HealthEquity Reports Fiscal Year and Fourth Quarter Ended January 31, 2025 Financial Results

Highlights of the fiscal year include:

• Revenue of $1.20 billion, an increase of 20% compared to $999.6 million in FY24.
• Net income of $96.7 million, an increase of 74% compared to $55.7 million in FY24, with non-GAAP net income of $277.3 million, an increase of 42% compared to $195.5 million in FY24.
• Net income per diluted share of $1.09, an increase of 70% compared to $0.64 in FY24, with non-GAAP net income per diluted share of $3.12, an increase of 39% compared to $2.25 in FY24.
• Adjusted EBITDA of $471.8 million, an increase of 28% compared to $369.2 million in FY24.
• 9.9 million HSAs, an increase of 14% compared to FY24.
• Total HSA Assets of $32.1 billion, an increase of 27% compared to FY24.
• 17.0 million Total Accounts, including both HSAs and complementary CDBs, an increase of 9% compared to FY24.
• The Company completed its acquisition of the BenefitWallet HSA portfolio.
• The Company repurchased 1.4 million shares of its common stock for $122.2 million.

Highlights of the fourth quarter include:

• Revenue of $311.8 million, an increase of 19% compared to $262.4 million in Q4 FY24.
• Net income of $26.4 million, the same as in Q4 FY24, with non-GAAP net income of $61.3 million, compared to $55.0 million in Q4 FY24.
• Net income per diluted share of $0.30, the same as in Q4 FY24, with non-GAAP net income per diluted share of $0.69, compared to $0.63 in Q4 FY24.
• Adjusted EBITDA of $107.8 million, an increase of 9% compared to $98.8 million in Q4 FY24.

DRAPER, Utah, March 18, 2025 (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 fourth quarter and fiscal year ended January 31, 2025.

“Team Purple finished fiscal ‘25 in strong fashion, with record revenues and major strides in advancing our strategic initiatives, allowing us to provide our outlook for an even stronger fiscal ‘26,” said Scott Cutler, President and Chief Executive Officer of HealthEquity. “With a focus on Member First Secure Mobile Experiences, we are executing against our 3Ds strategy to Deepen partnerships, Deliver remarkable experiences, and Drive member outcomes for our Clients, Network Partners, and members. We added a record one million new HSAs from sales this year and helped our nearly 10 million HSA members grow their HSA balances to over $32 billion.”

Fiscal year financial results

Revenue for the fiscal year ended January 31, 2025 was $1.20 billion, an increase of 20% compared to $999.6 million for the fiscal year ended January 31, 2024. Revenue this year included: service revenue of $478.3 million, custodial revenue of $545.4 million, and interchange revenue of $176.0 million.

HealthEquity reported net income of $96.7 million, or $1.09 per diluted share, and non-GAAP net income of $277.3 million, or $3.12 per diluted share, for the fiscal year ended January 31, 2025. The Company reported net income of $55.7 million, or $0.64 per diluted share, and non-GAAP net income of $195.5 million, or $2.25 per diluted share, for the fiscal year ended January 31, 2024.

Adjusted EBITDA was $471.8 million for the fiscal year ended January 31, 2025, an increase of 28% compared to $369.2 million for the fiscal year ended January 31, 2024. Adjusted EBITDA was 39% of revenue, compared to 37% for the fiscal year ended January 31, 2024.

As of January 31, 2025, HealthEquity had $295.9 million of cash and cash equivalents and $1.06 billion of outstanding debt, net of issuance costs. This compares to $404.0 million in cash and cash equivalents and $875.0 million of outstanding debt as of January 31, 2024.

Fourth quarter financial results

Revenue for the fourth quarter ended January 31, 2025 was $311.8 million, an increase of 19% compared to $262.4 million for the fourth quarter ended January 31, 2024. Revenue this quarter included: service revenue of $124.2 million, custodial revenue of $144.1 million, and interchange revenue of $43.5 million.

HealthEquity reported net income of $26.4 million, or $0.30 per diluted share, and non-GAAP net income of $61.3 million, or $0.69 per diluted share, for the fourth quarter ended January 31, 2025. The Company reported net income of $26.4 million, or $0.30 per diluted share, and non-GAAP net income of $55.0 million, or $0.63 per diluted share, for the fourth quarter ended January 31, 2024.

Adjusted EBITDA was $107.8 million for the fourth quarter ended January 31, 2025, an increase of 9% compared to $98.8 million for the fourth quarter ended January 31, 2024. Adjusted EBITDA was 35% of revenue, compared to 38% for the fourth quarter ended January 31, 2024.

Account and asset metrics

HSAs as of January 31, 2025 were 9.9 million, an increase of 14% year over year, including 753,000 HSAs with investments, an increase of 23% year over year. Total Accounts as of January 31, 2025 were 17.0 million, including 7.1 million other consumer-directed benefits (“CDBs”).

Total HSA Assets as of January 31, 2025 were $32.1 billion, an increase of 27% year over year. Total HSA Assets included $17.4 billion of HSA cash and $14.7 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 $0.9 billion as of January 31, 2025.

BenefitWallet HSA portfolio acquisition

In the first half of fiscal 2025, we acquired the BenefitWallet HSA portfolio, comprised of approximately 616,000 HSAs plus other accounts and $2.7 billion of HSA Assets, from Conduent Business Services, LLC for a purchase price of $425.0 million. We paid the purchase price using $225.0 million of borrowings under our revolving credit facility, with the remainder paid using cash on hand.

Stock repurchase program

The Company repurchased 1.4 million shares of its common stock for $122.2 million during the fiscal year ended January 31, 2025. As of January 31, 2025, $177.8 million of common stock remained authorized for repurchase under the Company’s stock repurchase program.

Business outlook

For the fiscal year ending January 31, 2026, management expects revenues of $1.280 billion to $1.305 billion. Its outlook for net income is between $164 million and $179 million, resulting in net income of $1.85 to $2.01 per diluted share. Its outlook for non-GAAP net income, calculated using the method described below, is between $318 million and $333 million, resulting in non-GAAP net income per diluted share of $3.57 to $3.74 (based on an estimated 89 million weighted-average shares outstanding). Management expects Adjusted EBITDA of $525 million to $545 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, March 18, 2025 to discuss the fiscal 2025 fourth quarter and year-end results. The conference call will be accessible by dialing 1-844-481-2556, or 1-412-317-0560 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 other consumer-directed benefits for more than 17 million accounts in partnership with employers, benefits advisors, and health and retirement plan providers who share our vision of saving and improving the lives of healthcare consumers. For more information, visit 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 recent CEO transition;
• the impact of increased fraudulent account activity involving our member accounts or our third-party service providers on our reputation and financial results;
• 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;
• potential regulatory changes and changes in the enforcement environment under the new U.S. administration;
• 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, 2025. 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
[email protected]

HealthEquity, Inc. and subsidiaries
Consolidated balance sheets (unaudited)

HealthEquity, Inc. and subsidiaries
Consolidated statements of operations and comprehensive income (unaudited)

HealthEquity, Inc. and subsidiaries
Consolidated statements of cash flows (unaudited)

HealthEquity, Inc. and subsidiaries
Consolidated statements of cash flows (unaudited) (continued)

Stock-based compensation expense (unaudited)

Total stock-based compensation expense included in the consolidated statements of operations and comprehensive income is as follows:

Total Accounts (unaudited)

HSA assets (unaudited)

The following table summarizes the amount of HSA cash held by our Depository Partners and insurance company partners that is expected to reprice by fiscal year and the respective average annualized yield currently earned on that HSA cash as of January 31, 2025:

Client-held funds (unaudited)

Net income reconciliation to Adjusted EBITDA (unaudited)

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

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

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

Certain terms