HealthEquity (HQY) investor relations material

Executive summary

• Achieved Q2 revenue of $325.8 million, up 9% year-over-year, with net income up 67% to $59.9 million and adjusted EBITDA up 18% to $151.1 million, representing a record gross margin of 71% and adjusted EBITDA margin of 46%.

• Total accounts grew 5% to 17.1 million, with HSA accounts up 6% to 10.0 million and HSA assets increasing 12% to $33.1 billion.

• Significant HSA eligibility expansion expected to add 3–4 million more eligible families due to new legislation.

• Continued investment in AI, technology modernization, and cloud-based platforms, enhancing security and operational efficiency.

Financial highlights

• Service revenue was $117.9 million, custodial revenue $159.9 million, and interchange revenue $48.1 million for Q2 FY26.

• Gross profit reached $232.6 million (71% of revenue), up from $204.1 million and 68% last year.

• Net income per diluted share was $0.68, up from $0.40 in the prior year; non-GAAP EPS was $1.08.

• Adjusted EBITDA margin increased to 46% from 43% year-over-year.

• Cash and cash equivalents stood at $304.5 million at quarter-end.

Outlook and guidance

• FY26 revenue expected between $1.29 billion and $1.31 billion; net income projected at $185–$200 million ($2.11–$2.28 per share); non-GAAP net income $329–$344 million ($3.74–$3.91 per share).

• Adjusted EBITDA guidance: $540–$560 million.

• Guidance includes further share repurchases and potential debt reductions.

• Expecting normalized fraud costs at one basis point of total HSA assets per annum by year-end.

• Service costs projected to decrease due to technology investments, while custodial costs may rise with higher HSA balances.