On September 3, 2024, HealthEquity Inc (HQY, Financial) released its 8-K filing for the second quarter ended July 31, 2024. HealthEquity Inc provides solutions that allow consumers to make healthcare saving and spending decisions. It manages tax-advantaged health savings accounts (HSAs) and other consumer-directed benefits (CDBs) offered by employers, including flexible spending accounts and health reimbursement arrangements (FSAs and HRAs), and administers COBRA, commuter, and other benefits.
Performance Overview
HealthEquity Inc (HQY, Financial) reported a revenue of $299.9 million for Q2 FY25, a 23% increase compared to $243.5 million in Q2 FY24. This figure significantly surpassed the analyst estimate of $284.87 million. The company also reported a net income of $35.8 million, or $0.40 per diluted share, compared to $10.6 million, or $0.12 per diluted share, in the same quarter last year. Non-GAAP net income was $76.3 million, or $0.86 per diluted share, up from $45.6 million, or $0.53 per diluted share, in Q2 FY24. These results exceeded the analyst estimate of $0.84 earnings per share.
Key Financial Achievements
HealthEquity Inc (HQY, Financial) achieved several notable financial milestones this quarter:
- Adjusted EBITDA of $128.3 million, a 46% increase from $88.1 million in Q2 FY24.
- 9.4 million HSAs, a 15% year-over-year increase.
- Total HSA Assets of $29.5 billion, a 27% year-over-year increase.
- 16.3 million Total Accounts, including both HSAs and complementary CDBs, a 9% year-over-year increase.
Income Statement Highlights
| Metric | Q2 FY25 | Q2 FY24 |
|---|---|---|
| Revenue | $299.9 million | $243.5 million |
| Net Income | $35.8 million | $10.6 million |
| Net Income per Diluted Share | $0.40 | $0.12 |
| Adjusted EBITDA | $128.3 million | $88.1 million |
Balance Sheet and Cash Flow
HealthEquity Inc (HQY, Financial) reported total assets of $3.51 billion as of July 31, 2024, up from $3.16 billion as of January 31, 2024. The company’s cash and cash equivalents stood at $326.9 million, compared to $404 million at the beginning of the fiscal year. The increase in long-term debt to $1.1 billion from $875 million reflects the company's recent refinancing activities.
Stock Repurchase Program
The company announced a $300 million stock repurchase program, reflecting its strong financial position and commitment to returning value to shareholders. This program allows HealthEquity Inc (HQY, Financial) to repurchase shares as market conditions warrant, through open market purchases, privately negotiated transactions, or other methods.
Refinancing of Credit Facilities
On August 23, 2024, HealthEquity Inc (HQY, Financial) entered into a new five-year senior secured revolving credit facility of up to $1.0 billion. The company borrowed $511.9 million under this new facility to refinance all outstanding obligations under its prior credit agreement.
Business Outlook
For the fiscal year ending January 31, 2025, HealthEquity Inc (HQY, Financial) expects revenue between $1.165 billion and $1.185 billion. The outlook for net income is between $94 million and $109 million, resulting in net income per diluted share of $1.05 to $1.22. Non-GAAP net income is projected to be between $265 million and $280 million, translating to non-GAAP net income per diluted share of $2.98 to $3.14.
HealthEquity Inc (HQY, Financial) continues to demonstrate robust growth and financial health, driven by its expanding HSA portfolio and strategic initiatives. For more detailed insights, visit the full 8-K filing.
Explore the complete 8-K earnings release (here) from HealthEquity Inc for further details.
