• HealthEquity Reports Fiscal Year and Fourth Quarter Ended January 31, 2024 Financial Results

    Источник: Nasdaq GlobeNewswire / 19 мар 2024 16:01:00   America/New_York

    Highlights of the fiscal year include:

    • Revenue of $999.6 million, an increase of 16% compared to $861.7 million in FY23.
    • Net income of $55.7 million, compared to net loss of $26.1 million in FY23, with non-GAAP net income of $195.5 million, compared to $114.5 million in FY23.
    • Net income per diluted share of $0.64, compared to net loss per diluted share of $0.31 in FY23, with non-GAAP net income per diluted share of $2.25, compared to $1.36 in FY23.
    • Adjusted EBITDA of $369.2 million, an increase of 36% compared to $272.3 million in FY23.
    • 8.7 million HSAs, an increase of 9% compared to FY23.
    • Total HSA Assets of $25.2 billion, an increase of 14% compared to FY23.
    • 15.7 million Total Accounts, including both HSAs and complementary CDBs, an increase of 5% compared to FY23.
    • The Company agreed to acquire the BenefitWallet HSA portfolio.

    Highlights of the fourth quarter include:

    • Revenue of $262.4 million, an increase of 12% compared to $233.8 million in Q4 FY23.
    • Net income of $26.4 million, compared to net loss of $0.2 million in Q4 FY23, with non-GAAP net income of $55.0 million, compared to $31.3 million in Q4 FY23.
    • Net income per diluted share of $0.30, compared to net loss per diluted share of less than one cent in Q4 FY23, with non-GAAP net income per diluted share of $0.63, compared to $0.37 in Q4 FY23.
    • Adjusted EBITDA of $98.8 million, an increase of 34% compared to $73.6 million in Q4 FY23.

    DRAPER, Utah, March 19, 2024 (GLOBE NEWSWIRE) -- HealthEquity, Inc. (NASDAQ: HQY) ("HealthEquity" or the "Company"), the nation's largest health savings account ("HSA") custodian, today announced financial results for its fourth quarter and fiscal year ended January 31, 2024.

    “We delivered fiscal 2024 with a record of nearly $1 billion in revenue as well as over 500 bps expansion in Adjusted EBITDA margin,” said Jon Kessler, President and CEO of HealthEquity. “Building on these results, we believe we are well-positioned to continue our growth in fiscal 2025 as our technology investments enable us to continue taking market share, with an initial outlook for increases of approximately 15% in revenue and 20% in Adjusted EBITDA.”

    Fiscal year financial results

    Revenue for the fiscal year ended January 31, 2024 was $999.6 million, an increase of 16% compared to $861.7 million for the fiscal year ended January 31, 2023. Revenue this year included: service revenue of $455.7 million, custodial revenue of $386.6 million, and interchange revenue of $157.3 million.

    HealthEquity reported net income of $55.7 million, or $0.64 per diluted share, and non-GAAP net income of $195.5 million, or $2.25 per diluted share, for the fiscal year ended January 31, 2024. The Company reported a net loss of $26.1 million, or $0.31 per diluted share, and non-GAAP net income of $114.5 million, or $1.36 per diluted share, for the fiscal year ended January 31, 2023.

    Adjusted EBITDA was $369.2 million for the fiscal year ended January 31, 2024, an increase of 36% compared to $272.3 million for the fiscal year ended January 31, 2023. Adjusted EBITDA was 37% of revenue, compared to 32% for the fiscal year ended January 31, 2023.

    As of January 31, 2024, HealthEquity had $404.0 million of cash and cash equivalents and $875.0 million of outstanding debt, net of issuance costs. This compares to $254.3 million in cash and cash equivalents and $925.3 million of outstanding debt as of January 31, 2023.

    Certain reclassifications have been made to prior year amounts to conform to the current year presentation. The reclassifications relate primarily to recordkeeping and advisory fees associated with HSA investments of $25.6 million, $21.8 million, and $16.7 million for the fiscal years ended January 31, 2024, 2023, and 2022, respectively, which were reclassified from custodial revenue to service revenue to better align our financial statement presentation with the underlying drivers of our revenue streams. The Company also reclassified certain immaterial personnel-related costs from custodial costs to service costs or general and administrative costs. The reclassifications had no impact on our total revenue, income (loss) from operations, net income (loss), cash flows, or stockholders' equity.

    Fourth quarter financial results

    Revenue for the fourth quarter ended January 31, 2024 was $262.4 million, an increase of 12% compared to $233.8 million for the fourth quarter ended January 31, 2023. Revenue this quarter included: service revenue of $118.6 million, custodial revenue of $105.4 million, and interchange revenue of $38.4 million.

    HealthEquity reported net income of $26.4 million, or $0.30 per diluted share, and non-GAAP net income of $55.0 million, or $0.63 per diluted share, for the fourth quarter ended January 31, 2024. The Company reported a net loss of $0.2 million, or less than one cent per diluted share, and non-GAAP net income of $31.3 million, or $0.37 per diluted share, for the fourth quarter ended January 31, 2023.

    Adjusted EBITDA was $98.8 million for the fourth quarter ended January 31, 2024, an increase of 34% compared to $73.6 million for the fourth quarter ended January 31, 2023. Adjusted EBITDA was 38% of revenue, compared to 31% for the fourth quarter ended January 31, 2023.

    Account and asset metrics

    HSAs as of January 31, 2024 were approximately 8.7 million, an increase of 9% year over year, including 610,000 HSAs with investments, an increase of 13% year over year. Total Accounts as of January 31, 2024 were 15.7 million, including 7.0 million other consumer-directed benefits ("CDBs").

    Total HSA Assets as of January 31, 2024 were $25.2 billion, an increase of 14% year over year. Total HSA Assets included $15.0 billion of HSA cash and $10.2 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 January 31, 2024.

    BenefitWallet HSA portfolio acquisition

    On September 18, 2023, we signed an agreement to acquire the BenefitWallet HSA portfolio from Conduent Business Services, LLC, which portfolio consists of approximately $2.8 billion of HSA Assets held in approximately 665,000 customer accounts, in exchange for a purchase price of approximately $425 million and reimbursement of up to $20 million of Conduent's transfer-related expenses. The acquisition is expected to close in multiple tranches during the first half of fiscal 2025, subject to the satisfaction of certain customary closing conditions. On March 7, 2024, the first of the three HSA Asset transfers occurred, with approximately 266,000 HSAs and $1.1 billion of HSA Assets transferring to HealthEquity’s custody. In connection with this transfer, HealthEquity paid the applicable purchase price of $163.9 million using cash on hand.

    Business outlook

    For the fiscal year ending January 31, 2025, management expects revenues of $1.14 billion to $1.16 billion. Its outlook for net income is between $73 and $88 million, resulting in net income of $0.83 to $0.99 per diluted share. Its outlook for non-GAAP net income, calculated using the method described below, is between $247 million and $262 million, resulting in non-GAAP net income per diluted share of $2.79 to $2.96 (based on an estimated 89 million weighted-average shares outstanding). Management expects Adjusted EBITDA of $438 million to $458 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 Tuesday, March 19, 2024 to discuss the fiscal 2024 fourth quarter and year-end 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, Inc. call." 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.

    • Adjusted EBITDA is earnings before interest, taxes, depreciation and amortization, amortization of acquired intangible assets, stock-based compensation expense, merger integration expenses, acquisition costs, gains and losses on equity securities, amortization of incremental costs to obtain a contract, costs associated with unused office space, and certain other non-operating items.
    • Non-GAAP net income is calculated by adding back to GAAP net income (loss) before income taxes the following items: amortization of acquired intangible assets, stock-based compensation expense, merger integration expenses, acquisition costs, gains and losses on equity securities, costs associated with unused office space, and losses on extinguishment of debt, and subtracting a non-GAAP tax provision using a normalized non-GAAP tax rate.
    • Non-GAAP net income per diluted share is calculated by dividing non-GAAP net income by diluted weighted-average shares outstanding.

    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 CDBs for our more than 15 million accounts in partnership with employers, benefits advisors, and health and retirement plan providers who share our mission and value our culture of remarkable “Purple” service. 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:

    • our ability to adequately place and safeguard our custodial assets, or the failure of any of our depository or insurance company partners;
    • our ability to compete effectively in a rapidly evolving healthcare and benefits administration industry;
    • our dependence on the continued availability and benefits of tax-advantaged HSAs and other CDBs;
    • our acquisition of the BenefitWallet HSA portfolio may not be fully consummated, and if fully consummated, we may not realize the expected benefits;
    • our ability to successfully identify, acquire and integrate additional portfolio purchases or acquisition targets;
    • the significant competition we face and may face in the future, including from those with greater resources than us;
    • our reliance on the availability and performance of our technology and communications systems;
    • potential future cybersecurity breaches of our technology and communications systems and other data interruptions, including resulting costs and liabilities, reputational damage and loss of business;
    • the current uncertain healthcare environment, including changes in healthcare programs and expenditures and related regulations;
    • our ability to comply with current and future privacy, healthcare, tax, ERISA, investment adviser and other laws applicable to our business;
    • our reliance on partners and third-party vendors for distribution and important services;
    • our ability to develop and implement updated features for our technology platforms and communications systems; and
    • our reliance on our management team and key team members.

    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, 2023, our Quarterly Report on Form 10-Q for the quarter ended October 31, 2023, 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
    Consolidated balance sheets (unaudited)
       
    (in thousands, except par value)January 31, 2024 January 31, 2023
    Assets   
    Current assets   
    Cash and cash equivalents$403,979 $254,266
    Accounts receivable, net of allowance for doubtful accounts of $3,947 and $4,989 as of January 31, 2024 and 2023, respectively 104,893  96,835
    Other current assets 48,564  31,792
    Total current assets 557,436  382,893
    Property and equipment, net 6,013  12,862
    Operating lease right-of-use assets 48,380  56,461
    Intangible assets, net 835,948  936,359
    Goodwill 1,648,145  1,648,145
    Other assets 67,868  52,180
    Total assets$3,163,790 $3,088,900
    Liabilities and stockholders’ equity   
    Current liabilities   
    Accounts payable$12,041 $13,899
    Accrued compensation 49,608  45,835
    Accrued liabilities 46,038  43,668
    Current portion of long-term debt   17,500
    Operating lease liabilities 9,404  10,159
    Total current liabilities 117,091  131,061
    Long-term liabilities   
    Long-term debt, net of issuance costs 874,972  907,838
    Operating lease liabilities, non-current 48,766  58,988
    Other long-term liabilities 19,270  12,708
    Deferred tax liability 68,670  82,665
    Total long-term liabilities 1,011,678  1,062,199
    Total liabilities 1,128,769  1,193,260
    Commitments and contingencies   
    Stockholders’ equity   
    Preferred stock, $0.0001 par value, 100,000 shares authorized, no shares issued and outstanding as of January 31, 2024 and 2023   
    Common stock, $0.0001 par value, 900,000 shares authorized, 86,127 and 84,758 shares issued and outstanding as of January 31, 2024 and 2023, respectively 9  8
    Additional paid-in capital 1,829,384  1,745,716
    Accumulated earnings 205,628  149,916
    Total stockholders’ equity 2,035,021  1,895,640
    Total liabilities and stockholders’ equity$3,163,790 $3,088,900


     

    HealthEquity, Inc. and subsidiaries
    Consolidated statements of operations and comprehensive income (loss) (unaudited)
         
     Three months ended January 31,
      Year ended January 31,
     
    (in thousands, except per share data)2024  2023  2024  2023 
    Revenue           
    Service revenue$118,575  $119,854  $455,690  $452,026 
    Custodial revenue105,433  77,886  386,594  261,282 
    Interchange revenue38,379  36,101  157,303  148,440 
    Total revenue262,387  233,841  999,587  861,748 
    Cost of revenue           
    Service costs83,859  85,373  317,357  318,516 
    Custodial costs8,398  7,739  32,502  26,101 
    Interchange costs6,810  5,956  27,091  25,196 
    Total cost of revenue99,067  99,068  376,950  369,813 
    Gross profit163,320  134,773  622,637  491,935 
    Operating expenses           
    Sales and marketing20,559  19,201  79,273  68,849 
    Technology and development55,238  52,722  218,811  193,375 
    General and administrative23,140  21,358  103,656  97,472 
    Amortization of acquired intangible assets23,218  23,166  92,763  94,586 
    Merger integration2,278  5,110  10,435  28,596 
    Total operating expenses124,433  121,557  504,938  482,878 
    Income from operations38,887  13,216  117,699  9,057 
    Other expense           
    Interest expense(13,641) (14,305) (55,455) (48,424)
    Other income, net4,471  1,097  12,796  1,271 
    Total other expense(9,170) (13,208) (42,659) (47,153)
    Income (loss) before income taxes29,717  8  75,040  (38,096)
    Income tax provision (benefit)3,353  217  19,328  (11,953)
    Net income (loss) and comprehensive income (loss)$26,364  $(209) $55,712  $(26,143)
    Net income (loss) per share:           
    Basic$0.31  $0.00  $0.65  $(0.31)
    Diluted$0.30  $0.00  $0.64  $(0.31)
    Weighted-average number of shares used in computing net income (loss) per share:           
    Basic85,975  84,718  85,564  84,442 
    Diluted87,435  84,718  86,957  84,442 


    HealthEquity, Inc. and subsidiaries
    Consolidated statements of cash flows (unaudited)
     
          Year ended January 31, 
    (in thousands) 2024   2023 
    Cash flows from operating activities:   
    Net income (loss)$55,712  $(26,143)
    Adjustments to reconcile net income (loss) to net cash provided by operating activities:   
    Depreciation and amortization 153,078   161,201 
    Stock-based compensation 77,151   62,614 
    Impairment of right-of-use assets     
    Amortization of debt issuance costs 2,852   3,261 
    Loss on extinguishment of debt 1,157    
    Change in fair value of contingent consideration     
    Gains on equity securities     
    Other non-cash items    268 
    Deferred taxes (13,995)  (17,181)
    Changes in operating assets and liabilities:   
    Accounts receivable (8,058)  (9,570)
    Other assets (32,790)  4,620 
    Operating lease right-of-use assets 10,190   8,244 
    Accrued compensation 2,951   (1,282)
    Accounts payable, accrued liabilities, and other current liabilities (204)  (26,673)
    Operating lease liabilities, non-current (11,780)  (7,232)
    Other long-term liabilities 6,562   (1,477)
    Net cash provided by operating activities 242,826   150,650 
    Cash flows from investing activities:   
    Business combinations, net of cash acquired     
    Purchases of software and capitalized software development costs (41,123)  (45,173)
    Acquisitions of HSA portfolios (3,257)  (70,583)
    Purchases of property and equipment (1,694)  (3,371)
    Proceeds from sale of equity securities     
    Net cash used in investing activities (46,074)  (119,127)
    Cash flows from financing activities:   
    Principal payments on long-term debt (54,375)  (8,750)
    Proceeds from long-term debt     
    Payment of debt issuance costs     
    Proceeds from follow-on equity offering, net of payments for offering costs     
    Settlement of client-held funds obligation, net 865   (603)
    Proceeds from exercise of common stock options 6,471   6,682 
    Payment of contingent consideration     
    Net cash provided by (used in) financing activities (47,039)  (2,671)
    Increase (decrease) in cash and cash equivalents 149,713   28,852 
    Beginning cash and cash equivalents 254,266   225,414 
    Ending cash and cash equivalents$403,979  $254,266 


    HealthEquity, Inc. and subsidiaries
    Consolidated statements of cash flows (unaudited) (continued)
          
         Year ended January 31, 
    (in thousands) 2024  2023 
        
    Supplemental cash flow data:   
    Interest expense paid in cash$49,560 $43,570 
    Income tax payments (refunds), net 35,352  1,526 
    Supplemental disclosures of non-cash investing and financing activities:   
    Purchases of software and capitalized software development costs included in accounts payable, accrued liabilities, or accrued compensation 3,145  3,595 
    Purchases of property and equipment included in accounts payable or accrued liabilities 263  69 
    Acquisitions of HSA portfolios included in accounts payable or accrued liabilities    
    Decrease (increase) in goodwill due to measurement period adjustments, net   (2,309)
    Exercise of common stock options receivable 429  382 


    Stock-based compensation expense (unaudited)
    Total stock-based compensation expense included in the consolidated statements of operations and comprehensive income (loss) is as follows:
     Three months ended January 31, Year ended January 31,
    (in thousands) 2024  2023  2024  2023
    Cost of revenue$3,240 $3,540 $16,462 $13,591
    Sales and marketing 3,419  2,685  13,182  9,821
    Technology and development 5,793  3,440  20,891  13,828
    General and administrative 4,760  2,639  26,616  25,374
    Total stock-based compensation expense$17,212 $12,304 $77,151 $62,614


    Total Accounts (unaudited)     
    (in thousands, except percentages)January 31, 2024 January 31, 2023 % Change
    HSAs8,692 7,984 9%
    New HSAs from sales - Quarter-to-date497 445 12%
    New HSAs from sales - Year-to-date949 971 (2)%
    New HSAs from acquisitions - Year-to-date 90 (100)%
    HSAs with investments610 541 13%
    CDBs7,006 6,933 1%
    Total Accounts15,698 14,917 5%
    Average Total Accounts - Quarter-to-date15,318 14,677 4%
    Average Total Accounts - Year-to-date15,105 14,531 4%


    HSA assets (unaudited)     
    (in millions, except percentages)January 31, 2024 January 31, 2023 % Change
    HSA cash$15,006 $14,199 6%
    HSA investments 10,208  7,947 28%
    Total HSA Assets 25,214  22,146 14%
    Average daily HSA cash - Quarter-to-date 14,210  13,375 6%
    Average daily HSA cash - Year-to-date 14,071  13,049 8%


    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 January 31, 2024:

    Year ending January 31, (in billions, except percentages)HSA cash expected to reprice Average annualized
    yield
    2025$2.1 3.6%
    2026 3.5 1.6%
    2027 3.2 1.6%
    2028 1.9 3.8%
    Thereafter 3.6 3.5%
    Total (1)$14.3 2.7%

    (1) Excludes $0.7 billion of HSA cash held in floating-rate contracts as of January 31, 2024. BenefitWallet HSA Assets and any subsequent growth in HSA cash are also excluded.


    Client-held funds (unaudited)     
    (in millions, except percentages)January 31, 2024 January 31, 2023 % Change
    Client-held funds$842 $901 (7)%
    Average daily Client-held funds - Quarter-to-date 791  809 (2)%
    Average daily Client-held funds - Year-to-date 845  827 2%


    Net income (loss) reconciliation to Adjusted EBITDA (unaudited)     
     Three months ended January 31,
      Year ended January 31,
     
    (in thousands) 2024   2023   2024   2023 
    Net income (loss)$26,364  $(209) $55,712  $(26,143)
    Interest income (4,343)  (1,179)  (12,138)  (1,763)
    Interest expense 13,641   14,305   55,455   48,424 
    Income tax provision (benefit) 3,353   217   19,328   (11,953)
    Depreciation and amortization 14,693   17,309   60,315   66,615 
    Amortization of acquired intangible assets 23,218   23,166   92,763   94,586 
    Stock-based compensation expense 17,212   12,304   77,151   62,614 
    Merger integration expenses 2,278   5,110   10,435   28,596 
    Acquisition costs          53 
    Amortization of incremental costs to obtain a contract 1,402   1,137   5,435   4,393 
    Costs associated with unused office space 927   1,170   4,179   4,958 
    Other 84   278   538   1,968 
    Adjusted EBITDA$98,829  $73,608  $369,173  $272,348 


    Reconciliation of net income outlook to Adjusted EBITDA outlook (unaudited) 
     Outlook for the year ending
    (in millions)January 31, 2025
    Net income$73 - 88
    Interest income(13)
    Interest expense63
    Income tax provision29 - 34
    Depreciation and amortization52
    Amortization of acquired intangible assets112
    Stock-based compensation expense98
    Merger integration expenses13
    Amortization of incremental costs to obtain a contract6
    Costs associated with unused office space4
    Other expense1
    Adjusted EBITDA$438 - 458


    Reconciliation of net income (loss) to non-GAAP net income (unaudited)   
     Three months ended January 31,
      Year ended January 31,
     
    (in thousands, except per share data) 2024  2023   2024  2023 
    Net income (loss)$26,364 $(209) $55,712 $(26,143)
    Income tax provision (benefit) 3,353  217   19,328  (11,953)
    Income (loss) before income taxes - GAAP 29,717  8   75,040  (38,096)
    Non-GAAP adjustments:       
    Amortization of acquired intangible assets 23,218  23,166   92,763  94,586 
    Stock-based compensation expense 17,212  12,304   77,151  62,614 
    Merger integration expenses 2,278  5,110   10,435  28,596 
    Acquisition costs        53 
    Costs associated with unused office space 927  1,170   4,179  4,958 
    Loss on extinguishment of debt      1,157   
    Total adjustments to income (loss) before income taxes - GAAP 43,635  41,750   185,685  190,807 
    Income before income taxes - Non-GAAP 73,352  41,758   260,725  152,711 
    Income tax provision - Non-GAAP (1) 18,337  10,440   65,180  38,178 
    Non-GAAP net income 55,015  31,318   195,545  114,533 
            
    Diluted weighted-average shares 87,435  84,718   86,957  84,442 
    GAAP net income (loss) per diluted share$0.30 $0.00  $0.64 $(0.31)
    Non-GAAP net income per diluted share$0.63 $0.37  $2.25 $1.36 

    (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)
     
     Outlook for the year ending
    (in millions, except per share data)January 31, 2025
    Net income$73 - 88
    Income tax provision29 - 34
    Income before income taxes - GAAP102 - 122
    Non-GAAP adjustments: 
    Amortization of acquired intangible assets112
    Stock-based compensation expense98
    Merger integration expenses13
    Costs associated with unused office space4
    Total adjustments to income before income taxes - GAAP227
    Income before income taxes - Non-GAAP329 - 349
    Income tax provision - Non-GAAP (1)82 - 87
    Non-GAAP net income$247 - 262
      
    Diluted weighted-average shares89
    GAAP net income per diluted share (2)$0.83 - 0.99
    Non-GAAP net income per diluted share (2)$2.79 - 2.96

    (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 
    TermDefinition
    HSAA financial account through which consumers spend and save long-term for healthcare on a tax-advantaged basis.
    CDBConsumer-directed benefits offered by employers, including flexible spending and health reimbursement arrangements (“FSAs” and “HRAs”), Consolidated Omnibus Budget Reconciliation Act (“COBRA”) administration, commuter and other benefits.
    HSA memberConsumers with HSAs that we serve.
    Total HSA AssetsHSA members’ custodial cash assets held by our federally insured depository partners and our insurance company partners. Total HSA Assets also includes HSA members' investments in mutual funds through our custodial investment fund partner.
    ClientOur employer clients.
    Total AccountsThe sum of HSAs and CDBs on our platforms.
    Client-held fundsDeposits held on behalf of our Clients to facilitate administration of our CDBs.
    Network PartnerOur health plan partners, benefits administrators, and retirement plan recordkeepers.
    Adjusted EBITDAEarnings before interest, taxes, depreciation and amortization, amortization of acquired intangible assets, stock-based compensation expense, merger integration expenses, acquisition costs, gains and losses on equity securities, amortization of incremental costs to obtain a contract, costs associated with unused office space, and certain other non-operating items.
    Non-GAAP net incomeCalculated by adding back to GAAP net income (loss) before income taxes the following items: amortization of acquired intangible assets, stock-based compensation expense, merger integration expenses, acquisition costs, gains and losses on equity securities, costs associated with unused office space, and losses on extinguishment of debt, and subtracting a non-GAAP tax provision using a normalized non-GAAP tax rate.
    Non-GAAP net income per diluted shareCalculated by dividing non-GAAP net income by diluted weighted-average shares outstanding.

    Primary Logo

Опубликовать