H&R Block (HRB) Q1 2025 earnings summary

Executive summary

• Revenue grew 5.4% year-over-year to $193.8 million, driven by higher company-owned volumes, increased international tax prep, and strong Wave segment performance.

• Net loss widened to $172.6 million from $163.5 million year-over-year, reflecting higher operating expenses and legal costs.

• Adjusted diluted loss per share was $(1.17), compared to $(1.05) in the prior year.

• Share repurchases totaled $210 million, retiring 3.3 million shares at $63.51 per share; over 41% of shares repurchased since 2016.

• AI Tax Assist tool enhanced and offered free in all DIY paid SKUs, supporting higher conversion among new paid clients.

Financial highlights

• Q1 revenue was $193.8 million, up 5.4% from $183.8 million in the prior year.

• Operating expenses rose 8.2% to $422.1 million, mainly due to higher wages, marketing, and legal fees.

• EBITDA from continuing operations was $(187.6) million, compared to $(166.3) million last year.

• Net loss from continuing operations was $171.4 million; total net loss $172.6 million.

• Adjusted EPS was $(1.17), with weighted average diluted shares outstanding at 139.2 million.

Outlook and guidance

• Full-year revenue expected between $3.69 billion and $3.75 billion, with EBITDA guidance of $975 million to $1.02 billion.

• Adjusted EPS forecasted at $5.15–$5.35, including a one-time benefit of ~$0.50; effective tax rate projected at 13%.

• Management expects pretax losses in Q1 to be offset by income in Q3 and Q4 due to business seasonality.

• Higher legal costs included in full-year guidance.

• Effective tax rate expected to return to low 20s after fiscal 2025.