H&R Block, Inc.

Thank you for standing by and welcome to H&R Block's year-end fiscal 2022 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 1-1 on your telephone. I would now like to hand the call over to Vice President, Investor Relations, Michele Galena. Please go ahead.

Thank you, Operator. Good afternoon, everyone, and welcome to H&R Block's full-year fiscal 2022 financial results conference call. Joining me are Jeff Jones, our President and Chief Executive Officer, and Tony Bowen, our Chief Financial Officer. Earlier today, we issued a press release and presentation, which can be downloaded or viewed live on our website at investors.hrblock.com. Our call is being broadcast and webcast live, and a replay of the webcast will be available for 90 days. Before we begin, I'd like to remind listeners that comments made by management may include forward-looking statements within the meaning of federal securities laws. These statements involve material risks and uncertainties, and actual results could differ from those projected in any forward-looking statement due to numerous factors. For a description of these risks and uncertainties, please see H&R Block's annual report on Form 10-K and quarterly reports on Form 10-Q, as updated periodically with our other SEC filings. Please note, some metrics we'll discuss today are presented on a non-GAAP basis. We've reconciled the comparable GAAP and non-GAAP figures in the appendix of our press release and presentation. The content of this call contains time-sensitive information, accurate only as of today, August 9, 2022. H&R Block undertakes no obligation to revise or otherwise update any statements to reflect events or circumstances after the date of this call. With that, I will now turn it over to Jeff.

Thank you, Michaela. Good afternoon, everyone, and thanks for joining us. Fiscal 2022 marked another year of strong performance, continuing a multi-year trend of improved results. We delivered another great tax season and achieved meaningful milestones in our Block Horizons journey, including a record year in small business, launching our new mobile banking platform, Spruce, and more than tripling the use of virtual tools among tax clients. As a result of the strength in our business, we are pleased to also announce another increase to our dividend and a new share repurchase authorization. I'll begin as usual by discussing the progress we have made across our strategic imperatives, share more on the tax season, and then Tony will provide details on our results and discuss our fiscal 2023 outlook. In small business tax, we are delivering exceptional results. We saw strong growth in both assisted and DIY clients, as well as improved mix, which led to a double-digit revenue increase this tax season versus last year. Our various client acquisition and retention efforts are working, including enhanced marketing efforts and the introduction of an advanced certification for tax professionals. In addition, we're building out our bookkeeping and payroll offerings and testing new services. Overall, it was a record year, and we're focused on building upon the momentum we saw in fiscal 22. Turning to WAVE, We had another solid year of performance. Revenue grew 28% over last year, and average revenue per user, or ARPU, continued to accelerate on both a sequential and year-over-year basis. I'm excited about the ongoing innovation, including the development of a unified mobile experience that will strengthen Wave's product ecosystem. We acquired Wave three years ago. and it has since achieved important financial and operational milestones. As such, founder and CEO Kirk Simpson believed it was the right time to hand over the reins to a new leader to take WAVE into its next phase of growth. I want to thank Kirk for his leadership and many accomplishments. Importantly, Kirk was instrumental in selecting our new leader, Zaheer Khoja. Zaheer was formerly the General Manager of North America for Afterpay, where he led the company's rapid market expansion. Previously, he was the Executive Vice President, Global Merchant Solutions and Partnerships at MasterCard. His significant FinTech management and product development experience make him an excellent fit to lead and scale the business, and I'm excited for this next chapter at Wave. Overall, small business continues to execute, and I'm pleased with the progress we made in fiscal 22. Moving to financial products, we're focused on driving innovation within our mobile banking platform, Spruce. We've had four new app releases since the January launch, streamlined the sign-up process, and made enhancements to the existing credit score feature to help clients understand how it's calculated and how they can improve it. As of June 30, we have 160,000 signups and $83 million in customer deposits. As a reminder, we introduce clients to Spruce only in the DIY channel at launch to learn and gain customer insights. Now that we're outside of tax season, we are continuing to innovate the feature set, test customer acquisition, and prepare for the launch in the assisted channel next tax season. Our block experience imperative, which is all about blending digital tools with human expertise, continues to drive a better experience for our clients. For example, our technology investments enable clients to be served fully virtually to fully in-person and everything in between. During the 2022 tax season, virtual uptake from clients more than tripled, Embedded machine learning in the DIY user interface is producing a better experience for customers by streamlining the time to complete their return. And we are better anticipating when to offer a DIY user help from a tax pro, which adds expertise to maximize their outcome. Our new innovative fulfillment network enables tax pros with capacity to process a return from anywhere in the country. regardless of location, which results in our clients being more quickly served and better leverages our TaxPro availability. This was one of the reasons we saw strong TaxPro productivity this season. Our enhanced virtual technologies have the added benefit of providing efficiencies for the business. We have begun reducing our existing square footage without closing stores. as most of our task flow training is now online and we no longer have a need for large conference rooms in many offices. We've also tested drop-off only locations this year to better leverage the fulfillment network, serve clients quickly, and optimize staffing. Finally, robotic process automation, or RPA, have streamlined highly manual back office processes, eliminating nearly 40,000 human labor hours in fiscal 22 alone. As you can see, we continue to achieve significant milestones in our Block Horizons journey, and I'm very pleased with our trajectory. Turning now to results, we finished the year strong in both the assisted and DIY channels, serving more clients than typical in the May and June period. We exceeded our guidance on both revenue and EBITDA and continued our multi-year trend of creating value for shareholders. Since 2019, the last normal year prior to the pandemic, our performance speaks for itself. We've grown total clients, grown assisted market share, grown revenue and EBITDA more than 12% each, and reduced shares outstanding by 21%. leading to adjusted EPS growth of nearly 50%. And we've grown the dividend. Stepping back over double that timeframe since 2016, we've grown adjusted EPS by approximately 110%. We emerged from the pandemic much stronger as a company and are on a path of growth. In summary, it was another great year for H&R Block, delivering on our purpose to provide help and inspire confidence in our clients and communities everywhere. I'm excited about the momentum in the business, the strength of our capital allocation, and where we are headed. Tony will now share more on our financials and outlook.