HealthEquity (HQY) Q3 2025 earnings summary

Executive summary

• Revenue reached $300.4 million in Q3 FY25, up 21% year-over-year, with adjusted EBITDA up 24% to $118.2 million and HSA assets up 33% to $30.0 billion.

• HSA members grew 15% to 9.5 million, total accounts up 8% to 16.5 million, and 186,000 new HSAs were opened organically in Q3.

• Completed BenefitWallet HSA portfolio acquisition, adding 616,000 HSAs and $2.7 billion in assets.

• Announced CEO transition: Jon Kessler to retire January 2025, Scott Cutler named successor.

• 0.7 million shares repurchased for $60 million; $240 million remains authorized for repurchase.

Financial highlights

• Q3 revenue was $300.4 million (+21% YoY); service revenue $119.2M (+4%), custodial revenue $141M (+41%), interchange revenue $40.3M (+15%).

• Gross profit was $197M (66% of revenue), up from 64% last year.

• Net income was $5.7M ($0.06/share GAAP), impacted by a $30M one-time legal settlement; non-GAAP net income $69.4M ($0.78/share).

• Adjusted EBITDA $118.2M (+24% YoY), 39% of revenue.

• Net cash from operations for the nine months was $264M; cash and equivalents at quarter-end were $322M.

Outlook and guidance

• FY25 revenue expected between $1.185B–$1.195B; GAAP net income $88M–$96M ($0.99–$1.08/share); non-GAAP net income $274M–$281M ($3.08–$3.16/share).

• Adjusted EBITDA for FY25 expected $470M–$480M; average HSA cash yield ~3.1%.

• FY26 initial guidance: revenue $1.275B–$1.295B, adjusted EBITDA margin 41.5%–42.5%, HSA cash yield 3.4%–3.5%.

• Guidance includes continued share repurchases and debt reduction.

• Expects further increases in custodial revenue as contracts reprice at higher rates.