We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
HRB's Q1 revenues climbed 10% y/y, driven by international services, Wave and U.S. tax demand.
HRB's operating expenses rose 11.1% to $456.2M, while adjusted EBITDA loss widened to $185.2M.
H&R Block reaffirmed FY27 revenue guidance of $4.11-$4.16B and adjusted EPS outlook of $6.04-$6.24.
H&R Block (HRB - Free Report) reported mixed first-quarter fiscal 2027 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same.
The company reported an adjusted loss of $1.40 per share, in line with the consensus estimate but wider than the year-ago loss of $1.20. Revenues of $224.3 million surpassed the consensus mark of $211.6 million by 6% and increased 10.2% year over year. Growth was driven by international services, tax protection and identity services, small business services, and U.S. tax preparation. International services revenues increased 12.5%.
International services revenues increased $8.3 million year over year to $74.8 million, primarily driven by favorable foreign exchange rates. Higher filing volumes and net average charge also contributed to growth. Management highlighted market-share gains in Australia, where the tax season supported the fiscal first-quarter performance.
Tax protection and identity services revenues rose 17.6% year over year to $34.3 million. Growth reflected higher volumes in Peace of Mind and Tax Identity Shield, along with changes in amortization rates. These offerings extend client engagement beyond tax preparation and filing.
H&R Block Benefits From Wave & U.S. Tax Demand
Small business services revenues increased 12.4% year over year to $34.9 million, driven by continued growth in Wave. The Pro tier subscription offering remained a key contributor, supported by sign-ups and increased use among active paying customers.
U.S. tax preparation revenues rose 5% year over year to $54.5 million, driven by favorable net average charge. The company's supplemental revenue data showed U.S. consumer-assisted tax preparation revenues of $30.7 million compared with $29.8 million a year ago. Small business-assisted tax preparation revenues increased to $20.6 million from $18.8 million.
Total operating expenses increased 11.1% year over year to $456.2 million. Field compensation and benefits expenses rose 23.3% to $102.1 million, including $8 million in severance and related costs associated with the seasonal office leadership transition. Investments in a dedicated Second Look team also contributed.
General corporate expenses increased 35.8% to $34.4 million, reflecting higher legal fees, settlements and consulting costs. Occupancy and equipment expenses rose 6.3% to $132.3 million, partly reflecting franchise office acquisitions. Excluding severance costs, operating expense growth was 9.2%, below revenue growth, despite approximately $6 million in strategic investments.
H&R Block's Losses Widen Despite Revenue Growth
The adjusted EBITDA loss widened to $185.2 million from $170 million in the year-ago quarter. Net loss from continuing operations increased 13.8% to $188.1 million, while reported loss per share widened to $1.53 from $1.26.
Adjusted net loss from continuing operations increased 9.5% to $172.1 million. The effective tax rate declined to 21.9% from 23.6%. Management noted that fewer outstanding shares amplify per-share losses during seasonally weaker quarters, although repurchases benefit earnings per share during profitable periods.
HRB Advances Client Retention & Returns Capital
H&R Block continues expanding its Second Look program, which uses artificial intelligence and dedicated tax professionals to review clients' prior returns. New clients receiving the service during tax season 2025 returned at a rate more than 600 basis points higher than those who did not. The program reached nearly three times its previous volume during tax season 2026.
The company is also expanding its consultative client experience test from five offices to approximately 650 offices for tax season 2027. The initiative aims to improve client engagement and tax professional productivity.
During the quarter, HRB repurchased 2.2 million shares for $100.3 million. The board also declared a quarterly dividend of 46 cents per share, payable Jan. 6, 2027. Approximately $500 million remained under its share repurchase authorization.
H&R Block Reaffirms FY27 Outlook
Management reaffirmed its fiscal 2027 revenue guidance of $4.11-$4.16 billion. The midpoint ($4.135 billion) is slightly higher than the Zacks Consensus Estimate of $4.13 billion.
Adjusted EBITDA is expected between $1.11 billion and $1.14 billion, while adjusted earnings per share are projected to be $6.04 to $6.24. The midpoint ($6.14) is higher than the Zacks Consensus Estimate of $6.11.
The company expects an effective tax rate of 23% and anticipates $400 million in share repurchases in fiscal 2027, subject to market conditions.
For the fiscal second quarter, management expects operating expense growth consistent with the first quarter, excluding severance costs. This includes approximately $12 million of investments in strategic growth initiatives, which management expects to begin generating benefits during the upcoming tax season.
NSP registered adjusted earnings of 22 cents per share, beating the consensus estimate of 20 cents by 10%. The figure improved from an adjusted loss of 20 cents in the year-ago quarter.
Revenues increased 1.7% year over year to $1.65 billion, surpassing the consensus estimate of $1.63 billion by 1.1%.
Verisk Analytics (VRSK - Free Report) posted third-quarter 2026 adjusted earnings of $1.96 per share, beating the Zacks Consensus Estimate of $1.92 by 2.1%. The figure increased 14% from the year-ago quarter.
Revenues of $809 million topped the consensus mark of $806.8 million by 0.3% and rose 5.3% year over year.
View the Zacks #1 Rank List
Image: Bigstock
H&R Block Q1 Earnings Meet Estimates, Revenues Increase 10% Y/Y
Key Takeaways
H&R Block (HRB - Free Report) reported mixed first-quarter fiscal 2027 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same.
The company reported an adjusted loss of $1.40 per share, in line with the consensus estimate but wider than the year-ago loss of $1.20. Revenues of $224.3 million surpassed the consensus mark of $211.6 million by 6% and increased 10.2% year over year. Growth was driven by international services, tax protection and identity services, small business services, and U.S. tax preparation. International services revenues increased 12.5%.
H&R Block, Inc. Price, Consensus and EPS Surprise
H&R Block, Inc. price-consensus-eps-surprise-chart | H&R Block, Inc. Quote
HRB's International & Tax Services Drive Growth
International services revenues increased $8.3 million year over year to $74.8 million, primarily driven by favorable foreign exchange rates. Higher filing volumes and net average charge also contributed to growth. Management highlighted market-share gains in Australia, where the tax season supported the fiscal first-quarter performance.
Tax protection and identity services revenues rose 17.6% year over year to $34.3 million. Growth reflected higher volumes in Peace of Mind and Tax Identity Shield, along with changes in amortization rates. These offerings extend client engagement beyond tax preparation and filing.
H&R Block Benefits From Wave & U.S. Tax Demand
Small business services revenues increased 12.4% year over year to $34.9 million, driven by continued growth in Wave. The Pro tier subscription offering remained a key contributor, supported by sign-ups and increased use among active paying customers.
U.S. tax preparation revenues rose 5% year over year to $54.5 million, driven by favorable net average charge. The company's supplemental revenue data showed U.S. consumer-assisted tax preparation revenues of $30.7 million compared with $29.8 million a year ago. Small business-assisted tax preparation revenues increased to $20.6 million from $18.8 million.
HRB's Rising Operating Expenses Pressure Profitability
Total operating expenses increased 11.1% year over year to $456.2 million. Field compensation and benefits expenses rose 23.3% to $102.1 million, including $8 million in severance and related costs associated with the seasonal office leadership transition. Investments in a dedicated Second Look team also contributed.
General corporate expenses increased 35.8% to $34.4 million, reflecting higher legal fees, settlements and consulting costs. Occupancy and equipment expenses rose 6.3% to $132.3 million, partly reflecting franchise office acquisitions. Excluding severance costs, operating expense growth was 9.2%, below revenue growth, despite approximately $6 million in strategic investments.
H&R Block's Losses Widen Despite Revenue Growth
The adjusted EBITDA loss widened to $185.2 million from $170 million in the year-ago quarter. Net loss from continuing operations increased 13.8% to $188.1 million, while reported loss per share widened to $1.53 from $1.26.
Adjusted net loss from continuing operations increased 9.5% to $172.1 million. The effective tax rate declined to 21.9% from 23.6%. Management noted that fewer outstanding shares amplify per-share losses during seasonally weaker quarters, although repurchases benefit earnings per share during profitable periods.
HRB Advances Client Retention & Returns Capital
H&R Block continues expanding its Second Look program, which uses artificial intelligence and dedicated tax professionals to review clients' prior returns. New clients receiving the service during tax season 2025 returned at a rate more than 600 basis points higher than those who did not. The program reached nearly three times its previous volume during tax season 2026.
The company is also expanding its consultative client experience test from five offices to approximately 650 offices for tax season 2027. The initiative aims to improve client engagement and tax professional productivity.
During the quarter, HRB repurchased 2.2 million shares for $100.3 million. The board also declared a quarterly dividend of 46 cents per share, payable Jan. 6, 2027. Approximately $500 million remained under its share repurchase authorization.
H&R Block Reaffirms FY27 Outlook
Management reaffirmed its fiscal 2027 revenue guidance of $4.11-$4.16 billion. The midpoint ($4.135 billion) is slightly higher than the Zacks Consensus Estimate of $4.13 billion.
Adjusted EBITDA is expected between $1.11 billion and $1.14 billion, while adjusted earnings per share are projected to be $6.04 to $6.24. The midpoint ($6.14) is higher than the Zacks Consensus Estimate of $6.11.
The company expects an effective tax rate of 23% and anticipates $400 million in share repurchases in fiscal 2027, subject to market conditions.
For the fiscal second quarter, management expects operating expense growth consistent with the first quarter, excluding severance costs. This includes approximately $12 million of investments in strategic growth initiatives, which management expects to begin generating benefits during the upcoming tax season.
HRB carries a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Snapshot
Insperity (NSP - Free Report) reported encouraging third-quarter 2026 results,
NSP registered adjusted earnings of 22 cents per share, beating the consensus estimate of 20 cents by 10%. The figure improved from an adjusted loss of 20 cents in the year-ago quarter.
Revenues increased 1.7% year over year to $1.65 billion, surpassing the consensus estimate of $1.63 billion by 1.1%.
Verisk Analytics (VRSK - Free Report) posted third-quarter 2026 adjusted earnings of $1.96 per share, beating the Zacks Consensus Estimate of $1.92 by 2.1%. The figure increased 14% from the year-ago quarter.
Revenues of $809 million topped the consensus mark of $806.8 million by 0.3% and rose 5.3% year over year.