HealthEquity, Inc. reported significant financial growth in its latest 10-Q filing for the quarter ending July 31, 2024. The company achieved total revenue of $299.9 million, a 23% increase from $243.5 million in the same quarter of 2023. This growth was driven by a substantial rise in custodial revenue, which surged 50% to $138.7 million, and a 4% increase in service revenue to $116.7 million. For the six months ended July 31, 2024, total revenue reached $587.5 million, up 20% from $488.0 million in the prior year.

HealthEquity's profitability also improved markedly, with net income for the three months ending July 31, 2024, rising to $35.8 million, compared to $10.6 million in the same period of 2023, reflecting a 239% increase. For the six-month period, net income was $64.6 million, a 340% increase from $14.7 million in the previous year. The company reported a diluted net income per share of $0.40 for the latest quarter, up from $0.12 a year earlier.

The company’s total assets increased to $3.5 billion as of July 31, 2024, up from $3.2 billion at the end of January 2024. However, total current assets decreased to $495.6 million, down from $557.4 million. Long-term liabilities rose significantly to $1.2 billion, primarily due to an increase in long-term debt, which reached $1.1 billion, up from $875.0 million.

Strategically, HealthEquity completed the acquisition of the BenefitWallet HSA portfolio from Conduent Business Services, LLC, for a total purchase price of $425 million, financed through a combination of cash and borrowings. The acquisition, finalized in three tranches, is expected to enhance the company’s market position in the HSA sector, where it currently administers 9.4 million accounts with total balances of $29.5 billion.

The company also reported a significant increase in cash provided by operating activities, which rose to $173.6 million for the six months ended July 31, 2024, compared to $108.6 million in the prior year. However, net cash used in investing activities surged to $(479.0 million), primarily due to the acquisition costs.

HealthEquity's ongoing investments in technology and modernization efforts are aimed at enhancing security and transaction processing capabilities, which are critical in maintaining its competitive edge in the health savings account market.