H&R Block, Inc. (HRB) Bundle
A Brief History of H&R Block
Company Overview
H&R Block, Inc. is a prominent tax preparation company in the United States, providing services for both individual and business clients. The company operates through a network of company-owned and franchise locations, offering a variety of tax-related services, including assisted tax preparation, do-it-yourself (DIY) tax preparation software, and financial services.
Recent Financial Performance (2024)
As of March 31, 2024, H&R Block reported total revenues of $2.55 billion, reflecting an increase of 4.4% from the previous year. This growth was primarily driven by a rise in U.S. tax preparation services, which accounted for $2.22 billion of total revenues.
| Revenue Source | Revenue (in $000s) | Year-over-Year Change (%) |
|---|---|---|
| Assisted Tax Preparation | 1,622,430 | 6.0 |
| Royalties | 153,070 | (5.1) |
| DIY Tax Preparation | 215,529 | 18.2 |
| Total Tax Preparation Services | 2,220,468 | 5.7 |
| Financial Services | 98,195 | (15.1) |
| International | 158,398 | 1.3 |
| Wave | 70,656 | 6.0 |
| Total Revenues | 2,547,717 | 4.4 |
Operating Expenses
H&R Block's total operating expenses for the nine months ended March 31, 2024, amounted to $2.09 billion, a slight increase of 1.2% from the previous year. The main components of operating expenses included:
| Expense Type | Amount (in $000s) | Year-over-Year Change (%) |
|---|---|---|
| Field Wages | 650,529 | (5.2) |
| Other Wages | 222,125 | (6.9) |
| Benefits and Other Compensation | 170,964 | (0.9) |
| Occupancy | 319,843 | (0.9) |
| Marketing and Advertising | 211,135 | 10.6 |
| Depreciation and Amortization | 91,004 | 7.8 |
| Bad Debt | 67,560 | 18.5 |
| Total Operating Expenses | 2,093,271 | 1.2 |
Net Income and Earnings Per Share
For the nine months ended March 31, 2024, H&R Block reported a net income of $690.7 million, representing a growth of 7.4% from the previous year. The diluted earnings per share (EPS) was $4.86, an increase of 18.0% compared to the prior year.
Balance Sheet Highlights
As of March 31, 2024, H&R Block's total assets stood at $3.21 billion, with total liabilities of $3.34 billion, resulting in a stockholders' equity deficiency of $129.8 million.
| Balance Sheet Item | Amount (in $000s) |
|---|---|
| Total Assets | 3,213,322 |
| Total Liabilities | 3,343,128 |
| Stockholders' Equity | (129,806) |
Cash Flow Summary
For the nine months ended March 31, 2024, H&R Block reported net cash provided by operating activities of $420.3 million, while cash used in investing activities totaled $99.6 million. Cash used in financing activities was $520.5 million.
| Cash Flow Activity | Amount (in $000s) |
|---|---|
| Net Cash Provided by Operating Activities | 420,264 |
| Net Cash Used in Investing Activities | (99,643) |
| Net Cash Used in Financing Activities | (520,503) |
| Net Decrease in Cash and Cash Equivalents | (202,621) |
Conclusion
H&R Block continues to adapt to the evolving tax preparation landscape, demonstrating resilience through its financial performance in 2024. With a focus on enhancing service offerings and managing operational efficiency, the company is positioned to navigate future challenges in the financial services sector.
A Who Owns H&R Block, Inc. (HRB)
Ownership Structure
As of 2024, H&R Block, Inc. (HRB) has a diverse ownership structure, including institutional investors, mutual funds, and individual shareholders. The company is publicly traded on the New York Stock Exchange (NYSE) under the ticker symbol HRB.
| Owner Type | Number of Shares (in millions) | Percentage Ownership |
|---|---|---|
| Institutional Investors | 79.1 | 88.5% |
| Mutual Funds | 35.6 | 40.0% |
| Individual Investors | 10.5 | 11.5% |
| Insider Holdings | 2.3 | 2.6% |
Major Institutional Shareholders
The following table lists the major institutional shareholders of H&R Block, Inc. as of 2024:
| Institution | Shares Held (in millions) | Percentage of Total Shares |
|---|---|---|
| Vanguard Group, Inc. | 15.2 | 17.2% |
| BlackRock, Inc. | 14.6 | 16.5% |
| State Street Corporation | 10.8 | 12.3% |
| FMR LLC (Fidelity) | 8.9 | 10.1% |
| Invesco Ltd. | 5.6 | 6.4% |
Recent Changes in Ownership
During the fiscal year ending June 30, 2024, H&R Block repurchased approximately $350.1 million of its common stock at an average price of $43.66 per share. This indicates a strategic move to reduce the number of shares outstanding and potentially increase earnings per share for remaining shareholders.
Insider Ownership
Insider ownership includes executives and board members who hold shares in the company. As of 2024, insider ownership is approximately 2.6% of total shares, highlighting a commitment from management to the company's performance.
| Insider | Position | Shares Held (in thousands) |
|---|---|---|
| Jeffrey J. Jones II | President & CEO | 65 |
| Holly R. Wofford | Chief Financial Officer | 48 |
| Other Executives | Various | 200 |
Market Performance and Share Price
As of March 31, 2024, H&R Block's stock price was approximately $43.66 per share, reflecting a year-to-date increase of 12%. The company's market capitalization stood at around $3.8 billion, indicating strong market confidence.
Dividend Policy
H&R Block has maintained a consistent dividend payment history. As of March 2024, the company declared quarterly dividends of $0.32 per share, amounting to approximately $135.1 million in total dividends paid during the nine months ending March 31, 2024.
Conclusion of Ownership Analysis
The ownership of H&R Block, Inc. reflects a strong institutional presence, with major shareholders including Vanguard Group, BlackRock, and State Street. The company's strategic share repurchase program and consistent dividend payments further enhance its appeal to investors.
H&R Block, Inc. (HRB) Mission Statement
Mission Statement Overview
The mission of H&R Block, Inc. (HRB) is to empower clients to take control of their finances and achieve their financial goals through expert assistance and innovative tools. The company aims to simplify the tax preparation process while providing valuable insights into personal finance.
Core Values
- Integrity: Commitment to ethical practices and transparency.
- Client Focus: Prioritizing client needs and satisfaction.
- Innovation: Embracing technology to enhance service delivery.
- Community: Giving back to the communities they serve.
Financial Performance Highlights (FY 2024)
As of March 31, 2024, H&R Block reported significant financial metrics that reflect its operational performance:
| Financial Metric | Amount (in $000s) |
|---|---|
| Total Revenues | 2,547,717 |
| Net Income | 690,737 |
| EBITDA | 964,100 |
| Diluted Earnings Per Share | 4.86 |
| Cash and Cash Equivalents | 794,617 |
| Total Assets | 3,213,322 |
| Total Liabilities | 3,343,128 |
| Stockholders' Equity | (129,806) |
Operational Insights
For the nine months ended March 31, 2024, H&R Block's revenues increased by $107.7 million, or 4.4%, compared to the previous year. The breakdown of revenue sources is as follows:
| Revenue Source | Amount (in $000s) | Year-over-Year Change (%) |
|---|---|---|
| Assisted Tax Preparation | 1,622,430 | 6.0 |
| Royalties | 153,070 | (5.1) |
| DIY Tax Preparation | 215,529 | 18.2 |
| Emerald Card® and SpruceSM | 61,493 | (10.2) |
Strategic Initiatives
H&R Block is focused on expanding its DIY tax preparation services, which saw an 18.2% increase in revenues, primarily driven by a 9.1% increase in online paid returns. Additionally, the company is investing in technology enhancements to streamline the client experience and improve service efficiency.
Market Position and Competitive Landscape
H&R Block remains a leader in the tax preparation industry, competing with companies like TurboTax and Jackson Hewitt. The company continues to adapt to market changes by enhancing its digital offerings and maintaining a strong presence in both assisted and DIY tax services.
Conclusion on Financial Health
As of the latest reporting period, H&R Block demonstrates solid financial health with significant revenues and net income growth, reflecting its effective execution of business strategies and commitment to client service.
How H&R Block, Inc. (HRB) Works
Business Model
H&R Block, Inc. operates primarily in the tax preparation industry, offering both assisted and do-it-yourself (DIY) tax preparation services. The company provides services through a network of retail offices, online platforms, and software products.
Financial Performance Overview
For the nine months ended March 31, 2024, H&R Block reported total revenues of $2.55 billion, representing an increase of 4.4% from the prior year. The breakdown of revenues includes:
| Revenue Category | Q3 FY2024 (in $000s) | Q3 FY2023 (in $000s) | Change ($000s) | Change (%) |
|---|---|---|---|---|
| U.S. Assisted Tax Preparation | 1,622,430 | 1,530,577 | 91,853 | 6.0 |
| Royalties | 153,070 | 161,337 | (8,267) | (5.1) |
| DIY Tax Preparation | 215,529 | 182,330 | 33,199 | 18.2 |
| Financial Services | 98,195 | 115,715 | (17,520) | (15.1) |
| Total Revenues | 2,547,717 | 2,440,039 | 107,678 | 4.4 |
Operating Expenses
Operating expenses for the nine months ended March 31, 2024, totaled $2.09 billion, a slight increase of 1.2% from the previous year. Key components include:
| Expense Category | Q3 FY2024 (in $000s) | Q3 FY2023 (in $000s) | Change ($000s) | Change (%) |
|---|---|---|---|---|
| Field Wages | 650,529 | 618,656 | 31,873 | 5.2 |
| Marketing and Advertising | 211,135 | 236,299 | (25,164) | (10.6) |
| Bad Debt Expense | 67,560 | 57,018 | 10,542 | 18.5 |
| Total Operating Expenses | 2,093,271 | 2,067,851 | 25,420 | 1.2 |
Net Income and Earnings Per Share
H&R Block reported a net income of $690.7 million for the nine months ended March 31, 2024, compared to $643.4 million in the prior year, reflecting a 7.4% increase. Diluted earnings per share (EPS) were $4.86, up from $4.12 in the previous year.
Cash Flow and Liquidity
Cash provided by operating activities for the nine months ended March 31, 2024, was $420.3 million, a decrease from $498.4 million in the previous year. Cash used in investing activities totaled $99.6 million, while financing activities accounted for $520.5 million. The company maintained a strong liquidity position with cash and cash equivalents totaling $794.6 million as of March 31, 2024.
Franchise Operations
H&R Block operates through a combination of company-owned and franchise locations. The total assisted tax return volume decreased by 1.1% for the nine months ended March 31, 2024. This reflected a shift as the company acquired several franchise offices, which transitioned their operations to company-owned, thus impacting royalties negatively.
Debt Structure
As of March 31, 2024, H&R Block had total long-term debt of $1.49 billion, primarily comprised of senior notes with varying maturities and interest rates:
| Debt Instrument | Amount (in $000s) | Maturity | Interest Rate (%) |
|---|---|---|---|
| Senior Notes, 5.250% | 350,000 | October 2025 | 5.250 |
| Senior Notes, 2.500% | 500,000 | July 2028 | 2.500 |
| Senior Notes, 3.875% | 650,000 | August 2030 | 3.875 |
| Total Long-term Debt | 1,490,570 |
Stockholder Returns
H&R Block has consistently returned capital to shareholders through dividends and share repurchases. During the nine months ended March 31, 2024, the company declared dividends totaling $135.1 million and repurchased $350.1 million of its common stock.
Regulatory Environment
H&R Block operates under a well-defined regulatory framework, primarily influenced by tax laws and regulations in the U.S. and Canada. The company has not reported any significant changes in its regulatory environment as of the latest filings.
How H&R Block, Inc. (HRB) Makes Money
Revenue Streams
H&R Block generates revenue primarily through various services related to tax preparation. For the nine months ended March 31, 2024, total revenues were $2.55 billion, an increase of 4.4% from $2.44 billion in the prior year. The breakdown of revenues is as follows:
| Revenue Source | Revenue (in $000s) | Change from Previous Year (%) |
|---|---|---|
| U.S. Assisted Tax Preparation | $1,622,430 | 6.0% |
| Royalties | $153,070 | (5.1%) |
| DIY Tax Preparation | $215,529 | 18.2% |
| Refund Transfers | $120,892 | 0.6% |
| Peace of Mind® Extended Service Plan | $59,100 | 0.4% |
| Tax Identity Shield® | $16,810 | (12.6%) |
| Other Services | $32,637 | 13.1% |
| Total U.S. Tax Preparation and Related Services | $2,220,468 | 5.7% |
| Financial Services | $98,195 | (15.1%) |
| International | $158,398 | 1.3% |
| Wave (Small Business Solutions) | $70,656 | 6.0% |
| Total Revenues | $2,547,717 | 4.4% |
Assisted Tax Preparation
Assisted tax preparation remains the largest revenue generator for H&R Block, accounting for approximately 63.7% of total revenues. The increase in assisted tax preparation revenue by $91.9 million or 6.0% was largely driven by a 4.6% increase in net average charges and higher volumes of company-owned tax returns.
Do-It-Yourself (DIY) Tax Preparation
The DIY tax preparation segment showed significant growth, with revenues increasing by $33.2 million or 18.2%. This growth was attributed to a 9.1% increase in online paid returns and a 9.4% rise in the average charge for services.
Financial Services
H&R Block also offers financial services, including the Emerald Card® and Emerald Advance®. However, revenues from these services decreased by $7.0 million or 10.2% due to lower card activity and a decrease in interest and fee income on Emerald Advance® by $10.6 million or 22.4%.
Operating Expenses
Total operating expenses increased by $25.4 million or 1.2%. Major components include:
| Expense Category | Expense (in $000s) | Change from Previous Year (%) |
|---|---|---|
| Field Wages | $650,529 | (5.2%) |
| Occupancy | $319,843 | (0.9%) |
| Marketing and Advertising | $211,135 | 10.6% |
| Depreciation and Amortization | $91,004 | 7.8% |
| Bad Debt | $67,560 | 18.5% |
| Total Operating Expenses | $2,093,271 | 1.2% |
Net Income
Net income for the nine months ended March 31, 2024, was $690.7 million, compared to $643.4 million in the prior year, reflecting a 7.4% increase. The diluted earnings per share increased to $4.86 from $4.12, marking an 18.0% increase year-over-year.
Conclusion on Financial Performance
H&R Block's financial performance in 2024 illustrates a robust business model with diversified revenue streams, primarily focused on tax preparation services. The growth in DIY services and effective management of operating expenses contributed to improved profitability.
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