H&r Block, Inc. · NYSE:HRB
H&r Block — Q1 2023 Earnings Presentation
21 slides from H&r Block's earnings presentation, Nov 1, 2022
Slide 1: Q1FY23 Financial Results Conference Call
Q1FY23 Financial Results Conference Call November 1, 2022
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: Q1 Performance Met Expectations
Q1 Performance Met Expectations FY23 guidance reaffirmed Extension Ongoing conversions adoption of increased 5% virtual tools YoY
Slide 7: Block Horizons: The next phase of our strategic transformation
Block Horizons The next phase of our strategic transformation
Slide 8: Small Business
Small Business Gaining momentum with significant runway ahead — Continued double Capitalizing upon growth trends: digit revenue growth in Assisted small business tax, 2. Launched self-serve business formation driven by volume product that can result in: 1. Building an inside sales capability and NAC
Slide 9: Wave
Wave New leadership successfully onboarded New CEO 18% revenue completing a growth YoY in Q1 strategic review of the business Less payment activity than anticipated ef) wave
Slide 10: Financial Products
Financial Products cm Preparing for launch of Spruce inthe Assisted channel ““ Innovation: As of September 30, 2022: Educating tax = Round Up 160K signups professionals on = Mobile check $98M customer the clear and deposit deposits different value = Smart Tax propositions between Spruce and Emerald
Slide 11: Block Experience
Block Experience Blending digital capabilities with human help = Machine learning Already hired to Opportunity to models are 75% of our goal for increase awareness improving the reimagined first year of DIY product; customer tax pro role coming to market experience and with new approach increasing o
Slide 12: Environmental, Social, Governance
Environmental, Social, Governance Third annual report recently released We We connect. Read the full report here
Slide 13: Tony Bowen, Chief Financial Officer
Tony Bowen Chief Financial Officer
Slide 14: Q1 FY23 Financial Results
Q1 FY23 Financial Results = Revenue decrease due to $17M impact from the Advanced Child Tax Credit loaded onto Emerald Cards in Q1’22; similar impact expected for Q2, contemplated in FY23 outlook = $4M negative foreign exchange impact in Australian and Canadian businesses = The decline was partially
Slide 15: Capital Allocation Practice Remains Strong
Capital Allocation Practice Remains Strong Ongoing value creation for shareholders — Q1FY23: Repurchased Retired another Paid $0.29 4.9M shares 3% of shares quarterly dividend, for $220M outstanding an increase of 7% Since 2016: red Repurchased Petes “lly Increased 71.6M shares quarterly dividend fo
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: Jeff Jones, President & Chief Executive Officer
Jeff Jones President & Chief Executive Officer
Slide 19: Q&A
Q&A
Slide 20: Appendix
Appendix
Slide 21: 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