HealthEquity Reports Third Quarter Ended October 31, 2018 Financial Results
Highlights of the third quarter include:
Revenue of $70.5 million, an increase of 24% compared to Q3 FY18.
Net income of $15.7 million, an increase of 50% compared to Q3 FY18.
Net income per diluted share of $0.25 compared to $0.17 in Q3 FY18.
Non-GAAP net income per diluted share of $0.28 compared to $0.17 in Q3 FY18.
Adjusted EBITDA of $29.7 million, an increase of 40% compared to Q3 FY18.
HSA Members of 3.7 million, an increase of 22% compared to Q3 FY18.
Total Custodial Assets of $7.1 billion, an increase of 27% compared to Q3 FY18.
Draper, Utah – December 4, 2018 – HealthEquity, Inc. (NASDAQ: HQY) ("HealthEquity" or the "Company"), the nation's largest health savings account ("HSA") non-bank custodian, today announced financial results for its third quarter ended October 31, 2018.
“HealthEquity delivered robust third quarter results, strengthening our momentum going into the important fourth quarter and year end,” said Jon Kessler, President and CEO of HealthEquity. “By adding more than $1.5 billion in additional custodial assets since the end of our third quarter last year, our growth continues well ahead of the market, allowing us to raise guidance for fiscal year 2019. Importantly, with custodial investment assets growing by 53% over the third quarter end last year, we are delivering on our promise to help our HSA members connect health and wealth and put them on the fast track to retirement readiness.”  
Third quarter financial results
For the third quarter ended October 31, 2018, HealthEquity reported revenue of $70.5 million, an increase of 24% compared to $56.8 million for the third quarter ended October 31, 2017. Revenue consisted of:
Service revenue of $25.0 million, an increase of 9% compared to Q3 FY18.
Custodial revenue of $31.6 million, an increase of 43% compared to Q3 FY18.
Interchange revenue of $13.9 million, an increase of 18% compared to Q3 FY18.
Net income was $15.7 million for the third quarter ended October 31, 2018, compared to $10.5 million for the third quarter ended October 31, 2017.
Net income per diluted share was $0.25 for the third quarter ended October 31, 2018, compared to $0.17 for the third quarter ended October 31, 2017.
Non-GAAP net income per diluted share was $0.28 for the third quarter ended October 31, 2018, compared to $0.17 for the third quarter ended October 31, 2017.
Non-GAAP Adjusted EBITDA was $29.7 million for the third quarter ended October 31, 2018, an increase of 40% compared to $21.2 million for the third quarter ended October 31, 2017. Adjusted EBITDA was 42% of revenue for the third quarter ended October 31, 2018, compared to 37% for the third quarter ended October 31, 2017.
As of October 31, 2018, we had $330.3 million of cash, cash equivalents and marketable securities and no outstanding debt. This compares to $240.3 million in cash, cash equivalents and marketable securities and no outstanding debt as of January 31, 2018.
HSA Member and Custodial Asset metrics
The total number of HSAs for which we serve as a non-bank custodian ("HSA Members") as of October 31, 2018 was 3.7 million, an increase of 22% from 3.0 million as of October 31, 2017. Total Active HSA Members as of October 31, 2018 was 3.0 million, an increase of 17% from 2.5 million as of October 31, 2017. An Active HSA Member is an HSA Member that (i) is associated with a Health Plan and Administrator Partner or an Employer Partner, in each case as of the end of the applicable period; or (ii) has held a custodial balance at any point during the previous twelve month period.
Total Custodial Assets as of October 31, 2018 was $7.1 billion, an increase of 27% year over year, consisting of:
Custodial Cash Assets of $5.6 billion, an increase of 22% compared to October 31, 2017; and
Custodial Investment Assets of $1.5 billion, an increase of 53% compared to October 31, 2017.



The following information was filed by Healthequity Inc (HQY) on Tuesday, December 4, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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