H & R Block Inc

NYSE:HRB

Earnings Call Analysis

H&R Block's FY '24 Performance and FY '25 Outlook

H&R Block reported $3.6 billion in revenue for fiscal 2024, a 4% increase, driven by higher charges and volumes in both Assisted and DIY categories. Total operating expenses rose by 3% to $2.8 billion due to higher labor costs. Pretax income climbed 7% to $762 million. EBITDA increased 5% to $963 million, and earnings per share grew 16% to $4.14. The company announced a 17% dividend increase to $37.5 per share and authorized a new $1.5 billion share repurchase program. For fiscal 2025, revenue is projected between $3.69 billion and $3.75 billion, with EPS expected to range from $5.15 to $5.35.

A Year of Solid Growth and Strategic Adjustments

H&R Block reported a revenue increase of 4% for the fiscal year 2024, reaching $3.6 billion. This was primarily driven by higher net average charges and increased volumes in the Assisted category, complemented by greater online paid returns. However, this growth was partially offset by lower activity on the Emerald Card. Operating expenses rose by 3% to $2.8 billion, mainly due to higher labor costs and bad debt expenses, though these were slightly mitigated by lower consulting fees.

Strong Financial Performance and Shareholder Returns

The company saw its pretax income climb by 7% to $762 million, driven by the increased revenue. The effective tax rate for the year slightly increased to 21.6% from 21% in the previous year. EBITDA also saw a rise of over 5%, reaching $963 million. Earnings per share (EPS) saw a significant jump, with a 16% increase from $3.56 to $4.14, and adjusted EPS grew by 15% to $4.41.

Strategic Acquisitions and Capital Allocation

Throughout FY '24, H&R Block acquired 158 franchise offices, aligning with its long-term strategy to bolster revenue and earnings growth. The company's capital allocation strategy remains robust, with a notable 17% increase in the quarterly dividend to $37.5 per share, marking an 88% rise since 2016. Furthermore, H&R Block announced a new share repurchase authorization of $1.5 billion, bringing the total repurchases since 2016 to over $2.3 billion.

Outlook for Fiscal Year 2025

For FY '25, H&R Block projects revenue to range between $3.69 billion and $3.75 billion, with EBITDA expected between $975 million and $1.02 billion. EPS is forecasted to be in the range of $5.15 to $5.35, benefiting from an effective tax rate of approximately 13%. The growth assumptions include a 1% industry growth, maintaining market share in the tax category, and continuing price adjustments in low single digits. The company also expects its small business and Wave segments to drive revenue growth, alongside opportunistic franchise acquisitions.

Challenges and Strategic Focus Areas

While inflation has moderated compared to post-pandemic levels, H&R Block continues to manage merit increases and rising rents. The strategy involves finding productivity gains and cost-saving measures to reinvest in the business. The Assisted tax preparation category saw a slight benefit from California's extended deadlines, contributing to industry volume. Looking ahead, the company aims to improve the customer experience, particularly for new clients, to maintain its market share in the Assisted segment.

Leadership Transition

As CFO Tony Bowen retires, he leaves behind a legacy of strong financial stewardship. His successor, Tiffany Mason, brings extensive experience from Driven Brands and Lowe's, promising to continue driving H&R Block's financial strategy forward. Additionally, the company has appointed Scott Manuel as the Chief Strategy and Operations Officer to oversee long-term enterprise strategy and execution, indicating a focused effort on innovation and efficiency.

Innovations and Technological Integration

H&R Block is leveraging technology to enhance its services, particularly with the launch of AI Tax Assist, which has shown promising results in new client conversions. The company also plans to explore further use cases for generative AI to drive efficiencies and cost savings. In the mobile banking space, the Spruce platform continues to grow, nearing a milestone of $1 billion in customer deposits, reflecting a positive trend in nontax source deposits.

Commitment to Long-term Growth

H&R Block remains committed to delivering value to its clients and shareholders. The company's Block Horizons plan has led to significant improvements in products and services, positioning it well for future growth. The leadership team is focused on maintaining momentum, enhancing customer satisfaction, and driving financial performance in the upcoming fiscal year.

Earnings Call Transcript 2024-Q4

[Operator]

Thank you for standing by, and welcome to H&R Block's Fourth Quarter Fiscal Year 2024 Earnings Conference Call. [Operator Instructions]

I would now like to hand the call over to Michaella Gallina, Vice President, Investor Relations. Please go ahead.

[Michaella Gallina, executive]

Thank you, operator. Good afternoon, everyone, and welcome to H&R Block's Fiscal Year 2024 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 that 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 reconcile 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, 2024. H&R Block undertakes no obligation to revise or otherwise update any statement to reflect events or circumstances after the date of this call.

With that, I will now turn it over to Jeff.

[JeffreyJones, executive]

Good afternoon, everyone, and thanks for joining us today. We will begin by sharing our results for the full fiscal year and the progress we continue to make on our Block Horizons imperatives. Then Tony will discuss our financial performance and outlook for fiscal '25 and then we'll open it up for Q&A.

Beginning with our fiscal '24 results, I am pleased that we were able to deliver another year of revenue growth, EBITDA that grows even faster and double-digit EPS growth. Our DIY business continued its momentum with market share gains for the second consecutive year. Performance was driven by paid client and NAC growth as well as ongoing strength in our Tax Pro Review product. I was pleased with how fast we were able to launch AI Tax Assist, which resulted in higher new client conversion and our customer satisfaction scores remained strong.

In Assisted, our brand continued to resonate with higher value clients, and we were able to grow NAC. Trends in Assisted small business tax also remained positive this year. In addition, we're continuing to drive value for shareholders through our capital allocation practice. In fact, today, we announced another 17% increase to our quarterly dividend as well as a new repurchase authorization of $1.5 billion, which replaces the prior authorization. Since 2016 through today, we've increased the dividend 88% and repurchased more than 40% of shares outstanding.

Looking to fiscal '25, we feel well positioned to deliver for our clients and shareholders, and Tony will share more about our outlook in a moment. But first, let me turn to our Block Horizon strategy, where we continue to make important progress in all 3 of our imperatives.

Starting with small business. We had another good year in tax delivering revenue growth in the mid-single digits. NAC grew 3%, entity trends remain strong, and bookkeeping and payroll had another year of double-digit growth. Our [ central live ] fulfillment model, alongside our dedicated sales team have driven services client conversion, and we continue to see a lot of opportunity ahead.

Turning to Wave. I'm pleased with the progress that's been made in the last year on our key priorities to accelerate revenue growth and drive profitability. You'll recall we recently launched a new paid subscription solution called [indiscernible]. This, along with our paid receipt product, are both designed to further empower small business owners to manage their business better. These products have been performing better than anticipated. For the full year, revenue growth was 7%. We continue to improve the losses in the business and expect ongoing positive trends in fiscal '25.

Moving on to our financial products imperative. We are pleased with the growth of our mobile banking platform, Spruce, and its performance in both the Assisted and DIY channels this season. Since launch through June 30, Spruce has 476,000 sign-ups, and we're nearing a milestone of $1 billion in customer deposits. We're pleased to see positive deposit trends with nearly 50% coming from nontax sources this year. In fact, last month, deposits increased 60% year-over-year.

At the same time, Spruce is continuing to deliver on its mission to help people be better with money. We're excited about new innovations that we'll be rolling out in the coming months, and our team is focused on acquiring users in and out of the tax season.

Now let's turn to Block Experience, which is all about blending digital tools with human expertise and care. We feel great about how we're positioned to serve clients however they want to be served. Fully virtual to fully in person in every way in between.

In DIY, our strategy continues to deliver, and we're pleased with the results. As I mentioned, we had meaningful growth in paid clients and NAC, which translated to strong revenue growth of 11% this year.

AI Tax Assist performed well, and we're excited about our GenAI use cases, which have the potential to drive future efficiencies and cost savings. We look forward to continuing this momentum in fiscal year '25.

In the assisted channel, we were pleased with our NAC growth, improved client satisfaction scores and success in attracting and serving higher-value clients. We're clear about where we can improve the experience for clients and recently welcomed Curtis Campbell as President of Global Consumer Tax and Chief Product Officer, who has more than 10 years of tax industry experience. His impact is already being felt across the organization, and I'm excited about his leadership.

Over the last few years, we've made significant strides in our products, services and features through our Block Horizons plan and I'm feeling very good about our positioning for fiscal year '25.

Before I turn things over to Tony to share more about our financial performance and outlook, I want to take a moment to thank him for his incredible tenure at H&R Block. As we shared on the Q2 call, Tony made the personal decision to retire after a 20-year career with Block. Tony has been an integral part of our company, playing a key role in our growth, transformation and success. His financial acumen, strategic insights and industry experience have been invaluable to our team.

During his tenure, Tony helped us navigate through numerous challenges and opportunities. Ensuring that we remain on strong financial footing. He began his career with H&R Block as the senior treasury analyst and has since held multiple executive roles. Under his leadership as CFO we've returned more than $3.9 billion to shareholders. His impact on H&R Block will be felt for years to come.

On behalf of the entire Block family and our Board of Directors, I want to extend our gratitude to Tony for his years of service and leadership, and we wish him all the best in his retirement and future endeavors.

As you may have seen in our announcement last week, I'm pleased to share that we have hired Tony's successor. Tiffany Mason brings a proven track record of financial leadership in consumer services, retail and franchising, which are all critical to our business. She most recently served as EVP and CFO at Driven Brands, a high-growth auto services company, where she drove strong organic and inorganic growth and led the company through a successful IPO. Prior to that, Tiffany spent 13 years at Lowe's, a Fortune 50 omni-channel home improvement retailer. Tony and Tiffany are working closely together to ensure a seamless transition and she will officially step into the role of CFO on September 13.

In addition, as we continue to transform H&R Block into an agile and innovative company, that delivers more value to our clients, associates and shareholders. I've also added another key member to our senior leadership team. Scott Manuel joined last week as Chief Strategy and Operations Officer and reports directly to me. Within this role, Scott is overseeing functions essential to driving our long-term enterprise strategy and improving our execution. Scott has a long history of delivering customer-centric innovation in complex and dynamic environments. He's an accomplished engineer, has worked in large-scale companies and private equity and across industries and he is steeped in artificial intelligence. I'm thrilled to have Curtis, Tiffany and Scott join the already strong senior leadership team.

With that, Tony, I'll now turn it over to you.

[Tony Bowen, executive]

Thank you, Jeff. It's been an incredible journey, and I'm deeply grateful for the career I've had at H&R Block. First and foremost, I want to thank our finance department and associates whose hard work and commitment have been instrumental in driving our success. I also want to extend my gratitude to our Board of Directors, shareholders and investors for their support and trust. As I look back at my time with the company, I'm immensely proud of what we have accomplished together. I'm confident that Block will continue to drive value for shareholders in the years to come.

With that, I will now turn to our fiscal year '24 results. We delivered $3.6 billion of revenue, an increase of 4% or $138 million, primarily due to a higher net average charge and company-owned volumes in the Assisted category, combined with greater online paid returns at a higher net average charge in DIY partially offset by lower Emerald Card activity in the current year.

Total operating expenses in the year were $2.8 billion, an increase of 3% or $82 million, primarily due to higher labor cost and bad debt expense partially offset by lower consulting and outsourced services.

Interest expense was $79 million, an increase of 8% over the prior year due to higher draws on our line of credit and the higher rate environment.

Pretax income was $762 million, an increase of $51 million or 7%, primarily due to higher revenues in the current year. Our effective tax rate was 21.6% for the full year versus 21% in the prior year.

Turning to EBITDA. We delivered $963 million compared to $915 million in the prior year an increase of more than 5%. We are pleased with another year of growing EBITDA faster than revenue. Earnings per share from continuing operations increased from $3.56 to $4.14 or 16%, while adjusted earnings per share from continuing operations increased from $3.82 to $4.41 or 15%.

In FY '24, we acquired a total of 158 franchise offices. We feel great about franchisees' willingness to sell to us and are pleased with how this strategy supports our longer-term revenue and earnings growth.

As Jeff shared, our capital allocation story remains strong. Regardless of year-to-year nuances, our disciplined approach drives meaningful value for shareholders. We produce significant and stable cash flow, pay a growing dividend and buy back a material number of shares. We also today announced a 17% increase in our quarterly dividend to $37.5 per share. Since 2016, we've increased the dividend by 88%.

In FY '24, we completed $350 million of share repurchases at an average price of $43.66. And today, we are pleased to announce a new share repurchase authorization of $1.5 billion. Since 2016, we have repurchased more than $2.3 billion, retiring over 89 million shares for more than 40% of shares outstanding at an average price of $26.74.

Now turning to our FY '25 outlook. Let me begin with context around the assumptions we've made. First, we believe the industry growth next year will be in line with historical trends or about 1%. Second, we assume that we will maintain market share in the overall tax category, but our goal, of course, is to always grow share. Third, we expect to continue taking low single-digit price, which we successfully executed again this year, with customer satisfaction scores remaining strong. Fourth, we expect Wave and small business to continue to be revenue growth drivers. And lastly, we will continue to repurchase franchise locations opportunistically.

As a result, our outlook for FY '25 is for revenue to be in the range of $3.69 billion to $3.75 billion, EBITDA to be in the range of $975 million to $1.02 billion, EPS to be in the range of $5.15 to $5.35, which will benefit from an unusually low effective tax rate of approximately 13%.

The tax rate is positively impacted due to the anticipated closures of various matters under examination and the expiration of statute of limitations. We expect this to contribute approximately $0.50 to EPS in fiscal year '25. As we have shared, we have multiple levers to drive annual revenue growth in our targeted range of 3% to 6%, and we believe we can leverage our cost structure for EBITDA to outpace revenue while utilizing share repurchase to grow EPS even faster.

All in all, we are well positioned for fiscal year '25 and beyond. In closing, it has been an honor to serve as CFO, and I look forward to seeing the company's continued success in the years to come.

With that, I will now turn it back over to Jeff for some closing remarks.

[JeffreyJones, executive]

Thank you, Tony. As I reflect on all that we accomplished, I'm grateful for our associates and team. Every day, we strive to deliver on our purpose of providing help and inspiring confidence in our clients and communities everywhere.

I would like to extend a sincere and meaningful thank you to our tax professionals our franchisees and our associates who make our success possible. I'm looking forward to all we will accomplish in the next year and sharing our Q1 results in November.

Now operator, we will open the line for questions.

[Operator]

[Operator Instructions] Our first question comes from the line of Kartik Mehta of Northcoast Research.

[Kartik Mehta, analyst]

First of all, Tony, it was a pleasure working with you, the best of luck in your retirement.

[Tony Bowen, executive]

Thanks, Kartik.

[Kartik Mehta, analyst]

Jeff, if you look at FY '25 and over the next tax season and kind of compared to this tax season, what changes do you think that Block needs to make sure that you maintain your market share on the Assisted side?

[JeffreyJones, executive]

Kartik, thank you. I mean, there's no question, and I teed this up a bit in our last call of just -- the opportunity I saw last year as I traveled in office execution and Assisted. We have lots and lots of clients that are choosing the brand. They're making an appointment, they're coming to the office. And we just didn't deliver well enough. And so that's really the focus of the entire team as we go into '25, is how do we improve the experience? How do we better manage expectations? How do we help clients understand the value? And then ultimately, how do we deliver on that?

And with a real emphasis on new clients, in particular, we saw there's even more opportunity for those people who are coming to us for the first time and don't really understand exactly how the process should work at H&R Block. And so there's many things across all the different businesses that teams are working on, but that has everyone's attention for next year.

[Kartik Mehta, analyst]

And then, Tony, just on free cash flow. Obviously, your free cash flow this year was much higher than net income. I'm assuming depreciation will be higher than CapEx again next year. But any other changes on the operating cash flow line that might impact free cash flow next year?

[Tony Bowen, executive]

No. I mean you're right. The depreciation and amortization continues to exceed CapEx, which is why we're generating more than 100% of free cash flow relative to net income. So that trend should continue. As you know, FY '23 with unusually high free cash flow because of some tax benefits that we got. But this year, I'd say it was more of a normal year. Free cash flow as defined by cash flow from operations, less CapEx is north of $650 million. And I think that's a pretty good run rate number for us going forward.

[Operator]

Our next question comes from the line of Scott Schneeberger of Oppenheimer & Co.

[Scott Schneeberger, analyst]

Tony, going to miss you as well. All the best. And I'll get a question to you, I promise. But starting now, Jeff, just high level, looking out to next year, the -- given a little bit of color on what you're expecting. Probably the next earnings call is going to be right around the election. I'm curious how you're thinking about the political outlook and developments in that 1% growth for the industry just kind of maybe compare and contrast candidates and other things you're thinking about out there that could influence the tax season next year? And then I'll follow up a quick follow-up.

[JeffreyJones, executive]

I'll leave the compare and contrast candidates for the political pundits. I mean, we absolutely have been in this business long enough to be through many election cycles and just have never really seen an election itself impact the tax filling season. And so it will happen. And then as we get into whatever happens in terms of who wins, whatever policy changes they may make and how that trickles down and impacts the consumer, I mean we certainly aren't trying to predict that, but that's where it really starts to potentially have an impact, positive potentially on the business as well.

So as we think about the season, Tony mentioned, we expect it to be a more normal season. Each year, there's always a little something that pops up. I think we've proven a great ability to respond to whatever those things are. 1099-Ks have been on the agenda for a couple of years, we're ready. If it happens, it's not built into the plan. We don't know if it will happen. So that does hang out there, and we'll wait and see. But otherwise, we're most focused on what can we best do to serve our customers and how do we build the best products and experiences to win more people to the brand.

[Scott Schneeberger, analyst]

I appreciate that, Jeff. Just one more follow-up for you, and then I'll get to Tony. But the -- Kartik asked about market share opportunity in Assisted and what you can do there. You've done a nice job the last couple of years and do-it-yourself on the market share front. Is that sustainable? And what are some of the levers you're pulling to try and keep that position?

[JeffreyJones, executive]

Well, it's been a couple of years of really nice performance, as you said. And the key always starts with having an excellent product, an experience that is easy for the consumer and we feel very good about the product. Of course, there's always things we want to do every year to make it better and better, but that's always the starting point. We have to deliver great value and price competitively, we're doing that. That's obviously a more dynamic conversation as the season unfolds, and we see competitive moves.

And then the third thing is we continue to be very aggressive about going after dissatisfied TurboTax clients. And we've made that very easy to switch. We have been very aggressive in how we market against them. And you should expect us to follow that recipe but not take anything for granted.

[Scott Schneeberger, analyst]

Great. Appreciate that. And then, Tony, congrats again. My question to you is on margin expansion. It looks like got a little bit this year. You referenced growing EBITDA faster than revenue. And the guidance next year appears the ranges imply kind of in line. What is the opportunity as you kind of pass the baton to Tiffany of -- what type of margin expansion can be achieved in years to come? And where might the levers be there?

[Tony Bowen, executive]

Thanks, Scott, and I really appreciate working with you over the years. So we've delivered pretty consistently EBITDA growing faster than revenue for a number of years, and we've talked about if we can hit that 3-plus percent revenue number, EBITDA can grow over the long term, 1.5x that rate, and I think that just takes advantage of the cost structure, takes advantage of us managing expenses, trying to drive productivity, figuring out ways to invest in the business by taking out costs in other places.

And as you said, margin has expanded several years in a row, and I think it will continue. We guided to, obviously, top line growth again in '25. We guided to EBITDA growing faster than the revenue and EPS growing even faster. So the model is working. There's always Europe-specific nuances 1 year over another. This year, we have some ERC credits that we got the benefit of in '24 that aren't continuing in '25. So that has EBITDA being a little bit lower on a year-over-year basis, but it's still outpacing revenue when you look at the guidance range.

So overall, the model is still working. Inflation has moderated versus what we saw kind of coming out of the pandemic. So that's obviously helpful. We're still seeing things like merit increases and rent go up, but some of those other things like supplies and utilities that were kind of out of control for a few years are now kind of more normal rates. So the model is working, and I think it will continue to work for the foreseeable future.

[Operator]

Our next question comes from the line of George Tong of Goldman Sachs.

[Keen Fai Tong, analyst]

I would also like to extend the thanks and congrats to Tony. Best wishes ahead.

[Tony Bowen, executive]

Thank you, George. I appreciate it.

[Keen Fai Tong, analyst]

Yes. So you mentioned looking at the outlook, industry volumes, you're expecting to be up 1%. Can you break that down into expectations for the Assisted and DIY categories? How fast do you expect both of those to grow in the 2025 tax season?

[Tony Bowen, executive]

Yes. I mean I don't think our expectations for this upcoming season are different than what we would have thought over the last several years. Obviously, this most recent one was a little bit unusual because of the California extension causing some kind of rebound this most recent tax season. But I think going into next year, we expect DIY to grow a little bit faster than Assisted. I think that's consistent with the longer-term trend.

Overall industry growth of 1%, probably means DIY growing a couple of percent, Assisted slightly up. I think that's been our mantra for a long time. And I think over the -- year-to-year, you might have slight nuances, but over the longer term, that's been the trend.

[Keen Fai Tong, analyst]

Okay. Got it. That's helpful. And then with respect to the goal to maintain market share, is that -- how much of that is a reflection of overall tax volumes versus individually Assisted and DIY? In other words, would you expect to be gaining share in DIY? Is that the base case assumed in guidance? And is -- does the guidance also assume Assisted market share as stable?

[Tony Bowen, executive]

Yes. I think the -- we start with we want to make sure we maintain overall share. We want to make sure that we're serving as many customers as the category is growing. And obviously, we did that in this most recent year. So that's a starting place.

I mean obviously, given the trends in our Assisted business over the last few years, we know that, that's more of a headwind and DIY has got a lot of tailwind. So that wouldn't be surprising. But as Jeff said, we're making a lot of changes and focus in the Assisted channel to try to get back to flat share. So it's definitely the goal, but it's not a current expectation. Overall share being flat across the tax category is the base expectation.

[Keen Fai Tong, analyst]

Got it. That's helpful. And just one more quick follow-up on initiatives to drive higher or -- stable or higher market share in Assisted. I know last year, trying to maintain market share was a big area of focus for Assisted and you've tried a number of initiatives. I guess, how will the approach this year be different than last year? Given last year, you had such a big focus on maintaining market share in Assisted as well.

[JeffreyJones, executive]

Yes, you're exactly right. We did and we will, for sure. I mean, last year, we were able to slow the decline among EITC filers, so we did see progress there, that's good news. But it's not enough and some of the things I mentioned about converting more of the people who are choosing us and starting with us is really what is a big shift for this year. And as I mentioned a couple of times already, George, I mean, when we look at the customer journey and the fact that they're choosing us and they're coming and they're starting with us, the 2 big reasons that they didn't finish last year had a lot to do with -- they were new clients to Block. They didn't fully understand how the process was going to work, we didn't do a good enough job communicating and welcoming them to the brand. And that's a breakdown in execution. So what the team has been working on is real changes to the client experience in the office. We think about before, during and after tax prep. And then specifically with emphasis on new clients, which we know is an extra area of emphasis.

[Operator]

Our next question comes from the line of Alex Paris of Barrington Research.

[Alexander Paris, analyst]

Guys, can you hear me?

[Tony Bowen, executive]

We got you.

[JeffreyJones, executive]

Yes.

[Alexander Paris, analyst]

Good, thank you. I'd like to add my congratulations to Tony. We'll definitely miss you and just wanted to say to Tiffany, who I'm sure is listening. We look forward to working with you.

[Tony Bowen, executive]

Thank you, Alex. It's been a pleasure. So you've been great over the years.

[Alexander Paris, analyst]

Yes, same here. So just to dive a little bit more into the fiscal 2025 guidance. You basically have revenue growth at 3%, EBITDA growth at 4% and adjusted EPS growth at about 8%. So the first question is, what sort of assumption do you have for share repurchases in fiscal 2025?

[Tony Bowen, executive]

Yes. I mean, obviously, we don't share the specific number that we're targeting. But obviously, we've assumed some share repurchase, which is obviously driving EPS benefit. Obviously, some of the share repurchase we did even in '24 gives a benefit going into '25 as well. But I think you should expect us to be on a trend that's similar to what we've done in the last several years. Obviously, we try to be opportunistic and take advantage of volatility in the stock price. It naturally happens over time. But I think our approach will be very consistent with what you've seen in the last several years.

[Alexander Paris, analyst]

Great. And then seasonally, refresh my memory, you do more of your share repurchasing in the first half of the fiscal year?

[Tony Bowen, executive]

That's right. We typically come out of this call and have a focus on it, so in Q1 and into Q2. And we do that for a couple of reasons. One is we get a better EPS benefit, the earlier we buy it in the year. Secondly, we're typically in blackout a lot of time during tax season. So for that reason, we try to do most of it in the first half of the year. That isn't always the case. There have been years where we've done 10b5-1 programs that we've executed during tax season. We've done open market purchases coming out of tax season. So it's not always the case, but generally, we try to do it in the first half of the year.

[Alexander Paris, analyst]

Great. And then regarding the long-term growth algorithm. For fiscal 2025, you're kind of at the low end of that revenue range. I assume there's some conservatism built into that. Adjusted EBITDA is definitely growing or EBITDA is growing faster than revenue. But I think you said it earlier and perhaps in response to a question, you have some ERC numbers that are not going to repeat this year versus last year. Is that the entire explanation for the slightly lower EBITDA growth rate than I would expect? But with all that said, I just want to be clear. I realize your guidance is above consensus. So just [indiscernible] little bit more.

[Tony Bowen, executive]

Yes, the employee retention credit -- yes, the employee retention credit is about a $15 million impact. So it definitely push EBITDA quite a bit higher, if it wasn't for that roll-off that we received in '24. But regardless, as you said, we try to set these numbers in a level where we can achieve. And the fact that the top line is in -- even if it's the lower end of the range, it's still in the range. Top end of the EBITDA number is over $1 billion on the guidance range, which is an incredible feat. Obviously, EPS has benefited from the much lower tax rate, which I talked about in the opening comments.

I mean the fact that we exceeded $4 even on an adjusted or a regular GAAP basis and EPS in '24 and now guiding to a number that's over $5 even if it's benefited from tax rate is an incredible feat. So we feel good about the progress. There's always year-over-year kind of P&L nuances, if you will, but the trajectory remains the same, which is up and to the right.

[Alexander Paris, analyst]

Even with that expected onetime $0.50 per share gain as a result of the tax benefit, the adjusted EPS guidance, excluding that benefit, is still above consensus. I wanted to ask you about the -- that tax benefit. Is there a particular quarter that you expect that to hit? Or is that going to hit evenly over the 4 quarters?

[Tony Bowen, executive]

No, it will hit in a particular quarter once we've resolved the open audit and kind of the statutes expire. We're not exactly sure which quarter that will be yet. Could be Q2, could be later in the year, but it will definitely happen, we believe, in the fiscal year, which is why we included it in the guidance range.

[Alexander Paris, analyst]

Got you. So the way you answered that question, it's unlikely in Q1. It's going to be Q2 or later in the year?

[Tony Bowen, executive]

Yes. It's possible. We just -- we aren't in complete control of when that's going to happen, but it will happen by the end of the fiscal year.

[Alexander Paris, analyst]

And then I think my last question for you is California. You got a little benefit in fiscal '24 because of the extended deadline from April 15 to October 15, as I recall. How much does that contribute to that extra bolus of revenue from California? Because I'm assuming you got 2 boluses of revenue from California last fall and then the spring. What's the grow-over for fiscal 2025 because of that?

[Tony Bowen, executive]

Yes. I mean maybe the way to think about it is how much it drove the industry volume. And as you saw, the Assisted category is probably up about 1 point more because of that California extension in the prior year. So you think that's driving 1 point of volume. But obviously, not all of that is -- that doesn't equal 1 point of revenue. So it's probably 75% of that from a revenue perspective. So 3/4 of 1 point of revenue, about 1 point of industry -- of tax prep volume.

[Operator]

Thank you. I would now like to turn the conference back to Michaella Gallina for closing remarks. Madam?

[Michaella Gallina, executive]

Thanks, Latif, and thanks, everyone, for joining us. We look forward to speaking with you next quarter.

[Operator]

And this concludes today's conference call. Thank you for participating. You may now disconnect.