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HealthEquity Reports Third Quarter Ended October 31, 2024 Financial Results

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HealthEquity (HQY) reported strong Q3 FY25 results with revenue of $300.4 million, up 21% year-over-year. The company achieved net income of $5.7 million ($0.06 per diluted share) and non-GAAP net income of $69.4 million ($0.78 per diluted share). Key metrics showed significant growth with 9.5 million HSAs (up 15%), Total HSA Assets of $30.0 billion (up 33%), and 16.5 million Total Accounts (up 8%). The company repurchased 0.7 million shares for $60.0 million and raised its FY25 guidance, projecting revenue between $1.185-1.195 billion and Adjusted EBITDA of $470-480 million.

HealthEquity (HQY) ha riportato risultati solidi per il terzo trimestre dell'anno fiscale 2025 con un fatturato di 300,4 milioni di dollari, in aumento del 21% rispetto all'anno precedente. L'azienda ha raggiunto un reddito netto di 5,7 milioni di dollari (0,06 dollari per azione diluita) e un reddito netto non-GAAP di 69,4 milioni di dollari (0,78 dollari per azione diluita). Le metriche principali hanno mostrato una crescita significativa con 9,5 milioni di HSA (in aumento del 15%), risorse totali HSA di 30,0 miliardi di dollari (in aumento del 33%) e 16,5 milioni di conti totali (in aumento dell'8%). L'azienda ha riacquistato 0,7 milioni di azioni per 60,0 milioni di dollari e ha alzato le previsioni per l'anno fiscale 2025, prevedendo un fatturato compreso tra 1,185 e 1,195 miliardi di dollari e un EBITDA rettificato di 470-480 milioni di dollari.

HealthEquity (HQY) reportó resultados sólidos para el tercer trimestre del año fiscal 2025, con ingresos de 300,4 millones de dólares, un aumento del 21% interanual. La compañía logró un ingreso neto de 5,7 millones de dólares (0,06 dólares por acción diluida) y un ingreso neto no-GAAP de 69,4 millones de dólares (0,78 dólares por acción diluida). Las métricas clave mostraron un crecimiento significativo con 9,5 millones de HSA (un aumento del 15%), activos totales de HSA de 30,0 mil millones de dólares (un aumento del 33%) y 16,5 millones de cuentas totales (un aumento del 8%). La compañía recompró 0,7 millones de acciones por 60,0 millones de dólares y elevó su guía para el año fiscal 2025, proyectando ingresos entre 1,185 y 1,195 mil millones de dólares y un EBITDA ajustado de 470 a 480 millones de dólares.

HealthEquity (HQY)는 2025 회계연도 3분기 실적을 발표했으며, 수익이 3억 4백만 달러로, 전년 대비 21% 증가했습니다. 이 회사는 570만 달러의 순이익을 달성했으며 (희석 주당 0.06 달러) 비GAAP 순이익은 6940만 달러 (희석 주당 0.78 달러)입니다. 주요 지표에서 950만 개의 HSA (15% 증가), 총 HSA 자산이 300억 달러 (33% 증가), 1650만 개의 총계좌 (8% 증가)로 знач한 성장이 나타났습니다. 이 회사는 60억 달러에 70만 주를 재매입했으며, 2025 회계연도 전체 수익을 11억 8500만 달러에서 11억 9500만 달러로 조정하고 조정 후 EBITDA를 4억 7000만 달러에서 4억 8000만 달러로 예상했습니다.

HealthEquity (HQY) a déclaré des résultats solides pour le troisième trimestre de l'exercice 2025, avec des revenus de 300,4 millions de dollars, en hausse de 21 % par rapport à l'année précédente. L'entreprise a réalisé un bénéfice net de 5,7 millions de dollars (0,06 dollar par action diluée) et un bénéfice net non-GAAP de 69,4 millions de dollars (0,78 dollar par action diluée). Les indicateurs clés ont montré une croissance significative avec 9,5 millions de HSA (en hausse de 15 %), un actif total HSA de 30,0 milliards de dollars (en hausse de 33 %) et 16,5 millions de comptes totaux (en hausse de 8 %). L'entreprise a racheté 0,7 million d'actions pour 60,0 millions de dollars et a relevé ses prévisions pour l'exercice 2025, s'attendant à des revenus compris entre 1,185 et 1,195 milliard de dollars et un EBITDA ajusté de 470 à 480 millions de dollars.

HealthEquity (HQY) hat im dritten Quartal des Geschäftsjahres 2025 starke Ergebnisse mit Umsätzen von 300,4 Millionen Dollar erzielt, was einem Anstieg von 21 % im Vergleich zum Vorjahr entspricht. Das Unternehmen erzielte einen Nettogewinn von 5,7 Millionen Dollar (0,06 Dollar pro verwässerter Aktie) und einen Non-GAAP Nettogewinn von 69,4 Millionen Dollar (0,78 Dollar pro verwässerter Aktie). Wichtige Kennzahlen zeigten ein signifikantes Wachstum mit 9,5 Millionen HSAs (Steigerung um 15 %), Gesamt-HSA-Vermögen von 30,0 Milliarden Dollar (Steigerung um 33 %) und 16,5 Millionen Gesamtkonten (Steigerung um 8 %). Das Unternehmen hat 0,7 Millionen Aktien für 60,0 Millionen Dollar zurückgekauft und die Prognose für das Geschäftsjahr 2025 erhöht, mit einer Umsatzprognose zwischen 1,185 und 1,195 Milliarden Dollar und einem bereinigten EBITDA von 470-480 Millionen Dollar.

Positive
  • Revenue increased 21% YoY to $300.4 million
  • Non-GAAP net income grew 33% to $69.4 million
  • Adjusted EBITDA increased 24% to $118.2 million
  • HSA accounts grew 15% to 9.5 million
  • Total HSA Assets increased 33% to $30.0 billion
  • $60 million share repurchase completed
  • Raised FY25 guidance
Negative
  • Net income decreased from $14.7 million to $5.7 million YoY
  • Diluted EPS declined from $0.17 to $0.06 YoY

Insights

HealthEquity delivered a strong quarter with several positive metrics, though mixed on profitability. Revenue grew 21% to $300.4 million, while HSA accounts increased 15% to 9.5 million and total HSA assets jumped 33% to $30 billion. The custodial revenue stream showed particular strength at $141 million.

However, GAAP net income declined to $5.7 million from $14.7 million year-over-year, though non-GAAP metrics were more favorable with adjusted EBITDA up 24% to $118.2 million. The company's 39% EBITDA margin demonstrates strong operational efficiency. The $60 million share repurchase shows confidence in the business model.

The raised FY2025 guidance and initial FY2026 outlook suggesting continued double-digit growth are encouraging signs. The projected 3.4-3.5% yield on HSA cash indicates stable revenue streams ahead.

The HSA market continues to demonstrate robust growth potential, with HealthEquity maintaining its leadership position. The 21% growth in HSA accounts with investments is particularly noteworthy, as these accounts typically generate higher revenue and show stronger customer retention. The diversification across service ($119.2 million), custodial ($141.0 million) and interchange ($40.3 million) revenue streams provides stability.

The increase in total HSA assets to $30.0 billion represents significant market penetration and growing consumer adoption of HSAs. The balanced split between HSA cash ($16.4 billion) and investments ($13.6 billion) suggests maturing account usage patterns. The company's ability to generate $264 million in operating cash flow year-to-date demonstrates the scalability of its business model.

Highlights of the third quarter include:

  • Revenue of $300.4 million, an increase of 21% compared to $249.2 million in Q3 FY24.
  • Net income of $5.7 million, compared to $14.7 million in Q3 FY24, with non-GAAP net income of $69.4 million, an increase of 33% compared to $52.2 million in Q3 FY24.
  • Net income per diluted share of $0.06, compared to $0.17 in Q3 FY24, with non-GAAP net income per diluted share of $0.78, compared to $0.60 in Q3 FY24.
  • Adjusted EBITDA of $118.2 million, an increase of 24% compared to $95.6 million in Q3 FY24.
  • 9.5 million HSAs, an increase of 15% compared to Q3 FY24.
  • Total HSA Assets of $30.0 billion, an increase of 33% compared to Q3 FY24.
  • 16.5 million Total Accounts, including both HSAs and complementary CDBs, an increase of 8% compared to Q3 FY24.
  • The Company repurchased 0.7 million shares of its common stock for $60.0 million.

DRAPER, Utah, Dec. 09, 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 third quarter ended October 31, 2024.

"Strong third quarter results delivered by Team Purple helped drive HSAs to 9.5 million, HSA Assets to $30 billion, Total Accounts to 16.5 million and quarterly revenue to over $300 million, all quarterly records," said Jon Kessler, President and CEO of HealthEquity. "Year to date, we have generated $264 million of cash from operations. This momentum has enabled us to return $60 million of capital to our shareholders via share repurchases, accelerate platform investments, raise our fiscal 2025 guidance, and provide a healthy initial outlook for fiscal year 2026."

Third quarter financial results

Revenue for the third quarter ended October 31, 2024 was $300.4 million, an increase of 21% compared to $249.2 million for the third quarter ended October 31, 2023. Revenue this quarter included: service revenue of $119.2 million, custodial revenue of $141.0 million, and interchange revenue of $40.3 million.

HealthEquity reported net income of $5.7 million, or $0.06 per diluted share, and non-GAAP net income of $69.4 million, or $0.78 per diluted share, for the third quarter ended October 31, 2024. The Company reported net income of $14.7 million, or $0.17 per diluted share, and non-GAAP net income of $52.2 million, or $0.60 per diluted share, for the third quarter ended October 31, 2023.

Adjusted EBITDA was $118.2 million for the third quarter ended October 31, 2024, an increase of 24% compared to the third quarter ended October 31, 2023. Adjusted EBITDA was 39% of revenue, compared to 38% for the third quarter ended October 31, 2023.

Account and asset metrics

HSAs as of October 31, 2024 were 9.5 million, an increase of 15% year over year, including 717,000 HSAs with investments, an increase of 21% year over year. Total Accounts as of October 31, 2024 were 16.5 million, including 7.0 million other consumer-directed benefits ("CDBs").

Total HSA Assets as of October 31, 2024 were $30.0 billion, an increase of 33% year over year. Total HSA Assets included $16.4 billion of HSA cash and $13.6 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 $0.7 billion as of October 31, 2024.

Stock repurchase program

The Company repurchased 0.7 million shares of its common stock for $60.0 million during the third quarter ended October 31, 2024. As of October 31, 2024, $240.0 million of common stock remained authorized for repurchase under the Company's stock repurchase program.

Business outlook

For the fiscal year ending January 31, 2025, management expects revenue of $1.185 billion to $1.195 billion. Its outlook for net income is between $88 million and $96 million, resulting in net income of $0.99 to $1.08 per diluted share. Its outlook for non-GAAP net income, calculated using the method described below, is between $274 million and $281 million, resulting in non-GAAP net income per diluted share of $3.08 to $3.16 (based on an estimated 89 million diluted weighted-average shares outstanding). Management expects Adjusted EBITDA of $470 million to $480 million.

For the fiscal year ending January 31, 2026, management expects revenue of approximately $1.275 billion to $1.295 billion and Adjusted EBITDA of approximately 41.5% to 42.5% of revenue. These amounts assume an average annualized yield on HSA cash of approximately 3.4% to 3.5%.

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 (other than with respect to our Adjusted EBITDA outlook for the fiscal year ending January 31, 2026) to the most comparable GAAP financial measures is included with the financial tables at the end of this release. A reconciliation of our Adjusted EBITDA outlook for the fiscal year ending January 31, 2026 to net income, its most directly comparable GAAP measure, is not included, because our net income outlook for this future period is not available without unreasonable efforts as we are unable to predict certain significant items excluded from this non-GAAP measure, such as stock-based compensation expense and income tax provision.

Conference call

HealthEquity management will host a conference call at 4:30 pm (Eastern Time) on Monday, December 9, 2024 to discuss the fiscal 2025 third 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;
  • risks relating to our upcoming CEO transition;
  • 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
  • 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)
 October 31, 2024
   January 31, 2024
 
  (unaudited)     
Assets
       
Current assets       
Cash and cash equivalents$        322,163  $        403,979 
Accounts receivable, net of allowance for doubtful accounts of $2,516 and $3,947 as of October 31, 2024 and January 31, 2024, respectively         106,712           104,893 
Other current assets         66,371           48,564 
Total current assets         495,246           557,436 
Property and equipment, net         3,890           6,013 
Operating lease right-of-use assets         44,845           48,380 
Intangible assets, net         1,228,476           835,948 
Goodwill         1,648,145           1,648,145 
Other assets         67,745           67,868 
Total assets$        3,488,347  $        3,163,790 
Liabilities and stockholders’ equity   
Current liabilities   
Accounts payable$        10,352  $        12,041 
Accrued compensation         47,514           49,608 
Accrued liabilities         86,725           46,038 
Operating lease liabilities         9,948           9,404 
Total current liabilities         154,539           117,091 
Long-term liabilities   
Long-term debt, net of issuance costs         1,081,039           874,972 
Operating lease liabilities, non-current         44,202           48,766 
Other long-term liabilities         25,275           19,270 
Deferred tax liability         58,605           68,670 
Total long-term liabilities         1,209,121           1,011,678 
Total liabilities         1,363,660           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 October 31, 2024 and January 31, 2024, respectively         —           — 
Common stock, $0.0001 par value, 900,000 shares authorized, 86,823 and 86,127 shares issued and outstanding as of October 31, 2024 and January 31, 2024, respectively         9           9 
Additional paid-in capital         1,893,088           1,829,384 
Accumulated earnings         231,590           205,628 
Total stockholders’ equity         2,124,687           2,035,021 
Total liabilities and stockholders’ equity$        3,488,347  $        3,163,790 


HealthEquity, Inc. and subsidiaries

Condensed consolidated statements of operations and comprehensive income (unaudited)

 Three months ended October 31,  Nine months ended October 31, 
(in thousands, except per share data) 2024   2023   2024   2023 
Revenue       
Service revenue$        119,174  $        114,082  $        354,108  $        337,115 
Custodial revenue         140,953           100,005           401,281           281,161 
Interchange revenue         40,305           35,132           132,568           118,924 
Total revenue         300,432           249,219           887,957           737,200 
Cost of revenue       
Service costs         86,860           75,721           246,122           233,498 
Custodial costs         10,241           8,029           29,406           24,104 
Interchange costs         6,305           6,287           24,213           20,281 
Total cost of revenue         103,406           90,037           299,741           277,883 
Gross profit         197,026           159,182           588,216           459,317 
Operating expenses       
Sales and marketing         22,636           19,656           67,655           58,714 
Technology and development         60,189           55,614           174,859           163,573 
General and administrative         31,789           27,153           102,285           80,516 
Amortization of acquired intangible assets         28,350           23,213           84,876           69,545 
Merger integration         34,437           2,655           38,357           8,157 
Total operating expenses         177,401           128,291           468,032           380,505 
Income from operations         19,625           30,891           120,184           78,812 
Other expense       
Interest expense         (18,155)          (13,545)          (45,377)          (41,814)
Other income, net         4,748           3,741           11,266           8,325 
Total other expense         (13,407)          (9,804)          (34,111)          (33,489)
Income before income taxes         6,218           21,087           86,073           45,323 
Income tax provision         515           6,414           15,735           15,975 
Net income and comprehensive income$        5,703  $        14,673  $        70,338  $        29,348 
Net income per share:       
Basic$        0.07  $        0.17  $        0.81  $        0.34 
Diluted$        0.06  $        0.17  $        0.79  $        0.34 
Weighted-average number of shares used in computing net income per share:       
Basic         87,193           85,697           86,935           85,424 
Diluted         88,634           87,122           88,699           86,707 


HealthEquity, Inc. and subsidiaries

Condensed consolidated statements of cash flows (unaudited)

 Nine months ended October 31, 
(in thousands) 2024   2023 
Cash flows from operating activities:   
Net income$        70,338  $        29,348 
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization         123,269           115,167 
Stock-based compensation         74,717           59,939 
Amortization of debt discount and issuance costs         1,805           2,150 
Loss on extinguishment of debt         1,576           1,157 
Deferred taxes         (10,065)          (15,928)
Changes in operating assets and liabilities:   
Accounts receivable, net         (1,819)          654 
Other assets         (11,672)          (12,820)
Operating lease right-of-use assets         5,004           8,241 
Accrued compensation         (3,161)          (14,829)
Accounts payable, accrued liabilities, and other current liabilities         24,757           (2,363)
Operating lease liabilities, non-current         (5,796)          (9,966)
Other long-term liabilities         (4,845)          5,003 
Net cash provided by operating activities         264,108           165,753 
Cash flows from investing activities:   
Purchases of software and capitalized software development costs         (37,900)          (30,413)
Purchases of property and equipment         (1,756)          (1,134)
Acquisitions of HSA portfolios         (452,241)          (3,257)
Net cash used in investing activities         (491,897)          (34,804)
Cash flows from financing activities:   
Proceeds from long-term debt         736,875           — 
Principal payments on long-term debt         (536,875)          (54,375)
Payment of debt issuance costs         (3,748)          — 
Repurchases of common stock         (58,513)          — 
Settlement of client-held funds obligation, net         3,188           (183)
Proceeds from exercise of common stock options         5,046           3,404 
Net cash provided by (used in) financing activities         145,973           (51,154)
Increase (decrease) in cash and cash equivalents         (81,816)          79,795 
Beginning cash and cash equivalents         403,979           254,266 
Ending cash and cash equivalents$        322,163  $        334,061 


HealthEquity, Inc. and subsidiaries

Condensed consolidated statements of cash flows (unaudited) (continued)

 Nine months ended October 31, 
(in thousands) 2024   2023 
Supplemental cash flow data:   
Interest expense paid in cash$        50,203  $        44,194 
Income tax payments, net         23,817           24,777 
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         4,754           2,882 
Purchases of property and equipment included in accounts payable or accrued liabilities         106           98 
Repurchases of common stock included in accrued liabilities         1,500           — 
Non-cash purchase consideration related to acquisitions of HSA portfolios         20,325           — 
Exercise of common stock options receivable         7           19 


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 October 31,  Nine months ended October 31, 
(in thousands) 2024   2023   2024   2023 
Cost of revenue$        3,751  $        4,343  $        11,210  $        12,342 
Sales and marketing         3,700           3,506           11,873           9,763 
Technology and development         6,353           5,923           18,747           15,098 
General and administrative         7,319           7,890           32,887           22,736 
Total stock-based compensation expense$        21,123  $        21,662  $        74,717  $        59,939 


Total Accounts (unaudited)

(in thousands, except percentages)October 31, 2024
  October 31, 2023
  % Change
   January 31, 2024
 
HSAs        9,508          8,295          15 %         8,692 
New HSAs from sales - Quarter-to-date        186          163          14 %         497 
New HSAs from sales - Year-to-date        568          453          25 %         949 
New HSAs from acquisitions - Year-to-date        616          —  *         — 
HSAs with investments        717          592          21 %         610 
CDBs        6,955          6,984          0 %         7,006 
Total Accounts        16,463          15,279          8 %         15,698 
Average Total Accounts - Quarter-to-date        16,400          15,167          8 %         15,318 
Average Total Accounts - Year-to-date        16,177          15,034          8 %         15,105 

*  Not meaningful


HSA Assets (unaudited)

(in millions, except percentages)
October 31, 2024
  October 31, 2023
  % Change
   January 31, 2024
 
HSA cash$        16,386  $        13,971         17 % $        15,006 
HSA investments         13,601           8,597          58 %          10,208 
Total HSA Assets         29,987           22,568          33 %          25,214 
Average daily HSA cash - Quarter-to-date         16,441           13,977          18 %          14,210 
Average daily HSA cash - Year-to-date         16,064           14,024          15 %          14,071 


Client-held funds (unaudited)

(in millions, except percentages)
October 31, 2024
  October 31, 2023
  % Change
   January 31, 2024
 
Client-held funds$        748  $        761          (2)% $        842 
Average daily Client-held funds - Quarter-to-date         770           794          (3)%          791 
Average daily Client-held funds - Year-to-date         823           862          (5)%          845 


Reconciliation of net income to Adjusted EBITDA (unaudited)

 Three months ended October 31,  Nine months ended October 31, 
(in thousands) 2024   2023   2024   2023 
Net income$        5,703  $        14,673  $        70,338  $        29,348 
Interest income         (3,897)          (3,713)          (10,881)          (7,795)
Interest expense         18,155           13,545           45,377           41,814 
Income tax provision         515           6,414           15,735           15,975 
Depreciation and amortization         12,371           14,567           38,393           45,622 
Amortization of acquired intangible assets         28,350           23,213           84,876           69,545 
Stock-based compensation expense         21,123           21,662           74,717           59,939 
Merger integration expenses         34,437           2,655           38,357           8,157 
Amortization of incremental costs to obtain a contract         1,702           1,379           5,015           4,033 
Costs associated with unused office space         812           950           2,408           3,252 
Other         (1,026)          301           (368)          454 
Adjusted EBITDA$        118,245  $        95,646  $        363,967  $        270,344 


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

 Outlook for the year ending 
(in millions)January 31, 2025 
Net income$88 - 96 
Interest income(13)
Interest expense60 
Income tax provision22 - 24 
Depreciation and amortization51 
Amortization of acquired intangible assets112 
Stock-based compensation expense98 
Merger integration expenses42 
Amortization of incremental costs to obtain a contract7 
Costs associated with unused office space3 
Other expense0 
Adjusted EBITDA$470 - 480 


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

 Three months ended October 31,  Nine months ended October 31, 
(in thousands, except per share data) 2024   2023   2024   2023 
Net income$        5,703  $        14,673  $        70,338  $        29,348 
Income tax provision         515           6,414           15,735           15,975 
Income before income taxes - GAAP         6,218           21,087           86,073           45,323 
Non-GAAP adjustments:       
Amortization of acquired intangible assets         28,350           23,213           84,876           69,545 
Stock-based compensation expense         21,123           21,662           74,717           59,939 
Merger integration expenses         34,437           2,655           38,357           8,157 
Costs associated with unused office space         812           950           2,408           3,252 
Loss on extinguishment of debt         1,576           —           1,576           1,157 
Total adjustments to income before income taxes - GAAP         86,298           48,480           201,934           142,050 
Income before income taxes - Non-GAAP         92,516           69,567           288,007           187,373 
Income tax provision - Non-GAAP (1)         23,129           17,391           72,002           46,843 
Non-GAAP net income         69,387           52,176           216,005           140,530 
        
Diluted weighted-average shares         88,634           87,122           88,699           86,707 
GAAP net income per diluted share$        0.06  $        0.17  $        0.79  $        0.34 
Non-GAAP net income per diluted share$        0.78  $        0.60  $        2.44  $        1.62 


(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$88 - 96 
Income tax provision22 - 24 
Income before income taxes - GAAP110 - 120 
Non-GAAP adjustments:  
Amortization of acquired intangible assets112 
Stock-based compensation expense98 
Merger integration expenses42 
Costs associated with unused office space3 
Total adjustments to income before income taxes - GAAP255 
Income before income taxes - Non-GAAP365 - 375 
Income tax provision - Non-GAAP (1)91 - 94 
Non-GAAP net income$274 - 281 
   
Diluted weighted-average shares89 
GAAP net income per diluted share (2)$0.99 - 1.08 
Non-GAAP net income per diluted share (2)$3.08 - 3.16 


(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

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

What was HealthEquity's (HQY) revenue growth in Q3 2024?

HealthEquity's revenue grew 21% year-over-year to $300.4 million in Q3 2024, compared to $249.2 million in Q3 2023.

How many HSA accounts does HealthEquity (HQY) manage as of Q3 2024?

HealthEquity managed 9.5 million HSA accounts as of Q3 2024, representing a 15% increase year-over-year.

What is HealthEquity's (HQY) total HSA asset value in Q3 2024?

HealthEquity's total HSA assets reached $30.0 billion in Q3 2024, showing a 33% increase compared to Q3 2023.

How much did HealthEquity (HQY) spend on share repurchases in Q3 2024?

HealthEquity repurchased 0.7 million shares of its common stock for $60.0 million during Q3 2024.

HealthEquity, Inc

NASDAQ:HQY

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8.29B
84.92M
2.06%
103.65%
4.89%
Health Information Services
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