Wave contributed $10.9 million in revenue for H&R Block for the second quarter ended October 31, Block said this week. It was the first complete quarter for Wave, which was purchased by the tax services company on July 1, and it represent a 40-percent increase in revenue over Wave’s year-earlier results.

The figures were reported during the recent earnings webcast for Block’s second quarter.

Block said it is also opening Wave’s APIs to third-party developers and will partner with Shopify to launch the first direct accounting integration in the Shopify app store

“It was a little softer than we would have liked, based on the mix of payment types but overall, we still feel very, very good about the health of the business, the way they're thinking about serving small business owners and the simplicity of their product, and the way they're thinking about the product road map and what's to come,” CEO Jeff Jones said during the webcast.

When it announced the deal, Block forecast Wave would add $40 million to $45 million to Block’s revenue for the year ending April 30. Block also said it would absorb Wave’s loss and transaction costs of $25 million to $35 million. Block executives said Wave has consistently grown at 40-percent plus for some time. Increased revenue and cost reductions to absorb the loss will be accomplished in the fourth quarter.

Block has been marketing Wave to what it called qualified H&R Block clients and vice versa. “So inside the installed base, we think there's a lot of opportunity that doesn't rely on a lot of incremental investment, and that's where we're focused for fiscal '20,” Jones said.

Since the quarter is outside of tax season, it is not a strong one for Block. The company lost slightly less than $188 million in the most recently completed quarter, compared to a loss of $176.3 million a year earlier. Second quarter revenue was $160.8 million, an 8 percent increase from $148.9 million.

Bob Scott
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
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