Financial Data and Key Metrics Changes - Revenue increased by 19% year-over-year in Q4, reaching $124.2 million, with full fiscal year revenue at $1.2 billion, up 20% year-over-year [10][22][26] - Adjusted EBITDA rose by 9% in Q4 to $107.8 million, with a full year adjusted EBITDA of $471.8 million, up 28% [10][25][26] - Net income for Q4 was $26.4 million or $0.30 per share on a GAAP basis, while non-GAAP net income was $61.3 million or $0.69 per share [25][28] - HSA assets increased by 27% year-over-year, totaling $32 billion, with HSA cash reaching $17.4 billion [10][11][22] Business Line Data and Key Metrics Changes - Total accounts grew by 9% year-over-year, with HSA accounts increasing by 14% and CDB accounts growing by 2% [10][12] - The number of HSA members who invest rose by 23% year-over-year, driving invested assets up 44% to $14.7 billion [10][11] - Custodial revenue grew by 37% to a record $144.1 million in Q4 [22] Market Data and Key Metrics Changes - The annualized yield on HSA cash was 3.23% for the quarter, with enhanced rate placements making up 49% of HSA cash placements [23][29] - Interchange revenue grew by 13% to $43.5 million, reflecting increased contributions and distributions [23] Company Strategy and Development Direction - The company is focusing on a member-first secure mobile experience, emphasizing seamless digital interactions for healthcare needs [14][15] - The Assist portfolio was introduced, which includes solutions like Analyzer and Navigator aimed at improving employer benefits offerings and employee healthcare decisions [16][17][58] - The company is consolidating platforms and moving to the cloud to enhance technological capabilities, including AI-driven solutions [15][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged increased cyber threats and fraud attacks, leading to higher service costs, but remains optimistic about reducing these costs in the future [13][24] - The company expects revenue for fiscal year 2026 to be between $1.28 billion and $1.305 billion, with GAAP net income projected between $164 million and $179 million [27][28] - Management is confident in the growth trajectory, driven by strong sales and technology investments [27][50] Other Important Information - The company repurchased $122 million of its outstanding shares during fiscal 2025, with $178 million remaining on the share repurchase authorization [26] - Cash on hand was $296 million as of year-end January 31, 2025, with $340 million generated from operations [26] Q&A Session Summary Question: Follow-up on incremental service costs - Management explained that the $17 million in Q4 service costs were due to fraud-related reimbursements and excess service costs, expecting these to continue into the first half of FY '26 [35][39][41] Question: Earnings guidance and potential risks - Management highlighted confidence in custodial revenue growth and operational efficiencies, while acknowledging potential risks from service costs and fraud [44][50] Question: Monetization of Assist initiative - The company clarified that the Assist initiative focuses on enhancing member engagement and benefits management, with products like Analyzer and Navigator being key components [56][58] Question: Technology investment and R&D - Management indicated no significant change in R&D spending percentage but emphasized prioritizing technology that enhances member experience [66][71] Question: HSA member growth and market share - Management noted that growth in HSA accounts is increasingly coming from small and medium-sized businesses, with a focus on leveraging technology for better engagement [75][80] Question: M&A strategy and capital allocation - The company maintains a high bar for M&A opportunities, focusing primarily on organic growth and execution within the industry [82][84] Question: Member and employer reactions to service issues - Management reported high client retention rates in the high-90s despite recent challenges, emphasizing commitment to service quality [100][103] Question: Update on fraud activity and security measures - Management clarified that the fraud incidents involved multiple bad actors, not a single entity, and outlined ongoing efforts to enhance security measures [120][123]