Q3 2025 H&R Block Inc Earnings Call
Thank you for standing by, and welcome to H&R Block's third quarter fiscal year 2025 earnings conference call. At this time, all participants aren't 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.
Speaker Change: I would now like to hand the call over to Jordan Eskisian, Program Manager, Investor Relations and ESG. Please, go ahead.
Jordan Eskejian: Thank you, trustees. Good afternoon, everyone, and welcome to H&R Block's fiscal 2025 3rd quarter financial results conference call. Joining me today are Jeff Jones, our president and chief executive officer, and Tiffany Mason, our chief financial officer.
Jordan Eskejian: Earlier today, we issued a press release and presentation which can be downloaded or viewed by us 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.
Jordan Eskejian: Before we begin, I'd like to remind listeners that common states made by management may include forward-looking statements within the meaning of federal securities laws.
Jordan Eskejian: These statements involve material risks and uncertainties and actual results could differ from those projected and any forward-looking statement due to numerous factors.
Jordan Eskejian: For a description of these risks and uncertainties, please see H&R Box annual report on form 10K and quarterly reports on form 10Q as updated periodically with our other SEC filings.
Jordan Eskejian: Please note, some metrics we'll discuss today are presented on a non-GAAP basis. We've reconciled the comparable gap and non-GAAP figures in the appendix of our presentation.
Finally, the content of this call continues.
Speaker Change: Time-sensitive information, accurate only as of today, May 7, 2025. 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.
Good afternoon, everyone. Thank you for joining us.
Jess: Today I'm pleased to share the highlights of our performance this tax season and an update on our block horizons of paradise.
Jess: Tiffany will then share the details of our third quarter financial results and we'll open it up for Q&A.
Tiffany Mason: For the third quarter, we delivered revenue growth of 4%, even a growth of 5%, and EPS growth of 9%.
We saw an increase in company owned assisted volume.
Tiffany Mason: Higher overall net average charge for NAC and effective labor management.
Tiffany Mason: Based on these results, we're reiterating our outlook for fiscal 25, which Tiffany will talk more about in detail later in the call.
Tiffany Mason: It was a strong order, and while we still have work to do, our transformation continues to gather momentum and deliver results.
Let me start with some commentary on the industry.
Tiffany Mason: While industry volume grew approximately 1% as anticipated, clients shifted from DIY to
Tiffany Mason: As a result, the assisted category delivered growth of 170 basis points compared to 90 basis points of growth in DIY.
Tiffany Mason: This shift underscores the importance of the assisted category and highlights client's desire for human health and expertise. A domain where H&R Block is the category leader and has been delivering for seven decades.
Tiffany Mason: Over the last couple of years, we've also observed an industry shift in overall filing behavior during the season, with more clients waiting until closer to the deadline to complete their tax returns.
Tiffany Mason: This year there was an acceleration of this trend, and as a result, we experienced record high volumes in our tax offices in the final two days of the season compared to recent history.
Tiffany Mason: In uncertain times, we know it's even more important to provide expertise and value to our clients and we did just that this tax season.
Now taking a closer look at our own performance.
Tiffany Mason: Through April 30th, I'm pleased that we improved our volume and market share trends year
Tiffany Mason: This tax season, we redesigned the assisted client experience with two important goals.
Tiffany Mason: to convert more clients who started tax prep with us and to improve retention.
Tiffany Mason: To do this, we improved our tax pro matching algorithm and introduced new steps in our process to ensure our tax pros better understood client's needs and manage their expectations.
Tiffany Mason: We drove an increase in assisted client conversion from the second consecutive year.
Demonstrating the benefits of the continued improvements with Maine.
Tiffany Mason: We saw higher overall client satisfaction scores in the key experience pillars of empathy, ease, and expertise.
Tiffany Mason: Importantly, we also increase the number of employment set for next-tax season versus this time last year.
Setting future appointments is important for retention and engagement.
Tiffany Mason: Additionally this season, we enhanced and automated our second look service.
Tiffany Mason: or we review the last three years of a new client's tax returns to see if any refund dollars were left on the table.
Tiffany Mason: Through Second Book, we consistently deliver meaningful value to clients by uncovering misdirections and credits on prior year returns.
Tiffany Mason: We had a tenfold increase in new clients who participated in the service this season.
Tiffany Mason: and we identified no worthy discrepancies in nearly a quarter of those reviews.
Tiffany Mason: This demonstrates the expertise and thoroughness of our task professionals and maximizes client
Tiffany Mason: 2nd look is unique among nationwide task repairs and offered three of charge to our clients, reinforcing our commitment to providing exceptional value and expert assistance.
Tiffany Mason: Our trusted brand name is a competitive differentiator, and we remain the category leader in assist attacks.
Tiffany Mason: Our local value proposition is strong, underpinned by our extensive retail footprint of nearly 9,000 offices conveniently located within five miles of most Americans in all 50 states.
Tiffany Mason: Our brand is well known, and more consumers are benefiting from our ability to handle all types of returns and financial situations as we are serving more complex clients to have higher lifetime value to block.
Tiffany Mason: For the third consecutive year, we have seen client growth in all segments of about $80,000 in income, with our fastest growing segment again being clients with over $100,000 in income.
Tiffany Mason: All in all, this year was another important step in demonstrating our leadership in the assisted tax business.
Tiffany Mason: and the Consumership toward the Assisted Category further demonstrates that clients are increasingly seeking expert health and value, and we have a trusted brand and proven track record of serving those needs.
Schiffing Gears The DIY
Tiffany Mason: For the quarter, we delivered DIY revenue growth of 8% year over year and saw customer satisfaction scores increase across all dimensions.
Through April 30, DIY paid nap was strong at $81.55.
Tiffany Mason: Up 9% versus the prior year, with more than half of that growth coming from a niche shift to more complex skills, demonstrating the strength of our product.
Tiffany Mason: While online paid volume was essentially flat this season, we believe this is a reasonable outcome as we remain disciplined in what was an unprecedented promotional environment.
Tiffany Mason: As you may recall, last year we began providing a breakout of free and paid DIY filing volume in the attendance of our earnings presentation.
Tiffany Mason: We believe this transparency is important because while three DIY clients help our market share, they don't generate revenue.
And consequently, many have a limited lifetime value to block.
Tiffany Mason: We recognize that most free-fathers will likely always file for free, and they are the least loyal ones to one provider.
Tiffany Mason: Others, such as young college educated consumers, have a greater potential to become paid filers in the future as their circumstances evolve.
Tiffany Mason: We continue to believe a strategic focus on paid filers and three filers who have potential to become paid filers over time is the best use of capital to deliver financial returns
Tiffany Mason: We will once again very pleased with the performance of our AI taxis stool in our DIY paid skews.
Tiffany Mason: We launched this tool to give clients easy access to our extensive body of tax knowledge along with expert help at no extra charge.
Tiffany Mason: Building on last year's success we expanded the knowledge base to cover more topics with a greater degree of accuracy.
Tiffany Mason: We continue to see higher user engagement and satisfaction among clients who used AI tax
Tiffany Mason: In fact, conversion was 13 points higher among clients who used the tool than those who didn't.
Tiffany Mason: Re-enforcing the confidence it provided in their tax outcomes by offering expert help.
Tiffany Mason: AI Tax Assist provides clients with more personalized guidance through the filing process.
Tiffany Mason: This coupled with live expert help is a powerful value proposition and competitive differentiator for Block.
Tiffany Mason: Particularly as clients must pay board and receive the same level of expert help in competitors' products.
Tiffany Mason: Additionally, we continue to see DIY clients upgrading to Tax Pro Review, which delivered another year of growth.
Tiffany Mason: Clients turning over their work for us to complete, reaffirms the value and demand for our professional expertise.
Tiffany Mason: And finally, we were pleased with the performance of my block, H&R Block's mobile app and digital friend dorm.
Tiffany Mason: We remain well positioned to serve clients, however they want to be served, fully virtual to fully in person in every way in between.
Tiffany Mason: This season we increased the total number of clients served Colby virtually by 24 percent.
Tiffany Mason: Reflecting our clients' growing preference for convenience, blended with expert health.
Tiffany Mason: My block of underscores are commitment to adapting to client needs and delivering unmatched service at expertise in person and online.
Tiffany Mason: Now let's move on to a quick update on our other Block for Rising Strategic Comparatives.
Starting with small business.
Tiffany Mason: Assistant Small Business Tax performed well again in this quarter, delivering high single-digit revenue growth.
Tiffany Mason: We saw positive trends in entity returns and other more complex filings, and our old marketing messages, including how up to 30% price advantage over a typical CPA or a countenance
Tiffany Mason: In DIY, we continue to improve the appeal of our small business use and we're pleased with the growth in top of funnel registration.
Tiffany Mason: Last season, we launched new custom experiences for clients tailored to their occupation, which gained traction.
Tiffany Mason: We increase the number of custom experiences from 5 to 20, covering over 70% appliance and driving another year of improved conversion.
Tiffany Mason: We also maintain momentum in our year-round bookkeeping and payroll services.
which together delivered double-digit revenue growth year-over-year.
Tiffany Mason: At WAVE, our key priorities of accelerating revenue growth and driving profitability remain unchanged and we continue to see momentum in WAVE's high-margin subscription product pro tier.
Tiffany Mason: To that end, I'm pleased that we delivered revenue growth of 13% in the quarter.
Tiffany Mason: Overall, I'm pleased with our performance as an increasing number of small businesses are choosing Block, and I'm excited about the continued opportunity ahead.
Certainly, the financial products.
Tiffany Mason: Spruce, our local banking platform, continued to deliver on its mission of helping people improve their financial well-being.
Since March through April 30, results showed over 700,000 signups.
and nearly 50% increase compared to the prior year.
Tiffany Mason: Notably, our cross-selling efforts have been highly effective, as approximately 90% of our
also completed a tax return with H&R Block.
and half of those clients were new to our brain.
Tiffany Mason: and by electing to posit their federal tax refund into their spruce account.
Tiffany Mason: Clients were able to access service on up to five days early.
Tiffany Mason: For the third consecutive year, clients using Spruce's Smart Tats Reflun feature.
Saved an average of 26% of their tax refund.
surpassing the recommended 15%
Tiffany Mason: This demonstrates Bruce's ability to help clients better manage their finances and foster
Tiffany Mason: I'm proud of how our team has continued to deliver value to clients regardless of the broader market conditions which speaks to the strength and resilience of our business model.
Amid an evolving economic backdrop, one thing remains constant.
Tiffany Mason: Consumers and small business owners want trusted support when it comes to their taxes and financial needs.
Tiffany Mason: I will now turn it over to Tiffany to discuss our financial results.
Thank you, Jeff, and good afternoon, everyone.
Speaker Change: I want to begin by reiterating H&R Block's investment thesis, particularly in this market.
Speaker Change: We have a resilient business with strong financial fundamentals, consistent cash flow generation, and a shareholder-friendly capital return practice.
There are three key components.
First, we operate in a very stable industry.
Speaker Change: Task preparation, the core of what we do is steadfast and resilient.
Speaker Change: Second, our National Office footprint, robust DIY offering and strong brain recognition are cornerstones and have paved the way for consistent performance and sustainable growth.
Speaker Change: Third, our financial profile is compelling. We deliver healthy margins, generate high free cash flow, have a strong balance sheet, and are disciplined in our capital allocation priorities.
Speaker Change: All of this is why I remain confident in our ability to continue driving significant value for our shareholders, even in the current economic backdrop.
Now, turn to our results for the third quarter.
We delivered $2.3 billion of revenue, an increase of 4.2%.
Speaker Change: The increase with the results of higher overall MAC in the U.S. and greater companies assisted return volumes, partially offset by lower international revenues due to lower return volumes in an unfavorable foreign exchange rate in Canada, and lower interest in C income on an older band.
Speaker Change: In the assisted channel, we struck a healthy balance of price, volume, and mix in the border, which is a testament to our redesigned client experience and our unwavering commitment to delivering value for our clients.
Speaker Change: Total operating expenses in the quarter were $1.3 billion, and increased to 3.4%. Primarily due to higher tax professional wages and benefits, as a result of the increase in company-owned assisted return volume.
Speaker Change: The industry continues to experience the shift in overall filing behavior later in the season and I'm pleased with how effectively we were able to manage labor throughout
Our effective tax rate in the photo was 24.6 percent.
Speaker Change: and net income from continuing operations with $722.9 million an increase of 4.5%.
Eva Tao was $1 billion dollars and increased the 5%
Speaker Change: Earnings per share from continuing operations increased 9.2% to $5.32, while adjusted Earnings per share from continuing operations increased 8.9% to $5.38.
Speaker Change: to the higher-led income and fewer shares outstanding from sharey purchases.
Speaker Change: From a capital allocation perspective, our priorities are unchanged. We invest in the business, grow the dividend, and return access capital to shareholders through Sherry Bridget.
Our strong capital allocation practices continue to yield meaningful results.
Speaker Change: We completed our share repurchased plans in the first two quarters of this fiscal year, repurchasing $400 million in retiring six and a half million shares, or another five percent of our share's outstanding.
Speaker Change: We have approximately $1.1 billion remaining on our $1.5 billion share of purchase program.
Speaker Change: We also continue to opportunistically repurchase franchise location, buying back 123 offices so
Speaker Change: We continue to see strong interest from franchisees willing to sell to us, and we're pleased with how this strategy supports our long-term revenue and earnings growth.
Finally, we are reiterating our 5025 Outlook.
Speaker Change: We are on plan for revenue, and we expect Eva-Daw to be slightly below the midpoint of the range for the year, due to higher than anticipated legal fees and settlements.
Speaker Change: For the full fiscal year, we continue to expect revenue to be in range of $3.69 to $3.75 billion.
Speaker Change: EBITDA to be in the range of $975 million to $1.02 billion.
Speaker Change: The effective tax rate to be approximately 13%, which is lower than historical levels due to the expected closure of various matters under examination and the expiration of certain statutes of limitation.
Speaker Change: and adjusted diluted earnings per share to be in the range of $5.15 to $5.35.
Speaker Change: The lower effective tax rate is expected to go by the one-time benefit of approximately 50 cents to EPS this year.
Speaker Change: We believe this will be a number-year top-line growth, strong cash flow generation, and double-digit EPS growth.
Speaker Change: We are committed to incompetence about driving ongoing value for shareholders.
Jeff Jones: and with that, I will turn it back over to Jeff for closing remarks.
Jeff Jones: Thank you, Tiffany, as we conclude our prepared remarks, I'd like to take a moment to share a personal note of appreciation.
Jeff Jones: In this milestone here as we celebrate H&R Block 70th anniversary, it's more important than ever to recognize the remarkable leaders who have contributed to our legacy.
Jeff Jones: to the engineers, designers, and product leaders to all those behind the scenes and to everyone on the
Jeff Jones: Thank you for all of you doing, and here's to many more years of making a meaningful impact together.
Jeff Jones: From here, we are focused on finishing the year strong, and I look forward to sharing more on our year end call in August .
Now operator, we will open the line for questions.
Jeff Jones: As a reminder, to ask a question, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again. Please stand by while we compile the Q&A roster.
. . . . . . . .
Speaker Change: Our first question comes from the line of Carti Mehta of North Coast Research. Please go ahead, Carti.
Thanks.
Speaker Change: Hey, Jeffrey Tiffany. Jeffrey's a bigger picture industry question for you.
Speaker Change: I think it's been four out of five years now that the assisted segment has grown faster than the DIY segment. You know, and that's not what I think most everybody expected, at least at the start of this season. Any thoughts on why we're seeing this shift, any theories or what you're saying?
Thank you.
Speaker Change: Hey Kartik, thanks for that question. You know, I think one of the things we definitely have learned is when there is uncertainty given the high stakes that taxes are for most Americans they seek help.
Speaker Change: And that doesn't just mean tax policy changes, but it means wondering about things that are being spoken about. And this year, even though the overall growth ended up being about 1% to your point, we saw a mixed shift to assisted.
Speaker Change: And we saw people filing later and later a continued trend from the pandemic really.
Speaker Change: We actually surveyed hundreds of customers during the season just to try to understand that dynamic and what we found were they were more aware than we expected them to be about conversations of potential changes.
Speaker Change: No taxes on tips, you know, really rose to the top as an example.
Speaker Change: So we do think consumers are listening to the conversation, and we think they were waiting to see if any of those changes may happen.
Speaker Change: And if you look back over the last several years, while a tax expert might not say there were major changes per se, there are lots of conversations about changes and we hypothesize that consumers noticing that.
Speaker Change: Just as a follow-up and I apologize, you might have said this during your prepared remarks that I got disconnected. As you look at the season for H&R Block, was there a difference in volume in the early season and latter part of the season? Do you think you need to make any changes to products that you're offering clients?
Speaker Change: Yeah, another great question. I mean, we definitely saw a season start slow. We saw a season end very strong. I did mention in my prepared remarks that
Speaker Change: On the last two days, April 14 and 15, we saw record volume in our offices, compared to recent history.
Speaker Change: So we do see a trend. We also are seeing a trend in the kind of clients we're serving.
Speaker Change: More complex, higher-knack, higher-income clients. And so, as we do every year, we'll digest the full season and start to evaluate for next year and beyond what changes to our offering
Speaker Change: As a result of delays and as a result of the positive trend we're seeing in terms of the clients we're serving.
Okay, thank you, Jeff. I really appreciate it. Thanks, Garnet.
Speaker Change: Thank you. Our next question comes from the line of Scott Schneeberger of Oppenheimer and Company, please go ahead, Scott.
Thank you very much for having me.
Scott Schneeberger: Jeffrey or Tiffany, I think it would be helpful. You had growth year-over-year in assistant company-owned operations and declines in year-over-year and franchise operations. However, it looked like you had a good amount of conversions this year. There's a footnote in the slide deck, but could you speak to the decline in franchise operations? How much was that just moving one category to the other? [inaudible]
Scott Schneeberger: and how much of it was organic and on the organic side why. Thanks.
Speaker Change: You want to take the first part and I'll comment on that. Yeah, sure Scott, so thanks for the question so first on the on the franchise side I mean obviously we opportunistically buyback.
Franchise locations from time to time as franchisees
Speaker Change: You know, don't have a generational succession plan and they're looking for an exit.
Speaker Change: and that's a great way for us to grow our long-term algorithm and it's a core part of that algorithm for us. We purchased those at very attractive multiples and we get a strong ROI on that capital allocation.
Speaker Change: Fiscal Year to date, we've acquired about 123 of those, which is at the low end of the 125 to 150 that we typically guide.
Speaker Change: So obviously, you know, finished the year somewhere at the low end of that range. So we're definitely seeing a shift more so than an absolute decline in volume from our franchise
Speaker Change: Yes, Scott, I guess I would just add real quickly. You've heard me talk about this for several quarters. The intense focus on converting more of the clients that are starting with us in company locations. We're going to have a little bit more time to talk about the clients that are starting with us.
Speaker Change: And listen, we're not ready to declare victory yet. We always have more to do.
Speaker Change: But we absolutely this year improve that trajectory. We improve conversion for the second year in a row. We're going to improve retention for the year among new and prior clients.
Speaker Change: And that's really been as a result of a focus on the new client experience, some of the things I've talked about, the way we delivered upfront, transparent pricing, second look, etc. So again, feel really good about the improved performance trajectory of both volume and share.
Alright, thanks. I'm just going over to do it yourself.
Jeff Jones: And again here, and I'm sure you have plenty to say on this, Jeff.
Online paid, looking relatively flat. So, that's not, that's not, uh...
Speaker Change: Taking share in the category, but that's pretty close to maintaining and really nice net average charge growth there for sure. So if you could speak to what occurred there in the mix, and then obviously online freed down a lot, could you just speak to the competitive dynamic there as well, so kind of a two part question. Thanks.
Jeff Jones: You got it. If I miss part of that, just let me know. A little bit.
Jeff Jones: So, start with, yes, we were pleased with the revenue growth in DIY, and I think especially pleased with the fact that about half of that was from more complex clients.
Jeff Jones: So, over, you know, many years now as we've improved our DIY product, I would just simply call it the upper end of complexity has not been our strength.
Jeff Jones: But as we continue to improve the product, we are attracting and serving more complex DIY
Jeff Jones: Paid Bowen, you may comment it on. The context for free, you know, it was, as I said, on my prepared remarks, an unprecedented promotional environment.
Jeff Jones: And I'm ploughed that we were disciplined and how we invested to win the business of paying clients and we chose not to invest to win free clients that we know are going to remain free.
Clearly, one of our DIY competitors decided
Jeff Jones: to spend what we think was an unprecedented amount in advertising and promotions this year.
Jeff Jones: They saw a value in free that we didn't, and we just think the best use of capital for shareholders to create real value is to focus on paying clients.
Jeff Jones: and those that are currently free that demonstrate propensity to become paying clients. That's how we thought about it.
Speaker Change: Thanks, and just great answers, and just a quick follow up on that last part, Jeff. What do you think occurs next year in the paid free balance? What's the consideration? At least of yours, you can't speak for the whole industry, but what do you think this involves?
Speaker Change: Yeah, I mean, obviously, I can't speak too much about next year yet because we're trying to finish this year but I think strategically the idea of how do we demonstrate great value to increasingly sophisticated and complex clients to win more that pay us is the strategic notion. Thank you very much.
Speaker Change: Now, there are free clients, as I mentioned, that we believe have the potential to become paying a different kind of free client.
Speaker Change: We've seen over many, many years that the pure free client certainly counts for volume and market share, but that's it.
Speaker Change: and we know that they are the most difficult to retain and they are the most fickle to other opportunities. And so then it becomes you win them and how do you keep them the next year. So I think that sums up strategically how we're thinking about it.
Great. Thanks. Appreciate the answers.
Thanks a lot.
Thank you. Our next question.
Speaker Change: Comes from the line of George Tong, Upgoldman Sachs. Please go ahead, George.
Speaker Change: Hi, thanks, good afternoon. If you look at total assisted volumes, they were down 0.8%, which
George Tong: broader industry volume growth as reported by the IRS of around 1.7 percent growth. Can you talk about what accountant for that difference in assisted volume sources industry volumes?
George Tong: Yeah, I mean, there's no question as I mentioned earlier, George, we're not ready to declare victory yet, but we feel really good about the fact that we have improved the performance trajectory in both volume and share.
George Tong: In this year and assisted, we improved conversion for the second year in a row. We improved retention.
George Tong: and importantly, we're growing again with higher, more complex clients. Those are all very positive signs given our focus on conversion, but you're absolutely right. We still didn't grow share and we remain intently focused on getting there.
Speaker Change: Got it. And in the assisted category, did you notice any changes in the competitive landscape as a large competitor decided to push more aggressively into the assisted space?
Speaker Change: Well, there's no question that our largest DIY competitor spent a tremendous amount this year. At least it seems like we don't know their data obviously, and they offered significant promotions this year, 100% free for everybody kinds of promotions.
Speaker Change: but the number one competitor in the assisted business is the independent category by far. That's where we have to keep demonstrating value to win.
Speaker Change: We know to this point that competitor has not impacted our performance at all. They report in a couple of weeks, and we look forward to seeing what kind of volume they report in the assisted business.
Got it very helpful. Thank you.
Thanks George.
Thank you.
Our next question.
Speaker Change: Come from the line of Alex Paris of Barrington Research. Please go ahead, Alex.
Alex Paris: Hi guys, thanks for taking my questions. I have a couple of follow-ups I think primarily. So
Alex Paris: First off, franchise location, volume is down 7.2%, and I thank God Tiffany, you explained that due to franchise buybacks. You did 128-year-to-date. How many did you do last year?
Last year we did 158, Alex.
I'm sorry. I'm sorry. I'm sorry. I'm sorry.
Okay, and then...
Alex Paris: How much of that decline do you think is attributable to the buyback? Would the franchise locations
It's primarily attributable to blackbacks
Project location for Durnwell.
Great, and then...
Alex Paris: A related question on the NAC. Company on-stores tend to get a higher NAC than franchise stores, and the year over your growth rate was better on the NAC from company on-stores.
Alex Paris: What do you attribute that the difference between a company on-store and a franchise stores knack?
Alex Paris: There is a combination of complexity and mix of clients that we all serve given their local communities in competitive sets.
Alex Paris: We're blending a lot of things together to get to the comparison, so it's a little hard to pull apart, but those are some of the things that drive performance.
Speaker Change: Gotcha, thank you for that. Then I had a question about just volumes in general.
Speaker Change: Bloods and weather and things like that. A number of states, Alabama, Florida, Georgia, and North Carolina, South Carolina, extended their deadline to May 1st, and I believe LA County extended their deadline to September due to the wildfires there earlier this year.
Speaker Change: Any impact from that on Q3 and will it positively influence volumes in Q4?
Speaker Change: Thanks for the question. You're right. The extensions that were a result of the hurricanes from last fall, so that was the first group that you rattled off there. Those extensions were all up until May 1st.
Speaker Change: So, a little bit of migration from Q3 to Q4 in terms of the potential impact but all within our current fiscal year, so all within fiscal 25.
Speaker Change: The California wildfires that impacted L.A. County, those extensions are until October of fiscal 2006. And so we will see a little bit of push into the next fiscal year, but not material to our guidance for this fiscal year, for fiscal 25.
Gotcha, that's helpful.
Speaker Change: Then I realized you were not contemplating any incremental volume from 1099K's, but I was wondering what was the experience with 1099K's this year and the influence on both volume and neck.
Speaker Change: There was no material impact. We didn't know what to assume, we didn't plan for it in terms of our outlook and we didn't see any material impact from it at all.
I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry.
Great, last question.
Speaker Change: I saw yesterday the Board of Directors approve of the 37.5% quarterly dividend. I realized that the dividend is reviewed annually, usually after fourth quarter.
Speaker Change: What's the policy with regard to dividends? Is there a payout ratio that you're trying to achieve when reviewing the dividend?
Speaker Change: Yeah, Alex, the short answer is yes. There's a there's a dividend impact ratio that we're looking to achieve. That's obviously a board level decision. And we have a finance committee as a part of the board that reviews that annually. And you're right about the timing. So all of that is subject to discussion over the next coming months. And so we're going to do that.
Speaker Change: The only thing else I would add, which we've been consistent about, is after we'd reinvest in the business, it's the number one capital priority above share repurchase, but everything else applies.
Speaker Change: That's right. Super helpful guys, thanks for the color. That's it for me.
Thank you.
Speaker Change: Thank you. I would now like to turn the conference back to Jordan Eskisian for closing remarks, madam.
Speaker Change: Thanks, Latisse. This concludes our third quarter fiscal 2025 financial results conference call.
Thank you.
Speaker Change: This concludes today's conference call. Thank you for participating. You may now disconnect.