Revenue increased 7% to $322.2 million.
Net income per diluted share rose to $0.59 from $0.06 one year ago, and non-GAAP net income per diluted share increased 29% to $1.01.
Total HSA Assets grew 15% to $34.4 billion.
Returned $93.7 million to shareholders through stock repurchases.
Further reduced HSA cash repricing risk with a cumulative $2.25 billion 5-year Treasury bond hedge at 3.94%.
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.
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 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 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:
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;
the impact of recent fraudulent account activity involving our member accounts or our third-party service providers on our reputation and financial results;
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;
impact of 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, 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 ContactRichard
HealthEquity, Inc. and subsidiariesCondensed consolidated balance sheets
(in thousands, except par value)
October 31, 2025
January 31, 2025
(unaudited)
Assets
Current assets
Cash and cash equivalents
$
309,259
$
295,948
Accounts receivable, net of allowance for doubtful accounts of $918 and $2,070 as of October 31, 2025 and January 31, 2025, respectively
111,243
118,006
Prepaid expenses and other current assets
78,206
63,795
Total current assets
498,708
477,749
Property and equipment, net
3,390
3,239
Operating lease right-of-use assets
38,045
43,185
Intangible assets, net
1,124,768
1,204,658
Goodwill
1,648,145
1,648,145
Other assets
85,005
71,574
Total assets
$
3,398,061
$
3,448,550
Liabilities and stockholders' equity
Current liabilities
Accounts payable
$
19,549
$
14,361
Accrued compensation
43,735
69,330
Accrued liabilities
47,413
62,631
Operating lease liabilities
9,931
10,001
Total current liabilities
120,628
156,323
Long-term liabilities
Long-term debt, net of issuance costs
982,105
1,056,301
Operating lease liabilities, non-current
36,228
42,219
Other long-term liabilities
23,501
22,962
Deferred tax liability
101,573
55,834
Total long-term liabilities
1,143,407
1,177,316
Total liabilities
1,264,035
1,333,639
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.0001 par value, 100,000 shares authorized, no shares issued and outstanding as of October 31, 2025 and January 31, 2025, respectively
—
—
Common stock, $0.0001 par value, 900,000 shares authorized, 85,615 and 86,536 shares issued and outstanding as of October 31, 2025 and January 31, 2025, respectively
9
9
Additional paid-in capital
1,917,244
1,905,628
Accumulated other comprehensive income
8,837
—
Accumulated earnings
207,936
209,274
Total stockholders' equity
2,134,026
2,114,911
Total liabilities and stockholders' equity
$
3,398,061
$
3,448,550
HealthEquity, Inc. and subsidiariesCondensed consolidated statements of operations (unaudited)
Three months ended October 31,
Nine months ended October 31,
(in thousands, except per share data)
2025
2024
2025
2024
Revenue
Service revenue
$
120,286
$
119,174
$
357,943
$
354,108
Custodial revenue
159,067
140,953
475,398
401,281
Interchange revenue
42,811
40,305
145,502
132,568
Total revenue
322,164
300,432
978,843
887,957
Cost of revenue
Service costs
76,889
86,860
240,050
246,122
Custodial costs
10,879
10,241
32,763
29,406
Interchange costs
6,333
6,305
21,061
24,213
Total cost of revenue
94,101
103,406
293,874
299,741
Gross profit
228,063
197,026
684,969
588,216
Operating expenses
Sales and marketing
24,411
22,636
70,317
67,655
Technology and development
65,916
60,189
192,156
174,859
General and administrative
30,880
31,789
86,406
102,285
Amortization of acquired intangible assets
27,002
28,350
81,005
84,876
Merger integration
1,159
34,437
3,700
38,357
Total operating expenses
149,368
177,401
433,584
468,032
Income from operations
78,695
19,625
251,385
120,184
Other expense
Interest expense
(14,049
)
(18,155
)
(43,862
)
(45,377
)
Other income, net
2,886
4,748
9,010
11,266
Total other expense
