Block H & R — Income Statement, Cash Flows & Balance Sheet
Is H&R Block profitable?
H&R Block grows revenue steadily and earns healthy profits, with margins holding firm year over year.
| Metric | FY2023 | FY2024 | FY2025 | Change (FY24→FY25) |
|---|---|---|---|---|
| Total revenues ($000s) | $3,472,185 | $3,610,347 | $3,760,995 | +4.2% |
| Total operating expenses ($000s) | $2,723,487 | $2,805,070 | $2,933,025 | +4.6% |
| Net income from continuing ops ($000s) | $561,800 | $597,963 | $609,450 | +1.9% |
| Operating margin (approx.) | 21.6% | 22.4% | 22.0% | −0.4 pts |
| Diluted EPS (continuing ops) | $3.56 | $4.14 | $4.42 | +6.8% |
Revenue has grown consistently each year, and net income from continuing operations has followed suit. Operating margins are essentially flat — costs grew slightly faster than revenue this year — but the business remains firmly profitable. Diluted earnings per share grew faster than net income because H&R Block has been buying back shares, shrinking the share count.
A small, shrinking discontinued operations loss is not a concern.
| Item | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Net loss from discontinued ops ($000s) | $(8,100) | $(2,646) | $(3,677) |
This loss relates to a mortgage business H&R Block exited back in 2008. The amounts are tiny relative to the overall business and have no bearing on ongoing operations.
Where does H&R Block's revenue come from?
In-person (assisted) tax preparation is the dominant and fastest-growing revenue line.
| Revenue Line | FY2024 | FY2025 | Change |
|---|---|---|---|
| U.S. assisted tax preparation ($000s) | $2,274,835 | $2,413,229 | +6.1% |
| U.S. DIY tax preparation ($000s) | $349,812 | $383,738 | +9.7% |
| U.S. royalties (franchise fees) ($000s) | $204,802 | $192,877 | −5.8% |
| Wave (small business fintech) ($000s) | $96,472 | $109,222 | +13.2% |
| International ($000s) | $247,123 | $246,993 | −0.1% |
Assisted tax prep — people walking into an H&R Block office or meeting with a tax professional virtually — accounts for roughly two-thirds of total revenue and posted solid growth. DIY software and Wave (a small-business payments platform) are the faster-growing pieces. Franchise royalties and several ancillary financial products like Emerald Advance loans and Emerald Card declined, suggesting some mix shift in how customers engage with the brand.
Does H&R Block generate cash?
H&R Block is a strong cash generator, returning the majority of that cash directly to shareholders.
| Cash Flow Item | FY2023 | FY2024 | FY2025 |
|---|---|---|---|
| Operating cash flow ($000s) | $821,841 | $720,860 | $680,883 |
| Capital expenditures ($000s) | $(69,698) | $(63,678) | $(82,034) |
| Free cash flow (approx.) ($000s) | $752,143 | $657,182 | $598,849 |
| Dividends paid ($000s) | $(177,925) | $(179,775) | $(197,330) |
| Share repurchases ($000s) | $(568,952) | $(379,569) | $(437,133) |
Operating cash flow has declined somewhat over three years, partly due to the timing of tax payments (cash taxes paid jumped significantly this year). Even so, free cash flow (operating cash minus capex) is substantial, and H&R Block returned the bulk of it to shareholders through dividends and buybacks. The dividend per share declared rose from $1.16 to $1.50 over the same period — a meaningful increase.
How strong is H&R Block's balance sheet?
H&R Block carries meaningful debt, with a near-term maturity coming due in 2026.
| Debt Item | FY2024 | FY2025 |
|---|---|---|
| Senior Notes, 5.25%, due Oct 2025 ($000s) | $350,000 | $350,000 |
| Senior Notes, 2.50%, due Jul 2028 ($000s) | $500,000 | $500,000 |
| Senior Notes, 3.875%, due Aug 2030 ($000s) | $650,000 | $650,000 |
| Total long-term debt ($000s) | $1,491,095 | $1,493,198 |
| Cash and equivalents ($000s) | $1,053,326 | $983,277 |
The $350 million note maturing in October 2025 is already classified as a current liability, meaning it comes due very soon after the fiscal year end. H&R Block has nearly $1 billion in cash plus an undrawn $1.5 billion revolving credit facility (recently extended to 2030), so repaying that note should be straightforward. Total equity is thin at roughly $89 million — a result of years of buybacks and dividends — but for a highly cash-generative, asset-light business like tax preparation, that is typical rather than alarming.