H&r Block, Inc. · NYSE:HRB
H&r Block — Q2 2023 Earnings Presentation
26 slides from H&r Block's earnings presentation, Feb 7, 2023
Slide 1: Q2 FY23 Financial Results Conference Call
Q2 FY23 Financial Results Conference Call February 7, 2023
Slide 2: Michaella Gallina, VP, Investor Relations
Michaella Gallina VP, Investor Relations
Slide 3: Safe Harbor Statement: Forward-Looking Statements
Safe Harbor Statement HR BLOCK Forward-Looking Statements 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
Safe Harbor Statement Non-GAAP Measures H&R BLOCK We refer to certain Non-GAAP financial measures in this presentation, including adjusted earnings per share, earnings before interest, taxes, depreciation, and amortization (EBITDA), free cash flow and free cash flow yield, which management believes
Slide 5: Jeff Jones, President & Chief Executive Officer
Jeff Jones President & Chief Executive Officer
Slide 6: Q2 Results Met Expectations
Q2 Results Met Expectations Ongoing momentum in the core business Revenue grew Reaffirming 5% to last year FY23 outlook with a strong ending to the 2022 tax season a=
Slide 7: Block Horizons: Our strategic transformation
Block Horizons Our strategic transformation
Slide 8: Small Business
Small Business Strong revenue growth New services: Increased training: = Self-serve = Half of small business business tax pros formation tool have achieved the creates value for advanced clients & HRB certification level
Slide 9: Wave
Wave One-stop money management for small business owners ef) wave 13% revenue growth YoY in Q2 accelerating revenue growth & driving long term profitability
Slide 10: Financial Products
Financial Products Launched Spruce. in the Assisted channel in January Spruce is living its As of December 31, 2022: purpose of helping 171K sign ups clients be good with $117M customer niteinicyy deposits Goals for tax season ‘23: Note: Banking products offered by Pathward™, N.A., Member FDIC,
Slide 11: Block Experience: In Assisted
Block Experience Blending technology with human expertise — In Assisted: Successfully met hiring and staffing goals for the year
Slide 12: Block Experience: In DIY
Block Experience Blending technology with human expertise — In DIY: Marketing & Ease & benefits Price awareness of switching transparency New Al-driven technology automatically scans prior year TurboTax® returns to identify potential missing refund dollars for clients
Slide 13: Jeff Jones, President & Chief Executive Officer
Jeff Jones President & Chief Executive Officer
Slide 14: Tony Bowen, Chief Financial Officer
Tony Bowen Chief Financial Officer
Slide 15: Q2 FY23 Financial Results
Q2 FY23 Financial Results H&R BLOCK For the three months ended For the three months ended il h December 31, 2021 December 31, 2022 In millions, except per share ey FY22 Q2 FY23 Revenue $158.8 $166.4 4.8% Operating Expense $436.1 $449.6 (3.1%) Interest Expense $23.1 $19.0 17.8% Pretax Loss ($298.9) (
Slide 16: Reiterating FY23 Outlook
Reiterating FY23 Outlook’ HER BLOCK Revenue $3,535 - $3,585M EBITDA' $915 - $950M Effective Tax Rate ~22% Adjusted EPS! $3.70 - $3.95 lEarnings before interest, tax, depreciation, and amortization (EBITDA) and adjusted earnings per share (EPS) from continuing operations are non-GAAP financial measur
Slide 17: Where We Are Going
Where We Are Going Total shareholder return Revenue EBITDA' Share Repurchase Adjusted EPS' Dividend Free Cash Flow’ 5x revenue $1.25B authorization through 2025 Double digit growth $0.29/share quarterly >100% FCF generation relative to net income H&R BLOCK Steady industry growth, low single digit pr
Slide 18: Capital Allocation Practice Remains Strong
Capital Allocation Practice Remains Strong Ongoing value creation for shareholders Q2 FY23: Repurchased Retired another 3.2M shares 2% of shares for $130M outstanding In 1H FY23: Repurchased Retired >8M shares for 5% $350M of the float
Slide 19: Industry Volatility is Low and HRB is Resilient
Industry Volatility is Low and HRB is Resilient Even during economic downturns Stable industry: Government & client behavior: = Most correlated to =» Government employment, history of which has providing stimulus remained strong through tax More small system business formed = In tough times, in toug
Slide 20: Tony Bowen, Chief Financial Officer
Tony Bowen Chief Financial Officer
Slide 21: Jeff Jones, President & Chief Executive Officer
Jeff Jones President & Chief Executive Officer
Slide 22: Q&A
Q&A
Slide 23: Appendix
Appendix
Slide 24: Non-GAAP Measures: FY22 Free Cash Flow and Free Cash Flow Yield
Non-GAAP Measures: FY22 Free Cash Flow HER and Free Cash Flow Yield BLOCK The following is a reconciliation of Free Cash Flow and Free Cash Flow Yield, which are non-GAAP financial measures: Free Cash Flow Yield Year ended (in 000's except for amounts per share) June 30, 2022 Operating cash flow - a
Slide 25: Non-GAAP Measure: EBITDA
Non-GAAP Measure: EBITDA HER BLOCK The following is a reconciliation of EBITDA, which is a non-GAAP financial measure: EBITDA ree months ended Three months ended (in 000's) December 3° Net Loss - as reported ($223,579) ($190,605) Discontinued operations, net 2,716 1,532 Net loss from continuing oper
Slide 26: Non-GAAP Measure: Adjusted EPS
Non-GAAP Measure: Adjusted EPS The following is a reconciliation of Adjusted EPS, which is a non-GAAP financial measure: Adjusted EPS. Three months ended (in 000's except for amounts per share) December 31, 2022 Three months ended December 31, 2021 H&R BLOCK Net loss from continuing operations - as