HealthEquity shares surge on upbeat guidance, earnings and revenue beat

DRAPER, Utah – HealthEquity Inc. (NASDAQ: HQY), the nation’s largest health savings account (HSA) custodian, reported a robust first quarter with earnings and revenue surpassing analyst expectations, propelling its shares upwards by 4% in response. The company’s adjusted EPS of $0.80 beat the consensus estimate of $0.66, while revenue for the quarter increased by 18% to $287.6 million, exceeding the consensus estimate of $277.66 million.

The company’s financial success in the first quarter, ending April 30, 2024, was attributed to record HSA sales, enhanced rates adoption, and the timely transition of two of three BenefitWallet tranches. President and CEO Jon Kessler highlighted the team’s strong start to fiscal 2025, noting the momentum in growth and margins and the company’s decision to raise full-year guidance while continuing to invest in its platform.

In comparison to the same quarter last year, the company’s revenue showed a significant increase from $244.4 million, reflecting an 18% rise. Net income also saw a substantial jump to $28.8 million, up from $4.1 million in the first quarter of the previous fiscal year. Adjusted EBITDA grew by 36% to $117.4 million, representing 41% of revenue, compared to 35% in the prior year’s quarter.

For the fiscal year ending January 31, 2025, HealthEquity projects revenue to be between $1.16 billion and $1.18 billion, with adjusted EPS expected to range from $2.93 to $3.10. This guidance exceeds the analyst consensus of $2.90 for adjusted EPS and is slightly above the revenue consensus of $1.155 billion.

The company’s upbeat outlook is a reflection of its strategic acquisitions and operational efficiency. The acquisition of the BenefitWallet HSA portfolio, completed on May 9, 2024, for $425.0 million, has been a significant contributor to the company’s growth, adding approximately 616,000 HSAs and $2.7 billion in HSA assets.

HealthEquity’s leadership remains optimistic about the company’s trajectory. CEO Jon Kessler expressed confidence in the company’s direction, stating, “With momentum on both growth and margins, we are raising full year guidance and pushing forward our platform investments to deliver remarkable experiences, deepen partnerships, and drive member outcomes.”

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