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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
March 31, 2023
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-06089

H&R Block, Inc.
(Exact name of registrant as specified in its charter)
Missouri44-0607856
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification No.)
One H&R Block Way, Kansas City, Missouri 64105
(Address of principal executive offices, including zip code)
(816) 854-3000
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, without par valueHRBNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes     No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes     No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one)
Large accelerated filer            Accelerated filer         Non-accelerated filer           Smaller reporting company  Emerging growth company
    
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes     No  
The number of shares outstanding of the registrant's Common Stock, without par value, at the close of business on April 28, 2023: 152,284,238 shares.



Table of Contents

Form 10-Q for the Period ended March 31, 2023
Table of Contents



Table of Contents
PART I    FINANCIAL INFORMATION
ITEM 1.    FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME:(unaudited, in 000s, except 
per share amounts)
Three months ended March 31,Nine months ended March 31,
2023202220232022
REVENUES:
Service revenues$1,885,035 $1,841,122 $2,191,794 $2,151,824 
Royalty, product and other revenues208,614 220,635 248,245 261,373 
2,093,649 2,061,757 2,440,039 2,413,197 
OPERATING EXPENSES:
Costs of revenues883,686 831,455 1,442,693 1,362,310 
Selling, general and administrative345,461 344,937 625,158 617,594 
Total operating expenses1,229,147 1,176,392 2,067,851 1,979,904 
Other income (expense), net13,224 238 21,020 1,989 
Interest expense on borrowings(22,298)(23,746)(57,107)(69,661)
Income from continuing operations before income taxes855,428 861,857 336,101 365,621 
Income taxes209,351 186,884 78,254 29,666 
Net income from continuing operations646,077 674,973 257,847 335,955 
Net loss from discontinued operations, net of tax benefits of $792, $539, $1,920 and $1,495
(2,648)(1,796)(6,418)(4,984)
NET INCOME$643,429 $673,177 $251,429 $330,971 
BASIC EARNINGS PER SHARE:
Continuing operations$4.22 $4.13 $1.65 $1.95 
Discontinued operations(0.01)(0.01)(0.04)(0.03)
Consolidated$4.21 $4.12 $1.61 $1.92 
DILUTED EARNINGS PER SHARE:
Continuing operations$4.14 $4.06 $1.62 $1.92 
Discontinued operations(0.02)(0.01)(0.04)(0.03)
Consolidated$4.12 $4.05 $1.58 $1.89 
DIVIDENDS DECLARED PER SHARE$0.29 $0.27 $0.87 $0.81 
COMPREHENSIVE INCOME:
Net income$643,429 $673,177 $251,429 $330,971 
Change in foreign currency translation adjustments402 5,595 (22,636)(3,926)
Other comprehensive income (loss)402 5,595 (22,636)(3,926)
Comprehensive income$643,831 $678,772 $228,793 $327,045 
See accompanying notes to consolidated financial statements.










H&R Block, Inc. |Q3 FY2023 Form 10-Q
1

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CONSOLIDATED BALANCE SHEETS(unaudited, in 000s, except 
share and per share amounts)
As ofMarch 31, 2023June 30, 2022
ASSETS
Cash and cash equivalents$909,075 $885,015 
Cash and cash equivalents - restricted25,270 165,698 
Receivables, less allowance for credit losses of $56,003 and $65,351
249,150 58,447 
Income taxes receivable32,584 202,838 
Prepaid expenses and other current assets86,736 72,460 
Total current assets1,302,815 1,384,458 
Property and equipment, at cost, less accumulated depreciation and amortization of $892,820 and $857,468
136,132 123,912 
Operating lease right of use assets372,175 427,783 
Intangible assets, net293,447 309,644 
Goodwill769,557 760,401 
Deferred tax assets and income taxes receivable226,527 208,948 
Other noncurrent assets57,254 54,012 
Total assets$3,157,907 $3,269,158 
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Accounts payable and accrued expenses$236,388 $160,929 
Accrued salaries, wages and payroll taxes208,560 154,764 
Accrued income taxes and reserves for uncertain tax positions284,124 280,115 
Operating lease liabilities179,415 206,898 
Deferred revenue and other current liabilities207,095 196,107 
Total current liabilities1,115,582 998,813 
Long-term debt1,488,457 1,486,876 
Deferred tax liabilities and reserves for uncertain tax positions256,119 226,362 
Operating lease liabilities199,086 228,820 
Deferred revenue and other noncurrent liabilities135,055 116,656 
Total liabilities3,194,299 3,057,527 
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, no par, stated value $0.01 per share, 800,000,000 shares authorized, shares issued of 185,403,081 and 193,571,309
1,854 1,936 
Additional paid-in capital775,269 772,182 
Accumulated other comprehensive loss(44,281)(21,645)
Retained earnings (deficit)(109,384)120,405 
Less treasury shares, at cost, of 33,119,705 and 33,640,988
(659,850)(661,247)
Total stockholders' equity (deficiency)(36,392)211,631 
Total liabilities and stockholders' equity$3,157,907 $3,269,158 
See accompanying notes to consolidated financial statements.
2
Q3 FY2023 Form 10-Q| H&R Block, Inc.

Table of Contents
CONSOLIDATED STATEMENTS OF CASH FLOWS(unaudited, in 000s)
Nine months ended March 31,20232022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$251,429 $330,971 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization98,660 107,462 
Provision49,174 59,778 
Deferred taxes6,685 (85,122)
Stock-based compensation26,785 19,988 
Changes in assets and liabilities, net of acquisitions:
Receivables(237,395)(233,362)
Prepaid expenses, other current and noncurrent assets(17,438)(16,525)
Accounts payable, accrued expenses, salaries, wages and payroll taxes122,025 122,112 
Deferred revenue, other current and noncurrent liabilities22,054 36,960 
Income tax receivables, accrued income taxes and income tax reserves179,692 36,244 
Other, net(3,285)(5,378)
Net cash provided by operating activities498,386 373,128 
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures(56,661)(52,718)
Payments made for business acquisitions, net of cash acquired(47,740)(25,465)
Franchise loans funded(21,566)(18,468)
Payments from franchisees14,963 17,714 
Other, net9,717 7,831 
Net cash used in investing activities(101,287)(71,106)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of line of credit borrowings(970,000)(705,000)
Proceeds from line of credit borrowings970,000 705,000 
Dividends paid(133,762)(143,435)
Repurchase of common stock, including shares surrendered(365,852)(555,247)
Proceeds from exercise of stock options1,427 4,605 
Other, net(7,400)(13,389)
Net cash used in financing activities(505,587)(707,466)
Effects of exchange rate changes on cash(7,880)(1,666)
Net decrease in cash and cash equivalents, including restricted balances(116,368)(407,110)
Cash, cash equivalents and restricted cash, beginning of period1,050,713 1,584,164 
Cash, cash equivalents and restricted cash, end of period$934,345 $1,177,054 
SUPPLEMENTARY CASH FLOW DATA:
Income taxes paid (received), net$(110,028)$76,894 
Interest paid on borrowings59,429 58,009 
Accrued additions to property and equipment4,378 1,336 
New operating right of use assets and related lease liabilities131,949 126,726 
Accrued dividends payable to common shareholders44,163 43,041 
See accompanying notes to consolidated financial statements.
H&R Block, Inc. | Q3 FY2023 Form 10-Q
3

Table of Contents
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY(amounts in 000s, except per share amounts)
Common StockAdditional
Paid-in
Capital
Accumulated Other
Comprehensive
Income (Loss)(1)
Retained
Earnings
(Deficit)
Treasury StockTotal
Stockholders’
Equity
SharesAmountSharesAmount
Balances as of July 1, 2022193,571 $1,936 $772,182 $(21,645)$120,405 (33,641)$(661,247)$211,631 
Net loss    (168,421)  (168,421)
Other comprehensive loss   (32,345)   (32,345)
Stock-based compensation  5,630     5,630 
Stock-based awards exercised or vested  (15,276) (742)805 15,839 (179)
Acquisition of treasury shares(2)
     (341)(15,432)(15,432)
Repurchase and retirement of common shares(4,927)(49)(2,907) (216,813)  (219,769)
Cash dividends declared - $0.29 per share
    (46,100)  (46,100)
Balances as of September 30, 2022188,644 $1,887 $759,629 $(53,990)$(311,671)(33,177)$(660,840)$(264,985)
Net loss    (223,579)  (223,579)
Other comprehensive income   9,307    9,307 
Stock-based compensation  9,544     9,544 
Stock-based awards exercised or vested  421  (209)52 1,023 1,235 
Acquisition of treasury shares(2)
     (2)(79)(79)
Repurchase and retirement of common shares(3,241)(33)(1,911) (128,409)  (130,353)
Cash dividends declared - $0.29 per share
    (44,569)  (44,569)
Balances as of December 31, 2022185,403 $1,854 $767,683 $(44,683)$(708,437)(33,127)$(659,896)$(643,479)
Net income    643,429   643,429 
Other comprehensive income   402    402 
Stock-based compensation  7,830     7,830 
Stock-based awards exercised or vested  (244) (213)13 265 (192)
Acquisition of treasury shares(2)
     (6)(219)(219)
Cash dividends declared - $0.29 per share
— — — — (44,163)— — (44,163)
Balances as of March 31, 2023185,403 $1,854 $775,269 $(44,281)$(109,384)(33,120)$(659,850)$(36,392)
(1) The balance of our accumulated other comprehensive income (loss) consists of foreign currency translation adjustments.
(2) Represents shares swapped or surrendered to us in connection with the vesting or exercise of stock-based awards.
See accompanying notes to consolidated financial statements.

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(amounts in 000s, except per share amounts)
Common StockAdditional
Paid-in
Capital
Accumulated Other
Comprehensive
Income (Loss)(1)
Retained
Earnings
(Deficit)
Treasury StockTotal
Stockholders’
Equity
SharesAmountSharesAmount
Balances as of July 1, 2021216,656 $2,167 $779,465 $88 $286,694 (34,842)$(680,356)$388,058 
Net loss— — — — (151,601)— — (151,601)
Other comprehensive loss— — — (11,177)— — — (11,177)
Stock-based compensation— — 5,627 — — — — 5,627 
Stock-based awards exercised or vested— — (10,328)— (291)705 13,765 3,146 
Acquisition of treasury shares(2)
— — — — — (205)(4,817)(4,817)
Repurchase and retirement of common shares(6,802)(68)(4,081)— (161,619)— — (165,768)
Cash dividends declared - $0.27 per share
— — — — (47,940)— — (47,940)
Balances as of September 30, 2021209,854 $2,099 $770,683 $(11,089)$(74,757)(34,342)$(671,408)$15,528 
Net loss— — — — (190,605)— — (190,605)
Other comprehensive income— — — 1,656 — — — 1,656 
Stock-based compensation— — 5,640 — — — — 5,640 
Stock-based awards exercised or vested— — (1,709)— (219)122 2,400 472 
Acquisition of treasury shares(2)
— — — — — (2)(52)(52)
Repurchase and retirement of common shares(6,589)(66)(3,953)— (154,778)— — (158,797)
Cash dividends declared - $0.27 per share
— — — — (46,497)— — (46,497)
Balances as of December 31, 2021203,265 $2,033 $770,661 $(9,433)$(466,856)(34,222)$(669,060)$(372,655)
Net income— — — — 673,177 — — 673,177 
Other comprehensive income— — — 5,595 — — — 5,595 
Stock-based compensation— — 5,619 — — — — 5,619 
Stock-based awards exercised or vested— — (2,595)— (201)244 4,771 1,975 
Acquisition of treasury shares(2)
— — — — — (1)(32)(32)
Repurchase and retirement of common shares(9,694)(97)(5,816)— (219,868)— — (225,781)
Cash dividends declared - $0.27 per share
— — — — (43,042)— — (43,042)
Balances as of March 31, 2022193,571 $1,936 $767,869 $(3,838)$(56,790)(33,979)$(664,321)$44,856 
(1) The balance of our accumulated other comprehensive income (loss) consists of foreign currency translation adjustments.
(2) Represents shares swapped or surrendered to us in connection with the vesting or exercise of stock-based awards.
See accompanying notes to consolidated financial statements.

H&R Block, Inc. |Q3 FY2023 Form 10-Q
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS             (unaudited)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATIONThe consolidated balance sheets as of March 31, 2023 and June 30, 2022, the consolidated statements of operations and comprehensive income for the three and nine months ended March 31, 2023 and 2022, the consolidated statements of cash flows for the nine months ended March 31, 2023 and 2022, and the consolidated statements of stockholders' equity for the three and nine months ended March 31, 2023 and 2022 have been prepared by the Company, without audit. In the opinion of management, all adjustments, which include only normal recurring adjustments, necessary to present fairly the financial position, results of operations, and cash flows as of March 31, 2023 and 2022 and for all periods presented, have been made.
"H&R Block," "the Company," "we," "our," and "us" are used interchangeably to refer to H&R Block, Inc., to H&R Block, Inc. and its subsidiaries, or to H&R Block, Inc.'s operating subsidiaries, as appropriate to the context.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (GAAP) have been condensed or omitted. These consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in our June 30, 2022 Annual Report to Shareholders on Form 10-K. All amounts presented herein as of June 30, 2022 or for the year then ended are derived from our Annual Report on Form 10-K.
MANAGEMENT ESTIMATESThe preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates, assumptions and judgments are applied in the evaluation of contingent losses arising from our discontinued mortgage business, contingent losses associated with pending claims and litigation, reserves for uncertain tax positions, fair value of reporting units, and related matters. Estimates have been prepared based on the best information available as of each balance sheet date. As such, actual results could differ materially from those estimates.
SEASONALITY OF BUSINESS – Our operating revenues are seasonal in nature with peak revenues typically occurring in the months of February through April. Therefore, results for interim periods are not indicative of results to be expected for the full year.
DISCONTINUED OPERATIONS – Our discontinued operations include the results of operations of Sand Canyon Corporation, previously known as Option One Mortgage Corporation (including its subsidiaries, collectively, SCC), which exited its mortgage business in fiscal year 2008. See note 9 for additional information on loss contingencies related to our discontinued operations.
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NOTE 2: REVENUE RECOGNITION
The majority of our revenues are from our U.S. tax services business. The following table disaggregates our U.S. revenues by major service line, with revenues from our international tax services businesses and from Wave included as separate lines:
(in 000s)
Three months ended March 31,Nine months ended March 31,
2023202220232022
Revenues:
U.S. assisted tax preparation$1,453,049 $1,392,142 $1,530,577 $1,456,594 
U.S. royalties150,163 158,786 161,337 169,548 
U.S. DIY tax preparation167,022 175,184 182,330 188,455 
Refund Transfers117,384 132,223 120,210 134,665 
Peace of Mind® Extended Service Plan16,750 17,222 58,840 59,373 
Tax Identity Shield®8,720 9,078 19,237 19,431 
Emerald Card® and SpruceSM
44,358 50,660 68,448 103,748 
Interest and fee income on Emerald AdvanceSM
33,750 30,535 47,267 43,438 
International69,417 65,232 156,297 151,464 
Wave22,064 20,111 66,651 58,745 
Other10,972 10,584 28,845 27,736 
Total revenues$2,093,649 $2,061,757 $2,440,039 $2,413,197 
Changes in the balances of deferred revenue and wages for our Peace of Mind® Extended Service Plan (POM) are as follows:
(in 000s)
POMDeferred RevenueDeferred Wages
Nine months ended March 31,2023202220232022
Balance, beginning of the period$173,486 $172,759 $19,495 $17,867 
Amounts deferred76,231 80,801 8,451 9,006 
Amounts recognized on previous deferrals(67,276)(69,075)(7,084)(6,786)