Executive Summary

Q3 FY2025 delivered solid growth: revenue $2.277B (+4.2% YoY), net income from continuing operations $722.9M (+4.5% YoY), and diluted EPS $5.32 (+9.2% YoY); adjusted diluted EPS $5.38 (+8.9% YoY) .
Results beat Wall Street consensus: EPS $5.32 vs $5.17 (+$0.15, +2.9%) and revenue $2.277B vs $2.249B (+$29.8M, +1.3%); Q3 FY2024 EPS was $4.87 and revenue $2.185B (S&P Global estimates marked with asterisks; values retrieved from S&P Global) .*
Guidance reaffirmed: FY2025 revenue $3.69–$3.75B, EBITDA $975M–$1.02B, effective tax rate ~13% (one-time ~$0.50 EPS benefit), adjusted diluted EPS $5.15–$5.35 .
Catalysts: improving Assisted channel conversion and client satisfaction, DIY monetization via higher NAC and AI Tax Assist engagement, continued capital return (dividend $0.375 and $400M repurchases YTD) .

What Went Well and What Went Wrong

What Went Well

Assisted channel: “healthy balance of price, volume, and mix” amid redesigned client experience; management cited stronger conversion and retention through April 30 .
DIY monetization: DIY revenue +8% YoY; paid NAC $81.55 (+9%) with mix shift to more complex SKUs; AI Tax Assist engagement drove 13-point higher conversion vs non-users .
Small business and Wave: Assisted small business tax delivered high single-digit revenue growth; Wave revenue +13% YoY in the quarter .

What Went Wrong

International headwinds: lower international revenue and unfavorable FX in Canada weighed on results .
Financial services: lower interest and fee income on Emerald Advance due to decreased loan originations vs prior year .
Assisted volume vs industry: analyst cited HRB Assisted volumes down ~0.8% vs IRS industry +1.7%; management noted improved trajectory but acknowledged share did not grow; elevated legal fees and settlements expected to push FY EBITDA “slightly below midpoint” .

Financial Results

YoY Comparison – Headline Financials

Metric	Q3 2024	Q3 2025
Revenue ($USD Millions)	$2,184.834	$2,277.104
Net Income from Continuing Ops ($USD Millions)	$691.586	$722.928
Diluted EPS – Continuing Ops ($)	$4.87	$5.32
Adjusted Diluted EPS – Continuing Ops ($)	$4.94	$5.38
EBITDA ($USD Millions)	$964.100	$1,012.088
Weighted Avg Diluted Shares (000s)	141,540	135,329

Sequential Comparison – Q2 vs Q3 FY2025

Metric	Q2 2025	Q3 2025
Revenue ($USD Millions)	$179.070	$2,277.104
Net Income (Loss) from Continuing Ops ($USD Millions)	$(242.466)	$722.928
Diluted EPS – Continuing Ops ($)	$(1.79)	$5.32
Adjusted Diluted EPS – Continuing Ops ($)	$(1.73)	$5.38
EBITDA ($USD Millions)	$(261.352)	$1,012.088

Margins – YoY

Metric	Q3 2024	Q3 2025
EBITDA Margin (%)	43.89%*	44.25%*
EBIT Margin (%)	42.48%*	42.96%*
Net Income Margin (%)	31.62%*	31.72%*
Values retrieved from S&P Global.*

Revenue Breakdown – YoY

Category	Q3 2024 ($USD Millions)	Q3 2025 ($USD Millions)
Assisted Tax Preparation	$1,534.825	$1,635.877
Royalties	$141.915	$133.961
DIY Tax Preparation	$198.570	$214.666
Refund Transfers	$118.937	$113.732
Peace of Mind® ESP	$16.813	$15.625
Tax Identity Shield®	$7.536	$7.025
Other (U.S. Tax Services)	$12.065	$14.582
Total U.S. Tax Preparation & Related	$2,030.661	$2,135.468
Emerald Card® & Spruce	$41.160	$40.195
Emerald Advance® – Interest & Fees	$21.169	$14.286
Total Financial Services	$62.329	$54.481
International	$68.264	$60.438
Wave	$23.580	$26.717
Total Revenues	$2,184.834	$2,277.104

KPIs and Operating Metrics

KPI	Q3 2024	Q3 2025
DIY Paid NAC ($)	n/a	$81.55 (+9% YoY)
Adjusted EPS – Continuing Ops ($)	$4.94	$5.38
EBITDA ($USD Millions)	$964.100	$1,012.088
Company Commentary on Assisted Conversion/Retention	n/a	Improved conversion 2nd consecutive year; improved retention

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY2025	$3.69–$3.75B	$3.69–$3.75B	Maintained
EBITDA	FY2025	$975M–$1.02B	$975M–$1.02B (expect slightly below midpoint due to higher legal fees/settlements)	Maintained (qualitative update)
Effective Tax Rate	FY2025	~13% (one-time ~$0.50 EPS benefit)	~13% (one-time ~$0.50 EPS benefit)	Maintained
Adjusted Diluted EPS	FY2025	$5.15–$5.35	$5.15–$5.35	Maintained
Dividend	Next Payment	n/a	$0.375 per share payable July 3, 2025 (record date June 4, 2025)	Announced/Confirmed

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q3 FY2025)	Trend
AI/Technology Initiatives	Q1: focus on “operational and technical enhancements” to improve client experience . Q2: preparation for tax season; no specific AI noted .	AI Tax Assist boosted engagement and conversion (+13 pts); announced OpenAI collaboration to support 60,000 tax pros .	Accelerating adoption and scope.
Filing Behavior/Macro	Q1/Q2: No specific commentary on filing timing in press releases .	Clients filing later; record office volumes on April 14–15; Assisted category growth outpacing DIY industry-wide .	Later-season filing intensified.
Product Performance (DIY/Assisted)	Q1: revenue +5%, assisted NAC up; share repurchases . Q2: DIY/International up; Emerald Advance down .	Assisted conversion/retention improved; DIY revenue +8% YoY; paid NAC $81.55 (+9%); more complex DIY mix .	Improving monetization and mix.
Small Business & Wave	Q1/Q2: Ongoing investment; Wave growth noted .	Assisted small business tax high single-digit growth; Wave +13% YoY .	Momentum building.
International/FX	Q2: International revenue up YoY .	Lower international revenue, unfavorable Canadian FX .	Headwind emerged.
Regulatory/Legal	Q1: higher legal expenses noted .	Higher-than-anticipated legal fees/settlements → FY EBITDA slightly below midpoint .	Cost pressure persists.
Capital Returns	Q1: $210M repurchases; dividend declared . Q2: $190M repurchases .	$400M repurchases in H1; $0.375 dividend announced; ~$1.1B remaining on $1.5B program .	Continued buybacks/dividend support.

Management Commentary

CEO Jeff Jones: “Our transformation continues to gather momentum and deliver results. We meaningfully enhanced the new client experience this season, driving higher client satisfaction scores and improving volume and market share trends in the Assisted channel.” .
CFO Tiffany Mason: “We have a resilient business with strong financial fundamentals, consistent cash flow generation, and a shareholder-friendly capital return practice… we struck a healthy balance of price, volume, and mix in the quarter….” .
CEO on AI: “We were once again very pleased with the performance of our AI Tax Assist… conversion was 13 points higher among clients who use this tool than those who didn’t” .
CFO on FY outlook: “We expect EBITDA to be slightly below the midpoint… due to higher-than-anticipated legal fees and settlements” and reiterated the full-year ranges .

Q&A Highlights

Assisted vs DIY dynamics: Assisted volumes down ~0.8% vs IRS industry +1.7% growth; management emphasized improved conversion/retention and focus on higher-complexity clients, but acknowledged share not yet growing .
Franchise vs company-owned: Franchise volume decline primarily a mix effect from buybacks (~123 offices YTD), with strategy to acquire at attractive multiples supporting long-term growth .
DIY promotional environment: HRB remained disciplined, focusing on paid filers rather than “100% free” promotions by competitors; monetization improved via complex SKUs and AI Tax Assist .
Filing extensions: Hurricanes extended deadlines to May 1 (some shift Q3→Q4); L.A. County wildfire extensions to October (FY2026) with immaterial impact to FY2025 guidance .
Dividend policy: Board reviews payout ratio annually; dividend ($0.375) reaffirmed within capital allocation priorities .

Estimates Context

Q3 FY2025 vs S&P Global consensus: EPS $5.32 actual vs $5.17 consensus*; Revenue $2.277B actual vs $2.249B consensus*. Prior-year Q3 FY2024 EPS $4.87 actual vs $4.615 consensus*, Revenue $2.185B actual vs $2.137B consensus* .
Values retrieved from S&P Global.*

Metric	Q3 2024 Estimate*	Q3 2024 Actual	Q3 2025 Estimate*	Q3 2025 Actual
Primary EPS Consensus Mean ($)	4.615*	4.87	5.17*	5.32
Revenue Consensus Mean ($USD Millions)	2,137.464*	2,184.834	2,247.976*	2,277.104
Primary EPS – # of Estimates	4*	n/a	4*	n/a
Revenue – # of Estimates	3*	n/a	3*	n/a
Values retrieved from S&P Global.*

FY context (S&P Global): FY2025 EPS normalized consensus $5.25 vs actual $4.66*, EBITDA consensus $986.1M vs actual $944.8M*, FY2026 EPS consensus $4.95*, EBITDA $1.024B*, Target Price consensus $55*, Recommendation text not available* (Values retrieved from S&P Global).*

Key Takeaways for Investors

H&R Block delivered a clean quarter with both EPS and revenue beating consensus and reaffirmed FY2025 guidance; margin profile held steady with modest YoY expansion in EBITDA margin, signaling operational discipline .
Assisted channel initiatives (conversion, retention, pricing, and client experience) are gaining traction, positioning HRB to benefit from the industry’s mix shift toward Assisted services .
DIY strategy focuses on monetization and complexity, supported by AI Tax Assist; management is avoiding costly free-user acquisition in a promotional environment, improving paid NAC and conversion .
International and financial services remain near-term headwinds; Emerald Advance interest/fee income and Canadian FX weighed on results, tempering segment contributions .
Legal fees/settlements are a transitory drag, with FY EBITDA still inside guidance bands (slightly below midpoint), limiting downside to the broader FY outlook .
Capital return remains robust: $400M repurchases in H1 FY2025, ~$1.1B remaining authorization, and $0.375 quarterly dividend, supporting EPS accretion and shareholder yield .
Near-term trading setup: Positive beat-plus-reaffirm quarter with improving Assisted KPIs and AI differentiation; watch for Q4 seasonality, International FX, legal costs, and competitive behavior in DIY as next catalysts .

H&R BLOCK INC (HRB)·Q3 2025 Earnings Summary