HealthEquity Reports 15% Revenue Growth to $330.8 Million, Net Income Up 87%

HealthEquity, Inc. reported significant financial performance for the three months ending April 30, 2025, with total revenue reaching $330.8 million, a 15% increase from $287.6 million in the same period last year. The growth was driven by a notable rise in custodial revenue, which surged by 29% to $156.5 million, and interchange revenue, which increased by 14% to $54.6 million. Service revenue saw a modest increase of 1%, totaling $119.8 million. The company's net income also experienced substantial growth, rising 87% to $53.9 million, compared to $28.8 million in the prior year, resulting in a net income per diluted share of $0.61.

In terms of operational metrics, HealthEquity administered approximately 9.9 million health savings accounts (HSAs) as of April 30, 2025, reflecting a 9% increase from the previous year. The total accounts, which include complementary consumer-directed benefits (CDBs), reached 17.1 million, up from 16.0 million a year earlier. The company also reported that HSA assets totaled $31.3 billion, a 15% increase from $27.3 billion in the prior year, driven by net contributions and market value increases.

Strategically, HealthEquity completed the acquisition of the BenefitWallet HSA portfolio, which added approximately 616,000 HSAs and $2.7 billion in HSA assets. This acquisition was financed through a combination of cash and $225 million in borrowings from its revolving credit facility. The company continues to focus on integrating acquired businesses to enhance its service offerings and expand its market share, which has grown from 4% in 2010 to 21% as of December 2024.

The company’s balance sheet showed total assets of $3.4 billion as of April 30, 2025, down slightly from $3.4 billion at the end of January 2025. Total liabilities decreased to $1.3 billion, primarily due to a reduction in current liabilities. HealthEquity's stockholders' equity increased to $2.1 billion, reflecting strong operational performance and stock repurchases amounting to $59.1 million during the quarter. The company maintains a robust liquidity position with cash and cash equivalents of $287.9 million.

Looking ahead, HealthEquity anticipates continued growth in service and custodial revenues, driven by an increase in total accounts and favorable market conditions. The company expects to benefit from higher average annualized yields on HSA cash and an increase in the percentage of HSA cash held in its Enhanced Rates offering. However, it remains cautious about potential impacts from changes in healthcare policy and tax law, which could affect its business model and revenue streams.