**H&R Block, Inc. Q4 2024 Earnings Call Transcript: Key Highlights and Insights**
H&R Block, Inc. (NYSE:HRB) Q4 2024 Earnings Conference Call took place on August 15, 2024, at 4:30 PM ET. The call featured key executives including Vice President of Investor Relations Michaella Gallina, President & CEO Jeff Jones, and CFO Tony Bowen. Several analysts participated in the call, including Kartik Mehta from Northcoast Research, Scott Schneeberger from Oppenheimer & Company, and George Tong from Goldman Sachs.
The conference call began with an introduction from Michaella Gallina, who welcomed participants and provided an overview of the agenda. She reminded listeners that management’s comments may include forward-looking statements and encouraged them to refer to the company’s SEC filings for more information. She also highlighted that some metrics would be presented on a non-GAAP basis, with reconciliations provided in the presentation.
Jeff Jones, President and CEO, then took the floor to share the company’s results for the full fiscal year and discuss the progress made on their Block Horizons imperatives. He expressed satisfaction with another year of revenue growth, faster EBITDA growth, and double-digit EPS growth. Jones highlighted the momentum in the DIY business, market share gains, and the successful launch of AI Tax Assist. He also mentioned the growth in the Assisted channel, particularly in small business tax services.
Jones emphasized the company’s commitment to driving value for shareholders through capital allocation practices. He announced a 17% increase in the quarterly dividend and a new repurchase authorization of $1.5 billion. Jones outlined the progress made in the Small Business, Wave, and Financial Products imperatives, as well as the focus on enhancing the Block Experience through digital tools and human expertise.
Next, Tony Bowen, CFO, provided a detailed overview of the company’s financial performance for fiscal year 2024. He highlighted the revenue growth of $3.6 billion, driven by higher net average charge and company-owned volumes in the Assisted category, as well as greater online paid returns in DIY. Bowen discussed the operating expenses, interest expenses, and pretax income, which increased by 7% primarily due to higher revenues.
Bowen shared that EBITDA reached $963 million, representing a more than 5% growth over the previous year. He noted the increase in earnings per share from continuing operations and adjusted earnings per share, highlighting the company’s strong financial performance. Bowen also discussed the strategic acquisition of franchise offices and the company’s capital allocation strategy, including dividends and share repurchases.
Looking ahead to fiscal year 2025, Bowen provided the company’s outlook, expecting revenue in the range of $3.69 billion to $3.75 billion, EBITDA in the range of $975 million to $1.02 billion, and EPS in the range of $5.15 to $5.35. He mentioned the anticipated benefits from a lower effective tax rate of approximately 13% due to the closure of various matters under examination.
In response to analyst questions, Jeff Jones elaborated on the company’s strategies to maintain market share in the Assisted and DIY categories, emphasizing a focus on improving the client experience, particularly for new clients. Tony Bowen addressed inquiries about margin expansion, share repurchases, and the impact of one-time benefits on EPS.
In conclusion, Jones thanked participants for joining the call and expressed confidence in the company’s positioning for fiscal year 2025. He highlighted the strong financial performance, strategic initiatives, and leadership transitions within the organization. The call concluded with closing remarks from Michaella Gallina, looking forward to the next quarterly update.
Overall, the Q4 2024 Earnings Call provided valuable insights into H&R Block’s financial performance, strategic priorities, and outlook for the future. The company’s focus on driving value for shareholders, enhancing the client experience, and leveraging digital tools demonstrates a commitment to sustainable growth and innovation in the tax services industry.
