H&R Block Reports $242.5 Million Net Loss in Q2 Fiscal 2025

H&R Block, Inc. reported its financial results for the second quarter of fiscal year 2025, revealing a net loss from continuing operations of $242.5 million for the three months ended December 31, 2024, compared to a loss of $189.1 million in the same period last year. Total revenues remained flat at $179.1 million, with a slight increase in U.S. assisted tax preparation revenues, which rose by 4.3% to $48.3 million. However, the company experienced a decline in interest and fee income on Emerald Advance® loans, which decreased by 19.2% to $12.3 million, attributed to a reduction in loans originated during the current year.

For the six months ended December 31, 2024, H&R Block's revenues increased by 2.8% to $362.9 million, driven by a 4.3% rise in U.S. assisted tax preparation revenues. The company noted a decrease in revenues from its Peace of Mind® Extended Service Plan, which fell by 7.2% to $39.2 million. Total operating expenses for the quarter increased by 5.8% to $469.5 million, primarily due to higher field wages and increased marketing and advertising costs. The effective tax rate for the quarter was 22.4%, down from 33.1% in the prior year.

In terms of strategic developments, H&R Block continued to focus on expanding its service offerings and enhancing customer engagement. The company reported an increase in international tax preparation revenues, which rose by 7.6% to $29.6 million, largely due to higher tax return volumes in Australia and favorable foreign currency exchange rates. Additionally, revenues from Wave, the company's small business solutions platform, increased by 14.8% to $23.1 million, reflecting growth in accounting and invoicing subscriptions.

Operationally, H&R Block's customer engagement metrics showed mixed results. The company reported a decrease in the number of loans originated under its Emerald Advance® program, which impacted interest income. However, the company maintained a strong presence in the market, with a significant number of clients utilizing its assisted and DIY tax preparation services. As of December 31, 2024, H&R Block had cash and cash equivalents of $320.1 million, including $158.6 million held by foreign subsidiaries, providing a solid liquidity position to support ongoing operations.

Looking ahead, H&R Block anticipates that its seasonal business model will lead to increased revenues in the upcoming tax season, which typically peaks from February to April. The company remains committed to its share repurchase program, having repurchased $400.1 million of its common stock during the first half of the fiscal year. H&R Block's management expressed confidence in the company's ability to navigate market conditions and achieve its financial objectives, despite the challenges faced in the current fiscal period.