HealthEquity, Inc. (NASDAQ: HQY), the nation’s largest health savings account (HSA) custodian, announced its financial results for the third quarter ended October 31, 2024.
Key Financial Metrics
| Metric | Q3 FY2024 | Q3 FY2023 | YoY Change |
|---|---|---|---|
| Total Revenue | $300.4M | $249.2M | +21% |
| Net Income | $5.7M | $14.7M | -61% |
| Non-GAAP Net Income | $69.4M | $52.2M | +33% |
| Earnings Per Share (EPS) | $0.06 | $0.17 | -65% |
| Non-GAAP EPS | $0.78 | $0.60 | +30% |
| Adjusted EBITDA | $118.2M | $95.6M | +24% |
Revenue increased by 21% year-over-year to $300.4 million, driven by growth in all major segments. However, GAAP net income decreased by 61% due to the impact of various operational expenses. The company’s robust growth in non-GAAP net income and adjusted EBITDA reflects strong operational efficiency and business momentum.
Revenue Performance by Segment
| Segment | Revenue (Q3 FY2024) |
|---|---|
| Service Revenue | $119.2M |
| Custodial Revenue | $141.0M |
| Interchange Revenue | $40.3M |
HealthEquity's segment performance showed solid growth, particularly in custodial revenue, which remains the largest contributor.
Operational Highlights
- Total Health Savings Accounts (HSAs) rose by 15% year-over-year, reaching 9.5 million.
- Total HSA Assets increased 33% year-over-year to $30 billion.
- The company returned $60 million to shareholders through the repurchase of 0.7 million shares.
Comments from Company Officers
Jon Kessler, President and CEO of HealthEquity, credited 'Team Purple' for achieving record metrics in various categories including HSAs and total accounts. Kessler highlighted the strong cash generation from operations, which has supported platform investments and an enhanced fiscal 2025 guidance.
Stock Repurchase Program
HealthEquity repurchased 0.7 million shares for $60 million during the third quarter. $240 million remains authorized under the company’s stock repurchase program.
Business Outlook
For the fiscal year ending January 31, 2025, HealthEquity expects revenue between $1.185 billion and $1.195 billion and net income of $88 million to $96 million. Adjusted EBITDA is projected in the range of $470 million to $480 million. For the fiscal year ending January 31, 2026, expected revenue is approximately $1.275 billion to $1.295 billion with an Adjusted EBITDA margin of 41.5% to 42.5%.
This summary captures HealthEquity's strong third-quarter performance, highlighting significant year-over-year revenue and operational growth despite a decrease in GAAP net income.
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