HealthEquity Reports 20% Revenue Growth to $1.2 Billion in Fiscal Year 2025

HealthEquity, Inc. reported significant financial growth in its latest 10-K filing for the fiscal year ending January 31, 2025. The company achieved total revenue of $1.2 billion, marking a 20% increase from $999.6 million in the previous fiscal year. This growth was driven by a substantial rise in custodial revenue, which surged by 41% to $545.4 million, attributed to an increase in average annualized yield on HSA cash and a higher average daily balance of HSA cash. Service revenue also saw a modest increase of 5%, reaching $478.3 million, while interchange revenue rose by 12% to $176 million.

HealthEquity's profitability improved significantly, with net income rising 74% to $96.7 million, compared to $55.7 million in the prior year. This increase in net income was primarily due to higher total revenue, although it was partially offset by increased operating expenses, including costs related to a lease settlement and fraud protection measures. The company's Adjusted EBITDA also increased by 28% to $471.8 million, reflecting a strong operational performance.

The company has made strategic moves to enhance its market position, including the acquisition of the BenefitWallet HSA portfolio, which added approximately 616,000 HSAs and $2.7 billion in HSA assets for a total purchase price of $425 million. This acquisition, along with the previously acquired HealthSavings HSA portfolio, has contributed to HealthEquity's growth in total accounts, which reached 17 million, a 9% increase year-over-year. The company now administers 9.9 million HSAs with total balances of $32.1 billion, representing a 27% increase in HSA assets from the previous year.

Operationally, HealthEquity has expanded its customer base and improved engagement metrics. The number of HSAs with investments increased by 23%, and the company has integrated its platforms with over 200 network partners, enhancing its distribution capabilities. The company also reported a favorable employee engagement score of 78% and a total headcount of 3,120 as of January 31, 2025, indicating a commitment to maintaining a strong workforce.

Looking ahead, HealthEquity anticipates continued growth driven by the increasing adoption of HSAs and consumer-directed benefits, alongside ongoing investments in technology and operational efficiencies. The company remains focused on its strategic initiatives, including further acquisitions and enhancements to its service offerings, while navigating the evolving regulatory landscape that impacts the healthcare benefits market.