H&R Block, Inc.

Thank you for standing by and welcome to H&R Block's full year 2023 financial results 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 11 on your telephone. To remove yourself from the question queue, press star 11 again. I would now like to hand the call over to Michaela Galena, Vice President, Investor Relations. Please go ahead.

Thank you, Lateef. Good afternoon, everyone, and welcome to H&R Block's full year 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.htrblock.com. Our call of 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. Finally, the content of this call contains time-sensitive information accurate only as of today, August 15, 2023. 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 Jess.

Thanks, Michaela. Today we'll provide an update on our fiscal year 23 results. Then I'll share more on the progress we continue to make within our Block Horizon strategy, provide initial thoughts on fiscal year 24, and Tony will discuss our financial performance and outlook in more detail. Starting with 2023 results, we had a good finish to the year and delivered revenue growth, material EBITDA growth, and adjusted EPS growth of 9%. As we discussed at the beginning of the year, we knew we were facing headwinds due to the rollback of the advanced child tax credit payments that were loaded onto the Emerald Card. During the year, we also had foreign exchange impacts, stimulus filers that returned to the sidelines, and California's deadline extension. Overall, I'm pleased with the results we produced despite these challenges. Our DIY strategy delivered this year, resulting in meaningful share gains. We demonstrated pricing power in the assisted channel and saw positive customer satisfaction metrics. Small business tax continued to be a growth driver. And we also added about 150,000 new sign-ups to our Spruce mobile banking platform. In addition, our capital allocation story is driving ongoing value for shareholders. We completed another $200 million of share repurchases in Q4 alone. and today announced a 10% increase to the dividend. Entering fiscal year 24, we are well positioned and expect a return to ordinary industry growth, which Tony will discuss in more detail later in the call. Before that, let me share more about our Block Horizons progress. Let's start with our small business imperative that includes tax and WAVE. Small business assisted tax continues to be a growth driver. This business delivered 6% revenue growth for the fiscal year, on top of strong growth last year, led by net average charge, or NAC, which grew 5%. We also see a nice runway of longer-term opportunities and services. While early, bookkeeping and payroll are gaining traction, and this year we launched a business formation tool Our new internal sales team more than doubled appointment-to-sale conversion rates, accelerating growth in services. All in all, we are pleased with the trends in small business and continue to see significant opportunity ahead. Turning to Wave, our top priorities are driving revenue growth and improving profitability. For the full year, revenue increased 12%. In the fourth quarter, we grew average revenue per user while also becoming more efficient with our customer acquisition spend. We also launched a new feature for receipt processing that scans and imports data in seconds, reducing manual bookkeeping. Its uptake has been faster than anticipated, and we are now working on a robust roadmap of other new features to roll out in the coming months. Moving on to our financial products imperative, regarding Spruce, our mobile banking platform, we've been utilizing learnings from its first year in the assisted channel to address and solve the needs of our clients. Since launch through June 30, we have had 300,000 sign-ups and $334 million in customer deposits. Spruce is committed to helping customers be good with money, and we're seeing progress toward that impact goal. A higher percentage of users are now saving money, and the balances accumulating in savings accounts continues to grow. These savings accounts allow users to customize goals in order to save for the things they want in their lives, whether it be emergency savings or a new car. Our newest feature, a budget watch list, utilizes flexible guardrails to help build healthy spending habits. Feedback from users indicate that these tools give them the visibility and control that they've been missing in their financial lives. From here, we are focused on acquiring clients both in and out of the tax season. Now let's turn to block experience, which is all about blending digital tools with human expertise to serve clients however they want to be served, fully virtual to fully in person and everything in between. In DIY, we delivered on what we set out to do, and we were especially pleased with the results. As you recall, our goal was to return to share growth by increasing awareness that we offer a DIY product, by improving the product, and by making it easier to switch from TurboTax. This multifaceted strategy worked, and as we reported last quarter, we saw online client growth of 2.5% through April 30th, and 35 basis points of share growth. We are looking forward to continuing this momentum in fiscal 24. In assisted through April 30, we successfully increased company MAC by 4% while receiving strong customer satisfaction metrics. We also attracted higher income clients and sold over 10% growth in those with more than $100,000 of income. And as we shared last quarter, we continue to see progress in the adoption of virtual tools. Although we saw stimulus filers return to the sidelines, the data shows that dynamic is now behind us, and we're focused on bringing more new clients into the assisted channel next year. As you may have seen from our recent announcement, we entered into an industry-leading partnership with Microsoft to leverage its Azure OpenAI services in leading GenAI technology to fuel faster and better experiences for taxpayers. While we have been building in-house capabilities for some time, we believe we can further accelerate our progress by leveraging the most advanced AI models in the world while continuing to keep data security a top priority. We will initially be focused on two areas. First, using GenAI to reduce expenses and increase productivity. and second, to deliver enhanced customer experiences. We have dedicated teams working on these efforts, and we are excited about the possibilities for H&R Block. Looking back over the last few years, we've made significant strides in our products, services, and features within our Block Horizon strategy, and we're looking forward to what lies ahead. Now let me turn it over to Tony to discuss our financials and outlook.