HealthEquity (HQY) Tops Q3 EPS by 7c, Revenues Beat; Offers FY21 EPS/Revenue Outlook

HealthEquity (NASDAQ: HQY) reported Q3 EPS of $0.43, $0.07 better than the analyst estimate of $0.36. Revenue for the quarter came in at $179.4 million versus the consensus estimate of $176.78 million.

Highlights of the third quarter include:

• Revenue of $179.4 million, an increase of 14% compared to $157.1 million in Q3 FY20.
• Net income of $1.8 million, with non-GAAP net income of $32.2 million, compared to net loss of $21.3 million and non-GAAP net income of $30.3 million in Q3 FY20.
• Net income per diluted share of $0.02, with non-GAAP net income per diluted share of $0.41, compared to net loss per diluted share of $0.30 and non-GAAP net income per diluted share of $0.43 in Q3 FY20.
• Adjusted EBITDA of $61.1 million, an increase of 10% compared to $55.5 million in Q3 FY20.
• 5.5 million HSAs, an increase of 9% compared to Q3 FY20.
• $12.4 billion Total HSA Assets, an increase of 19% compared to Q3 FY20.
• 12.5 million Total Accounts, including both HSAs and complementary CDB accounts, the same as in Q3 FY20.

"HealthEquity provided another quarter of growth and profitability," said Jon Kessler, President and CEO of HealthEquity. "Our team helped members open over 104,000 new HSAs this quarter, growing membership organically by 11% year-over-year, with HSA assets growing by more than $200 million, or 19% year-over-year. Total accounts held steady at 12.5 million despite 0.6 million commuter accounts being suspended as more participants began working from home due to COVID-19. Revenue grew by 14% to $179 million, overcoming a nearly 40% decrease in commuter revenue, and adjusted EBITDA grew 10% to $61 million in the quarter, producing a 34% margin during the pandemic. We are pleased with how quickly the team has adjusted during this time and look forward to finishing this fiscal year strong, positioning us for further growth next year."

GUIDANCE:

HealthEquity sees FY2021 EPS of $1.55-$1.61, versus the consensus of $1.56. HealthEquity sees FY2021 revenue of $725-731 million, versus the consensus of $728.06 million.

For the fiscal year ending January 31, 2021, management expects revenues of $725 million to $731 million. Its outlook for net loss or income is between net loss of $5 million and net income of $2 million, resulting in net loss of $0.07 to net income of $0.02 per diluted share. Its outlook for non-GAAP net income, calculated using the method described below, is between $116 million and $121 million, resulting in non-GAAP net income per diluted share of $1.55 to $1.61 (based on an estimated 75 million weighted-average shares outstanding). Management expects Adjusted EBITDA of $232 million to $238 million.

For earnings history and earnings-related data on HealthEquity (HQY) click here.

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