H&R Block, Inc. (HRB): Business Model Canvas [Dec-2025 Updated]

You're looking past the old image of crowded tax lines to see how H&R Block, Inc. (HRB) actually makes money today, and the answer is a calculated pivot. For fiscal 2025, the company posted $3.8 billion in total revenue by leaning hard into digital, evidenced by DIY tax software sales growing 9.7%, even while supporting over 60,000 tax pros. The real story is how they manage the cost structure-$2.9 billion in operating expenses-to support this hybrid model spanning retail, small business services, and the Spruce banking app. Keep reading; this full Business Model Canvas shows exactly where their near-term bets are placed.

H&R Block, Inc. (HRB) - Canvas Business Model: Key Partnerships

You're looking at the core relationships H&R Block, Inc. (HRB) relies on to deliver its tax and financial services ecosystem. These aren't just vendor agreements; they are strategic alignments that feed directly into their financial performance, which saw total revenue reach $3.8 billion in fiscal year 2025.

The Key Partnerships block is where HRB scales its reach and embeds its services into the daily lives of its target segments, especially small business owners.

The Home Depot Pro Xtra: Discounted services for small business members.

• This collaboration targets Pro Xtra loyalty members, offering them specialized Block Advisors services.
• For the 2025 tax season, the offers included $50 off tax preparation with a Small Business Certified Tax Pro.
• They also offered a first month free, plus 10% off recurring bookkeeping and payroll services to convert tax clients into year-round users.
• Block Advisors supported these Pros by helping them leverage industry-specific deductions like the 45L Tax Credit and Section 179 deductions for equipment.

Financial institutions: Issuing partners for the Spruce mobile banking app.

• The Spruce mobile banking platform, built by H&R Block, relies on Pathward®, N.A. for the issuance of Spending and Savings Accounts and the Emerald Card.
• Pathward, N.A. is also a partner for data processing and card production services for the fintech platform.
• Spruce saw newly created accounts rise nearly 40% in fiscal 2025.
• Since its launch, total customer deposits in Spruce reached $1.75 billion as of the end of fiscal 2025.

Franchisees: Network of independent owners operating retail offices.

• H&R Block, Inc. operates a hybrid model, relying on a vast network of independent owners.
• As of the 2025 Franchise Disclosure Document (FDD), the estimated number of worldwide units was 9,470.
• In the U.S., the brand maintains over 2,000 franchised locations, complementing the company-owned offices.
• Franchise agreements typically grant the right to operate for an initial term of 10 years.

Technology vendors: Providers for core tax software and AI development.

• H&R Block is intensifying efforts to leverage technology and AI for greater business efficiencies.
• The company has a noted partnership with Microsoft Corporation for technology infrastructure.
• For its generative AI powered technology, AI Tax Assist, H&R Block has established a great partnership with OpenAI.
• The company also partners with Galileo Financial Technologies, LLC for data processing services related to its financial products.

Urban League: Community-focused coaching for Black-owned businesses.

• HRB partners with affiliates like the Urban League of Greater Kansas City (ULKC) to support Black-owned businesses.
• The goal tied to this initiative, as part of the broader 'Make Every Block Better' effort, was supporting 500,000 small business owners by 2025.
• Block Advisors provides free, personalized coaching to improve financial management and increase access to capital for these owners.

Here's a quick look at how these key relationships translate into specific value propositions and metrics for H&R Block, Inc. in fiscal 2025:

Also, don't forget the small business digital platform, Wave, which is a key partnership ecosystem component; it delivered a 13% increase in annual revenue from paid products in fiscal 2025. The overall strength of the business, supported by these alliances, allowed HRB to return $600 million to shareholders via dividends and buybacks in fiscal 2025. Finance: draft 13-week cash view by Friday.

H&R Block, Inc. (HRB) - Canvas Business Model: Key Activities

You're looking at the core actions H&R Block, Inc. (HRB) takes to deliver value across its diverse service lines as of late 2025. These activities are the engine driving their financial results for the fiscal year ended June 30, 2025.

Delivering Assisted Tax Preparation via 60,000+ tax pros

The foundation of H&R Block, Inc.'s business remains the high-touch, expert-driven tax preparation service. This activity involves deploying a massive seasonal workforce to handle complex client needs.

• H&R Block, Inc. relies on more than 60,000 company tax professionals.
• These professionals operate across approximately 9,000 office locations.
• The company guarantees 100% accuracy and maximum refund for assisted returns.

The financial output from this core activity for the fiscal year ended June 30, 2025, was substantial.

Developing and marketing Do-It-Yourself (DIY) tax software

H&R Block, Inc. actively develops and markets its DIY software suite, which includes various tiers to capture different complexity levels. A key part of this activity is integrating AI support directly into the paid tiers.

• H&R Block, Inc. AI Tax Assist is included at no extra charge with Deluxe, Premium, or Self-Employed editions.
• About 55% of filers qualify for the Free Online tier, which supports more forms and schedules than the comparable offering from TurboTax.
• In the prior filing season (2024), about 50%, or 3.5 million DIY clients, filed for free.
• New clients using AI Tax Assist converted at a higher rate within the DIY software.

Providing year-round small business bookkeeping and payroll (Wave, Block Advisors)

H&R Block, Inc. is focused on growing its small business segment, viewing it as a source of high lifetime customer value. This involves maintaining and enhancing the Wave platform and the Block Advisors service.

• Fiscal 2025 was a record revenue year for small business operations.
• The Wave platform delivered a 13.2% increase in annual revenue year-over-year for the full fiscal year 2025.
• Block Advisors and Wave offer year-round bookkeeping, payroll, advisory, and payment processing solutions.

Enhancing the Spruce mobile banking and financial product platform

This activity centers on building out the financial services ecosystem to help clients be better with money year-round. The Spruce mobile banking app is central to this effort.

• In fiscal 2025, newly created Spruce accounts rose nearly 40%.
• Total customer deposits on the Spruce platform reached $1.75 billion since its launch.
• Nearly 50% of all deposits came from non-tax sources, like recurring payroll deposits.

Leveraging AI and technology for client experience (AI Tax Assist)

The integration of artificial intelligence is a key operational focus, used both to support DIY clients and to improve the efficiency of tax professionals.

• AI Tax Assist provides DIY clients with unlimited tax help 24/7.
• The company believes the combination of AI to help the consumer and AI to help tax professionals is the future direction.

Here's a look at the financial scale of the key revenue-generating activities for the fiscal year ended June 30, 2025:

The total revenue for H&R Block, Inc. for the fiscal year ended June 30, 2025, was $3,760,995,000, a 4.2% increase year-over-year.

H&R Block, Inc. (HRB) - Canvas Business Model: Key Resources

The Key Resources for H&R Block, Inc. are the core assets that enable the company to deliver its value propositions across its Assisted, DIY, and Small Business segments.

Brand equity is built on approximately 70 years of established trust in tax preparation, as H&R Block, Inc. was organized as a corporation in 1955.

Human capital is anchored by a large, trained workforce. The resource base includes over 60,000 trained tax professionals who provide the expertise for the Assisted channel.

The physical network provides critical access points for clients seeking in-person service. This network comprises approximately 9,000 retail office locations across the United States, Canada, and Australia.

Digital platforms are essential for the DIY segment and the year-round financial services offerings. The company leverages its proprietary DIY software, which in fiscal 2025 offered tools like AI Tax Assist, and the Spruce mobile banking platform.

Here's a look at the performance metrics tied to these digital assets for the fiscal year ended June 30, 2025:

The company's overall scale and operational efficiency, which depend on these resources, are reflected in its fiscal 2025 financial outcomes.

• Total Revenue (Fiscal 2025): approximately $3.8 billion.
• Year-over-Year Revenue Growth (Fiscal 2025): 4.2%.
• Last Twelve Month Operating Margin: 22.5%.
• EBITDA (Fiscal 2025): $976 million.
• Return on Capital Employed (ROCE): 123.67%.
• Free Cash Flow Yield (TTM): 8.7%.
• Adjusted Earnings Per Share (Fiscal 2025): $4.66.

Customer data represents an extensive repository of historical tax and financial information, which the company collects, uses, and retains in the ordinary course of business to serve clients and comply with regulations.

H&R Block, Inc. (HRB) - Canvas Business Model: Value Propositions

You're looking at the core reasons clients choose H&R Block, Inc. over the alternatives, grounded in their Fiscal 2025 performance and recent service metrics.

Blended experience: Digital tools plus human expert support on demand.

• DIY conversions saw a 13-point rise, driven by AI Tax Assist enhancements in fiscal 2025.
• The Assisted channel showed improved volume and market share trends through April 30, 2025.
• H&R Block provided help via over 60,000 tax professionals during the 2025 season.

Maximum refund guarantee and accuracy review for peace of mind.

H&R Block, Inc. backs its services with guarantees, a key differentiator from purely DIY platforms. For instance, they offer a free Second Look® tax review to catch missed credits and deductions.

Year-round financial confidence via the Spruce mobile banking app.

The Spruce mobile banking app supports clients beyond tax season. Data from a Spruce survey indicates that only 13% of respondents cited learning about money at school, highlighting the need for tools like Spruce. Separately, the survey noted that 68% of Gen Z have tried a finance trend they discovered online.

Specialized small business tax and advisory services (Block Advisors).

H&R Block, Inc. is intensifying efforts in the small business space through Block Advisors and Wave. Fiscal 2025 saw the small business offerings achieve double-digit revenue increases. For Wave, revenue was up 14.4% year-over-year in the first quarter of the current period.

The value proposition here is often cost savings compared to traditional CPAs. Here's a quick comparison of Block Advisors bookkeeping rates versus national averages from a 2020 survey:

Simplicity and speed for simple DIY returns (many file for free).

The entry point for simple returns remains highly competitive. In 2024, about 50%, or 3.5 million DIY clients, filed for free with H&R Block, Inc. This free tier supports Form 1040, W-2 income, Child Tax Credit, and Earned Income Credit claims.

The overall financial scale supporting these value propositions for Fiscal Year 2025 (ended June 30, 2025) was substantial:

Finance: draft 13-week cash view by Friday.

H&R Block, Inc. (HRB) - Canvas Business Model: Customer Relationships

You're looking at how H&R Block, Inc. manages its connection with the millions of taxpayers and small businesses it serves. The relationship strategy blends high-touch human expertise with scalable digital tools, all while navigating new regulatory requirements.

Dedicated, personal tax professional service (Assisted)

H&R Block, Inc. maintains a significant relationship channel through its human experts. This segment supports clients who prefer direct, personalized interaction for their tax preparation needs.

• Over 60,000 tax professionals are available to assist clients annually.
• In-person filing services start at $89 for federal returns.
• The company offers an online tax professional service where clients upload documents for a pro to complete the work.
• Tax Pro Review, a service to check a completed return, is offered, with a promotion making it free for new paying DIY clients for a limited time in early 2026.

Self-service digital interaction with AI-driven support

The digital relationship is centered on self-service tools enhanced by artificial intelligence, aiming to reduce friction for the Do-It-Yourself (DIY) filer. H&R Block, Inc. is actively transforming its customer care into a digital-first, AI-powered organization.

The DIY online packages offer tiered access to human support via digital channels:

In 2024, about 50%, or 3.5 million DIY clients, filed for free with H&R Block, Inc.

Automated, easy product downgrade options (FTC compliance for 2025)

Customer relationships in the digital space were subject to mandated changes following a Federal Trade Commission (FTC) order. H&R Block, Inc. agreed to pay $7 million as part of this settlement.

• By February 15, 2025, the company was required to allow consumers to downgrade products using a chatbot or other automated means, eliminating the prior requirement to call customer service.
• By the 2026 tax filing season, H&R Block, Inc. must stop completely deleting consumers' previously entered data upon downgrade.
• When a consumer downgrades back to a prior product, the company must ensure they return to the same point in the filing process.
• The company is also obligated to disclose in its 'free' advertising either the percentage of taxpayers eligible or state that the majority do not qualify.

Subscription-based relationships for Wave small business software

H&R Block, Inc. views the small business market as having the highest lifetime value, driving focus toward its Wave software offerings, which include accounting, invoicing, receipts, payments, and payroll software.

The subscription relationship shows strong growth metrics:

• Wave segment revenue was up 14.4% year-over-year in the first quarter (Q1) of fiscal 2026.
• Overall revenue for the Wave segment was up 13.2% in the most recently reported period.
• This growth was primarily driven by higher volume and an increase in subscriptions.

H&R Block, Inc. (HRB) - Canvas Business Model: Channels

You're looking at how H&R Block, Inc. gets its services to clients across its different delivery methods as of late 2025. The Channels segment is where the rubber meets the road, blending physical presence with digital reach.

Retail office network: In-person tax preparation and consultation

The physical network remains a core channel, supporting the Assisted tax preparation segment. H&R Block maintains approximately ~9,000 company and franchise offices nationwide. This channel focuses on clients with more complex needs, seeing client growth in every income segment above $80,000, with the fastest growth among clients earning more than $100,000 in fiscal year 2025. The company relies on a seasonal workforce that peaks at around 70,100 employees during the fiscal year, alongside approximately 4,300 regular full-time associates.

The revenue performance for the U.S. Assisted business was strong in FY2025:

• Assisted tax preparation revenue (U.S.) for FY2025 was $2,413,229 thousand.
• This Assisted revenue segment grew by 6.1% year-over-year in FY2025.

Online/Mobile: DIY tax software and the Spruce banking app

The Do-It-Yourself (DIY) digital channel saw significant top-line growth in fiscal year 2025. For context, in the prior year (2024), about 50%, or 3.5 million DIY clients, filed for free using H&R Block's service. The DIY tax preparation revenue for FY2025 showed a healthy increase.

The Spruce mobile banking platform also contributes to the financial services aspect of this channel. As of the latest data, total customer deposits in Spruce reached $1.75 billion since its launch, and newly created Spruce accounts rose nearly 40% in fiscal 2025.

Block Advisors: Dedicated physical and virtual offices for small businesses

Block Advisors serves as the specialized touchpoint for small business clients, offering services through dedicated physical and virtual offices. The company highlighted a landmark year for its small business operations in fiscal 2025. The Block Advisors Small Business Certified program is used to credential tax professionals supporting this segment.

Wave: Direct-to-small-business SaaS platform for accounting

Wave is H&R Block, Inc.'s direct-to-small-business SaaS platform, focusing on accounting and bookkeeping solutions. This segment delivered notable growth in FY2025, with revenue increasing by 13% for the full year.

Here is a breakdown of the key revenue contributions from the digital and small business channels for the full fiscal year 2025 (amounts in thousands):

For the fourth quarter of fiscal 2025, Wave revenue specifically registered $29,541 thousand.

H&R Block, Inc. (HRB) - Canvas Business Model: Customer Segments

Mass-market individual taxpayers are served through both Assisted and DIY channels, representing the core volume base.

H&R Block filed a total of 22.8 million returns by or through the company in fiscal year 2025.

U.S. tax preparation and related services generated revenues of $3,302,934 thousand in fiscal year 2025.

Higher-value clients: Individuals with income over $100,000.

H&R Block saw client growth in every income segment above $80,000 in fiscal year 2025.

The fastest growth in client numbers occurred among those earning more than $100,000 in fiscal year 2025.

Management is intensifying efforts to engage clients with more complex needs.

Small business owners and self-employed individuals.

Fiscal year 2025 was a record revenue year for the small business segment, achieving double-digit top-line growth.

The Wave digital platform saw paid products like the Pro tier deliver a 13% increase in annual revenue in fiscal year 2025.

Higher growth from small businesses is expected to be the number one driver for fiscal year 2026.

International and expat tax filers.

International segment revenues were $246,993 thousand in fiscal year 2025.

Free DIY filers: Used for acquisition and upselling to paid services.

In 2024, about 50%, or 3.5 million DIY clients, filed for free with H&R Block.

The DIY tax segment is expected to outpace Assisted services growth.

The following table summarizes key segment financial and volume data for fiscal year 2025:

You're looking at where the dollars are coming from, so focus on the $3.8 billion total revenue for context.

The company is focusing on capturing clients with more complex needs, as evidenced by the growth in the over $80,000 income bracket.

The DIY segment's role as an acquisition funnel is supported by the 50% free filing rate reported for 2024.

Finance: draft 13-week cash view by Friday.

H&R Block, Inc. (HRB) - Canvas Business Model: Cost Structure

You're looking at the major drains on the bottom line for H&R Block, Inc. as of late 2025. For a business so heavily reliant on a seasonal workforce and a vast physical presence, the cost structure is dominated by personnel and property. The overall picture for the fiscal year ending June 30, 2025, shows that costs are rising alongside revenue.

The headline number for the full fiscal year 2025 is that Total operating expenses were $2.9 billion. This represented an increase of $128.0 million, or 4.6%, compared to the prior year. This increase was primarily driven by several key areas that map directly to your cost structure requirements.

To give you a concrete example of how these costs manifest mid-year, consider the second quarter of fiscal 2025 (ended December 31, 2024). Total operating expenses for that quarter hit $472.4 million, up $25.8 million from the prior year's second quarter. Management specifically pointed to several factors driving that quarterly rise.

Here is a look at the key cost components, using the full-year drivers and the quarter-specific data points we have:

The Tax professional and corporate compensation and benefits line is definitely a major cost. The full fiscal year 2025 results cited higher compensation and benefits as a primary driver for the expense increase. This makes sense; you need to staff the offices for the tax rush. To be fair, this cost includes not just the preparers but also the corporate staff supporting the 9,000+ office footprint, which carries its own occupancy and operating costs.

The investment in the future, tied to the Block Horizons 2025 transformation, shows up in the technology and consulting spend. The full-year report noted that higher consulting and technology costs contributed to the overall rise in operating expenses. This spend is critical for driving the efficiencies and personalized experiences mentioned by leadership.

You can see the pressure points clearly when you look at the components that drove the Q2 increase:

• Higher tax professional and corporate wages.
• Increased healthcare costs.
• An increase in occupancy costs.
• The timing of marketing expenses.

It's important to note that while operating expenses rose by $128.0 million for the year, lower bad debt provided a partial offset to that increase. That's the only positive cost movement mentioned in the full-year summary.

Finance: draft 13-week cash view by Friday.

H&R Block, Inc. (HRB) - Canvas Business Model: Revenue Streams

You're looking at the money-making engine for H&R Block, Inc. as of late 2025. It's a mix of high-volume, in-person expertise and scalable digital tools, plus a growing side hustle in small business tech.

The top-line number for the fiscal year ended June 30, 2025, was a solid $3.8 billion in total revenue. That represented a 4.2% increase year-over-year.

Here's how the core tax preparation services performed in fiscal 2025:

• Assisted Tax Preparation Fees grew by 6.1% in FY2025.
• DIY Tax Software Sales and Fees showed an impressive growth rate of 9.7% in FY2025.

The detailed revenue breakdown for the major components in fiscal 2025 compared to fiscal 2024 is laid out below, with all figures in thousands of U.S. Dollars, based on the year-end report.

Small business services, driven by Block Advisors and the Wave platform, had a record year. Wave, the digital platform for small businesses, delivered a 13% increase in annual revenue for fiscal 2025, helped by paid products like the Pro tier.

The financial products segment also contributes, though some areas saw headwinds. You need to watch the mix here:

• Revenue from Emerald Card® and SpruceSM for fiscal 2025 was $72,888 thousand.
• Interest and fee income on Emerald Advance® revenue for fiscal 2025 was $28,958 thousand, which was lower than the prior year's $40,933 thousand due to fewer loan originations.

The total financial services revenue for fiscal 2025 came in at $101,846 thousand.