H&r Block, Inc. · NYSE:HRB
H&r Block — Q2 2024 Earnings Presentation
24 slides from H&r Block's earnings presentation, Feb 6, 2024
Slide 1: Q2 FY24 Financial Results Conference Call
HaR BLOCK Q2FY24 Financial Results Conference Call February 6, 2024
Slide 2: Michaella Gallina, VP Investor Relations
H&R BLOCK Michaella Gallina VP, Investor Relations, ESG, & Productivity
Slide 3: Safe Harbor Statement: Forward-Looking Statement
H&R BLOCK Safe Harbor Statement Forward-Looking Statement This presentation contains forward-looking statements within the meaning of the securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include word
Slide 4: Safe Harbor Statement: Non-GAAP Measures
H&R BLOCK Safe Harbor Statement Non-GAAP Measures We refer to certain Non-GAAP financial measures in this presentation, including adjusted earnings per share (EPS), earnings before interest, taxes, depreciation, and amortization (EBITDA), free cash flow and free cash flow yield, which management bel
Slide 5: Jeff Jones, President & CEO
H&R BLOCK Jeff Jones President & Chief Executive Officer
Slide 6: Q2 Result
Q2 Result Reaffirmed FY24 outlook +8% revenue growth, strong finish to the extended filing season Emerald Advance®™ performed well, which we believe bodes well for the tax season Repurchased $218M of shares outstanding, retiring another 3%
Slide 7: Block Horizons
H&R BLOCK Block Horizons
Slide 8: Small Business
HaR BLOCK Q2FY24 Financi: al Results Conference Call Small Business BLOCK Advisors by H&R BLOCK >20% revenue growth in Assisted Small Business tax Nearly +4% NAC increase Favorable trends in bookkeeping and payroll ef wave = +5% revenue growth = Introduced a paid tier subscription service = Roadmap
Slide 9: Financial Products: Emerald Advance
H&RBLOCK —Q2FY24 Financial Results Conference Call Financial Products Emerald Advance”: new offering performed well in Q2 "Transitioned product from a In total: line of credit to a short-term : >$380M in EA loan with flexible repayment options loans were originated, =Eliminated annual fee and stream
Slide 10: Financial Products: Spruce
HaR BLOCK Q2FY24 Financial Results Conference Call Financial Products Spruce*”:; H&R Block's mobile banking platform Cumulative results as of Dec 31, 2023: 316K signups «Improved App Store ratings; increase in accounts & engagement « Savings features are helping clients be better with money a =Promo
Slide 11: Block Experience
HaR BLOCK Q2FY24 Financial Results Conference Call Block Experience Blending digital tools with human expertise Clients are empowered to be served however they choose: fully in person to fully virtual, and everything in between Assisted Blended Everything in-between " Uploading documents from home *
Slide 12: Assisted
HaR BLOCK Q2FY24 Financial Results Conference Call Assisted Many Launched Al enhancements technology in to the MyBlock call center app operations Achieved hiring goals and saw strong trends in tax pro retention These advancements, alongside positive customer satisfaction metrics, give us confidence
Slide 13: Continue to Build Momentum in DIY
H&RBLOCK —Q2FY24 Financial Results Conference Call Continue to Build Momentum in DIY [1] [2 EF Taking modest price increases Made it easier for clients to switch with Direct Import Launched Al Tax Assist
Slide 14: It's Better With Block
H@R BLOCK Q2FY24 Financial Results Conference Call It’s Better With Block Marketing campaign promotes strong value proposition in Assisted & DIY IT’S BETTER WITH BLOCK. Spiadisp oe fs) = yok Simply upload last year’s TurboTax" return to make the switch to H&R Block Online. No interest. No loan fees.
Slide 15: Tony Bowen, Chief Financial Officer
H&R BLOCK Tony Bowen Chief Financial Officer
Slide 16: Q2 FY24 Financial Results
HaR BLOCK Q2FY24 Financial Results Conference Call Q2 FY24 Financial Results For the three months ended For the three months ended December 31, 2023 December 31, 2022 In millions, except per share amounts Q2 FY24 Q2 FY23 Change Revenue 7.6% Operating Expenses 0.7% Interest Expense $21.4 (12.5%) Pret
Slide 17: FY24 Outlook Reaffirmed
H&RBLOCK —Q2FY24 Financial Results Conference Call | FY24 Outlook Reaffirmed Assumptions: = Return to typical 1% industry growth Maintain market share Low single digit pricing Ongoing franchise acquisitions Opportunistic share repurchase FY24 Outlook Revenue $3,530 - $3,585M EBITDA’ $930 - $965M Adj
Slide 18: Where We Are Going
HaR BLOCK Q2FY24 Financial Results Conference Call Where We Are Going Total shareholder return algorithm Steady industry growth, low single digit price increases, franchise acquisitions, and Wave; Block Horizons as upside Revenue EBITDA" Share Repurchase Leverage our fixed cost structure Opportunist
Slide 19: Capital Allocation Practice Remains Robust
Capital Allocation Practice Remains Robust Q2 FY24: Repurchased Retired another 4.8M shares for 3% of shares $218M outstanding Since 2016: Returned >$3.8B Retired >40% of | Increased quarterly to shareholders | shares outstanding | dividend by 60% ‘Dividend growth is calculated as the percentage gro
Slide 20: H&R BLOCK
H&R BLOCK Q2FY24 Financial Results Conference Call 20
Slide 21: Appendix
H&RBLOCK — Q2FY24 Financial Results Conference Call Appendix Wa Section
Slide 22: EBITDA Reconciliation
Three months ended December 31, 2023 Three months ended December 31, 2022 EBITDA Net loss – as reported ($189,755) ($223,579) Discontinued operations, net 639 2,716 Net loss from continuing operations – as reported (189,116) (220,863) Add back: Income tax benefit (93,758) (77,140) Interest expense 2
Slide 23: Non-GAAP Measure: Adjusted EPS
H&RBLOCK —Q2FY24 Financial Results Conference Call | Non-GAAP Measure: /\cliusted EPS The following is a reconciliation of Adjusted EPS, which is a non-GAAP financial measure: Adjusted EPS (in 00O's except for amounts per share) Net loss from continuing operations - as reported Adjustments: Amortiza
Slide 24: Non-GAAP Measure: Free Cash Flow & Free Cash Flow Yield
H&RBLOCK —Q2FY24 Financial Results Conference Call Non-GAAP Measure: ce Cas) Flow & Free Cash Flow Yield The following is a reconciliation of Free Cash Flow and Free Cash Flow Yield, which are non-GAAP financial measures: (in 000's except for amounts per share) Free Cash Flow Yield Yaron ans Operati