HealthEquity Reports Second Quarter Ended July 31, 2024 Financial Results
HealthEquity (NASDAQ: HQY) reported strong financial results for Q2 FY25, with revenue increasing 23% to $299.9 million. Net income rose to $35.8 million, or $0.40 per diluted share, while non-GAAP net income reached $76.3 million, or $0.86 per diluted share. Adjusted EBITDA grew 46% to $128.3 million.
The company saw significant growth in key metrics, with HSAs increasing 15% to 9.4 million and Total HSA Assets rising 27% to $29.5 billion. HealthEquity also announced a $300 million stock repurchase program and raised its fiscal year 2025 guidance, projecting revenue between $1.165 billion and $1.185 billion.
HealthEquity (NASDAQ: HQY) ha riportato risultati finanziari solidi per il secondo trimestre dell'anno fiscale 2025, con un aumento del fatturato del 23% a 299,9 milioni di dollari. L'utile netto è salito a 35,8 milioni di dollari, pari a $0,40 per azione diluita, mentre l'utile netto non-GAAP ha raggiunto 76,3 milioni di dollari, ovvero $0,86 per azione diluita. L'EBITDA rettificato è cresciuto del 46% a 128,3 milioni di dollari.
L'azienda ha registrato una crescita significativa in metriche chiave, con HSAs in aumento del 15% a 9,4 milioni e il valore totale degli HSA aumentato del 27% a 29,5 miliardi di dollari. HealthEquity ha anche annunciato un programma di riacquisto di azioni da 300 milioni di dollari e ha alzato le previsioni per l'anno fiscale 2025, prevedendo ricavi tra 1,165 miliardi e 1,185 miliardi di dollari.
HealthEquity (NASDAQ: HQY) reportó resultados financieros sólidos para el segundo trimestre del año fiscal 2025, con un aumento del 23% en los ingresos, alcanzando 299.9 millones de dólares. El ingreso neto aumentó a 35.8 millones de dólares, o $0.40 por acción diluida, mientras que el ingreso neto no-GAAP alcanzó 76.3 millones de dólares, es decir, $0.86 por acción diluida. El EBITDA ajustado creció un 46% alcanzando 128.3 millones de dólares.
La compañía experimentó un crecimiento significativo en métricas clave, con HSAs aumentando un 15% hasta 9.4 millones y los activos totales de HSA subiendo un 27% hasta 29.5 mil millones de dólares. HealthEquity también anunció un programa de recompra de acciones de 300 millones de dólares y elevó su guía para el año fiscal 2025, proyectando ingresos entre 1.165 y 1.185 millones de dólares.
HealthEquity (NASDAQ: HQY)는 2025 회계연도 2분기 강력한 재무 결과를 보고했으며, 수익은 23% 증가하여 2억 9,990만 달러에 달했습니다. 순이익은 3,580만 달러로 증가했으며, 희석 주당 $0.40에 해당합니다. 비GAAP 기준 순이익은 7,630만 달러로, 희석 주당 $0.86입니다. 조정된 EBITDA는 1억 2,830만 달러로 46% 성장했습니다.
회사는 주요 지표에서 상당한 성장을 보였으며, HSAs는 15% 증가하여 940만 개에 이르고, 총 HSA 자산은 27% 증가하여 295억 달러에 달했습니다. HealthEquity는 또한 3억 달러 주식 매입 프로그램을 발표하고, 2025 회계연도 수익 전망을 상향 조정하여 11억 6,500만 달러에서 11억 8,500만 달러 사이의 수익을 예상했습니다.
HealthEquity (NASDAQ: HQY) a annoncé de solides résultats financiers pour le deuxième trimestre de l'exercice 2025, avec une augmentation de 23 % des revenus, atteignant 299,9 millions de dollars. Le bénéfice net a augmenté à 35,8 millions de dollars, soit 0,40 $ par action diluée, tandis que le bénéfice net non-GAAP a atteint 76,3 millions de dollars, soit 0,86 $ par action diluée. L'EBITDA ajusté a augmenté de 46 % pour atteindre 128,3 millions de dollars.
L'entreprise a connu une croissance significative dans des métriques clés, avec les HSAs augmentant de 15 % à 9,4 millions et les actifs totaux des HSA augmentant de 27 % pour atteindre 29,5 milliards de dollars. HealthEquity a également annoncé un programme de rachat d'actions de 300 millions de dollars et a révisé à la hausse ses prévisions pour l'exercice 2025, projetant des revenus compris entre 1,165 milliard et 1,185 milliard de dollars.
HealthEquity (NASDAQ: HQY) berichtete über starke Finanzergebnisse für das zweite Quartal des Geschäftsjahres 2025, mit einem Umsatzwachstum von 23% auf 299,9 Millionen US-Dollar. Der Nettogewinn stieg auf 35,8 Millionen US-Dollar, oder $0,40 je verwässerter Aktie, während der nicht-GAAP Nettogewinn 76,3 Millionen US-Dollar erreichte, oder $0,86 je verwässerter Aktie. Das bereinigte EBITDA wuchs um 46% auf 128,3 Millionen US-Dollar.
Das Unternehmen verzeichnete ein signifikantes Wachstum in wichtigen Kennzahlen, mit HSAs, die um 15% auf 9,4 Millionen stiegen und die Gesamt-HSA-Vermögenswerte um 27% auf 29,5 Milliarden US-Dollar zulegten. HealthEquity kündigte außerdem ein Aktienrückkaufprogramm über 300 Millionen US-Dollar an und hob seine Prognose für das Geschäftsjahr 2025 an, wobei es einen Umsatz zwischen 1,165 Milliarden und 1,185 Milliarden US-Dollar projizierte.
- Revenue increased 23% year-over-year to $299.9 million
- Non-GAAP net income grew 67% to $76.3 million
- Adjusted EBITDA rose 46% to $128.3 million, representing 43% of revenue
- HSAs increased 15% year-over-year to 9.4 million
- Total HSA Assets grew 27% to $29.5 billion
- Announced $300 million stock repurchase program
- Raised fiscal year 2025 guidance
- None.
Insights
HealthEquity's Q2 FY25 results demonstrate robust growth and financial strength. Revenue increased by
The announcement of a
The improved full-year guidance reflects the company's strong momentum. However, investors should monitor the sustainability of this growth rate and potential impacts of market conditions on HSA investments.
HealthEquity's performance indicates a growing demand for HSAs and consumer-directed benefits. The
The company's expansion of its platform to include Health Payment Accounts could further diversify its revenue streams and strengthen its market position. However, the competitive landscape in the HSA custodian space is intensifying and HealthEquity will need to continue innovating to maintain its leadership.
The
Announces
Highlights of the second quarter include:
- Revenue of
$299.9 million , an increase of23% compared to$243.5 million in Q2 FY24. - Net income of
$35.8 million , compared to$10.6 million in Q2 FY24, with non-GAAP net income of$76.3 million , an increase of67% compared to$45.6 million in Q2 FY24. - Net income per diluted share of
$0.40 , compared to$0.12 in Q2 FY24, with non-GAAP net income per diluted share of$0.86 , compared to$0.53 in Q2 FY24. - Adjusted EBITDA of
$128.3 million , an increase of46% compared to$88.1 million in Q2 FY24. - 9.4 million HSAs, an increase of
15% compared to Q2 FY24. - Total HSA Assets of
$29.5 billion , an increase of27% compared to Q2 FY24. - 16.3 million Total Accounts, including both HSAs and complementary CDBs, an increase of
9% compared to Q2 FY24.
DRAPER, Utah, Sept. 03, 2024 (GLOBE NEWSWIRE) -- HealthEquity, Inc. (NASDAQ: HQY) ("HealthEquity" or the "Company"), the nation's largest health savings account ("HSA") custodian, today announced financial results for its second quarter ended July 31, 2024.
"Team Purple delivered an outstanding second quarter, increasing HSAs and HSA Assets by
Second quarter financial results
Revenue for the second quarter ended July 31, 2024 was
HealthEquity reported net income of
Adjusted EBITDA was
Account and asset metrics
HSAs as of July 31, 2024 were 9.4 million, an increase of
Total HSA Assets as of July 31, 2024 were
Stock repurchase program
The Company announced that its Board of Directors authorized a common stock repurchase program. Under the program, the Company may purchase up to
Refinancing of credit facilities
On August 23, 2024, the Company entered into a new credit agreement, pursuant to which it established a new five-year senior secured revolving credit facility in an aggregate principal amount of up to
Business outlook
For the fiscal year ending January 31, 2025, management expects revenue of
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 Tuesday, September 3, 2024 to discuss the fiscal 2025 second quarter financial results. The conference call will be accessible by dialing 1-833-630-1956, or 1-412-317-1837 for international callers, and referencing conference ID "HealthEquity." A live audio webcast of the call will 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 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 equity securities, amortization of incremental costs to obtain a contract, costs associated with unused office space, and certain other non-operating items.
- Non-GAAP net income is calculated by adding back to GAAP net income before income taxes the following items: amortization of acquired intangible assets, stock-based compensation expense, merger integration expenses, acquisition costs, gains and losses on equity securities, costs associated with unused office space, and losses on extinguishment of debt, 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 various other consumer-directed benefits for over 16 million accounts, working in close partnership with employers, benefits advisors, and health and retirement plan providers who share our unwavering commitment to our mission to save and improve lives by empowering healthcare consumers. Through cutting-edge solutions, innovation, and a relentless focus on improving health outcomes, we empower individuals to take control of their healthcare journey while ultimately enhancing their overall well-being. Learn more about our “Purple" service and approach at 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:
- our ability to adequately place and safeguard our custodial assets, or the failure of any of our depository or insurance company partners;
- 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 HSAs and other CDBs;
- 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 platforms and communications systems and successfully manage our growth; 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 Annual Report on Form 10-K for the fiscal year ended January 31, 2024 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
801-727-1000
rputnam@healthequity.com
HealthEquity, Inc. and subsidiaries
Condensed consolidated balance sheets
(in thousands, except par value) | July 31, 2024 | January 31, 2024 | |||
(unaudited) | |||||
Assets | |||||
Current assets | |||||
Cash and cash equivalents | $ | 326,893 | $ | 403,979 | |
Accounts receivable, net of allowance for doubtful accounts of | 108,454 | 104,893 | |||
Other current assets | 60,280 | 48,564 | |||
Total current assets | 495,627 | 557,436 | |||
Property and equipment, net | 4,592 | 6,013 | |||
Operating lease right-of-use assets | 46,484 | 48,380 | |||
Intangible assets, net | 1,254,210 | 835,948 | |||
Goodwill | 1,648,145 | 1,648,145 | |||
Other assets | 65,408 | 67,868 | |||
Total assets | $ | 3,514,466 | $ | 3,163,790 | |
Liabilities and stockholders’ equity | |||||
Current liabilities | |||||
Accounts payable | $ | 10,562 | $ | 12,041 | |
Accrued compensation | 37,072 | 49,608 | |||
Accrued liabilities | 63,379 | 46,038 | |||
Operating lease liabilities | 9,895 | 9,404 | |||
Total current liabilities | 120,908 | 117,091 | |||
Long-term liabilities | |||||
Long-term debt, net of issuance costs | 1,101,400 | 874,972 | |||
Operating lease liabilities, non-current | 46,158 | 48,766 | |||
Other long-term liabilities | 25,497 | 19,270 | |||
Deferred tax liability | 63,466 | 68,670 | |||
Total long-term liabilities | 1,236,521 | 1,011,678 | |||
Total liabilities | 1,357,429 | 1,128,769 | |||
Commitments and contingencies | |||||
Stockholders’ equity | |||||
Preferred stock, | — | — | |||
Common stock, | 9 | 9 | |||
Additional paid-in capital | 1,886,765 | 1,829,384 | |||
Accumulated earnings | 270,263 | 205,628 | |||
Total stockholders’ equity | 2,157,037 | 2,035,021 | |||
Total liabilities and stockholders’ equity | $ | 3,514,466 | $ | 3,163,790 |
HealthEquity, Inc. and subsidiaries
Condensed consolidated statements of operations and comprehensive income (unaudited)
Three months ended July 31, | Six months ended July 31, | ||||||||||||||
(in thousands, except per share data) | 2024 | 2023 | 2024 | 2023 | |||||||||||
Revenue | |||||||||||||||
Service revenue | $ | 116,720 | $ | 111,960 | $ | 234,934 | $ | 223,033 | |||||||
Custodial revenue | 138,684 | 92,676 | 260,328 | 181,156 | |||||||||||
Interchange revenue | 44,524 | 38,913 | 92,263 | 83,792 | |||||||||||
Total revenue | 299,928 | 243,549 | 587,525 | 487,981 | |||||||||||
Cost of revenue | |||||||||||||||
Service costs | 76,915 | 76,904 | 159,262 | 157,777 | |||||||||||
Custodial costs | 10,108 | 8,037 | 19,165 | 16,075 | |||||||||||
Interchange costs | 8,853 | 6,943 | 17,908 | 13,994 | |||||||||||
Total cost of revenue | 95,876 | 91,884 | 196,335 | 187,846 | |||||||||||
Gross profit | 204,052 | 151,665 | 391,190 | 300,135 | |||||||||||
Operating expenses | |||||||||||||||
Sales and marketing | 21,525 | 19,123 | 45,019 | 39,058 | |||||||||||
Technology and development | 58,580 | 54,767 | 114,670 | 107,959 | |||||||||||
General and administrative | 32,260 | 27,825 | 70,496 | 53,363 | |||||||||||
Amortization of acquired intangible assets | 30,981 | 23,166 | 56,526 | 46,332 | |||||||||||
Merger integration | 1,777 | 2,044 | 3,920 | 5,502 | |||||||||||
Total operating expenses | 145,123 | 126,925 | 290,631 | 252,214 | |||||||||||
Income from operations | 58,929 | 24,740 | 100,559 | 47,921 | |||||||||||
Other expense | |||||||||||||||
Interest expense | (15,427 | ) | (13,272 | ) | (27,222 | ) | (28,269 | ) | |||||||
Other income, net | 3,114 | 2,756 | 6,518 | 4,584 | |||||||||||
Total other expense | (12,313 | ) | (10,516 | ) | (20,704 | ) | (23,685 | ) | |||||||
Income before income taxes | 46,616 | 14,224 | 79,855 | 24,236 | |||||||||||
Income tax provision | 10,794 | 3,643 | 15,220 | 9,561 | |||||||||||
Net income and comprehensive income | $ | 35,822 | $ | 10,581 | $ | 64,635 | $ | 14,675 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.41 | $ | 0.12 | $ | 0.74 | $ | 0.17 | |||||||
Diluted | $ | 0.40 | $ | 0.12 | $ | 0.73 | $ | 0.17 | |||||||
Weighted-average number of shares used in computing net income per share: | |||||||||||||||
Basic | 87,131 | 85,533 | 86,805 | 85,286 | |||||||||||
Diluted | 88,646 | 86,341 | 88,606 | 86,356 |
HealthEquity, Inc. and subsidiaries
Condensed consolidated statements of cash flows (unaudited)
Six months ended July 31, | |||||||
(in thousands) | 2024 | 2023 | |||||
Cash flows from operating activities: | |||||||
Net income | $ | 64,635 | $ | 14,675 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 82,548 | 77,387 | |||||
Stock-based compensation | 53,594 | 38,277 | |||||
Amortization of debt discount and issuance costs | 1,428 | 1,461 | |||||
Loss on extinguishment of debt | — | 1,157 | |||||
Deferred taxes | (5,204 | ) | (8,138 | ) | |||
Changes in operating assets and liabilities: | |||||||
Accounts receivable, net | (3,561 | ) | 4,254 | ||||
Other assets | (9,345 | ) | (8,526 | ) | |||
Operating lease right-of-use assets | 3,365 | 6,594 | |||||
Accrued compensation | (12,706 | ) | (14,675 | ) | |||
Accounts payable, accrued liabilities, and other current liabilities | 7,267 | 3,970 | |||||
Operating lease liabilities, non-current | (3,840 | ) | (8,175 | ) | |||
Other long-term liabilities | (4,623 | ) | 384 | ||||
Net cash provided by operating activities | 173,558 | 108,645 | |||||
Cash flows from investing activities: | |||||||
Purchases of software and capitalized software development costs | (25,329 | ) | (18,794 | ) | |||
Purchases of property and equipment | (1,462 | ) | (590 | ) | |||
Acquisitions of HSA portfolios | (452,241 | ) | — | ||||
Net cash used in investing activities | (479,032 | ) | (19,384 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from long-term debt | 225,000 | — | |||||
Principal payments on long-term debt | — | (54,375 | ) | ||||
Settlement of client-held funds obligation, net | (828 | ) | (161 | ) | |||
Proceeds from exercise of common stock options | 4,216 | 1,354 | |||||
Net cash provided by (used in) financing activities | 228,388 | (53,182 | ) | ||||
Increase (decrease) in cash and cash equivalents | (77,086 | ) | 36,079 | ||||
Beginning cash and cash equivalents | 403,979 | 254,266 | |||||
Ending cash and cash equivalents | $ | 326,893 | $ | 290,345 |
HealthEquity, Inc. and subsidiaries
Condensed consolidated statements of cash flows (unaudited) (continued)
Six months ended July 31, | |||||||
(in thousands) | 2024 | 2023 | |||||
Supplemental cash flow data: | |||||||
Interest expense paid in cash | $ | 26,970 | $ | 23,504 | |||
Income tax payments, net | 13,471 | 15,113 | |||||
Supplemental disclosures of non-cash investing and financing activities: | |||||||
Purchases of software and capitalized software development costs included in accounts payable, accrued liabilities, or accrued compensation | 3,370 | 3,228 | |||||
Purchases of property and equipment included in accounts payable or accrued liabilities | 70 | 300 | |||||
Non-cash purchase consideration related to acquisitions of HSA portfolios | 20,325 | — | |||||
Exercise of common stock options receivable | — | 50 |
Stock-based compensation expense (unaudited)
Total stock-based compensation expense included in the condensed consolidated statements of operations and comprehensive income is as follows:
Three months ended July 31, | Six months ended July 31, | ||||||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | |||||||
Cost of revenue | $ | 2,934 | $ | 4,393 | $ | 7,459 | $ | 7,999 | |||
Sales and marketing | 3,850 | 3,478 | 8,173 | 6,257 | |||||||
Technology and development | 6,454 | 4,283 | 12,394 | 9,175 | |||||||
General and administrative | 8,336 | 7,919 | 25,568 | 14,846 | |||||||
Total stock-based compensation expense | $ | 21,574 | $ | 20,073 | $ | 53,594 | $ | 38,277 |
Total Accounts (unaudited)
(in thousands, except percentages) | July 31, 2024 | July 31, 2023 | % Change | January 31, 2024 | ||||
HSAs | 9,383 | 8,164 | 15 | % | 8,692 | |||
New HSAs from sales - Quarter-to-date | 187 | 156 | 20 | % | 497 | |||
New HSAs from sales - Year-to-date | 382 | 290 | 32 | % | 949 | |||
New HSAs from acquisitions - Year-to-date | 616 | — | * | — | ||||
HSAs with investments | 711 | 574 | 24 | % | 610 | |||
CDBs | 6,898 | 6,831 | 1 | % | 7,006 | |||
Total Accounts | 16,281 | 14,995 | 9 | % | 15,698 | |||
Average Total Accounts - Quarter-to-date | 16,214 | 14,954 | 8 | % | 15,318 | |||
Average Total Accounts - Year-to-date | 16,066 | 14,967 | 7 | % | 15,105 |
- Not meaningful
HSA Assets (unaudited)
(in millions, except percentages) | July 31, 2024 | July 31, 2023 | % Change | January 31, 2024 | |||||||
HSA cash | $ | 16,368 | $ | 14,021 | 17 | % | $ | 15,006 | |||
HSA investments | 13,099 | 9,181 | 43 | % | 10,208 | ||||||
Total HSA Assets | 29,467 | 23,202 | 27 | % | 25,214 | ||||||
Average daily HSA cash - Quarter-to-date | 16,363 | 14,001 | 17 | % | 14,210 | ||||||
Average daily HSA cash - Year-to-date | 15,875 | 14,048 | 13 | % | 14,071 |
Client-held funds (unaudited)
(in millions, except percentages) | July 31, 2024 | July 31, 2023 | % Change | January 31, 2024 | |||||||
Client-held funds | $ | 817 | $ | 811 | 1 | % | $ | 842 | |||
Average daily Client-held funds - Quarter-to-date | 860 | 891 | (3)% | 791 | |||||||
Average daily Client-held funds - Year-to-date | 850 | 896 | (5)% | 845 |
Reconciliation of net income to Adjusted EBITDA (unaudited)
Three months ended July 31, | Six months ended July 31, | ||||||||||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | |||||||||||
Net income | $ | 35,822 | $ | 10,581 | $ | 64,635 | $ | 14,675 | |||||||
Interest income | (3,103 | ) | (2,484 | ) | (6,984 | ) | (4,082 | ) | |||||||
Interest expense | 15,427 | 13,272 | 27,222 | 28,269 | |||||||||||
Income tax provision | 10,794 | 3,643 | 15,220 | 9,561 | |||||||||||
Depreciation and amortization | 12,629 | 15,180 | 26,022 | 31,055 | |||||||||||
Amortization of acquired intangible assets | 30,981 | 23,166 | 56,526 | 46,332 | |||||||||||
Stock-based compensation expense | 21,574 | 20,073 | 53,594 | 38,277 | |||||||||||
Merger integration expenses | 1,777 | 2,044 | 3,920 | 5,502 | |||||||||||
Amortization of incremental costs to obtain a contract | 1,681 | 1,350 | 3,313 | 2,654 | |||||||||||
Costs associated with unused office space | 806 | 1,286 | 1,596 | 2,302 | |||||||||||
Other | (101 | ) | — | 658 | 153 | ||||||||||
Adjusted EBITDA | $ | 128,287 | $ | 88,111 | $ | 245,722 | $ | 174,698 |
Reconciliation of net income outlook to Adjusted EBITDA outlook (unaudited)
Outlook for the year ending | ||
(in millions) | January 31, 2025 | |
Net income | ||
Interest income | (13) | |
Interest expense | 60 | |
Income tax provision | 31 - 36 | |
Depreciation and amortization | 50 | |
Amortization of acquired intangible assets | 112 | |
Stock-based compensation expense | 99 | |
Merger integration expenses | 13 | |
Amortization of incremental costs to obtain a contract | 7 | |
Costs associated with unused office space | 4 | |
Other expense | 1 | |
Adjusted EBITDA |
Reconciliation of net income to non-GAAP net income (unaudited)
Three months ended July 31, | Six months ended July 31, | ||||||||||
(in thousands, except per share data) | 2024 | 2023 | 2024 | 2023 | |||||||
Net income | $ | 35,822 | $ | 10,581 | $ | 64,635 | $ | 14,675 | |||
Income tax provision | 10,794 | 3,643 | 15,220 | 9,561 | |||||||
Income before income taxes - GAAP | 46,616 | 14,224 | 79,855 | 24,236 | |||||||
Non-GAAP adjustments: | |||||||||||
Amortization of acquired intangible assets | 30,981 | 23,166 | 56,526 | 46,332 | |||||||
Stock-based compensation expense | 21,574 | 20,073 | 53,594 | 38,277 | |||||||
Merger integration expenses | 1,777 | 2,044 | 3,920 | 5,502 | |||||||
Costs associated with unused office space | 806 | 1,286 | 1,596 | 2,302 | |||||||
Loss on extinguishment of debt | — | — | — | 1,157 | |||||||
Total adjustments to income before income taxes - GAAP | 55,138 | 46,569 | 115,636 | 93,570 | |||||||
Income before income taxes - Non-GAAP | 101,754 | 60,793 | 195,491 | 117,806 | |||||||
Income tax provision - Non-GAAP (1) | 25,439 | 15,199 | 48,873 | 29,452 | |||||||
Non-GAAP net income | 76,315 | 45,594 | 146,618 | 88,354 | |||||||
Diluted weighted-average shares | 88,646 | 86,341 | 88,606 | 86,356 | |||||||
GAAP net income per diluted share | $ | 0.40 | $ | 0.12 | $ | 0.73 | $ | 0.17 | |||
Non-GAAP net income per diluted share | $ | 0.86 | $ | 0.53 | $ | 1.65 | $ | 1.02 |
(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
Reconciliation of net income outlook to non-GAAP net income outlook (unaudited)
Outlook for the year ending | |
(in millions, except per share data) | January 31, 2025 |
Net income | |
Income tax provision | 31 - 36 |
Income before income taxes - GAAP | 125 - 145 |
Non-GAAP adjustments: | |
Amortization of acquired intangible assets | 112 |
Stock-based compensation expense | 99 |
Merger integration expenses | 13 |
Costs associated with unused office space | 4 |
Total adjustments to income before income taxes - GAAP | 228 |
Income before income taxes - Non-GAAP | 353 - 373 |
Income tax provision - Non-GAAP (1) | 88 - 93 |
Non-GAAP net income | |
Diluted weighted-average shares | 89 |
GAAP net income per diluted share (2) | |
Non-GAAP net income per diluted share (2) |
(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
(2) GAAP and Non-GAAP net income per diluted share may not calculate due to rounding.
Certain terms
Term | Definition |
HSA | A financial account through which consumers spend and save long-term for healthcare on a tax-advantaged basis. |
CDB | Consumer-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 member | Consumers with HSAs that we serve. |
Total HSA Assets | HSA members’ custodial cash assets held by our federally insured depository partners and our insurance company partners. Total HSA Assets also includes HSA members' investments in mutual funds through our custodial investment fund partner. |
Client | Our employer clients. |
Total Accounts | The sum of HSAs and CDBs on our platforms. |
Client-held funds | Deposits held on behalf of our Clients to facilitate administration of our CDBs. |
Network Partner | Our health plan partners, benefits administrators, and retirement plan recordkeepers. |
Adjusted EBITDA | 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 equity securities, amortization of incremental costs to obtain a contract, costs associated with unused office space, and certain other non-operating items. |
Non-GAAP net income | Calculated by adding back to GAAP net income before income taxes the following items: amortization of acquired intangible assets, stock-based compensation expense, merger integration expenses, acquisition costs, gains and losses on equity securities, costs associated with unused office space, and losses on extinguishment of debt, and subtracting a non-GAAP tax provision using a normalized non-GAAP tax rate. |
Non-GAAP net income per diluted share | Calculated by dividing non-GAAP net income by diluted weighted-average shares outstanding. |
FAQ
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