HealthEquity (HQY) Q3 2025 Financial Results Summary
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HealthEquity (HQY) Q3 2025 Financial Results Summary
HealthEquity, Inc. (NASDAQ: HQY) announced its financial results for the third quarter ended October 31, 2025, on December 3, 2025. Here are the key highlights from the report:
Financial Highlights
- Revenue:
- Total revenue for Q3 2025 reached $322.2 million, a 7% increase from $300.4 million in Q3 2024.
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Revenue breakdown:
- Service revenue: $120.3 million
- Custodial revenue: $159.1 million
- Interchange revenue: $42.8 million
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Net Income:
- Net income was $51.7 million, translating to $0.59 per diluted share, compared to $5.7 million (or $0.06 per diluted share) a year ago, demonstrating a 806% growth in net income.
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Non-GAAP net income rose 29% to $1.01 per diluted share from $0.78 the previous year.
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Adjusted EBITDA:
- Adjusted EBITDA amounted to $141.8 million, reflecting a 20% increase compared to $118.2 million in Q3 2024.
- Adjusted EBITDA margin was 44% of revenue, an increase from 39% year-over-year.
HSA Accounts and Assets
- HSA Accounts:
- As of October 31, 2025, total HSAs were 10.1 million, marking a 6% increase from 9.5 million the prior year.
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HSAs with investments also increased by 12% year-over-year to 802,000.
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HSA Assets:
- Total HSA Assets reached $34.4 billion, a 15% increase from $29.9 billion in Q3 2024.
- This includes:
- HSA cash: $16.9 billion (up 3% from previous year)
- HSA investments: $17.5 billion (up 29% from previous year)
Shareholder Returns
- HealthEquity returned $93.7 million to shareholders through stock repurchases during the quarter.
- The company repurchased 1.0 million shares, leaving $258.8 million authorized for future stock buybacks.
Business Outlook
- For the fiscal year ending January 31, 2026, HealthEquity projects:
- Revenue between $1.302 billion to $1.312 billion.
- Net income forecast of $197 million to $205 million, implying net income per diluted share of $2.24 to $2.33.
- Non-GAAP net income projected between $341 million to $348 million, resulting in non-GAAP net income per diluted share of $3.87 to $3.95.
Conclusion
HealthEquity reported robust financial performance in Q3 2025, driven by a significant rise in both revenue and earnings metrics compared to the same quarter last year. The company’s focus on enhancing HSAs and expanding market presence contributed to increased account numbers and total assets, ultimately resulting in substantial shareholder returns through stock buybacks.
Call to Action
Investors and stakeholders can learn more about HealthEquity’s ongoing financial developments by accessing the conference call recorded on December 3, 2025.
Here are the extracted tables in HTML format:
Condensed Consolidated Statements of Operations (unaudited) (in thousands)
| Three months ended October 31, 2025 | Three months ended October 31, 2024 | Nine months ended October 31, 2025 | Nine months ended October 31, 2024 | |
|---|---|---|---|---|
| Service revenue | $ 120,286 | $ 119,174 | $ 357,943 | $ 354,108 |
| Custodial revenue | $ 159,067 | $ 140,953 | $ 475,398 | $ 401,281 |
| Interchange revenue | $ 42,811 | $ 40,305 | $ 145,502 | $ 132,568 |
| Total revenue | $ 322,164 | $ 300,432 | $ 978,843 | $ 887,957 |
| Service costs | $ 76,889 | $ 86,860 | $ 240,050 | $ 246,122 |
| Custodial costs | $ 10,879 | $ 10,241 | $ 32,763 | $ 29,406 |
| Interchange costs | $ 6,333 | $ 6,305 | $ 21,061 | $ 24,213 |
| Total cost of revenue | $ 94,101 | $ 103,406 | $ 293,874 | $ 299,741 |
| Gross profit | $ 228,063 | $ 197,026 | $ 684,969 | $ 588,216 |
| Sales and marketing | $ 24,411 | $ 22,636 | $ 70,317 | $ 67,655 |
| Technology and development | $ 65,916 | $ 60,189 | $ 192,156 | $ 174,859 |
| General and administrative | $ 30,880 | $ 31,789 | $ 86,406 | $ 102,285 |
| Amortization of acquired intangible assets | $ 27,002 | $ 28,350 | $ 81,005 | $ 84,876 |
| Merger integration | $ 1,159 | $ 34,437 | $ 3,700 | $ 38,357 |
| Total operating expenses | $ 149,368 | $ 177,401 | $ 433,584 | $ 468,032 |
| Income from operations | $ 78,695 | $ 19,625 | $ 251,385 | $ 120,184 |
| Interest expense | $ -14,049 | $ -18,155 | $ -43,862 | $ -45,377 |
| Other income, net | $ 2,886 | $ 4,748 | $ 9,010 | $ 11,266 |
| Total other expense | $ -11,163 | $ -13,407 | $ -34,852 | $ -34,111 |
| Income before income taxes | $ 67,532 | $ 6,218 | $ 216,533 | $ 86,073 |
| Income tax provision | $ 15,840 | $ 515 | $ 51,072 | $ 15,735 |
| Net income | $ 51,692 | $ 5,703 | $ 165,461 | $ 70,338 |
| Net income per share: | ||||
| Basic | $ 0.60 | $ 0.07 | $ 1.92 | $ 0.81 |
| Diluted | $ 0.59 | $ 0.06 | $ 1.88 | $ 0.79 |
| Weighted-average shares used to compute net income per share: | ||||
| Basic | 85,995 | 87,193 | 86,397 | 86,935 |
| Diluted | 86,970 | 88,634 | 87,799 | 88,699 |
Condensed Consolidated Balance Sheets (in thousands)
| October 31, 2025 | January 31, 2025 | |
|---|---|---|
| Assets | ||
| Current assets | ||
| Cash and cash equivalents | $ 309,259 | $ 295,948 |
| Accounts receivable, net of allowance for doubtful accounts of $918 and $2,070 | $ 111,243 | $ 118,006 |
| Prepaid expenses and other current assets | $ 78,206 | $ 63,795 |
| Total current assets | $ 498,708 | $ 477,749 |
| Property and equipment, net | $ 3,390 | $ 3,239 |
| Operating lease right-of-use assets | $ 38,045 | $ 43,185 |
| Intangible assets, net | $ 1,124,768 | $ 1,204,658 |
| Goodwill | $ 1,648,145 | $ 1,648,145 |
| Other assets | $ 85,005 | $ 71,574 |
| Total assets | $ 3,398,061 | $ 3,448,550 |
| Liabilities and stockholders’ equity | ||
| Current liabilities | ||
| Accounts payable | $ 19,549 | $ 14,361 |
| Accrued compensation | $ 43,735 | $ 69,330 |
| Accrued liabilities | $ 47,413 | $ 62,631 |
| Operating lease liabilities | $ 9,931 | $ 10,001 |
| Total current liabilities | $ 120,628 | $ 156,323 |
| Long-term liabilities | ||
| Long-term debt, net of issuance costs | $ 982,105 | $ 1,056,301 |
| Operating lease liabilities, non-current | $ 36,228 | $ 42,219 |
| Other long-term liabilities | $ 23,501 | $ 22,962 |
| Deferred tax liability | $ 101,573 | $ 55,834 |
| Total long-term liabilities | $ 1,143,407 | $ 1,177,316 |
| Total liabilities | $ 1,264,035 | $ 1,333,639 |
| Commitments and contingencies | ||
| Stockholders’ equity | ||
| Preferred stock, $0.0001 par value, 100,000 shares authorized, no shares issued and outstanding as of October 31, 2025 and January 31, 2025 | — | — |
| Common stock, $0.0001 par value, 900,000 shares authorized, 85,615 and 86,536 shares issued and outstanding as of October 31, 2025 and January 31, 2025 | 9 | 9 |
| Additional paid-in capital | $ 1,917,244 | $ 1,905,628 |
| Accumulated other comprehensive income | $ 8,837 | $ — |
| Accumulated earnings | $ 207,936 | $ 209,274 |
| Total stockholders’ equity | $ 2,134,026 | $ 2,114,911 |
| Total liabilities and stockholders’ equity | $ 3,398,061 | $ 3,448,550 |