HealthEquity(HQY) - 2026 Q3 - Quarterly Results

Financial Performance - Revenue for the third quarter increased by 7% to $322.2 million, compared to $300.4 million in the same quarter last year[3] - Net income for the third quarter was $51.7 million, or $0.59 per diluted share, up from $5.7 million, or $0.06 per diluted share, a year ago[4] - Non-GAAP net income per diluted share rose by 29% to $1.01, compared to $0.78 in the prior year[4] - Adjusted EBITDA for the third quarter was $141.8 million, reflecting a 20% increase year over year, and represented 44% of revenue[5] - The company reported a gross profit of $228,063 thousand for the three months ended October 31, 2025, compared to $197,026 thousand in the same period of 2024, indicating a 16% increase[21] - Adjusted EBITDA for the three months ended October 31, 2025, was $141,812,000, representing a 20% increase from $118,245,000 in the same period of 2024[34] - The company's net income as a percentage of revenue increased to 16% for the three months ended October 31, 2025, compared to 2% in the same period of 2024[33] - The outlook for Adjusted EBITDA for the year ending January 31, 2026, is projected to be between $555 million and $565 million[35] - The company expects net income for the year ending January 31, 2026, to be between $197 million and $205 million[37] HSA Growth - Total HSA Assets grew by 15% to $34.4 billion, including $16.9 billion in HSA cash and $17.5 billion in HSA investments[7] - The number of HSAs increased by 6% year over year to 10.1 million, with 802,000 HSAs having investments, a 12% increase[6] - The number of Health Savings Accounts (HSAs) increased to 10,108 thousand as of October 31, 2025, a 6% increase from 9,508 thousand in 2024[28] - Total HSA assets reached $34,446 million as of October 31, 2025, reflecting a 15% increase from $29,987 million in 2024[29] - HSA investments increased by 29% to $17,536 million as of October 31, 2025, compared to $13,601 million in 2024[29] Shareholder Actions - The company repurchased 1.0 million shares for $93.7 million during the third quarter, with $258.8 million remaining authorized for repurchase[8] Cash Flow and Expenses - Cash flows from operating activities for the nine months ended October 31, 2025, were $339,179 thousand, up from $264,108 thousand in 2024[24] - The company incurred total operating expenses of $149,368 thousand for the three months ended October 31, 2025, down from $177,401 thousand in the same period of 2024, a decrease of 16%[21] - Stock-based compensation expense for the three months ended October 31, 2025, was $20,542,000, slightly down from $21,123,000 in the same period of 2024[36] Market and Technology - HealthEquity's marketplace platform is expanding access to affordable healthcare solutions, leveraging AI for personalized experiences[2] Other Financial Metrics - Average daily client-held funds for the year-to-date as of October 31, 2025, were $859 million, a 4% increase from $823 million in 2024[31] - The average annualized yield on HSA cash expected to reprice in 2026 is 1.5%[30] - Non-GAAP net income for the three months ended October 31, 2025, was $87,666,000, up from $69,387,000 in the same period of 2024[36] - The diluted weighted-average shares for the three months ended October 31, 2025, were 86,970,000[36] - The company reported a total adjustment to income before income taxes - GAAP of $49,357,000 for the three months ended October 31, 2025[36]