H&R Block, Inc. (NYSE:HRB) Q2 2023 Earnings Call Transcript

Alex Paris: Great. And then last question for Tony. In your prepared comments, you talked a little bit about within operating expenses, insurance loss reserves, providing a favorable impact. Just wondering if we can get a little bit more color on that. And then the increased bad debt, what is that related to?

Tony Bowen: Yes. So I’ll start with the bad debt. I mean part of that is driven by the fact that we had a stronger EACs and when we participate in those EA loans we book our portion of the bad debt all upfront. As you know, Alex, a lot of that revenue is recognized over several months as there is an interest income component through the period to where those loans are ultimately paid off. On the insurance loss reserve, it’s a fairly technical topic, but essentially we have an actuarial assumption based on some expected losses that actuarial assumption changed during the quarter, and that’s what that positive benefit resulted from, so not something that typically occurs, but it’s a change from kind of pre pandemic and post-pandemic, some of the expectations on losses, specifically related to workers’ compensation.

Alex Paris: All right. Well. Thank you very much. I appreciate it. Thanks for answering my questions.

Jeff Jones: Thank you.

Tony Bowen: Thanks Alex.

Operator: Thank you. At this time, I’d like to turn the call back over to Michaella Gallina for closing remarks. Madam?

Michaella Gallina: Thank you, Lateef and thanks everyone for joining us today. This concludes our second quarter 2023 financial results conference call.

Operator: Thank you for participating. You may now disconnect.