On June 3, 2024, HealthEquity Inc (HQY, Financial) released its 8-K filing for the first quarter ended April 30, 2024. HealthEquity Inc provides solutions that allow consumers to make healthcare saving and spending decisions. It manages tax-advantaged health savings accounts (HSAs) and other consumer-directed benefits (CDBs) offered by employers, including flexible spending accounts and health reimbursement arrangements (FSAs and HRAs), and administers COBRA, commuter, and other benefits. The company also provides investment advisory services to customers whose account balances exceed a certain threshold.
Performance Overview
HealthEquity Inc (HQY, Financial) reported revenue of $287.6 million for Q1 FY25, an 18% increase compared to $244.4 million in Q1 FY24. This figure significantly surpassed the analyst estimate of $278.11 million. The company also reported a net income of $28.8 million, or $0.33 per diluted share, compared to $4.1 million, or $0.05 per diluted share, in the same quarter last year. Non-GAAP net income was $70.3 million, or $0.80 per diluted share, compared to $42.8 million, or $0.50 per diluted share, in Q1 FY24. These results exceeded the estimated earnings per share of $0.24.
Key Financial Achievements
HealthEquity Inc (HQY, Financial) achieved several notable financial milestones in Q1 FY25:
- Adjusted EBITDA of $117.4 million, a 36% increase from $86.6 million in Q1 FY24.
- 9.1 million HSAs, a 13% year-over-year increase.
- Total HSA Assets of $27.3 billion, a 22% year-over-year increase.
- 16.0 million Total Accounts, including both HSAs and complementary CDBs, a 7% year-over-year increase.
Income Statement Highlights
| Metric | Q1 FY25 | Q1 FY24 |
|---|---|---|
| Revenue | $287.6 million | $244.4 million |
| Net Income | $28.8 million | $4.1 million |
| Non-GAAP Net Income | $70.3 million | $42.8 million |
| Adjusted EBITDA | $117.4 million | $86.6 million |
Balance Sheet and Cash Flow
As of April 30, 2024, HealthEquity Inc (HQY, Financial) reported total assets of $3.25 billion, up from $3.16 billion as of January 31, 2024. The company's cash and cash equivalents stood at $251.2 million, a decrease from $404.0 million at the end of the previous fiscal year. This reduction was primarily due to the acquisition of the BenefitWallet HSA portfolio.
Acquisition and Business Outlook
HealthEquity Inc (HQY, Financial) completed the acquisition of the BenefitWallet HSA portfolio on May 9, 2024, adding approximately 616,000 HSAs and other accounts and $2.7 billion of HSA Assets. The company paid $425.0 million for this acquisition, using a combination of borrowings and cash on hand.
For the fiscal year ending January 31, 2025, HealthEquity Inc (HQY, Financial) has raised its revenue guidance to $1.16 billion to $1.18 billion. The company expects net income between $90 million and $105 million, resulting in net income per diluted share of $1.01 to $1.18. Non-GAAP net income is projected to be between $261 million and $276 million, with non-GAAP net income per diluted share of $2.93 to $3.10.
Record first quarter HSA sales, greater Enhanced Rates adoption, and timely transition of two of three BenefitWallet tranches made for a great team start to fiscal 2025," said Jon Kessler, President and CEO of HealthEquity.
HealthEquity Inc (HQY, Financial)'s strong performance in Q1 FY25, marked by significant revenue and net income growth, positions the company well for continued success in the healthcare savings and spending solutions market. Investors and stakeholders will be keenly watching how the company leverages its recent acquisitions and platform investments to drive further growth and enhance member outcomes.
Explore the complete 8-K earnings release (here) from HealthEquity Inc for further details.
