Q2 2025 Healthequity Inc Earnings Call Transcript
Key Points
- HealthEquity Inc (HQY) reported double-digit year-over-year growth across key metrics, including a 23% increase in revenue, 46% increase in adjusted EBITDA, and 27% increase in HSA assets.
- The company successfully transitioned the final tranche of BenefitWallet, adding approximately 216,000 HSAs and $1.0 billion in HSA assets in Q2.
- HealthEquity Inc (HQY) ended Q2 with over 16 million total accounts, including 9 million HSAs holding $29 billion in HSA assets.
- The company launched a new mobile app and completed a card processor migration, enabling stack cards on major digital wallets and future instant card issuance.
- HealthEquity Inc (HQY) announced a $300 million share repurchase authorization, reflecting confidence in its financial position and future growth prospects.
- Service revenue growth was only 4% year over year, reflecting a mixed shift toward HSAs with lower average unit service revenue.
- The company faces potential volatility in custodial yields due to changes in interest rates, which could impact future financial performance.
- Despite strong performance, the guidance for the second half of the fiscal year implies a significant step down in margins, raising concerns about future profitability.
- The company acknowledged challenges in maintaining flat service costs and highlighted the need for continued investment in technology and development.
- HealthEquity Inc (HQY) is still dealing with the aftermath of a cyber incident disclosed during the quarter, which required significant resources and attention.
Good afternoon and welcome to the HealthEquity second-quarter 2025 earnings conference call. (Operator Instructions)
Please note, this event is being recorded. I would now like to turn the conference over to Richard Putnam. Please go ahead.
Thank you, Gary. Appreciate it. Hello, everyone. Welcome to HealthEquity's second quarter of fiscal year 2025 earnings conference call. My name is Richard Putnam. I do investor relations for HealthEquity. Joining me today is Jon Kessler, President and CEO; Dr. Steve Neeleman, Vice Chair and Founder of the company; and James Lucania -- one-year anniversary, James -- Executive Vice President and CFO.
Before I turn the call over to Jon, I have a couple of reminders. First, the press release announcing the financial results for our second quarter of fiscal 2025 was issued after the market closes this afternoon. These financial results include contributions from our wholly-owned subsidiaries and accounts they administer. The press release includes
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