H&R Block, Inc.

Thank you for standing by, and welcome to H&R Block's fiscal 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference may be recorded. Should you require any further assistance, please press star zero. I would now like to hand the conference over to your host, Vice President of Finance, Colby Brown.

Thank you, Operator. Good afternoon, everyone, and thank you for joining us to discuss our fiscal 2021 results. On the call today are Jeff Jones, our President and CEO, and Tony Bowen, our CFO. Today's press release is posted on the Investor Relations website at hrblock.com, where you can also access a webcast of today's presentation. The presentation will also be posted online after this call. Some of these figures we'll discuss today are presented on a non-GAAP basis. We've reconciled the comparable GAAP and non-GAAP figures in the schedules attached to our press release and in today's presentations. Before we begin our prepared remarks, I'll remind everyone that this call will include forward-looking statements as defined under the securities laws. Such statements are based on current information and management's expectations as of this date and are not guarantees of future performance. Forward-looking statements involve certain risks, uncertainties, and assumptions that are difficult to predict. As a result, our actual outcomes and results could differ materially. You can learn more about these risks in our Form 10-K and our other SEC filings. H&R Block undertakes no obligation to publicly update these risk factors or forward-looking statements. At the conclusion of our prepared remarks, we'll have a Q&A session. During Q&A, we ask that participants limit themselves to one question with a follow-up, after which they may choose to jump back into the queue. With that, I'll now turn the call over to Jeff. Thank you, Colby.

Good afternoon, everyone, and thanks for joining us. Today, I'm excited to share our outstanding results. I'm proud of what our team has accomplished, including progress on our Block Horizon strategy and a very strong tax season. Our results show that our multi-year efforts to improve client trajectory are gaining traction. We grew clients and achieved our largest overall and largest assisted market share gains in over a decade. We drove significant growth in DIY revenue and continued strong growth at Wave, We increased digitization of the business, advanced how we serve small businesses and block advisors, and made meaningful progress in building our new mobile banking product. Today, we also announced another increase in our quarterly dividend, our fifth in the past six years, further demonstrating the confidence we have in both our financial strength and outlook for continued long-term growth. With that backdrop, Let me provide more detail on what we've achieved with Block Horizon since our investor day in December, followed by additional color on the 2021 tax season. Tony will then review our full year financials and capital structure, discuss our fiscal year change, and provide thoughts on our fiscal year 22 outlook. Since our investor day in December, where we laid out our Block Horizon strategy, We've had our foot on the gas to execute across our three strategic imperatives, small business, financial products, and block experience. Small business and financial products are categories where we have a right to compete and advantages to help us win. Block experience represents our modernized approach to tax. I'll start with an update on each of these key areas. In small business, we've gained traction on all elements of our strategy. First, we expanded our reach to more small business owners by improving our client experience in tax and amplifying our messaging. In a few short months, we certified over 25,000 tax professionals to serve small businesses, relaunched the Block Advisors brand, and built a new Block Advisors product in DIY, which includes unlimited expert help. Our Block Advisors marketing campaign, which launched in mid-February, resonated with customers as it drove awareness of our ability to serve small business owners' unique needs and reinforced our expertise as a trusted year-round partner for this critical customer segment. Second, we made progress in bookkeeping and payroll services, laying the foundation for future growth. And third, WAVE continued its exceptional growth of over 35% for the year, while also expanding Wave Money as the center of the experience. Turning to financial products, we've begun our journey to provide additional value to underbanked customers by offering a mobile banking alternative to meet their unique needs. We've completed the design phase and are now building the beta version of our product, which we expect to launch by calendar year-end. Regarding block experience, we're continuing to infuse human help into our DIY offering and transform the assisted experience through digital tools as we meet our customers however and wherever they wish to be served. We're already seeing positive signs in virtual adoption by our assisted customers. And we also saw a great uptake of DIY clients requesting human help. I'll share more on this in a moment as I go through taxis and details. The theme of this year's tax season for H&R Block can be summed up in one word, growth. To provide context on the strength of our results this year, I'd like to first frame the industry dynamics, particularly given this year's unique considerations. The season included a delayed start from the IRS, two additional rounds of related stimulus payments, mid-season changes to tax laws, added new policies regarding unemployment and recovery rebate credits, and finally, a one-month delay in the filing deadline to May 17th, all in year two of the pandemic. The industry in total saw an increase in filings when compared to last year's completed season, that is, to the filing deadlines in each year. There was also a mix shift from DIY to assisted representing a reversal of prior year trends. As a reminder, the category also showed strength in 2020 as assisted returns were essentially flat in a year when the operating environment was far from normal. The resilience and sustainability of the assisted category, even amid the pandemic, reflects our conviction in its stability over time. the bottom line continues to be that most Americans want personal help with their taxes, and nobody is better positioned than we are in delivering that expert help. With the industry backdrop as important context, I'd like to provide more detail on our results. To clarify, when making comparisons, I will discuss the full tax season in 2021 versus the full tax season in 2020 despite the different filing deadlines. Later, Tony will share more about our fiscal year results and how these were impacted by the extension. As I said at the beginning of this call, I am very proud of the results our team achieved this season. We saw growth in overall clients, total share, assisted share, and strong revenue performance in DIY. we estimate that we gained approximately 30 basis points of total market share when compared to last year's completed tax season. This is our best result in over a decade. In our assisted business, we grew clients by over 700,000, or approximately 7%, and estimate we gained 70 basis points of market share. Again, the best in over 10 years. Based on these results and the continued positive feedback we hear from customers, we know that our work to improve value, quality, and digital capabilities are helping consumers rediscover a new H&R Block. We were the go-to source of help for many individuals who haven't normally been filing, but who this year had questions about unemployment or receiving the recovery rebate credit. Though some of these filings may be one time in nature, we're committed to doing all we can to retain these additional clients. Importantly, our client satisfaction scores remain strong, and our new client scores improved, with high marks for being cared for, price for service, and intent to return. With these dynamics, we held pricing flat and assisted. Our net average charge was down about 2%, due entirely to MIX, as the majority of growth in new clients came from filers at lower price points. While these new clients caused a decrease in our average charge, they were additive to revenue. Our share gains show that our value is being recognized in the marketplace, giving us confidence to consider modest price increases. Moving to our DIY business, revenue grew nearly 20% due to an increase in the net average charge related to improved mix and pricing actions. Also, significantly more clients chose to add human help, resulting in the second year in a row of TaxPro review growing more than 50%. We saw a slight share loss as we focused on more valuable returns, evidenced by our improved mix and an increase in NAC of over 20%. The increasing use of human help by our DIY customers, along with the use of digital tools by our assisted customers, demonstrates the importance of our block experience efforts to blend digital capabilities with human expertise and care. We're confident we're on the right path to serving consumers in a modern way. As a reminder, digital does not mean DIY. and the increasing use of digital capabilities in the assisted business does not reduce our NAC. I'll now move on to small business, which includes our Block Advisors and Wave brands. We grew assisted small business filers by 4%, and as I previously shared, Wave continues to produce strong results as we see increases in customers new to the brand, overall payments volumes, and the use of payroll services. This all led to revenue growth of over 35%. In addition, our strategy of putting waived money at the core of our offering is picking up steam, as waived money deposits have grown at a pace of 40% per month for the past six months. In summary, our team provided help and inspired confidence for millions of consumers and small business owners this season. We made tremendous progress in our first year of Block Horizons, blending technology and digital tools with human expertise in tax to help achieve our largest market share gains in over a decade. We improved our offerings in small business, drove significant growth at Wave, and are making progress on our new mobile banking platform. We're confident about the journey we're on, and I'm very excited about our future. I'll now turn it over to Tony to cover our financial results.