HRB - Earnings call 2 2024 | H&R Block, Inc.

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Operator

Thank you for standing by, and welcome to H&R Block's Second Quarter Fiscal Year 2024 Earnings Conference Call. [Operator Instructions] I would now like to hand the call over to Vice President, Investor Relations, Michaella Gallina. Please go ahead.

Michaella Gallina

Thank you, Latif. Good afternoon, everyone, and welcome to H&R Block's Second Quarter Fiscal 2024 Financial Results Conference Call.

presentation, Jeff Bowen, President today, our our a release are Officer; Chief we website today downloaded press Tony be and Chief and at me investors.hrblock.com. Jones, live and our Executive issued or Joining viewed can on which Financial Officer. Earlier

Our being webcast broadcast live, of a replay call webcast XX will days. is the be and and available for

federal by securities to differ management I'd any These actual we like remind the numerous listeners to meaning comments and within begin, statement forward-looking material of include may from involve made laws. forward-looking statements in uncertainties, risks statements Before that due factors. those and projected could results

and our discuss today a note, figures Form reports basis. in H&R the please we'll on see report other some of the as metrics on presentation. and non-GAAP presented For We've risks GAAP Block's periodically updated SEC reconciled quarterly of comparable our XX-Q description filings. Please with uncertainties, non-GAAP a on these are annual Form appendix XX-K and

content circumstances this the will to any of time-sensitive Block turn information H&R XXXX. to call of date the events no Jeff. contains I as obligation X, February reflect or to or undertakes otherwise today, statements revise call. With accurate update over that, after of only this now Finally, it

JeffreyJones

on including strength allocation sheet. announcement And he decision retire. share capital the of tax and finally, Good financials, and today results, progress provide and you, discuss season. the I'll context on on thanks summary Block regarding provide for Then everyone, with Tony's are afternoon, well Horizons our a QX balance Thank begin an the positioned I'll Michaella. of for why joining today will us. to our we update more our

finish year Performance results. strong quarter, In the we the fiscal grew outlook. continues And extended QX our had season. to X% to a as to filing we revenue expectations. reaffirmed today, meet Turning

to Block to for tax needs our cash the need which meet new and season. with many offering, we Emerald well H&R addition, of saw consumers bodes in Advance their In turned financial believe we

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gig be our have marketing industry with on Overall, business. We I in. we plan do pleased continue the focused segments seeing we're to in small growth economy already the and specific well

payments than drive to to to road our progress commitment for rather same to At support aligns now the features paid business and self-service shift continue our past customers. Wave. to forward features step more bank preferred empower to time, Wave's revenue took imports, map a X% subscription meet agent pricing survive on premium support. to thrive. owners tier growth another Revenue accelerate Wave new in like reflect our build profitability on small and detailed in This I fee. payments This Turning week, additional will strategic by quarter, offer moves recent and and QX. start, growth service. evolving automated with Last was introducing the and the tier These model transaction incorporates an payroll needs long-term of we business

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over flexible annual credit with meet the Although from to the Pathword include in holiday spending which bank line help A of our clients In product process ], eliminating a transitioning repayment the the made the customers name product the the available we better feedback [ remains And to loan those Emerald total, few amount options, increasing same, and Advance changes to prior were needs. of collaboration client the year. associates. positive significant of a partner, short-term XX% loan needs. with their and million fee were up from received $XXX originated, and to streamlining application maximum loans in

as Spruce, in $XXX had of Regarding deposits. XX, we and December XXX,XXX customer million sign-ups

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tax. To saw Let retention. with, me in more we pro our trends share starting tax some continued hiring strong and achieved goals with begin assisted

tax flexibility We pros our have offer. positive feedback we heard about from the

innovative where pros, to us with on shared digital that were experience, I help to improve our addition, of including and our to the to speed now the AI. app to will when and the MyBlock In with access them Not tracker they experience service mind, action reduce our manage but many capacity. Last return. help only enhancements we are focused an of expenses client tax we the understand of quarter, are see documents can better easier the status be to client available opportunity some in clients network a take to the made in give flow, network fulfillment their our which and entire also

launched operations and This already signs to also volumes. our able its are We use. assist to continue the have help customers related learn from complex which themselves, indicate call our agents technology call issues. center that enable Early should more in reduces center with to

able us just started, the it help we're getting serve we're While how clients. pleased we're speed that with innovation will deploy our and this better to

advancements, this alongside year, positive price give for we these metrics satisfaction increases which year, including take from paid, customer of modest All confidence discussed. have to price last value our us previously

We year continues award-winning an product it make competitively. year, continually is success be momentum. executed to DIY. believe gains. Turning to easy for for switch formula returned offer share this to that to and to last that This price we'll the continue build plan We and innovative, on clients

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we're increases discussed last price this channel. modest quarter, As in taking

competitive full execute to our are our across highlights our extensive through and pricing, local global summary, Advance the Refund clients and tax every In DIY to pros. to get it to the the value network simplicity of service helps It easy-to-use the America. clients sooner, assistance switch this which expertise accuracy of to showcases MAX DIY better aggressively experiences, with From H&R our software promoting prefer. and is and easy it's block, marketing Block of is just This well guarantees campaign, season. and empower our proposition our prepared reasons transparent assisted corner our and also they we offerings. that demonstrates Finally, strong both their how of our network money product to refund of switch however messages year's file

nearly about I to Before want decision financially. CFO. in years and position on a Tony's to interest the instrumental more handing retire it will after including strong in been of focus Tony H&R driving XX as Block, last X over, and results has leave service us share to personal

shareholders. Some the of and capital our pricing of track his most business upfront driving in earnings record of notable to material a transparent meaningful achieving include returning contributions rollout model, growth the

process Over and we'll As share earnings year more year as of in a Tony's next our through of I'm a you all only us end together, best committed to and the fiscal enter later the replacement firm season, search in proud part to of this life. wish Tony, CFO at to complete engaging participate his XXXX of through We're we've of August, prepare I and he's find the decision, see the remaining date. tax to accomplished full chapter you. to call. you

Tony Bowen

tenure opportunities for will loss continuing My $XXX.X effective credit, been income current an interest primarily this EBITDA year. $XXX Total through all year. decreased results. We grateful higher was honor over Block year. by be and and the from and from million, on will $X while lower to $X.XX. operating $X.XX million The share increase part with learned of net as Jeff I'd a higher ensuring partially expenses $XX consulting and in charging incredible in expenses of result which loss, combined nothing X% interest and by revenue, an with Loss million Emerald With from the coupled I've I'm I'm of about and offset adjusted increased loss by given. been rate that, decision. million XX.X% Block marketing delivered of volumes to to wages Advance. million experience, an corporate million operations million, coming offset H&R personal committed to was rates Jeff. a of has is or $XXX end higher that to reiterate the improved XX.X% and the million I tax or due year. fee like smooth the Thanks, compared or in on my transformation were prior compared engagement last been months. an decreased that journey, share draws line path change prior continuing the expense $X of a $XX of million was shares $XX improved per about driven and on. increase lower higher I've to from $XX.X assisted X% change It's of the to higher role August operations loss And outstanding. our by $XXX partially to as by QX improvement was $X.XX, meantime. average turn $X.XX per my due million, prior in fewer Interest XX% Both year. to Pretax our is I'm my confident of the will mentioned, H&R to Block this the now H&R as to transition the CFO not to

small 'XX year, year While our our year performance. is reaffirming outlook. the fiscal I we first am of half the as overall with pleased And a such, our portion are of fiscal

Turning to allocation. capital

or half shares practice we strong. of In an another repurchased price bought first QX, outstanding. 'XX, of of million at X.X% X% a $XXX In X.X a fiscal the total of million remains outstanding. Our $XX.XX. shares $XXX of average shares of we million was for total This

use historically our of repurchase great most fiscal what the As windows, and year. accomplished. am a the in of we narrow with reminder, of we our a executed I have capital, believe given I have trading this first pleased share half is

All we feel the I we last given how the and I'm balance continue looking environment good back second relatively of turn in as on some the to about in our positioned remarks. sheet half current are leverage. Finally, low all, over closing to call, the now to year. I'll for shared Jeff our it forward

JeffreyJones

value for performance ability our to in with and through our pleased drive allocation. shareholders results and I'm capital Tony. our Thanks, confident business

a team provide our would our purpose to extend whose thank Together, in end tax franchisees, confidence and every we I to work, collective hard help associates As prepared and day. everywhere. you and our deliver communities spirit to expertise continue professionals, of our clients sincere and on remarks, inspire like we

will As a May. early the tax reminder, be call on our on in our season next update QX

Now questions. we'll open the line for

Operator

first Kartik Research. Instructions] from [Operator Our the comes of question Mehta Northcoast of line

Kartik Mehta

you're but anticipated? we'll get season, from standpoint that good different but a early retiring, be I'm chance look competitive had talk you as might to been Tony, you surprised the sure a you. congratulations it's working and noticed tax with Jeff, at anything you've later, than

JeffreyJones

date, little a to to say that a industry, thought. to started thanks that not would and let it not and I'll say for competitively anything than celebrate ago. you Tony respond week we in Kartik, did Obviously, of we getting is the plenty And we're be anticipate. a opened chances them sure. maybe little seeing shortly, over e-file slower I there'll

We to anything reason volume year, have probably for cetera. to related worried see believe credit. no And not we child the we're that what for other about tax than et that's

but really week the or that seeing two, that expected, thing I the in think we're only competitively. that's So wasn't first nothing

Kartik Mehta

And next my that -- I question. into segues [ then just ] guess

Congress? DIY on to Or that's slower people start to do the Is a bit through stuff Just assisted get you there are little think other? and both from one than you tax standpoint, different you waiting standpoint anticipated the an [indiscernible]. than

JeffreyJones

to there's both so try Mean in precise tax hard EITC get for credit are to apart at going or channels. point tease by no and question that this that channel. filers to early filers be It's child

to our the think we So tax we of I we when And surveys, one we being consumer really it some of like slower But than credit. that a call it this is are want little wouldn't early. expected. do child reasons pulse about seeing

Kartik Mehta

you're only is And margin, then any or of weeks but channels your know I just what season? change thoughts from in using Would first of strategy the this marketing? on possible the learning the the on you you're couple maybe

JeffreyJones

Great question.

always going the of obviously marketing into early We advance. I and by is right. plans know timing season. trying the to think positively refund with we We a the emphasis lot have the that landing season creative get way, EITC had we're plans, And on very consumers.

timing on the teams again, little But So impact campaign, don't are season, things. thinking shifting bit it where we timing or or the is search around so of those overall. a more real it's kind the e-mail early about the margins see in spending of still of and an

on And to so knee-jerk we maybe really a any want reactions based start. slower big make don't little

Operator

comes the from of question next Sachs. line George of Our Tong Goldman

Keen Fai Tong

for guide revenue of to this You X% reiterated year. growth your X%

Your this X% longer-term of is growth What long-term X%. some target? revenue growth cause target could are things year to come below the that to the

Tony Bowen

I X%. said, range the end obviously, that. a at X% is longer-term stab as mean, Tony. within the of range top is of take the to can George, this I you

off obviously the wanted some balls think year, few what -- I coming inevitably we guidance at was we to account year get that and we're sure specifically wanted. last took this a there's client why volume set thrown reasons make of industry. that that curve potential We achievable frankly, into was

all in. are those So built

start. just good The was really a strong. reported really was year the of half first The quarter we

goes. And of how north think tax long we've the to heading have we're confidence of tax long a we I we're ultimately we know can and going for season see a regardless, got But flow, increasing this about We'll have lot pay buy year. back create I that achieve good so to go, over So we but even the obviously, can to that's what way and an cash shareholders, continue we focused term, feel grow possibly obviously value lot a X%, that generate still stock, look dividend to of into on. far good season. signs And guidance.

Keen Fai Tong

can market and little performance changing share talk That's helpful. And your compared this to last stabilize drive about it. market year? potentially how assisted and to help a Got approach year gains share bit is you

JeffreyJones

the Yes, EITC filers. field serve the pricing, How communicate reasons, we refund of year, But of X is about our then increases deliver things of what we and has And way and season, again start early to single-digit we a experience. we that to for last of holistically, the very about retention, to year this that to the low proposition season. training, first go talked clients, proposition the this field I market good we to as together we've have I'm organization really good look The focused a of that to hiring, we And clients, price the been it's which value assisted advance mean, the there and number and said, remembering value to one way year are X feeling the now the season absolutely, Tony about of to are the balance behind today. a us. execute and assisted George. half, loss to year. is a year. we center every And deliver essential, great which role the strong strong communication broadly, value execution intend for that obviously, identified prepare all that's organize comes at,

Operator

line of of next comes Schneeberger Oppenheimer the Our Company. & question Scott from

Scott Schneeberger

the in I'm it the curious revenue about Congratulations, apparently Guys, was quarter, -- Tony. from extension jumping I guess, strong up, season.

growth revenue relative or do rearview a would of have fiscal completely year, to So How absolutely? that in quantification what to mirror, was? impact contribute that year's just that's you now that, this the this expectations

Tony Bowen

Scott, being way, California, along a going in year the fiscal this We potential We a for given the don't fruition definitely tailwind last specific of by come number, bit about have you, October. and year. obviously, happened that We saw of congratulations. a some talked what Yes. all to into thank

Advance I said We of last broadly, obviously in a and made materially his was on average think obviously and volume gave top loans number Jeff charge opening just in. which had number of as participate assisted. strong volume product the really of We the was higher the that country. that kind than we season. across we year, changes to comments, some realize of out net a Emerald And good

of things expense number a just being were on So the expenses despite revenue up. down I the mean, side. Also side. on revenue

obviously that's start, but keep first good XX% our for the always X really So mind the of a we about to like quarters in revenue is year.

despite So in early the good we're having game. a start, still

to slower have Tax We industry. well for bit of like do. season even starting our a it's it's perspective, a little business looks lot though from the

a go, good year. way of start to we about So but long feel the the

Scott Schneeberger

the following industry. that Just slow but well said on you mentioned, for last for line you starting you,

just -- let might have -- been a just them the in there earlier, I So and wait thought earlier. outperforming ones. might tie, I'm -- think consumers? although is part, seeing, you they are why what that's [indiscernible] didn't have Jeff why appreciate you're you as -- that need think dynamic. curious all are you was you have that's situation. would something you lot might I there this year the understand I slow passing the Or you for guys Is or attributed work? and Thanks starting I a Are I EITC think other why thought but pushed I that think And money then well. from you be it what hearing early? me it side slow? is to Do heard you second say it you done to I survey under

Tony Bowen

probably clear with start I because me the wasn't enough. Let clarification

think include starting industry. the overall that's So especially Scott. industry And us. early that, would not Obviously, part the slower. we're I see I atypical. think part, mean the that a big is of And I you

lot for shows softer you when of season, this typically times in early around day-to-day the a basis, especially time, volume. long been a compare You've a on business

who to, I a talked waiting, kind this gets finalized we that this just think even of though see CTC taxes all don't their are eventually at little We they exaggerating to timing. then technically bit what and need that point. clients filing is year. That's know

look our prior we our we the I our operational things mix, think control, clients, of pricing can when clients, good. everything volume at new looks execution,

mean let all land. slower know volume I is point. what than up will that's at going in weeks. I'll us, timing. Jeff starting ultimately where the though So by That's that's for next it the just well here We to even catch EITC few

JeffreyJones

it's mean EITC CTC I some there. out clients, going overall Yes. there's and to obviously, be

So But focus refund advanced season commented value messaging, that. on early our on just strong. again, prop and Tony that's

with see of And Advance. is We value. is market. we're on the we the Refund that a are year. in know an do you audiences. work performing is that But that's what you advertising with most doing lot see targeted specific what very We're may very to communicating with this television better underneath creative that segment well And important

Scott Schneeberger

free, just little Great. SKUs, taxes because rollout? clarification. but signs importantly, to that that I get question, the early read what just of a free the is are But you're we that part if of that the a want two that part and seeing maybe could, just that it. and three pain and AI want I this strategy, first -- approach. two on Thanks first about not bit free [indiscernible]. was for what price elaboration the the decision one for it's on behind to on But kind from your just I more you, -- more just like I early

JeffreyJones

drive quickly in we how I'll brought I absolute both AI mean, to with every of it your lots products. very what's product and early, at tax to kind we is day exist The see this what versus tax strong, they opting assist. choices. is That's conversion They us self-help two and what this DIY want looking to I'm ultimately, Tax but team DIY, accuracy at in behavior. Ultimately, generative about have can product pleased we're mean using terms a we of watching great human choose. Yes. AI AI them. simple very and reiterate for unknown the and at different higher is consumers help user consumer we're certainly help for is that this often but our center absolutely see to professional point. point, experience the inside And call I if today. behavior? with How in things both are quality want operations, looking market, versus

So new and deliver versus clients. SKU value as QX lineup plays simple. this a is the out our learning. is competition. and competitors. proposition the great we feel core and The it was I about strengthen think to in world. we we ability tax we technology pricing user idea able QX, be versus pricing value really value we for experience It's into just for We the thought our know will our this that get The and to share opportunity season more a lot have about and for the more and lot free perception even to great about a strengthen the

Operator

next comes line Alex Our from the question Research. Barrington Paris of of

Alexander Paris

my Tony, later. but talk add on we'll Yes. well, as I'll pricing. congratulations Question

has versus you as of assisted the then if in any, that for think, modest the you my example? it's text think had second on changed, that taking single how said single-digit question. And DIY Orders assisted. TurboTax, well. that I increases said, price is side on I discount like low the digits price magnitude, low prepared you're increases price first And just

JeffreyJones

channels. of in in range what I'll see is the first. kind Jeff. given yes, the I So chime the X% in we both tax nature of mean, more X%, competitively dynamic the with X%, and in Obviously, DIY, in Alex, in happening and similar this DIY, we assisted can channel market. pricing, be consumer

For years relative confident more And take to price we gap. more and as of closing has that advantage grown, the feel about price maintained our we a They continue experience have price quality now, dramatically. to TurboTax.

the getting that for. we and not to us And the experience paying they close increases, to so about we're gap. necessarily see exist that be We consumer make really price like telling do lead to worth take getting great ability but follow they're the their intentional they're continue want things is sure significant to that tax as AI value the and is that trying

bit so DIY, we than what of bit how it do obviously is And a view in about a pricing thinking that's we little But the strategy. in dynamic assisted.

Alexander Paris

Great.

clarification. point a just of So

price your price both X% both said dramatically. X%, take X%, continue is on DIY. to sides, channels, they But up You

So I would away correct? narrow, price see you from your for Turbo did that over take opportunity that, versus narrow the Is but to discount it time. not

JeffreyJones

I gets to are different many are generally so It complex there think fast because There that's right. attaches SKUs. SKUs.

have All of those different price gaps.

So definitely by I'm SKU add SKU generalizing trying you a to comparison. on would do our anything? versus pricing in philosophy lineup Tony,

Tony Bowen

price thing only think paid the on include I know Yes, is that the a larger much discrepancy. we SKUs AI assist, we've got

price and you're think that point, in we which know into [indiscernible] We time to to #X So trying your depends to been it as revenue advantage is overall continue use an still last important. SKU the player value which having proposition and this the our lean few it in which the product years, growth, of volume, drive additional the essentially that's DIY category, on I as year. season. definitely that. And the we piece and drive think strategy will but can We're an

Alexander Paris

complexity, appreciate I Great. that. tax Okay. code changes. And then

to this NAC any due you code year? changes, tax While in modest, do lift expect

JeffreyJones

a where than answer our other Well, we're not of see this CTC, is both lot a changes mean to customers. year at happening it's that really. yes, year benefit I about the we a I same where not time, think

So that's we really the one. talked And earlier. obviously, about that's as timing more

Alexander Paris

tax half for Block that's a me. assume busy. first H&R last guess routinely I repurchased locations. then has And I is Great. given season question awfully franchise fair the

you you to in this that same per expect be think XXX target neighborhood year. to year? I in XXX Do

Tony Bowen

You're exactly right.

basically first We in probably those point. close So we now level is the before us. XXX try all behind season at tax do this starts, which those of half. almost to We're closer to

they're the the job sell, nice they're buyers willing We being franchisees of them been we're capital. if willing already love on if Block of ROI integration to locations. buyers. use has a seamless great is great reacting as a H&R It's investments. operating got those to We've So fantastic. been sellers, did given they're The willing a sorry, which acquiring -- willing team very

are. willing right, like they going said, locations being year, which in XXX we're is it the about to up So this probably if I always end total. typically And are

Operator

to like now would closing remarks. I the you. conference Gallina Michaella to back Thank for Madam? turn

Michaella Gallina

conference everyone, Latif, fiscal our Thanks, results quarter for This and second today. us call. financial joining XXXX thanks, concludes

Operator

Thank you for participating.

may You now disconnect.

H&R Block (HRB) 6 Feb 242024 Q2 Earnings call transcript