HealthEquity® JP Morgan Conference Investor presentation January 2022 Copyright © 2022 HealthEquity, Inc. All rights reserved. HealthEquity does not provide legal, tax or financial advice. Safe harbor This presentation contains "forward-looking" statements that are based on our management's beliefs and assumptions and on information currently available to management. These forward-looking statements include, without limitation, statements regarding our industry, business strategy, plans, goals and expectati ...

Company Overview - HealthEquity has 13.3 million total accounts[7], 6.2 million HSA members[7], and $16.4 billion in HSA assets[7] - The company serves approximately 100,000 employer clients[7] - HealthEquity has established a network of 174 partners and 15,000 integrations[7] Growth Strategies - The company aims to win new network partners and clients, leveraging advisors, brokers, and health plan partners[9] - HealthEquity intends to increase cross-sell uptake by offering multiple account types, including HSA, FSA, HRA, Commuter, and COBRA[12] - The company focuses on data-driven, personalized engagement to increase HSA uptake, noting that only 21% of those with commercial health insurance have HSA-qualified plans[13] - M&A initiatives are part of the growth strategy, focusing on custodial consolidation and additional solutions[20] Financial Performance - HealthEquity's 5-year revenue CAGR is 42%[23], and the 5-year Adjusted EBITDA CAGR is 43%[23] - Q3FY22 HSA assets reached $16.428 billion[24], a $4.0 billion net increase year-over-year, representing 32% total growth[25] - The company's revenue for Q3FY22 was $180.0 million[25], with 0% growth year-over-year[25]

[Part I. FINANCIAL INFORMATION](index=3&type=section&id=Part%20I.%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20statements) The company reported a net loss of $5.0 million for Q3 FY2022 and $11.5 million for the nine months ended October 31, 2021, with total assets increasing to $3.1 billion [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20consolidated%20balance%20sheets) Balance Sheet Highlights (as of October 31, 2021 vs. January 31, 2021) | (in thousands) | October 31, 2021 (unaudited) | January 31, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$3,099,614** | **$2,710,407** | | Cash and cash equivalents | $649,129 | $328,803 | | Goodwill | $1,363,549 | $1,327,193 | | Intangible assets, net | $820,946 | $767,003 | | **Total Liabilities** | **$1,227,764** | **$1,331,679** | | Long-term debt, net | $923,501 | $924,217 | | **Total Stockholders' Equity** | **$1,871,850** | **$1,378,728** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20consolidated%20statements%20of%20operations%20and%20comprehensive%20income%20%28loss%29) Statement of Operations Summary (unaudited) | (in thousands, except per share data) | Three months ended Oct 31, 2021 | Three months ended Oct 31, 2020 | Nine months ended Oct 31, 2021 | Nine months ended Oct 31, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Total revenue** | **$179,954** | **$179,351** | **$553,259** | **$545,401** | | Gross profit | $103,320 | $104,558 | $318,407 | $314,416 | | Income (loss) from operations | $(366) | $11,502 | $3,012 | $35,601 | | **Net income (loss)** | **$(5,038)** | **$1,789** | **$(11,471)** | **$3,467** | | **Diluted EPS** | **$(0.06)** | **$0.02** | **$(0.14)** | **$0.05** | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20consolidated%20statements%20of%20cash%20flows) Cash Flow Summary (Nine months ended October 31, unaudited) | (in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $90,438 | $120,717 | | Net cash used in investing activities | $(167,946) | $(76,730) | | Net cash provided by financing activities | $397,834 | $63,643 | | **Increase in cash and cash equivalents** | **$320,326** | **$107,630** | - Cash used in investing activities increased significantly, driven by acquisitions of Luum (**$49.5M**), intangible member assets (**$64.5M**), and software development (**$49.0M**)[11](index=11&type=chunk)[199](index=199&type=chunk) - Financing activities provided a large cash inflow due to net proceeds from a follow-on equity offering (**$456.6M**) and issuance of long-term debt (**$950.0M**), which were used to repay prior debt (**$1.0B**)[11](index=11&type=chunk)[201](index=201&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20condensed%20consolidated%20financial%20statements) - In Q1 FY2022, the company completed a follow-on public offering of **5.75 million shares**, raising net proceeds of **$456.6 million**[19](index=19&type=chunk) - On March 8, 2021, the company acquired Luum for **$50.2 million** in cash plus contingent consideration, adding **$36.4 million** in goodwill[25](index=25&type=chunk)[27](index=27&type=chunk) - On September 29, 2021, the company acquired the Fifth Third Bank HSA portfolio for **$60.8 million**, adding approximately **160,000 HSAs** and **$491.0 million** of HSA Assets[39](index=39&type=chunk) - On October 8, 2021, the company refinanced its debt, issuing **$600.0 million** of **4.50% Senior Notes** due 2029 and entering a new credit agreement for a **$350.0 million** term loan and a **$1.0 billion** revolving credit facility[56](index=56&type=chunk)[62](index=62&type=chunk)[71](index=71&type=chunk) - Subsequent to the quarter end, on November 1, 2021, the company closed the acquisition of Further for **$455 million**, and on December 6, 2021, it entered an agreement to acquire HealthSavings' HSA portfolio for **$60 million**[84](index=84&type=chunk)[85](index=85&type=chunk) [Management's Discussion and Analysis (MD&A)](index=20&type=section&id=Item%202.%20Management%27s%20discussion%20and%20analysis%20of%20financial%20condition%20and%20results%20of%20operations) Management reported flat Q3 FY2022 revenue at $180.0 million, with operating income declining to a $0.4 million loss due to increased expenses, while continuing its active acquisition and integration strategy [Overview & Recent Acquisitions](index=20&type=section&id=Overview%20%26%20Recent%20Acquisitions) - As of October 31, 2021, the company administered **6.2 million HSAs** with **$16.4 billion** in assets and **7.1 million complementary CDBs**, for a total of **13.3 million accounts**[89](index=89&type=chunk) - The company is continuing a multi-year integration of the WageWorks acquisition, expecting to achieve approximately **$80 million** in annualized net synergies by the end of fiscal 2022, with **$75 million** already achieved[97](index=97&type=chunk) - The company has been highly active in acquisitions, including Luum (March 2021), the Fifth Third Bank HSA portfolio (September 2021), Further (closed November 2021), and the pending HealthSavings HSA portfolio transition[98](index=98&type=chunk)[99](index=99&type=chunk)[101](index=101&type=chunk) [Key Financial and Operating Metrics](index=25&type=section&id=Key%20financial%20and%20operating%20metrics) Key Operating Metrics (as of October 31, 2021) | (in thousands, except percentages) | October 31, 2021 | October 31, 2020 | % Change | | :--- | :--- | :--- | :--- | | HSAs | 6,241 | 5,460 | 14% | | CDBs | 7,085 | 7,060 | 0% | | **Total Accounts** | **13,326** | **12,520** | **6%** | HSA Assets (as of October 31, 2021) | (in millions, except percentages) | October 31, 2021 | October 31, 2020 | % Change | | :--- | :--- | :--- | :--- | | Total HSA cash | $10,469 | $9,017 | 16% | | Total HSA investments | $5,959 | $3,423 | 74% | | **Total HSA Assets** | **$16,428** | **$12,440** | **32%** | Adjusted EBITDA Reconciliation (unaudited) | (in thousands) | Three months ended Oct 31, 2021 | Three months ended Oct 31, 2020 | Nine months ended Oct 31, 2021 | Nine months ended Oct 31, 2020 | | :--- | :--- | :--- | :--- | :--- | | Net income (loss) | $(5,038) | $1,789 | $(11,471) | $3,467 | | **Adjusted EBITDA** | **$61,087** | **$61,139** | **$185,576** | **$184,149** | [Results of Operations Comparison](index=29&type=section&id=Comparison%20of%20the%20three%20and%20nine%20months%20ended%20October%2031%2C%202021%20and%202020) Revenue Breakdown (Three months ended October 31) | (in thousands) | 2021 | 2020 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Service revenue | $102,733 | $104,562 | $(1,829) | (2)% | | Custodial revenue | $49,006 | $48,544 | $462 | 1% | | Interchange revenue | $28,215 | $26,245 | $1,970 | 8% | | **Total revenue** | **$179,954** | **$179,351** | **$603** | **0%** | - Service revenue decreased **2%** YoY for the quarter, primarily due to a drop in CDB accounts related to the COVID-19 pandemic and efforts to simplify CDB engagements[154](index=154&type=chunk)[155](index=155&type=chunk) - Custodial revenue increased **1%** YoY for the quarter, as a **16%** increase in average HSA cash balances was largely offset by a decline in the average annualized yield from **2.08%** to **1.72%**[156](index=156&type=chunk) - Total operating expenses increased **11%** YoY for the quarter, driven by a **24%** rise in Technology & Development costs and a **62%** increase in Merger Integration expenses[170](index=170&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20capital%20resources) - As of October 31, 2021, the company had cash and cash equivalents of **$649.1 million**, up from **$328.8 million** at January 31, 2021, boosted by a **$456.6 million** follow-on equity offering[190](index=190&type=chunk) - In October 2021, the company refinanced its debt, securing a new **$350 million** term loan and a **$1.0 billion** revolving credit facility, and issuing **$600 million** in senior notes[193](index=193&type=chunk) - The company believes existing cash, cash equivalents, and its Revolving Credit Facility will be sufficient to meet operating and capital expenditure requirements for at least the next 12 months[196](index=196&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20qualitative%20disclosures%20about%20market%20risk) The company faces market risks including concentration in healthcare accounts, credit risk from cash balances, and significant interest rate exposure on its $16.4 billion HSA assets and variable-rate debt - A substantial portion of revenue is derived from tax-advantaged healthcare accounts, making the company vulnerable to downturns in this market or adverse regulatory changes[208](index=208&type=chunk) - The company is exposed to interest rate risk on its **$16.4 billion** in HSA Assets and **$811.0 million** in Client-held funds, as declining rates reduce custodial revenue[211](index=211&type=chunk)[212](index=212&type=chunk) - The company has variable-rate debt, with **$350.0 million** outstanding under its Term Loan Facility, where a hypothetical **1%** increase in interest rates would result in an additional **$3.5 million** of annual interest expense[214](index=214&type=chunk) [Controls and Procedures](index=36&type=section&id=Item%204.%20Controls%20and%20procedures) Management concluded that disclosure controls and procedures were ineffective as of October 31, 2021, due to material weaknesses in internal control over financial reporting inherited from the WageWorks acquisition, with remediation efforts ongoing - The CEO and CFO concluded that as of October 31, 2021, the Company's disclosure controls and procedures were not effective[217](index=217&type=chunk) - The ineffectiveness is due to material weaknesses in internal control over financial reporting at the acquired WageWorks subsidiary, specifically related to the COSO framework components of Risk Assessment, Information and Communication, and Monitoring[220](index=220&type=chunk)[221](index=221&type=chunk) - Specific control activity weaknesses identified include: A) Accounting Close and Financial Reporting, B) Contract to Cash Process, and C) Information Technology General Controls (ITGCs), with ongoing integration and remediation efforts to address these issues[222](index=222&type=chunk)[223](index=223&type=chunk)[224](index=224&type=chunk) [Part II. OTHER INFORMATION](index=40&type=section&id=Part%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20proceedings) The company is involved in legal disputes, including a lease termination dispute where $2.8 million was drawn from a letter of credit, and a $30.0 million securities class action settlement against WageWorks - WageWorks is in a legal dispute with landlord Union Mesa 1, LLC over a terminated lease in Arizona, seeking declaratory judgment and return of a **$2.8 million** letter of credit drawn by the landlord[45](index=45&type=chunk) - A putative class action against WageWorks was settled for **$30.0 million**, with WageWorks contributing **$5.0 million** and insurers paying the remaining **$25.0 million**[46](index=46&type=chunk) [Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20factors) Key risk factors include the complex integration of the Further acquisition, challenges in retaining personnel due to market trends and vaccine mandates, and operational restrictions imposed by substantial debt covenants - The successful integration of the Further acquisition presents a risk, as it involves a complex carve-out from its parent company[235](index=235&type=chunk) - The company faces risks in retaining qualified personnel due to the 'great resignation' and a federal COVID-19 Vaccine Mandate for contractors, which could increase team member attrition[236](index=236&type=chunk)[237](index=237&type=chunk)[239](index=239&type=chunk) - The company's substantial debt (**$350M** term loan and **$600M** in notes) and associated covenants impose significant operational and financial restrictions, limiting its ability to incur more debt, make investments, and pay dividends[242](index=242&type=chunk)[244](index=244&type=chunk) [Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists key legal and financial documents filed with the Form 10-Q, including acquisition agreements, debt indentures, and executive certifications - Lists key legal and financial documents filed with the report, including acquisition agreements, debt indentures, and executive certifications[246](index=246&type=chunk)

Financial Data and Key Metrics Changes - Q3 revenue was $180 million, slightly up from $179.4 million in the same quarter last year, representing a growth of less than 1% year-over-year [7][14] - Adjusted EBITDA for Q3 was $61.1 million, flat compared to the previous year, with an adjusted EBITDA margin of 34% [14][16] - Total accounts reached 13.3 million, a 6% increase year-over-year, while HSA members grew to 6.2 million, up 14% from a year ago [7][9] - HSA assets at the end of the quarter were $16.4 billion, reflecting a 32% increase year-over-year, including 28% organic growth [7][9] Business Line Data and Key Metrics Changes - Core HSA sales continued strong growth, with record new HSA openings of 151,000 in Q3, up 45% from 104,000 in Q3 of the previous year [8][9] - Ancillary consumer-directed benefits (CDB) administration slowed, impacting overall operating performance [7][10] - Interchange revenue grew by 8% to $28.2 million, but FSA spend on debit cards slowed more than anticipated, affecting service revenue [10][15] Market Data and Key Metrics Changes - HealthEquity's organic HSA and asset growth outperformed industry averages, with 14% account growth compared to an estimated 6% market-wide [9] - The company captured a greater share of HSA growth during the pandemic, achieving record organic openings and asset growth [9][10] Company Strategy and Development Direction - The company is focusing on expanding revenue generation capabilities around high-margin HSAs through sales execution, portfolio M&A, and product innovation [12] - Recent acquisitions, including the HSA business of Further, are expected to enhance the company's market position and technology integration [12][13] - The company aims to streamline operations by discontinuing non-core services and focusing on core HSA growth [12][19] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding future revenue growth, anticipating a rebound in interchange revenue as pandemic effects wane [10][29] - The company is adjusting its guidance for fiscal 2022, projecting revenue between $750 million and $755 million, reflecting a conservative outlook for service and interchange revenue [18][19] - Management highlighted the importance of member education and engagement in driving HSA investment growth [68] Other Important Information - The company reported a net loss of $5 million for Q3, with non-GAAP net income of $29 million, down from $32.2 million a year ago [14][16] - The cash balance as of October 31, 2021, was $649 million, with $930 million in debt outstanding [16][17] Q&A Session Summary Question: Can you provide more color on what happened with the interchange? - Management noted that interchange revenue was impacted by a decline in FSA accounts, which affected both service fees and interchange revenue [25][26] Question: What is the outlook for custodial revenue? - Management indicated that custodial revenues are expected to stabilize, with a focus on enhanced rates products to improve yields [36][38] Question: How is the adoption of the enhanced rates product progressing? - The company expects a yield differential of 50 to 75 basis points with the enhanced rates product, which is still in the early stages of adoption [49][50] Question: What are the headwinds and tailwinds for fiscal 2023? - Management identified the mix shift towards enhanced rates as a significant tailwind, while employment trends and pandemic impacts on spending remain headwinds [57][58] Question: What is driving the organic growth rate in HSAs? - The company is seeing strong sales from various channels and is focused on cross-selling opportunities with legacy WageWorks clients [73]

Company Overview - HealthEquity has 13.1 million total accounts, 6.0 million HSA members, and $15.5 billion in HSA assets as of July 31, 2021[7] - The company serves approximately 100,000 employer clients and has 174 network partners[7,9] - HealthEquity estimates a market-wide revenue opportunity in the range of $8-10 billion[8] Growth Strategies - The company aims to win new network partners and clients, with approximately 35% of retirement plan partners managing defined contribution plan assets[8,9] - HealthEquity intends to increase cross-sell uptake and balance growth through engagement platforms and connected 401(k) offerings[8,12] - M&A initiatives are a key part of HealthEquity's strategy, focusing on custodial consolidation and additional solutions[8,20] Financial Performance - HealthEquity reported $15471 million in total HSA assets for Q2FY22[25] - The company's Q2FY22 revenue grew by 7% year-over-year, with a 9% increase in Adjusted EBITDA[27] - HealthEquity's cash, cash equivalents, and marketable securities totaled $754 million as of July 31, 2021[28] Future Outlook - HealthEquity projects revenue between $755 million and $765 million for the fiscal year ending January 31, 2022[30] - The company anticipates Adjusted EBITDA between $241 million and $247 million and Non-GAAP EPS between $1.45 and $1.50 for the same period[30]

HealthEquity® Investor presentation September 2021 Copyright © 2021 HealthEquity, Inc. All rights reserved. HealthEquity does not provide legal, tax or financial advice. Safe harbor This presentation contains "forward-looking" statements that are based on our management's beliefs and assumptions and on information currently available to management. These forward-looking statements include, without limitation, statements regarding our industry, business strategy, plans, goals and expectations concerning our ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 001-36568 HEALTHEQUITY, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Delaware 52-2383166 (I.R.S. Em ...

HealthEquity, Inc.'s (NASDAQ:HQY) Q2 2022 Earnings Conference Call September 8, 2021 4:30 PM ET Company Participants Richard Putnam - Investor Relations Jon Kessler - President and CEO Steve Neeleman - Vice Chair and Founder Tyson Murdock - EVP and CFO Ted Bloomberg - EVP and COO Conference Call Participants Greg Peters - Raymond James Anne Samuel - JPMorgan George Hill - Deutsche Bank Donald Hooker - KeyBanc Sean Dodge - RBC Capital Markets David Larsen - BTIG Scott Schoenhaus - Stephens Allen Lutz - Bank ...

HealthEquity® Investor presentation June 2021 Copyright © 2021 HealthEquity, Inc. All rights reserved. HealthEquity does not provide legal, tax or financial advice. Safe harbor This presentation contains "forward-looking" statements that are based on our management's beliefs and assumptions and on information currently available to management. These forward-looking statements include, without limitation, statements regarding our industry, business strategy, plans, goals and expectations concerning our marke ...

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number: 001-36568 HEALTHEQUITY, INC. (Exact name of registrant as specified in its charter) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 30, 2021 OR Delaware 52-2383166 (State or other jurisdiction of incorporation or organization) (I.R.S. E ...