H&R Block, Inc.

Thank you for standing by, and welcome to H&R Block's first quarter fiscal 2023 results 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, Michela Galina. Please go ahead.

Thank you, Operator. Good afternoon, everyone, and welcome to H&R Block's first quarter fiscal 2023 financial results conference call. Joining me today 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 presentation. The content of this call contains time-sensitive information accurate only as of today, November 1, 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. Today I will begin with a summary of our Fiscal 23 Q1 results and share more about our Block Horizons progress. Then Tony will provide an update on our financials. While the first quarter is small in comparison to our fiscal year, just about 5% of our total revenue, our Q1 performance met expectations, and we are reaffirming our full-year outlook. We've done a good job of converting extensions, which increased 5% over prior year, and we saw healthy, ongoing adoption of virtual tools in the quarter. We also managed expenses well despite the high inflationary environment. On the capital allocation front, we bought back another 3% of shares outstanding, and in October paid our quarterly dividend of 29 cents per share, which is an increase of 7% to last year. Overall, I'm pleased with our start, and I'm looking forward to the rest of fiscal 23. We're in the third year of our Block Horizons transformation, and we're gaining momentum. Beginning with small business, we see a significant runway of growth and opportunity with both small business tax and WAVE. In assisted small business tax, we continue to see double-digit revenue growth driven by both volume and net average charge. In Q1, we broadened our marketing efforts with a bold message focusing on the value we deliver versus independent CPAs, which is meaningful. While early, bookkeeping and payroll are growing nicely. driven by our dedicated team of company bookkeepers and franchisees. We are also capitalizing upon the growth trends we saw last year in two ways. First, we're building an inside sales capability to convert tax leads into small business services. Second, we saw significant opportunity to help clients incorporate their small business. In response, we launched a self-serve business formation product in October that enables business owners to create an entity. This can result in significantly better tax outcomes and a greater level of legal protection for our clients, and simultaneously provides the benefit of having two returns filed with Block, both the individual and the entity. As you can see, we have a lot of good things happening in small business. Turning to Wave, our new CEO has successfully onboarded is completing a strategic review of the business, and is assessing levers to drive future performance. While Wave customers saw increased invoice volume, there was less payment activity than we anticipated. As a result, revenue growth was 18% in the quarter. Moving to financial products, recall that we brought our new mobile banking platform, Spruce, to market in the DIY channel this past tax season. Given most of our marketing efforts are currently timed around the tax season, our metrics are relatively unchanged to the results we shared last quarter with approximately 160,000 sign-ups and $98 million in customer deposits. We know that Spruce customers want to improve their financial health. One of the most proven and effective ways they can do this is by saving money, even in small amounts. which is why we've continued to focus on savings-related innovation within the app. We recently added capabilities that enable users to round up their purchases to the nearest dollar, with the difference automatically deposited to their savings account, as well as the ability to deposit checks with their mobile phone. We're also enhancing our unique smart tax refund feature, which allows customers to make a pre-commitment to save a portion of their tax refund rather than spending it right away. Last year, this feature empowered the average user to set aside more than a quarter of their tax refund. One of the greatest challenges of engaging clients to load money is the process of switching their payroll. In an upcoming release, users will be able to change their payroll deposit settings from within the Spruce app. without having to go back to their employer, making this process much simpler. Alongside product innovation, we're preparing for launch in the assisted channel by educating tax professionals on the clear and different value propositions between SPRUCE and the Emerald Card to help clients make the best decision for their needs. Regarding block experience, we're making great strides blending digital capabilities with human help. resulting in a better, more personalized process for our clients. We believe this is the key to winning in both assisted and DIY, and we have a multitude of exciting projects underway. Last year, we increased the number of clients using a virtual tool by more than three times. We're continuing to help the customer understand the benefit of these offerings, such as digital drop-off and approving returns online. Machine learning models are improving how we serve assisted and DIY clients, as well as driving advancements in matching the complexity of a client's return to the right tax professional. This makes for a better customer experience and increases our productivity. We've expanded remote work options for tax professionals and are seeing early positive signs in hiring and retention. Our first year TaskPro role has been reshaped to accelerate their expertise, which increases productivity by enabling them to serve more clients. In fact, we've already hired to 75% of our goal for this new role. Over the last few months, we've evaluated how we can more effectively highlight our DIY value proposition. We've been doing research with our clients and our competitors' clients And we know that our product is strong, our value is strong, and the number one opportunity we have is increasing awareness that we offer a DIY product. As a result, you'll see us come to market with a new approach. In all, expanding virtual capabilities enables us to be well positioned to help our clients however they want, completely virtually or completely in person and everything in between. Our block horizon's progress continues to build, and we're excited about the magnitude and the impact of this work. Lastly, I'd like to mention that we recently released our annual Environmental, Social, and Governance, or ESG, report, which can be found on our website. While this is our third annual publication, in many ways we're just getting started. Being a responsible corporate citizen that connects our people, communities, and planet, has been a part of our culture and aspirations from the very beginning, and I'm pleased with the work we're doing. With that, I now turn it over to Tony.