H&r Block, Inc. · NYSE:HRB
H&r Block — Q1 2024 Earnings Presentation
24 slides from H&r Block's earnings presentation, Nov 7, 2023
Slide 1: Q1FY24 Financial Results Conference Call
Q1FY24 Financial Results Conference Call November 7, 2023
Slide 2: Michaella Gallina, VP, Investor Relations
Michaella Gallina VP, Investor Relations
Slide 3: Safe Harbor Statement
Safe Harbor Statement H&R 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 wor
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 (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 & Chief Executive Officer
Jeff Jones President & Chief Executive Officer
Slide 6: Good Start to the Year
Good Start to the Year Q1 highlights: Reaffirming FY24 outlook Grew revenue and managed expenses well Repurchased $132M of shares outstanding, retiring another 2% i
Slide 7: Block Horizons
Block Horizons The next phase of our strategic transformation
Slide 8: Small Business
Small Business Continues to be a growth driver BLOCK BLOCK Advisors & Wave by H&R BLOCK " +6% Assisted Small Business | * +6% revenue growth YoY total revenue growth YoY g = Plan to accelerate revenue * Double digit growth in growth and put us on a path bookkeeping and payroll to profitability: serv
Slide 9: Financial Products
Financial Products Spruce: H&R Block’s mobile banking platform Since launch through September 30, 2023: 1] De pos it t ren d iS >300K improving signups = Focused on acquiring clients at tax time & driving ~ user engagement $400M within the app customer deposits Note: Banking products offered by Path
Slide 10: Block Experience
Block Experience Blending digital tools with human expertise MyBlock enhancements for TS24: Status tracker Personalized checklist Call to action Easier and faster to approve and sign return online Access tax documents and return digitally 4» Download on the GETITON @ App Store Google Play H&R BLOCK
Slide 11: Block Experience
Block Experience Blending digital tools with human expertise Leaning into genAl, initially focused on two areas: 1) Enhancing the customer experience 2) Reducing expenses and increasing productivity Microsoft highlighted our work to industry experts during their Envision Tour H&R BLOCK
Slide 12: Environmental, Social, Governance
Environmental, Social, Governance Fourth annual report released * Reflects our ongoing commitment to transparency, sustainability, and responsible business « A practices H&R = Read the full BLOCK report here
Slide 13: Tony Bowen, Chief Financial Officer
Tony Bowen Chief Financial Officer
Slide 14: Q1 FY24 Financial Results
Q1 FY24 Financial Results HER BLOCK For the three months ended For the three months ended September 30, 2023 September 30, 2022 In millions, except per share amounts Ql! FY24 QI FY23 Revenue $183.8 $180.0 2.1% Operating Expense $390.1 $389.1 (0.3%) EBITDA’ ($166.3) ($171.9) 3.3% Interest Expense $15
Slide 15: FY24 Outlook Reaffirmed
FY24 Outlook Reaffirmed HER BLOCK Assumptions: Return to typical industry growth of ~1% Maintain market share Revenue $3,530 - $3,585M Low single digit pricing EBITDA' $930 - $965M Ongoing franchise acquisitions Effective Tax Rate ~23% Opportunistic share repurchase Adjusted EPS' $4.10 - $4.30 1EBIT
Slide 16: Where We Are Going
Where We Are Going Total shareholder return algorithm Revenue EBITDA’ Share Repurchase Adjusted EPS' Dividend Free Cash Flow’ 3 - 6% Can grow up to ~1.5x revenue $1.25B authorization through 2025 Double digit growth $0.32/share quarterly >100% FCF generation relative to net income H&R BLOCK Steady i
Slide 17: Capital Allocation Practice Remains Robust
Capital Allocation Practice Remains Robust Ongoing value creation for shareholders — Q1FY24: Repurchased Retired another Paid $0.32 3.3M shares for 2% of shares quarterly dividend, $132M outstanding an increase of 10% Since 2016: Returned >$3.5B Retired ~38% Increased to shareholders of shares quart
Slide 18: Our Balance Sheet is Strong
Our Balance Sheet is Strong H&R Block is well positioned for the macro environment Relatively low leverage with $1.5B of long-term debt and >$900M EBITDA in FY23 Rising interest rates benefit our P&L on a short-term basis as interest income from our cash position will exceed interest expense on shor
Slide 19: Jeff Jones, President & Chief Executive Officer
Jeff Jones President & Chief Executive Officer
Slide 20: Q&A
Q&A
Slide 21: Appendix
Appendix
Slide 22: Non-GAAP Measure: EBITDA
Non-GAAP Measure: EBITDA The following is a reconciliation of EBITDA, which is a non-GAAP financial measure: EBITDA Net loss - as reported Discontinued operations, net Net loss from continuing operations - as reported Add back: Income tax benefit Interest expense Depreciation and amortization EBITDA
Slide 23: Non-GAAP Measure: Adjusted EPS
Non-GAAP Measure: Adjusted EPS HER BLOCK The following is a reconciliation of Adjusted EPS, which is a non-GAAP financial measure: (in 000's except for amounts per share) Three months ended Three months ended Adjusted EPS September 30, 2023 September 30, 2022 Net loss from continuing operations - as
Slide 24: Non-GAAP Measures: Free Cash Flow and Free Cash Flow Yield
Non-GAAP Measures: Free Cash Flow and Free Cash Flow Yield The following is a reconciliation of Free Cash Flow and Free Cash Flow Yield, which are non-GAAP financial measures: Free Cash Flow Yield Operating cash flow - as reported Less: Capital expenditures H&R BLOCK (in 000's except for amounts per