H & R Block Inc (NYSE: HRB) stock fell over 8.6% on 29th August, 2019 (as of 11:56 am GMT-4 ; Source: Google finance) after the company delivered the net loss of $150.2 million, compared with a net loss of $152.7 million for the comparable quarter a year prior. The company has posted mixed results in the first quarter. The company completed its acquisition of Wave, a rapidly growing financial solutions platform focused on changing the way small business owners manage their finances.
HRB in the first quarter of FY 20 has reported the adjusted loss per share of 72 cents, beating the analysts’ estimates for the adjusted loss per share of 75 cents, according to analysts polled by FactSet. The company had reported the adjusted revenue growth of 3.6 percent to $150.4 million in the first quarter of FY 20, missing the analysts’ estimates for revenue of $151.4 million. Total operating expenses increased $18.2 million, or 5.6%, to $345.5 million due to planned increases in compensation and other expenses. These increases primarily resulted from investments related to our technology roadmap and Wave, and were partially offset by lower depreciation and amortization expense.
Further, Wave contributed $3.6 million representing one month of activity. Additionally pre-season results in the US tax business have been strong, resulting in increased tax prep revenues in Assisted and DIY. The international revenues also increased as Australia has seen positive results in the first part of its tax season. These results were partially offset by a reduction in reported revenues.
During the first quarter of fiscal 2020, the company repurchased and retired approximately 1.6 million shares at an aggregate price of $44.1 million, or $27.68 per share. The company has declared a quarterly cash dividend of $0.26 per share is payable on October 1, 2019 to shareholders of record as of September 13, 2019.
For fiscal 2020, the company expects EBITDA margin of 24% to 26% for fiscal ’20. HRB also expect the effective tax rate to be 23% to 25%. For revenue, the company continue to expect growth of 1.5% to 3.5% in fiscal ’20 driven by growth in the tax business following the recent year and the addition of Wave. With respect to earnings, the company anticipate total EBITDA dollars to be slightly higher than fiscal ’19 as the company return to revenue growth.