that grows
even faster, and
double-digit EPS1
growth.
17%
New share repurchase
authorization of $1.5B
Note: The 17% dividend increase and the new share repurchase authorization of $1.5 billion were approved and announced on August 15, 2024.
1 All share amounts are from continuing operations and based on weighted average fully diluted shares over the corresponding period. EBITDA is a non-GAAP
financial measure. A reconciliation of EBITDA to the most comparable GAAP measure can be found on page 32 of our Annual Report on Form 10-K filed with the
SEC on August 15, 2024.
dividend
increase
Fellow Shareholders:
Fiscal 2024 marked yet another year of revenue growth,
EBITDA that grew even faster, and double-digit EPS growth
for H&R Block. We made progress across our product and
service offerings that provide value to our clients and help
enable financial confidence, and I am pleased with all we
accomplished this year.
In DIY, our business continued its momentum with market
share gains for the second consecutive year. We delivered
revenue growth of 11% in this channel year over year, and our
customer satisfaction scores remained strong. Performance
was driven by paid client and net average charge (NAC)
growth. I was also pleased with how fast we were able to
launch our genAI powered AI Tax Assist, which resulted
in higher new client conversion, as well as the ongoing
strength in our Tax Pro Review product.
In Assisted, our brand is resonating with higher value clients,
and NAC grew 4% year over year. The trends in Assisted
small business tax were also positive this year and we are
making good progress at Wave with our new monetization
strategy. Finally, our mobile banking platform, Spruce, added
>175K new sign ups and we were pleased to see positive
deposit trends.
Our strong capital allocation practice continues to
deliver value for shareholders. In August, we announced
a 17% increase to our quarterly dividend as well as a new
repurchase authorization of $1.5 billion, which replaced
the prior authorization. Since 2016, we have increased
the dividend 88%1 and repurchased more than 40% of
shares outstanding.
Let me share more detail on our progress:
Block Horizons 2025
FY24 was the fourth year of our five-year Block Horizons
journey to drive transformational change, and we advanced
all three of our strategic imperatives–Small Business,
Financial Products, and Block Experience.
Small Business: We continue to see opportunity ahead
We had another good year in Small Business tax, delivering
revenue growth in the mid-single digits. NAC grew 3%,
entity trends remained strong, and bookkeeping and payroll
had another year of double-digit growth. Our centralized
fulfillment model alongside our dedicated sales team have
driven services client conversion, and we continue to see
opportunity ahead.
Regarding Wave, I am pleased with the progress that has
been made in the last year on our key priorities to accelerate
revenue growth and drive profitability. In FY24 we launched a
new paid subscription solution, Pro-Tier, along with our paid
receipt product, to further empower small business owners
to manage their business better. These products performed
better than anticipated and for the full year, revenue growth
was 7% year over year. We continue to improve the losses in
the business and expect ongoing positive trends in FY25.
Financial Products: Spruce, our mobile banking platform,
has continued to deliver on its mission
Within our Financial Products imperative, we have been
pleased with the growth of our mobile banking platform,
Spruce2, and its performance in both the Assisted and DIY
channels. Since launch through June 30, 2024, Spruce had
476K sign ups and we are nearing a milestone of $1 billion in
customer deposits. We were pleased to see positive deposit
trends this year, and nearly 50% of deposits came from non-
tax sources in fiscal 2024.
This season was the first time we offered Assisted and DIY
tax within the Spruce app, and we saw good results. Among
new Spruce clients that also filed a tax return, 54% were new
to H&R Block, and we were pleased with the low associated
customer acquisition costs. In FY24, we released a variable
interest rate feature that pays 3.50% APY3 on savings
account balances, which is 7 times the national average4.
There are no monthly fees and no minimum balance or
direct deposit requirements, making it an appealing option
for clients versus other competitors in the marketplace.
We are excited about new innovations that will be rolling out
in the coming months, and our team is focused on acquiring
users in and out of the tax season. Spruce’s mission is to
help people be better with money, and we are proud of how
we are delivering against this objective.
Block Experience: Blending digital tools with human
expertise and care
Our Block Experience imperative is all about blending
digital tools with human expertise and care. We feel great
about how we are positioned to serve clients however they
want to be served–fully virtual to fully in person and every
way in between.
1 Dividend growth is calculated as the percentage growth from our April 2016 dividend to our October 2024 dividend.
2 Note: Spruce fintech platform is built by H&R Block, which is not a bank. SpruceSM Spending and Savings Accounts established at, and debit card issued by,
Pathward®, N.A., Member FDIC, pursuant to license by Mastercard®.
3 The Annual Percentage Yield (APY) is accurate as of 9/12/24. This rate is variable and can change without notice. Fees may reduce earnings.
4 Based on FDIC average national savings rate as of 8/19/24.
Jeffrey J. Jones II
President & CEO
In the DIY channel, our strategy continued to deliver, and we
are pleased with the results. Paid DIY growth significantly
outpaced the category, and we had another year of market
share gains. Through April 30, paid volumes grew 6% year
over year. We saw strong NAC growth of 7% in paid clients
year over year, and at the same time, customer satisfaction
metrics, including Ease of Use and Price for Service,
improved. In addition, we focused on curated experiences
to help self-employed workers feel more confident in their
tax outcome, which resulted in notable increases among
those filers.
We also launched our genAI powered AI Tax Assist in all of
our paid DIY SKUs this year, and it performed well. Feedback
indicated that the tool was easy to use and helpful in the
tax preparation process, and clients found value in it.
Importantly, we saw greater conversion among new clients
who leveraged AI Tax Assist.
In the Assisted channel, we grew NAC, improved client
satisfaction scores, and had ongoing success in attracting
and serving higher value clients. We had client growth in
each segment above $60K of income, and like last year, our
fastest growing segment was in those with more than $100K
of income. Our efforts slowed the decline of EITC filers,
which was a goal for this year, and we also saw growth in
the number of Assisted clients working with us completely
virtually, increasing more than 25% year over year. We
expect this number to continue to grow in the future.
Additionally, our genAI efforts to improve the customer
experience in our call center operations provided great
learnings in its initial pilot this year. We were pleased with its
accuracy, which was relatively high compared to
similar offerings.
We are excited about our genAI use cases which have the
potential to drive efficiencies and cost savings, and look
forward to leveraging AI to better serve more clients in
the future.
All in all, we have made significant strides in our products,
services, and features in our Block Horizons journey, and we
have more to come in FY25.
Our capital allocation story remains strong
Our disciplined capital allocation again drove meaningful
value for shareholders.
In August 2024 we were pleased to announce a 17% increase
in our quarterly dividend; since 2016, we have increased the
dividend by 88%1.
In FY24 we completed $350 million of share repurchases at
an average price of $43.66; and in August 2024 announced
a new share repurchase authorization of $1.5 billion,
replacing the prior authorization and reflecting the Board’s
support of our strategy and confidence in our future.
Since 2016, we have repurchased more than $2.3 billion,
retiring over 89 million shares, or more than 40% of shares
outstanding, at an average price of $26.74.
We remain confident in our ability to drive ongoing value for
shareholders with our strategy and these practices.
Making a positive impact
Our Purpose is to provide help and inspire confidence in
our clients and communities everywhere. As part of this
Purpose, we believe in doing our part to be a responsible
corporate citizen–which has been a part of our culture and
aspirations from the very beginning. We remain committed
to carrying out the legacy of our co-founders, Henry and
Richard Bloch, to be a force for change.
We aim to foster a culture of Belonging, where every
voice is heard and our associates feel safe, included, and
inspired. Relationships are at the heart of how we work
with each other, our clients, and in our communities.
Connected Culture is a relationship centered principle at
Block that puts associates, franchisees, and clients at the
2
476K
signups
$1B
in customer
deposits
Since launch through June 30, 2024:
Nearing
n Nearly 50% of
deposits in FY24
were non-tax
Note: Spruce fintech platform is built by H&R Block, which is not a bank. SpruceSM Spending and Savings 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.
1 Dividend growth is calculated as the percentage growth from our April 2016 dividend to our October 2024 dividend.
heart of our strategic focus. It creates an environment of
clear accountability, partnership, and trust–all focused
on common goals, allowing for accelerated business and
personal progress.
To support our Connected Culture and foster more in-
person engagement at our corporate headquarters in
Kansas City, in FY24 we introduced quarterly Block Party
events centered around bringing local associates and teams
together. Attendees had the opportunity to attend several
Belonging events, networking sessions, professional panels,
and other various engagement activities.
I am proud of the recognition we received in FY24 from
multiple organizations across many diff erent categories
for our eff orts, including being certified as one of Fortune’s
Great Places to Work for the fourth consecutive year, and
receiving Kansas City Business Journal’s Champions of
Business Award. On a global scale, our team in India was
ranked as number one in India’s Great Mid-Size Workplaces,
and named in the Top 25 India’s Best Workplaces Building a
Culture of Innovation by the Great Place to Work Institute®.
Our community impact platform, Make Every Block Better,
has continued to eff ectively demonstrate our Purpose in the
communities where we live and serve. Our commitment is
to build connections among neighbors and support small
business owners from coast to coast, and with nearly 9,000
off ices nationwide we are able to find unique ways to give
back and connect people to possibility.
In FY24, we also furthered our Environmental, Social, and
Governance (ESG) eff orts. As we continued our digital
transformation journey, our ‘Path to Print Less’ initiative
reduced the number of total pages printed across our
retail footprint by 36%, and reduced paper and toner
expenses by 38%. We also introduced a new associate led
composting program at the Chopping Block, our corporate
headquarters’ public cafeteria, and expanded our GHG
emissions inventory by adding additional categories to our
Scope 3 calculation.
I invite you to learn more about our eff orts in our fifth Annual
ESG Report at investors.hrblock.com.
Final thanks
As I reflect on all that we have accomplished, I am filled with
gratitude for our associates and team.
I would like to extend a sincere thank you to our tax
professionals, franchisees, and associates who make our
success possible. I would also like to thank our Board
of Directors for their unwavering commitment as we
collaboratively work to drive value for our shareholders.
Finally, I want to thank our shareholders for their investment
and ongoing support.
I am proud of all that we have done, and believe we are
well positioned to build on this momentum in fiscal 2025
and beyond.
Sincerely,
Jeff rey J. Jones II
President and Chief Executive Off icer
3
Capital Allocation Story Remains Strong
Ongoing value creation for shareholders
In FY24:
Since 2016:
Returned >$3.9B
to shareholders
Retired >40% of
shares outstanding
Increased quarterly
dividend by 88%1
Retired another
5.5% of shares
outstanding
1 Dividend growth is calculated as the percentage growth from our April 2016 dividend to our October 2024 dividend.
Repurchased
8M shares for
$350M
4
Awards and Recognition
Environmental
Committed to reducing
consumption and waste
Social
Remain committed to our
associates’ total well-being
Governance
Proactive, sound, and ethical
corporate governance practices
We remain committed to carrying out the legacy of our co-founders, Henry and Richard Bloch, to be a force for
change. Our ESG initiatives are not just about compliance; they are integral to our Purpose and long-term success.
For more information on our ESG initiatives and our Sustainability Accounting Standards Board disclosures, please refer to our
Annual ESG Report, which can be found on our investor relations website at https://investors.hrblock.com/corporate-governance/
esg-corporate-responsibility.
We received recognition in FY24 from multiple organizations across diff erent
categories, including:
Fortune Best (Large) Workplaces in
Financial Services & Insurance 2023
Fortune Great Place to Work Certified
2021, 2022, 2023, 2024
Kansas City Business Journal’s
Champions of Business Award 2023
Kansas City Chamber of Commerce’s
Champions of Diversity Award 2024
Kansas City Business Journal's
Kansas City's Best Places to Work 2024
“At H&R Block, our Purpose is to provide help and inspire confidence in our clients and
communities everywhere. As part of this Purpose, we believe in doing our part to be a
responsible corporate citizen–which has been a part of our culture and aspirations from
the very beginning–and we are making a positive impact.”
Jeff rey J. Jones II
President & CEO
Our Purpose
Latino Magazine’s Top 100 Workplace
for Latinos 2024
Human Rights Campaign Corporate
Equality Index- Equality 100 Award 2023
H&R Block India
#1 in India’s Great Mid-Size Workplaces 2024
Great Place to Work Institute® Top 25 India’s
Best Workplaces Building a Culture of Innovation
Great Place to Work Institute® Top 50 India’s
Best Workplaces in Health and Wellness
3
2024
dia’s
nnovation
ndia’s
s
5
Form 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☑
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2024
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-06089
H&R Block, Inc.
(Exact name of registrant as specified in its charter)
Missouri
44-0607856
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
One H&R Block Way, Kansas City, Missouri 64105
(Address of principal executive offices, including zip code)
(816) 854-3000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, without par value
HRB
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, without par value
(Title of Class)
Indicate by check mark whether the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☑ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging
growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the
Exchange Act.
Large Accelerated Filer ☑ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over
financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared or issued its audit
report. Yes ☑ No ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing
reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any
of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
The aggregate market value of the registrant's Common Stock (all voting stock) held by non-affiliates of the registrant, computed by reference to the price at which
the stock was sold on December 29, 2023, was $6,758,236,447.
Number of shares of the registrant's Common Stock, without par value, outstanding on July 31, 2024: 139,594,009.
Documents incorporated by reference
The definitive proxy statement for the registrant's 2024 Annual Meeting of Shareholders, to be filed no later than 120 days after June 30, 2024, is incorporated by
reference in Part III to the extent described therein.
2024 FORM 10-K AND ANNUAL REPORT
TABLE OF CONTENTS
INTRODUCTION AND FORWARD-LOOKING STATEMENTS
1
PART I
ITEM 1.
BUSINESS
2
ITEM 1A. RISK FACTORS
8
ITEM 1B.
UNRESOLVED STAFF COMMENTS
20
ITEM 1C.
CYBERSECURITY
20
ITEM 2.
PROPERTIES
21
ITEM 3.
LEGAL PROCEEDINGS
22
ITEM 4.
MINE SAFETY DISCLOSURES
22
PART II
ITEM 5.
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES
22
ITEM 6.
SELECTED FINANCIAL DATA
23
ITEM 7.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
24
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
33
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
34
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
61
ITEM 9A. CONTROLS AND PROCEDURES
61
ITEM 9B.
OTHER INFORMATION
62
PART III
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
62
ITEM 11.
EXECUTIVE COMPENSATION
62
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
63
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
63
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
63
PART IV
ITEM 15.
EXHIBIT INDEX
64
SIGNATURES
67
INTRODUCTION
"H&R Block," "the Company," "we," "our" and "us" are used interchangeably to refer to H&R Block, Inc., to H&R
Block, Inc. and its subsidiaries, or to H&R Block, Inc.'s operating subsidiaries, as appropriate to the context.
Specified portions of our proxy statement are "incorporated by reference" in response to certain items. Our
proxy statement will be made available to shareholders no later than 120 days after June 30, 2024, and will also be
available on our website at www.hrblock.com.
FORWARD-LOOKING STATEMENTS
This report and other documents filed with the Securities and Exchange Commission (SEC) may contain forward-
looking statements. In addition, our senior management may make forward-looking statements orally to analysts,
investors, the media and others. 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," "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, services or products, 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.
Readers are cautioned not to place undue reliance on these forward-looking statements, which 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, operational and regulatory factors,
many of which are beyond the Company's control. Investors should understand that it is not possible to predict or
identify all such factors and, consequently, should not consider any such list to be a complete set of all potential
risks or uncertainties.
Details about risks, uncertainties and assumptions that could affect various aspects of our business are included
throughout this Form 10-K. Investors should carefully consider all of these risks, and should pay particular
attention to Item 1A, Risk Factors, and Item 7 under "Critical Accounting Estimates" of this Form 10-K.
H&R Block, Inc. | 2024 Form 10-K
1
PART I
ITEM 1. BUSINESS
OVERVIEW
H&R Block provides help and inspires confidence in its clients and communities everywhere through global tax
preparation services, financial products, and small business solutions. We blend digital innovation with human
expertise and care to help people get the best outcome at tax time and also be better with money by using our
mobile banking app, Spruce℠. Through Block Advisors and Wave, we help small-business owners thrive with year-
round bookkeeping, payroll, advisory and payment processing solutions.
H&R Block, Inc. was organized as a corporation in 1955 under the laws of the State of Missouri. A complete list of
our subsidiaries as of June 30, 2024 can be found in Exhibit 21.
During fiscal year 2024, we prepared
11.4 million U.S. assisted tax returns(1)
and our clients filed
3.8 million DIY online paid tax returns(1)
which contributed to our consolidated revenues of
$3.6 billion,
net income from continuing operations of
$598.0 million,
EBITDA(2) from continuing operations of
$963.2 million,
and diluted EPS from continuing operations of
$4.14 per share.
We repurchased
8.0 million shares of our common stock,
and declared dividends of
$1.28 per share,
which was an increase of
$0.12, or 10.3%, per share from the prior year.
(1) U.S. assisted tax returns prepared includes tax returns prepared in U.S. company-owned and franchise operations, including virtual
returns. An assisted tax return is defined as a current or prior year individual or business tax return that has been accepted by the client.
A DIY online paid return is defined as a current year individual or business tax return that has been accepted by the client.
(2) See "Non-GAAP Financial Information" in Item 7 for a reconciliation of non-GAAP measures.
2
2024 Form 10-K | H&R Block, Inc.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
We provide assisted and do-it-yourself (DIY) tax
preparation solutions through multiple channels
(including in-person, online and mobile applications,
virtual, and desktop software) and distribute H&R
Block-branded services and products, including those
of our bank partners, to the general public primarily
in the United States (U.S.), Canada and Australia. Tax
returns are either prepared by H&R Block tax
professionals in one of our company-owned or
franchise offices, virtually or via an online review or
prepared and filed by our clients through our DIY tax
solutions. We also offer small business solutions
through our company-owned and franchise offices
(including in-person, online and virtual) and online
through Wave. We report a single segment that
includes all of our continuing operations.
TAX PREPARATION SERVICES
Assisted income tax return preparation and related services are provided by tax professionals via a system of retail
offices operated directly by us or our franchisees. These tax professionals provide assistance to our clients either in
person or virtually in a number of ways. Clients can come into an office, digitally "drop off" their documents for
their tax professional, approve their return online, or have a tax professional review a return they prepared
themselves through Tax Pro Review®.
Our online software may be accessed through our website at www.hrblock.com or in a mobile application, while
our desktop software may be purchased online and through third-party retail stores. Our generative AI powered
technology, AI Tax Assist, and human help was offered to clients who prepared a paid DIY online return in the
current year at no additional charge.
Assisted tax returns are covered by our 100% accuracy guarantee, whereby we will reimburse a client for
penalties and interest attributable to an H&R Block error on a tax return. DIY tax returns are covered by our 100%
accuracy guarantee, whereby we will reimburse a client up to a maximum of $10,000 if our software makes an
arithmetic error that results in payment of penalties and/or interest to the respective taxing authority that the
client would otherwise not have been required to pay.
We offer franchises as a way to expand our presence in certain geographic areas. In the U.S., our franchisees
pay us approximately 30% of gross tax return preparation and related service revenues as a franchise royalty.
H&R Block, Inc. | 2024 Form 10-K
3
OTHER OFFERINGS
During fiscal year 2024, we also offered U.S. clients a number of additional services, including Refund Transfers
(RT), our Peace of Mind® Extended Service Plan (POM), H&R Block Emerald Prepaid Mastercard® (Emerald Card®),
SpruceSM, H&R Block Emerald Advance® (EA) term loans, Tax Identity Shield® (TIS), Refund Advances (RA), and
small business financial solutions. For our Canadian clients, we also offer POM, H&R Block's Instant Refund®, H&R
Block Pay With Refund®, and small business financial solutions.
Refund Transfers. RTs enable clients to receive their tax refunds by their chosen method of disbursement and
include a feature enabling clients to deduct tax preparation and related fees from their tax refunds. Depending on
circumstances, clients may choose to receive their RT proceeds by a load to their Emerald Card®, a deposit to their
Spruce Spending Account, by receiving a check or by direct deposit to an existing account. RTs are available to U.S.
clients and are frequently obtained by those who: (1) do not have bank accounts into which the Internal Revenue
Service (IRS) can direct deposit their refunds; (2) like the convenience and benefits of a temporary account for
receipt of their refund; and/or (3) prefer to have their tax preparation fees paid directly out of their refunds. RTs
are offered through our relationship with our bank partner. We offer a similar program, H&R Block Pay With
Refund®, to our Canadian clients through a Canadian chartered bank.
Peace of Mind® Extended Service Plan. We offer POM to U.S. and Canadian clients who obtain assisted tax
preparation services, whereby we (1) represent our clients if they are audited by a taxing authority, and (2) assume
the cost, subject to certain limits, of additional taxes owed by a client resulting from errors attributable to H&R
Block. The additional taxes paid under POM have a cumulative limit of $6,000 for U.S. clients and $3,000 CAD for
Canadian clients with respect to the federal, state/provincial and local tax returns we prepared for applicable
clients during the taxable year protected by POM.
H&R Block Emerald Prepaid Mastercard® and SpruceSM. The Emerald Card® and SpruceSM debit card can be
used for everyday purchases, bill payments and ATM withdrawals anywhere Debit Mastercard® (Mastercard is a
registered trademark of Mastercard International Incorporated) is accepted. Clients can receive their tax refunds
and direct RT, EA or RA proceeds directly onto an Emerald Card® or into their SpruceSM account. Additional funds
can be added to the Emerald Card® and to SpruceSM year-round, such as through direct deposit or at participating
retail reload providers. The Emerald Card® and SpruceSM debit card can be added to clients' mobile wallets. We
distribute the Emerald Card® and the SpruceSM debit card issued by our bank partner.
H&R Block Emerald Advance® Term Loans. EA term loans are offered by our bank partner to clients in our
offices, in November and December, in amounts of $350 to $1,300. EA term loans are interest bearing with
principal and interest due in full on March 31, and there are no annual fees or required monthly payments.
Tax Identity Shield®. Our TIS program offers clients assistance in helping protect their tax identity and access to
services to help restore their tax identity, if necessary. Protection services include a daily scan of the dark web for
personal information, a monthly scan for the client's social security number in credit header data, notifying clients
if their information is detected on a tax return filed through H&R Block, and obtaining additional IRS identity
protections when eligible.
Refund Advance Loans. RAs are interest-free loans offered by our bank partner, which are available to eligible
U.S. assisted clients in company-owned and participating franchise locations, including virtual clients. In tax season
2024, RAs were offered in amounts of $250, $500, $750, $1,250 and $3,500, based on client eligibility as
determined by our bank partner.
H&R Block's Instant Refund®. Our Canadian operations advance refunds due to certain clients from the Canada
Revenue Agency (CRA), for a fee. The fee charged for this service is mandated by federal legislation which is
administered by the CRA. The client assigns to us the full amount of the tax refund to be issued by the CRA and the
refund amount is then sent by the CRA directly to us.
Small Business Financial Solutions. Our Block Advisors small business certified tax professionals provide small
businesses with financial expertise in taxes, bookkeeping and payroll through our office network (including in-
person, online and virtual). Wave provides small business owners with an online solution to manage their finances,
including payment processing, payroll and bookkeeping services.
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2024 Form 10-K | H&R Block, Inc.
SEASONALITY OF BUSINESS
Because the majority of our clients file their tax returns during the period from February through April in a typical
year, a substantial majority of our revenues from income tax return preparation and related services and products
are earned during this period. As a result, we generally operate at a loss through the first two quarters of our fiscal
year.
COMPETITIVE CONDITIONS
We provide assisted and DIY tax preparation services and products, as well as small business financial solutions,
and face substantial competition in and across each category, including from tax return preparation firms, software
providers, accounting firms, independent tax preparers, certified public accountants and governmental
organizations, including the IRS, state and foreign tax authorities.
We are one of the largest providers of tax return preparation solutions and electronic filing services in the U.S.,
Canada, and Australia with 23.8 million returns filed by or through H&R Block in fiscal year 2024.
GOVERNMENT REGULATION
Our business is subject to various forms of government regulation, including U.S. Federal and state tax preparer
regulations, financial consumer protection and privacy regulations, state regulations, franchise regulations and
foreign regulations. See further discussion of these items in our Item 1A. Risk Factors and Item 7 under "Regulatory
Environment" of this Form 10-K.
HUMAN CAPITAL
Fulfilling our Purpose extends to helping and inspiring confidence in our associates. We remain committed to our
associates’ total well-being — physical, mental, financial, career, team, and community. Together, when we
balance these components, we achieve personal, team, and organizational strength.
Associates. We had approximately 4,200 regular full-time associates as of June 30, 2024. Our business is
dependent on the availability of a seasonal workforce, including tax professionals, and our ability to hire, train, and
supervise these associates. The highest number of persons we employed during the fiscal year ended June 30,
2024, including seasonal associates, was approximately 70,900.
Associate Engagement. We administer an annual survey to all associates to better understand their levels of
engagement and identify areas where we can improve. We compare our scores to the top 25th percentile of the
global benchmark to challenge our associates and leaders and to yield reports that are easier for leaders to identify
opportunities to take action. Across the company, over 40% of culture and engagement questions measured were
at or above the top 25th percentile of the global benchmark. We are pleased with our overall employee
satisfaction score which currently meets the Top 25 benchmark. Individual leaders at all levels create and monitor
culture and engagement-related goals.
Compensation and Benefits. Our total rewards programs are designed to attract and retain top talent by
supporting what associates need to be their authentic selves. Our equitable and comprehensive benefits offerings
provide access to benefits to help both regular and seasonal associates plan for the health and security of their
families. H&R Block offers comprehensive mental and behavioral health support through robust well-being
programs, ensuring regular associates and their families have access to therapists, coaching, and holistic mental
health services.
To thank our associates for their resiliency and hard work, each year H&R Block takes an “Annual Reboot” – a
paid week of time off offered during the first week of July – as an important time for our associates to disconnect,
recharge, and reboot.
H&R Block also provides comprehensive medical insurance to our associates and extends the opportunity for
medical insurance to our seasonal workforce who satisfy the eligibility guidelines of the Affordable Care Act.
Subject to meeting eligibility requirements, associates can also choose to participate in the H&R Block Retirement
Savings Plan 401(k) and Employee Stock Purchase Plan. Collectively, these programs promote and support the
physical, mental, financial, and community well-being of our associates.
H&R Block, Inc. | 2024 Form 10-K
5
Training and Development. Our people are the number one enabler for living our Purpose, and we recognize
the importance of attracting, developing, and retaining top talent. Our goal is to provide continuous development
opportunities to our associates in order to help them grow both personally and professionally. We do this through
a robust offering of programs, educational courses, and learning journeys offered virtually and in person.
Our expertise is delivered each year through our tax professional network. H&R Block tax professionals receive
extensive annual tax training on topics including recent tax code changes and filing practices, and we offer
additional education opportunities for tax professionals to enhance their knowledge and skills. In preparation for
the upcoming tax season, our tax professionals receive training on H&R Block products, soft skills, and tax office
best practices. These resources ultimately enable us to continue enhancing our services and better our client
experience.
Belonging. At H&R Block, we foster a culture of belonging, where every voice is heard and our associates feel
safe, included, and inspired. We are committed to a fair and respectful workplace culture, free of discrimination;
and we work to foster a Connected Culture that ensures all associates have a strong sense of belonging across the
organization.
Connected Culture is a relationship centered principle at H&R Block that puts associates and clients at the heart
of our strategic focus. It creates an environment of clear accountability, partnership, and trust – all focused on
common goals, allowing for accelerated business and personal progress. Relationships are at the heart of how we
work with each other, our customers, and in our communities.
In the workplace we are committed to creating an environment where everyone feels they belong, and we
believe that our commitment to diversity and inclusion makes us a stronger, more successful company. We
continually reflect on our management approaches to improve the workplace, including discussions with our Board
of Directors, to review how we can provide a sense of belonging within the company for our associates - what we
call Belonging@Block.
One of the many ways we work to foster a Connected Culture across the organization for all associates to
connect, support, motivate, and inspire is through our associate-led Belonging Groups focusing on LGBTQ+,
neurodiversity, young professionals, veterans, women, Black, and Hispanic/Latino/a/x associates.
SERVICE MARKS AND TRADEMARKS
We have made a practice of offering our services and products under service marks and trademarks and of
securing registration for many of these marks in the U.S. and other countries where our services and products are
marketed. We consider these service marks and trademarks, in the aggregate, to be of material importance to our
business, particularly our businesses providing services and products under the "H&R Block" brand. The initial
duration of U.S. federal trademark registrations is 10 years. Most U.S. federal registrations can be renewed
perpetually at 10-year intervals and remain enforceable so long as the marks continue to be used.
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2024 Form 10-K | H&R Block, Inc.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS (as of June 30, 2024)
Jeffrey J. Jones II, 56, became our President and Chief Executive Officer in October 2017 and was
our President and Chief Executive Officer-Designate from August 2017 to October 2017. Before
joining the Company, he served as the President of Ridesharing at Uber Technologies, Inc. from
October 2016 until March 2017. He also served as the Executive Vice President and Chief
Marketing Officer of Target Corporation from April 2012 until September 2016.
Tony G. Bowen, 49, became our Chief Financial Officer in May 2016. Prior to that, he served as our
Vice President, U.S. Tax Services Finance from May 2013 through April 2016. He will be retiring
effective September 13, 2024.
Kellie J. Logerwell, 54, became our Chief Accounting Officer in July 2016. Prior to that, she served
as our Vice President of Corporate and Field Accounting from December 2014 until July 2016 and
as our Assistant Controller from December 2010 until December 2014.
Dara S. Redler, 57, became our Chief Legal Officer in January 2022. Prior to joining the Company,
she served as General Counsel and Corporate Secretary for Tilray, Inc. from January 2019 until
September 2021. She also held various legal roles of increasing responsibility with The Coca-Cola
Company from September 2001 until December 2018.
Curtis A. Campbell, 51, became our President, Global Consumer Tax and Chief Product Officer in
June 2024. Prior to that, he served as the Chief Executive Officer of TaxAct where he ran TaxAct
from 2018 until it was sold by Blucora, Inc. in 2022. He continued to lead TaxAct after the sale until
2023. Prior to TaxAct, Mr. Campbell served Capital One Financial Corporation as Managing Vice
President of Consumer Auto from 2017 to 2018. He also served in Vice President roles at Intuit Inc,
leading Product Management and Strategy from 2014 to 2017.
AVAILABILITY OF REPORTS AND OTHER INFORMATION
Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments
to those reports filed with or furnished to the SEC are available, free of charge, through our website at
www.hrblock.com as soon as reasonably practicable after such reports are electronically filed with or furnished to
the SEC. The SEC maintains a website at www.sec.gov containing reports, proxy and information statements and
other information regarding issuers who file electronically with the SEC.
The following corporate governance documents are posted on our website at www.hrblock.com:
▪
The Amended and Restated Articles of Incorporation of H&R Block, Inc.;
▪
The Amended and Restated Bylaws of H&R Block, Inc.;
▪
The H&R Block, Inc. Corporate Governance Guidelines;
▪
The H&R Block, Inc. Code of Business Ethics and Conduct;
▪
The H&R Block, Inc. Board of Directors Independence Standards;
▪
The H&R Block, Inc. Audit Committee Charter;
▪
The H&R Block, Inc. Compensation Committee Charter;
▪
The H&R Block, Inc. Finance Committee Charter; and
▪
The H&R Block, Inc. Governance and Nominating Committee Charter.
If you would like a printed copy of any of these corporate governance documents, please send your request to
H&R Block, Inc., One H&R Block Way, Kansas City, Missouri 64105, Attention: Corporate Secretary.
Information contained on our website does not constitute any part of this report.
H&R Block, Inc. | 2024 Form 10-K
7
ITEM 1A. RISK FACTORS
Our business activities expose us to a variety of risks. Identification, monitoring, and management of these risks
are essential to the success of our operations and the financial soundness of H&R Block. Senior management and
the Board of Directors, acting as a whole and through its committees, take an active role in our risk management
process and have delegated certain activities related to the oversight of risk management to the Company's
enterprise risk management (ERM) team and the Enterprise Risk Committee, which is comprised of Vice Presidents
of major business and control functions and members of the ERM team. The Company’s ERM team, working in
coordination with the Enterprise Risk Committee, is responsible for identifying and monitoring risk exposures and
related mitigation and leading the continued development of our risk management policies and practices.
An investment in our securities involves risk, including the risk that the value of that investment may decline or
that returns on that investment may fall below expectations. There are a number of factors that could cause actual
conditions, events, or results to differ materially from those described in forward-looking statements, many of
which are beyond management's control or its ability to accurately estimate or predict, or that could adversely
affect our financial position, results of operations, cash flows, and the value of an investment in our securities. The
risks described below are not the only ones we face. We could also be affected by other events, factors, or
uncertainties that are presently unknown to us or that we do not currently consider to be significant risks to our
business. These risks may be exacerbated by the effects of local, national, and global conditions or events,
including macroeconomic, political, geopolitical, or public health conditions or events, which may cause significant
instability.
STRATEGIC AND INDUSTRY RISKS
Changes in applicable tax laws have had, and may in the future have, a negative impact on the demand for and
pricing of our services. Government changes in tax filing or IRS processes may adversely affect our business and
our consolidated financial position, results of operations, and cash flows.
The U.S. government has in the past made, and may in the future make, changes to the individual income tax
provisions of the Internal Revenue Code, tax regulations, and the rules and procedures for implementing such laws
and regulations. In addition, taxing authorities or other relevant governing bodies in various federal, state, local,
and foreign jurisdictions in which we operate may change the income tax laws in their respective jurisdictions, and
such laws may vary greatly across the various jurisdictions. It is difficult to predict the manner in which future
changes to the Internal Revenue Code, tax regulations, and the rules and procedures for implementing such laws
and regulations, and state, local, and foreign tax laws may impact us and the tax return preparation industry. Such
future changes could decrease the demand or the amount we charge for our services, and, in turn, have a material
adverse effect on our business and our consolidated financial position, results of operations, and cash flows.
In addition, taxing authorities in various federal, state, local, and foreign jurisdictions in which we operate have
introduced measures seeking to simplify or otherwise modify the preparation and filing of tax returns or the
issuance of refunds in their respective jurisdictions. For example, from time to time, U.S. federal and state
governments have considered various proposals through which the respective governmental taxing authorities
would use taxpayer information provided by employers, financial institutions, and other payers to "pre-populate,"
prepare, and calculate tax returns and distribute them to taxpayers. There are various initiatives from time to time
seeking to expedite, reduce, or change the timing of refunds, which could reduce the demand for certain of our
services or financial products.
The adoption or expansion of any measures that significantly simplify tax return preparation, or otherwise
reduce the need for third-party tax return preparation services or financial products, including governmental
encroachment at the U.S. federal and state levels, as well as in foreign jurisdictions, could reduce demand for our
services and products and could have a material adverse effect on our business and our consolidated financial
position, results of operations and cash flows.
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2024 Form 10-K | H&R Block, Inc.
Increased competition for clients could adversely affect our current market share and profitability.
We face substantial competition throughout our businesses. All categories in the tax return preparation industry
are highly competitive, and additional competitors have entered, and in the future may enter, the market to
provide tax preparation services or products. In the assisted tax services category, there are a substantial number
of tax return preparation firms and accounting firms offering tax return preparation services. Commercial tax
return preparers are highly competitive with regard to price and service. In DIY and virtual, options include various
forms of digital electronic assistance, including online and mobile applications, and desktop software, all of which
we offer. Our DIY and virtual services and products compete with a number of online and software solutions,
primarily on price and functionality. Individual tax filers may elect to change their tax preparation method,
choosing from among various assisted, DIY, and virtual offerings.
Technology advances quickly and in new and unexpected ways, and it is difficult to predict the manner in which
these changes will impact the tax return preparation industry, the problems we may encounter in enhancing our
services and products, or the time and resources we may need to devote to the creation, support, and
maintenance of technological enhancements. New technologies, such as those related to artificial intelligence,
machine learning, automation, and algorithms, may have unexpected consequences, which may be due to their
limitations, potential manipulation or unintended uses, or our failure to use or implement them effectively. If we
are slow to enhance our services, products, or technologies, if our competitors are able to achieve results more
quickly than us, if there are new and unexpected entrants into the industry, or if there are new technologies
available that provide products or services that compete with ours, we may fail to capture, or lose, a significant
share of the market.
Additionally, we and many other tax return preparation firms compete by offering one or more of RTs, prepaid
cards, RAs, other financial services and products, and other tax-related services and products, many of which are
subject to regulatory scrutiny, litigation, and other risks. From time to time we may make changes to certain of our
services and products and we can make no assurances that we will be able to offer, or that we will continue to
offer, all of these services and products. Any such changes to our services or products or any failure to continue
offering such services and products could negatively impact our financial results and ability to compete. Intense
competition could result in a reduction of our market share, lower revenues, lower margins, and lower
profitability. In addition, we face intense competition with our small business solutions. We may be unsuccessful in
competing with other providers, which may diminish our revenue and profitability, and harm our ability to acquire
and retain clients.
We may not be effective in achieving our strategic and operating objectives.
Our strategy is focused on small business, financial products and the tax client experience. While we believe that
we have identified and will identify strategic objectives that are appropriate and achievable, it is possible that our
objectives may not deliver projected long-term growth in revenue and profitability due to competition, inadequate
execution, incorrect assumptions, sub-optimal resource allocation, or other reasons, including any of the other
risks described in this “Risk Factors” section.
As a part of our strategy, we expect to continue to seek growth through acquisitions. Our future growth and
profitability may depend, in part, upon our successful execution of those acquisitions. However, we may not be
able to execute on our growth strategy due to a number of factors, including an inability to identify sufficient
suitable acquisition candidates, an unwillingness of businesses to sell to us, an inability to generate the funds
necessary to fully execute desired acquisitions, or our inability to successfully integrate acquired businesses into
our business model and operate them effectively.
If we are unable to realize the desired benefits from our business strategy, our ability to compete across our
business and our consolidated financial position, results of operations, and cash flows could be adversely affected.
Offers of free services or products could adversely affect our revenues and profitability.
U.S. federal, state, and foreign governmental authorities in certain jurisdictions in which we operate currently
offer, or facilitate the offering of, tax return preparation and electronic filing options to taxpayers at no charge, and
certain volunteer organizations also prepare tax returns at no charge for low-income taxpayers. In addition, many
of our competitors offer certain tax preparation services and products, and other financial services and products,
H&R Block, Inc. | 2024 Form 10-K
9
at no charge. Government tax authorities, volunteer organizations, our competitors, and potential new market
entrants have implemented, and may expand free offerings in the future. In tax season 2024, the IRS launched a
limited free direct tax filing system, which it has announced it will expand for the 2025 filing season. In addition,
certain members of private industry offer free DIY tax software to certain taxpayers through Free File, Inc., which
operates under an agreement among the IRS and those industry participants that is currently set to expire in
October 2029. As a result of these or other programs, the government has, and could further, become our direct
competitor, which could have a material adverse effect on our business and our consolidated financial position,
results of operations, and cash flows.
In order to compete, we have offered certain, and may in the future offer, additional services and products at
no charge. There can be no assurance that we will be able to attract clients or effectively ensure the migration of
clients from our free offerings to those for which we receive fees, and clients who have formerly paid for our
offerings may elect to use free offerings instead. These competitive factors may diminish our revenue and
profitability, or harm our ability to acquire and retain clients, resulting in a material adverse effect on our business
and our consolidated financial position, results of operations, and cash flows.
Our businesses may be adversely affected by difficult economic, geopolitical or public health conditions.
Unfavorable changes in economic conditions, which are typically beyond our control, including without limitation,
inflation, slowing growth, rising interest rates, recession, changes in the political climate, significant armed
conflicts, acts of war or terrorism, supply chain or labor market disruptions, banking or financial market
disruptions, pandemics or endemics, or other adverse changes, could negatively affect our business and financial
condition. Difficult economic conditions are frequently characterized by high unemployment levels and declining
consumer and business spending. These poor economic conditions may negatively affect demand and pricing for
our services and products. In the event of difficult economic conditions that include high unemployment levels,
especially within the client segments we serve, clients may elect not to file tax returns or utilize lower cost
preparation and filing alternatives.
In addition, difficult economic conditions may disproportionately impact small business owners. Wave’s
revenues may be negatively impacted in the event of a sustained economic slowdown or recession. Difficult
economic conditions, including an economic recession or high inflationary period, could have a material adverse
effect on our business and our consolidated financial position, results of operations, and cash flows.
OPERATIONAL AND EXECUTION RISKS
Our failure to effectively address fraud by third parties using our offerings could have a material adverse effect
on our business and our consolidated financial position, results of operations, and cash flows.
Many industries have experienced an increased variety and amount of attempted fraudulent activities by third
parties, and those fraudulent activities are becoming increasingly sophisticated through the use of artificial
intelligence, social engineering, and other technological developments and strategies. A number of companies,
including those in the tax return preparation and financial services industries, have reported instances where
criminals created new accounts, or gained access to consumer information or user accounts maintained on their
systems by using stolen identity information (e.g., email, username, password information, or credit history)
obtained from third-party sources. We have experienced, and in the future may continue to experience, this form
of unauthorized and illegal use and/or access to our systems, despite no breach in the security of our systems.
Though we do not believe this fraud is uniquely targeted at our offerings, our failure to effectively address any
such fraud may adversely impact our business and our consolidated financial position, results of operations, and
cash flows.
In addition to losses directly from such fraud, which could occur in some cases, we may also suffer a loss of
confidence by our clients or by governmental agencies in our ability to detect and mitigate fraudulent activity, and
such governmental authorities may refuse to allow us to continue to offer such services or products. For example,
a person with malicious intent may unlawfully create a new account with stolen information or take existing user
account and password information from our clients to electronically file fraudulent federal and state tax returns,
which could impede their ability to file their tax returns and receive refunds (or other amounts due) and diminish
consumers' perceptions of the security and reliability of our services and products, despite no breach in the
security of our systems.
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2024 Form 10-K | H&R Block, Inc.
Governmental authorities in jurisdictions in which we operate have taken action, and may in the future take
additional action, in an attempt to combat identity theft or other fraud, which may require changes to our systems
and business practices, or those of third parties on which we rely, that cannot be anticipated. These actions may
have a material adverse effect on our business and our consolidated financial position, results of operations, and
cash flows.
Furthermore, as fraudulent activity continues to become more pervasive and sophisticated, we may implement
fraud detection and prevention measures that could make it less convenient for legitimate clients to obtain and
use our services and products, which may adversely affect the demand for our services and products, our
reputation, and our financial performance.
An interruption in our information systems, or those of our franchisees or a third party on which we rely, or an
interruption in the internet, could have a material adverse effect on our business and our consolidated financial
position, results of operations, and cash flows.
We, our franchisees, and other third parties material to our business operations rely heavily upon communications,
networks, and information systems and the internet to conduct our business (including third-party internet-based
or cloud computing services, and the information systems of our key vendors). These networks, systems, and
operations are potentially vulnerable to damage or interruption from upgrades and maintenance, network failure,
hardware failure, software failure, power or telecommunications failures, cyberattacks, human error, and natural
disasters. As our tax preparation business is seasonal, our systems must be capable of processing high volumes
during our peak periods. Therefore, any failure or interruption in our information systems, or information systems
of our franchisees or a private or government third party on which we rely, or an interruption in the internet or
other critical business capability during our busiest periods, could negatively impact our business operations and
reputation, and increase our risk of loss.
We have experienced systems outages in the past, and there can be no assurance that system or internet
failures or interruptions in critical business capabilities will not occur in the future, and, if they do occur, that we,
our franchisees or the private or governmental third parties on whom we rely, will adequately address them. The
precautionary measures that we, or third parties on whom we rely, have implemented to avoid systems outages
and to minimize the effects of any data or communication systems interruptions or failures may not be adequate,
and we and such third parties may not have anticipated or addressed all of the potential events that could
threaten or undermine our or such third parties information systems or other critical business capabilities. We do
not have redundancy for all of our systems and our disaster recovery planning may not account for all
eventualities. Our software and computer systems utilize cloud computing services provided by Microsoft
Corporation. If the Microsoft Azure Cloud is unavailable for any reason, it could negatively impact our ability to
deliver our services and products and our clients may not be able to access certain of our products or features, any
of which could significantly impact our operations, business, and financial results.
The occurrence of any systems or internet failure, or business interruption could negatively impact our ability to
serve our clients, which in turn could have a material adverse effect on our business and our consolidated financial
position, results of operations, and cash flows.
Any significant delays in launching our tax service and product offerings, changes in government regulations or
processes (including the acceptance of tax returns and the issuance of refunds and other amounts to clients by
the IRS or state tax agencies) that affect how we provide such offerings to our clients, or significant problems
with such offerings or the manner in which we provide them to our clients may harm our revenue, results of
operations, and reputation.
Tax laws and tax forms are subject to change each year, and the nature and timing of such changes are
unpredictable. As a part of our business, we must incorporate any changes to tax laws and tax forms into our tax
service and product offerings, including our online and mobile applications and desktop software. The
unpredictable nature, timing and effective dates of changes to tax laws and tax forms can result in condensed
development cycles for our tax service and product offerings because our clients expect high levels of accuracy and
a timely launch of such offerings to prepare and file their taxes by the applicable tax filing deadlines and, in turn,
receive any tax refund amounts on a timely basis. From time to time, we review and enhance our quality controls
for preparing accurate tax returns, but there can be no assurance that we will be able to prevent all inaccuracies.
H&R Block, Inc. | 2024 Form 10-K
11
Further, changes in governmental administrations or regulations could result in a delay of the start of the tax
season, create uncertainty, or result in further and unanticipated changes in requirements or processes, which may
require us to make corresponding changes to our client service systems and procedures immediately prior to, or
during, a tax season. In addition, unanticipated changes in governmental processes, or newly implemented
processes, for (1) accepting tax filings and related forms, including the ability of taxing authorities to accept
electronic tax return filings, or (2) distributing tax refunds or other amounts to clients may result in processing
delays by us or applicable taxing authorities.
Certain of our financial products are dependent on the IRS following the client’s directions to direct deposit the
tax refund. If the IRS disregards this direction, and sends the tax refund via check, then it could result in a loss of
tax preparation and financial product revenue, negative publicity, and client dissatisfaction. In addition, any delays
in launching new or existing financial service or product offerings, or technical or other issues associated with the
launch, could cause a loss of revenue, a loss of clients, or client dissatisfaction, especially if such issues occur during
the tax season.
Any major defects or delays caused by the above-described complexities may lead to loss of clients and loss of
or delay in revenue, negative publicity, client dissatisfaction, a deterioration in our business relationships with our
partners or our franchisees, exposure to litigation, and increased operating expenses, even if any such launch
delays or defects are not caused by us. Any of the risks described above could have a material adverse effect on
our business, our reputation, and our consolidated financial position, results of operations, and cash flows.
We rely on a single vendor or a limited number of vendors to provide certain key services or products, and the
loss of such relationships, the inability of these key vendors to meet our needs, or errors by the key vendors in
providing services to or for us, could have a material adverse effect on our business and our consolidated
financial position, results of operations, and cash flows.
Historically, we have contracted, and in the future we will likely continue to contract, with a single vendor or a
limited number of vendors to provide certain key services or products for our tax, financial, and other services and
products. A few examples of this type of reliance are our relationships with Fidelity National Information Services,
Inc. (FIS), Galileo Financial Technologies, LLC, or similar vendors, for data processing and card production services;
PathwardTM, N.A. (Pathward), a wholly-owned subsidiary of Pathward Financial, Inc., for the issuance of RTs, EAs,
RAs, Emerald Cards, and Spruce accounts; and Microsoft Corporation, for cloud computing services and artificial
intelligence technology. In certain instances, we are vulnerable to vendor error, service inefficiencies, data
breaches, service interruptions, or service delays, and such issues by our key vendors in providing services to or for
us could result in material losses for us due to the nature of the services being provided or our contractual
relationships with our vendors. If any material adverse event were to affect one of our key vendors or if we are no
longer able to contract with our key vendors for any reason, we may be forced to find an alternative provider for
these critical services. It may not be possible to find a replacement vendor on terms that are acceptable to us or at
all.
Our sensitivity to any of these issues may be heightened (1) due to the seasonality of our business, (2) with
respect to any vendor that we utilize for the provision of any product or service that has specialized expertise, (3)
with respect to any vendor that is a sole or exclusive provider, or (4) with respect to any vendor whose
indemnification obligations are limited or that does not have the financial capacity to satisfy its indemnification
obligations. Some of our vendors are subject to the oversight of regulatory bodies and, as a result, our product or
service offerings may be affected by the actions or decisions of such regulatory bodies. If our vendors are unable to
meet our needs and we are not able to develop alternative sources for these services and products quickly and
cost-effectively, or if a key vendor were to commit a major error or suffer a material adverse event, it could result
in a material and adverse impact on our business and our consolidated financial position, results of operations, and
cash flows.
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2024 Form 10-K | H&R Block, Inc.
The specialized and highly seasonal nature of our business presents financial risks and operational and human
capital challenges.
Our business is highly seasonal, with the substantial portion of our revenue earned from February through April in
a typical year. The concentration of our revenue-generating activity during this relatively short period presents a
number of challenges for us, including (1) cash and resource management during the remainder of our fiscal year,
when we generally operate at a loss and incur fixed costs and costs of preparing for the upcoming tax season, (2)
responding to changes in competitive conditions, including marketing, pricing, and new product offerings, which
could affect our position during the tax season, (3) disruptions, delays, or extensions in a tax season, including
those caused by pandemics, or severe weather, (4) client dissatisfaction issues or negative social media campaigns,
which may not be timely discovered or satisfactorily addressed, and (5) ensuring optimal uninterrupted operations
and service delivery during the tax season, which may be disrupted by natural or manmade disasters, extreme
weather conditions, pandemics or endemics, catastrophes, or a wide variety of events within or outside of our
control. Any unanticipated changes to federal or state tax filing deadlines may further amplify the impact of
seasonality on our business and affect the comparability of our financial results from period to period. If we
experience significant business disruptions during the tax season or if we are unable to effectively address the
challenges described above and related challenges associated with a seasonal business, we could experience a loss,
disruption, or change in timing of business, which could have a material adverse effect on our business and our
consolidated financial position, results of operations, and cash flows.
We rely on the performance of key personnel, including our executive leadership and other key associates, and
we may be unable to attract and retain key personnel or fully control or accurately predict our labor costs.
Our business depends on our ability to attract, develop, motivate, and retain key personnel in a timely manner,
including members of our executive team and those in seasonal tax preparation positions (which may be required
on short notice during any extended tax season or to serve extended filers) or with other required specialized
expertise, such as technical positions (including with respect to cybersecurity, artificial intelligence, and machine
learning). Changes in our management team resulting from the hiring or departure of executives and key
associates from time to time could disrupt our business. Executive leadership transition periods may negatively
impact operations due to increased or unanticipated expenses, operational inefficiencies, uncertainty, decreased
employee morale and productivity, or increased turnover.
The market for key personnel is extremely competitive, and there can be no assurance that we will be
successful in our efforts to attract and retain the required qualified personnel within necessary timeframes, or at
expected cost levels. As the global labor market continues to evolve, our current and prospective key personnel
may seek new or different opportunities based on pay levels, benefits, or remote work flexibility that are different
from what we offer, or may determine to leave the workforce, making it difficult to attract and retain them. If we
are unable to attract, develop, motivate, and retain key personnel, our business, operations, and financial results
could be negatively impacted. In addition, if our costs of labor or related costs increase, if new or revised labor
laws, rules, or regulations are adopted or implemented that impact our seasonal workforce and increase our labor
costs, or if our labor costs are unpredictable due to tax season fluctuations or otherwise, there could be a material
adverse effect on our business and our consolidated financial position, results of operations, and cash flows.
Our business depends on our strong reputation and the value of our brands.
Developing and maintaining awareness of our brands is critical to achieving widespread acceptance of our existing
and future services and products and is an important element in attracting new clients. In addition, our franchisees
operate their businesses under our brands. Adverse publicity (whether or not justified) relating to events or
activities involving or attributed to us, our franchisees, employees, vendors, or agents or our services or products,
which may be enhanced due to the nature of social media, may tarnish our reputation and reduce the value of our
brands. Damage to our reputation and loss of brand equity may reduce demand for our services and products and
H&R Block, Inc. | 2024 Form 10-K
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thus have an adverse effect on our future financial results, as well as require additional resources to rebuild our
reputation and restore the value of our brands.
Failure to maintain sound business relationships with our franchisees may have a material adverse effect on our
business and we may be subject to legal and other challenges resulting from our franchisee relationships.
Our financial success depends in part on our ability to maintain sound business relationships with our franchisees.
The support of our franchisees is also critical for the success of our ongoing operations. Deterioration in our
relationships with our franchisees could have a material adverse effect on our business and our consolidated
financial position, results of operations, and cash flows.
We also grant our franchisees a limited license to use our registered trademarks and, accordingly, there is risk
that one or more of the franchisees may be alleged to be controlled by us. Third parties, regulators or courts may
seek to hold us responsible for the actions or failures to act by our franchisees. Adverse outcomes related to legal
actions could result in substantial damages and could cause our earnings to decline. Negative public opinion could
also result from our or our franchisees’ actual or alleged conduct in such claims, possibly damaging our reputation,
which, in turn, could adversely affect our business prospects and cause the market price of our securities to
decline.
Our international operations are subject to risks that may harm our business and our consolidated financial
position, results of operations, and cash flows.
We have international operations, including tax preparation businesses in Canada and Australia, a technology and
shared services center in India, a technology center in Ireland, and Wave in Canada. We may consider expansion
opportunities in additional countries in the future and there is uncertainty about our ability to generate revenues
from new or emerging foreign operations or expand into other international markets. Additionally, there are risks
inherent in doing business internationally, including: (1) changes in trade regulations; (2) difficulties in managing
foreign operations as a result of distance, language, and cultural differences; (3) profit repatriation restrictions, and
fluctuations in foreign currency exchange rates; (4) geopolitical events, including acts of war and terrorism, and
economic and political instability; (5) compliance with anti-corruption laws such as the U.S. Foreign Corrupt
Practices Act and other applicable foreign anti-corruption laws; (6) compliance with U.S. and international laws and
regulations, including those concerning privacy and data protection and retention; and (7) risks related to other
government regulation or required compliance with local laws. These risks inherent in international operations and
expansion could prevent us from expanding into other international markets or increase our costs of doing
business internationally and could have a material adverse effect on our business and our consolidated financial
position, results of operations, and cash flows.
In addition, we prepare U.S. federal and state tax returns for taxpayers residing in foreign jurisdictions,
including the European Union (EU), and we and certain of our franchisees operate and provide other services in
foreign jurisdictions. As a result, certain aspects of our operations are subject, or may in the future become
subject, to the laws, regulations, and policies of those jurisdictions that regulate the collection, use, and transfer of
personal information, which may be more stringent than those of the U.S., including, but not limited to the EU
General Data Protection Regulation, the Canadian Personal Information Protection and Electronic Documents Act,
and Canadian Provincial legislation.
Costs for us to comply with such laws, regulations, and policies that are applicable to us could be significant. We
may also face audits or investigations by one or more foreign government agencies relating to these laws,
regulations, and policies that could result in the imposition of penalties or fines.
INFORMATION SECURITY, CYBERSECURITY, AND DATA PRIVACY RISKS
Compliance with the complex and evolving laws, regulations, standards, and contractual requirements regarding
privacy and data protection could require changes in our business practices and increase costs of operation;
failure to comply could result in significant claims, fines, penalties, and damages.
Due to the nature of our business, we collect, use, and retain large amounts of personal information and data
pertaining to clients, including tax return information, financial product and service information, and social security
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2024 Form 10-K | H&R Block, Inc.
numbers. In addition, we collect, use, and retain personal information and data of our employees in the ordinary
course of our business.
We are subject to laws, rules, and regulations relating to the collection, use, disclosure, and security of such
consumer and employee personal information, which have drawn increased attention from U.S. federal, state, and
foreign governmental authorities in jurisdictions in which we operate. In the U.S., the IRS generally requires a tax
return preparer to obtain the written consent of the taxpayer prior to using or disclosing the taxpayer's tax return
information for certain purposes other than tax return preparation, which may limit our ability to market revenue-
generating products to our clients. In addition, other regulations require financial institutions to adopt and disclose
their consumer privacy notice and generally provide consumers with a reasonable opportunity to "opt-out" of
having nonpublic personal information disclosed to unaffiliated third parties for certain purposes.
Numerous jurisdictions have passed, and may in the future pass, new laws related to the collection, use, and
retention of consumer or employee information and this area continues to be an area of interest for U.S. federal,
state, and foreign governmental authorities. For example, the State of California adopted the California Consumer
Privacy Act (CCPA), which became effective January 1, 2020, as amended by the California Privacy Rights Act
(CPRA) on January 1, 2023. Subject to certain exceptions, these laws impose new requirements on how businesses
collect, process, manage, and retain certain personal information of California residents and provide California
residents with various rights regarding personal information collected by a business. In addition, certain states
have adopted comprehensive privacy laws, and other jurisdictions have adopted or may in the future adopt their
own, different privacy laws. These laws may contain different requirements or may be interpreted and applied
inconsistently from jurisdiction to jurisdiction. Our current privacy and data protection policies and practices may
not be consistent with all of those requirements, interpretations, or applications. In addition, changes in U.S.
federal and state regulatory requirements, as well as requirements imposed by governmental authorities in foreign
jurisdictions in which we operate, could result in more stringent requirements and a need to change business
practices, including the types of information we can use and the manner in which we can use such information.
Establishing systems and processes, or making changes to our existing policies, to achieve compliance with these
complex and evolving requirements may increase our costs or limit our ability to pursue certain business
opportunities. There can be no assurance that we will successfully comply in all circumstances. We are, and may in
the future be, subject to regulatory investigations, claims and legal actions related to the collection, use, sharing,
and/or retention of information, which could lead to further inquiries, further legal actions, other regulatory or
legislative actions, harm to our reputation and brands, fines, penalties, and other damages.
We have incurred, and may continue to incur, significant expenses to comply with existing or future privacy and
data security standards and protocols imposed by law, regulation, industry standards or contractual obligations.
A security breach of our systems, or third-party systems on which we rely, resulting in unauthorized access to
personal information of our clients or employees or other sensitive, nonpublic information, may adversely affect
the demand for our services and products, our reputation, and financial performance.
We offer a range of services and products to our clients, including tax return preparation solutions, financial
services and products, and small business solutions through our company-owned or franchise offices and online.
Due to the nature of these services and products, we use multiple digital technologies to collect, transmit, and
store high volumes of client personal information. We also collect, use, and retain other sensitive, nonpublic
information, such as employee social security numbers, healthcare information, and payroll information, as well as
confidential, nonpublic business information. Certain third parties and vendors have access to personal
information to help deliver client benefits, services, and products, or may host certain of our and our clients’
sensitive and personal information and data. Information security risks continue to increase due in part to the
increased adoption of and reliance upon digital technologies by companies and consumers. Our risk and exposure
to these matters remain heightened due to a variety of factors including, among other things, (1) the evolving
nature of these threats and related regulation, (2) the increased activity and sophistication of hostile foreign
governments, organized crime, cyber criminals, and hackers that may initiate cyberattacks against us or third-party
systems on which we rely using technology and other strategies that continue to evolve, including artificial
intelligence and social engineering, (3) the prominence of our brand, (4) our and our franchisees' extensive office
footprint, (5) our plans to continue to implement strategies for our online and mobile applications and our desktop
software, (6) our use of third-party vendors, (7) our use of certain new technologies, such as artificial intelligence
H&R Block, Inc. | 2024 Form 10-K
15
and machine learning, and (8) the usage of remote working arrangements by our associates, franchisees, and third-
party vendors, which has significantly expanded in recent years.
Cybersecurity risks may result from fraud or malice from external or internal actors (a cyberattack), human
error, or accidental technological failure. Cyberattacks are designed to electronically circumvent network security
for malicious purposes such as unlawfully obtaining personal information, disrupting our ability to offer services,
damaging our brand and reputation, stealing our intellectual property, or advancing social or political agendas. We
face a variety of cyberattack threats including computer viruses, malicious codes, worms, phishing attacks, social
engineering, denial of service attacks, ransomware, and other sophisticated attacks.
Although we use security and business controls to limit access to and use of personal information and expend
significant resources to maintain multiple levels of protection to address or otherwise mitigate the risk of a security
breach, such measures cannot provide absolute security. We regularly test our systems to discover and address
potential vulnerabilities, and we rely on training and testing of our employees regarding heightened phishing and
social engineering threats. We also conduct certain background checks on our employees, as allowed by law. Due
to the structure of our business model, we also rely on our franchisees, vendors, and other private and
governmental third parties to maintain secure systems and respond to cybersecurity risks. Where appropriate, we
impose certain requirements and controls on these third parties, but it is possible that they may not appropriately
employ these controls or that such controls (or their own separate requirements and controls) may be insufficient
to protect personal information.
Cybersecurity and the continued development and enhancement of our controls, processes, and practices
designed to protect our systems, computers, software, data, and networks from attack, damage, or unauthorized
access remain a top priority for us. As risks and regulations continue to evolve, we may be required to expend
significant additional resources to continue to modify or enhance our protective measures or to investigate and
remediate information security vulnerabilities. Notwithstanding these efforts, there can be no assurance that a
security breach, intrusion, or loss or theft of personal information will not occur. In addition, the techniques used
to obtain unauthorized access change frequently, become more sophisticated, and are often difficult to detect
until after a successful attack, causing us to be unable to anticipate these techniques or implement adequate
preventive measures in all cases.
Unauthorized access to personal information as a result of a security breach could cause us to determine that it
is required or advisable for us to notify affected individuals, regulators, or others under applicable privacy laws and
regulations or otherwise. Security breach remediation could also require us to expend significant resources to
assist impacted individuals, repair damaged systems, implement modified information security measures, and
maintain client and business relationships. Other consequences could include reduced client demand for our
services and products, loss of valuable intellectual property, reduced growth and profitability and negative impacts
to future financial results, loss of our ability to deliver one or more services or products (e.g., inability to provide
financial services and products or to accept and process client credit card transactions or tax returns), modifying or
stopping existing business practices, legal actions, harm to our reputation and brands, fines, penalties, and other
damages, and further regulation and oversight by U.S. federal, state, or foreign governmental authorities.
A security breach or other unauthorized access to our systems, or third-party systems on which we rely, could
have a material adverse effect on our business and our consolidated financial position, results of operations, and
cash flows.
LEGAL AND REGULATORY RISKS
Regulations promulgated by state and federal regulators, including the Consumer Financial Protection Bureau
(CFPB), may affect our financial services businesses in new or unexpected ways, which may impact our ability to
offer certain financial products or require changes to the financial products we offer, our services, and contracts.
The CFPB has broad powers to administer, investigate compliance with, and, in some cases, enforce U.S. federal
financial consumer protection laws. The CFPB has broad rule-making authority for a wide range of financial
consumer protection laws that apply to certain of the financial products we offer, including the authority to
prohibit or allege "unfair, deceptive, or abusive" acts and practices. In addition, state or local jurisdictions in which
we operate have passed, and may in the future pass, new laws related to banking and the offering of financial
products. These laws may contain different requirements or may be interpreted and applied inconsistently from
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2024 Form 10-K | H&R Block, Inc.
jurisdiction to jurisdiction. Regulators are interpreting existing laws, regulations, and rules in new and different
ways as they attempt to apply them more broadly. For example, bank partnership arrangements are increasingly
subject to heightened scrutiny at the federal and state level. It is difficult to predict how currently proposed or new
regulations, or new interpretations of existing regulations, may impact the financial products we offer.
The CFPB and other federal or state regulators may examine, investigate, and take enforcement actions against
our subsidiaries that offer consumer financial services and products, as well as financial institutions and other third
parties upon which our subsidiaries rely to provide consumer financial services and products. State regulators also
have certain authority in enforcing and promulgating financial consumer protection laws. As a result, some states
have issued new and broader financial consumer protection laws and others may in the future, which are more
comprehensive than existing U.S. federal regulations. In addition, state attorneys general may in some cases bring
actions to enforce federal consumer protection laws.
Currently proposed or new federal and state laws and regulations, or expanded interpretations of current laws
and regulations that differ from our existing interpretations, may result in legal actions, may impact our ability to
offer certain financial products, or may require changes to the financial products we offer, our services or
contracts, and this could have a material adverse effect on our business and our consolidated financial position,
results of operations, and cash flows.
Laws and regulations or other regulatory actions could have an adverse effect on our business and our
consolidated financial position, results of operations, and cash flows.
Our tax preparation business and operations are subject to various forms of government regulation, including U.S.
federal requirements regarding the signature and inclusion of identification numbers on tax returns and tax return
retention requirements. U.S. federal laws also subject income tax return preparers to accuracy-related penalties,
and preparers may be prohibited from continuing to act as income tax return preparers if they repeatedly engage
in specified misconduct. We are also subject to, among other things, advertising standards for electronic tax return
filers, and to possible monitoring by the IRS, and if deemed appropriate, the IRS could impose various penalties,
including suspension from the IRS electronic filing program. Many states and local jurisdictions have laws
regulating tax professionals or the offering of income tax courses, which are in addition to and may be different
than federal requirements.
In addition, our franchising activities are subject to various rules and regulations, including requirements to
furnish prospective franchisees with a prescribed franchise disclosure document. Substantive state laws regulating
the franchisor/franchisee relationship presently exist in a large number of states. These state laws often limit,
among other things, the duration and scope of non-competition provisions, the ability of a franchisor to terminate
or refuse to renew a franchise contract and the ability of a franchisor to designate sources of supply. In addition,
bills have been introduced from time to time that would provide for federal regulation of the franchisor/franchisee
relationship in certain respects or that would impact the traditional nature of the relationship between franchisors
and franchisees.
Additionally, our offering of consumer financial products and services are subject to various rules and
regulations, including potential limitations or restrictions on the amount of interchange fees. There can be no
assurance that future regulation or changes by the payment networks will not impact interchange revenues
substantially. If interchange rates decline, whether due to actions by the payment networks or future regulation, it
could impact the profitability of our consumer financial products and services or our ability to offer such products
or services.
Given the nature of our businesses, we are subject to various additional federal, state, local, and foreign laws
and regulations, including, without limitation, in the areas of labor, immigration, marketing and advertising,
consumer protection, financial services and products, payment processing, privacy and data security, anti-
competition, environmental, health and safety, insurance, and healthcare. There have been significant new or
proposed regulations and/or heightened focus by the government and others in some of these areas, including, for
example, privacy and data security, climate change, interchange fees, consumer financial services and products,
endorsements and testimonials, telemarketing, web and wireless marketing technologies, non-competition
agreements and other restrictive covenants, and labor, including overtime and exemption regulations, state and
local laws on minimum wage, worker classification, and other labor-related issues. In addition, as we continue to
H&R Block, Inc. | 2024 Form 10-K
17
incorporate additional or emerging technologies into our business, such as in the areas of artificial intelligence and
machine learning, we may become subject to increased government regulation or regulatory scrutiny.
The above requirements and business implications are subject to change and evolving application, including by
means of new legislation, legislative changes, and/or executive orders, and there may be additional regulatory
actions or enforcement priorities, or new interpretations of existing requirements that differ from ours. These
developments could impose unanticipated limitations or require changes to our business, which may make
elements of our business more expensive, less efficient, or impossible to conduct, and may require us to modify
our current or future services or products, which effects may be heightened given the nature, broad geographic
scope, and seasonality of our business.
We face legal actions in connection with our various business activities, both past and present, and current or
future legal actions may damage our reputation, impair our product offerings, or result in material liabilities and
losses.
We have been named and, in the future will likely continue to be named, in various legal actions, including class or
representative actions, individual or mass arbitrations, actions or inquiries by state attorneys general and other
regulators, and other litigation arising in connection with our various business activities, including relating to our
various service and product offerings. For example, as previously reported, we are subject to legal actions and have
received and are responding to certain governmental inquiries and other matters relating to the IRS Free File
program and other aspects of our DIY tax preparation services, including the use of pixels. These inquiries and
other matters include, among other things, requests for information and subpoenas from various regulators and
state attorneys general and private legal actions, including class actions and mass arbitrations.
In addition, our discontinued operations, which include the results of operations of Sand Canyon Corporation,
formerly known as Option One Mortgage Corporation (including its subsidiaries, collectively, SCC), have been, and
may in the future be, subject to loss contingencies, which may result in significant financial losses. The creditors of
SCC or other potential claimants may attempt to assert claims against us for payment of SCC's obligations.
We cannot predict whether the legal actions described above could lead to further inquiries, further litigation,
fines, damages, injunctions or other regulatory or legislative actions, or impacts on our brand, reputation and
business. See discussion in Item 8, note 12 to the consolidated financial statements for additional information.
Failure to protect our intellectual property rights may harm our competitive position and litigation to protect
our intellectual property rights or defend against third party allegations of infringement may be costly.
Despite our efforts to protect our intellectual property and proprietary information, we may be unable to do so
effectively in all cases. Our intellectual property could be wrongfully acquired as a result of a cyberattack, other
wrongful conduct by employees or third parties, or human error. To the extent that our intellectual property is not
protected effectively by trademarks, copyrights, patents, or other means, other parties with knowledge of our
intellectual property, including former employees, may seek to exploit our intellectual property for their own or
others' advantage. Competitors may also misappropriate our trademarks, copyrights or other intellectual property
rights or duplicate our technology and products. Any significant impairment or misappropriation of our intellectual
property or proprietary information could harm our business and our brand, and may adversely affect our ability to
compete.
In addition, third parties may allege we are infringing their intellectual property rights, and we may face
intellectual property challenges from other parties. We may not be successful in defending against any such
challenges or in obtaining licenses to avoid or resolve any intellectual property disputes and, in that event, we
could lose significant revenues, incur significant royalty or technology development expenses, suffer harm to our
reputation, or pay significant monetary damages.
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2024 Form 10-K | H&R Block, Inc.
FINANCIAL RISKS
Our access to liquidity may be negatively impacted by disruptions in credit markets, downgraded credit ratings,
increased interest rates or our failure to meet certain covenants. Our funding costs could increase, further
impacting earnings.
We need liquidity to meet our working capital requirements, to service debt obligations, including refinancing of
maturing obligations, and for general corporate purposes. Our operations are highly seasonal and substantially all
of our revenues and cash flows are generated during the period from February through April in a typical year.
Therefore, we normally require the use of cash to fund losses and working capital needs, periodically resulting in a
working capital deficit, from May through January. We typically have relied on available cash balances from the
prior tax season and borrowings to meet liquidity needs during this time period. Events may occur that could
increase our need for liquidity above current levels. We may need to obtain additional sources of funding to meet
these needs, which may not be available or may only be available under unfavorable terms. In addition, if rating
agencies downgrade our credit rating or interest rates increase, the cost of debt under our existing financing
arrangements, as well as future financing arrangements, could increase and our capital market access could
decrease or become unavailable.
Our unsecured committed line of credit (CLOC) is subject to various covenants, and a violation of a covenant
could impair our access to liquidity currently available through the CLOC. In addition, if we violate a covenant in the
CLOC and are unable to obtain a waiver from our lenders, our debt under the CLOC would be in default and could
be accelerated by our lenders. An acceleration of the indebtedness under the CLOC would cause a cross default
under the indenture governing our Senior Notes. There can be no assurance that we will be able to obtain
sufficient funds to enable us to repay or refinance our debt obligations on commercially reasonable terms, or at all.
If current sources of liquidity were to become unavailable, we would need to obtain additional sources of
funding, which may not be available or may only be available under less favorable terms. This could have a
material adverse effect on our business and our consolidated financial position, results of operations, and cash
flows.
The continued payment of dividends on our common stock and repurchases of our common stock are
dependent on a number of factors, and cannot be assured.
We need liquidity sufficient to fund payments of dividends on our common stock and repurchases of our common
stock. In addition, holders of our common stock are only entitled to receive such dividends, and the Company may
only repurchase shares, as our Board of Directors may authorize out of funds legally available for such payments.
Due to the seasonal nature of our business and the fact that our business is not asset-intensive, we have had, and
are likely to continue to have, a negative net worth under U.S. generally accepted accounting principles (GAAP) at
various times throughout the year. Therefore, the payment of dividends or stock repurchases at such times would
cause us to further increase that GAAP negative net worth. In addition, our stock repurchase program does not
have an expiration date and we are not obligated to repurchase a specified number of shares. Our repurchase
program may be suspended or terminated at any time, and there can be no assurance that our repurchase
program will enhance long-term shareholder value.
The payment of future dividends and future repurchases will depend upon our earnings, economic conditions,
liquidity and capital requirements, and other factors, including our debt leverage. Even if we have sufficient
resources to pay dividends and to repurchase shares of our common stock, our Board of Directors may determine
to use such resources to fund other Company initiatives. Accordingly, we cannot make any assurance that future
dividends will be paid, or future repurchases will be made, at levels comparable to our historical practices, if at all.
Changes in corporate tax laws or regulations, or in the interpretations of tax laws or regulations, could
materially affect our financial condition, cash flows, and operating results.
As a profitable multinational corporation, we are subject to a material amount of taxes in the U.S. and numerous
foreign jurisdictions where our subsidiaries are organized and conduct their operations. Significant judgment is
required in determining our worldwide provision for income taxes and other tax liabilities. The amount of tax due
in various jurisdictions may change significantly as a result of political or economic factors beyond our control,
including changes to tax laws or new interpretations of existing laws that are inconsistent with previous
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19
interpretations or positions taken by taxing authorities on which we have relied. New regulatory guidance, or
regulatory interpretations that differ from our existing interpretations, could materially affect our effective tax
rates or value of deferred tax assets and liabilities.
Legislatures and taxing authorities in jurisdictions in which we operate may propose additional changes to their
tax rules in response to economic conditions, or as part of broader tax reformation initiatives. The current
administration previously committed to increasing the corporate income tax rate from 21 percent to 28 percent,
and to increasing the tax rate applied to profits earned outside the United States. If enacted, the impact of these
potential new rules could be material to our tax provision and value of deferred tax assets and liabilities.
In addition, projects undertaken by international organizations may change international tax norms relating to
each country’s jurisdiction to tax cross-border international trade. Given the unpredictability of these and other
possible changes to tax laws and related regulations, it is difficult to assess the overall effect of such potential
changes, but any such changes could, if adopted and applicable to us, adversely impact our effective tax rates and
other tax liabilities.
Our tax returns and other tax matters are periodically examined by tax authorities and governmental bodies,
including the IRS, which may disagree with positions taken by us in determining our tax liability. There can be no
assurance as to the outcome of these examinations. We regularly assess the likelihood of an adverse outcome
resulting from these examinations to determine the adequacy of our provision for income taxes.
If our effective tax rates were to increase, or if the ultimate determination of our taxes owed is for an amount
in excess of amounts previously accrued, our operating results, cash flows, and financial condition could be
adversely affected.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 1C. CYBERSECURITY
Risk Management and Strategy
To help address cybersecurity threats, we have developed a strategy and implemented a program to identify,
assess, and prioritize cybersecurity risks as part of our broader ERM program. We are committed to a risk-centric,
layered information security approach to secure our data, systems, and services. We prioritize our data security
initiatives and processes based on our assessment of known and anticipated threats to our data security. Utilizing
the National Institute of Standards and Technology (NIST) Cybersecurity Framework, we strive for continuous
improvement and utilize a metrics-based approach to identify and mitigate data security risks that could
potentially impact our business operations or clients.
We maintain multiple levels of protection to mitigate data security risks, and we regularly test our systems to
discover and address potential vulnerabilities, including without limitation:
•
using a multi-layered, zero-trust principled approach to secure systems;
•
systematic monitoring of our sites and services to detect and respond to unauthorized activity; and
•
regular security audits and vulnerability assessments conducted by our dedicated internal information
security team, our internal auditors, and by external third parties.
In addition, we engage in a broad range of activities to secure and protect the data that we obtain through our
business operations including, but not limited to:
•
continued development and enhancement of our controls, processes, and practices designed to protect
our systems, computers, software, data, and networks from attack, damage, or unauthorized access;
•
security and business controls to appropriately limit access to and use of personal information, including
adaptive and multifactor authentication;
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2024 Form 10-K | H&R Block, Inc.
•
comprehensive data protections, including encryption, to facilitate the secure storage, use, and
transmission of sensitive data;
•
annual privacy/data security training to all employees and contractors and regular awareness and testing
activities year-round regarding social engineering threats, such as phishing, for employees;
•
background checks on our employees, as permitted;
•
due diligence requirements and controls for third parties (e.g., service providers) with access to sensitive
data throughout the lifecycle of the relationship; and
•
a dedicated global information security team that partners with all technology groups to monitor,
prioritize, and remediate risks to the enterprise.
Governance
The Audit Committee of the Board of Directors has the primary responsibility of assisting our Board in the
oversight of policies and processes pertaining to the ERM program and specifically considers risks and controls
relating to, among other things, data and cybersecurity. Risks associated with cybersecurity threats are a top
priority for ongoing oversight by the ERM team and the Enterprise Risk Committee. Our Chief Risk Officer oversees
the activities of the Enterprise Risk Committee and, together with the Chief Information Security Officer (CISO),
briefs the Audit Committee and the Board of Directors on information security risk matters as a part of regular
ERM reports, with a deep dive focused on information security at least annually (or more frequently if
appropriate).
In addition, the Audit Committee receives regular reports on cybersecurity matters from the Chief Information
Officer (CIO) and the CISO. The Board of Directors is also updated by the CIO and CISO on a periodic basis. Our CIO,
who reports directly to the President and CEO, has over 30 years of leadership experience in technology-based
roles across multiple industries. Our CISO, who reports directly to the CIO, has extensive cybersecurity knowledge
and skills gained from over 25 years of information technology experience, with more than 15 years of Information
Security specialization. Our CISO is responsible for understanding, managing, and communicating cybersecurity
risks internally to our management (including the Enterprise Risk Committee on which he serves), and works
closely with our Legal department to oversee compliance with legal, regulatory, and contractual security
requirements.
Our CISO heads the Information Security team, which is responsible for implementing, monitoring, and
maintaining cybersecurity and data protection practices across our business. The Information Security team covers
a wide range of cyber and information security responsibilities. Our CISO also receives reports on cybersecurity
threats on an ongoing basis and regularly reviews risk management measures implemented by us to identify and
mitigate cybersecurity risks. In addition to our internal capabilities, we also periodically engage external
consultants, legal counsel, or other third-party advisors to assist with assessing, identifying, and managing
cybersecurity risks.
Material Cybersecurity Risks, Threats, and Incidents
We have been, and continue to be, the subject of cybersecurity threats, and we describe how risks from these
threats, if realized, are reasonably likely to materially affect us. See further discussion of these items in our Item
1A. Risk Factors of this Form 10-K. As of the date of this report, we have not identified risks from any known
cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us,
including our business strategy, results of operations, or financial condition. However, there can be no assurance
that cybersecurity threats will not have a material impact on us, including our business strategy, results of
operations, or financial condition, in the future.
ITEM 2. PROPERTIES
Most of our tax offices are operated under leases throughout the U.S., Canada and Australia.
We own our corporate headquarters, which is located in Kansas City, Missouri. Our Canadian executive offices
are located in a leased office in Calgary, Alberta. Our Australian executive offices are located in a leased office in
Thornleigh, New South Wales. Wave's headquarters are located in leased offices in Toronto, Ontario.
H&R Block, Inc. | 2024 Form 10-K
21
All current leased and owned facilities are in reasonably good repair and adequate to meet our needs.
ITEM 3. LEGAL PROCEEDINGS
For a description of our material pending legal proceedings, see discussion in Item 8, note 12 to the consolidated
financial statements.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
MARKET INFORMATION AND HOLDERS – H&R Block's common stock is traded on the New York Stock Exchange
(NYSE) under the symbol HRB. On July 31, 2024, there were 12,147 shareholders of record and the closing stock
price on the NYSE was $57.94 per share.
DIVIDENDS – Although we have historically paid dividends and plan to continue to do so, there can be no
assurances that circumstances will not change in the future that could affect our ability or decisions to pay
dividends.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER – A summary of our purchases of H&R Block common stock
during the fourth quarter of fiscal year 2024 is as follows:
(in 000s, except per share amounts)
Total Number of
Shares Purchased (1)
Average
Price Paid
per Share
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs (2)
Maximum Dollar Value of
Shares that May be Purchased
Under the Plans or Programs (2)(3)
April 1 – April 30
1
$
47.02
—
$
350,000
May 1 - May 31
9
$
47.96
—
$
350,000
June 1 - June 30
1
$
49.64
—
$
350,000
11
$
47.98
—
(1) We purchased approximately 11 thousand shares in connection with funding employee income tax withholding obligations arising upon the lapse of restrictions
on restricted share units.
(2) In August 2022, we announced that our Board of Directors approved a $1.25 billion share repurchase program, effective through June 2025.
(3) On August 15, 2024, we announced that our Board of Directors authorized a new $1.5 billion share repurchase program. This repurchase program does not have
an expiration date and replaced the previously existing share repurchase program.
22
2024 Form 10-K | H&R Block, Inc.
PERFORMANCE GRAPH – The following graph compares the cumulative five-year total return provided to
shareholders of H&R Block, Inc.'s common stock relative to the cumulative total returns of the S&P Midcap 400
index and the S&P 400 Consumer Services Industry index.
An investment of $100, with reinvestment of all dividends, is assumed to have been made in our common stock
and in each of the indexes on June 30, 2019, and its relative performance is tracked through June 30, 2024.
H&R Block, Inc.
S&P Midcap 400
S&P 400 Consumer Services Industry index
June 2019
June 2020
June 2021
June 2022
June 2023
June 2024
$0
$100
$200
$300
ITEM 6. SELECTED FINANCIAL DATA
Not applicable.
H&R Block, Inc. | 2024 Form 10-K
23
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Our subsidiaries provide assisted and DIY tax preparation solutions through multiple channels (including in-person,
online and mobile applications, virtual, and desktop software) and distribute H&R Block-branded products and
services, including those of our bank partners, to the general public primarily in the U.S., Canada and Australia. Tax
returns are either prepared by H&R Block tax professionals in one of our 6,643 company-owned or 2,168 franchise
offices (as of March 31, 2024), virtually or via an online review or prepared and filed by our clients through our DIY
tax solutions. We also offer small business solutions through our company-owned and franchise offices (including
in-person, online and virtual) and online through Wave. We report a single segment that includes all of our
continuing operations.
In fiscal year 2024, revenue increased $138.2 million over the prior year. U.S. assisted tax preparation revenues
were higher $107.7 million due to an increase in net average charge and company-owned tax return volumes. U.S.
DIY tax preparation revenues increased $35.1 million due to increases in online paid returns and paid net average
charge. Operating expenses increased $81.6 million due to higher labor costs and bad debt expense, which was
partially offset by lower consulting and outsourced services expenses. This resulted in an increase in pretax income
of $51.1 million, or 7.2%. Net income from continuing operations of $598.0 million increased $36.2 million from
the prior year.
Fiscal Year 2024 Compared to Fiscal Year 2023
Revenues
Operating Expenses
Net Income from Continuing
Operations
$3.61B
4.0%
$2.81B
3.0%
$598.0M
6.4%
Diluted EPS from Continuing Operations
EBITDA(1) from Continuing Operations
$4.14
Reported:
16.3%
$963.2M
5.3%
$4.41
Adjusted(1):
15.4%
(1) See "Non-GAAP Financial Information" at the end of this item for a reconciliation of non-GAAP measures.
24
2024 Form 10-K | H&R Block, Inc.
Consolidated – Financial Results
(in 000s, except per share amounts)
Year ended June 30,
2024
2023
$ Change
% Change
Revenues:
U.S. tax preparation and related services:
Assisted tax preparation
$
2,274,835
$
2,167,138
$
107,697
5.0 %
Royalties
204,802
210,631
(5,829)
(2.8) %
DIY tax preparation
349,812
314,758
35,054
11.1 %
Refund Transfers
142,249
143,310
(1,061)
(0.7) %
Peace of Mind® Extended Service Plan
93,087
95,181
(2,094)
(2.2) %
Tax Identity Shield®
33,386
38,265
(4,879)
(12.8) %
Other
51,555
45,252
6,303
13.9 %
Total U.S. tax preparation and related services
3,149,726
3,014,535
135,191
4.5 %
Financial services:
Emerald Card® and SpruceSM
76,093
84,651
(8,558)
(10.1) %
Interest and fee income on Emerald Advance®
40,933
47,554
(6,621)
(13.9) %
Total financial services
117,026
132,205
(15,179)
(11.5) %
International
247,123
235,131
11,992
5.1 %
Wave
96,472
90,314
6,158
6.8 %
Total revenues
$
3,610,347
$
3,472,185
$
138,162
4.0 %
Compensation and benefits:
Field wages
869,002
841,742
(27,260)
(3.2) %
Other wages
298,819
273,850
(24,969)
(9.1) %
Benefits and other compensation
228,723
220,530
(8,193)
(3.7) %
1,396,544
1,336,122
(60,422)
(4.5) %
Occupancy
432,461
428,167
(4,294)
(1.0) %
Marketing and advertising
277,747
286,255
8,508
3.0 %
Depreciation and amortization
121,784
130,501
8,717
6.7 %
Bad debt
91,523
60,401
(31,122)
(51.5) %
Other
485,011
482,041
(2,970)
(0.6) %
Total operating expenses
2,805,070
2,723,487
(81,583)
(3.0) %
Other income (expense), net
36,125
35,492
633
1.8 %
Interest expense on borrowings
(79,080)
(72,978)
(6,102)
(8.4) %
Income from continuing operations before income taxes
762,322
711,212
51,110
7.2 %
Income taxes
164,359
149,412
(14,947)
(10.0) %
Net income from continuing operations
597,963
561,800
36,163
6.4 %
Net loss from discontinued operations
(2,646)
(8,100)
5,454
67.3 %
Net income
$
595,317
$
553,700
$
41,617
7.5 %
DILUTED EARNINGS PER SHARE:
Continuing operations
$
4.14
$
3.56
$
0.58
16.3 %
Discontinued operations
(0.02)
(0.05)
0.03
60.0 %
Consolidated
$
4.12
$
3.51
$
0.61
17.4 %
Adjusted diluted EPS(1)
$
4.41
$
3.82
$
0.59
15.4 %
EBITDA(1)
$
963,186
$
914,691
$
48,495
5.3 %
(1) All non-GAAP measures are results from continuing operations. See "Non-GAAP Financial Information" at the end of this item for a reconciliation of non-GAAP
measures.
H&R Block, Inc. | 2024 Form 10-K
25
FISCAL YEAR 2024 COMPARED TO FISCAL YEAR 2023
Revenues increased $138.2 million, or 4.0%, from the prior year. U.S. assisted tax preparation revenues increased
$107.7 million, or 5.0%, due to a 4.0% increase in net average charge combined with higher company-owned tax
return volumes in the current year. U.S. royalties revenue decreased $5.8 million, or 2.8%, due to lower franchise
tax return volumes. During the year we purchased franchise offices which results in increasing tax preparation
revenues and decreasing royalties as the revenues and returns become company-owned after the acquisition.
During the year ended June 30, 2024 our total assisted tax return volume, which includes both company-owned
and franchise offices, decreased 1.3% from the prior year.
U.S. DIY tax preparation revenues increased $35.1 million, or 11.1%, due to a 5.4% increase in online paid
returns combined with a 6.8% increase in paid net average charge compared to the prior year.
Emerald Card® and SpruceSM revenues decreased $8.6 million, or 10.1%, due to lower Emerald Card® activity in
the current year as a result of less funds being loaded on the cards. Interest and fee income on Emerald Advance®
decreased $6.6 million, or 13.9%, due to lower customer fees under the new EA term loans, partially offset by
higher interest income due to the increase in EA term loans and a longer loan term in the current year.
International revenues increased $12.0 million, or 5.1%, due to higher tax returns prepared by our Canadian
and Australian operations, partially offset by unfavorable foreign currency exchange rates. Wave revenues
increased $6.2 million, or 6.8%, due to higher small business payments processing volumes.
Total operating expenses increased $81.6 million, or 3.0%, from the prior year. Field wages increased $27.3
million, or 3.2%, due to higher wages in the current year primarily resulting from an increase in company-owned
volumes. Other wages increased $25.0 million, or 9.1%, due to higher corporate bonuses and wages in the current
year. Benefits and other compensation increased $8.2 million, or 3.7%, due to higher payroll taxes.
Marketing and advertising expense decreased $8.5 million, or 3.0%, due to vendor refunds for expired
customer incentives and lower agency fees. Depreciation and amortization decreased $8.7 million, or 6.7%, due to
lower amortization of capitalized software. Bad debt expense increased $31.1 million, or 51.5%, due to higher EA
bad debt rates coupled with an increase in EAs and RTs compared to the prior year.
Other operating expenses increased $3.0 million, or 0.6%. The components of other expenses are as follows:
(in 000s)
Year ended June 30,
2024
2023
$ Change
% Change
Consulting and outsourced services
$
92,737
$
109,120
$
16,383
15.0 %
Bank partner fees
28,856
24,108
(4,748)
(19.7) %
Client claims and refunds
25,623
29,484
3,861
13.1 %
Employee and travel expenses
33,473
39,262
5,789
14.7 %
Technology-related expenses
108,694
102,753
(5,941)
(5.8) %
Credit card/bank charges
102,377
96,074
(6,303)
(6.6) %
Insurance
12,075
8,806
(3,269)
(37.1) %
Legal fees and settlements
28,536
12,058
(16,478)
(136.7) %
Supplies
23,090
29,278
6,188
21.1 %
Other
29,550
31,098
1,548
5.0 %
$
485,011
$
482,041
$
(2,970)
(0.6) %
Consulting and outsourced services expense decreased $16.4 million, or 15.0%, due to lower contract labor,
Emerald Card® data processing and call center expenses in the current year. Legal fees and settlements expense
increased $16.5 million in the current year.
We recorded income tax expense of $164.4 million in the current year compared to $149.4 million in the prior
year. The increase is due to higher pretax income and effective tax rate in the current year. The effective tax rate
for the year ended June 30, 2024, and 2023 was 21.6% and 21.0%, respectively. See Item 8, note 9 to the
consolidated financial statements for additional discussion.
26
2024 Form 10-K | H&R Block, Inc.
FISCAL YEAR 2023 COMPARED TO FISCAL YEAR 2022
The comparison of fiscal year 2023 to 2022 has been omitted from this Form 10-K, but can be found in our Form
10-K for the fiscal year ended June 30, 2023, filed on August 17, 2023.
FINANCIAL CONDITION
These comments should be read in conjunction with the consolidated balance sheets and consolidated statements
of cash flows included in Item 8.
CAPITAL RESOURCES AND LIQUIDITY –
OVERVIEW – Our primary sources of capital and liquidity include cash from operations (including changes in
working capital), draws on our CLOC, and issuances of debt. We use our sources of liquidity primarily to fund
working capital, service and repay debt, pay dividends, repurchase shares of our common stock, and acquire
businesses.
Our operations are highly seasonal and substantially all of our revenues and cash flow are generated during the
period from February through April in a typical year. Therefore, we normally require the use of cash to fund losses
and working capital needs, periodically resulting in a working capital deficit, from May through January. We
typically have relied on available cash balances from the prior tax season and borrowings to meet liquidity needs.
Given the likely availability of a number of liquidity options discussed herein, we believe that in the absence of
any unexpected developments, our existing sources of capital as of June 30, 2024 are sufficient to meet our future
operating and financing needs.
DISCUSSION OF CONSOLIDATED STATEMENTS OF CASH FLOWS – The following table summarizes our
statements of cash flows for fiscal year 2024 and 2023. See Item 8 for the complete consolidated statements of
cash flows for these periods.
(in 000s)
Year ended June 30,
2024
2023
Net cash provided by (used in):
Operating activities
$
720,860
$
821,841
Investing activities
(93,858)
(101,389)
Financing activities
(564,311)
(750,992)
Effects of exchange rates on cash
(2,814)
(4,857)
Net increase (decrease) in cash and cash equivalents, including restricted balances
$
59,877
$
(35,397)
Operating Activities. Cash provided by operating activities totaled $720.9 million for the year ended June 30,
2024 compared to $821.8 million in the prior year period. The change is primarily due to deferred taxes, the
receipt of income tax receivables in the prior year, and higher receivables in the current year, partially offset by
lower bonus payments in the current year.
Investing Activities. Cash used in investing activities totaled $93.9 million for the year ended June 30, 2024
compared to $101.4 million for the prior year period. The decrease is primarily due to lower capital expenditures
and payments to acquire businesses in the current year.
Financing Activities. Cash used in financing activities totaled $564.3 million for the year ended June 30, 2024
compared to $751.0 million for the prior year period. The change is primarily due to lower share repurchases in the
current year.
CASH REQUIREMENTS –
Dividends and Share Repurchase. Returning capital to shareholders in the form of dividends and the
repurchase of outstanding shares has historically been a significant component of our capital allocation plan.
We have consistently paid quarterly dividends. Dividends paid totaled $179.8 million and $177.9 million in the
years ended June 30, 2024 and 2023, respectively. Although we have historically paid dividends and plan to
H&R Block, Inc. | 2024 Form 10-K
27
continue to do so, there can be no assurances that circumstances will not change in the future that could affect our
ability or decisions to pay dividends.
On August 15, 2024, our Board of Directors authorized a new share repurchase program under which we may
repurchase up to $1.5 billion of our outstanding common stock. This repurchase program does not have an
expiration date and replaced the previously existing share repurchase program.
During the year ended June 30, 2024, we repurchased $350.1 million of our common stock at an average price
of $43.66 per share under the previously existing share repurchase authorization. In the prior year, we
repurchased $550.2 million of our common stock at an average price of $37.59 per share.
Share repurchases are subject to prevailing market prices, may be made in open market transactions (some of
which may be effectuated under SEC Rule 10b5-1) and remain subject to the discretion of our Board of Directors.
The Company may cancel or suspend the repurchase of shares at any time. Any repurchases will be funded
primarily through available cash and cash from operations. There can be no assurance that we will repurchase any
shares.
The following table summarizes our shares outstanding, shares repurchased, and annual dividends per share:
(in 000s, except per share amounts)
Year ended June 30,
2024
2023
2022
Shares outstanding
139,591
146,150
159,930
Shares repurchased
8,020
14,635
23,085
Dividends declared per share
$
1.28
$
1.16
$
1.08
Capital Investment. Capital expenditures totaled $63.7 million and $69.7 million for the years ended June 30,
2024 and 2023, respectively. Our capital expenditures relate primarily to recurring improvements to retail offices,
as well as investments in computers, software and related assets. In addition to our capital expenditures, we also
made payments to acquire businesses. We acquired franchise and competitor businesses totaling $43.4 million and
$48.2 million during the years ended June 30, 2024 and 2023, respectively. See Item 8, note 6 for additional
information on our acquisitions.
Contractual Obligations and Commercial Commitments. Effective October 20, 2023, we amended the Program
Management Agreement (PMA) with Pathward and entered into a new participation agreement related to EAs.
Additionally, on April 1, 2024, we further amended the PMA to facilitate an interest-bearing feature for Spruce
savings accounts. We are party to many contractual obligations involving commitments to make payments to third
parties, which impact our short-term and long-term liquidity and capital resource needs. Our contractual
obligations primarily consist of operating leases, contingent acquisition payments, and long-term debt and related
interest payments. See Item 8, note 7, 10, and 11 to the consolidated financial statements for additional
information.
FINANCING RESOURCES – Our CLOC has capacity up to $1.5 billion and is scheduled to expire in June 2026.
Proceeds under the CLOC may be used for working capital needs or for other general corporate purposes. We were
in compliance with our CLOC covenants as of June 30, 2024. As of June 30, 2024, amounts available to borrow
under the CLOC were not limited by the debt-to-EBITDA covenant. We had no balance outstanding under our CLOC
as of June 30, 2024.
See Item 8, note 7 to the consolidated financial statements for discussion of our CLOC and Senior Notes.
The following table provides ratings for debt issued by Block Financial LLC (Block Financial) as of June 30, 2024
and 2023:
As of
June 30, 2024
June 30, 2023
Short-term
Long-term
Outlook
Short-term
Long-term
Outlook
Moody's
P-3
Baa3
Stable
P-3
Baa3
Positive
S&P
A-2
BBB
Stable
A-2
BBB
Stable
CASH AND OTHER ASSETS – As of June 30, 2024, we held cash and cash equivalents, excluding restricted
amounts, of $1.1 billion, including $170.8 million held by our foreign subsidiaries.
28
2024 Form 10-K | H&R Block, Inc.
Foreign Operations. Seasonal borrowing needs of our Canadian operations are typically funded by our U.S.
operations. To mitigate foreign currency risk, we sometimes enter into foreign exchange forward contracts. There
were no forward contracts outstanding as of June 30, 2024.
We do not currently intend to repatriate non-borrowed funds held by our foreign subsidiaries in a manner that
would trigger a tax liability.
The impact of changes in foreign exchange rates during the period on our international cash balances resulted
in a decrease of $2.8 million and $4.9 million during the years ended June 30, 2024 and 2023, respectively.
SUMMARIZED GUARANTOR FINANCIAL STATEMENTS – Block Financial is a 100% owned indirect subsidiary of
H&R Block, Inc. Block Financial is the Issuer and H&R Block, Inc. is the full and unconditional Guarantor of our
Senior Notes, CLOC and other indebtedness issued from time to time.
The following table presents summarized financial information for H&R Block, Inc. (Guarantor) and Block
Financial (Issuer) on a combined basis after intercompany eliminations and excludes investments in and equity
earnings in non-guarantor subsidiaries.
SUMMARIZED BALANCE SHEET
(in 000s)
As of June 30, 2024
GUARANTOR AND ISSUER
Current assets
$
44,423
Noncurrent assets
1,778,832
Current liabilities
77,848
Noncurrent liabilities
1,492,211
SUMMARIZED STATEMENTS OF OPERATIONS
(in 000s)
Year ended June 30, 2024
GUARANTOR AND ISSUER
Total revenues
$
144,206
Income from continuing operations before income taxes
75,819
Net income from continuing operations
57,441
Net income
54,795
The table above reflects $1.7 billion of non-current intercompany receivables due to the Issuer from non-
guarantor subsidiaries.
H&R Block, Inc. | 2024 Form 10-K
29
CRITICAL ACCOUNTING ESTIMATES
We consider the estimates discussed below to be critical to understanding our financial statements, as they require
the use of significant judgment and estimation in order to measure, at a specific point in time, matters that are
inherently uncertain. Specific methods and assumptions for these critical accounting estimates are described in the
following paragraphs. We have reviewed and discussed each of these estimates with the Audit Committee of our
Board of Directors. For all of these estimates, we caution that future events rarely develop precisely as forecasted
and estimates routinely require adjustment and may require material adjustment.
See Item 8, note 1 to the consolidated financial statements for discussion of our significant accounting policies.
LITIGATION AND OTHER RELATED CONTINGENCIES –
Nature of Estimates Required. We accrue liabilities related to certain legal matters for which we believe it is
probable that a loss has been incurred and the amount of such loss can be reasonably estimated. Assessing the
likely outcome of pending or threatened litigation or other related loss contingencies, including the amount of
potential loss, if any, is highly subjective.
Assumptions and Approach Used. We are subject to pending or threatened litigation and other related loss
contingencies, which are described in Item 8, note 12 to the consolidated financial statements. It is our policy to
routinely assess the likelihood of any adverse judgments or outcomes related to legal matters, as well as ranges of
probable losses. A determination of the amount of the liability required to be accrued, if any, for these
contingencies is made after analysis of each known issue and an analysis of historical experience. In cases where
we have concluded that a loss is only reasonably possible or remote, or is not reasonably estimable, no liability is
accrued.
Sensitivity of Estimate to Change. It is reasonably possible that pending or future litigation and other related
loss contingencies may vary from the amounts accrued. Our estimate of the aggregate range of reasonably
possible losses includes (1) matters where a liability has been accrued and there is a reasonably possible loss in
excess of the amount accrued for that liability, and (2) matters where a liability has not been accrued but we
believe a loss is reasonably possible. This aggregate range represents only those losses as to which we are currently
able to estimate a reasonably possible loss or range of loss. It does not represent our maximum loss exposure. As
of June 30, 2024, we believe the estimate of the aggregate range of reasonably possible losses in excess of
amounts accrued, where the range of loss can be estimated, was not material.
However, our judgments on whether a loss is probable, reasonably possible, or remote, and our estimates of
probable loss amounts may differ from actual results due to difficulties in predicting changes in or interpretations
of, laws, predicting the outcome of court trials, arbitration hearings, settlement discussions and related activity,
predicting the outcome of class certification actions, and numerous other uncertainties. Due to the number of
claims which are periodically asserted against us, and the magnitude of damages sought in those claims, actual
losses in the future may significantly differ from our current estimates.
Our accrued liabilities for litigation and other related contingencies are disclosed in Item 8, note 12 to the
consolidated financial statements.
INCOME TAXES – UNCERTAIN TAX POSITIONS –
Nature of Estimates Required. The income tax laws of jurisdictions in which we operate are complex and subject
to different interpretations by the taxpayer and applicable government taxing authorities. Income tax returns filed
by us are based on our interpretation of these rules. The amount of income taxes we pay is subject to ongoing
audits by federal, state and foreign tax authorities, which may result in proposed assessments, including interest or
penalties. We accrue a liability for unrecognized tax benefits arising from uncertain tax positions reflecting our
judgment as to the ultimate resolution of the applicable issues.
Assumptions and Approach Used. Differences between a tax position taken or expected to be taken in our tax
returns and the amount of benefit recorded in our financial statements result in uncertain tax positions. Uncertain
tax positions are recorded in the balance sheet as either a liability or reductions to recorded tax assets as
applicable. Our uncertain tax positions arise from items such as apportionment of income for state purposes,
transfer pricing, and the deductibility of intercompany transactions. We evaluate each uncertain tax position based
30
2024 Form 10-K | H&R Block, Inc.
on its technical merits. For each position, we consider all applicable information including relevant tax laws, the
taxing authorities' potential position, our tax return position, and the possible settlement outcomes to determine
the amount of liability to record. In making this determination, we assume the tax authority has all relevant
information at its disposal.
Sensitivity of Estimate to Change. Our assessment of the technical merits and measurement of tax benefits
associated with uncertain tax positions is subject to a high degree of judgment and estimation. Actual results may
differ from our current judgments due to a variety of factors, including changes in law, interpretations of law by
taxing authorities that differ from our assessments, changes in the jurisdictions in which we operate and results of
routine tax examinations. We believe we have adequately provided for any reasonably foreseeable outcomes
related to these matters. However, our future results may include favorable or unfavorable adjustments to our
estimated tax liabilities in the period the assessments are made or resolved, or when statutes of limitation on
potential assessments expire. As a result, our effective tax rate may fluctuate on a quarterly basis.
A schedule of changes in our uncertain tax positions during the last three years is included in Item 8, note 9 to
the consolidated financial statements.
GOODWILL –
Nature of Estimates Required. We test goodwill for impairment annually as of February 1 or more frequently if
events occur or circumstances change which would, more likely than not, reduce the fair value of a reporting unit
below its carrying value. We first assess qualitative factors to determine whether it is more likely than not that the
fair value of a reporting unit is less than its carrying value. If, based on a review of qualitative factors, it is more
likely than not that the fair value of a reporting unit is less than its carrying value, we perform a quantitative
analysis. Our goodwill impairment analysis utilizes both income and market approaches, which includes revenue
and expense forecasts, selection of market multiples of comparable publicly traded companies and selection of a
discount rate, all of which are highly subjective.
Assumptions and Approach Used. Our goodwill impairment analysis is performed at the reporting unit level.
Our valuation methods include a discounted cash flow model for the income approach and the guideline public
company method for the market approach. The income approach requires significant management judgment with
respect to revenue and expense forecasts and selection of an appropriate discount rate. The market approach
requires significant assumptions related to the selection of comparable publicly traded companies and the market
multiples. Changes in projections or assumptions could materially affect our estimate of reporting unit fair values.
The use of different assumptions could increase or decrease estimated discounted future operating cash flows and
could affect our conclusion regarding the existence or amount of potential impairment.
Sensitivity of Estimate to Change. Estimates of fair value may be adversely impacted by declining economic
conditions and changes in the industries and markets in which we operate. Additionally, if future operating results
of our reporting units are below our current modeled expectations, fair value estimates may decline. Any of these
factors could result in future impairments, and those impairments could be significant.
A schedule of changes in our goodwill balances, including any impairment charges, is included in Item 8, note 6
to the consolidated financial statements.
NEW ACCOUNTING PRONOUNCEMENTS
See Item 8, note 1 to the consolidated financial statements for any recently issued accounting pronouncements.
REGULATORY ENVIRONMENT
The federal government, various state, local, provincial and foreign governments, and some self-regulatory
organizations have enacted statutes and ordinances, or adopted rules and regulations, regulating many aspects of
our business. These aspects include, but are not limited to, commercial income tax return preparation, income tax
courses, the electronic filing of income tax returns, the offering of RTs and RAs, privacy and data security,
consumer protection, marketing and advertising, franchising, antitrust and competition, sales methods, and
financial services and products. We work to comply with those laws that are applicable to us or our services or
products, and we continue to monitor developments in the regulatory environment in which we operate.
H&R Block, Inc. | 2024 Form 10-K
31
There has been recent increased regulatory focus in the area of financial services and products, which has
impacted or may in the future impact our program, our contractual arrangements with our bank partner or other
partners, or the offering of financial products and services to our clients. For example, as previously disclosed, in
2017 the CFPB published a final rule regulating certain consumer credit products (Payday Rule). The Payday Rule
was challenged through litigation, which stayed the compliance deadline. On May 16, 2024, the U.S. Supreme
Court upheld the constitutionality of the CFPB, and the new effective date of the Payday Rule is currently set for
March 30, 2025, though further developments are possible. Though we do not expect the Payday Rule to have a
material adverse impact on us, we will continue to monitor and analyze the potential impact of this and other
current and future regulatory developments related to financial services and products.
See further discussion of these items in our Item 1A. Risk Factors under "Legal and Regulatory Risks" of this Form
10-K.
From time to time, we receive inquiries from governmental authorities regarding the applicability of laws to our
services and products and other matters relating to our business. We cannot predict what effect future laws,
changes in interpretations of existing laws or the results of future governmental inquiries with respect to services
and products or other matters relating to our business may have on our consolidated financial position, results of
operations and cash flows. We have received certain governmental inquiries related to the IRS Free File Program
and our DIY tax preparation services. We may also be subject to future inquiries or other proceedings regarding
these programs or other aspects of our business. Regulatory inquiries may result in us incurring additional expense,
diversion of management's attention, adverse judgments, settlements, fines, penalties, injunctions or other relief.
See additional discussion of legal matters in Item 8, note 12 to the consolidated financial statements.
NON-GAAP FINANCIAL INFORMATION
Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial
performance prepared in accordance with 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.
We consider our non-GAAP financial measures to be performance measures and a useful metric for
management and investors to evaluate and compare the ongoing operating performance of our business. We
make adjustments for certain non-GAAP financial measures related to amortization of intangibles from acquisitions
and goodwill impairments. We may consider whether other significant items that arise in the future should be
excluded from our non-GAAP financial measures.
We measure the performance of our business using a variety of metrics, including earnings before interest,
taxes, depreciation and amortization (EBITDA) from continuing operations, adjusted EBITDA from continuing
operations, adjusted diluted earnings per share from continuing operations, free cash flow and free cash flow
yield. We also use EBITDA from continuing operations and pretax income of continuing operations, each subject to
permitted adjustments, as performance metrics in incentive compensation calculations for our employees.
The following is a reconciliation of net income to EBITDA from continuing operations, which is a non-GAAP
financial measure:
(in 000s)
Year ended
June 30, 2024
June 30, 2023
Net income - as reported
$
595,317
$
553,700
Discontinued operations, net
2,646
8,100
Net income from continuing operations - as reported
597,963
561,800
Add back:
Income taxes
164,359
149,412
Interest expense
79,080
72,978
Depreciation and amortization
121,784
130,501
365,223
352,891
EBITDA from continuing operations
$
963,186
$
914,691
32
2024 Form 10-K | H&R Block, Inc.
The following is a reconciliation of our results from continuing operations to our adjusted results from
continuing operations, which is a non-GAAP financial measure:
(in 000s, except per share amounts)
Year ended
June 30, 2024
June 30, 2023
Net income from continuing operations - as reported
$
597,963
$
561,800
Adjustments:
Amortization of intangibles related to acquisitions (pretax)
50,835
51,411
Tax effect of adjustments(1)
(11,751)
(10,797)
Adjusted net income from continuing operations
$
637,047
$
602,414
Diluted earnings per share from continuing operations - as reported
$
4.14
$
3.56
Adjustments, net of tax
0.27
0.26
Adjusted diluted earnings per share from continuing operations
$
4.41
$
3.82
(1) The tax effect of adjustments is the difference between the tax provision calculation on a GAAP basis and on an adjusted non-GAAP basis.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
INTEREST RATE RISK
GENERAL – We have a formal investment policy that strives to minimize the market risk exposure of our cash
equivalents, which are primarily affected by credit quality and movements in interest rates. The guidelines in our
investment policy focus on managing liquidity and preserving principal and earnings.
Our cash equivalents are primarily held for liquidity purposes and are comprised of high quality, short-term
investments, including money market funds and U.S. Treasuries. Because our cash and cash equivalents have a
short maturity, our portfolio's market value is relatively insensitive to interest rate changes.
Interest expense on our CLOC borrowings is determined based on short-term interest rates. As our CLOC
borrowings are generally seasonal, interest rate risk typically increases during the months of November through
March. We had no outstanding balance on our CLOC as of June 30, 2024.
Our long-term debt as of June 30, 2024, consists of fixed-rate Senior Notes; therefore, a change in interest rates
would have no impact on consolidated pretax earnings until these notes mature or are refinanced. The interest we
pay on our Senior Notes is fixed and is subject to adjustment based upon our credit ratings. See Item 8, note 7 to
the consolidated financial statements.
FOREIGN EXCHANGE RATE RISK
Our operations in international markets are exposed to movements in currency exchange rates. The currencies
primarily involved are the Canadian dollar and the Australian dollar. We translate revenues and expenses related
to these operations at the average of exchange rates in effect during the period. Assets and liabilities of foreign
subsidiaries are translated into U.S. dollars at exchange rates at the end of the year. Translation adjustments are
recorded as a separate component of other comprehensive income in stockholders' equity. Translation of financial
results into U.S. dollars does not presently materially affect, and has not historically materially affected, our
consolidated financial results, although such changes do affect the year-to-year comparability of the operating
results in U.S. dollars of our international businesses. The impact of changes in foreign exchange rates during the
period on our international cash balances resulted in a decrease of $2.8 million and $4.9 million during the years
ended June 30, 2024 and 2023, respectively. We estimate a 10% change in foreign exchange rates by itself would
impact consolidated pretax income for the years ended June 30, 2024 and 2023 by $4.3 million and $3.8 million,
respectively, and cash balances, excluding restricted balances, as of June 30, 2024 and 2023 by $16.7 million and
$13.0 million, respectively.
We generally use foreign exchange forward contracts to mitigate foreign currency exchange rate risk for loans
we advance to our Canadian operations. We had no forward contracts outstanding at June 30, 2024 or 2023.
H&R Block, Inc. | 2024 Form 10-K
33
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
DISCUSSION OF FINANCIAL RESPONSIBILITY
H&R Block's management is responsible for the integrity and objectivity of the information contained in this
document. Management is responsible for the consistency of reporting this information and for ensuring that
accounting principles generally accepted in the U.S. are properly applied. In discharging this responsibility,
management maintains an extensive program of internal audits and requires members of management to certify
financial information within their scope of management. Our system of internal control over financial reporting
also includes formal policies and procedures, including a Code of Business Ethics and Conduct that reinforces our
commitment to ethical business conduct and is designed to encourage our employees and directors to act with
high standards of integrity in all that they do.
The Audit Committee of the Board of Directors, composed solely of independent outside directors, meets
periodically with management, the independent auditor and the Vice President, Audit Services (our chief internal
auditor) to review matters relating to our financial statements, internal audit activities, internal accounting
controls and non-audit services provided by the independent auditors. The independent auditor and the Vice
President, Audit Services have full access to the Audit Committee and meet with the committee, both with and
without management present, to discuss the scope and results of their audits, including internal controls and
financial matters.
Deloitte & Touche LLP audited our consolidated financial statements for the fiscal years 2024, 2023 and 2022.
The audits were conducted in accordance with the standards of the Public Company Accounting Oversight Board
(United States).
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as
such term is defined in Exchange Act Rules 12a-15(f). Under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal
control over financial reporting based on the criteria established in "Internal Control - Integrated Framework"
issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), using the 2013
framework, as of June 30, 2024.
Based on our assessment, our Chief Executive Officer and Chief Financial Officer concluded that as of June 30,
2024, the Company's internal control over financial reporting was effective based on the criteria set forth by COSO,
using the 2013 framework. The Company's external auditor, Deloitte & Touche LLP, an independent registered
public accounting firm, has issued an audit report on the effectiveness of the Company's internal control over
financial reporting.
/s/ Jeffrey J. Jones II
/s/ Tony G. Bowen
Jeffrey J. Jones II
Tony G. Bowen
President and Chief Executive Officer
Chief Financial Officer
34
2024 Form 10-K | H&R Block, Inc.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of H&R Block, Inc.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of H&R Block, Inc. and subsidiaries (the
"Company") as of June 30, 2024 and 2023, the related consolidated statements of operations and comprehensive
income, stockholders' equity, and cash flows, for each of the three years in the period ended June 30, 2024, and
the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements
present fairly, in all material respects, the financial position of the Company as of June 30, 2024 and 2023, and the
results of its operations and its cash flows for each of the three years in the period ended June 30, 2024, in
conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the Company's internal control over financial reporting as of June 30, 2024, based on
criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated August 15, 2024, expressed an unqualified
opinion on the Company's internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on the Company's financial statements based on our audits. We are a public accounting firm registered
with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial
statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial
statements that were communicated or required to be communicated to the audit committee and that (1) relate
to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective, or complex judgments. The communication of critical audit matters does not alter in any way our
opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters
below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they
relate.
Income Taxes - Uncertain Tax Positions - Refer to Note 9 to the consolidated financial statements
Critical Audit Matter Description
The Company operates in multiple income tax jurisdictions both within the United States and internationally.
Accordingly, management must determine the appropriate allocation of income to each of these jurisdictions
based on transfer pricing analyses of comparable companies and predictions of future economic conditions.
Transfer pricing terms and conditions may be scrutinized by local tax authorities during an audit and any resulting
changes may impact the mix of earnings in countries with differing statutory tax rates. The Company accrues a
liability for unrecognized tax benefits arising from uncertain tax positions reflecting their judgment as to the
ultimate resolution of the applicable issues. For each position, management considers all applicable information
including relevant tax laws, the taxing authorities' potential position, management’s tax return position, and the
possible settlement outcomes to determine the amount of liability to record.
We identified the Company’s determination of uncertain tax positions measured in accordance with the
Company’s transfer pricing policies as a critical audit matter because of the significant judgment in the application
H&R Block, Inc. | 2024 Form 10-K
35
of the tax law in applying the arm’s length standard to intercompany transactions and scrutiny by local tax
authorities. The significant level of judgment increases the uncertainty in evaluating the valuation of tax balances,
including any uncertain tax positions that relate to the Company’s transfer pricing. As a result, we utilized a high
degree of auditor judgment and increased the extent of work performed, including involving our income tax
specialists to evaluate whether management’s judgments in interpreting and applying tax laws were appropriate.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the Company’s uncertain tax positions for transfer pricing included the following,
among others:
•
We tested the effectiveness of controls over management’s evaluation and determination of uncertain
tax positions. This evaluation includes management’s assessment of tax positions taken by the Company
on its tax returns, including transfer pricing terms and conditions, and the related recorded amounts for
uncertain tax positions.
•
With the assistance of our income tax specialists, we evaluated the Company’s transfer pricing
methodologies and performed the following:
◦
Evaluated the appropriateness of management’s application of jurisdictional tax regulations in
applying the arm’s length standard to intercompany transactions.
◦
Evaluated the application of the transfer pricing method to transactions subject to transfer
pricing.
◦
Tested the application of the transfer pricing policies by legal entity through an independent
calculation.
◦
Evaluated management’s approach to identifying uncertain tax positions related to changes in
the transfer pricing terms and conditions and tested the calculation of the tax positions at the
individual legal entity level and at the consolidated level.
Goodwill - Wave Reporting Unit - Refer to Note 6 to the consolidated financial statements
Critical Audit Matter Description
The Company tests goodwill for impairment annually as of February 1 ("measurement date"), or more frequently if
events occur or circumstances change which would, more likely than not, reduce the fair value of a reporting unit
below its carrying value. The Company determines the fair value of the Wave reporting unit using the income
approach ("discounted cash flow model") and the market approach ("guideline public company method"). The
determination of the fair value using the discounted cash flow model requires management to make significant
estimates and assumptions related to forecasts of future revenues, operating margins, and the discount rate. The
determination of the fair value using the guideline public company method requires management to make
significant assumptions related to the selection of market multiples of comparable publicly traded companies. The
goodwill balance was $780 million as of February 1, 2024, of which $180 million relates to the Wave reporting unit.
The estimated fair value of the Wave reporting unit exceeded its carrying value as of the measurement date and,
therefore, no impairment was recognized.
We identified the Company's goodwill impairment assessment for the Wave reporting unit as of the measurement
date as a critical audit matter because of the significant judgments made by management to estimate the fair value
of Wave. This required a high degree of auditor judgment and an increased extent of effort, including the need to
involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of
management’s estimates and assumptions related to forecasts of future revenues and operating margins and
selection of market multiples of comparable publicly traded companies and the discount rate.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the forecasts of future revenues and operating margins ("forecasts") and selection
of market multiples of comparable publicly traded companies and the discount rate for the Wave reporting unit
included the following, among others:
36
2024 Form 10-K | H&R Block, Inc.
•
We tested the effectiveness of the control over management’s evaluation and determination of estimates
and assumptions related to the forecast of future revenues and operating margins and selection of market
multiples of comparable publicly traded companies and the discount rate.
•
We evaluated management’s ability to accurately forecast by comparing actual results to management’s
historical forecasts.
•
We evaluated the reasonableness of management’s revenue and operating margin forecasts by
comparing the forecasts to (1) the Company's historical revenue growth and operating margin rates, (2)
internal communications to management and the Board of Directors, (3) forecasted information included
in industry reports, applicable market data, and guideline public company information, and (4) underlying
analyses detailing business strategies and growth plans.
•
With the assistance of our fair value specialists, we evaluated the discount rate, including testing the
mathematical accuracy of the calculations, developing a range of independent estimates, and comparing
those to the discount rate selected by management.
•
With the assistance of our fair value specialists, we evaluated the market multiples, including comparing
the reporting unit’s growth and profitability to the guideline public companies, testing the underlying
source information and mathematical accuracy of the calculations, and comparing the multiples selected
by management to the guideline companies.
/s/ Deloitte & Touche LLP
Kansas City, Missouri
August 15, 2024
We have served as the Company's auditor since 2007.
H&R Block, Inc. | 2024 Form 10-K
37
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of H&R Block, Inc.
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of H&R Block, Inc. and subsidiaries (the “Company”)
as of June 30, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company
maintained, in all material respects, effective internal control over financial reporting as of June 30, 2024, based on
criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States) (PCAOB), the consolidated financial statements as of and for the year ended June 30, 2024, of the
Company and our report dated August 15, 2024, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and
for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management's Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on
the Company’s internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting
was maintained in all material respects. Our audit included obtaining an understanding of internal control over
financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and
operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
/s/ Deloitte & Touche LLP
Kansas City, Missouri
August 15, 2024
38
2024 Form 10-K | H&R Block, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(in 000s, except per share amounts)
Year ended June 30,
2024
2023
2022
REVENUES:
Service revenues
$
3,302,337
$
3,156,921
$
3,134,686
Royalty, product and other revenues
308,010
315,264
328,584
3,610,347
3,472,185
3,463,270
OPERATING EXPENSES:
Costs of revenues
1,991,566
1,923,452
1,881,262
Selling, general and administrative
813,504
800,035
837,111
Total operating expenses
2,805,070
2,723,487
2,718,373
Other income (expense), net
36,125
35,492
2,454
Interest expense on borrowings
(79,080)
(72,978)
(88,282)
Income from continuing operations before income taxes
762,322
711,212
659,069
Income taxes
164,359
149,412
98,423
Net income from continuing operations
597,963
561,800
560,646
Net loss from discontinued operations, net of tax benefits of $790,
$2,423 and $2,093
(2,646)
(8,100)
(6,972)
NET INCOME
$
595,317
$
553,700
$
553,674
BASIC EARNINGS PER SHARE:
Continuing operations
$
4.20
$
3.63
$
3.31
Discontinued operations
(0.02)
(0.05)
(0.04)
Consolidated
$
4.18
$
3.58
$
3.27
DILUTED EARNINGS PER SHARE:
Continuing operations
$
4.14
$
3.56
$
3.26
Discontinued operations
(0.02)
(0.05)
(0.04)
Consolidated
$
4.12
$
3.51
$
3.22
COMPREHENSIVE INCOME:
Net income
$
595,317
$
553,700
$
553,674
Change in foreign currency translation adjustments
(11,746)
(15,454)
(21,733)
Other comprehensive loss
(11,746)
(15,454)
(21,733)
Comprehensive income
$
583,571
$
538,246
$
531,941
See accompanying notes to consolidated financial statements.
H&R Block, Inc. | 2024 Form 10-K
39
CONSOLIDATED BALANCE SHEETS
(in 000s, except share
and per share amounts)
As of
June 30, 2024
June 30, 2023
ASSETS
Cash and cash equivalents
$
1,053,326
$
986,975
Cash and cash equivalents - restricted
21,867
28,341
Receivables, less allowance for credit losses of $61,182 and $55,502
69,075
59,987
Prepaid expenses and other current assets
95,208
112,183
Total current assets
1,239,476
1,187,486
Property and equipment, at cost, less accumulated depreciation and amortization of
$838,814 and $846,177
131,319
130,015
Operating lease right of use asset
461,986
438,299
Intangible assets, net
264,102
277,043
Goodwill
785,226
775,453
Deferred tax assets and income taxes receivable
271,658
211,391
Other noncurrent assets
65,043
52,571
Total assets
$
3,218,810
$
3,072,258
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable and accrued expenses
$
155,830
$
159,901
Accrued salaries, wages and payroll taxes
105,548
95,154
Accrued income taxes and reserves for uncertain tax positions
318,830
271,800
Operating lease liabilities
206,070
205,391
Deferred revenue and other current liabilities
191,050
206,536
Total current liabilities
977,328
938,782
Long-term debt
1,491,095
1,488,974
Deferred tax liabilities and reserves for uncertain tax positions
291,063
264,567
Operating lease liabilities
265,373
240,543
Deferred revenue and other noncurrent liabilities
103,357
107,328
Total liabilities
3,128,216
3,040,194
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, no par, stated value $.01 per share, 800,000,000 shares authorized,
shares issued of 170,915,771 and 178,935,578
1,709
1,789
Additional paid-in capital
762,583
770,376
Accumulated other comprehensive loss
(48,845)
(37,099)
Retained earnings (deficit)
12,654
(48,677)
Less treasury shares, at cost, of 31,324,609 and 32,785,658
(637,507)
(654,325)
Total stockholders' equity
90,594
32,064
Total liabilities and stockholders' equity
$
3,218,810
$
3,072,258
See accompanying notes to consolidated financial statements.
40
2024 Form 10-K | H&R Block, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in 000s)
Year ended June 30,
2024
2023
2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$
595,317
$
553,700
$
553,674
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization
121,784
130,501
142,178
Provision for credit losses
82,567
52,290
66,807
Deferred taxes
(40,940)
49,579
(53,352)
Stock-based compensation
34,277
31,326
34,252
Changes in assets and liabilities, net of acquisitions:
Receivables
(108,394)
(57,244)
(37,889)
Prepaid expenses, other current and noncurrent assets
(7,287)
(7,011)
(1,944)
Accounts payable, accrued expenses, salaries, wages and
payroll taxes
(4,662)
(67,627)
(19,645)
Deferred revenue, other current and noncurrent liabilities
(28,507)
(4,773)
7,342
Income tax receivables, accrued income taxes and income tax
reserves
75,444
144,164
118,713
Other, net
1,261
(3,064)
(1,599)
Net cash provided by operating activities
720,860
821,841
808,537
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
(63,678)
(69,698)
(61,955)
Payments made for business acquisitions, net of cash acquired
(43,358)
(48,246)
(35,920)
Franchise loans funded
(18,891)
(21,633)
(18,467)
Payments from franchisees
24,926
27,350
30,899
Other, net
7,143
10,838
8,902
Net cash used in investing activities
(93,858)
(101,389)
(76,541)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of line of credit borrowings
(1,025,000)
(970,000)
(705,000)
Proceeds from line of credit borrowings
1,025,000
970,000
705,000
Repayments of long-term debt
—
—
(500,000)
Dividends paid
(179,775)
(177,925)
(186,476)
Repurchase of common stock, including shares surrendered
(379,569)
(568,952)
(563,174)
Other, net
(4,967)
(4,115)
(7,696)
Net cash used in financing activities
(564,311)
(750,992)
(1,257,346)
Effects of exchange rate changes on cash
(2,814)
(4,857)
(8,101)
Net increase (decrease) in cash and cash equivalents, including
restricted balances
59,877
(35,397)
(533,451)
Cash, cash equivalents and restricted cash, beginning of the period
1,015,316
1,050,713
1,584,164
Cash, cash equivalents and restricted cash, end of the period
$
1,075,193
$
1,015,316
$
1,050,713
SUPPLEMENTARY CASH FLOW DATA:
Income taxes paid (received), net
$
131,173
$
(45,539) $
31,689
Interest paid on borrowings
75,694
69,554
81,960
Accrued additions to property and equipment
3,052
2,238
4,315
Accrued dividends payable to common shareholders
44,653
42,953
43,093
See accompanying notes to consolidated financial statements.
H&R Block, Inc. | 2024 Form 10-K
41
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(amounts in 000s, except per share amounts)
Common Stock
Additional
Paid-in
Capital
Accumulated Other
Comprehensive
Income (Loss)(1)
Retained
Earnings
(Deficit)
Treasury Stock
Total
Stockholders’
Equity
Shares
Amount
Shares
Amount
Balances as of July 1, 2021
216,656
$
2,167
$
779,465
$
88
$
286,694
(34,842) $
(680,356) $
388,058
Net income
—
—
—
—
553,674
—
—
553,674
Other comprehensive loss
—
—
—
(21,733)
—
—
—
(21,733)
Stock-based compensation
—
—
28,189
—
—
—
—
28,189
Stock-based awards exercised or vested
—
—
(21,622)
—
(3,126)
1,634
31,937
7,189
Acquisition of treasury shares(2)
—
—
—
—
—
(433)
(12,828)
(12,828)
Repurchase and retirement of common shares
(23,085)
(231)
(13,850)
—
(536,265)
—
—
(550,346)
Cash dividends declared - $1.08 per share
—
—
—
—
(180,572)
—
—
(180,572)
Balances as of June 30, 2022
193,571
$
1,936
$
772,182
$
(21,645) $
120,405
(33,641) $
(661,247) $
211,631
Net income
—
—
—
—
553,700
—
—
553,700
Other comprehensive loss
—
—
—
(15,454)
—
—
—
(15,454)
Stock-based compensation
—
—
27,086
—
—
—
—
27,086
Stock-based awards exercised or vested
—
—
(20,258)
—
(1,899)
1,298
25,656
3,499
Acquisition of treasury shares(2)
—
—
—
—
—
(443)
(18,734)
(18,734)
Repurchase and retirement of common shares
(14,635)
(147)
(8,634)
—
(543,098)
—
—
(551,879)
Cash dividends declared - $1.16 per share
—
—
—
—
(177,785)
—
—
(177,785)
Balances as of June 30, 2023
178,936
$
1,789
$
770,376
$
(37,099) $
(48,677)
(32,786) $
(654,325) $
32,064
Net income
—
—
—
—
595,317
—
—
595,317
Other comprehensive loss
—
—
—
(11,746)
—
—
—
(11,746)
Stock-based compensation
—
—
30,733
—
—
—
—
30,733
Stock-based awards exercised or vested
—
—
(33,794)
—
(3,703)
2,305
46,267
8,770
Acquisition of treasury shares(2)
—
—
—
—
—
(844)
(29,449)
(29,449)
Repurchase and retirement of common shares
(8,020)
(80)
(4,732)
—
(348,808)
—
—
(353,620)
Cash dividends declared - $1.28 per share
—
—
—
—
(181,475)
—
—
(181,475)
Balances as of June 30, 2024
170,916
$
1,709
$
762,583
$
(48,845) $
12,654
(31,325) $
(637,507) $
90,594
(1) The balance of our accumulated other comprehensive income (loss) consists of foreign currency translation adjustments.
(2) Represents shares swapped or surrendered to us in connection with the vesting or exercise of stock-based awards.
See accompanying notes to consolidated financial statements.
42
2024 Form 10-K | H&R Block, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF OPERATIONS – Our subsidiaries provide assisted and do-it-yourself (DIY) tax return preparation
solutions through multiple channels (including in-person, online and mobile applications, virtual, and desktop
software) and distribute H&R Block-branded services and products, including those of our bank partners, to the
general public primarily in the United States (U.S.), Canada and Australia. Tax returns are either prepared by H&R
Block tax professionals (in company-owned or franchise offices, virtually or via an online review) or prepared and
filed by our clients through our DIY tax solutions. We also offer small business solutions through our company-
owned and franchise offices (including in-person, online and virtual) and online through Wave.
"H&R Block," "the Company," "we," "our" and "us" are used interchangeably to refer to H&R Block, Inc., to H&R
Block, Inc. and its subsidiaries, or to H&R Block, Inc.'s operating subsidiaries, as appropriate to the context.
PRINCIPLES OF CONSOLIDATION – The consolidated financial statements include the accounts of the Company
and our subsidiaries. Intercompany transactions and balances have been eliminated.
DISCONTINUED OPERATIONS – Our discontinued operations include the results of operations of Sand Canyon
Corporation, previously known as Option One Mortgage Corporation (including its subsidiaries, collectively, SCC),
which exited its mortgage business in fiscal year 2008.
SEGMENT INFORMATION – We report a single segment that includes all of our continuing operations.
MANAGEMENT ESTIMATES – The preparation of financial statements in conformity with accounting principles
generally accepted in the U.S. (GAAP) requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant
estimates, assumptions and judgments are applied in the evaluation of contingent losses associated with pending
claims and litigation, reserves for uncertain tax positions, and fair value of reporting units. Estimates have been
prepared based on the best information available as of each balance sheet date. As such, actual results could differ
materially from those estimates.
CASH AND CASH EQUIVALENTS – All non-restricted highly liquid instruments maturing within three months at
acquisition are considered to be cash equivalents.
Outstanding checks in excess of funds on deposit (book overdrafts) included in accounts payable totaled $2.8
million and $3.3 million as of June 30, 2024 and 2023, respectively.
CASH AND CASH EQUIVALENTS – RESTRICTED – Cash and cash equivalents – restricted consists primarily of cash
held by our captive insurance subsidiary that is expected to be used to pay claims.
RECEIVABLES AND RELATED ALLOWANCES – Our trade receivables consist primarily of accounts receivable from
tax clients for tax return preparation and related fees. The allowance for credit losses for these receivables
requires management's judgment regarding collectibility and current economic conditions to establish an amount
considered by management to be adequate to cover estimated losses as of the balance sheet date. Losses from tax
clients for tax return preparation and related fees are not specifically identified and charged off; instead they are
evaluated on a pooled basis. At the end of the fiscal year the outstanding balances on these receivables are
evaluated based on collections received and expected collections over subsequent years. We establish an
allowance for credit losses at an amount that we believe reflects the receivable at net realizable value. Typically in
December of each year we charge-off the receivables to an amount we believe represents the net realizable value.
Our financing receivables consist primarily of participations in H&R Block Emerald Advance® (EA) term loans,
loans made to franchisees, and amounts due under H&R Block's Instant Refund® (Instant Refund).
Our accounting policies related to receivables and related allowances are discussed further in note 4.
PROPERTY AND EQUIPMENT – Buildings, equipment and leasehold improvements are initially recorded at cost
and are depreciated over the estimated useful life of the assets using the straight-line method. Estimated useful
lives are generally 15 to 40 years for buildings, two to five years for computers and other equipment, three to five
H&R Block, Inc. | 2024 Form 10-K
43
years for purchased software and up to eight years for leasehold improvements. Property and equipment is retired
when no longer in use.
GOODWILL AND INTANGIBLE ASSETS – Goodwill represents costs in excess of fair values assigned to the
underlying net assets of acquired businesses. Goodwill is not amortized, but rather is tested for impairment
annually as of February 1, or more frequently if indications of potential impairment exist.
Intangible assets, including internally-developed software, with finite lives are amortized over their estimated
useful lives and are reviewed for impairment whenever events or changes in circumstances indicate that their
carrying amount may not be recoverable. Intangible assets are typically amortized over the estimated useful life of
the assets using the straight-line method. Fully amortized intangible assets are retired at the end of their economic
useful life.
We first assess qualitative factors to determine whether it is more likely than not that the fair value of a
reporting unit is less than its carrying value. If, based on a review of qualitative factors, it is more likely than not
that the fair value of a reporting unit is less than its carrying value, we perform a quantitative analysis. If the
quantitative analysis indicates the carrying value of a reporting unit exceeds its fair value, we measure any goodwill
impairment losses as the amount by which the carrying amount of a reporting unit exceeds its fair value, not to
exceed the total amount of goodwill allocated to that reporting unit. See additional discussion in note 6.
LEASES – Operating lease right-of-use (ROU) assets represent our right to use an underlying asset for the lease
term and operating lease liabilities represent our obligation to make lease payments arising from the lease. The
majority of our lease portfolio consists of retail office space in the U.S., Canada, and Australia. The contract terms
for these retail offices generally are from May 1 to April 30, and generally run two to five years.
We record operating lease ROU assets and operating lease liabilities based on the discounted future minimum
lease payments over the term of the lease. We generally do not include renewal options in the term of the lease.
As the rates implicit in our leases are not readily determinable, we use our incremental borrowing rate based on
the lease term and geographic location in calculating the discounted future minimum lease payments.
We recognize lease expenses for our operating leases on a straight-line basis. For lease payments that are
subject to adjustments based on indexes or rates, the most current index or rate adjustments were included in the
measurement of our ROU assets and lease liabilities at commencement of the lease. Variable lease costs, including
non-lease components (such as common area maintenance, utilities, insurance, and taxes) and certain index-based
changes in lease payments, are expensed as incurred. Our ROU assets are reviewed for impairment whenever
events or changes in circumstances indicate that their carrying amount may not be recoverable.
FOREIGN CURRENCY – The financial statements of the Company’s foreign operations are translated into U.S.
dollars. Assets and liabilities are translated at current exchange rates as of the balance sheet date, equity accounts
at historical exchange rates, while income statement accounts are translated at the average rates in effect during
the year. Translation adjustments are not included in net income, but are recorded as a separate component of
other comprehensive income in stockholders' equity. Foreign currency gains and losses included in operating
results for fiscal years 2024, 2023 and 2022 were not material.
TREASURY SHARES – We record shares of common stock repurchased by us as treasury shares, at cost, resulting
in a reduction of stockholders' equity. Periodically, we may retire shares held in treasury as determined by our
Board of Directors. We typically reissue treasury shares as part of our stock-based compensation programs. When
shares are reissued, we determine the cost using the average cost method.
FAIR VALUE MEASUREMENT – We use the following classification of financial instruments pursuant to the fair
value hierarchy methodologies for assets measured at fair value:
▪
Level 1 – inputs to the valuation are quoted prices in an active market for identical assets.
▪
Level 2 – inputs to the valuation include quoted prices for similar assets in active markets utilizing a third-
party pricing service to determine fair value.
▪
Level 3 – valuation is based on significant inputs that are unobservable in the market and our own estimates
of assumptions that we believe market participants would use in pricing the asset.
44
2024 Form 10-K | H&R Block, Inc.
Assets measured on a recurring basis are initially measured at fair value and are required to be remeasured at
fair value in the financial statements at each reporting date.
Fair value estimates, methods and assumptions are set forth below. The fair value was not estimated for assets
and liabilities that are not considered financial instruments.
▪
Cash and cash equivalents, including restricted – Fair value approximates the carrying amount (Level 1).
▪
Receivables, net – short-term – For short-term balances the carrying values reported in the balance sheet
approximate fair market value due to the relative short-term nature of the respective instruments (Level 1).
▪
Receivables, net – long-term – The carrying values for the long-term portion of loans to franchisees
approximate fair market value due to variable interest rates, low historical delinquency rates and franchise
territories serving as collateral (Level 1). Long-term EA, Refund Transfer (RT) and Instant Refund receivables
are carried at net realizable value which approximates fair value (Level 3). Net realizable value is determined
based on historical and projected collection rates.
▪
Long-term debt – The fair value of our Senior Notes is based on quotes from multiple banks (Level 2). See
note 7 for fair value.
▪
Contingent consideration – Fair value approximates the carrying amount (Level 3). See note 10 for the
carrying amount.
REVENUE RECOGNITION – Revenue is recognized when a contract has been established with a customer and
when we satisfy the performance obligations by the transfer of a service or product to the customer. Revenue is
the amount of consideration we expect to receive for our services and products and excludes sales taxes. The
majority of our services and products have multiple performance obligations. We have certain services for which,
the various performance obligations are generally provided simultaneously at a point in time, and revenue is
recognized at that time. We have certain services and products where we have multiple performance obligations
that are provided at various points in time. For these services and products, we allocate the transaction price to
the various performance obligations based on relative standalone selling prices and recognize the revenue when
the respective performance obligations have been satisfied. We have determined that our contracts do not contain
a significant financing component.
Service revenues consist of assisted and online tax preparation revenues, fees for electronic filing, revenues
from RTs, Emerald Card®, SpruceSM, Peace of Mind® (POM), Tax Identity Shield® (TIS) and Wave.
Assisted tax preparation. Services include tax preparation and electronic filing or printing of the completed tax
return. Revenues from tax preparation and printing for clients that choose to print and mail their returns, are
recognized when a completed return is accepted by the customer. Revenues for electronic filing are recognized
when the return is electronically filed.
Royalties. Revenues are based on contractual percentages of franchise gross receipts and are generally
recorded in the period in which the services are provided by the franchisee to the customer.
DIY tax preparation. Revenues include fees for online and desktop tax preparation software and for electronic
filing or printing. Revenues for online software and printing for clients that choose to print and mail their returns,
are recognized when the customer uses the software to complete a return. Revenues for desktop software are
recognized when the software is sold to the end user. Revenues for electronic filing are recognized when the
return is electronically filed.
Refund Transfer. Revenues are recognized when the Internal Revenue Service (IRS) filing acknowledgment is
received and the bank account is established at our bank partner, PathwardTM, N.A. (Pathward), a wholly-owned
subsidiary of Pathward Financial, Inc.
Emerald Card® and SpruceSM. Revenues consist of interchange income from the use of debit cards and fees
paid by cardholders. Interchange income is a fee paid by merchants to our bank partner through the card
networks. Revenues associated with Emerald Card® and SpruceSM are recognized based on authorization of
cardholder transactions.
Peace of Mind® Extended Service Plan. Revenues are initially deferred and recognized over the term of the
plan, based on the historical pattern of actual claims paid, as claims paid represent the transfer of POM services to
the customer. The plan is effective for the life of the tax return, which can be up to six years; however, the majority
H&R Block, Inc. | 2024 Form 10-K
45
of claims are incurred in years two and three after the sale of POM. POM has multiple performance obligations
where we represent our clients if they are audited by a taxing authority, and assume the cost, subject to certain
limits, of additional taxes owed by a client resulting from errors attributable to H&R Block. Incremental wages are
also deferred and recognized over the term of the plan, in conjunction with the revenues earned.
Tax Identity Shield®. Revenues are initially deferred and are recognized as the various services are provided to
the client, either by us or a third party, throughout the term of the contract, which generally ends on April 30th of
the following year. TIS has multiple performance obligations where we provide clients assistance in helping protect
their tax identity and access to services to help restore their tax identity, if necessary. Protection services include a
daily scan of the dark web for personal information, a monthly scan for the client's social security number in credit
header data, notifying clients if their information is detected on a tax return filed through H&R Block, and
obtaining additional IRS identity protections when eligible.
Interest and fee income on Emerald Advance®. Interest income is recorded over the life of the loan and late
fees are recorded when the loan becomes 15 days past due.
Wave®. Revenues primarily consist of fees received to process payment transactions and are generally
calculated as a percentage of the transaction amounts processed. Revenues are recognized upon authorization of
the transaction.
MARKETING AND ADVERTISING – Marketing and advertising costs are expensed as used and totaled $277.7
million, $286.3 million and $284.2 million in fiscal years 2024, 2023 and 2022, respectively.
EMPLOYEE BENEFIT PLANS – We have a 401(k) defined contribution plan in the U.S., and similar plans
internationally, covering eligible full-time and seasonal employees following the completion of an eligibility period.
Employer contributions to these plans are discretionary and totaled $25.7 million, $25.6 million and $25.1 million
for continuing operations in fiscal years 2024, 2023 and 2022, respectively.
We have severance plans covering executives and eligible regular full-time or part-time active employees who
incur a qualifying termination. Expenses related to severance benefits for continuing operations totaled $2.6
million, $6.9 million and $2.6 million in fiscal years 2024, 2023 and 2022, respectively.
NEW ACCOUNTING PRONOUNCEMENTS – In November 2023, the Financial Accounting Standards Board (FASB)
issued Accounting Standards Update No. 2023-07 (ASU 2023-07), “Segment Reporting (Topic 280): Improvements
to Reportable Segment Disclosures,” which requires companies to disclose significant segment expenses that are
regularly provided to the chief operating decision maker. ASU 2023-07 will be effective for annual periods
beginning in fiscal year 2025 and interim periods beginning in fiscal year 2026. ASU 2023-07 must be applied
retrospectively to all prior periods presented in the financial statements.
46
2024 Form 10-K | H&R Block, Inc.
NOTE 2: REVENUE RECOGNITION
The majority of our revenues are from our U.S. tax services business. The following table disaggregates our U.S.
revenues by major service line, with revenues from our international tax services businesses and from Wave
included as separate lines:
(in 000s)
Year ended June 30,
2024
2023
2022
Revenues:
U.S. assisted tax preparation
$
2,274,835
$
2,167,138
$
2,094,612
U.S. royalties
204,802
210,631
225,242
U.S. DIY tax preparation
349,812
314,758
319,086
Refund Transfers
142,249
143,310
162,893
Peace of Mind® Extended Service Plan
93,087
95,181
94,637
Tax Identity Shield®
33,386
38,265
39,114
Emerald Card® and SpruceSM
76,093
84,651
125,444
Interest and fee income on Emerald Advance®
40,933
47,554
43,981
International
247,123
235,131
231,335
Wave
96,472
90,314
80,965
Other
51,555
45,252
45,961
Total revenues
$
3,610,347
$
3,472,185
$
3,463,270
Changes in the balances of deferred revenue and wages for POM are as follows:
(in 000s)
POM
Deferred Revenue
Deferred Wages
Year ended June 30,
2024
2023
2024
2023
Balance, beginning of the year
$
167,257
$
173,486
$
21,828
$
19,495
Amounts deferred
97,125
103,136
11,819
14,247
Amounts recognized on previous deferrals
(107,772)
(109,365)
(13,435)
(11,914)
Balance, end of the year
$
156,610
$
167,257
$
20,212
$
21,828
As of June 30, 2024, deferred revenue related to POM was $156.6 million. We expect that $93.3 million will be
recognized over the next twelve months, while the remaining balance will be recognized over the following five
years. POM deferred revenues are included in deferred revenue and other liabilities in the consolidated balance
sheets. POM deferred wages are included in prepaid expenses and other current assets and other noncurrent
assets.
As of June 30, 2024 and 2023, TIS deferred revenue was $21.4 million and $25.2 million, respectively. The
related liabilities are included in deferred revenue and other current liabilities in the consolidated balance sheets.
All deferred revenue related to TIS as of June 30, 2024 will be recognized by April 2025.
A significant portion of our accounts receivable balances arise from services and products that we provide to
our customers, with the exception of those related to EAs which arise from purchased participation interests with
our bank partner. The majority of our receivables are related to RTs. Generally the prices of our services and
products are fixed and determinable at the time of sale. For RTs, we record a receivable for our fees which is then
collected at the time the IRS issues the client’s refund. Our receivables from customers are generally collected on a
periodic basis during and subsequent to the tax season. See note 4 for our accounts receivable balances.
NOTE 3: EARNINGS PER SHARE
Basic and diluted earnings per share is computed using the two-class method. The two-class method is an earnings
allocation formula that determines net income per share for each class of common stock and participating security
according to dividends declared and participation rights in undistributed earnings. Per share amounts are
computed by dividing net income from continuing operations attributable to common shareholders by the
weighted average shares outstanding during each period.
H&R Block, Inc. | 2024 Form 10-K
47
The computations of basic and diluted earnings per share from continuing operations are as follows:
(in 000s, except per share amounts)
Year ended June 30,
2024
2023
2022
Net income from continuing operations attributable to shareholders
$
597,963
$
561,800
$
560,646
Amounts allocated to participating securities
(2,390)
(2,272)
(2,468)
Net income from continuing operations attributable to common
shareholders
$
595,573
$
559,528
$
558,178
Basic weighted average common shares
141,932
154,044
168,519
Potential dilutive shares
1,958
3,204
2,916
Dilutive weighted average common shares
143,890
157,248
171,435
Earnings per share from continuing operations attributable to common
shareholders:
Basic
$
4.20
$
3.63
$
3.31
Diluted
4.14
3.56
3.26
Diluted earnings per share excludes the impact of shares of common stock issuable upon the lapse of certain
restrictions or the exercise of options to purchase 0.1 million, 0.6 million and 0.4 million shares of stock for fiscal
years 2024, 2023 and 2022, respectively, as the effect would be antidilutive.
NOTE 4: RECEIVABLES
Receivables, net of their related allowance, consist of the following:
(in 000s)
As of
June 30, 2024
June 30, 2023
Short-term
Long-term
Short-term
Long-term
Loans to franchisees
$
5,917
$
16,498
$
6,344
$
19,206
Receivables for U.S. assisted and DIY tax preparation and related fees
18,440
5,332
11,061
6,824
H&R Block's Instant Refund® receivables
2,947
207
8,499
414
Emerald Advance®
17,867
21,360
10,834
7,089
Software receivables from retailers
1,029
—
1,650
—
Royalties and other receivables from franchisees
5,808
—
3,416
—
Wave payment processing receivables
1,078
—
964
—
Other
15,989
427
17,219
1,108
$
69,075
$
43,824
$
59,987
$
34,641
Balances presented above as short-term are included in receivables, while the long-term portions are included
in other noncurrent assets in the consolidated balance sheets.
Loans to Franchisees. Franchisee loan balances consist of term loans made primarily to finance the purchase of
franchises and short-term lines of credit primarily for the purpose of funding seasonal working capital needs. As of
June 30, 2024 and 2023 loans with a principal balance more than 90 days past due, or on non-accrual status, are
not material.
The credit quality of these receivables is assessed at origination at an individual franchisee level. Payment
history is monitored on a regular basis. Based upon our internal analysis and underwriting activities, we believe all
loans to franchisees are of similar credit quality. Loans are evaluated for collectibility when they become
delinquent or more than 90 days past due. Amounts deemed to be uncollectible are written off to bad debt
expense and bad debt related to these loans has typically been immaterial. Additionally, the franchise territory
serves as additional protection in the event a franchisee defaults on the loan, as we may revoke franchise rights,
write off the remaining balance of the loan and refranchise the territory or begin operating it as company-owned.
48
2024 Form 10-K | H&R Block, Inc.
H&R Block's Instant Refund®. Our Canadian operations advance refunds due to certain clients from the Canada
Revenue Agency (CRA), in exchange for a fee. The total fee we charge for this service is mandated by legislation
which is administered by the CRA. The client assigns to us the full amount of the tax refund to be issued by the CRA
and the refund is then sent by the CRA directly to us. The amount we advance to clients under this program is the
amount of their estimated refund, less our fees, any amounts expected to be withheld by the CRA for amounts the
client may owe to government authorities and any amounts owed to us from prior years. The CRA system for
tracking amounts due to various government agencies also indicates if the client has already filed a return, does
not exist in CRA records, or is bankrupt. This serves to greatly reduce the amounts of uncollectible receivables and
the risk of fraudulent returns. H&R Block's Instant Refund® amounts are generally received from the CRA within 60
days of filing the client's return, with the remaining balance collectible from the client.
Credit losses from these receivables are not specifically identified and charged off; instead we review the credit
quality of these receivables on a pooled basis, segregated by the tax return year of origination with older years
being deemed more unlikely to be repaid. At the end of the fiscal year, the outstanding balances on these
receivables are evaluated based on collections received and expected collections over subsequent tax seasons. We
establish an allowance for credit losses at an amount that we believe reflects the receivable at net realizable value.
In December of each year we charge-off the receivables to an amount we believe represents the net realizable
value.
Balances and amounts on non-accrual status, classified as impaired, or more than 60 days past due, by tax
return year of origination, as of June 30, 2024 are as follows:
(in 000s)
Tax return year of origination
Balance
More Than 60 Days
Past Due
2023
$
2,589
$
1,832
2022 and prior
1,575
1,575
4,164
$
3,407
Allowance
(1,010)
Net balance
$
3,154
H&R Block Emerald Advance®. Historically, Emerald Advance® lines of credit have been offered to clients in our
offices from mid-November through mid-January. If the borrower met certain criteria as agreed in the loan terms,
the line of credit could be utilized year-round (Revolving Loan). In fiscal year 2024, EAs were offered as term loans,
and we discontinued EA lines of credit, including the Revolving Loans. EA lines of credit required an annual
paydown on February 15, and any amounts unpaid were placed on non-accrual status as of March 1. EA term loans
are interest bearing with principal and interest due in full on March 31, late fees assessed as of April 15, and any
amounts unpaid are placed on non-accrual status as of April 30. EA term loans are offered by our bank partner. We
purchase participation interests in their loans, as discussed further in note 10.
Credit losses from EAs are not specifically identified and charged off; instead we review the credit quality of our
purchased participation interest in EA receivables on a pooled basis, which are segregated by the fiscal year of
origination with older years being deemed more unlikely to be repaid. At the end of the fiscal year, the outstanding
balances on these receivables are evaluated based on collections received and expected collections over
subsequent years. We establish an allowance for credit losses at an amount that we believe reflects the receivable
at net realizable value. Typically, in December of each year, we charge-off the receivables and the related
allowance for EA lines of credit, excluding Revolving Loans, to an amount we believe represents the net realizable
value. However, due to the discontinuation of EA lines of credit, we charged-off the receivables and the related
allowance of EA lines of credit and Revolving Loans during the quarter ended September 30, 2023 to an amount
that we believe represents net realizable value.
H&R Block, Inc. | 2024 Form 10-K
49
Balances and amounts on non-accrual status, classified as impaired, or more than 60 days past due, by fiscal
year of origination as of June 30, 2024, are as follows:
(in 000s)
Fiscal year of origination
Balance
Non-Accrual
2024
$
64,847
$
64,847
2023 and prior – Lines of credit and Revolving Loans
7,916
7,916
72,763
$
72,763
Allowance
(33,536)
Net balance
$
39,227
Allowance for Credit Losses. Activity in the allowance for credit losses for EAs and all other short-term and long-
term receivables for the years ended June 30, 2024, 2023 and 2022 is as follows:
(in 000s)
EAs
All Other
Total
Balances as of July 1, 2021
$
27,704
$
60,272
$
87,976
Provision for credit losses
14,814
51,993
66,807
Charge-offs, recoveries and other
(16,377)
(61,139)
(77,516)
Balances as of June 30, 2022
26,141
51,126
77,267
Provision for credit losses
16,059
36,231
52,290
Charge-offs, recoveries and other
(14,814)
(52,249)
(67,063)
Balances as of June 30, 2023
27,386
35,108
62,494
Provision for credit losses
33,864
48,703
82,567
Charge-offs, recoveries and other
(27,714)
(38,484)
(66,198)
Balances as of June 30, 2024
$
33,536
$
45,327
$
78,863
Gross charge-offs of EAs were $27.7 million for the year ended June 30, 2024, of which $15.4 million related to
EA lines of credit originated in fiscal year 2023 and $12.3 million related to Revolving Loans.
NOTE 5: PROPERTY AND EQUIPMENT
The components of property and equipment, net of accumulated depreciation and amortization, are as follows:
(in 000s)
As of
June 30, 2024
June 30, 2023
Buildings
$
23,200
$
28,954
Computers and other equipment
46,880
49,750
Leasehold improvements
59,553
49,428
Purchased software
247
506
Land and other non-depreciable assets
1,439
1,377
$
131,319
$
130,015
Depreciation expense of property and equipment from continuing operations for fiscal years 2024, 2023 and
2022 was $60.7 million, $58.5 million and $64.7 million, respectively.
The carrying value of long-lived assets held outside the U.S., which is comprised of property and equipment,
totaled $20.0 million and $19.2 million as of June 30, 2024 and 2023 respectively.
50
2024 Form 10-K | H&R Block, Inc.
NOTE 6: GOODWILL AND INTANGIBLE ASSETS
Changes in the carrying amount of goodwill for the periods ended June 30, 2024 and 2023 are as follows:
(in 000s)
Goodwill
Accumulated
Impairment Losses
Net
Balances as of July 1,2022
$
898,698
$
(138,297) $
760,401
Acquisitions(1)
23,832
—
23,832
Disposals and foreign currency changes, net
(8,780)
—
(8,780)
Impairments
—
—
—
Balances as of June 30, 2023
913,750
(138,297)
775,453
Acquisitions(1)
19,086
—
19,086
Disposals and foreign currency changes, net
(9,313)
—
(9,313)
Impairments
—
—
—
Balances as of June 30, 2024
$
923,523
$
(138,297) $
785,226
(1) All goodwill added during the period is expected to be tax-deductible for federal income tax reporting.
We test goodwill for impairment annually as of February 1, or more frequently if events occur or circumstances
change which would, more likely than not, reduce the fair value of a reporting unit below its carrying value.
Components of intangible assets are as follows:
(in 000s)
Gross
Carrying
Amount
Accumulated
Amortization
Net
June 30, 2024:
Reacquired franchise rights
$
403,955
$
(228,157) $
175,798
Customer relationships
331,435
(270,245)
61,190
Internally-developed software
122,673
(119,610)
3,063
Noncompete agreements
21,977
(19,494)
2,483
Purchased technology
70,100
(51,432)
18,668
Trade name
5,800
(2,900)
2,900
$
955,940
$
(691,838) $
264,102
June 30, 2023:
Reacquired franchise rights
$
392,452
$
(212,495) $
179,957
Customer relationships
351,695
(301,062)
50,633
Internally-developed software
133,380
(120,054)
13,326
Noncompete agreements
42,596
(39,617)
2,979
Franchise agreements
19,201
(18,668)
533
Purchased technology
122,700
(96,565)
26,135
Trade name
5,800
(2,320)
3,480
$
1,067,824
$
(790,781) $
277,043
Amortization of intangible assets from continuing operations for the fiscal years ended June 30, 2024, 2023 and
2022 was $61.1 million, $72.0 million and $77.5 million, respectively. Estimated amortization of intangible assets
for fiscal years 2025, 2026, 2027, 2028 and 2029 is $43.3 million, $33.6 million, $27.0 million, $19.1 million and
$11.1 million, respectively.
H&R Block, Inc. | 2024 Form 10-K
51
We made payments to acquire businesses totaling $43.4 million, $48.2 million and $35.9 million during the fiscal
years ended June 30, 2024, 2023 and 2022, respectively. The amounts and weighted-average lives of assets
acquired during fiscal year 2024 are as follows:
(dollars in 000s)
Amount
Weighted-Average
Life (in years)
Customer relationships
$
35,040
5
Reacquired franchise rights
11,778
5
Noncompete agreements
1,611
5
Total
$
48,429
5
NOTE 7: LONG-TERM DEBT
The components of long-term debt are as follows:
(in 000s)
As of
June 30, 2024
June 30, 2023
Senior Notes, 5.250%, due October 2025 (1)
$
350,000
$
350,000
Senior Notes, 2.500%, due July 2028 (1)
500,000
500,000
Senior Notes, 3.875%, due August 2030 (1)
650,000
650,000
Debt issuance costs and discounts
(8,905)
(11,025)
Total long-term debt
1,491,095
1,488,975
Less: Current portion
—
—
Long-term portion
$
1,491,095
$
1,488,975
Estimated fair value of long-term debt
$
1,391,000
$
1,339,000
(1) The Senior Notes are not redeemable by the bondholders prior to maturity, although we have the right to redeem some or all of these notes at any time, at
specified redemption prices. The interest rates on our Senior Notes are subject to adjustment based upon our credit ratings.
Our unsecured committed line of credit (CLOC) provides for an unsecured senior revolving credit facility in the
aggregate principal amount of $1.5 billion, which includes a $175.0 million sublimit for swingline loans and a $50.0
million sublimit for standby letters of credit. We may request increases in the aggregate principal amount of the
revolving credit facility of up to $500.0 million, subject to obtaining commitments from lenders and meeting
certain other conditions. The CLOC will mature on June 11, 2026, unless extended pursuant to the terms of the
CLOC, at which time all outstanding amounts thereunder will be due and payable. Our CLOC includes an annual
facility fee, which will vary depending on our then current credit ratings.
The CLOC is subject to various conditions, triggers, events or occurrences that could result in earlier
termination and contains customary representations, warranties, covenants and events of default, including,
without limitation: (1) a covenant requiring the Company to maintain a debt-to-EBITDA ratio, as defined by the
CLOC agreement, calculated on a consolidated basis of no greater than (a) 3.50 to 1.00 as of the last day of each
fiscal quarter ending on March 31, June 30, and September 30 of each year and (b) 4.50 to 1.00 as of the last day of
each fiscal quarter ending on December 31 of each year; (2) a covenant requiring us to maintain an interest
coverage ratio (EBITDA-to-interest expense) calculated on a consolidated basis of not less than 2.50 to 1.00 as of
the last date of any fiscal quarter; and (3) covenants restricting our ability to incur certain additional debt, incur
liens, merge or consolidate with other companies, sell or dispose of assets (including equity interests), liquidate or
dissolve, engage in certain transactions with affiliates or enter into certain restrictive agreements. The CLOC
includes provisions for an equity cure which could potentially allow us to independently cure certain defaults.
Proceeds under the CLOC may be used for working capital needs or for other general corporate purposes. We were
in compliance with these requirements as of June 30, 2024.
We had no outstanding balance under our CLOC as of June 30, 2024 and amounts available to borrow were not
limited by the debt-to-EBITDA covenant as of June 30, 2024.
OTHER INFORMATION – The aggregate payments required to retire long-term debt are $350.0 million in fiscal
year 2026, $500.0 million in fiscal year 2029 and $650.0 million in fiscal year 2031.
52
2024 Form 10-K | H&R Block, Inc.
NOTE 8: STOCK-BASED COMPENSATION
We have a stock-based Long Term Incentive Plan (Plan), under which we can grant stock options, restricted shares,
performance-based share units, restricted share units, deferred stock units and other forms of equity to
employees, non-employee directors and consultants. Stock-based compensation expense and related tax items are
as follows:
(in 000s)
Year ended June 30,
2024
2023
2022
Stock-based compensation expense
$
34,277
$
31,326
$
34,252
Tax benefit
11,567
7,386
6,494
Realized tax benefit
10,939
6,942
5,438
As of June 30, 2024, we had 8.6 million shares reserved for future awards under our Plan. We issue treasury
shares to satisfy the exercise or vesting of stock-based awards and believe we have adequate treasury shares
available for future issuances.
We measure the fair value of restricted share units (other than performance-based share units) based on the
closing price of our common stock on the grant date. We measure the fair value of performance-based share units
based on the Monte Carlo valuation model, taking into account, as necessary, those provisions of the performance-
based share units that are characterized as market conditions. We generally expense the grant-date fair value, net
of estimated forfeitures, over the vesting period on a straight-line basis.
Options and restricted share units (other than performance-based share units) granted to employees typically
vest pro-rata based upon service over a three-year period with a portion vesting each year. Performance-based
share units granted to employees typically cliff vest at the end of a three-year period based upon satisfaction of
both service-based and performance-based requirements. The number of performance-based share units that
ultimately vest can range from zero up to 200 percent of the number granted, based on the form of the award,
which can vary by year of grant. The performance metrics for these awards typically consist of earnings before
interest, taxes, depreciation and amortization (EBITDA), total shareholder return or our stock price. Deferred stock
units granted to non-employee directors vest when they are granted and are settled six months after the director
separates from service as a director of the Company, except in the case of death.
All share units granted to employees and non-employee directors receive cumulative dividend equivalents to
the extent of the units ultimately vesting at the time of distribution. Options granted under our Plan have a
maximum contractual term of ten years.
A summary of restricted share units and deferred stock units, including those that are performance-based, for
the year ended June 30, 2024, is as follows:
(shares in 000s)
Restricted Share Units and Deferred
Stock Units
Performance-Based
Share Units
Shares
Weighted-Average
Grant Date
Fair Value
Shares
Weighted-Average
Grant Date
Fair Value
Outstanding, beginning of the year
1,750
$
30.96
1,687
$
25.04
Granted(1)
673
40.30
1,041
43.62
Released
(423)
33.99
(1,641)
16.56
Forfeited
(133)
38.45
(66)
39.99
Outstanding, end of the year
1,867
$
33.31
1,021
$
37.91
(1) Includes adjustments for performance achievement and dividend equivalents.
The total fair value of shares vesting during fiscal years 2024, 2023 and 2022 was $39.1 million, $33.6 million
and $33.3 million, respectively. As of June 30, 2024, we had $40.8 million of total unrecognized compensation cost
related to these shares. This cost is expected to be recognized over a weighted-average period of two years.
H&R Block, Inc. | 2024 Form 10-K
53
When valuing our performance-based share units on the grant date, we typically estimate the expected
volatility using historical volatility for H&R Block, Inc. and selected comparable companies. The dividend yield is
calculated based on the current dividend and the market price of our common stock on the grant date. The risk-
free interest rate is based on the U.S. Treasury zero-coupon yield curve in effect on the grant date. Both expected
volatility and the risk-free interest rate are based on a period that approximates the expected term. The following
assumptions were used to value performance-based share units using the Monte Carlo valuation model during the
periods:
Year ended June 30,
2024
2023
2022
Expected volatility
10.17% - 157.11%
24.80% - 163.58%
23.19% - 88.48%
Expected term
3 years
3 years
3 years
Dividend yield (1)
0%
0%
0%
Risk-free interest rate
4.54%
3.43 %
0.37%
Weighted-average fair value
$
44.06
$
48.58
$
27.07
(1) The valuation model assumes that dividends are reinvested by the Company on a continuous basis.
NOTE 9: INCOME TAXES
We file a consolidated federal income tax return in the U.S. with the IRS and file tax returns in various state, local,
and foreign jurisdictions. Tax returns are typically examined and either settled upon completion of the examination
or through the appeals process. With respect to federal, state and local jurisdictions and countries outside of the
U.S., we are typically subject to examination for three to six years after the income tax returns have been filed. On
November 7, 2022, the IRS commenced their examination of our 2020 tax return and related carryback claims to
tax years 2015 through 2018. Our U.S. federal income tax returns for tax years 2014 and prior are closed. Although
the outcome of tax audits is always uncertain, we believe that adequate amounts of tax, interest, and penalties
have been provided for in the accompanying consolidated financial statements for any adjustments that might be
incurred due to federal, state, local or foreign audits.
The components of income from continuing operations upon which domestic and foreign income taxes have
been provided are as follows:
(in 000s)
Year ended June 30,
2024
2023
2022
Domestic
$
489,912
$
447,900
$
478,166
Foreign
272,410
263,312
180,903
$
762,322
$
711,212
$
659,069
We operate in multiple income tax jurisdictions both within the U.S. and internationally. Accordingly,
management must determine the appropriate allocation of income to each of these jurisdictions based on transfer
pricing analyses of comparable companies and predictions of future economic conditions. Although these
intercompany transactions reflect arm’s length terms and the proper transfer pricing documentation is in place,
transfer pricing terms and conditions may be scrutinized by local tax authorities during an audit and any resulting
changes may impact our mix of earnings in countries with differing statutory tax rates.
54
2024 Form 10-K | H&R Block, Inc.
The reconciliation between the statutory U.S. federal tax rate and our effective tax rate from continuing
operations is as follows:
Year ended June 30,
2024
2023
2022
U.S. statutory tax rate
21.0 %
21.0 %
21.0 %
Change in tax rate resulting from:
State income taxes, net of federal income tax benefit
1.4 %
1.6 %
2.1 %
Earnings taxed in foreign jurisdictions
(1.9) %
(2.9) %
(2.4) %
Permanent differences
0.7 %
0.6 %
0.9 %
Uncertain tax positions
(0.4) %
(0.9) %
(6.3) %
U.S. tax on income from foreign affiliates
4.1 %
3.1 %
2.0 %
Federal income tax credits
(2.4) %
(1.3) %
(2.6) %
Foreign investment recapture
2.6 %
— %
0.6 %
Change in valuation allowance - domestic
— %
(0.4) %
0.2 %
Change in valuation allowance - foreign
(2.8) %
0.7 %
(0.3) %
Other
(0.7) %
(0.5) %
(0.3) %
Effective tax rate
21.6 %
21.0 %
14.9 %
The components of income tax expense for continuing operations are as follows:
(in 000s)
Year ended June 30,
2024
2023
2022
Current:
Federal
$
191,664
$
97,430
$
121,319
State
9,695
19,023
25,108
Foreign
18,240
18,214
8,956
219,599
134,667
155,383
Deferred:
Federal
(59,441)
23,367
(58,487)
State
(11,749)
1,860
(2,016)
Foreign
15,950
(10,482)
3,543
(55,240)
14,745
(56,960)
Total income taxes for continuing operations
$
164,359
$
149,412
$
98,423
H&R Block, Inc. | 2024 Form 10-K
55
We account for income taxes under the asset and liability method, which requires us to record deferred income
tax assets and liabilities for future tax consequences attributable to differences between the financial statement
carrying value of existing assets and liabilities and their respective tax basis. Deferred taxes are determined
separately for each tax-paying component within each tax jurisdiction based on provisions of enacted tax law. The
effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that
includes the enactment date.
We record a valuation allowance to reduce our deferred tax assets to the estimated amount that we believe is
more likely than not to be realized. Determination of a valuation allowance for deferred tax assets requires that we
make judgments about future matters that are not certain, including projections of future taxable income and
evaluating potential tax-planning strategies.
The significant components of deferred tax assets and liabilities are reflected in the following table:
(in 000s)
As of
June 30, 2024
June 30, 2023
Deferred tax assets:
Accrued expenses
$
3,796
$
2,540
Deferred revenue
50,944
17,702
Allowance for credit losses
30,581
22,715
Deferred and stock-based compensation
8,060
6,629
Net operating loss carry-forward
63,398
116,956
Lease liabilities
117,483
111,721
Federal tax benefits related to state unrecognized tax benefits
26,841
22,037
Property and equipment
2,260
—
Internally developed software
15,063
—
Intangibles - intellectual property
71,367
80,879
Valuation allowance
(16,569)
(57,566)
Total deferred tax assets
373,224
323,613
Deferred tax liabilities:
Prepaid expenses and other
(3,001)
(5,954)
Lease right of use assets
(115,128)
(109,814)
Property and equipment
—
(1,421)
Income tax method change
—
(1,018)
Intangibles
(51,398)
(56,651)
Total deferred tax liabilities
(169,527)
(174,858)
Net deferred tax assets
$
203,697
$
148,755
A reconciliation of the deferred tax assets and liabilities and the corresponding amounts reported in the
consolidated balance sheets is as follows:
(in 000s)
As of
June 30, 2024
June 30, 2023
Deferred income tax assets
$
203,697
$
152,699
Deferred tax liabilities
—
(3,944)
Net deferred tax asset
$
203,697
$
148,755
56
2024 Form 10-K | H&R Block, Inc.
Changes in our valuation allowance for fiscal years 2024, 2023 and 2022 are as follows:
(in 000s)
Year ended June 30,
2024
2023
2022
Balance, beginning of the year
$
57,566
$
55,172
$
55,784
Additions charged to costs and expenses
4,584
6,438
4,752
Deductions
(45,581)
(4,044)
(5,364)
Balance, end of the year
$
16,569
$
57,566
$
55,172
Our valuation allowance on deferred tax assets has a net decrease of $41.0 million during the current period.
The $4.6 million of additions charged to costs and expenses were due to net operating loss deferred tax assets
generated by current year foreign and domestic losses that we do not expect to utilize in future years. This
increase is offset by a $45.6 million decrease for adjustments to certain foreign net operating losses utilized in the
current fiscal year or for adjustments to net operating losses that are no longer available due to expiration. Of the
net $41.0 million decrease in valuation allowance, $21.6 million impacted the effective tax rate due to state and
foreign net operating losses we were able to utilize in the current period or now expect to utilize in future periods.
The remaining $19.4 million decrease in valuation allowance was offset by decreases to net operating loss deferred
tax assets and therefore did not impact the effective tax rate.
Certain of our subsidiaries file stand-alone returns in various state, local and foreign jurisdictions, and others
join in filing consolidated or combined returns in such jurisdictions. As of June 30, 2024, we had net operating
losses of $63.4 million in various states and foreign jurisdictions. The amount of state and foreign net operating
losses varies by taxing jurisdiction. We maintain a valuation allowance of $5.6 million on state net operating losses
and $5.6 million on foreign net operating losses for the portion of such loses that, more likely than not, will not be
realized. Of the total net operating loss deferred tax assets, $52.2 million are more likely than not to be realized.
Net operating loss deferred tax assets of $11.2 million will expire in varying amounts during fiscal years 2025
through 2042 and the remaining $52.2 million have no expiration.
We do not currently intend to repatriate non-borrowed funds held by our foreign subsidiaries in a manner that
would trigger a tax liability; therefore, no provision has been made for income taxes that might be payable upon
remittance of such earnings. The amount of unrecognized tax liability on these foreign earnings, net of expected
foreign tax credits, is immaterial as of June 30, 2024.
Changes in unrecognized tax benefits for fiscal years 2024, 2023 and 2022 are as follows:
(in 000s)
Year ended June 30,
2024
2023
2022
Balance, beginning of the year
$
240,063
$
232,004
$
264,323
Additions based on tax positions related to prior years
1,232
1,252
2,499
Reductions based on tax positions related to prior years
(4,604)
—
(5,332)
Additions based on tax positions related to the current year
37,063
33,330
32,948
Reductions related to settlements with tax authorities
(4,472)
(661)
(9,800)
Expiration of statute of limitations
(17,495)
(25,862)
(52,634)
Balance, end of the year
$
251,787
$
240,063
$
232,004
Included in the total gross unrecognized tax benefit ending balance as of June 30, 2024, 2023 and 2022 are
$207.5 million, $209.0 million and $203.7 million respectively, which if recognized, would impact our effective tax
rate. Increases from prior year are primarily related to additions based on current year tax positions offset by
expirations of statute of limitations and settlements with taxing authorities.
We believe it is reasonably possible that the balance of unrecognized tax benefits could decrease by
approximately $122.0 million within the next twelve months. The anticipated decrease is due to the expiration of
statutes of limitations, anticipated closure of various tax matters currently under examination, and settlements
with tax authorities. For such matters where a change in the balance of unrecognized tax benefits is not yet
deemed reasonably possible, no estimate has been included.
H&R Block, Inc. | 2024 Form 10-K
57
Interest and penalties, if any, accrued on the unrecognized tax benefits are reflected in income tax expense. The
total gross interest recorded to income tax expense for periods ending June 30, 2024, 2023 and 2022 totaled $14.1
million, $10.1 million and $3.7 million, respectively. The total penalties, if any, recorded for the same periods were
immaterial. The total gross interest and penalties accrued as of June 30, 2024 and 2023 totaled $42.0 million and
$32.6 million, respectively.
NOTE 10: COMMITMENTS AND CONTINGENCIES
Our U.S. and Canadian businesses offer our 100% accuracy guarantee. Assisted tax returns are covered by our
100% accuracy guarantee, whereby we will reimburse a client for penalties and interest attributable to an H&R
Block error on a return. DIY tax returns are covered by our 100% accuracy guarantee, whereby we will reimburse a
client up to a maximum of $10,000, if our software makes an arithmetic error that results in payment of penalties
and/or interest to the respective taxing authority that a client would otherwise not have been required to pay. Our
liability related to estimated losses under the 100% accuracy guarantee was $14.1 million and $15.8 million as of
June 30, 2024 and 2023, respectively. The short-term and long-term portions of this liability are included in
deferred revenue and other liabilities in the consolidated balance sheets.
Liabilities related to acquisitions for (1) estimated contingent consideration based on expected financial
performance of the acquired business and economic conditions at the time of acquisition and (2) estimated
accrued compensation related to continued employment of key employees were $26.9 million and $18.3 million as
of June 30, 2024 and 2023, respectively, with amounts recorded in deferred revenue and other liabilities. These
liabilities will be settled within the nine years. Should actual results differ from our estimates, future payments
made will differ from the above estimate and any differences will be recorded in results from continuing
operations.
We have contractual commitments to fund certain franchises with approved short-term lines of credit for the
purpose of meeting their seasonal working capital needs. Our total obligation under these lines of credit was $0.4
million as of June 30, 2024, and net of amounts drawn and outstanding, our remaining commitment to fund
totaled $0.2 million.
In March 2020, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
to provide economic and other relief as a result of the COVID-19 pandemic. The CARES Act includes, among other
items, provisions relating to refundable employee retention payroll tax credits. Due to the complex nature of the
employee retention credit computations, we deferred benefits related to these credits until both the receipt of the
benefit and the resolution of the uncertainties, including, but not limited to, the completion of any potential audit
or examination, or the expiration of the related statute of limitations. As of June 30, 2023, we had deferred
$15.4 million related to these credits which were recorded in deferred revenue and other current liabilities. Due to
the expiration of the statute of limitations, we recognized the deferred credits during fiscal year 2024 as an offset
to related operating expenses.
We are self-insured for certain risks, including employer provided medical benefits, workers' compensation,
property, general liability, tax errors and omissions, and claims related to POM. These programs maintain various
self-insured retentions and commercial insurance is purchased in excess of the self-insured retentions for all but
POM in company-owned offices and employer provided medical benefits. We accrue estimated losses for self-
insured retentions using actuarial models and assumptions based on historical loss experience.
We have a deferred compensation plan that permits certain employees to defer portions of their compensation
and accrue income on the deferred amounts. Included in deferred revenue and other liabilities is $10.1 million and
$10.5 million as of June 30, 2024 and 2023, respectively, reflecting our obligation under this plan.
Effective October 20, 2023, we amended the Program Management Agreement and entered into a new
participation agreement related to EA term loans originated by Pathward. In fiscal year 2024, EAs were offered as
term loans and we discontinued EA lines of credit. We continue to purchase a 90% participation interest in each
loan made by Pathward in accordance with the participation agreement. See note 4 for additional information
about these balances.
Refund Advance loans are originated by Pathward and offered to certain assisted U.S. tax preparation clients,
based on client eligibility as determined by Pathward. We pay fees primarily based on loan size and customer type.
58
2024 Form 10-K | H&R Block, Inc.
We have provided a guarantee up to $18.0 million related to certain loans to clients prior to the IRS accepting
electronic filing. We accrued an estimated liability of $1.4 million at June 30, 2024 related to this guarantee. As of
June 30, 2023 we had $0.7 million accrued under the Refund Advance guarantee agreement, and we paid
$0.7 million, net of recoveries, related to that guarantee during the fiscal year ended June 30, 2024.
We offer POM to U.S. and Canadian clients, whereby we (1) represent our clients if they are audited by a taxing
authority, and (2) assume the cost, subject to certain limits, of additional taxes owed by a client resulting from
errors attributable to H&R Block. The additional taxes paid under POM have a cumulative limit of $6,000 for U.S.
clients and $3,000 CAD for Canadian clients with respect to the federal, state/provincial and local tax returns we
prepared for applicable clients during the taxable year protected by POM. A loss on POM would be recognized if
the sum of expected costs for services exceeded unearned revenue.
NOTE 11: LEASES
Our lease costs and other information related to operating leases consisted of the following:
(dollars in 000s)
Year ended June 30,
2024
2023
2022
Operating lease costs
$
242,372
$
238,899
$
233,004
Variable lease costs
88,629
85,239
79,923
Subrental income
(508)
(575)
(520)
Total lease costs
$
330,493
$
323,563
$
312,407
Cash paid for operating lease costs
$
239,292
$
236,423
$
236,946
New operating right of use assets and related lease liabilities
$
266,970
$
253,755
$
222,352
Weighted-average remaining operating lease term (years)
3
2
2
Weighted-average operating lease discount rate
5.0%
4.1 %
2.8 %
Aggregate operating lease maturities as of June 30, 2024 are as follows:
(in 000s)
2025
$
223,914
2026
133,307
2027
80,386
2028
37,535
2029
15,955
2030 and thereafter
11,438
Total future undiscounted operating lease payments
502,535
Less imputed interest
(31,092)
Total operating lease liabilities
$
471,443
NOTE 12: LITIGATION AND OTHER RELATED CONTINGENCIES
We are a defendant in numerous litigation and arbitration matters, arising both in the ordinary course of business
and otherwise, including as described below. The matters described below are not all of the lawsuits or
arbitrations to which we are subject. In some of the matters, very large or indeterminate amounts, including
punitive damages, may be sought. U.S. jurisdictions permit considerable variation in the assertion of monetary
damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may
permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction. In addition,
jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible
verdicts in the jurisdiction for similar matters. We believe that the monetary relief which may be specified in a
lawsuit or claim bears little relevance to its merits or disposition value due to this variability in pleadings and our
experience in handling and resolving numerous claims over an extended period of time.
H&R Block, Inc. | 2024 Form 10-K
59
The outcome of a matter and the amount or range of potential loss at particular points in time may be difficult
to ascertain. Among other things, uncertainties can include how fact finders will evaluate documentary evidence
and the credibility and effectiveness of witness testimony, and how courts and arbitrators will apply the law.
Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will view the
relevant evidence and applicable law.
In addition to litigation and arbitration matters, we are also subject to other loss contingencies arising out of our
business activities, including as described below.
We accrue liabilities for litigation, arbitration and other related loss contingencies and any related settlements
when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. If a
range of loss is estimated, and some amount within that range appears to be a better estimate than any other
amount within that range, then that amount is accrued. If no amount within the range can be identified as a better
estimate than any other amount, we accrue the minimum amount in the range.
For such matters where a loss is believed to be reasonably possible, but not probable, or the loss cannot be
reasonably estimated, no accrual has been made. It is possible that such matters could require us to pay damages
or make other expenditures or accrue liabilities in amounts that could not be reasonably estimated as of June 30,
2024. While the potential future liabilities could be material in the particular quarterly or annual periods in which
they are recorded, based on information currently known, we do not believe any such liabilities are likely to have a
material adverse effect on our business and our consolidated financial position, results of operations, and cash
flows. As of June 30, 2024 and 2023 our total accrued liabilities were $7.2 million and $0.2 million, respectively.
Our estimate of the aggregate range of reasonably possible losses includes (1) matters where a liability has been
accrued and there is a reasonably possible loss in excess of the amount accrued for that liability, and (2) matters
where a liability has not been accrued but we believe a loss is reasonably possible. This aggregate range only
represents those losses as to which we are currently able to estimate a reasonably possible loss or range of loss. It
does not represent our maximum loss exposure.
Matters for which we are not currently able to estimate the reasonably possible loss or range of loss are not
included in this range. We are often unable to estimate the possible loss or range of loss until developments in
such matters have provided sufficient information to support an assessment of the reasonably possible loss or
range of loss, such as precise information about the amount of damages or other remedies being asserted, the
defenses to the claims being asserted, discovery from other parties and investigation of factual allegations, rulings
by courts or arbitrators on motions or appeals, analyses by experts, or the status or terms of any settlement
negotiations.
The estimated range of reasonably possible loss is based upon currently available information and is subject to
significant judgment and a variety of assumptions, as well as known and unknown uncertainties. The matters
underlying the estimated range will change from time to time, and actual results may vary significantly from the
current estimate. As of June 30, 2024, we believe the estimate of the aggregate range of reasonably possible losses
in excess of amounts accrued, where the range of loss can be estimated, is not material.
At the end of each reporting period, we review relevant information with respect to litigation, arbitration and
other related loss contingencies and update our accruals, disclosures, and estimates of reasonably possible loss or
range of loss based on such reviews. Costs incurred with defending matters are expensed as incurred. Any
receivable for insurance recoveries is recorded separately from the corresponding liability, and only if recovery is
determined to be probable and reasonably estimable.
We believe we have meritorious defenses to the claims asserted in the various matters described in this note,
and we intend to defend them vigorously. The amounts claimed in the matters are substantial, however, and there
can be no assurances as to their outcomes. In the event of unfavorable outcomes, it could require modifications to
our operations; in addition, the amounts that may be required to be paid to discharge or settle the matters could
be substantial and could have a material adverse impact on our business and our consolidated financial position,
results of operations, and cash flows.
60
2024 Form 10-K | H&R Block, Inc.
On February 23, 2024, the Federal Trade Commission (FTC) filed an administrative complaint before the FTC
alleging unfair or deceptive business acts or practices in connection with certain aspects of our DIY tax preparation
services. A hearing before an administrative law judge (ALJ) of the FTC is scheduled for October 23, 2024. We filed
a complaint in federal court in the Western District of Missouri challenging the constitutionality of the ALJ’s
removal protections and seeking to enjoin the ALJ’s participation in the adjudication of the matter. The federal
court denied our motion for a preliminary injunction on August 1, 2024. We filed an appeal with the Eighth Circuit
Court of Appeals, which is pending. We have also received and are responding to certain governmental inquiries
and other matters relating to the IRS Free File Program and other aspects of our DIY tax preparation services,
including the use of pixels. An accrual related to these matters is included in our loss contingency accrual.
We are from time to time a party to litigation, arbitration and other loss contingencies not discussed herein
arising out of our business operations. These matters may include actions by state attorneys general, other state
regulators, federal regulators, individual plaintiffs, and cases in which plaintiffs seek to represent others who may
be similarly situated.
While we cannot provide assurance that we will ultimately prevail in each instance, we believe the amount, if
any, we are required to pay to discharge or settle these other matters will not have a material adverse impact on
our business and our consolidated financial position, results of operations, and cash flows.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There were no disagreements or reportable events requiring disclosure pursuant to Item 304(b) of Regulation S-K.
ITEM 9A. CONTROLS AND PROCEDURES
(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES – We have established disclosure controls and
procedures (Disclosure Controls) to ensure that information required to be disclosed in the Company's reports filed
under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within
the time periods specified in the U.S. Securities and Exchange Commission's rules and forms. Disclosure Controls
are also designed to ensure that such information is accumulated and communicated to management, including
the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required
disclosure. Our Disclosure Controls were designed to provide reasonable assurance that the controls and
procedures would meet their objectives. Our management, including the Chief Executive Officer and Chief
Financial Officer, does not expect that our Disclosure Controls will prevent all error and all fraud. A control system,
no matter how well designed and operated, can provide only reasonable assurance of achieving the designed
control objectives and management is required to apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures. Because of the inherent limitations in all control systems, no evaluation of
controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company
have been detected. These inherent limitations include the realities that judgments in decision-making can be
faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be
circumvented by the individual acts of some persons, by collusions of two or more people or by management
override of the control. Because of the inherent limitations in a cost-effective, maturing control system,
misstatements due to error or fraud may occur and not be detected.
As of the end of the period covered by this Form 10-K, management, under the supervision and with the
participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design
and operations of our Disclosure Controls. Based on this evaluation, our Chief Executive Officer and Chief Financial
Officer have concluded our Disclosure Controls were effective as of the end of the period covered by this Annual
Report on Form 10-K.
(b) MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING – Management is
responsible for establishing and maintaining adequate internal control over financial reporting for the Company, as
such term is defined in Exchange Act Rules 13a-15(f). Under the supervision and with the participation of our Chief
Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal
control over financial reporting as of June 30, 2024 based on the criteria established in "Internal Control –
H&R Block, Inc. | 2024 Form 10-K
61
Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO), using the 2013 framework.
Based on our assessment, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30,
2024, the Company's internal control over financial reporting was effective based on the criteria set forth by COSO.
The Company's external auditors that audited the consolidated financial statements included in Item 8,
Deloitte & Touche LLP, an independent registered public accounting firm, have issued an audit report on the
effectiveness of the Company's internal control over financial reporting. This report appears near the beginning of
Item 8.
(c) CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING – During the quarter ended June 30, 2024,
there were no changes that materially affected, or are reasonably likely to materially affect, our internal control
over financial reporting.
ITEM 9B. OTHER INFORMATION
During the three months ended June 30, 2024, no director or officer of the Company adopted or terminated a
"Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item
408(a) of Regulation S-K.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Information about our executive officers is included under the caption "Information About Our Executive Officers"
in Item 1 of this report on Form 10-K.
The following information appearing in our definitive proxy statement, to be filed no later than 120 days after
June 30, 2024, is incorporated herein by reference:
▪
Information appearing under the heading "Proposal 1 – Election of Directors";
▪
Information appearing under the heading "Delinquent Section 16(a) Reports" (if applicable);
▪
Information appearing under the heading "Board of Directors' Meetings and Committees" regarding
identification of the Audit Committee and Audit Committee financial experts;
▪
Information appearing under the heading “Other Executive Compensation Practices and Policies” regarding
the Company’s Insider Trading Policy.
We have adopted a Code of Business Ethics and Conduct that applies to our directors, officers and employees,
including our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer and persons performing
similar functions. A copy of the Code of Business Ethics and Conduct is available on our website at
www.hrblock.com. We intend to provide information on our website regarding amendments to, or waivers under,
the Code of Business Ethics and Conduct.
ITEM 11. EXECUTIVE COMPENSATION
The information called for by this item is contained in our definitive proxy statement to be filed pursuant to
Regulation 14A not later than 120 days after June 30, 2024, in the sections entitled "Director Compensation,"
"Director Compensation Table," "Compensation Discussion and Analysis," "Compensation Committee Report,"
"Compensation Committee Interlocks and Insider Participation," "Risk Assessment in Compensation Programs,"
and "Executive Compensation," and is incorporated herein by reference.
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2024 Form 10-K | H&R Block, Inc.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The information called for by this item is contained in our definitive proxy statement to be filed pursuant to
Regulation 14A not later than 120 days after June 30, 2024, in the sections entitled "Equity Compensation Plans"
and "Information Regarding Security Holders," and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND
DIRECTOR INDEPENDENCE
The information called for by this item is contained in our definitive proxy statement to be filed pursuant to
Regulation 14A not later than 120 days after June 30, 2024, in the sections entitled "Employment Agreements,
Change in Control and Other Arrangements," "Review of Related Person Transactions," and "Corporate
Governance," and is incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The information called for by this item relating to our principal accountant, Deloitte & Touche LLP (PCAOB ID No.
34) is contained in our definitive proxy statement to be filed pursuant to Regulation 14A not later than 120 days
after June 30, 2024, in the section entitled "Audit Fees," and is incorporated herein by reference.
H&R Block, Inc. | 2024 Form 10-K
63
PART IV
ITEM 15. EXHIBIT INDEX
The following exhibits are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K:
3.1
Amended and Restated Articles of Incorporation of H&R Block, Inc., as amended through September 12, 2013,
filed as Exhibit 3.1 to the Company's current report on Form 8-K filed September 16, 2013, file number
1-06089, is incorporated herein by reference.
3.2
Amended and Restated Bylaws of H&R Block, Inc., as amended through July 14, 2015, filed as Exhibit 3.1 to
the Company's current report on Form 8-K filed July 16, 2015, file number 1-06089, is incorporated herein by
reference.
4.1
Indenture dated as of October 20, 1997, among H&R Block, Inc., Block Financial Corporation and Bankers
Trust Company, as Trustee, filed as Exhibit 4(a) to the Company's quarterly report on Form 10-Q for the
quarter ended October 31, 1997, file number 1-06089, is incorporated herein by reference.
4.2
First Supplemental Indenture, dated as of April 18, 2000, among H&R Block, Inc., Block Financial Corporation,
Bankers Trust Company and the Bank of New York, filed as Exhibit 4(a) to the Company's current report on
Form 8-K filed April 17, 2000, file number 1-06089, is incorporated herein by reference.
4.3
Second Supplemental Indenture, dated September 30, 2015, among H&R Block, Inc., Block Financial LLC
(formerly known as Block Financial Corporation), Deutsche Bank Trust Company Americas (formerly known as
Bankers Trust Company) and U.S. Bank National Association, as separate trustee, filed as Exhibit 4.1 to the
Company's current report on Form 8-K filed September 30, 2015, file number 1-06089, is incorporated herein
by reference.
4.4
Third Supplemental Indenture, dated August 7, 2020, among H&R Block, Inc., Block Financial LLC (formerly
known as Block Financial Corporation), Deutsche Bank Trust Company Americas (formerly known as Bankers
Trust Company) and U.S. Bank National Association, as separate trustee, filed as Exhibit 4.1 to the Company's
current report on Form 8–K filed August 7, 2020, file number 1–06089, is incorporated herein by reference.
4.5
Fourth Supplemental Indenture, dated June 25, 2021, among H&R Block, Inc., Block Financial LLC (formerly
known as Block Financial Corporation), Deutsche Bank Trust Company Americas (formerly known as Bankers
Trust Company) and U.S. Bank National Association, as separate trustee, filed as Exhibit 4.1 to the Company's
current report on Form 8-K filed June 25, 2021, file number 1-06089, is incorporated herein by reference.
4.6
Officers’ Certificate, dated September 30, 2015, of Block Financial LLC (including the Form of the 4.125% Note
due 2020 and the Form of the 5.250% Note due 2025), filed as Exhibit 4.2 to the Company's current report on
Form 8-K filed September 30, 2015, file number 1-06089, is incorporated herein by reference.
4.7
Officers’ Certificate, dated August 7, 2020, of Block Financial LLC (including the Form of the 3.875% Notes due
2030), filed as Exhibit 4.2 to the Company's current report on Form 8–K filed August 7, 2020, file number 1–
06089, is incorporated herein by reference.
4.8
Officers’ Certificate, dated June 25, 2021, of Block Financial LLC (including the Form of the 2.500% Notes due
2028), filed as Exhibit 4.2 to the Company's current report on Form 8-K filed June 25, 2021, file number
1-06089, is incorporated herein by reference.
4.9
Form of Certificate of Designation, Preferences and Rights of Participating Preferred Stock of H&R Block, Inc.,
filed as Exhibit 4(e) to the Company's annual report on Form 10-K for the fiscal year ended April 30, 1995, file
number 1-06089, is incorporated herein by reference.
4.10
Form of Certificate of Amendment of Certificate of Designation, Preferences and Rights of Participating
Preferred Stock of H&R Block, Inc., filed as Exhibit 4(j) to the Company's annual report on Form 10-K for the
fiscal year ended April 30, 1998, file number 1-06089, is incorporated herein by reference.
4.11
Form of Certificate of Designation, Preferences and Rights of Delayed Convertible Preferred Stock of
H&R Block, Inc., filed as Exhibit 4(f) to the Company's annual report on Form 10-K for the fiscal year ended
April 30, 1995, file number 1-06089, is incorporated herein by reference.
4.12
Description of Securities.
10.1
*
2013 Long-Term Incentive Plan, as amended and restated on March 6, 2013, filed as Exhibit 10.1 to the
Company's quarterly report on Form 10-Q for the quarter ended January 31, 2013, file number 1-06089, is
incorporated herein by reference.
10.2
*
Form of 2013 Long Term Incentive Plan Award Agreement for Deferred Stock Units, as approved on
September 12, 2013, filed as Exhibit 10.1 to the Company's quarterly report on Form 10-Q for the quarter
ended October 31, 2013, file number 1-06089, is incorporated herein by reference.
10.3
*
Form of 2013 Long Term Incentive Plan Award Agreement for Non-Qualified Stock Options, as approved on
July 18, 2016, filed as Exhibit 10.4 to the Company’s current report on Form 8-K filed July 22, 2016, file
number 1-06089, is incorporated herein by reference.
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2024 Form 10-K | H&R Block, Inc.
10.4
*
Form of 2013 Long Term Incentive Plan Award Agreement for Non-Qualified Stock Options, as approved on
June 19, 2017, filed as Exhibit 10.4 to the Company’s current report on Form 8-K filed June 23, 2017, file
number 1-06089, is incorporated herein by reference.
10.5
*
The Company's 2003 Long-Term Executive Compensation Plan, as amended September 30, 2010, filed as
Exhibit 10.2 to the Company's quarterly report on Form 10-Q for the quarter ended October 31, 2010, file
number 1-06089, is incorporated herein by reference.
10.6
*
First Amendment to the Company's 2003 Long-Term Executive Compensation Plan, effective May 10, 2012,
filed as Exhibit 10.1 to the Company's current report on Form 8-K filed May 11, 2012, file number 1-06089, is
incorporated herein by reference.
10.7
*
Form of 2003 Long-Term Executive Compensation Plan Grant Agreement for Stock Options as approved on
June 20, 2012, filed as Exhibit 10.3 to the Company's current report on Form 8-K filed June 26, 2012, file
number 1-06089, is incorporated herein by reference.
10.8
*
H&R Block Deferred Compensation Plan for Executives, as amended and restated effective January 1, 2022,
filed as Exhibit 10.1 to the Company's quarterly report on Form 10-Q for the quarter ended December 31,
2021, file number 1-06089, is incorporated herein by reference.
10.9
*
The Amended and Restated H&R Block Executive Performance Plan, filed as Exhibit 10.8 to the Company's
quarterly report on Form 10-Q for the quarter ended July 31, 2019, file number 1-06089, is incorporated
herein by reference.
10.10
*
The H&R Block, Inc. 2000 Employee Stock Purchase Plan, as amended and restated on March 2, 2020, filed
as Exhibit 10.1 to the Company's quarterly report on Form 10-Q for the quarter ended January 31, 2020, file
number 1-06089, is incorporated herein by reference.
10.11
*
H&R Block Severance Plan, as amended and restated on May 15, 2021, filed as Exhibit 10.17 to the
Company's annual report on Form 10-K for the fiscal year ended April 30, 2021, file number 1-06089, is
incorporated herein by reference.
10.12
*
H&R Block Inc. Executive Severance Plan, as amended and restated effective May 9, 2022, filed as Exhibit
10.1 to the Company's quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2022, file
number 1-06089, is incorporated herein by reference.
10.13
*
Form of Indemnification Agreement with Directors and Officers, filed as Exhibit 10.2 to the Company's
quarterly report on Form 10-Q for the quarter ended January 31, 2012, file number 1-06089, is incorporated
herein by reference.
10.14
*
2008 Deferred Stock Unit Plan for Outside Directors, as amended on September 14, 2011, filed as Exhibit
10.27 to the Company's annual report on Form 10-K for the year ended April 30, 2012, file number 1-06089,
is incorporated herein by reference.
10.15
*
Employment Agreement dated November 4, 2021, between H&R Block, Inc., HRB Professional Resources LLC,
and Jeffrey J. Jones II, filed as Exhibit 10.1 to the Company’s current report on Form 8-K filed November 4,
2021, file number 1-06089, is incorporated herein by reference.
10.16
*
H&R Block, Inc. 2018 Long Term Incentive Plan, filed as Exhibit 10.1 to the Company’s current report on
Form 8-K filed September 14, 2017, file number 1-06089, is incorporated herein by reference.
10.17
*
Form of 2018 Long Term Incentive Plan Award Agreement for Deferred Stock Units, as approved on
November 3, 2017, filed as Exhibit 10.1 to the Company’s quarterly report on Form 10-Q for the quarter
ended October 31, 2017, file number 1-06089, is incorporated herein by reference.
10.18
*
Form of 2018 Long Term Incentive Plan Award Agreement for Non-Qualified Stock Options, filed as Exhibit
10.3 to the Company’s current report on Form 8-K filed September 14, 2017, file number 1-06089, is
incorporated herein by reference.
10.19
*
Form of 2018 Long Term Incentive Plan Award Agreement for Restricted Share Units, as approved on June 25,
2021, filed as Exhibit 10.1 to the Company's current report on Form 8-K filed June 30, 2021, file number
1-06089, is incorporated herein by reference.
10.20
*
Form of 2018 Long Term Incentive Plan Award Agreement for Performance Share Units, as approved on June
25, 2021, filed as Exhibit 10.2 to the Company's current report on Form 8-K filed June 30, 2021, file number
1-06089, is incorporated herein by reference.
10.21
*
Alternate Form of 2018 Long Term Incentive Plan Award Agreement for Restricted Share Units, as approved
on June 25, 2021, filed as Exhibit 10.3 to the Company's current report on Form 8-K filed June 30, 2021, file
number 1-06089, is incorporated herein by reference.
10.22
*
Alternate Form of 2018 Long Term Incentive Plan Award Agreement for Performance Share Units, as
approved on June 25, 2021, filed as Exhibit 10.4 to the Company's current report on Form 8-K filed June 30,
2021, file number 1-06089, is incorporated herein by reference.
10.23
*
Form of 2018 Long Term Incentive Plan Award Agreement for Restricted Share Units, as approved on August
11, 2022, filed as Exhibit 10.1 to the Company's current report on Form 8-K filed August 17, 2022, file number
1-06089, is incorporated herein by reference.
H&R Block, Inc. | 2024 Form 10-K
65
10.24
*
Form of 2018 Long Term Incentive Plan Award Agreement for Performance Share Units, as approved on
August 11, 2022, filed as Exhibit 10.2 to the Company's current report on Form 8-K filed August 17, 2022, file
number 1-06089, is incorporated herein by reference.
10.25
Fourth Amended and Restated Credit and Guarantee Agreement dated June 11, 2021, by and among Block
Financial LLC, H&R Block, Inc., the lenders party thereto from time to time, and JPMorgan Chase Bank, N.A.,
as administrative agent, filed as Exhibit 10.1 to the Company’s current report on Form 8-K filed June 15, 2021,
file number 1-06089, is incorporated herein by reference.
10.26
First Amendment to Fourth Amended and Restated Credit and Guarantee Agreement, dated May 25, 2023, by
and among Block Financial LLC, H&R Block, Inc., the lenders party thereto from time to time, and JPMorgan
Chase Bank, N.A., as administrative agent, including Annex I, which is a conformed copy of the Fourth
Amdended and Restated Credit and Guarantee Agreement as amended by the First Amendment, filed as
Exhibit 10.1 to the Company's current report on Form 8-K filed May 30, 2023, file number 1-06089, is
incorporated herein by reference.
10.27
Program Management Agreement, dated August 5, 2020, by and between Emerald Financial Services, LLC and
Pathward, N.A. filed as Exhibit 10.1 to the Company's quarterly report on Form 10-Q for the quarter ended
July 31, 2020, file number 1-06089, is incorporated herein by reference.
10.28
First Amendment to Program Management Agreement, dated December 20, 2021, by and between Emerald
Financial Services, LLC and Pathward, N.A. filed as Exhibit 10.1 to the Company’s current report on Form 8-K
filed December 23, 2021, file number 1-06089, is incorporated herein by reference.
10.29
Second Amendment to Program Management Agreement, dated October 20, 2023, by and between Emerald
Financial Services, LLC and Pathward, N.A. filed as Exhibit 10.1 to the Company's quarterly report on Form 10-
Q for the quarter ended September 30, 2023, file number 1-06089, is incorporated herein by reference.
10.30
Third Amendment to Program Management Agreement, dated April 1, 2024, by and between Emerald
Financial Services, LLC and Pathward, N.A.
19.1
H&R Block, Inc. Insider Trading Policy
21
Subsidiaries of the Company.
22
List of Guarantor and Issuer Subsidiaries.
23
Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.
31.1
Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2
Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1
**
Certification by Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted by Section 906 of the
Sarbanes-Oxley Act of 2002.
32.2
**
Certification by Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted by Section 906 of the Sarbanes-
Oxley Act of 2002.
97
H&R Block, Inc. Policy for the Recovery of Erroneously Awarded Compensation
101.INS
XBRL Instance Document- the instance document does not appear in the Interactive Data File because its
XBRL tags are embedded within the Inline XBRL document
101.SCH
XBRL Taxonomy Extension Schema
101.CAL
XBRL Extension Calculation Linkbase
101.LAB
XBRL Taxonomy Extension Label Linkbase
101.PRE
XBRL Taxonomy Extension Presentation Linkbase
101.DEF
XBRL Taxonomy Extension Definition Linkbase
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*
Indicates management contracts, compensatory plans or arrangements.
** Furnished, not filed.
66
2024 Form 10-K | H&R Block, Inc.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
H&R BLOCK, INC.
/s/ Jeffrey J. Jones II
Jeffrey J. Jones II
President and Chief Executive Officer
August 15, 2024
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the date indicated on August 15, 2024.
/s/ Jeffrey J. Jones II
/s/ Tony G. Bowen
/s/ Kellie J. Logerwell
Jeffrey J. Jones II
Tony G. Bowen
Kellie J. Logerwell
President, Chief Executive Officer
Chief Financial Officer
Chief Accounting Officer
and Director
(principal financial officer)
(principal accounting officer)
(principal executive officer)
/s/ Robert A. Gerard
/s/ Sean H. Cohan
/s/ Anuradha Gupta
Robert A. Gerard
Sean H. Cohan
Anuradha Gupta
Director, Chairman of the Board
Director
Director
/s/ Richard A. Johnson
/s/ Mia F. Mends
/s/ Yolande G. Piazza
Richard A. Johnson
Mia F. Mends
Yolande G. Piazza
Director
Director
Director
/s/ Victoria J. Reich
/s/ Matthew E. Winter
Victoria J. Reich
Matthew E. Winter
Director
Director
H&R Block, Inc. | 2024 Form 10-K
67
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Forward Looking Statements
These materials contain 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 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.
Market and Industry Data
The data included in this Annual Report 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 Annual Report.
Design: Latitude latitudesign.net
Corporate Information
Headquarters
H&R Block Center
One H&R Block Way
Kansas City, Missouri 64105
816.854.3000
Transfer Agent & Registrar
EQ Shareowner Services
P.O. Box 64874
St. Paul, Minnesota 55164-0874
or
1110 Centre Pointe Curve, Suite 101
Mendota Heights, Minnesota 55120-4100
888.213.0968
shareowneronline.com
EQ Shareowner Services maintains the records for
registered shareowners and provides a variety of
shareowner-related services at no charge, including
change of name or address, consolidation of accounts,
duplicate mailings, dividend reinvestment enrollment,
and transfer of stock to another person.
Independent Registered
Public Accounting Firm
Deloitte & Touche LLP
1100 Walnut Street, Suite 3300
Kansas City, Missouri 64106-2129
Common Stock
Traded on the New York Stock Exchange
Ticker symbol: HRB
Form 10-K Requests
Upon request, we will furnish, without charge, to our
shareholders a copy of our 2024 Form 10-K as filed with
the Securities and Exchange Commission. Requests
should be directed to Investor Relations by e-mail at
investorrelations@hrblock.com or online at
https://investors.hrblock.com/.
For more information about H&R Block, visit our website
at www.hrblock.com.
Certifications Filed with the Securities
and Exchange Commission Pursuant to
The Sarbanes-Oxley Act of 2002
The certifications of the Chief Executive Officer and
Chief Financial Officer of the company required by
Section 302 of the Sarbanes-Oxley Act of 2002 have
been filed as exhibits 31.1 and 31.2, respectively, in the
company’s Form 10-K for the fiscal year ended
June 30, 2024.
Certification Submitted to the
New York Stock Exchange
The certification of the Chief Executive Officer required
by the New York Stock Exchange Listing Standards,
Section 303A.12(a), relating to the company’s
compliance with the New York Stock Exchange
Corporate Governance Listing Standards, was
submitted to the New York Stock Exchange on
November 28, 2023.
H&R BLOCK, INC.
One H&R Block Way
Kansas City, MO 64105
816.854.3000
www.hrblock.com