H&R Block, Inc. (NYSE:HRB) Q1 2019 Earnings Conference Call - Final Transcript

Aug 28, 2018 • 04:30 pm ET


H&R Block, Inc. (NYSE:HRB) Q1 2019 Earnings Conference Call - Final Transcript


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Good day. Ladies and gentlemen, my name is Ian, and I'll be your conference operator today. At this time, I would like to welcome everyone to the H&R Block First Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) Thank you.

I would now like to turn the call over to Mr. Colby Brown, VP of Finance and IR. Sir, you may begin.

Colby Brown

Thank you, Ian. Good afternoon, everyone, and thank you for joining us to discuss our fiscal 2019 first quarter results. On the call today are Jeff Jones, our President and CEO; and Tony Bowen, our CFO.

We've posted today's press release on the Investor Relations website at hrblock.com. Additionally, a presentation for viewing is available via the webcast and will also be posted to the Investor Relations website after this call. Some of the figures that 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.

(Forward-Looking Cautionary 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.

Jeff Jones

Thank you, Colby. Good afternoon, everyone, and thanks for joining us. It's been about a year since I joined H&R Block and I'm even more excited about the future of this Company. The tax industry continues to grow in both the assisted and DIY channels, and we're executing a strategy to take advantage of opportunities in each, plus developing new products that digitally-enabled human health and care, so H&R Block is available to people in any way they choose. Of course, all of this is backed by solid cash flow at a strong financial position allowing us to effectively balance investing for the future, while continuing to opportunistically return capital to shareholders and create long-term value.

On today's call, I'd like to spend time framing the opportunities we see and provide additional context for our strategy regarding the structure and evolution of the tax industry, how we're positioning H&R Block to win and the initiatives and investments we're making in fiscal '19. Tony will provide details on our first quarter results, which were in line with expectations, as well as additional insight into our fiscal '19 outlook.

Let's start by talking about the industry, and why we see opportunities in both the assisted and DIY categories. The tax prep industry has enjoyed stable and steady growth over decades. Since 2005, the industry grew on average 1% per year, with assisted growing at an annual rate of 0.3% and DIY at 2.1%. And more recently, the assisted category has grown two out of the last three years. This growth has led to an increase in overall industry revenue as