HealthEquity (HQY) investor relations material

Executive summary

• Net income rose 29% year-over-year to $69.4 million, with Adjusted EBITDA up 17% to $164.5 million and margin expanding to 46% from 42% last year.

• Revenue grew 7% year-over-year to $354.6 million, driven by increases in service, custodial, and interchange revenue.

• Total HSA assets climbed 19% to $37.1 billion, with 172,000 new HSAs added and HSA accounts up 8% to 10.6 million.

• Accelerated digital engagement, with mobile monthly active usage up 90% year-over-year and two-thirds of Marketplace transactions via mobile app.

• AI and automation drove significant operational efficiencies, reducing manual service efforts and fraud costs by nearly 90% year-over-year.

Financial highlights

• Service revenue was $122.9 million (up 3%), custodial revenue $174.3 million (up 11%), and interchange revenue $57.4 million (up 5%).

• Gross profit hit a record $256.3 million (72% of revenue, up from 68% last year).

• GAAP net income was $69.4 million ($0.82/diluted share); non-GAAP net income $105.1 million ($1.24/diluted share).

• Operating cash flow was $97.5 million, up from $64.7 million year-over-year; quarter-end cash balance $265.4 million.

• $123 million returned to shareholders via stock repurchases during the quarter; board increased repurchase authorization by $1 billion.

Outlook and guidance

• Fiscal 2027 revenue expected between $1.41 billion and $1.42 billion.

• GAAP net income forecasted at $242–$248 million ($2.88–$2.95/share); non-GAAP net income $392–$398 million ($4.66–$4.73/share).

• Adjusted EBITDA guidance raised to $625–$633 million.

• Average yield on HSA cash projected at ~3.85% for FY27, with forward treasury contracts reducing yield volatility.

• Guidance includes expanded share repurchase and potential debt reduction.