Latest news with #HealthEquityInc
Yahoo
5 days ago
- Business
- Yahoo
HealthEquity Inc (HQY) Q1 2026 Earnings Call Highlights: Strong Revenue Growth Amid ...
Release Date: June 03, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. HealthEquity Inc (NASDAQ:HQY) reported a 15% year-over-year increase in revenue for Q1 2026. The company saw a 19% rise in adjusted EBITDA, indicating strong operational performance. HSA assets grew by 15%, with a notable 16% increase in the number of HSA members who invest. HealthEquity Inc (NASDAQ:HQY) successfully reduced fraud-related service costs from $11 million in Q4 to $3 million in Q1. The company is leveraging AI technology to enhance member satisfaction and reduce processing costs, with AI-driven expedited claims and chat support. New HSA sales were down compared to the previous year, reflecting softer macroeconomic conditions. Despite improvements, fraud costs remain a concern, with $3 million in reimbursements still impacting service costs. The company faces challenges in driving app adoption, with only 1.2 million downloads among 9.9 million HSA members. There is uncertainty around the impact of proposed legislative changes on the HSA market expansion. HealthEquity Inc (NASDAQ:HQY) is cautious about macroeconomic impacts on job creation and GDP growth, which could affect new account sales. Warning! GuruFocus has detected 6 Warning Sign with HQY. Q: Scott, can you discuss the slowdown in HSA selling conditions? Is it due to tough comparisons or macroeconomic factors? A: Scott Cutler, CEO: The 150,000 new HSA sales were lighter than last year's 194,000 but higher than the 134,000 in Q1 of fiscal 2024. We feel optimistic about our enterprise pipeline and believe our value proposition can help employers reduce healthcare costs. We remain cautious about macroeconomic impacts like slow GDP growth affecting new account sales. Q: Jim, you mentioned locking in 4% rates net of hedging costs. What is the duration of these contracts? A: James Luania, CFO: We have entered into forward Treasury contracts for five-year Treasuries, effectively locking in the base rate for maturities happening in Q4 of this year and next year. Q: Can you explain the impact of fraud costs on your guidance and how much upside there is if fraud costs normalize? A: James Luania, CFO: While we may have been ahead of some expectations, we are on track with our outlook. We aim to reach a one basis point exit rate for fraud costs in the second half of the year. We haven't changed our outlook from the last guidance as this quarter happened as expected. Q: How are you progressing towards getting current members to download the app, and how does this relate to security and fraud expenses? A: Scott Cutler, CEO: Our priority is fraud prevention and platform stabilization. We are driving a mobile-first secure experience, expecting members to authenticate through a passwordless method via the mobile app by fall. This will enhance security and member engagement. Q: Have you seen any fallout from elevated fraud levels in HSAs, and how is enterprise customer retention? A: Scott Cutler, CEO: We have seen no fallout from fraud on the platform, and our retention rates are higher than in previous years. We are communicating directly with enterprise clients about our security measures, which are seen as positive changes. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
20-03-2025
- Business
- Yahoo
Why HealthEquity Inc. (HQY) Went Down On Thursday?
We recently published a list of . In this article, we are going to take a look at where HealthEquity Inc. (NASDAQ:HQY) stands against other Wednesday's worst performers. Shares on Wall Street bounced back from a bloodbath, with all main indices ending in the green on Wednesday, as investors cheered the Federal Reserve's decision to keep interest rates unchanged. The tech-heavy Nasdaq led the gains, rallying 1.41 percent, followed by the S&P 500 with a 1.08 percent gain, and the Dow Jones, by 0.92 percent. Meanwhile, 10 companies defied overall market optimism, booking losses during the trading session. In this article, let's take a look at the 10 worst-performing stocks and explore the reasons behind their drop. To come up with the list, we considered only the companies with a $2-billion market capitalization and $5 million in trading volume. An online investment platform, showing stocks, index funds, and a mutual fund investment platform. HealthEquity Inc. (NASDAQ:HQY) HealthEquity fell by 17.07 percent on Wednesday to end at $84.32 each after missing earnings estimates in its latest earnings performance. In the fourth quarter of fiscal year 2025, HQY reported earnings per share of 69 cents, missing the Zacks Consensus Estimate by 2.82 percent. The bottom line, however, improved 9.5 percent on a year-on-year basis. Revenues, on the other hand, came in at $311.8 million, higher by 18.8 percent year-on-year, and beating Zacks Consensus Estimate by 2.2 percent. For fiscal year 2026, HQY said it expected revenues to settle between $1.28 billion and $1.30 billion. Adjusted EPS, meanwhile, is expected to settle between $3.57 to $3.74. Overall, HQY ranks 1st on our list of Wednesday's worst performers. While we acknowledge the potential of HQY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as HQY but trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
19-03-2025
- Business
- Yahoo
HealthEquity Inc (HQY) Q4 2025 Earnings Call Highlights: Strong Revenue Growth Amidst Rising ...
Revenue Growth: Up 19% year-over-year for Q4. Adjusted EBITDA: Increased 9% to $107.8 million for Q4. HSA Growth: HSAs grew 14%, totaling 9.9 million accounts. HSA Assets: Increased 27% to $32 billion. Invested Assets: Grew 44% to $14.7 billion. Gross Profit: $189 million, representing 61% of revenue for Q4. Net Income: $26.4 million or $0.30 per share (GAAP) for Q4. Non-GAAP Net Income: $61.3 million or $0.69 per share for Q4. Full Year Revenue: $1.2 billion, up 20% year-over-year. Full Year Adjusted EBITDA: $471.8 million, up 28% year-over-year. Cash on Hand: $296 million as of year-end. Fiscal '26 Revenue Guidance: $1.28 billion to $1.305 billion. Fiscal '26 GAAP Net Income Guidance: $164 million to $179 million. Fiscal '26 Non-GAAP Net Income Guidance: $318 million to $333 million. Fiscal '26 Adjusted EBITDA Guidance: $525 million to $545 million. Warning! GuruFocus has detected 3 Warning Signs with HQY. Release Date: March 18, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. HealthEquity Inc (NASDAQ:HQY) reported a 19% year-over-year increase in revenue for Q4 2025. The company achieved a milestone of 1 million new Health Savings Accounts (HSAs) from sales for the year. HSA assets increased by 27% year over year, with invested assets up 44% to $14.7 billion. The company launched a new app experience, downloaded by over 1 million members, enhancing user engagement. HealthEquity Inc (NASDAQ:HQY) introduced the Assist Portfolio, offering solutions like Analyzer and Navigator to improve benefits offerings for employers and employees. The company faced increased service costs due to sophisticated fraud activities, impacting gross profit. Gross profit margin decreased slightly from 62% to 61% year over year due to additional service costs. HealthEquity Inc (NASDAQ:HQY) expects elevated service costs to continue into the first half of fiscal 2026. The company is experiencing increased cyber threats and fraud attacks, leading to excess service expenses. Despite strong revenue growth, the adjusted EBITDA margin decreased from 38% to 35% in Q4 2025. Q: Can you explain the incremental service costs incurred in Q4 and their impact on fiscal '26? A: James Lucania, Executive Vice President and CFO, explained that the costs were due to sophisticated fraud activities, including reimbursements to members and increased service center costs. The impact was higher than expected in Q4, and similar costs are anticipated in the first half of fiscal '26, with normalization expected in the latter half. Q: What factors could drive results towards the lower end of your fiscal '26 guidance range? A: Scott Cutler, President and CEO, highlighted confidence in custodial line growth and enhanced rates. He mentioned the focus on expense management and service modernization to drive margin expansion, suggesting that these efforts support optimism for fiscal '26. Q: Is there direct monetization associated with the Assist initiative, and who are the partners involved? A: Scott Cutler stated that the Assist initiative focuses on enrollment, adoption, and engagement. Analyzer, an internally developed product, helps employers manage healthcare costs. Navigator, developed with Talend, aids in engagement and compliance. The initiative leverages technology and partnerships to enhance member experiences. Q: How should we think about investment in R&D given the focus on technology enhancements? A: Scott Cutler indicated no material change in R&D spending as a percentage of revenue but emphasized prioritizing a member-first secure mobile experience. The focus will be on enhancing app adoption, AI-driven claims automation, and overall tech efficiency. Q: Can you discuss the fraud activity and its resolution? A: Scott Cutler clarified that the fraud involved account takeovers, not data breaches. The company is enhancing security measures, including multifactor authentication, to address these issues. James Lucania added that the fraud is not a cybersecurity incident but rather traditional account impersonation. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Sign in to access your portfolio
