H&R Block Reports Strong Fiscal 2022 Results; Increases Dividend & Announces New Share Repurchase Authorization

Aug 9, 2022

KANSAS CITY, Mo., Aug. 09, 2022 (GLOBE NEWSWIRE) -- H&R Block, Inc. (NYSE: HRB) (the "Company") today released its financial results1 for the fiscal year ended June 30, 2022.

  • H&R Block reports fiscal year results exceeding its revenue and earnings outlook
  • In fiscal year 2022, the Company completed share repurchases of $550 million at an average price of $23.84, retiring 13% of its total shares outstanding
  • The Company announced a 7% increase in its quarterly dividend to $0.29 per share
  • The Company announced a new share repurchase authorization of $1.25 billion available through fiscal year 2025
  • The Company provided its FY23 outlook, guiding to growth in revenue, EBITDA, and adjusted earnings per share

"Fiscal year 2022 marked another year of strong performance, continuing a multi-year trend of driving shareholder value," said Jeff Jones, H&R Block's president and chief executive officer. "We produced another strong tax season and achieved meaningful milestones in our Block Horizons journey, including a record year in Small Business, launching our new mobile banking platform, Spruce, and more than tripling the use of virtual tools among tax clients. I am also pleased to announce that the Board of Directors has approved an increase to our dividend and a new share repurchase authorization as a result of the strength in our business and their confidence in our future."

Fiscal 2022 Results and Key Financial Metrics

“Our strong finish resulted in beating our revenue and earnings outlook," said Tony Bowen, H&R Block's chief financial officer. "Because of our robust free cash flow generation, we are able to return significant value to shareholders. This year we repurchased 13% of shares outstanding and are increasing the dividend by 7%. We continue to create value and are excited for the years ahead."

Fiscal year 2022 results are not comparable to the prior year period, as the 2020 tax deadline was extended to July 15 of that year due to the pandemic. As a result, 15 days of tax season 2020 were included in reported results for the year ended June 30, 2021. Therefore, to provide a more useful comparison, in the “Normalized Results” section below the Company has provided comparisons adjusted for the impacts of the extended 2020 tax season.

  Year Ended June 30,
(in millions, except EPS) 2022
Revenue $3,463  $3,589 
Pretax Income $659  $797 
Net Income $554  $684 
Weighted-Avg. Shares - Diluted  171.4   187.3 
EPS2 $3.26  $3.67 
Adjusted EPS2 $3.51  $3.94 
EBITDA2 $890  $1,051 
  • Total revenue of $3.46 billion decreased by $125 million, or 3.5%.
  • Total operating expenses of $2.7 billion increased by $21 million, or 0.8%, primarily due to higher marketing and technology costs, partially offset by lower depreciation and amortization and bad debt.
  • Pretax income of $659 million decreased by $138 million, or 17.3%, due to the decrease in revenue because of the 2020 tax season extension.
  • Earnings per share from continuing operations of $3.26 decreased by $0.41, or 11.2%; adjusted earnings per share from continuing operations of $3.51 decreased by $0.43, or 10.9%.

Normalized2 Results

When comparing fiscal year 2022 to the prior year results normalized2 to remove the impacts of the tax season extension into July of 2020 and non-recurring Emerald Card stimulus activity:

(in millions, except EPS)
 Year Ended June 30,    Normalized2
Year Ended
June 30, 2021

 % Change  % Change
Total Revenue $3,463  $3,589  (3.5)% $3,298  5.0%
Pretax Income $659  $797  (17.3)%  $561  17.6%
Adjusted EPS2 $3.51  $3.94  (10.9)%  $2.97  18.2%
EBITDA2 $890  $1,051  (15.3)%  $815  9.2%
  • Total revenue of $3.46 billion increased by $165 million, or 5.0%.
  • Pretax income of $659 million increased by $99 million, or 17.6%.
  • Adjusted earnings per share from continuing operations2 of $3.51 increased by $0.54, or 18.2%.
  • EBITDA2 of $890 million increased by $75 million, or 9.2%.

Capital Structure

The Company reported the following related to its capital structure:

  • In fiscal year 2022, the Company repurchased and retired approximately 23 million shares, or 13% of shares outstanding, at an aggregate price of $550 million, or $23.84 per share.
  • The Company announced today that the Board of Directors approved a new share repurchase authorization of $1.25 billion, effective through fiscal year 2025.
  • The Company announced today that the Board of Directors increased the quarterly dividend by 7%, representing the sixth increase in seven years. The quarterly cash dividend is now $0.29 per share, payable on October 3, 2022, to shareholders of record as of September 8, 2022.

H&R Block has paid quarterly dividends consecutively since the Company became public in 1962. Since 2016, the Company has returned over $2.7 billion to shareholders in the form of share repurchases and dividends.


For fiscal year 2023 the Company expects:

  • Revenue to be in the range of $3.535 to $3.585 billion.
  • EBITDA3 to be in the range of $915 to $950 million.
  • Effective tax rate to be approximately 22%.
  • Adjusted Diluted Earnings Per Share3 to be in the range of $3.70 to $3.95.

The Company expects double digit Adjusted Diluted Earnings Per Share3 growth annually through 2025.

Conference Call & Webcast

A conference call for analysts, institutional investors, and shareholders will be held at 4:30 p.m. Eastern time on Tuesday, August 9, 2022. During the conference call the company will discuss fiscal 2022 results, outlook, and a general business update. To join live, participants must register at https://register.vevent.com/register/BI1e6bb1dd7d67421f8c5a52396a15e904. Once registered, the participant will receive a dial-in number and unique PIN to access the call. Please join approximately 5 minutes prior to the scheduled start time.

The call, along with a presentation for viewing, will also be webcast in a listen-only format for the media and public. The webcast can be accessed directly at https://edge.media-server.com/mmc/p/bh45bypx and will be available for replay 2 hours after the call is concluded and continuing for 90 days.

About H&R Block

H&R Block, Inc. (NYSE: HRB) provides help and inspires confidence in its clients and communities everywhere through global tax preparation services, financial products, and small-business solutions. The company blends digital innovation with human expertise and care as it helps people get the best outcome at tax time and also be better with money using its mobile banking app, Spruce. Through Block Advisors and Wave, the company helps small-business owners thrive with innovative products like Wave Money, a mobile-first, small-business bank account and bookkeeping solution that manages bookkeeping automatically. For more information, visit H&R Block News or follow @HRBlockNews on Twitter.

About Non-GAAP Financial Information

This press release and the accompanying tables include non-GAAP financial information. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with generally accepted accounting principles, please see the section of the accompanying tables titled "Non-GAAP Financial Information."

Forward-Looking Statements

This press release 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 words or variation of words such as "expects," "anticipates," "intends," "plans," "believes," "commits," "seeks," "estimates," "projects," "forecasts," "targets," "would," "will," "should," "goal," "could" or "may" or other similar expressions. Forward-looking statements provide management's current expectations or predictions of future conditions, events or results. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. They may include estimates of revenues, client trajectory, income, effective tax rate, earnings per share, cost savings, capital expenditures, dividends, share repurchases, liquidity, capital structure, market share, industry volumes or other financial items, descriptions of management’s plans or objectives for future operations, products or services, or descriptions of assumptions underlying any of the above. They also include the expected impact of the coronavirus (COVID-19) pandemic, including, without limitation, the impact on economic and financial markets, the Company’s capital resources and financial condition, the expected use of proceeds under the Company’s revolving credit facility, future expenditures, potential regulatory actions, such as extensions of tax filing deadlines or other related relief, changes in consumer behaviors and modifications to the Company’s operations related thereto. All forward-looking statements speak only as of the date they are made and reflect the Company's good faith beliefs, assumptions and expectations, but they are not guarantees of future performance or events. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions, factors, or expectations, new information, data or methods, future events or other changes, except as required by law. By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause such differences include, but are not limited to a variety of economic, competitive and regulatory factors, many of which are beyond the Company's control, that are described in our Annual Report on Form 10-K for the fiscal year ended April 30, 2021 in the section entitled "Risk Factors" and additional factors we may describe from time to time in other filings with the Securities and Exchange Commission. You may get such filings for free at our website at https://investors.hrblock.com. In addition, factors that may cause the Company’s actual estimated effective tax rate to differ from estimates include the Company’s actual results from operations compared to current estimates, future discrete items, changes in interpretations and assumptions the Company has made, future actions of the Company, or increases in applicable tax rates in jurisdictions where the Company operates. You should understand that it is not possible to predict or identify all such factors and, consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

1 All amounts in this release are unaudited. Unless otherwise noted, all comparisons refer to the current period compared to the corresponding prior year period.
2 All per share amounts are based on fully diluted shares at the end of the corresponding period. The company reports non-GAAP financial measures of performance, including adjusted earnings per share (EPS), earnings before interest, tax, depreciation, and amortization (EBITDA) from continuing operations, normalized revenues, normalized pretax income, normalized EBITDA, and normalized adjusted earnings per share, and free cash flow, which it considers to be useful metrics for management and investors to evaluate and compare the ongoing operating performance of the company. See "About Non-GAAP Financial Information" below for more information regarding financial measures not prepared in accordance with generally accepted accounting principles (GAAP).
3 Adjusted Diluted Earnings Per Share (EPS) and earnings before interest, tax, depreciation, and amortization (EBITDA) from continuing operations are non-GAAP financial measures. Future period non-GAAP outlook includes adjustments for items not indicative of our core operations, which may include, without limitation, items described in the below section titled “Non-GAAP Financial Information” and in the accompanying tables. Such adjustments may be affected by changes in ongoing assumptions and judgments, as well as nonrecurring, unusual, or unanticipated charges, expenses or gains, or other items that may not directly correlate to the underlying performance of our business operations. The exact amounts of these adjustments are not currently determinable but may be significant. It is therefore not practicable to provide the comparable GAAP measures or reconcile this non-GAAP outlook to the most comparable GAAP measures.

For Further Information

Investor Relations: Michaella Gallina, (816) 854-3022, michaella.gallina@hrblock.com
  Jordyn Eskijian, (816) 854-5674, jordyn.eskijian@hrblock.com
Media Relations: Angela Davied, (816) 854-5798, angela.davied@hrblock.com

FINANCIAL RESULTS (unaudited, in 000s - except per share amounts)
  Three months ended June 30, Year ended June 30,
  2022 2021 2022 2021
U.S. assisted tax preparation $638,018  $608,331  $2,094,612  $2,140,410 
U.S. royalties  55,694   60,503   225,242   238,629 
U.S. DIY tax preparation  130,631   132,418   319,086   367,289 
International  79,871   81,125   231,335   229,407 
Refund Transfers  28,228   31,047   162,893   172,356 
Emerald Card®  21,696   48,050   125,444   144,095 
Peace of Mind® Extended Service Plan  35,264   34,421   94,637   97,851 
Tax Identity Shield®  19,683   18,553   39,114   40,999 
Interest and fee income on Emerald AdvanceSM  543   429   43,981   53,241 
Wave  22,220   18,478   80,965   63,134 
Other  18,225   12,415   45,961   41,234 
Total revenues  1,050,073   1,045,770   3,463,270   3,588,645 
Compensation and benefits:        
Field wages  247,421   243,530   808,903   812,123 
Other wages  83,974   75,487   284,689   280,304 
Benefits and other compensation  60,194   57,102   206,902   211,382 
   391,589   376,119   1,300,494   1,303,809 
Occupancy  106,639   103,862   413,162   413,500 
Marketing and advertising  60,448   50,654   284,244   264,745 
Depreciation and amortization  34,716   37,782   142,178   154,818 
Bad debt  12,018   19,197   71,778   82,353 
Other  133,059   137,457   506,517   477,785 
Total operating expenses  738,469   725,071   2,718,373   2,697,010 
Other income (expense), net  465   1,498   2,454   4,989 
Interest expense on borrowings  (18,621)  (20,834)  (88,282)  (99,491)
Income from continuing operations before income taxes  293,448   301,363   659,069   797,133 
Income taxes  68,757   55,678   98,423   106,675 
Net income from continuing operations  224,691   245,685   560,646   690,458 
Net loss from discontinued operations  (1,988)  (1,976)  (6,972)  (6,509)
Net income $222,703  $243,709  $553,674  $683,949 
Continuing operations $1.37  $1.32  $3.26  $3.67 
Discontinued operations  (0.01)  (0.01)  (0.04)  (0.03)
Consolidated $1.36  $1.31  $3.22  $3.64 
WEIGHTED AVERAGE DILUTED SHARES  163,283   184,849   171,435   187,316 
Adjusted diluted EPS(1) $1.43  $1.39  $3.51  $3.94 
EBITDA(1) $346,785  $359,979  $889,529  $1,051,442 

(1)   All non-GAAP measures are results from continuing operations. See "Non-GAAP Financial Information" for a reconciliation of non-GAAP measures.

CONSOLIDATED BALANCE SHEETS (unaudited, in 000s - except per share data)
As of June 30, 2022 2021
Cash and cash equivalents $885,015  $1,434,381 
Cash and cash equivalents - restricted  165,698   149,783 
Receivables, net  58,447   88,932 
Income taxes receivable  202,838   330,872 
Prepaid expenses and other current assets  72,460   76,414 
Total current assets  1,384,458   2,080,382 
Property and equipment, net  123,912   139,276 
Operating lease right of use asset  427,783   445,847 
Intangible assets, net  309,644   351,093 
Goodwill  760,401   754,521 
Deferred tax assets and income taxes receivable  208,948   181,996 
Other noncurrent assets  54,012   61,273 
Total assets $3,269,158  $4,014,388 
Accounts payable and accrued expenses $160,929  $164,269 
Accrued salaries, wages and payroll taxes  154,764   168,989 
Accrued income taxes and reserves for uncertain tax positions  280,115   238,863 
Operating lease liabilities  206,898   214,190 
Deferred revenue and other current liabilities  196,107   196,175 
Total current liabilities  998,813   982,486 
Long-term debt  1,486,876   1,983,719 
Deferred tax liabilities and reserves for uncertain tax positions  226,362   301,658 
Operating lease liabilities  228,820   244,932 
Deferred revenue and other noncurrent liabilities  116,656   113,535 
Total liabilities  3,057,527   3,626,330 
Common stock, no par, stated value $.01 per share  1,936   2,167 
Additional paid-in capital  772,182   779,465 
Accumulated other comprehensive income (loss)  (21,645)  88 
Retained earnings  120,405   286,694 
Less treasury shares, at cost  (661,247)  (680,356)
Total stockholders' equity  211,631   388,058 
Total liabilities and stockholders' equity $3,269,158  $4,014,388 

Year ended June 30, 2022 2021
Net income $553,674  $683,949 
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization  142,178   154,818 
Provision for bad debt  66,807   76,350 
Deferred taxes  (53,352)  33,775 
Stock-based compensation  34,252   27,808 
Changes in assets and liabilities, net of acquisitions:    
Receivables  (37,889)  (69,554)
Prepaid expenses and other current and noncurrent assets  (1,944)  (10,334)
Accounts payable, accrued expenses, salaries, wages and payroll taxes  (19,645)  85,062 
Deferred revenue, other current and noncurrent liabilities  7,342   (994)
Income tax receivables, accrued income taxes and income tax reserves  118,713   (214,586)
Other, net  (1,599)  (5,058)
Net cash provided by operating activities  808,537   761,236 
Capital expenditures  (61,955)  (53,053)
Payments made for business acquisitions, net of cash acquired  (35,920)  (17,024)
Franchise loans funded  (18,467)  (26,926)
Payments from franchisees  30,899   43,643 
Other, net  8,902   10,713 
Net cash used in investing activities  (76,541)  (42,647)
Repayments of line of credit borrowings  (705,000)  (3,275,000)
Proceeds from line of credit borrowings  705,000   1,275,000 
Repayments of long-term debt  (500,000)  (650,000)
Proceeds from issuance of long-term debt     1,142,400 
Dividends paid  (186,476)  (195,068)
Repurchase of common stock, including shares surrendered  (563,174)  (193,551)
Proceeds from exercise of stock options  6,334   2,537 
Other, net  (14,030)  (24,147)
Net cash used in financing activities  (1,257,346)  (1,917,829)
Effects of exchange rate changes on cash  (8,101)  13,457 
Net decrease in cash and cash equivalents, including restricted balances  (533,451)  (1,185,783)
Cash, cash equivalents and restricted cash, beginning of the year  1,584,164   2,769,947 
Cash, cash equivalents and restricted cash, end of the year $1,050,713  $1,584,164 
Income taxes paid, net of refunds received $31,689  $286,040 
Interest paid on borrowings  81,960   92,756 
Accrued additions to property and equipment  4,315   2,085 
Accrued dividends payable to common shareholders  43,093   48,998 

(in 000s, except per share amounts)
 Year Ended
June 30, 2022
 Year Ended
June 30, 2021
Year Ended
June 30, 2021
Revenue - as reported $3,463,270  $3,588,645  $3,588,645  $(125,375) (3.5)%
Adjustments - normalization:          
Impacts of Emerald Card Stimulus        (44,346)    
Tax Season impacts recognized in July 2020        (246,250)    
Revenues $3,463,270  $3,588,645  $3,298,049  $165,221  5.0%
Pretax income - as reported $659,069  $797,133  $797,133  $(138,064) (17.3)%
Adjustments - normalization:          
Impacts of Emerald Card Stimulus and pandemic related sick pay and supplies        (32,546)    
Tax Season impacts recognized in July 2020        (204,060)    
Pretax income $659,069  $797,133  $560,527  $98,542  17.6%
Net income from continuing operations - as reported $560,646  $690,458  $690,458  $(129,812) (18.8)%
Adjustments - normalization:          
Impacts of Emerald Card Stimulus and pandemic related sick pay and supplies (pretax)        (32,546)    
Tax Season impacts recognized in July 2020 (pretax)        (204,060)    
Tax effect of adjustments        55,023     
Net income from continuing operations $560,646  $690,458  $508,875  $51,771  10.2%
Adjustments to net income from continuing operations:          
Amortization of intangibles related to acquisitions (pretax)  56,292   66,246   66,246     
Tax effect of adjustments(2)  (13,358)  (16,237)  (16,237)    
Adjusted net income from continuing operations $603,580  $740,467  $558,884  $44,696  8.0%
Diluted earnings per share from continuing operations - as reported $3.26  $3.67  $3.67  $(0.41) (11.2)%
Adjustments to normalize net income, net of tax        (0.97)    
Adjustments to remove amortization of intangibles, net of tax  0.25   0.27   0.27     
Adjusted diluted earnings per share from continuing operations $3.51  $3.94  $2.97  $0.54  18.2%

(1) The variance is calculated as the difference between the year ended June 30, 2022 and the normalized year ended June 30, 2021.
(2) The tax effect of adjustments is the difference between the tax provision calculation on a GAAP basis and on an adjusted non-GAAP basis.

(in 000s)
 Year Ended
June 30, 2022
 Year Ended
June 30, 2021
Year Ended
June 30, 2021
Net income - as reported $553,674  $683,949       
Discontinued operations, net  (6,972)  (6,509)      
Net income from continuing operations(2)  560,646   690,458   508,875     
Add back:          
Income taxes  98,423   106,675   51,652     
Interest expense  88,282   99,491   99,491     
Depreciation and amortization  142,178   154,818   154,818     
   328,883   360,984   305,961     
EBITDA from continuing operations $889,529  $1,051,442  $814,836  $74,693  9.2%

(1) The variance is calculated as the difference between the year ended June 30, 2022 and the normalized year ended June 30, 2021.
(2) Net income from continuing operations for the normalized year ended June 30, 2021 is computed in the preceding table.

    (in 000s)
  Three months ended June 30,
Net income - as reported $222,703  $243,709 
Discontinued operations, net  (1,988)  (1,976)
Net income from continuing operations - as reported  224,691   245,685 
Add back:    
Income taxes  68,757   55,678 
Interest expense  18,621   20,834 
Depreciation and amortization  34,716   37,782 
   122,094   114,294 
EBITDA from continuing operations $346,785  $359,979 

  (in 000s, except per share amounts)
  Three months ended June 30,
Net income from continuing operations - as reported $224,691  $245,685 
Amortization of intangibles related to acquisitions (pretax)  13,151   15,848 
Tax effect of adjustments(1)  (3,256)  (3,648)
Adjusted net income from continuing operations $234,586  $257,885 
Diluted earnings per share from continuing operations - as reported $1.37  $1.32 
Adjustments, net of tax  0.06   0.07 
Adjusted diluted earnings per share from continuing operations $1.43  $1.39 

(1) The tax effect of adjustments is the difference between the tax provision calculation on a GAAP basis and on an adjusted non-GAAP basis.


Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Because these measures are not measures of financial performance under GAAP and are susceptible to varying calculations, they may not be comparable to similarly titled measures for other companies.

We consider our non-GAAP financial measures to be performance measures and a useful metric for management and investors to evaluate and compare the ongoing operating performance of our business. The normalized measures are intended to provide additional context around our results for the year ended June 30, 2021 by showing the impacts of the extended 2020 tax season. We make adjustments for certain non-GAAP financial measures related to amortization of intangibles from acquisitions and goodwill impairments. We may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures.

We measure the performance of our business using a variety of metrics, including earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations, adjusted EBITDA from continuing operations, adjusted diluted earnings per share from continuing operations, normalized revenues, normalized pretax income, normalized EBITDA from continuing operations, normalized adjusted diluted earnings per share and free cash flow. We also use EBITDA from continuing operations and pretax income of continuing operations, each subject to permitted adjustments, as performance metrics in incentive compensation calculations for our employees.