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HealthEquity Reports Second Quarter Ended July 31, 2024 Financial Results

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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.

Positive
  • 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
Negative
  • None.

Insights

HealthEquity's Q2 FY25 results demonstrate robust growth and financial strength. Revenue increased by 23% year-over-year to $299.9 million, while non-GAAP net income surged by 67% to $76.3 million. The company's core HSA business is thriving, with a 15% increase in HSAs and a 27% rise in Total HSA Assets.

The announcement of a $300 million stock repurchase program signals management's confidence in the company's future and commitment to shareholder value. This, coupled with the refinancing of credit facilities, provides HealthEquity with enhanced financial flexibility.

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 15% increase in HSAs to 9.4 million and 27% growth in Total HSA Assets to $29.5 billion reflect a shift towards consumer-driven healthcare models.

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 24% year-over-year increase in HSAs with investments suggests growing consumer sophistication in managing healthcare savings, a trend that could drive future growth for HealthEquity if sustained.

Announces $300 Million Stock Repurchase Program

Highlights of the second quarter include:

  • Revenue of $299.9 million, an increase of 23% 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 of 67% 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 of 46% 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 of 27% 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 15% and 27%, respectively, driven by strong growth in new HSAs from sales and the transition of the remaining BenefitWallet HSAs to the HealthEquity platform," said Jon Kessler, President and CEO of HealthEquity. "Momentum in both topline growth and margin expansion allows us to raise guidance, accelerate our platform investments, launch Health Payment Accounts and announce a $300 million share repurchase authorization."

Second quarter financial results

Revenue for the second quarter ended July 31, 2024 was $299.9 million, an increase of 23% compared to $243.5 million for the second quarter ended July 31, 2023. Revenue this quarter included: service revenue of $116.7 million, custodial revenue of $138.7 million, and interchange revenue of $44.5 million.

HealthEquity reported net income of $35.8 million, or $0.40 per diluted share, and non-GAAP net income of $76.3 million, or $0.86 per diluted share, for the second quarter ended July 31, 2024. The Company reported net income of $10.6 million, or $0.12 per diluted share, and non-GAAP net income of $45.6 million, or $0.53 per diluted share, for the second quarter ended July 31, 2023.

Adjusted EBITDA was $128.3 million for the second quarter ended July 31, 2024, an increase of 46% compared to the second quarter ended July 31, 2023. Adjusted EBITDA was 43% of revenue, compared to 36% for the second quarter ended July 31, 2023.

Account and asset metrics

HSAs as of July 31, 2024 were 9.4 million, an increase of 15% year over year, including 711,000 HSAs with investments, an increase of 24% year over year. Total Accounts as of July 31, 2024 were 16.3 million, including 6.9 million other consumer-directed benefits ("CDBs").

Total HSA Assets as of July 31, 2024 were $29.5 billion, an increase of 27% year over year. Total HSA Assets included $16.4 billion of HSA cash and $13.1 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 $0.8 billion as of July 31, 2024.

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 $300 million of its common stock, as market conditions warrant. The common stock may be repurchased at prices that the Company deems appropriate and subject to market conditions, applicable law and other factors deemed relevant in the Company's sole discretion. Such repurchases may be effected through open market purchases, privately negotiated transactions or otherwise, including repurchase plans that satisfy the conditions of Rule 10b5-1 under the Securities Exchange Act of 1934. The stock repurchase program does not obligate the Company to repurchase any dollar amount or number of shares of common stock, and the program may be suspended or discontinued at any time.

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 $1.0 billion. The Company borrowed $511.9 million under this new facility to refinance all outstanding obligations under its prior credit agreement, including both the revolving credit facility and term loan facility thereunder. The revolving credit facility may be used in the future for working capital and general corporate purposes, including the financing of acquisitions and other investments.

Business outlook

For the fiscal year ending January 31, 2025, management expects revenue of $1.165 billion to $1.185 billion. Its outlook for net income is between $94 million and $109 million, resulting in net income of $1.05 to $1.22 per diluted share. Its outlook for non-GAAP net income, calculated using the method described below, is between $265 million and $280 million, resulting in non-GAAP net income per diluted share of $2.98 to $3.14 (based on an estimated 89 million diluted weighted-average shares outstanding). Management expects Adjusted EBITDA of $458 million to $478 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 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 $2,831 and $3,947 as of July 31, 2024 and January 31, 2024, respectively 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, $0.0001 par value, 100,000 shares authorized, no shares issued and outstanding as of July 31, 2024 and January 31, 2024, respectively   
Common stock, $0.0001 par value, 900,000 shares authorized, 87,324 and 86,127 shares issued and outstanding as of July 31, 2024 and January 31, 2024, respectively 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
HSAs9,383 8,164 15% 8,692
New HSAs from sales - Quarter-to-date187 156 20% 497
New HSAs from sales - Year-to-date382 290 32% 949
New HSAs from acquisitions - Year-to-date616  * 
HSAs with investments711 574 24% 610
CDBs6,898 6,831 1% 7,006
Total Accounts16,281 14,995 9% 15,698
Average Total Accounts - Quarter-to-date16,214 14,954 8% 15,318
Average Total Accounts - Year-to-date16,066 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$94 - 109 
Interest income(13) 
Interest expense60 
Income tax provision31 - 36 
Depreciation and amortization50 
Amortization of acquired intangible assets112 
Stock-based compensation expense99 
Merger integration expenses13 
Amortization of incremental costs to obtain a contract7 
Costs associated with unused office space4 
Other expense1 
Adjusted EBITDA$458 - 478 


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 25%. The Company may adjust its non-GAAP tax rate as additional information becomes available and in conjunction with any other significant events occurring that may materially affect this rate, such as merger and acquisition activity, changes in business outlook, or other changes in expectations regarding tax regulations.

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$94 - 109
Income tax provision31 - 36
Income before income taxes - GAAP125 - 145
Non-GAAP adjustments: 
Amortization of acquired intangible assets112
Stock-based compensation expense99
Merger integration expenses13
Costs associated with unused office space4
Total adjustments to income before income taxes - GAAP228
Income before income taxes - Non-GAAP353 - 373
Income tax provision - Non-GAAP (1)88 - 93
Non-GAAP net income$265 - 280
  
Diluted weighted-average shares89
GAAP net income per diluted share (2)$1.05 - 1.22
Non-GAAP net income per diluted share (2)$2.98 - 3.14

(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 occurring 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)   GAAP and Non-GAAP net income per diluted share may not calculate due to rounding.


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’ 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.
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 EBITDAEarnings 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 incomeCalculated 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 shareCalculated by dividing non-GAAP net income by diluted weighted-average shares outstanding.

FAQ

What was HealthEquity's revenue for Q2 FY25?

HealthEquity's revenue for Q2 FY25 was $299.9 million, a 23% increase compared to $243.5 million in Q2 FY24.

How much did HealthEquity's HSAs grow in Q2 FY25?

HealthEquity's HSAs grew by 15% year-over-year, reaching 9.4 million in Q2 FY25.

What is the size of HealthEquity's new stock repurchase program?

HealthEquity announced a $300 million stock repurchase program.

What is HealthEquity's revenue guidance for fiscal year 2025?

HealthEquity expects revenue between $1.165 billion and $1.185 billion for fiscal year 2025.

How much did HealthEquity's Total HSA Assets grow in Q2 FY25?

HealthEquity's Total HSA Assets grew by 27% year-over-year, reaching $29.5 billion in Q2 FY25.

HealthEquity, Inc

NASDAQ:HQY

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Health Information Services
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