H&R Block's Q3 2025: Key Contradictions in Pricing, 1099-K Impact, and Assisted Segment Growth

Pricing strategy and product positioning, impact of 1099-Ks on volume and NAC, Assisted segment growth and market dynamics, marketing strategy and positioning, and Assisted segment performance are the key contradictions discussed in H&R Block's latest 2025Q3 earnings call.



Revenue and Earnings Growth:
- H&R Block reported revenue growth of 4% and EBITDA growth of 5% for Q3 2025, with EPS growth of 9%.
- The growth was driven by an increase in company-owned Assisted volume, higher overall net average charge, and effective labor management.

Shift in Assisted vs DIY:
- Assisted category delivered 170 basis points growth compared to 90 basis points growth in DIY.
- The shift was attributed to clients seeking human help and expertise, with H&R Block being the category leader in Assisted tax services.

Improved Assisted Performance:
- H&R Block improved its volume and market share trends year-over-year in the Assisted channel.
- This was due to redesigning the Assisted client experience, enhancing the tax pro matching algorithm, and offering Second Look service, which identified discrepancies in nearly 1/4 of client reviews.

DIY Revenue and Paid Volume:
- DIY revenue grew by 8% year-over-year, with free and paid volume broken out for transparency.
- The growth in paid volume was due to strategic focus on complex paid SKUs and disciplined investment, outweighing the impact of an unprecedented promotional environment.

Franchise Operations and Buybacks:
- Assisted company-owned revenue grew, while franchise operations saw a decline, with 123 franchise locations bought back year-to-date.
- The decline was primarily due to franchise buybacks, which are part of H&R Block's growth strategy, while company-owned locations saw improved performance due to enhanced client experience and conversions.