A maker of tax preparation services, H&R Block helps everyday people file their returns through neighborhood offices, online software, and small-business services like Block Advisors and Wave. Brothers Henry and Richard Bloch started it in Kansas City in 1955 after the IRS stopped offering free tax help locally, so they ran a newspaper ad and were swamped. They spelled the name "Block" with a K so customers wouldn't mispronounce the family name "Bloch" as "blotch."
10-K · Fiscal year ended Jun 30, 2026 · SEC filing ↗
H&R Block FY2026 net income rose 20.8% to $733.6M, aided by an $84.1M IRS settlement tax benefit.
Pricing power held for a fifth straight year, but the pace of increase eased. rose 4.9% to $3.95 billion and climbed 28.9% to $5.66, though the was lifted by an $84.1 million one-time tax benefit from an IRS settlement. The core tax business is still growing, but the main engine—assisted pricing—is downshifting.
Key takeaways
rose 20.8% to $733.6 million, a rate of growth that far outpaced the 9.3% increase in because of an $84.1 million from the settlement of an IRS examination of the 2020 tax return and related carryback claims.
U.S. assisted tax preparation grew 6.1% to $2.41 billion, driven by a 4.0% increase in the net average charge and a 2.0% rise in company-owned return volumes, marking the fifth consecutive year of pricing-led growth but the first deceleration in the net average charge increase since FY2022.
Section summaries
Business
H&R Block provides assisted and DIY tax preparation, financial products, and small business solutions primarily in the U.S., Canada, and Australia.
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The company operates as a single reportable , filing 22.3 million returns in FY2026 across assisted (11.3M) and DIY online paid (3.6M) channels.
U.S. DIY tax preparation rose 9.7% to $383.9 million, with the paid net average charge up 9.8% and online paid returns rising, extending the 's recovery from the volume declines of FY2022 and FY2023.
Operating expenses grew 3.6% to $2.94 billion, a slower pace than the 4.6% increase in FY2025, as a 2.8% decline in marketing and advertising spend partially offset a 7.5% rise in field wages tied to higher assisted .
rose 12.3% to $113.5 million on higher subscriptions and payments volume, sustaining the double-digit growth rate seen in the prior year and confirming the platform's re-acceleration.
The company repurchased $500.3 million of stock and paid $211.0 million in dividends, ending the year with $958.7 million in cash and $600 million remaining under its authorization.
What changed
The U.S. assisted net average charge increase decelerated to 4.0% in FY2026 from 5.1% in FY2025, settling the question of whether a fifth year of 5% pricing was sustainable—it was not.
The IRS Free File inquiries and California AG outcome flagged in every prior filing remain unresolved, leaving the $165 million exposure open.
growth of 12.3% for the full year confirms the re-acceleration flagged in FY2025, up from the single-digit growth seen in early FY2024.
The $84.1 million IRS settlement tax benefit is a one-time item that flatters the FY2026 comparison; without it, the would have been closer to the prior year's level.
What to watch
U.S. assisted net average charge in FY2027 to see whether the 4.0% increase represents a new, lower run rate for pricing or whether the deceleration continues.
growth rate in FY2027 to determine if the 12.3% growth rate is sustainable or represents a peak tied to small-business activity.
Resolution of the California AG outcome and IRS Free File inquiries, which could affect the $165 million exposure that has been flagged for over five years.
Impact of the August 2026 workforce restructuring eliminating approximately 200 positions and the $8.3 million pre-tax charge on FY2027 operating expenses.
Assisted services are delivered through company-owned and franchise offices, virtual tools, and , while DIY is offered via online, mobile, and desktop software.
Beyond tax prep, H&R Block offers Refund Transfers, and debit cards, Refund Advance and Emerald Advance loans, Peace of Mind plans, and .
Small business solutions are provided through (in-person and virtual tax, bookkeeping, payroll) and (online payment processing, payroll, bookkeeping).
The business is highly seasonal, with a substantial majority of earned from February through April, and faces competition from tax prep firms, software providers, CPAs, and government authorities.
FY2026 consolidated was $3.95 billion, with from continuing operations of $736.3 million and of $5.69; the company repurchased 10.5 million shares and raised its 12% to $1.68 per share.
H&R Block faces material risks from government tax simplification, intense competition including free offerings, and operational challenges tied to its seasonal business model.
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Government proposals to simplify tax filing or offer free direct filing could materially reduce demand for H&R Block's services and financial products.
Intense competition from assisted, DIY, and free service providers, including potential new AI-driven entrants, threatens market share, pricing, and profitability.
The highly seasonal nature of the business concentrates in a few months, amplifying the impact of any operational disruptions, system outages, or fraud during peak tax season.
A security breach or systems failure, particularly involving key vendors like Microsoft Azure or , could severely disrupt operations and damage the company's reputation.
Evolving privacy, data protection, and AI regulations may increase compliance costs and limit the company's use of client data for marketing and product development.
The company's new growth strategy and reliance on acquisitions may not deliver projected results due to execution risks, incorrect assumptions, or integration challenges.
Most of our tax offices are operated under leases throughout the U.S., Canada and Australia. We own our corporate headquarters, which is located in Kansas City, Missouri. Our Canadian executive offices are located in leased offices in Calgary, Alberta and Toronto, Ontario. Our A…
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Most of our tax offices are operated under leases throughout the U.S., Canada and Australia.
We own our corporate headquarters, which is located in Kansas City, Missouri. Our Canadian executive offices are located in leased offices in Calgary, Alberta and Toronto, Ontario. Our Australian executive offices are located in a leased office in Thornleigh, New South Wales. We also lease shared services centers in Hyderabad and Trivandrum, India.
All current leased and owned facilities are in reasonably good repair and adequate to meet our needs.
Revenue rose 4.9% to $3.95B on higher U.S. assisted net average charge and volume; net income up 20.8% aided by an $84.1M IRS settlement tax benefit.
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U.S. assisted tax preparation grew 6.1% ($147.7M) driven by a 4.0% increase in net average charge and a 2.0% rise in company-owned return volume.
U.S. royalties fell 3.9% ($7.4M) as franchise acquisitions shifted returns to company-owned offices, reducing franchise volumes.
International increased 7.4% ($18.4M) due to favorable foreign exchange rates in Canada and Australia, while revenue rose 12.3% ($13.5M) on higher subscriptions and payments volume.
Operating expenses grew 3.6% ($104.7M), with field wages up 7.5% on higher assisted and technology costs up 8.4% on cloud spending, partially offset by an 2.8% decline in marketing.
Income tax expense dropped 31.6% ($54.4M) primarily from an $84.1M discrete benefit tied to the settlement of an IRS examination of the 2020 tax return and related carryback claims.
rose to $838.7M; the company repurchased $500.3M in stock and paid $211.0M in dividends, with $600M remaining under its authorization.
Quantitative and Qualitative Disclosures About Market Risk
Primary market risks are foreign exchange from international operations and seasonal interest rate exposure on short-term borrowings.
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Foreign exchange risk arises from international operations, primarily in Canada and Australia, with a 10% currency move estimated to impact annual pretax income by $5.1 million and cash balances by $23.3 million.
The company uses foreign exchange to hedge intercompany loans to Canadian operations, though no such contracts were outstanding at fiscal year-end 2026.
Interest rate risk on the is seasonal, increasing from November through March, but there was no outstanding balance on the 2025 CLOC as of June 30, 2026.
consists of fixed-rate , so interest rate changes do not affect current pretax earnings, though rates are subject to adjustment based on credit ratings.
Cash equivalents are held in short-term, high-quality instruments with a policy to minimize market risk, making their value relatively insensitive to interest rate changes.
Management and Deloitte confirm effective internal controls and unqualified audit opinions on FY2026 financials, with a critical audit matter on transfer pricing.
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Management assessed as effective as of June 30, 2026, using the COSO 2013 framework.
Deloitte & Touche LLP issued unqualified opinions on both the consolidated financial statements for the three years ended June 30, 2026, and the effectiveness of .
The sole identified relates to the valuation of uncertain tax positions for , due to significant judgment in applying the .
Total revenues grew to $3.95 billion in FY2026, driven by increases in U.S. assisted tax preparation and , while from continuing operations rose to $736.3 million.
The decreased to 13.8% in FY2026, primarily due to the settlement of an IRS examination for the 2020 tax year and related carryback claims.
A subsequent workforce restructuring announced on August 5, 2026, will eliminate approximately 200 positions and incur an estimated $8.3 million pre-tax charge.