[Management View]
H&R Block reported a 5% increase in total revenue for Q1 FY2026, driven by higher net average charge, increased U.S. assisted volumes, and double-digit growth in the WAVE segment. Strategic priorities include focusing on complex paid filers, further AI investment, enhancing client experience, and acquiring franchise locations at attractive EBITDA multiples.

[Outlook]
The company projects FY2026 revenue between $3.875-$3.895 billion, EBITDA (non-GAAP) between $1.015-$1.035 billion, and adjusted EPS of $4.85-$5. H&R Block plans to continue returning capital to shareholders through increased dividends and share repurchases.

[Financial Performance]
- Revenue: $204 million, up 5% YoY
- EBITDA: Loss of $170 million, a 9.4% improvement YoY
- Net loss from continuing operations: $165 million, a 3.5% improvement YoY
- Loss per share: Adjusted loss per share was $1.20 compared to $1.17 last year
- Total operating expenses: $411 million, decreased by $12 million YoY
- Share repurchases: 7.9 million shares bought for $400 million, completing the fiscal 2026 repurchase plan

[Q&A Highlights]
Question 1: Can you talk about changes you're planning to make to marketing and operations in assisted to stem some of the share losses from prior years?
Answer: Investments in Second Look and AI are key. Second Look reviews prior returns for missed opportunities, often resulting in significant savings. AI will improve tax pro productivity and optimize tax outcomes for clients.

Question 2: Can you elaborate on your pricing strategy in DIY and how you expect that to impact both margins and market share performance?
Answer: The pricing strategy remains consistent with prior years, expecting low single-digit price increases across both assisted and DIY channels. Customer satisfaction metrics are strong, and the focus is on amplifying the value provided to consumers.

Question 3: With the anticipated complexity from the new tax bill, what magnitude are you expecting, and how are you preparing for it? Also, should we anticipate a slow start to the year due to the government shutdown?
Answer: No indication of a late start to the tax season. The new tax bill is expected to be a tailwind, with a proxy of a 20 basis point share shift from DIY to assisted last season.

Question 4: Can you address AI differentiation and the marketing strategy for free customers?
Answer: AI is seen as an opportunity to optimize operations and client experience, with AI Tax Assist providing real-time help in DIY. The focus is on understanding and reaching client cohorts individually to convert free clients to paying clients over time.

[Sentiment Analysis]
Analysts and management maintained a positive and optimistic tone, focusing on strategic investments, AI advancements, and strong capital return commitments.

[Quarterly Comparison]
| Metric | Q1 FY2026 | Q1 FY2025 |
|-------------------------------|-----------|-----------|
| Revenue | $204M | $194M |
| EBITDA | -$170M | -$188M |
| Net Loss from Continuing Ops | -$165M | -$171M |
| Adjusted Loss per Share | -$1.20 | -$1.17 |
| Total Operating Expenses | $411M | $423M |
| Share Repurchases | 7.9M | N/A |

[Risks and Concerns]
- Potential delays in the tax season start due to government shutdowns.
- Uncertainty in the impact of new tax legislation.
- Market share shifts between assisted and DIY segments.

[Final Takeaway]
H&R Block demonstrated solid revenue growth and improved EBITDA performance in Q1 FY2026, driven by strategic investments in AI and client solutions. The company remains focused on enhancing client experience, expanding its market share in the assisted segment, and returning capital to shareholders. The transition to new CEO Curtis Campbell is expected to bring continuity and innovation, positioning H&R Block for sustained long-term growth.