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HealthEquity Reports Third Quarter Ended October 31, 2025 Financial Results

globenewswire.com
HQY The company reported strong Q3 results with significant growth in net income, Adjusted EBITDA, and non-GAAP net income per share. Revenue increased, and key metrics like HSA accounts and assets under management also saw year-over-year growth. The business outlook for the full fiscal year remains positive.

Highlights of the third quarter include:

DRAPER, Utah, Dec. 03, 2025 (GLOBE NEWSWIRE) -- HealthEquity, Inc. (NASDAQ: HQY) ("HealthEquity" or the "Company"), a leader in administering health savings accounts (“HSAs”) and complementary consumer-directed benefits (“CDBs”), today announced financial results for its third quarter ended October 31, 2025.

"HealthEquity delivered a record third quarter for fiscal 2026, with net income of $52 million, 20% growth in Adjusted EBITDA, and 29% growth in non-GAAP net income per share, reflecting our team’s focus on helping members better save, spend and invest for health," said Scott Cutler, President and CEO of HealthEquity. "Our marketplace platform is expanding access to more affordable healthcare solutions, and AI is beginning to power more personalized and efficient experiences. As we enter onboarding season, we do so with strong momentum and an enduring mission to save and improve lives by empowering healthcare consumers."

Third quarter financial results

Revenue for the third quarter ended October 31, 2025 was $322.2 million, an increase of 7% compared to $300.4 million for the third quarter ended October 31, 2024. Revenue this quarter included: service revenue of $120.3 million, custodial revenue of $159.1 million, and interchange revenue of $42.8 million.

HealthEquity reported net income of $51.7 million, or $0.59 per diluted share, and non-GAAP net income of $87.7 million, or $1.01 per diluted share, for the third quarter ended October 31, 2025. The Company reported net income of $5.7 million, or $0.06 per diluted share, and non-GAAP net income of $69.4 million, or $0.78 per diluted share, for the third quarter ended October 31, 2024.

Adjusted EBITDA was $141.8 million for the third quarter ended October 31, 2025, an increase of 20% compared to the third quarter ended October 31, 2024. Adjusted EBITDA was 44% of revenue, compared to 39% for the third quarter ended October 31, 2024.

Account and asset metrics

HSAs as of October 31, 2025 were 10.1 million, an increase of 6% year over year, including 802,000 HSAs with investments, an increase of 12% year over year. Total Accounts as of October 31, 2025 were 17.3 million, including 7.2 million complementary CDBs.

Total HSA Assets as of October 31, 2025 were $34.4 billion, an increase of 15% year over year. Total HSA Assets included $16.9 billion of HSA cash and $17.5 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 $0.8 billion as of October 31, 2025.

Stock repurchase program

The Company repurchased 1.0 million shares of its common stock for $93.7 million during the third quarter ended October 31, 2025. As of that date, $258.8 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 $1.302 billion to $1.312 billion. Its outlook for net income is between $197 million and $205 million, resulting in net income of $2.24 to $2.33 per diluted share. Its outlook for non-GAAP net income, calculated using the method described below, is between $341 million and $348 million, resulting in non-GAAP net income per diluted share of $3.87 to $3.95 (based on an estimated 88 million diluted weighted-average shares outstanding). Management expects Adjusted EBITDA of $555 million to $565 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 Wednesday, December 3, 2025 to discuss the fiscal 2026 third quarter financial results. The conference call will be accessible by dialing 1-833-630-1956, or 1-412-317-1837 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.

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 mission to save and improve lives by empowering 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:

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 and subsequent periodic and current reports. 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

rputnam@healthequity.com

HealthEquity, Inc. and subsidiaries

Condensed consolidated balance sheets

HealthEquity, Inc. and subsidiaries

Condensed consolidated statements of operations (unaudited)

HealthEquity, Inc. and subsidiaries

Condensed consolidated statements of comprehensive income (unaudited)

HealthEquity, Inc. and subsidiaries

Condensed consolidated statements of cash flows (unaudited)

HealthEquity, Inc. and subsidiaries

Condensed consolidated statements of cash flows (unaudited) (continued)

Stock-based compensation expense (unaudited)

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

Total Accounts (unaudited)

* Not meaningful

HSA Assets (unaudited)

HSA cash maturity schedule

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 October 31, 2025:

(1) Excludes $0.5 billion of HSA cash held in floating-rate contracts as of October 31, 2025.

Client-held funds (unaudited)

Reconciliation of net income to Adjusted EBITDA (unaudited)

Net income as a percentage of revenue (unaudited)

Adjusted EBITDA as a percentage of revenue (unaudited)

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

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

(1) The Company utilizes a normalized non-GAAP tax rate to provide better consistency across the interim reporting periods within a given fiscal year by eliminating the effects of non-recurring and period-specific items, which can vary in size and frequency, and which are not necessarily reflective of the Company’s longer-term operations. The normalized non-GAAP tax rate applied to each period presented was 25%. The Company may adjust its non-GAAP tax rate as additional information becomes available and in conjunction with any other significant events occurring that may materially affect this rate, such as merger and acquisition activity, changes in business outlook, or other changes in expectations regarding tax regulations.

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

(1) The Company utilizes a normalized non-GAAP tax rate to provide better consistency across the interim reporting periods within a given fiscal year by eliminating the effects of non-recurring and period-specific items, which can vary in size and frequency, and which are not necessarily reflective of the Company’s longer-term operations. The normalized non-GAAP tax rate applied to each period presented was 25%. The Company may adjust its non-GAAP tax rate as additional information becomes available and in conjunction with any other significant events occurring that may materially affect this rate, such as merger and acquisition activity, changes in business outlook, or other changes in expectations regarding tax regulations.

(2) GAAP and non-GAAP net income per diluted share may not calculate due to rounding.

Certain terms