HealthEquity, Inc. (HQY) reported record revenue of $322.2 million for its third quarter of fiscal 2026, a 7 % year‑over‑year increase from $300.4 million in the same period a year earlier. Net income rose to $51.7 million, while non‑GAAP net income reached $87.7 million, translating to a non‑GAAP earnings per diluted share of $1.01—an $0.11 or 12 % beat over the consensus estimate of $0.90–$0.91. Adjusted EBITDA climbed 20 % to $141.8 million, representing a 44 % margin versus 39 % in fiscal 2025, the largest margin expansion in the company’s history.
The revenue mix reflected strong performance across all core segments. Service revenue grew to $120.3 million, custodial revenue expanded to $159.1 million, and interchange revenue reached $42.8 million. Total HSA assets increased 15 % to $34.4 billion, while total accounts rose 21 % to 17.3 million, including 7.2 million complementary CDBs. The growth in custodial revenue, driven by higher asset balances and fee‑based services, was a key contributor to the margin expansion.
Management attributed the results to sustained demand for HSA administration and investment services, amplified by the company’s technology investments. The launch of a direct HSA enrollment platform and the deployment of AI‑powered member engagement tools have broadened the addressable market and improved operational efficiency. These initiatives have helped the company capture a larger share of the growing HSA market, which is expected to expand as policy changes make HSAs more accessible.
Margin expansion was also supported by disciplined cost management. Fraud costs were contained at approximately $0.3 million, well below the target of 1 basis point of total HSA assets per year. The company’s investment in automation and data analytics has reduced manual processing costs, while the higher mix of custodial and interchange revenue—both higher‑margin streams—has offset any pressure from lower‑margin service revenue.
Looking ahead, HealthEquity raised its fiscal‑year revenue guidance to $1.302 billion–$1.312 billion and adjusted EBITDA guidance to $555 million–$565 million, reflecting confidence in continued demand and operational leverage. The company highlighted ongoing headwinds such as potential regulatory uncertainty and the need to maintain fraud controls, but emphasized tailwinds from the expanding HSA market, AI deployment, and the One Big Beautiful Bill Act’s potential to broaden the addressable customer base.
CEO Scott Cutler said, “HealthEquity delivered a record third quarter for fiscal 2026, with net income of $52 million, 20 % growth in Adjusted EBITDA, and 29 % growth in non‑GAAP net income per share, reflecting our team’s focus on helping members better save, spend and invest for health.” He added, “HSAs sit at the center of our solution to that challenge, and this positions us well as millions of households consider Bronze plans in the months ahead.” Cutler also noted that fraud costs were well below the company’s run‑rate target and that policymakers are exploring options to make HSAs available to more Americans.
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