STOCK TITAN

HealthEquity Reports Fiscal Year and Fourth Quarter Ended January 31, 2021 Financial Results

Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
(Neutral)
Tags
Rhea-AI Summary

HealthEquity, Inc. (NASDAQ: HQY) reported robust financial results for fiscal year 2021, achieving $733.6 million in revenue, a 38% increase from $532 million in FY20. However, net income dropped to $8.8 million from $39.7 million year-over-year. The company's non-GAAP net income was $126.3 million, slightly up from $114.8 million. Q4 revenue declined 6% to $188.2 million, but net income rose to $5.4 million from a loss in Q4 FY20. For FY2022, HealthEquity anticipates revenue between $750 million and $760 million, with a projected net loss of up to $10 million.

Positive
  • FY21 revenue grew 38% to $733.6 million.
  • Non-GAAP net income of $126.3 million, up from $114.8 million in FY20.
  • Adjusted EBITDA increased by 23% to $240.8 million.
  • HSA assets rose 24% to $14.3 billion.
Negative
  • Net income decreased to $8.8 million from $39.7 million in FY20.
  • Q4 revenue declined 6% to $188.2 million compared to Q4 FY20.
  • Adjusted EBITDA in Q4 fell by 8% to $56.6 million.

Highlights of the fiscal year include:

  • Revenue of $733.6 million, an increase of 38% compared to $532.0 million in FY20.
  • Net income of $8.8 million, compared to $39.7 million in FY20, with non-GAAP net income of $126.3 million, compared to $114.8 million in FY20.
  • Net income per diluted share of $0.12, compared to $0.58 in FY20, with non-GAAP net income per diluted share of $1.67, compared to $1.68 in FY20.
  • Adjusted EBITDA of $240.8 million, an increase of 23% compared to $196.5 million in FY20.
  • 5.8 million HSAs, an increase of 8% compared to FY20.
  • $14.3 billion Total HSA Assets, an increase of 24% compared to FY20.
  • 12.8 million Total Accounts, including both HSAs and complementary CDB accounts, the same as in FY20.

Highlights of the fourth quarter include:

  • Revenue of $188.2 million, a decrease of 6% compared to $201.2 million in Q4 FY20.
  • Net income of $5.4 million, compared to net loss of $0.2 million in Q4 FY20, with non-GAAP net income of $33.3 million, compared to $28.4 million in Q4 FY20.
  • Net income per diluted share of $0.07, compared to net loss of less than one-half of one cent in Q4 FY20, with non-GAAP net income per diluted share of $0.42, compared to $0.40 in Q4 FY20.
  • Adjusted EBITDA of $56.6 million, a decrease of 8% compared to $61.3 million in Q4 FY20.

DRAPER, Utah, March 15, 2021 (GLOBE NEWSWIRE) -- HealthEquity, Inc. (NASDAQ: HQY) ("HealthEquity" or the "Company"), the nation's largest health savings account non-bank custodian, today announced financial results for its fourth quarter and fiscal year ended January 31, 2021.

“The team delivered strong results in fiscal 2021, growing revenue by 38% to $734 million and Adjusted EBITDA by 23% to $241 million,” said Jon Kessler, president and CEO of HealthEquity. “Fiscal 2022 is off to a fast start as well, with early client and partner wins as well as the acquisition of Luum, which will help our clients return to work.”

Fiscal year financial results

The comparability of the Company's financial results between years is impacted by its acquisition of WageWorks. As the WageWorks acquisition closed on August 30, 2019, WageWorks' results of operations are included in the Company's consolidated results of operations for the entire fiscal year ended January 31, 2021, but are only included in the consolidated results of operations for approximately five months during the fiscal year ended January 31, 2020.

Revenue for the fiscal year ended January 31, 2021 of $733.6 million grew 38% compared to $532.0 million for the fiscal year ended January 31, 2020. Revenue this year included: service revenue of $431.0 million, custodial revenue of $190.9 million, and interchange revenue of $111.7 million.

HealthEquity reported net income of $8.8 million, or $0.12 per diluted share, and non-GAAP net income of $126.3 million, or $1.67 per diluted share, for the fiscal year ended January 31, 2021. The Company reported net income of $39.7 million, or $0.58 per diluted share, and non-GAAP net income of $114.8 million, or $1.68 per diluted share, for the fiscal year ended January 31, 2020.

Adjusted EBITDA of $240.8 million for the fiscal year ended January 31, 2021 grew 23% compared to $196.5 million for the fiscal year ended January 31, 2020. Adjusted EBITDA was 33% of revenue compared to 37% for the fiscal year ended January 31, 2020.

As of January 31, 2021, HealthEquity had $328.8 million of cash and cash equivalents and $986.7 million of outstanding debt, net of issuance costs. This compares to $191.7 million in cash and cash equivalents and $1.22 billion of outstanding debt as of January 31, 2020. The cash amount as of January 31, 2021 does not reflect the approximately $456.7 million in net proceeds from the Company's sale of common stock in February and March 2021.

Fourth quarter financial results

Revenue for the fourth quarter ended January 31, 2021 of $188.2 million decreased 6% compared to $201.2 million for the fourth quarter ended January 31, 2020. Revenue this quarter included: service revenue of $111.3 million, custodial revenue of $48.6 million, and interchange revenue of $28.3 million.

HealthEquity reported net income of $5.4 million, or $0.07 per diluted share, and non-GAAP net income of $33.3 million, or $0.42 per diluted share, for the fourth quarter ended January 31, 2021. The Company reported a net loss of $0.2 million, or less than one-half of one cent per diluted share, and non-GAAP net income of $28.4 million, or $0.40 per diluted share, for the fourth quarter ended January 31, 2020.

Adjusted EBITDA was $56.6 million for the fourth quarter ended January 31, 2021, a decrease of 8% compared to $61.3 million for the fourth quarter ended January 31, 2020. Adjusted EBITDA was 30% of revenue, the same as in the fourth quarter ended January 31, 2020.

Account and asset metrics

HSAs as of January 31, 2021 were approximately 5.8 million, an increase of 8% year over year, including 333,000 HSAs with investments, an increase of 51% year over year. Total Accounts as of January 31, 2021 were 12.8 million, including 7.0 million CDBs.

Total HSA Assets as of January 31, 2021 were $14.3 billion, an increase of 24% year over year. Total HSA Assets included $10.1 billion of HSA cash and $4.2 billion of HSA investments. Client-held funds, which are deposits held on behalf of our Clients to facilitate administration of our CDBs, and from which we generate custodial revenue, were $1.0 billion as of January 31, 2021.

New HSA openings and HSA asset balances

HealthEquity reported sales of 687,000 new HSAs during the fiscal year ended January 31, 2021, compared to 724,000 during the fiscal year ended January 31, 2020. HSA members grew their cash balances by approximately $1.4 billion during the year, while total member balances increased by approximately $2.8 billion due primarily to HSA contributions, decreased spending per HSA, and appreciation of invested balances.

WageWorks integration

HealthEquity completed its acquisition of WageWorks on August 30, 2019. The Company has identified opportunities of approximately $80 million in annualized ongoing net synergies to be achieved by the end of the fiscal year ending January 31, 2022, of which approximately $60 million were achieved as of January 31, 2021.

Business outlook

For the fiscal year ending January 31, 2022, management expects revenues of $750 million to $760 million. Its outlook for net loss is between $10 million and $5 million, resulting in net loss of $0.12 to $0.07 per diluted share. Its outlook for non-GAAP net income, calculated using the method described below, is between $115 million and $119 million, resulting in non-GAAP net income per diluted share of $1.37 to $1.42 (based on an estimated 84 million weighted-average shares outstanding). Management expects Adjusted EBITDA of $240 million to $246 million.

See “Non-GAAP financial information” below for definitions of our Adjusted EBITDA and non-GAAP net income. A reconciliation of the non-GAAP financial measures used throughout this release to the most comparable GAAP financial measures is included with the financial tables at the end of this release.

Conference call

HealthEquity management will host a conference call at 4:30 pm (Eastern Time) on Monday, March 15, 2021 to discuss the fiscal 2021 fourth quarter and year-end results. The conference call will be accessible by dialing 844-791-6252, or 661-378-9636 for international callers, and referencing conference ID 8874995. A live audio webcast of the call will also be available on the investor relations section of our website at http://ir.healthequity.com.

Non-GAAP financial information

To supplement our financial information presented on a GAAP basis, we disclose non-GAAP financial measures, including Adjusted EBITDA, non-GAAP net income, and non-GAAP net income per diluted share.

  • Adjusted EBITDA is adjusted earnings before interest, taxes, depreciation and amortization, amortization of acquired intangible assets, stock-based compensation expense, merger integration expenses, acquisition costs, gains and losses on marketable equity securities, and other certain non-operating items.
  • Non-GAAP net income is calculated by adding back to GAAP net income (loss) before income taxes the following items: amortization of acquired intangible assets, stock-based compensation expense, merger integration expenses, and acquisition costs, and subtracting a non-GAAP tax provision using a normalized non-GAAP tax rate.
  • Non-GAAP net income per diluted share is calculated by dividing non-GAAP net income by diluted weighted-average shares outstanding.

Non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, GAAP results. We believe that these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to the Company's financial condition and results of operations. The Company cautions investors that non-GAAP financial information, by its nature, departs from GAAP; accordingly, its use can make it difficult to compare current results with results from other reporting periods and with the results of other companies. In addition, while amortization of acquired intangible assets is being excluded from non-GAAP net income, the revenue generated from those acquired intangible assets is not excluded. Whenever we use these non-GAAP financial measures, we provide a reconciliation of the applicable non-GAAP financial measure to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measure as detailed in the tables below.

About HealthEquity

HealthEquity and its subsidiaries administer HSAs and other consumer-directed benefits for our more than 12 million accounts in partnership with employers, benefits advisors, and health and retirement plan providers who share our mission to connect health and wealth and value our culture of remarkable “Purple” service. For more information, visit www.healthequity.com.

Forward-looking statements

This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding our industry, business strategy, plans, goals and expectations concerning our markets and market position, product expansion, future operations, expenses and other results of operations, revenue, margins, profitability, acquisition synergies, future efficiencies, tax rates, capital expenditures, liquidity and capital resources and other financial and operating information. When used in this discussion, the words “may,” “believes,” “intends,” “seeks,” “aims,” “anticipates,” “plans,” “estimates,” “expects,” “should,” “assumes,” “continues,” “could,” “will,” “future” and the negative of these or similar terms and phrases are intended to identify forward-looking statements in this press release.

Forward-looking statements reflect our current expectations regarding future events, results or outcomes. These expectations may or may not be realized. Although we believe the expectations reflected in the forward-looking statements are reasonable, we can give you no assurance these expectations will prove to be correct. Some of these expectations may be based upon assumptions, data or judgments that prove to be incorrect. Actual events, results and outcomes may differ materially from our expectations due to a variety of known and unknown risks, uncertainties and other factors. Although it is not possible to identify all of these risks and factors, they include, among others, risks related to the following:

  • the impact of the ongoing COVID-19 pandemic on the Company, its operations and its financial results;
  • our ability to realize the anticipated financial and other benefits from combining the operations of WageWorks with our business in an efficient and effective manner;
  • our ability to compete effectively in a rapidly evolving healthcare and benefits administration industry;
  • our dependence on the continued availability and benefits of tax-advantaged health savings accounts and other consumer-directed benefits;
  • our ability to successfully identify, acquire and integrate additional portfolio purchases or acquisition targets;
  • the significant competition we face and may face in the future, including from those with greater resources than us;
  • our reliance on the availability and performance of our technology and communications systems;
  • recent and potential future cybersecurity breaches of our technology and communications systems and other data interruptions, including resulting costs and liabilities, reputational damage and loss of business;
  • the current uncertain healthcare environment, including changes in healthcare programs and expenditures and related regulations;
  • our ability to comply with current and future privacy, healthcare, tax, ERISA, investment adviser and other laws applicable to our business;
  • our reliance on partners and third-party vendors for distribution and important services;
  • our ability to develop and implement updated features for our technology and communications systems and successfully manage our growth;
  • our ability to protect our brand and other intellectual property rights; and
  • our reliance on our management team and key team members.

For a detailed discussion of these and other risk factors, please refer to the risks detailed in our filings with the Securities and Exchange Commission, including, without limitation, our most recent Quarterly Report on Form 10-Q and subsequent periodic and current reports. Past performance is not necessarily indicative of future results. We undertake no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

Investor Relations Contact
Richard Putnam
801-727-1209
rputnam@healthequity.com

HealthEquity, Inc. and its subsidiaries
Consolidated balance sheets (unaudited)

(in thousands, except par value)January 31, 2021
  January 31, 2020
 
Assets   
Current assets   
Cash and cash equivalents$328,803  $191,726 
Accounts receivable, net of allowance for doubtful accounts of $4,239 and $1,216 as of January 31, 2021 and 2020, respectively72,767  70,863 
Other current assets58,607  34,711 
Total current assets460,177  297,300 
Property and equipment, net29,106  33,486 
Operating lease right-of-use assets89,508  83,178 
Intangible assets, net767,003  783,279 
Goodwill1,326,793  1,332,631 
Deferred tax asset  18 
Other assets37,420  35,089 
Total assets$2,710,007  $2,564,981 
Liabilities and stockholders’ equity   
Current liabilities   
Accounts payable$1,614  $3,980 
Accrued compensation50,670  50,121 
Accrued liabilities75,480  46,372 
Current portion of long-term debt62,500  39,063 
Operating lease liabilities14,037  12,401 
Total current liabilities204,301  151,937 
Long-term liabilities   
Long-term debt, net of issuance costs924,217  1,181,615 
Operating lease liabilities, non-current74,224  68,017 
Other long-term liabilities8,808  2,625 
Deferred tax liability119,729  130,492 
Total long-term liabilities1,126,978  1,382,749 
Total liabilities1,331,279  1,534,686 
Commitments and contingencies   
Stockholders’ equity   
Preferred stock, $0.0001 par value, 100,000 shares authorized, no shares issued and outstanding as of January 31, 2021 and 2020   
Common stock, $0.0001 par value, 900,000 shares authorized, 77,168 and 71,051 shares issued and outstanding as of January 31, 2021 and 2020, respectively8  7 
Additional paid-in capital1,158,372  818,774 
Accumulated earnings220,348  211,514 
Total stockholders’ equity1,378,728  1,030,295 
Total liabilities and stockholders’ equity$2,710,007  $2,564,981 

HealthEquity, Inc. and its subsidiaries
Consolidated statements of operations and comprehensive income (loss) (unaudited)

 Three months ended January 31,
  Year ended January 31,
 
(in thousands, except per share data)2021
  2020
  2021
  2020
 
Revenue       
Service revenue$111,328  $122,158  $430,966  $262,868 
Custodial revenue48,581  49,354  190,933  181,892 
Interchange revenue28,260  29,688  111,671  87,233 
Total revenue188,169  201,200  733,570  531,993 
Cost of revenue       
Service costs78,019  78,191  280,214  170,863 
Custodial costs4,769  4,847  19,574  17,563 
Interchange costs4,463  4,481  18,448  17,658 
Total cost of revenue87,251  87,519  318,236  206,084 
Gross profit100,918  113,681  415,334  325,909 
Operating expenses       
Sales and marketing13,462  13,936  49,964  43,951 
Technology and development32,319  31,515  124,809  77,576 
General and administrative22,903  23,368  84,493  60,561 
Amortization of acquired intangible assets19,159  18,668  76,064  34,704 
Merger integration12,929  11,652  44,257  32,111 
Total operating expenses100,772  99,139  379,587  248,903 
Income from operations146  14,542  35,747  77,006 
Other expense       
Interest expense(6,771) (14,417) (34,881) (24,772)
Other income (expense), net5,283  (732) 3,274  (9,079)
Total other expense(1,488) (15,149) (31,607) (33,851)
Income (loss) before income taxes(1,342) (607) 4,140  43,155 
Income tax provision (benefit)(6,709) (417) (4,694) 3,491 
Net income (loss) and comprehensive income (loss)$5,367  $(190) $8,834  $39,664 
Net income per share:       
Basic$0.07  $0.00  $0.12  $0.59 
Diluted$0.07  $0.00  $0.12  $0.58 
Weighted-average number of shares used in computing net income per share:       
Basic76,846  70,880  74,235  67,026 
Diluted78,559  70,880  75,679  68,453 

HealthEquity, Inc. and its subsidiaries
Consolidated statements of cash flows (unaudited)

 Year ended January 31,
 
(in thousands)2021
  2020
  2019
 
Cash flows from operating activities:     
Net income$8,834  $39,664  $73,899 
Adjustments to reconcile net income to net cash provided by operating activities:     
Depreciation and amortization115,904  55,352  18,185 
Stock-based compensation42,863  39,844  21,057 
Amortization of debt issuance costs5,102  2,711  60 
(Gains) losses on marketable equity securities  (27,570) 103 
Other non-cash items1,753  728  676 
Deferred taxes(5,132) 3,665  408 
Changes in operating assets and liabilities:     
Accounts receivable(413) (4,029) (4,066)
Other assets(24,839) (12,577) (5,799)
Operating lease right-of-use assets11,150  6,218   
Accrued compensation771  4,550  4,432 
Accounts payable, accrued liabilities, and other current liabilities30,422  1,920  3,894 
Operating lease liabilities, non-current(10,803) (5,383)  
Other long-term liabilities6,007  (83) 573 
Net cash provided by operating activities181,619  105,010  113,422 
Cash flows from investing activities:     
Purchases of property and equipment(13,093) (7,286) (3,869)
Purchases of software and capitalized software development costs(51,500) (25,654) (9,978)
Acquisition of intangible member assets(32,371) (9,134) (1,195)
Acquisitions, net of cash acquired  (1,644,575)  
Purchases of marketable securities  (53,845) (728)
Proceeds from sale of marketable securities    41,422 
Net cash provided by (used in) investing activities(96,964) (1,740,494) 25,652 
Cash flows from financing activities:     
Proceeds from follow-on equity offering, net of payments for offering costs286,779  458,495   
Principal payments on long-term debt(239,063) (7,813)  
Proceeds from long-term debt  1,250,000   
Payment of debt issuance costs  (30,504)  
Settlement of client-held funds obligation(3,862) (215,790)  
Proceeds from exercise of common stock options8,568  11,347  22,929 
Net cash provided by financing activities52,422  1,465,735  22,929 
Increase (decrease) in cash and cash equivalents137,077  (169,749) 162,003 
Beginning cash and cash equivalents191,726  361,475  199,472 
Ending cash and cash equivalents$328,803  $191,726  $361,475 

HealthEquity, Inc. and its subsidiaries
Consolidated statements of cash flows (unaudited) (continued)

 Year ended January 31,
 
(in thousands)2021
  2020
  2019
 
      
Supplemental cash flow data:     
Interest expense paid in cash$27,686  $21,806  $203 
Income tax payments (refunds), net(6,022) 9,277  587 
Supplemental disclosures of non-cash investing and financing activities:     
Purchases of property and equipment included in accounts payable or accrued liabilities160  487  37 
Purchases of software and capitalized software development costs included in accounts payable, accrued liabilities, or accrued compensation1,930  1,742  200 
Decrease in goodwill due to measurement period adjustments, net5,838     
Exercise of common stock options receivable1,478     
Equity-based acquisition consideration  3,776   

Stock-based compensation expense (unaudited)
Total stock-based compensation expense included in the consolidated statements of operations and comprehensive income (loss) is as follows:

 Three months ended January 31,
  Year ended January 31,
 
(in thousands)2021
  2020
  2021
  2020
 
Cost of revenue$2,259  $1,507  $7,996  $4,792 
Sales and marketing2,176  1,225  6,986  4,694 
Technology and development2,721  2,049  10,772  7,649 
General and administrative5,394  3,486  17,109  12,972 
Merger integration  383    1,603 
Other expense, net      13,714 
Total stock-based compensation expense$12,550  $8,650  $42,863  $45,424 

Total Accounts (unaudited)

(in thousands, except percentages)January 31, 2021January 31, 2020% Change
HSAs5,7825,3448 %
New HSAs from sales - Quarter-to-date370379(2) %
New HSAs from sales - Year-to-date687724(5) %
New HSAs from acquisitions - Year-to-date757(100) %
HSAs with investments33322051 %
CDBs7,0287,437(5) %
Total Accounts12,81012,781— %
Average Total Accounts - Quarter-to-date12,65912,603— %
Average Total Accounts - Year-to-date12,6048,01357 %

HSA assets (unaudited)

(in millions, except percentages)January 31, 2021
  January 31, 2020
  % Change
HSA cash with yield (1)$9,875  $8,301  19 %
HSA cash without yield (2)244  383  (36) %
Total HSA cash10,119  8,684  17 %
HSA investments with yield (1)4,078  2,495  63 %
HSA investments without yield (2)138  362  (62) %
Total HSA investments4,216  2,857  48 %
Total HSA Assets14,335  11,541  24 %
Average daily HSA cash with yield - Year-to-date8,599  6,937  24 %
Average daily HSA cash with yield - Quarter-to-date$9,060  $7,791  16 %

(1)  HSA Assets that generate custodial revenue.

(2)  HSA Assets that do not generate custodial revenue.

Client-held funds (unaudited)

(in millions, except percentages)January 31, 2021
 January 31, 2020
 % Change
Client-held funds (1)$986 $779 27 %
Average daily Client-held funds - Year-to-date (1)847 382 122 %
Average daily Client-held funds - Quarter-to-date (1)848 727 17 %

(1)  Client-held funds that generate custodial revenue.

Net income (loss) reconciliation to Adjusted EBITDA (unaudited)

 Three months ended January 31,
  Year ended January 31,
 
(in thousands)2021
  2020
  2021
  2020
 
Net income (loss)$5,367  $(190) $8,834  $39,664 
Interest income(195) (632) (1,045) (5,905)
Interest expense6,771  14,417  34,881  24,772 
Income tax provision (benefit)(6,709) (417) (4,694) 3,491 
Depreciation and amortization11,259  7,708  39,839  20,648 
Amortization of acquired intangible assets19,159  18,668  76,064  34,704 
Stock-based compensation expense12,550  8,267  42,863  30,107 
Merger integration expenses (1)12,929  11,652  44,257  32,111 
Acquisition costs (2)1,039  98  1,118  40,810 
Gain on marketable equity securities  (190)   (27,760)
Other (3)(5,524) 1,957  (1,322) 3,811 
Adjusted EBITDA$56,646  $61,338  $240,795  $196,453 

(1)  For the fiscal year ended January 31, 2020, merger integration expenses included $1.6 million of stock-based compensation expense related to post-acquisition integration activities.

(2)  For the fiscal year ended January 31, 2020, acquisition costs included $13.7 million of stock-based compensation expense related to awards that were accelerated in connection with the acquisition of WageWorks, Inc.

(3)  For the fiscal year ended January 31, 2021, Other consisted of amortization of incremental costs to obtain a contract of $2.0 million, offset by other income, net, of $3.3 million. For the fiscal year ended January 31, 2020, Other consisted of amortization of incremental costs to obtain a contract of $1.9 million and other costs of $1.9 million. For the three months ended January 31, 2021, Other consisted of amortization of incremental costs to obtain a contract of $0.6 million, offset by other income, net, of $6.1 million. For the three months ended January 31, 2020, Other consisted of amortization of incremental costs to obtain a contract of $0.5 million and other costs of $1.5 million.

Reconciliation of net loss outlook to Adjusted EBITDA outlook (unaudited)

 Outlook for the year ending
(in millions)January 31, 2022
Net loss$(10) - (5)
Interest expense26
Income tax provision(3) - (2)
Depreciation and amortization56
Amortization of acquired intangible assets77
Stock-based compensation expense61
Merger integration expenses26
Acquisition costs2
Other5
Adjusted EBITDA$240 - 246

Reconciliation of net income (loss) to non-GAAP net income (unaudited)

 Three months ended
  Year ended
  Outlook for the year ending
(in millions, except per share data)January 31, 2021
  January 31, 2021
  January 31, 2022
Net income (loss)$5  $9  $(10) - (5)
Income tax benefit(6) (5) (3) - (2)
Income (loss) before income taxes - GAAP(1) 4  (13) - (7)
Non-GAAP adjustments:     
Amortization of acquired intangible assets19  76  77
Stock-based compensation expense12  43  61
Merger integration expenses13  44  26
Acquisition costs1  1  2
Total adjustments to income (loss) before income taxes - GAAP45  164  166
Income before income taxes - Non-GAAP44  168  153 - 159
Income tax provision - Non-GAAP (1)11  42  38 - 40
Non-GAAP net income33  126  115 - 119
      
Diluted weighted-average shares79  76  84
Non-GAAP net income per diluted share (2)$0.42  $1.67  $1.37 - 1.42

(1)  The Company utilizes a normalized non-GAAP tax rate to provide better consistency across the interim reporting periods within a given fiscal year by eliminating the effects of non-recurring and period-specific items, which can vary in size and frequency, and which are not necessarily reflective of the Company’s longer-term operations. The normalized non-GAAP tax rate applied to each period presented was 25%. The Company may adjust its non-GAAP tax rate as additional information becomes available and in conjunction with any other significant events occur that may materially affect this rate, such as merger and acquisition activity, changes in business outlook, or other changes in expectations regarding tax regulations.

(2)  Non-GAAP net income per diluted share may not calculate due to rounding of non-GAAP net income and diluted weighted-average shares.

Certain terms

TermDefinition
HSAA financial account through which consumers spend and save long-term for healthcare on a tax-advantaged basis.
CDBConsumer-directed benefits offered by employers, including flexible spending and health reimbursement arrangements (“FSAs” and “HRAs”), Consolidated Omnibus Budget Reconciliation Act (“COBRA”) administration, commuter and other benefits.
HSA memberConsumers with HSAs that we serve.
Total HSA AssetsHSA members' deposits with our federally insured custodial depository partners and custodial cash deposits invested in an annuity contract with our insurance company partner. Total HSA Assets also includes HSA members' investments in mutual funds through our custodial investment fund partner.
ClientOur employer clients.
Total AccountsThe sum of HSAs and CDBs on our platforms.
Client-held fundsDeposits held on behalf of our Clients to facilitate administration of our CDBs.
Network PartnerOur health plan partners, benefits administrators, and retirement plan recordkeepers.
Adjusted EBITDAAdjusted earnings before interest, taxes, depreciation and amortization, amortization of acquired intangible assets, stock-based compensation expense, merger integration expenses, acquisition costs, gains and losses on marketable equity securities, and other certain non-operating items.
Non-GAAP net incomeCalculated by adding back to GAAP net income (loss) before income taxes the following items: amortization of acquired intangible assets, stock-based compensation expense, merger integration expenses, and acquisition costs, and subtracting a non-GAAP tax provision using a normalized non-GAAP tax rate.
Non-GAAP net income per diluted shareCalculated by dividing non-GAAP net income by diluted weighted-average shares outstanding.

FAQ

What were HealthEquity's revenue results for FY2021 (HQY)?

HealthEquity reported revenue of $733.6 million for FY2021, a 38% increase from the previous fiscal year.

How did HealthEquity's net income change in FY2021 (HQY)?

Net income for HealthEquity dropped to $8.8 million in FY2021, down from $39.7 million in FY2020.

What is HealthEquity's guidance for FY2022 (HQY)?

HealthEquity expects revenue between $750 million and $760 million for FY2022, with a projected net loss of up to $10 million.

What was the Adjusted EBITDA for HealthEquity in FY2021 (HQY)?

HealthEquity's Adjusted EBITDA for FY2021 was $240.8 million, a 23% increase from the previous year.

How did HealthEquity perform in Q4 FY2021 (HQY)?

In Q4 FY2021, HealthEquity reported revenue of $188.2 million, a 6% decrease from Q4 FY2020, but net income increased to $5.4 million.

HealthEquity, Inc

NASDAQ:HQY

HQY Rankings

HQY Latest News

HQY Stock Data

8.40B
86.16M
2.06%
102.64%
5.05%
Health Information Services
Services-business Services, Nec
Link
United States of America
DRAPER