H&R Block Raises Outlook as Annual Profit Growth Accelerates
Fiscal fourth-quarter revenue increased 3% to $1.145 billion, trailing the full-year pace.
H&R Block Inc. (HRB), the tax-preparation company, lifted fiscal 2026 adjusted earnings to $5.31 a share, up 13.9%, as revenue growth accelerated and margins widened.
Full-year revenue rose 4.9% to $3.945 billion, compared with 4.2% growth in fiscal 2025. Operating expenses increased 3.6%, allowing operating margin to expand to about 23.0% from 22.0% as operating income reached approximately $907.7 million.
The fourth quarter ended the year at a slower pace. Revenue increased 3.0%, while EBITDA rose 1.8% to $420.5 million and EBITDA margin narrowed to about 36.7% from 37.2%. Net income from continuing operations fell 2.0%, though diluted EPS increased 4.5% to $2.31 as the diluted share count declined 6.3%.
U.S. assisted-tax-preparation revenue drove the annual expansion, rising 6.1% to $2.561 billion on higher net average charges and increased company-owned volume. DIY revenue was nearly flat, while royalty revenue declined 3.9%. Wave grew fastest among the disclosed businesses, with revenue up 12.3%, and international revenue increased 7.4%.
Reported results included an $84.1 million benefit from an IRS examination that had been delayed beyond fiscal 2025. The item added $0.65 a share, above the approximately $0.50 benefit the company previously expected, and helped net income from continuing operations rise 20.8% to $736.3 million.
For fiscal 2027, H&R Block forecasts revenue of $4.11 billion to $4.16 billion and adjusted EPS of $6.04 to $6.24, implying adjusted earnings growth of roughly 13.7% to 17.5%. Adjusted EBITDA guidance stands at $1.11 billion to $1.14 billion, while the expected effective tax rate is approximately 23%.
Operating cash flow increased 23% during fiscal 2026, supporting $500.3 million of share repurchases and total shareholder returns of $713.7 million. H&R Block also raised its quarterly dividend to $0.46 a share from $0.42, extending its capital returns as it entered the new fiscal year with a higher earnings target.