HealthEquity (HQY) Q2 2025 earnings summary

Executive summary

• Revenue grew 23% year-over-year to $299.9 million for Q2 FY25, driven by strong HSA and account growth, with Adjusted EBITDA up 46% to $128.3 million and HSA assets up 27% to $29.5 billion.

• HSA members grew 15% year-over-year to 9.4 million, with total accounts reaching 16.3 million, a 9% increase year-over-year.

• BenefitWallet acquisition completed, adding up to 616,000 HSAs and $2.7 billion in assets, finalized in multiple tranches during the first half of 2024.

• Launched Health Payment Accounts (HPAs), a no-interest, no-fee option for flexible medical payments, and continued digital transformation with new mobile app, Claims AI rollout, and card processor migration.

• Announced a $300 million stock repurchase program and completed the transition of BenefitWallet HSAs.

Financial highlights

• Q2 revenue increased 23% year-over-year to $299.9 million; six-month revenue was $587.5 million, up 20%.

• Service revenue was $116.7 million (+4%), custodial revenue $138.7 million (+50%), and interchange revenue $44.5 million (+14%) for Q2.

• Net income for the quarter was $35.8 million (12% of revenue), up 239% year-over-year; non-GAAP net income was $76.3 million, up 67%.

• Adjusted EBITDA reached $128.3 million (43% of revenue), up 46% year-over-year; six-month Adjusted EBITDA was $245.7 million, up 41%.

• Diluted EPS for the quarter was $0.40 (GAAP) and $0.86 (non-GAAP), compared to $0.12 and $0.53 a year ago.

Outlook and guidance

• FY25 revenue expected between $1.165 billion and $1.185 billion.

• FY25 GAAP net income guidance: $94–$109 million ($1.05–$1.22 per share); non-GAAP net income: $265–$280 million ($2.98–$3.14 per share).

• Adjusted EBITDA forecasted at $458–$478 million; average HSA cash yield projected at 3.05%.

• Guidance includes BenefitWallet impacts, higher net interest expense, and $300 million share repurchase authorization.

• Expect higher expenses as the company invests in growth, compliance, and technology.