Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Jan. 31, 2019 | Feb. 28, 2019 | Jul. 31, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | HEALTHEQUITY INC | ||
Entity Central Index Key | 0001428336 | ||
Current Fiscal Year End Date | --01-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Jan. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 62,471,952 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 4.1 | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | false | ||
Entity Shell Company | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Jan. 31, 2019 | Jan. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 361,475 | $ 199,472 |
Marketable securities, at fair value | 0 | 40,797 |
Total cash, cash equivalents and marketable securities | 361,475 | 240,269 |
Accounts receivable, net of allowance for doubtful accounts of $125 and $208 as of January 31, 2019 and 2018, respectively | 25,668 | 21,602 |
Other current assets | 7,534 | 3,525 |
Total current assets | 394,677 | 265,396 |
Property and equipment, net | 8,223 | 7,836 |
Intangible assets, net | 79,666 | 83,635 |
Goodwill | 4,651 | 4,651 |
Deferred tax asset | 1,677 | 5,461 |
Other assets | 21,122 | 2,180 |
Total assets | 510,016 | 369,159 |
Current liabilities | ||
Accounts payable | 3,520 | 2,420 |
Accrued compensation | 16,981 | 12,549 |
Accrued liabilities | 8,552 | 5,521 |
Total current liabilities | 29,053 | 20,490 |
Long-term liabilities | ||
Other long-term liabilities | 2,968 | 2,395 |
Deferred tax liability | 916 | 0 |
Total long-term liabilities | 3,884 | 2,395 |
Total liabilities | 32,937 | 22,885 |
Commitments and contingencies (see note 6) | ||
Stockholders’ equity | ||
Preferred stock, $0.0001 par value, 100,000 shares authorized, no shares issued and outstanding as of January 31, 2019 and 2018 | 0 | 0 |
Common stock, $0.0001 par value, 900,000 shares authorized, 62,446 and 60,825 shares issued and outstanding as of January 31, 2019 and 2018, respectively | 6 | 6 |
Additional paid-in capital | 305,223 | 261,237 |
Accumulated other comprehensive loss, net | 0 | (269) |
Accumulated earnings | 171,850 | 85,300 |
Total stockholders’ equity | 477,079 | 346,274 |
Total liabilities and stockholders’ equity | $ 510,016 | $ 369,159 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jan. 31, 2019 | Jan. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 125 | $ 208 |
Preferred stock par value (dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (shares) | 100,000,000 | 100,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Common stock, par value per share (dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (shares) | 900,000,000 | 900,000,000 |
Common stock, shares issued (shares) | 62,446,000 | 60,825,000 |
Common stock, shares outstanding (shares) | 62,446,000 | 60,825,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Total revenue | $ 287,243 | $ 229,525 | $ 178,370 |
Total cost of revenue | 106,050 | 94,609 | 72,015 |
Gross profit | 181,193 | 134,916 | 106,355 |
Operating expenses | |||
Sales and marketing | 29,498 | 23,139 | 18,320 |
Technology and development | 35,057 | 27,385 | 22,375 |
General and administrative | 33,039 | 25,111 | 20,151 |
Amortization of acquired intangible assets | 5,929 | 4,863 | 4,297 |
Total operating expenses | 103,523 | 80,498 | 65,143 |
Income from operations | 77,670 | 54,418 | 41,212 |
Other expense | |||
Other expense, net | (1,852) | (2,229) | (1,092) |
Total other expense | (1,852) | (2,229) | (1,092) |
Income before income taxes | 75,818 | 52,189 | 40,120 |
Income tax provision | 1,919 | 4,827 | 13,744 |
Net income | $ 73,899 | $ 47,362 | $ 26,376 |
Net income per share: | |||
Basic (usd per share) | $ 1.20 | $ 0.79 | $ 0.45 |
Diluted (usd per share) | $ 1.17 | $ 0.77 | $ 0.44 |
Weighted-average number of shares used in computing net income per share: | |||
Basic (shares) | 61,836 | 60,304 | 58,615 |
Diluted (shares) | 63,370 | 61,854 | 59,894 |
Comprehensive income: | |||
Net income | $ 73,899 | $ 47,362 | $ 26,376 |
Other comprehensive loss: | |||
Unrealized loss on available-for-sale marketable securities, net of tax | 0 | (59) | (67) |
Comprehensive income | 73,899 | 47,303 | 26,309 |
Service revenue | |||
Total revenue | 100,564 | 91,619 | 77,254 |
Total cost of revenue | 76,858 | 70,426 | 51,868 |
Custodial revenue | |||
Total revenue | 126,178 | 87,160 | 59,593 |
Total cost of revenue | 14,124 | 11,400 | 9,767 |
Interchange revenue | |||
Total revenue | 60,501 | 50,746 | 41,523 |
Total cost of revenue | $ 15,068 | $ 12,783 | $ 10,380 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common stock | Additional paid-in capital | Accumulated compre- hensive loss | Accumulated earnings (deficit) |
Opening balance (shares) at Jan. 31, 2016 | 57,726 | ||||
Opening balance at Jan. 31, 2016 | $ 203,457 | $ 6 | $ 199,940 | $ (98) | $ 3,609 |
Stockholders’ equity | |||||
Issuance of common stock upon exercise of options, and for restricted stock units (in shares) | 1,812 | ||||
Issuance of common stock upon exercise of options, and for restricted stock units | 7,142 | 7,142 | |||
Stock-based compensation | 8,398 | 8,398 | |||
Tax benefit on stock options exercised | 16,634 | 16,634 | |||
Other comprehensive loss, net of tax | (67) | (67) | |||
Net income | 26,376 | 26,376 | |||
Ending balance (shares) at Jan. 31, 2017 | 59,538 | ||||
Ending balance at Jan. 31, 2017 | 261,940 | $ 6 | 232,114 | (165) | 29,985 |
Stockholders’ equity | |||||
Issuance of common stock upon exercise of options, and for restricted stock units (in shares) | 1,287 | ||||
Issuance of common stock upon exercise of options, and for restricted stock units | 14,564 | 14,564 | |||
Stock-based compensation | 14,310 | 14,310 | |||
Other comprehensive loss, net of tax | (59) | (59) | |||
Net income | 47,362 | 47,362 | |||
Ending balance (shares) at Jan. 31, 2018 | 60,825 | ||||
Ending balance at Jan. 31, 2018 | 346,274 | $ 6 | 261,237 | (269) | 85,300 |
Stockholders’ equity | |||||
Cumulative effect from adoption of accounting standard update | Accounting Standards Update 2018-02 | (45) | 45 | |||
Issuance of common stock upon exercise of options, and for restricted stock units (in shares) | 1,621 | ||||
Issuance of common stock upon exercise of options, and for restricted stock units | 22,929 | 22,929 | |||
Stock-based compensation | 21,057 | 21,057 | |||
Net income | 73,899 | 73,899 | |||
Ending balance (shares) at Jan. 31, 2019 | 62,446 | ||||
Ending balance at Jan. 31, 2019 | $ 477,079 | $ 6 | $ 305,223 | $ 0 | $ 171,850 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Cash flows from operating activities: | |||
Net income | $ 73,899 | $ 47,362 | $ 26,376 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 18,185 | 15,952 | 13,186 |
Deferred taxes | 408 | 4,306 | (2,891) |
Stock-based compensation | 21,057 | 14,310 | 8,398 |
Bad debt expense | 240 | 133 | 35 |
Loss on disposal of software development costs and other | 933 | 464 | 96 |
Changes in operating assets and liabilities: | |||
Accounts receivable | (4,306) | (4,734) | (2,728) |
Other assets | (5,893) | (760) | (1,343) |
Accounts payable | 863 | (581) | 567 |
Accrued compensation | 4,432 | 3,827 | 946 |
Accrued liabilities | 3,031 | 484 | 1,729 |
Other long-term liabilities | 573 | 939 | 1,220 |
Net cash provided by operating activities | 113,422 | 81,702 | 45,591 |
Cash flows from investing activities: | |||
Purchase of marketable securities | (728) | (483) | (379) |
Purchase of property and equipment | (3,869) | (5,458) | (3,645) |
Purchase of software and capitalized software development costs | (9,978) | (10,380) | (9,030) |
Acquisition of intangible member assets | (1,195) | (17,545) | 0 |
Acquisition of a business | 0 | (2,882) | 0 |
Proceeds from sale of marketable securities | 41,422 | 0 | 0 |
Net cash provided by (used in) investing activities | 25,652 | (36,748) | (13,054) |
Cash flows from financing activities: | |||
Proceeds from exercise of common stock options | 22,929 | 14,564 | 7,142 |
Tax benefit from exercise of common stock options | 0 | 0 | 16,634 |
Net cash provided by financing activities | 22,929 | 14,564 | 23,776 |
Increase in cash and cash equivalents | 162,003 | 59,518 | 56,313 |
Beginning cash and cash equivalents | 199,472 | 139,954 | 83,641 |
Ending cash and cash equivalents | 361,475 | 199,472 | 139,954 |
Supplemental cash flow data: | |||
Interest expense paid in cash | 203 | 203 | 213 |
Income taxes paid in cash, net of refunds received | 587 | 27 | 863 |
Supplemental disclosures of non-cash investing and financing activities: | |||
Purchases of property and equipment included in accounts payable or accrued liabilities at period end | 37 | 0 | 25 |
Customer relationships | |||
Supplemental disclosures of non-cash investing and financing activities: | |||
Purchases of intangible assets | 0 | 1,409 | 0 |
Computer Software, Intangible Asset | |||
Supplemental disclosures of non-cash investing and financing activities: | |||
Purchases of intangible assets | $ 200 | $ 3 | $ 330 |
Summary of business and signifi
Summary of business and significant accounting policies | 12 Months Ended |
Jan. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of business and significant accounting policies | Summary of business and significant accounting policies HealthEquity, Inc. was incorporated in the state of Delaware on September 18, 2002, and was organized to offer a full range of innovative solutions for managing health care accounts (Health Savings Accounts ("HSAs"), Health Reimbursement Arrangements ("HRAs"), and Flexible Spending Accounts ("FSAs")) for health plans, insurance companies, and third-party administrators. In February 2006, HealthEquity, Inc. received designation by the U.S. Department of Treasury to act as a passive non-bank custodian, which allows HealthEquity, Inc. to hold custodial assets for individual account holders. On July 24, 2017, HealthEquity, Inc. received designation by the U.S. Department of Treasury to act as both a passive and non-passive non-bank custodian, which allows HealthEquity, Inc. to hold custodial assets for individual account holders and use discretion to direct investment of such assets held. As a passive and non-passive non-bank custodian according to Treasury Regulations section 1.408-2(e)(5)(ii)(B), the Company must maintain net worth (assets minus liabilities) greater than 2% of passive custodial funds held at each calendar year-end and 4% of the non-passive custodial funds held at each calendar year-end in order to take on additional custodial assets. The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, or GAAP, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements and notes are representations of the Company's management, which is responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the consolidated financial statements, except for the new accounting pronouncements, which were adopted during the year ended January 31, 2019 as described below. Certain reclassifications have been made to prior year amounts to conform to the current year presentation. Principles of consolidation The consolidated financial statements include the accounts of HealthEquity, Inc. and its wholly owned subsidiaries, HealthEquity Trust Company, HEQ Insurance Services, Inc., HealthEquity Advisors, LLC and HealthEquity Retirement Services, LLC (collectively referred to as the "Company"). During the year ended January 31, 2015, the Company and an unrelated company formed a limited partnership for investment in and the management of early stage companies in the healthcare industry. The Company has a 22% ownership interest in such partnership that is accounted for using the equity method of accounting. The investment was approximately $0.2 million as of January 31, 2019 and is included in other assets on the accompanying consolidated balance sheets. During the year ended January 31, 2016, the Company purchased an approximate 1% ownership interest in a limited partnership that engages in the development of technology-based financial healthcare products. The Company elected the measurement alternative for non-marketable investments previously accounted for under the cost method of accounting to account for the investment. The investment was $0.5 million as of January 31, 2019 and is included in other assets on the accompanying consolidated balance sheet. During the year ended January 31, 2017, the Company formed HealthEquity Trust Company, a Wyoming corporation and non-depository trust company, to act as the master custodian of all investment assets held in HSAs administered by the Company. During the year ended January 31, 2018, the Company formed HealthEquity Retirement Services, LLC, a Delaware limited liability company, to acquire and own the assets of BenefitGuard LLC and provide ERISA plan fiduciary services. All significant intercompany balances and transactions have been eliminated. Segments The Company operates in one segment. Management uses one measurement of profitability and does not segregate its business for internal reporting. All long-lived assets are maintained in the United States of America. Cash and cash equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company’s cash and cash equivalents were held in institutions in the U.S. and include deposits in a money market account that was unrestricted as to withdrawal or use. Accounts receivable Accounts receivable represent monies due to the Company for monthly service revenue, custodial revenue and interchange revenue. As of January 31, 2019 and 2018 , service revenue receivables, net, were $6.3 million and $7.9 million , custodial revenue receivables were $13.8 million and $9.0 million , and interchange revenue receivables were $5.6 million and $4.7 million , respectively. The Company maintains an allowance for doubtful accounts to reserve for potentially uncollectible receivable amounts. In evaluating the Company’s ability to collect outstanding receivable balances, the Company considers various factors including the age of the balance, the creditworthiness of the customer, which is assessed based on ongoing credit evaluations and payment history, and the customer’s current financial condition. As of January 31, 2019 and 2018 , the Company had allowance for doubtful accounts of $0.1 million and $0.2 million , respectively. Investments In January 2019, the Company sold all the marketable securities it previously held. See Note 3—Cash, Cash Equivalents and Marketable Securities for additional information regarding the realized loss on sale of marketable securities. The Company classified marketable securities, which consisted primarily of mutual funds invested in corporate bonds, U.S. government agency securities, U.S. treasury bills, commercial paper, certificates of deposit, municipal notes, and bonds with original maturities beyond three months at the time of purchase as available-for-sale. Marketable securities were reported at fair value with changes included in other expense, net in the consolidated statements of operations and comprehensive income. The Company used the specific identification method to determine cost in calculating the realized loss upon the sale of marketable securities. The Company periodically evaluated its marketable securities to assess whether those with unrealized loss positions were other-than-temporarily impaired. The Company considered impairments to be other than temporary if they were related to deterioration in credit risk or if it was likely it would sell the securities before the recovery of their cost basis. Equity investments are accounted for using the equity method of accounting if the investment gives the Company the ability to exercise significant influence, but not control, over an investee. Equity-method investments are included in other assets on the consolidated balance sheets. The Company's share of the earnings or losses as reported by equity-method investees, amortization of basis differences, and related gains or losses, if any, are recognized in other expense, net on the consolidated statements of operations and comprehensive income. Equity investments without readily determinable fair values and for which the Company does not have the ability to exercise significant influence are accounted for using the measurement alternative and are classified as other assets on the consolidated balance sheets. All gains and losses on these investments, realized and unrealized, are recognized in other expense, net on the consolidated statements of operations and comprehensive income. The Company assesses whether an other-than-temporary impairment loss on equity method investments and an impairment loss on measurement alternative investments has occurred due to declines in fair value or other market conditions. If any impairment is considered other than temporary for equity method investments or impairment is identified for measurement alternative investments, the Company will write down the investment to its fair value and record the corresponding charge through other expense, net in the consolidated statements of operations and comprehensive income. Other assets Other assets consist primarily of contract costs, prepaid expenditures, income tax receivables, inventories, and various other assets. Amounts expected to be recouped or recognized over a period of twelve months or less have been classified as current in the accompanying consolidated balance sheets. Property and equipment Property and equipment, including leasehold improvements, are stated at cost less accumulated depreciation. Depreciation is determined using the straight-line method over the estimated useful lives of individual assets. The useful life for leasehold improvements is the shorter of the estimated useful life or the term of the lease ranging from 3 - 5 years . The useful life used for computing depreciation for all other asset classes is described below: Computer equipment 3-5 years Furniture and fixtures 5 years Maintenance and repairs are expensed when incurred, and improvements that extend the economic useful life of an asset are capitalized. Gains and losses on the disposal of property and equipment are reflected in operating expenses. Capitalized software development costs We account for the costs of computer software developed or obtained for internal use in accordance with Accounting Standards Codification (“ASC”) 350-40, “Internal-Use Software.” Costs incurred during operation and post-implementation stages are charged to expense. Costs incurred during the application development stage that are directly attributable to developing or obtaining software for internal use are capitalized. Management’s judgment is required in determining the point when various projects enter the stages at which costs may be capitalized, in assessing the ongoing value of the capitalized costs and in determining the estimated useful lives over which the costs are amortized. See Note 5—Intangible assets and goodwill for additional information. Intangible assets, net Intangible assets are carried at cost and amortized, typically, on a straight-line basis over their estimated useful lives. The useful life used for computing amortization for all intangible asset classes is described below: Computer software and capitalized software development costs 3 years 401(k) customer relationships 10 years Acquired HSA intangible member assets 15 years Acquired intangible member assets are the result of various acquisitions of HSA portfolios. A significant portion of the purchase price from each acquisition has been allocated to the acquired HSA assets, which consists of the contractual rights to administer the activities related to the individual HSAs acquired. The Company used its HSA customer relationship period assumption and the historical attrition rates of member accounts to determine that an average useful life of 15 years and the use of a straight-line amortization method are appropriate to reflect the pattern over which the economic benefits of existing member assets are realized. The Company reviews identifiable amortizable intangible assets to be held and used for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Determination of recoverability is based on the lowest level of identifiable estimated undiscounted cash flows resulting from use of the asset and its eventual disposition. Measurement of any impairment loss is based on the excess of the carrying value of the asset over its fair value. During the year ended January 31, 2019, the Company incurred a loss on disposal of approximately $0.7 million of previously capitalized software development costs. No impairment charges have been recorded during the years ended January 31, 2018 and 2017. See Note 5—Intangible assets and goodwill for additional information. Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a business combination. Goodwill is not amortized, but is tested for impairment annually on January 31 or more frequently if events or changes in circumstances indicate that the asset may be impaired. The Company’s impairment tests are based on a single operating segment and reporting unit structure. The goodwill impairment test involves a two-step process. The first step involves comparing the Company's market capitalization to the carrying value of the reporting unit, including goodwill. If the carrying value of the reporting unit exceeds its fair value, the second step of the test is performed by comparing the carrying value of the goodwill in the reporting unit to its implied fair value. An impairment charge is recognized for the excess of the carrying value of goodwill over its implied fair value. The Company’s annual goodwill impairment test resulted in no impairment charges in any of the periods presented in the accompanying consolidated financial statements. Self insurance The Company is self-insured for medical insurance up to certain annual stop-loss limits. The Company establishes a liability as of the balance sheet date for claims, both reported and incurred but not reported, using currently available information as well as historical claims experience, and as determined by an independent third party. Other long-term liabilities The Company recognizes rental expense for its office lease on a straight-line basis over the lease term. Other long-term liabilities includes deferred rent, which represents the difference between actual operating lease payments due and straight-line rent expense. The excess is recorded as a deferred credit in the early periods of the lease, when cash payments are generally lower than straight-line rent expense, and is reduced in the later periods of the lease when payments begin to exceed the straight-line expense. Revenue recognition On February 1, 2018, the Company adopted Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers ("ASC 606") , which replaced most existing revenue recognition guidance in GAAP, using the modified retrospective method for all contracts not completed as of the date of adoption. The Company recorded the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of retained earnings. The comparative period information has not been restated and continues to be reported under the accounting standards in effect for that period. The adoption of ASC 606 did not have a material impact on the Company's revenue for the year ended January 31, 2019 . Effective February 1, 2018, the Company capitalizes incremental contract acquisition costs, such as sales commissions, previously included in sales and marketing expenses in the consolidated statement of operations and comprehensive income, and amortizes these costs over the average estimated economic life of an HSA Member, RA customer relationship, and 401(k) customer relationship. The Company's prior practice was to fully expense sales commissions when the respective account was added to the Company's platform. The cumulative effect of the changes made to the Company's consolidated balance sheet as of February 1, 2018 for the adoption of ASC 606 is as follows: (in thousands) January 31, 2018 Adjustments February 1, 2018 Other current assets $ 3,310 $ 1,366 $ 4,676 Deferred tax asset 5,461 (4,187 ) 1,274 Other assets 2,180 15,847 18,027 Deferred tax liability — 18 18 Accumulated earnings $ 85,300 $ 13,007 $ 98,307 The impact of adoption on the Company's consolidated statement of operations and comprehensive income for the year ended January 31, 2019 is as follows: (in thousands) As reported Without adoption of ASC 606 Effect of change higher (lower) Sales and marketing $ 29,498 $ 31,335 $ (1,837 ) Income from operations 77,670 75,833 1,837 Income tax provision 1,919 1,470 449 Net income $ 73,899 $ 72,511 $ 1,388 The impact of adoption on the Company's consolidated balance sheet as of January 31, 2019 is as follows: (in thousands) As reported Without adoption of ASC 606 Effect of change higher (lower) Other current assets $ 7,534 $ 5,815 $ 1,719 Deferred tax asset 1,677 5,415 (3,738 ) Other assets 21,122 3,790 17,332 Deferred tax liability 916 — 916 Accumulated earnings $ 171,850 $ 157,455 $ 14,395 Under ASC 606, the Company recognizes revenue when control of the promised goods or services is transferred to its customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. The Company determines revenue recognition through the following steps: • identification of the contract, or contracts, with a customer; • identification of the performance obligations in the contract; • determination of the transaction price; • allocation of the transaction price to the performance obligations in the contract; and • recognition of revenue when, or as, we satisfy a performance obligation. Disaggregation of revenue. The Company's primary sources of revenue are service, custodial, and interchange revenue and are disclosed in the consolidated statements of operations and comprehensive income. All of the Company's sources of revenue are deemed to be revenue contracts with customers. Each revenue source is affected differently by economic factors as it relates to the nature, amount, timing and uncertainty. Costs to obtain a contract. ASC 606 requires capitalizing the costs of obtaining a contract when those costs are expected to be recovered. Since incremental commissions paid to sales team members as a result of obtaining contracts are recoverable, the Company recorded a $17.2 million cumulative catch-up capitalized asset on February 1, 2018. As of January 31, 2019 , the net amount capitalized as contract costs was $19.1 million , which is included in other current assets and other assets. In order to determine the amortization period for sales commissions contract costs, the Company applied the portfolio approach. Accordingly, the amortization period of the assets has been determined to be the average economic life of an HSA Member, RA customer relationship, and 401(k) customer relationship, which is estimated to be 15 years, 7 years, and 10 years, respectively. Amortization of capitalized sales commission contract costs is included in sales and marketing expenses in the consolidated statements of operations and comprehensive income. Performance obligations. ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations; however, as permitted by ASC 606, the Company has elected to exclude from this disclosure any contracts with an original duration of one year or less and any variable consideration that meets specified criteria. Amounts excluded are not significant to the Company's consolidated statements of operations and comprehensive income. Service revenue. The Company hosts its platform, prepares statements, provides a mechanism for spending funds, and provides customer support services. All of these services are consumed as they are received. The Company will continue to recognize service revenue, in an amount that reflects the consideration it expects to be entitled to in exchange for those services, on a monthly basis as it satisfies its performance obligations. Custodial revenue. The Company deposits custodial cash at federally-insured custodial depository partners and investment assets with an investment partner. The deposit of funds represents a service that is simultaneously received and consumed by the custodial depository partners and investment partner. The Company will continue to recognize custodial revenue, in an amount that reflects the consideration it expects to be entitled to in exchange for the service, each month based on the amount received by its custodial partners and investment partners. Interchange revenue. The Company satisfies its interchange performance obligation each time payments are made with its cards via payment networks. The Company will continue to recognize interchange revenue, in an amount that reflects the consideration it expects to be entitled to in exchange for the service, in the month the payment transaction occurs. Contract balances. The Company does not recognize revenue in advance of invoicing its customers and therefore has no related contract assets. The Company records a receivable when revenue is recognized prior to payment and the Company has unconditional right to payment. Alternatively, when payment precedes the related services, the Company records a contract liability, or deferred revenue, until its performance obligations are satisfied. The Company's deferred revenue as of January 31, 2019 and 2018 was $0.3 million and $0.4 million , respectively. The balances related to cash received in advance for a certain interchange revenue arrangement. From the deferred revenue balance as of February 1, 2018, revenue recognized during the year ended January 31, 2019 was $0.2 million . The Company expects to satisfy its remaining obligations for this arrangement. Significant judgments. The Company makes no significant judgments in determining the amount or timing of revenue recognition. The Company has estimated the average economic life of an HSA Member, RA customer relationship, and a 401(k) customer relationship to be 15 years, 7 years, and 10 years, respectively, and which has been determined to be the amortization period for the capitalized sales commissions contract costs. Practical expedients. The Company has applied the practical expedient which allows an entity to account for incremental costs of obtaining a contract at a portfolio level. The Company has also applied the practical expedient to recognize incremental costs of obtaining contracts as an expense when incurred if the amortization period would have been one year or less. Cost of revenue The Company incurs cost of revenue related to servicing member accounts, managing customer and partner relationships, and processing reimbursement claims. Expenditures include personnel-related costs, depreciation, amortization, stock-based compensation, common expense allocations, new member and participant supplies and other operating costs of the Company’s related member account servicing departments. Other components of the Company’s cost of revenue sold include interest retained by members on custodial assets held and interchange costs incurred in connection with processing card transactions initiated by members. Stock-based compensation The Company grants stock-based awards, which consist of stock options, restricted stock units ("RSUs") and restricted stock awards ("RSAs"), to certain team members, executive officers, and directors. The Company recognizes compensation expense for stock-based awards based on the grant date estimated fair value. Expense for stock-based awards is generally recognized on a straight-line basis over the requisite service period, and is reversed as pre-vesting forfeitures occur. The fair value of stock options is determined using the Black-Scholes option pricing model. The determination of fair value for stock options on the date of grant using an option pricing model requires management to make certain assumptions regarding a number of complex and subjective variables. The fair value of RSUs and RSAs is based on the current value of the Company's closing stock price on the date of grant less the present value of future expected dividends discounted at the risk-free interest rate. For stock-based awards with performance conditions, the Company evaluates the probability of achieving the performance criteria and of the number of shares that are expected to vest, and compensation expense is then adjusted to reflect the number of shares expected to vest and the requisite service period. For awards with performance conditions, compensation expense is recognized using the graded-vesting attribution method in accordance with the provisions of FASB ASC Topic 718, Compensation—Stock Compensation ("Topic 718") . See Note 9—Stock-based compensation for additional information. Upon the exercise of a stock option or release of an RSU/RSA, common shares are issued from authorized, but not outstanding, common stock. Income tax provision The Company accounts for income taxes and the related accounts under the liability method as set forth in the authoritative guidance for accounting for income taxes. Under this method, current tax liabilities and assets are recognized for the estimated taxes payable or refundable on the tax returns for the current fiscal year. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, for net operating losses, and for tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted statutory tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled. The effect on deferred tax assets and liabilities of changes in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for when it is more likely than not that some or all of the deferred tax assets may not be realized in future years. After weighing both the positive and negative evidence, the Company has recorded a valuation allowance with respect to realized capital losses for which the Company does not expect to generate capital gains in order to utilize the capital losses in the future. The Company believes that it is more likely than not that all other deferred tax assets will be realized as of January 31, 2019 . The Company uses the tax law ordering approach of intraperiod allocation in determining when excess tax benefits have been realized for provisions of the tax law that identify the sequence in which those amounts are utilized for tax purposes. The Company has also elected to exclude the indirect tax effects of share-based compensation deductions in computing the income tax provision recorded within the consolidated statements of operations and comprehensive income. Also, the Company uses the portfolio approach in releasing income tax effects from accumulated other comprehensive income. The Company recognizes the tax benefit from an uncertain tax position taken or expected to be taken in a tax return using a two-step approach. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained upon examination by the relevant taxing authorities, based on the technical merits of the position. For tax positions that are more likely than not to be sustained upon audit, the second step is to measure the tax benefit in the financial statements as the largest benefit that has a greater than 50% likelihood of being sustained upon settlement. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as a component of other expense in the consolidated statements of operations and comprehensive income. Significant judgment is required to evaluate uncertain tax positions. Changes in facts and circumstances could have a material impact on the Company’s effective tax rate and results of operations. Comprehensive income Comprehensive income is defined as a change in equity of a business enterprise during a period, resulting from transactions from non-owner sources, including unrealized gains and losses on marketable securities prior to the February 1, 2018 adoption of ASU 2016-01. Asset acquisitions During the year ended January 31, 2019, the Company acquired the rights to be the custodian of an HSA portfolio. During the year ended January 31, 2018, the Company acquired the rights to be the custodian of two HSA portfolios and rights to act as sole administrator of one portfolio. Substantially all of the fair value of the gross portfolio assets acquired was concentrated in a group of similar HSA assets and therefore the acquisitions did not constitute a business. Accordingly, the acquisitions were accounted for under the asset acquisition method of accounting in accordance with ASC 805-50, Business Combinations—Related Issues. Under the asset acquisition method of accounting, the Company is required to fair value the assets transferred. The cost of the assets acquired was allocated to the individual assets acquired based on their relative fair values and does not give rise to goodwill. The purchase price was allocated to acquired intangible member assets. Furthermore, transaction costs that are incurred in conjunction with an asset acquisition are allocated to the acquired intangible member assets. Business combination Acquisition-related expenses incurred in conjunction with the acquisition of a business as defined by ASC 805-10 are recognized in earnings in the period in which they are incurred and are included in other expense, net on the consolidated statement of operations. During the years ended January 31, 2019 , 2018 and 2017 , the Company incurred an expense of $2.1 million , $2.2 million, and $0.6 million, respectively, for acquisition-related activity. There were no business combinations during the years ended January 31, 2019 and 2017 . Concentration of market risk The Company derives a substantial portion of its revenue from providing services for healthcare accounts. A significant downturn in this market or changes in state and/or federal laws impacting the preferential tax treatment of healthcare accounts could have a material adverse effect on the Company’s results of operations. For the years ended January 31, 2019 , 2018 and 2017 , no one customer accounted for greater than 10% of revenue or accounts receivable. Concentration of credit risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash. The Company maintains its cash and cash equivalents in bank and other depository accounts, which, frequently exceeds federally insured limits. The Company’s cash and cash equivalents held in banks as of January 31, 2019 was $361.5 million , of which $1.0 million was covered by federal depository insurance. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash. The Company’s accounts receivable balance as of January 31, 2019 was $25.7 million . The Company has not experienced any significant write-offs to accounts receivable and believes that it is not exposed to significant credit risk with respect to accounts receivable. Interest rate risk The Company has entered into depository agreements with financial institutions for its custodial cash deposits. The contracted interest rates were negotiated at the time the depository agreements were executed. A significant reduction in prevailing interest rates may make it difficult for the Company to continue to place custodial deposits at the current contracted rates. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management has made estimates for the allowance for doubtful accounts, capitalized software development costs, evaluating goodwill and long-lived assets for impairment, useful lives of property and equipment and intangible assets, accrued compensation, accrued liabilities, grant date fair value of stock options and income taxes. Actual results could differ from those estimates. Change in estimate. Effective November 1, 2018, the Company prospectively changed its estimate of the useful life of capitalized incremental costs to obtain an RA contract to better reflect the estimated periods during which the intangible asset is expected to generate cash flows. The incremental costs to obtain an RA contract were previously amortized over the same life as the incremental costs to obtain an HSA contract, which is estimated to be 15 y |
Net income per share
Net income per share | 12 Months Ended |
Jan. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net income per share | Net income per share The following table sets forth the computation of basic and diluted net income per share: (in thousands, except per share data) Year ended January 31, 2019 2018 2017 Numerator (basic and diluted): Net income $ 73,899 $ 47,362 $ 26,376 Denominator (basic): Weighted-average common shares outstanding 61,836 60,304 58,615 Denominator (diluted): Weighted-average common shares outstanding 61,836 60,304 58,615 Weighted-average dilutive effect of stock options and restricted stock units 1,534 1,550 1,279 Weighted-average common shares outstanding 63,370 61,854 59,894 Net income per share: Basic $ 1.20 $ 0.79 $ 0.45 Diluted $ 1.17 $ 0.77 $ 0.44 For the years ended January 31, 2019 , 2018 and 2017 , approximately 0.1 million , 0.6 million , and 1.4 million shares, respectively, attributable to outstanding stock options and restricted stock units were excluded from the calculation of diluted earnings per share as their inclusion would have been anti-dilutive. |
Cash, cash equivalents and mark
Cash, cash equivalents and marketable securities | 12 Months Ended |
Jan. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Cash, cash equivalents and marketable securities | Cash, cash equivalents and marketable securities In January 2019, the Company sold all the marketable securities it previously held. Cash, cash equivalents as of January 31, 2019 consisted of the following: (in thousands) Cost basis Gross unrealized gains Gross unrealized losses Fair value Cash and cash equivalents $ 361,475 $ — $ — $ 361,475 Marketable securities: Mutual funds — — — — Total cash, cash equivalents and marketable securities $ 361,475 $ — $ — $ 361,475 Cash, cash equivalents and marketable securities as of January 31, 2018 consisted of the following: (in thousands) Cost basis Gross unrealized gains Gross unrealized losses Fair value Cash and cash equivalents $ 199,472 $ — $ — $ 199,472 Marketable securities: Mutual funds 41,153 270 (626 ) 40,797 Total cash, cash equivalents and marketable securities $ 240,625 $ 270 $ (626 ) $ 240,269 Gross gains and losses realized during the year ended January 31, 2019 for marketable securities sold as of January 31, 2019 was $0.4 million and $0.9 million , respectively, of which a $0.1 million current year net realized loss was recorded to other expense, net in the consolidated statements of operations and comprehensive income and a $0.4 million of prior cumulative net realized loss was recorded in accumulated earnings on February 1, 2018 due to the adoption of ASU 2016-01. |
Property and equipment
Property and equipment | 12 Months Ended |
Jan. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | Property and equipment Property and equipment consisted of the following as of January 31, 2019 and 2018 : (in thousands) January 31, 2019 January 31, 2018 Leasehold improvements $ 3,583 $ 2,292 Furniture and fixtures 4,476 4,785 Computer equipment 9,242 8,174 Property and equipment, gross 17,301 15,251 Accumulated depreciation (9,078 ) (7,415 ) Property and equipment, net $ 8,223 $ 7,836 Depreciation expense for the years ended January 31, 2019 , 2018 and 2017 was $3.5 million , $2.8 million and $2.0 million , respectively. |
Intangible assets and goodwill
Intangible assets and goodwill | 12 Months Ended |
Jan. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets and goodwill | Intangible assets and goodwill Asset acquisitions During the years ended January 31, 2019 and 2018 , the Company capitalized the following amounts to acquire the rights to be the custodian of HSA portfolios: (in thousands) January 31, 2019 January 31, 2018 Acquired HSA intangible member assets $ 1,195 $ 18,953 The costs, including transaction costs, were allocated to the respective acquired intangible member assets. The Company has determined the acquired intangible member assets to have a useful life of 15 years. The assets are being amortized using the straight-line amortization method, which has been determined appropriate to reflect the pattern over which the economic benefits of existing member assets are realized. During the year ended January 31, 2018, $1.3 million of the of the acquired intangible assets relates to a contingent payment that may be earned upon the achievement of certain targets. This amount is expected to be paid during the year ended January 31, 2020. Software development During the years ended January 31, 2019 , 2018 and 2017 , the Company capitalized software development costs of $9.3 million , $8.1 million and $7.7 million , respectively, related to significant enhancements and upgrades to its proprietary system. The gross carrying amount and associated accumulated amortization of intangible assets is as follows as of January 31, 2019 and January 31, 2018 : (in thousands) January 31, 2019 January 31, 2018 Amortized intangible assets: Capitalized software development costs $ 40,583 $ 31,993 Software 4,252 8,863 Other intangible assets 2,882 2,882 Acquired intangible member assets 85,110 83,915 Intangible assets, gross 132,827 127,653 Accumulated amortization (53,161 ) (44,018 ) Intangible assets, net $ 79,666 $ 83,635 During the years ended January 31, 2019 , 2018 and 2017 , the Company expensed a total of $13.7 million , $12.2 million and $10.0 million , respectively, in software development costs primarily related to the post-implementation and operation stages of its proprietary software. Amortization expense for the years ended January 31, 2019 , 2018 and 2017 was $14.7 million , $13.2 million and $11.2 million , respectively. Estimated amortization expense for the years ending January 31 is as follows: Year ending January 31, (in thousands) 2020 $ 13,824 2021 10,706 2022 7,930 2023 6,209 2023 6,209 Thereafter 34,788 Total $ 79,666 During the year ended January 31, 2019, the Company incurred a loss on disposal of approximately $0.7 million of previously capitalized software development costs. All of the Company’s goodwill was generated from the acquisition of First Horizon MSaver, Inc. on August 11, 2011. There have been no changes to the goodwill carrying value during the years ended January 31, 2019 and 2018 . |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Jan. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies Property, colocation, equipment, and license agreements The Company leases office space, data storage facilities and equipment, as well as contractual commitments related to network infrastructure and certain maintenance requirements under long-term non-cancelable operating leases. Future minimum lease and other contractual payments required under non-cancelable obligations as of January 31, 2019 are as follows: Year ending January 31, (in thousands) Office lease Other agreements Total 2020 $ 3,690 $ 3,568 $ 7,258 2021 3,933 3,392 7,325 2022 5,589 1,739 7,328 2023 5,728 70 5,798 2024 5,872 11 5,883 Thereafter 44,252 — 44,252 Total $ 69,064 $ 8,780 $ 77,844 Office lease obligations The Company’s headquarters is in Draper, UT where it leases two buildings and is party to a third lease for a building to be constructed on a parcel contiguous to its existing buildings. The leases will expire on November 30, 2030. The Company is responsible for payment of taxes and operating expenses relating to the premises occupied by the Company, in addition to 2.5% annual rent increases over the lease term. The Company also leases office space in Overland Park, Kansas, under a lease that expires in March 2022. Lease expense for office space for the years ended January 31, 2019 , 2018 and 2017 totaled $5.5 million , $4.3 million and $3.3 million , respectively. Expense for other agreements for the years ended January 31, 2019 , 2018 and 2017 totaled $0.6 million , $0.5 million and $0.3 million , respectively. Data storage and equipment lease obligations The data storage and equipment leases relate to the Company's offsite data storage facilities and office equipment leases, which expire during the years ended January 31, 2021 and January 31, 2024 , respectively. Telephony services The telephony service agreement relates to our 24/7/365 member support center. The agreement expires in September 2019. In January 2019, the Company entered into a telephony agreement with a new provider that is cancelable without significant penalty. Processing services agreement During the year ended January 31, 2016, the Company amended its merchant processing services agreement with a vendor. The agreement expires December 31, 2020 and requires the Company to pay a dollar minimum processing fee based on the processing year of the agreement. The Company may terminate the agreement beginning January 1, 2020 by providing 180 days’ written notice. If the processing agreement is terminated prior to December 31, 2020, the Company is required to pay the vendor a termination fee, equal to 75% of the aggregate value of the minimum processing fees for the remaining years of the agreement, plus a portion of the account on-boarding incentive fee. For each of the years ended January 31, 2019 , 2018 and 2017 , the Company exceeded the minimum amounts required under the agreement. The Company has an agreement with an entity for access to its software. The agreement contains minimum required payments. The Company also has agreements with several entities for access to technology and software. The agreements are based on usage, and there are no minimum required monthly payments. Contingencies In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. Indemnification In accordance with the Company’s amended and restated Certificate of Incorporation and amended and restated bylaws, the Company has indemnification obligations to its officers and directors for certain events or occurrences, subject to certain limits, while they are serving at the Company’s request in such capacity. There have been no claims to date and the Company has a director and officer insurance policy that may enable it to recover a portion of any amounts paid for future claims. Litigation The Company may from time to time be involved in legal proceedings arising from the normal course of business. There are no material pending or threatened legal proceedings as of January 31, 2019 and 2018 . |
Indebtedness
Indebtedness | 12 Months Ended |
Jan. 31, 2019 | |
Debt Disclosure [Abstract] | |
Indebtedness | Indebtedness On September 30, 2015, the Company entered into a credit facility (the "Credit Agreement"). The Credit Agreement provides for a secured revolving credit facility in the aggregate principal amount of $100.0 million for a term of five years . The proceeds of borrowings under the Credit Agreement may be used for general corporate purposes. No amounts have been drawn under the Credit Agreement as of January 31, 2019 . Borrowings under the Credit Agreement bear interest equal to, at the Company's option, a) an adjusted LIBOR rate or b) a customary base rate, in each case with an applicable spread to be determined based on the Company's leverage ratio as of the most recent fiscal quarter. The applicable spread for borrowing under the Credit Agreement will range from 1.50% to 2.00% with respect to adjusted LIBOR rate borrowings and 0.50% to 1.00% with respect to customary base rate borrowings. Additionally, the Company pays a commitment fee ranging from 0.20% to 0.30% on the daily amount of the unused commitments under the Credit Agreement payable in arrears at the end of each fiscal quarter. During each of the years ended January 31, 2019 and 2018 , the Company incurred $0.3 million of interest expense associated with the Credit Agreement. The Company's material subsidiaries are required to guarantee the obligations of the Company under the Credit Agreement. The obligations of the Company and the guarantors under the Credit Agreement and the guarantees are secured by substantially all assets of the Company and the guarantors, subject to customary exclusions and exceptions. The Credit Agreement requires the Company to maintain a total leverage ratio of not more than 3.00 to 1.00 as of the end of each fiscal quarter and a minimum interest coverage ratio of at least 3.00 to 1.00 as of the end of each fiscal quarter. In addition, the Credit Agreement includes customary representations and warranties, affirmative and negative covenants, and events of default. The restrictive covenants include customary restrictions on the Company's ability to incur additional indebtedness; make investments, loans or advances; grant or incur liens on assets; engage in mergers, consolidations, liquidations or dissolutions; engage in transactions with affiliates; and make dividend payments. The Company was in compliance with these covenants as of January 31, 2019 . In connection with the Credit Agreement, the Company incurred $0.3 million in financing costs, which are deferred and are being amortized using the straight-line method, which approximates the effective interest method, over the life of the agreement. |
Income taxes
Income taxes | 12 Months Ended |
Jan. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income taxes | ome tax provision consisted of the following: Year ended January 31, (in thousands) 2019 2018 2017 Current: Federal $ 1,095 $ 392 $ 14,848 State 416 130 1,823 Total current tax provision $ 1,511 $ 522 $ 16,671 Deferred: Federal $ 1,258 $ 4,068 $ (2,308 ) State (850 ) 237 (619 ) Total deferred tax (benefit) provision $ 408 $ 4,305 $ (2,927 ) Total income tax provision $ 1,919 $ 4,827 $ 13,744 Total income tax provision differed from the amounts computed by applying the U.S. federal statutory income tax rate to income before income taxes as a result of the following: Year ended January 31, (in thousands) 2019 2018 2017 Federal income tax provision at the statutory rate $ 15,922 $ 17,744 $ 13,641 State income tax provision, net of federal tax benefit 1,518 1,241 742 Non-deductible or non-taxable items 411 143 87 Excess tax benefits on stock-based compensation expense, net (14,255 ) (14,136 ) — Federal research and development credit (2,252 ) (729 ) (907 ) Deferred tax rate adjustment due to tax reform — 458 — Current statutory rate differential due to tax reform — (308 ) — Change in uncertain tax position reserves, net of indirect benefits 450 191 246 Other items, net 125 223 (65 ) Total income tax provision $ 1,919 $ 4,827 $ 13,744 The Company’s effective income tax rate for the years ended January 31, 2019 , 2018 and 2017 was 2.5% , 9.2% , and 34.3% , respectively. The difference between the effective income tax rate and the U.S. federal statutory income tax rate each period is impacted by a number of factors, including the relative mix of earnings among state jurisdictions, credits, excess tax benefits or shortfalls on stock-based compensation expense due to the adoption of ASU 2016-09, and other discrete items. The decrease in the effective tax rate for the year ended January 31, 2019 over the year ended January 31, 2018 was primarily due to the reduction in the US federal corporate income tax rate from 35% to 21% as a result of legislative changes effective January 1, 2018 and an increase in federal and state research and development tax credits over prior periods. The decrease in the effective tax rate for the year ended January 31, 2018 compared to the year ended January 31, 2017 was primarily the result of excess tax benefits on stock-based compensation expense. The Tax Cuts and Jobs Act, which was enacted on December 22, 2017, included a reduction of the statutory corporate income tax rate from a top rate of 35% to 21% effective January 1, 2018. The Company is subject to federal and state income taxes in the United States based on a calendar year which differs from its January fiscal year-end for financial reporting purposes. For purposes of reconciling the total income tax provision for the fiscal year ended January 31, 2018, the Company applied a federal statutory rate of 34% for the entire fiscal year as that was the rate that applied for the tax year ended December 31, 2017 which comprised 11 months of the fiscal year. Because a 21% federal statutory rate applied for the one month ending January 31, 2018, a reconciling item was included in the tax rate reconciliation table above to adjust for the statutory rate reduction that applied to this one-month period. This resulted in a reduction to the income tax provision of $0.3 million . Given the significance of the Tax Cuts and Jobs Act, the U.S. Securities and Exchange Commission (the "SEC") staff issued Staff Accounting Bulletin ("SAB") No. 118 (“SAB 118”), which allowed registrants to record provisional amounts during a one-year “measurement period” from the date of enactment of the Tax Cuts and Jobs Act. The measurement period is deemed to have ended earlier when the registrant has obtained, prepared, and analyzed the information necessary to finalize its accounting. During the measurement period, impacts of the law are expected to be recorded at the time a reasonable estimate for all or a portion of the effects can be made, and provisional amounts can be recognized and adjusted as information becomes available, prepared, or analyzed. SAB 118 summarizes a three-step process to be applied at each reporting period to account for and qualitatively disclose: (1) the effects of the change in tax law for which accounting is complete; (2) provisional amounts (or adjustments to provisional amounts) for the effects of the tax law where accounting is not complete, but that a reasonable estimate has been determined; and (3) a reasonable estimate cannot yet be made and therefore taxes are reflected in accordance with law prior to the enactment of the Tax Cuts and Jobs Act. The Company remeasured certain deferred tax assets and liabilities as of December 31, 2017 based on rates at which they are expected to reverse in the future, which is generally the new corporate income tax rate of 21% as enacted by the Tax Cuts and Jobs Act. However, the Company's analysis was incomplete as of January 31, 2018 as the Company was still analyzing certain aspects of the Act and refining its calculations, including state conformity and the impact of state tax rates on deferred tax balances, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. Based on the best information available, the provisional amount recorded related to the remeasurement of the Company's deferred tax balance resulted in a decrease in net deferred tax assets of $ 0.5 million , with a corresponding increase to the income tax provision during the year ended January 31, 2018. As of January 31, 2019 , the Company has not made any additional adjustments following completion of its continued analysis during the one-year measurement period to the provisional amount recorded as of January 31, 2018, which amount is now considered final. Other significant provisions of the Tax Cuts and Jobs Act were effective as of January 1, 2018, including, but not limited to: the limitation on the current deductibility of net interest expense in excess of 30% of adjusted taxable income, changes in the deductibility of certain meals and entertainment business expenses, and changes in the deductibility of certain excessive employee remuneration. The Company has applied these provisions to its current income tax provision as it relates to its tax return period beginning January 1, 2018 using reasonable interpretations and available guidance. Further guidance or technical corrections may affect the application of these provisions on its income tax provision. Deferred tax assets and liabilities consisted of the following: (in thousands) January 31, 2019 January 31, 2018 Deferred tax assets: Accrued bonuses $ 808 $ 489 Other accrued liabilities 664 572 Deferred rent 626 520 Stock compensation 6,987 5,316 Net operating loss carryforward 68 666 Research and development credits 2,323 2,882 AMT credits — 857 Other, net 255 286 Total gross deferred tax assets 11,731 11,588 Less valuation allowance (97 ) — Deferred tax assets, net of valuation allowance $ 11,634 $ 11,588 Deferred tax liabilities: Fixed assets: depreciation and gain/loss $ (1,294 ) $ (1,170 ) Intangibles: amortization (4,798 ) (4,830 ) Incremental contract costs (4,654 ) — Other, net (127 ) (127 ) Total gross deferred tax liabilities (10,873 ) (6,127 ) Net deferred tax assets $ 761 $ 5,461 Management considered whether it is more likely than not that some portion or all of the deferred tax assets would be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considered the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment and determined that based on the weight of all available evidence, it is more likely than not (a likelihood of more than 50%) that the Company will be able to realize most of its deferred tax assets. However, the Company has recorded a valuation allowance of $ 0.1 million as of January 31, 2019 with respect to realized capital losses for which it does not expect to generate capital gains in order to utilize the capital losses in the future. This valuation allowance was reflected as an adjustment to retained earnings as a result of the adoption of ASU 2016-01. No valuation allowance was recorded as of January 31, 2018 . As of January 31, 2019 , the Company had recorded gross state net operating loss carryforwards of $1.1 million which begin to expire at various intervals between tax years ending December 31, 2026 and December 31, 2036. As of January 31, 2019 , the Company also had federal and state research and development carryforwards of $1.9 million and $2.5 million , respectively, which expire beginning with the tax years ending December 31, 2037 and 2030, respectively. As of January 31, 2019 and 2018 , the gross unrecognized tax benefit was $1.7 million and $0.9 million , respectively. If recognized, $1.5 million and $0.8 million of the total unrecognized tax benefits would affect the Company's effective tax rate as of January 31, 2019 and 2018 , respectively. Total gross unrecognized tax benefits increased by $0.8 million in the period from January 31, 2018 to January 31, 2019 . A tabular reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows: (in thousands) January 31, 2019 January 31, 2018 Gross unrecognized tax benefits at beginning of year $ 889 $ 674 Gross amounts of increases and decreases: Increases as a result of tax positions taken during a prior period — — Decreases as a result of tax positions taken during a prior period (1 ) — Increases as a result of tax positions taken during the current period 805 215 Decreases as a result of tax positions taken during the current period — — Decreases resulting from the lapse of the applicable statute of limitations — — Gross unrecognized tax benefits at end of year $ 1,693 $ 889 Certain unrecognized tax benefits are required to be netted against their related deferred tax assets as a result of Accounting Standards Update No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists . The resulting unrecognized tax benefit recorded within the Company's consolidated balance sheet excludes the following amounts that have been netted against the related deferred tax assets accordingly: (in thousands) January 31, 2019 January 31, 2018 Total gross unrecognized tax benefits $ 1,693 $ 889 Amounts netted against related deferred tax assets (1,693 ) (889 ) Unrecognized tax benefits recorded on the consolidated balance sheet $ — $ — The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits as a component of other expense in the statement of operations and comprehensive income. During the years ended January 31, 2019 , 2018 , and 2017 , there were no interest and penalties recorded related to unrecognized tax benefits in the statement of operations and comprehensive income. As of January 31, 2019 and 2018 , no accrued interest and penalties were recorded. The Company files income tax returns with U.S. federal and state taxing jurisdictions and is not currently under examination with any jurisdiction. The Company remains subject to examination by federal and various state taxing jurisdictions for tax years after 2003. |
Stock-based compensation
Stock-based compensation | 12 Months Ended |
Jan. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based compensation | Stock-based compensation The following table shows a summary of stock-based compensation in the Company's consolidated statements of operations and comprehensive income during the years presented: Year ended January 31, (in thousands) 2019 2018 2017 Cost of revenue $ 2,837 $ 2,594 $ 1,780 Sales and marketing 3,536 2,030 914 Technology and development 5,117 3,318 1,903 General and administrative 9,567 6,368 3,801 Total stock-based compensation expense $ 21,057 $ 14,310 $ 8,398 The following table shows stock-based compensation by award type: Year ended January 31, (in thousands) 2019 2018 2017 Stock options $ 7,581 $ 7,826 $ 6,480 Performance stock options 681 1,378 1,685 Restricted stock units 7,657 3,224 233 Performance restricted stock units 2,419 1,882 — Restricted stock awards 570 — — Performance restricted stock awards 2,149 — — Total stock-based compensation expense $ 21,057 $ 14,310 $ 8,398 Stock options The Company currently grants stock options under the 2014 Equity Incentive Plan (as amended and restated, the "Incentive Plan"), which provided for the issuance of stock options to the directors and team members of the Company to purchase up to an aggregate of 2.6 million shares of common stock. In addition, under the Incentive Plan, the number of shares of common stock reserved for issuance under the Incentive Plan automatically increases on February 1 of each year, beginning as of February 1, 2015 and continuing through and including February 1, 2024 , by 3% of the total number of shares of the Company’s capital stock outstanding on January 31 of the preceding fiscal year, or a lesser number of shares determined by the board of directors. As of January 31, 2019 , 4.1 million shares were available for grant under the Incentive Plan. Under the terms of the Incentive Plan, the Company has the ability to grant incentive and nonqualified stock options. Incentive stock options may be granted only to Company team members. Nonqualified stock options may be granted to Company team members, executive officers, directors and consultants. Such options are to be exercisable at prices, as determined by the board of directors, which must be equal to no less than the fair value of the Company's common stock at the date of the grant. Stock options granted under the Incentive Plan generally expire 10 years from the date of issuance, or are forfeited 90 days after termination of employment. Shares of common stock underlying stock options that are forfeited or that expire are returned to the Incentive Plan. Valuation assumptions. The Company has adopted the provisions of Topic 718, which requires the measurement and recognition of compensation for all stock-based awards made to team members, executive officers and directors, based on estimated fair values. Under Topic 718, the Company uses the Black-Scholes option pricing model as the method of valuation for stock-based awards. The determination of the fair value of stock-based awards on the date of grant is affected by the fair value of the stock as well as assumptions regarding a number of complex and subjective variables. The variables include, but are not limited to, 1) the expected life of the option, 2) the expected volatility of the fair value of the Company's common stock over the term of the award estimated by averaging the Company's historical volatility in addition to published volatilities of a relative peer group 3) risk-free interest rate, and 4) expected dividends. The key input assumptions that were utilized in the valuation of the stock options granted during the years ended January 31, 2019 , 2018 and 2017 are as follows: Year ended January 31, 2019 2018 2017 Expected dividend yield — % — % — % Expected stock price volatility 36.53% - 37.84% 37.79% - 38.01% 38.01% - 38.37% Risk-free interest rate 2.52% - 2.79% 1.18% - 2.07% 1.18% - 2.18% Expected life of options 5.17 - 6.25 years 4.50 - 6.25 years 4.50 - 6.25 years The Company uses the "simplified" method to estimate the expected life of an option as determined under Staff Accounting Bulletin No. 110 due to limited option exercise history as a public company. Expected volatility is determined using weighted average volatility of publicly traded peer companies. During the year ended January 31, 2019 , the Company began using its own historical volatility in addition to the volatility of publicly traded peer companies, as its share price history grows over time. The risk-free interest rate is determined by using published zero coupon rates on treasury notes for each grant date given the expected term on the options. The dividend yield of zero is based on the fact that the Company expects to invest cash in operations. A summary of stock option activity is as follows: Outstanding stock options (in thousands, except for exercise prices and term) Number of Range of Weighted- Weighted- Aggregate Outstanding as of January 31, 2018 3,699 $0.10 - 51.44 $ 22.83 7.26 $ 102,796 Granted 140 $50.41 - 82.39 $ 64.06 Exercised (1,276 ) $0.10 - 44.53 $ 17.97 Forfeited (119 ) $14.00 - 44.53 $ 30.50 Outstanding as of January 31, 2019 2,444 $0.10 - 82.39 $ 27.37 6.74 $ 85,971 Vested and expected to vest as of January 31, 2019 2,444 $ 27.37 6.74 $ 85,971 Exercisable as of January 31, 2019 843 $ 23.19 6.28 $ 33,023 The aggregate intrinsic value in the tables above represents the difference between the estimated fair value of common stock and the exercise price of outstanding, in-the-money stock options. A summary of stock options granted and exercised is as follows: Year ended January 31, (in thousands, except weighted-average fair value) 2019 2018 2017 Stock options granted 140 420 1,399 Weighted-average fair value at date of grant $ 64.06 $ 42.72 $ 28.85 Total intrinsic value of stock options exercised $ 65,463 $ 44,823 $ 50,094 As of January 31, 2019 and 2018 , 0.8 million and 1.1 million of all outstanding options were exercisable, respectively. The options are valued at their estimated fair market value as of the date of the grant. As of January 31, 2019 , the weighted-average vesting period of non-vested awards expected to vest is approximately 1.6 years ; the amount of compensation expense the Company expects to recognize for stock options vesting in future periods is approximately $11.6 million . Performance options. During the year ended January 31, 2015, the Company granted 1.5 million performance-based stock options to certain key team members and executive officers under the Incentive Plan, which vest upon the achievement of certain performance criteria. The performance-based stock options vest upon the attainment of the following performance criteria: (a) 10% of the stock options vest upon attainment of at least $34.5 million in Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") for the year ended January 31, 2016, (b) 20% of the stock options vest upon the attainment of an annual growth rate of Adjusted EBITDA per share of common stock of 30% for the year ended January 31, 2017, (c) 30% of the stock options vest upon the attainment of an annual growth rate of Adjusted EBITDA per share of common stock of 30% for the year ended January 31, 2018, and (d) 40% of the stock options vest upon the attainment of an annual growth rate of Adjusted EBITDA per share of common stock of 25% for the year ended January 31, 2019. During the year ended January 31, 2016, the Company achieved the $34.5 million Adjusted EBITDA performance criteria and as such, 10% of the performance-based stock options outstanding as of January 31, 2016 became vested. During the year ended January 31, 2017, the Company achieved the annual growth rate of Adjusted EBITDA per share of common stock of 30% and as such 20% of the performance-based stock options outstanding as January 31, 2017 became vested. Subsequent to the year ended January 31, 2017, the two remaining vesting criteria were amended to vest based upon the attainment of a compound annual growth rate of Adjusted EBITDA per share of common stock of 35% as compared to the year ended January 31, 2016 Adjusted EBTIDA target of $34.5 million , or $0.61 per common share. During the year ended January 31, 2018, the Company achieved the third performance criteria and as such 30% of the performance-based stock options outstanding as of January 31, 2018 became vested. During the year ended January 31, 2019, the Company achieved the fourth performance criteria and as such the remaining 40% of the performance-based stock options outstanding as of January 31, 2019 became vested. Restricted stock units and restricted stock awards The Company grants restricted stock units ("RSUs") and restricted stock awards ("RSAs") to certain team members, executive officers, and directors under the Incentive Plan. RSUs and RSAs vest upon service-based criteria and performance-based criteria. Generally, service-based RSUs and RSAs vest over a four -year period in equal annual installments commencing upon the first anniversary of the grant date. RSUs and RSAs are valued based on the current value of the Company's closing stock price on the date of grant less the present value of future expected dividends discounted at the risk-free interest rate. Performance restricted stock units. In March 2017, the Company awarded 146,964 performance-based RSUs ("PRSUs"). Vesting of the PRSUs is dependent upon the achievement of certain financial criteria and cliff vest on January 31, 2020. The Company records stock-based compensation related to PRSUs when it is considered probable that the performance conditions will be met. The Company believes it is probable that the PRSUs will vest at least in part. The vesting of PRSUs will ultimately range from 0% to 150% of the number of shares underlying the PRSU grant based on the level of achievement of the performance goals. Performance restricted stock awards. In March 2018, the Company awarded 227,760 performance-based RSAs ("PRSAs"). Vesting of the PRSAs is dependent upon the achievement of certain financial criteria and cliff vest on January 31, 2021. The Company records stock-based compensation related to PRSAs when it is considered probable that the performance conditions will be met. Issuance of the underlying shares occurred at the grant date. The Company believes it is probable that the PRSAs will vest at least in part. The vesting of PRSAs will ultimately range from 0% to 200% based on the level of achievement of the performance goals. The PRSAs were issued at the 200% level of achievement subject to clawback based on actual Company performance. A summary of the RSU and RSA activity is as follows: RSUs and PRSUs RSAs and PRSAs (in thousands, except weighted-average grant date fair value) Shares Weighted-average grant date fair value Shares Weighted-average grant date fair value Outstanding as of January 31, 2018 451 $ 44.10 — $ — Granted 321 67.69 275 61.92 Vested (88 ) 46.35 — — Forfeited (36 ) 49.00 (19 ) 61.72 Outstanding as of January 31, 2019 648 $ 55.20 256 $ 61.93 During the years ended January 31, 2019 , 2018 and 2017 the aggregate intrinsic value of RSUs vested was $6.4 million , $0.7 million , and $21,000 respectively. Total unrecorded stock-based compensation expense as of January 31, 2019 associated with RSUs and PRSUs was $25.9 million , which is expected to be recognized over a weighted-average period of 2.5 years . Total unrecorded stock-based compensation expense as of January 31, 2019 associated with RSAs and PRSAs was $7.2 million , which is expected to be recognized over a weighted-average period of 2.4 years . |
Fair value
Fair value | 12 Months Ended |
Jan. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair value | Fair value Fair value measurements—Fair value measurements are made at a specific point in time, based on relevant market information. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting standards specify a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair value hierarchy: • Level 1—quoted prices in active markets for identical assets or liabilities; • Level 2—inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; • Level 3—unobservable inputs based on the Company’s own assumptions. In January 2019, the Company sold all marketable securities, which were classified as Level 1 instruments that consisted primarily of highly liquid mutual funds. The following table summarizes as of January 31, 2018 the assets measured at fair value on a recurring basis and indicates the level within the fair value hierarchy reflecting the valuation techniques utilized to determine fair value: January 31, 2018 (in thousands) Level 1 Level 2 Level 3 Marketable securities: Mutual funds $ 40,797 $ — $ — The carrying value of cash and cash equivalents approximate fair values as of January 31, 2019 due to the short-term nature of these instruments. The Company has classified cash and cash equivalents as Level 1 in the fair value hierarchy. |
Employee benefits
Employee benefits | 12 Months Ended |
Jan. 31, 2019 | |
Retirement Benefits [Abstract] | |
Employee benefits | Employee benefits The Company has established a 401(k) plan that qualifies as a deferred compensation arrangement under Section 401 of the IRS Code. All team members over the age of 21 are eligible to participate in the plan. The plan provides for Company matching of employee contributions up to 3.5% of eligible earnings. Employer contributions vest 25% each year of employment. 401(k) plan administrative expense was $25,000 , $25,000 and $15,000 for the years ended January 31, 2019 , 2018 and 2017 , respectively. Employer matching contribution expense was $1.8 million , $1.4 million and $0.9 million for the years ended January 31, 2019 , 2018 and 2017 , respectively. Beginning on January 1, 2017, the Company is self-insured for medical and dental benefits for all qualifying employees. The medical plan carries a stop-loss policy which will protect from individual claims during the plan year exceeding $110,000 . The Company records estimates of costs of claims incurred based on an analysis of historical data and independent estimates. The Company's liability for self-insured medical claims is included in accrued compensation in its consolidated balance sheet and was $1.4 million and $1.7 million as of January 31, 2019 and 2018 , respectively. |
Supplementary quarterly financi
Supplementary quarterly financial data (unaudited) | 12 Months Ended |
Jan. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Supplementary quarterly financial data (unaudited) | Supplementary quarterly financial data (unaudited) Three months ended (in thousands, except for per share amounts) January 31, 2019 October 31, 2018 July 31, 2018 April 30, 2018 Total revenue $ 75,777 $ 70,495 $ 71,067 $ 69,904 Total cost of revenue 31,332 24,678 24,492 25,548 Gross profit 44,445 45,817 46,575 44,356 Total operating expenses 27,864 26,831 25,012 23,816 Total other expense (221 ) (1,555 ) (75 ) (1 ) Income tax provision (benefit) 3,241 1,745 (1,029 ) (2,038 ) Net income $ 13,119 $ 15,686 $ 22,517 $ 22,577 Net income per share: Basic (1) $ 0.21 $ 0.25 $ 0.36 $ 0.37 Diluted (1) $ 0.21 $ 0.25 $ 0.36 $ 0.36 Three months ended (in thousands, except for per share amounts) January 31, 2018 October 31, 2017 July 31, 2017 April 30, 2017 Total revenue $ 60,436 $ 56,789 $ 56,879 $ 55,421 Total cost of revenue 28,790 23,062 21,077 21,680 Gross profit 31,646 33,727 35,802 33,741 Total operating expenses 23,212 20,165 19,307 17,814 Total other expense (1,706 ) (395 ) (38 ) (90 ) Income tax provision (benefit) 823 2,685 (489 ) 1,808 Net income $ 5,905 $ 10,482 $ 16,946 $ 14,029 Net income per share: Basic (1) $ 0.10 $ 0.17 $ 0.28 $ 0.23 Diluted (1) $ 0.09 $ 0.17 $ 0.27 $ 0.23 (1) Net income per share amounts do not sum to equal full year total due to changes in the number of shares outstanding during the periods and rounding. |
Summary of business and signi_2
Summary of business and significant accounting policies (Policies) | 12 Months Ended |
Jan. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of consolidation | Principles of consolidation The consolidated financial statements include the accounts of HealthEquity, Inc. and its wholly owned subsidiaries, HealthEquity Trust Company, HEQ Insurance Services, Inc., HealthEquity Advisors, LLC and HealthEquity Retirement Services, LLC (collectively referred to as the "Company"). During the year ended January 31, 2015, the Company and an unrelated company formed a limited partnership for investment in and the management of early stage companies in the healthcare industry. The Company has a 22% ownership interest in such partnership that is accounted for using the equity method of accounting. The investment was approximately $0.2 million as of January 31, 2019 and is included in other assets on the accompanying consolidated balance sheets. During the year ended January 31, 2016, the Company purchased an approximate 1% ownership interest in a limited partnership that engages in the development of technology-based financial healthcare products. The Company elected the measurement alternative for non-marketable investments previously accounted for under the cost method of accounting to account for the investment. The investment was $0.5 million as of January 31, 2019 and is included in other assets on the accompanying consolidated balance sheet. During the year ended January 31, 2017, the Company formed HealthEquity Trust Company, a Wyoming corporation and non-depository trust company, to act as the master custodian of all investment assets held in HSAs administered by the Company. During the year ended January 31, 2018, the Company formed HealthEquity Retirement Services, LLC, a Delaware limited liability company, to acquire and own the assets of BenefitGuard LLC and provide ERISA plan fiduciary services. All significant intercompany balances and transactions have been eliminated. |
Segments | Segments The Company operates in one segment. Management uses one measurement of profitability and does not segregate its business for internal reporting. All long-lived assets are maintained in the United States of America. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company’s cash and cash equivalents were held in institutions in the U.S. and include deposits in a money market account that was unrestricted as to withdrawal or use. |
Accounts receivable | Accounts receivable Accounts receivable represent monies due to the Company for monthly service revenue, custodial revenue and interchange revenue. |
Investments | Investments In January 2019, the Company sold all the marketable securities it previously held. See Note 3—Cash, Cash Equivalents and Marketable Securities for additional information regarding the realized loss on sale of marketable securities. The Company classified marketable securities, which consisted primarily of mutual funds invested in corporate bonds, U.S. government agency securities, U.S. treasury bills, commercial paper, certificates of deposit, municipal notes, and bonds with original maturities beyond three months at the time of purchase as available-for-sale. Marketable securities were reported at fair value with changes included in other expense, net in the consolidated statements of operations and comprehensive income. The Company used the specific identification method to determine cost in calculating the realized loss upon the sale of marketable securities. The Company periodically evaluated its marketable securities to assess whether those with unrealized loss positions were other-than-temporarily impaired. The Company considered impairments to be other than temporary if they were related to deterioration in credit risk or if it was likely it would sell the securities before the recovery of their cost basis. Equity investments are accounted for using the equity method of accounting if the investment gives the Company the ability to exercise significant influence, but not control, over an investee. Equity-method investments are included in other assets on the consolidated balance sheets. The Company's share of the earnings or losses as reported by equity-method investees, amortization of basis differences, and related gains or losses, if any, are recognized in other expense, net on the consolidated statements of operations and comprehensive income. Equity investments without readily determinable fair values and for which the Company does not have the ability to exercise significant influence are accounted for using the measurement alternative and are classified as other assets on the consolidated balance sheets. All gains and losses on these investments, realized and unrealized, are recognized in other expense, net on the consolidated statements of operations and comprehensive income. The Company assesses whether an other-than-temporary impairment loss on equity method investments and an impairment loss on measurement alternative investments has occurred due to declines in fair value or other market conditions. If any impairment is considered other than temporary for equity method investments or impairment is identified for measurement alternative investments, the Company will write down the investment to its fair value and record the corresponding charge through other expense, net in the consolidated statements of operations and comprehensive income. |
Other assets | Other assets Other assets consist primarily of contract costs, prepaid expenditures, income tax receivables, inventories, and various other assets. Amounts expected to be recouped or recognized over a period of twelve months or less have been classified as current in the accompanying consolidated balance sheets. |
Property and equipment | Property and equipment Property and equipment, including leasehold improvements, are stated at cost less accumulated depreciation. Depreciation is determined using the straight-line method over the estimated useful lives of individual assets. The useful life for leasehold improvements is the shorter of the estimated useful life or the term of the lease ranging from 3 - 5 years . The useful life used for computing depreciation for all other asset classes is described below: Computer equipment 3-5 years Furniture and fixtures 5 years Maintenance and repairs are expensed when incurred, and improvements that extend the economic useful life of an asset are capitalized. Gains and losses on the disposal of property and equipment are reflected in operating expenses. |
Capitalized software development costs | Capitalized software development costs We account for the costs of computer software developed or obtained for internal use in accordance with Accounting Standards Codification (“ASC”) 350-40, “Internal-Use Software.” Costs incurred during operation and post-implementation stages are charged to expense. Costs incurred during the application development stage that are directly attributable to developing or obtaining software for internal use are capitalized. Management’s judgment is required in determining the point when various projects enter the stages at which costs may be capitalized, in assessing the ongoing value of the capitalized costs and in determining the estimated useful lives over which the costs are amortized. |
Intangible assets, net | Intangible assets, net Intangible assets are carried at cost and amortized, typically, on a straight-line basis over their estimated useful lives. The useful life used for computing amortization for all intangible asset classes is described below: Computer software and capitalized software development costs 3 years 401(k) customer relationships 10 years Acquired HSA intangible member assets 15 years Acquired intangible member assets are the result of various acquisitions of HSA portfolios. A significant portion of the purchase price from each acquisition has been allocated to the acquired HSA assets, which consists of the contractual rights to administer the activities related to the individual HSAs acquired. The Company used its HSA customer relationship period assumption and the historical attrition rates of member accounts to determine that an average useful life of 15 years and the use of a straight-line amortization method are appropriate to reflect the pattern over which the economic benefits of existing member assets are realized. The Company reviews identifiable amortizable intangible assets to be held and used for impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. Determination of recoverability is based on the lowest level of identifiable estimated undiscounted cash flows resulting from use of the asset and its eventual disposition. Measurement of any impairment loss is based on the excess of the carrying value of the asset over its fair value. During the year ended January 31, 2019, the Company incurred a loss on disposal of approximately $0.7 million of previously capitalized software development costs. No impairment charges have been recorded during the years ended January 31, 2018 and 2017. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and intangible assets acquired in a business combination. Goodwill is not amortized, but is tested for impairment annually on January 31 or more frequently if events or changes in circumstances indicate that the asset may be impaired. The Company’s impairment tests are based on a single operating segment and reporting unit structure. The goodwill impairment test involves a two-step process. The first step involves comparing the Company's market capitalization to the carrying value of the reporting unit, including goodwill. If the carrying value of the reporting unit exceeds its fair value, the second step of the test is performed by comparing the carrying value of the goodwill in the reporting unit to its implied fair value. An impairment charge is recognized for the excess of the carrying value of goodwill over its implied fair value. The Company’s annual goodwill impairment test resulted in no impairment charges in any of the periods presented in the accompanying consolidated financial statements. |
Self insurance | Self insurance The Company is self-insured for medical insurance up to certain annual stop-loss limits. The Company establishes a liability as of the balance sheet date for claims, both reported and incurred but not reported, using currently available information as well as historical claims experience, and as determined by an independent third party. |
Other long-term liabilities | Other long-term liabilities The Company recognizes rental expense for its office lease on a straight-line basis over the lease term. Other long-term liabilities includes deferred rent, which represents the difference between actual operating lease payments due and straight-line rent expense. The excess is recorded as a deferred credit in the early periods of the lease, when cash payments are generally lower than straight-line rent expense, and is reduced in the later periods of the lease when payments begin to exceed the straight-line expense. |
Revenue recognition | Revenue recognition On February 1, 2018, the Company adopted Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers ("ASC 606") , which replaced most existing revenue recognition guidance in GAAP, using the modified retrospective method for all contracts not completed as of the date of adoption. The Company recorded the cumulative effect of initially applying ASC 606 as an adjustment to the opening balance of retained earnings. The comparative period information has not been restated and continues to be reported under the accounting standards in effect for that period. The adoption of ASC 606 did not have a material impact on the Company's revenue for the year ended January 31, 2019 . Effective February 1, 2018, the Company capitalizes incremental contract acquisition costs, such as sales commissions, previously included in sales and marketing expenses in the consolidated statement of operations and comprehensive income, and amortizes these costs over the average estimated economic life of an HSA Member, RA customer relationship, and 401(k) customer relationship. The Company's prior practice was to fully expense sales commissions when the respective account was added to the Company's platform. The cumulative effect of the changes made to the Company's consolidated balance sheet as of February 1, 2018 for the adoption of ASC 606 is as follows: (in thousands) January 31, 2018 Adjustments February 1, 2018 Other current assets $ 3,310 $ 1,366 $ 4,676 Deferred tax asset 5,461 (4,187 ) 1,274 Other assets 2,180 15,847 18,027 Deferred tax liability — 18 18 Accumulated earnings $ 85,300 $ 13,007 $ 98,307 The impact of adoption on the Company's consolidated statement of operations and comprehensive income for the year ended January 31, 2019 is as follows: (in thousands) As reported Without adoption of ASC 606 Effect of change higher (lower) Sales and marketing $ 29,498 $ 31,335 $ (1,837 ) Income from operations 77,670 75,833 1,837 Income tax provision 1,919 1,470 449 Net income $ 73,899 $ 72,511 $ 1,388 The impact of adoption on the Company's consolidated balance sheet as of January 31, 2019 is as follows: (in thousands) As reported Without adoption of ASC 606 Effect of change higher (lower) Other current assets $ 7,534 $ 5,815 $ 1,719 Deferred tax asset 1,677 5,415 (3,738 ) Other assets 21,122 3,790 17,332 Deferred tax liability 916 — 916 Accumulated earnings $ 171,850 $ 157,455 $ 14,395 Under ASC 606, the Company recognizes revenue when control of the promised goods or services is transferred to its customers, in an amount that reflects the consideration it expects to be entitled to in exchange for those goods or services. The Company determines revenue recognition through the following steps: • identification of the contract, or contracts, with a customer; • identification of the performance obligations in the contract; • determination of the transaction price; • allocation of the transaction price to the performance obligations in the contract; and • recognition of revenue when, or as, we satisfy a performance obligation. Disaggregation of revenue. The Company's primary sources of revenue are service, custodial, and interchange revenue and are disclosed in the consolidated statements of operations and comprehensive income. All of the Company's sources of revenue are deemed to be revenue contracts with customers. Each revenue source is affected differently by economic factors as it relates to the nature, amount, timing and uncertainty. Costs to obtain a contract. ASC 606 requires capitalizing the costs of obtaining a contract when those costs are expected to be recovered. Since incremental commissions paid to sales team members as a result of obtaining contracts are recoverable, the Company recorded a $17.2 million cumulative catch-up capitalized asset on February 1, 2018. As of January 31, 2019 , the net amount capitalized as contract costs was $19.1 million , which is included in other current assets and other assets. In order to determine the amortization period for sales commissions contract costs, the Company applied the portfolio approach. Accordingly, the amortization period of the assets has been determined to be the average economic life of an HSA Member, RA customer relationship, and 401(k) customer relationship, which is estimated to be 15 years, 7 years, and 10 years, respectively. Amortization of capitalized sales commission contract costs is included in sales and marketing expenses in the consolidated statements of operations and comprehensive income. Performance obligations. ASC 606 requires disclosure of the aggregate amount of the transaction price allocated to unsatisfied performance obligations; however, as permitted by ASC 606, the Company has elected to exclude from this disclosure any contracts with an original duration of one year or less and any variable consideration that meets specified criteria. Amounts excluded are not significant to the Company's consolidated statements of operations and comprehensive income. Service revenue. The Company hosts its platform, prepares statements, provides a mechanism for spending funds, and provides customer support services. All of these services are consumed as they are received. The Company will continue to recognize service revenue, in an amount that reflects the consideration it expects to be entitled to in exchange for those services, on a monthly basis as it satisfies its performance obligations. Custodial revenue. The Company deposits custodial cash at federally-insured custodial depository partners and investment assets with an investment partner. The deposit of funds represents a service that is simultaneously received and consumed by the custodial depository partners and investment partner. The Company will continue to recognize custodial revenue, in an amount that reflects the consideration it expects to be entitled to in exchange for the service, each month based on the amount received by its custodial partners and investment partners. Interchange revenue. The Company satisfies its interchange performance obligation each time payments are made with its cards via payment networks. The Company will continue to recognize interchange revenue, in an amount that reflects the consideration it expects to be entitled to in exchange for the service, in the month the payment transaction occurs. Contract balances. The Company does not recognize revenue in advance of invoicing its customers and therefore has no related contract assets. The Company records a receivable when revenue is recognized prior to payment and the Company has unconditional right to payment. Alternatively, when payment precedes the related services, the Company records a contract liability, or deferred revenue, until its performance obligations are satisfied. The Company's deferred revenue as of January 31, 2019 and 2018 was $0.3 million and $0.4 million , respectively. The balances related to cash received in advance for a certain interchange revenue arrangement. From the deferred revenue balance as of February 1, 2018, revenue recognized during the year ended January 31, 2019 was $0.2 million . The Company expects to satisfy its remaining obligations for this arrangement. Significant judgments. The Company makes no significant judgments in determining the amount or timing of revenue recognition. The Company has estimated the average economic life of an HSA Member, RA customer relationship, and a 401(k) customer relationship to be 15 years, 7 years, and 10 years, respectively, and which has been determined to be the amortization period for the capitalized sales commissions contract costs. Practical expedients. The Company has applied the practical expedient which allows an entity to account for incremental costs of obtaining a contract at a portfolio level. The Company has also applied the practical expedient to recognize incremental costs of obtaining contracts as an expense when incurred if the amortization period would have been one year or less. Cost of revenue The Company incurs cost of revenue related to servicing member accounts, managing customer and partner relationships, and processing reimbursement claims. Expenditures include personnel-related costs, depreciation, amortization, stock-based compensation, common expense allocations, new member and participant supplies and other operating costs of the Company’s related member account servicing departments. Other components of the Company’s cost of revenue sold include interest retained by members on custodial assets held and interchange costs incurred in connection with processing card transactions initiated by members. |
Stock-based compensation | Stock-based compensation The Company grants stock-based awards, which consist of stock options, restricted stock units ("RSUs") and restricted stock awards ("RSAs"), to certain team members, executive officers, and directors. The Company recognizes compensation expense for stock-based awards based on the grant date estimated fair value. Expense for stock-based awards is generally recognized on a straight-line basis over the requisite service period, and is reversed as pre-vesting forfeitures occur. The fair value of stock options is determined using the Black-Scholes option pricing model. The determination of fair value for stock options on the date of grant using an option pricing model requires management to make certain assumptions regarding a number of complex and subjective variables. The fair value of RSUs and RSAs is based on the current value of the Company's closing stock price on the date of grant less the present value of future expected dividends discounted at the risk-free interest rate. For stock-based awards with performance conditions, the Company evaluates the probability of achieving the performance criteria and of the number of shares that are expected to vest, and compensation expense is then adjusted to reflect the number of shares expected to vest and the requisite service period. For awards with performance conditions, compensation expense is recognized using the graded-vesting attribution method in accordance with the provisions of FASB ASC Topic 718, Compensation—Stock Compensation ("Topic 718") . See Note 9—Stock-based compensation for additional information. Upon the exercise of a stock option or release of an RSU/RSA, common shares are issued from authorized, but not outstanding, common stock. |
Income tax provision | Income tax provision The Company accounts for income taxes and the related accounts under the liability method as set forth in the authoritative guidance for accounting for income taxes. Under this method, current tax liabilities and assets are recognized for the estimated taxes payable or refundable on the tax returns for the current fiscal year. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, for net operating losses, and for tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted statutory tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be realized or settled. The effect on deferred tax assets and liabilities of changes in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided for when it is more likely than not that some or all of the deferred tax assets may not be realized in future years. After weighing both the positive and negative evidence, the Company has recorded a valuation allowance with respect to realized capital losses for which the Company does not expect to generate capital gains in order to utilize the capital losses in the future. The Company believes that it is more likely than not that all other deferred tax assets will be realized as of January 31, 2019 . The Company uses the tax law ordering approach of intraperiod allocation in determining when excess tax benefits have been realized for provisions of the tax law that identify the sequence in which those amounts are utilized for tax purposes. The Company has also elected to exclude the indirect tax effects of share-based compensation deductions in computing the income tax provision recorded within the consolidated statements of operations and comprehensive income. Also, the Company uses the portfolio approach in releasing income tax effects from accumulated other comprehensive income. The Company recognizes the tax benefit from an uncertain tax position taken or expected to be taken in a tax return using a two-step approach. The first step is to evaluate the tax position taken or expected to be taken in a tax return by determining if the weight of available evidence indicates that it is more likely than not that the tax position will be sustained upon examination by the relevant taxing authorities, based on the technical merits of the position. For tax positions that are more likely than not to be sustained upon audit, the second step is to measure the tax benefit in the financial statements as the largest benefit that has a greater than 50% likelihood of being sustained upon settlement. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as a component of other expense in the consolidated statements of operations and comprehensive income. Significant judgment is required to evaluate uncertain tax positions. Changes in facts and circumstances could have a material impact on the Company’s effective tax rate and results of operations. |
Comprehensive income | Comprehensive income Comprehensive income is defined as a change in equity of a business enterprise during a period, resulting from transactions from non-owner sources, including unrealized gains and losses on marketable securities prior to the February 1, 2018 adoption of ASU 2016-01. |
Asset acquisitions and Business combination | Asset acquisitions During the year ended January 31, 2019, the Company acquired the rights to be the custodian of an HSA portfolio. During the year ended January 31, 2018, the Company acquired the rights to be the custodian of two HSA portfolios and rights to act as sole administrator of one portfolio. Substantially all of the fair value of the gross portfolio assets acquired was concentrated in a group of similar HSA assets and therefore the acquisitions did not constitute a business. Accordingly, the acquisitions were accounted for under the asset acquisition method of accounting in accordance with ASC 805-50, Business Combinations—Related Issues. Under the asset acquisition method of accounting, the Company is required to fair value the assets transferred. The cost of the assets acquired was allocated to the individual assets acquired based on their relative fair values and does not give rise to goodwill. The purchase price was allocated to acquired intangible member assets. Furthermore, transaction costs that are incurred in conjunction with an asset acquisition are allocated to the acquired intangible member assets. Business combination Acquisition-related expenses incurred in conjunction with the acquisition of a business as defined by ASC 805-10 are recognized in earnings in the period in which they are incurred and are included in other expense, net on the consolidated statement of operations. |
Concentration of market risk | Concentration of market risk The Company derives a substantial portion of its revenue from providing services for healthcare accounts. A significant downturn in this market or changes in state and/or federal laws impacting the preferential tax treatment of healthcare accounts could have a material adverse effect on the Company’s results of operations. |
Concentration of credit risk | Concentration of credit risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash. The Company maintains its cash and cash equivalents in bank and other depository accounts, which, frequently exceeds federally insured limits. |
Interest rate risk | Interest rate risk The Company has entered into depository agreements with financial institutions for its custodial cash deposits. The contracted interest rates were negotiated at the time the depository agreements were executed. A significant reduction in prevailing interest rates may make it difficult for the Company to continue to place custodial deposits at the current contracted rates. |
Use of estimates | Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management has made estimates for the allowance for doubtful accounts, capitalized software development costs, evaluating goodwill and long-lived assets for impairment, useful lives of property and equipment and intangible assets, accrued compensation, accrued liabilities, grant date fair value of stock options and income taxes. Actual results could differ from those estimates. |
Recent adopted and issued accounting pronouncements | Recent adopted accounting pronouncements Adoption of ASC 606 In May 2014, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers ("ASC 606") , which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. This ASU and related subsequent amendments replaces most existing revenue recognition guidance in GAAP. The Company adopted ASC 606 on February 1, 2018 using the modified retrospective transition method. See Revenue Recognition above for further details. Adoption of ASU 2016-01 In January 2016, the FASB issued ASU 2016-01, Recognition and Measurement of Financial Assets and Liabilities . In February 2018, the FASB issued ASU No. 2018-03, Technical Corrections and Improvements to Financial Instruments-Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities, which clarifies certain aspects of the guidance issued in ASU 2016-01. These updates revise an entity's accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value. This ASU 2016-01 also amends certain disclosure requirements associated with the fair value of financial instruments. The Company adopted these ASUs on February 1, 2018 using the modified retrospective method. The Company recorded the cumulative effect as an adjustment to the opening balance of retained earnings. The comparative period information has not been restated and continues to be reported under the accounting standards in effect for that period.The cumulative effect of the changes made to the Company's consolidated balance sheet as of February 1, 2018 due to the adoption of ASU 2016-01 were as follows: (in thousands) January 31, 2018 Adjustments February 1, 2018 Deferred tax asset $ 5,461 $ (87 ) $ 5,374 Accumulated other comprehensive loss $ (269 ) $ 269 $ — Accumulated earnings $ 85,300 $ (356 ) $ 84,944 This ASU also eliminated the cost method of accounting for investments in equity securities that do not have readily determinable fair values and permits the election of a measurement alternative that allows such securities to be recorded at cost, less impairment, if any, plus or minus changes resulting from observable price changes in market-based transactions for an identical or similar investment of the same issuer. The Company adopted this provision on a prospective basis as it relates to its 1% ownership interest in a limited partnership and elected the measurement alternative for non-marketable investments previously accounted for under the cost method of accounting. Gains and losses resulting from observable price changes in market-based transactions for an identical or similar investment of the same issuer or impairment will be recognized in other expense, net on the consolidated statements of operations and comprehensive income in the period incurred. No observable price changes occurred during the year ended January 31, 2019 . The impact of the adoption on the Company's consolidated financial statements for the year ended January 31, 2019 was not significant. Adoption of ASU 2018-02 In February 2018, the FASB issued ASU 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income , which gives companies the option to reclassify between accumulated other comprehensive income ("AOCI") and retained earnings the income tax rate differential that has become stranded in AOCI as a result of the enactment of the Tax Cuts and Jobs Act and the revaluation of certain deferred tax assets and liabilities at the new federal income tax rate of 21%. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The Company elected to early adopt this ASU in the fourth quarter of fiscal year 2018. As a result of adopting this standard, the reclassification of the income tax effects of this tax reform during the year ended January 31, 2018 resulted in an increase to retained earnings and a decrease to AOCI in the amount of $45,000 related to the decrease in the federal corporate income tax rate. The Company's policy is to use the portfolio approach in releasing income tax effects from AOCI. Adoption of ASU 2016-16 In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) - Intra-Entity Transfers of Assets Other Than Inventory , which updates the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this ASU during the year ended January 31, 2019. There was no impact on the Company's consolidated financial statements as a result of the adoption. Adoption of ASU 2016-15 In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230), which provides guidance on the classification of certain cash receipts and cash payments. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this ASU during the year ended January 31, 2019. Adoption of the ASU did not have a material impact on the Company's consolidated financial statements. Adoption of ASU 2017-09 In May 2017, the FASB issued ASU 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting, which provides guidance about changes to the terms or conditions of a share-based payment award. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. The Company adopted this ASU during the year ended January 31, 2019, and prospectively applies this standard to awards modified on or after the adoption date. There was no impact on the Company's consolidated financial statements as a result of the adoption. Recent issued accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (codified as "ASC 842"), which sets out the principles for the recognition, measurement, presentation and disclosure for both parties to a contract (i.e., lessees and lessors). ASC 842 supersedes the previous leases standard, ASC 840 Leases. ASC 842 is effective for financial statements issued for reporting periods beginning after December 15, 2018, requires a modified retrospective transition, and provides for certain practical expedients; early adoption is permitted. In July 2018, the FASB issued ASU 2018-11- Leases ("Topic 842") – Targeted Improvements, which provides an additional transition method to adopt the new lease standard at the adoption date, as compared to the beginning of the earliest period presented, and recognize a cumulative-effect adjustment to the beginning balance of retained earnings in the period of adoption. The Company adopted ASC 842 effective February 1, 2019, using the alternative transition method under Topic 842. The Company expects that this standard will have a material effect on the Company’s consolidated balance sheets, but does not expect it to have a material impact on the Company's consolidated statements of operations and consolidated income, stockholders’ equity and cash flows. Although the Company is still in the process of evaluating the impact of adoption of ASC 842 on its consolidated financial statements, the Company currently believes the most significant change will be related to the recognition of right-of-use assets and lease liabilities on the Company’s balance sheet for office space and data center operating lease agreements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments, which requires financial assets measured at amortized cost be presented at the net amount expected to be collected. This ASU is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted. The Company does not plan to early adopt this ASU. The Company believes the adoption of this ASU will not have a material impact on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment, which removes step two from the goodwill impairment test. As a result, an entity should perform its annual goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount and should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting units' fair value. This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the timing of adoption; however, it does not believe this ASU will have a material impact on the Company's consolidated financial statements. In August 2018, FASB issued ASU 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which amends ASC 820, "Fair Value Measurement." ASU 2018-13 modifies the disclosure requirements for fair value measurements by removing, modifying and adding certain disclosures. This ASU is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. As this relates to disclosure only, the Company believes the adoption of this ASU will not have a material impact on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . This ASU allows the capitalization of implementation costs incurred in a hosting arrangement. This ASU is effective for fiscal years beginning after December 15, 2019. The Company is currently evaluating the potential effect of this ASU on the consolidated financial statements. In August 2018, the SEC adopted a final rule under SEC Release No. 33-10532, Disclosure Update and Simplification , that amends certain disclosure requirements that were duplicative, overlapping, outdated or superseded. The amendments also expanded the disclosure requirements relating to stockholders' equity for interim financial statements, to require changes in stockholders’ equity, in the form of reconciliation, for the current and comparative year-to-date periods, with subtotals for each interim period. This final rule was effective on November 5, 2018. As permitted by the SEC, the Company will apply the disclosure change in stockholders’ equity analysis commencing with its Form 10-Q for the fiscal quarter ending April 30, 2019. As this relates to disclosure only, the Company believes the adoption of this rule will not have a material impact on its consolidated financial statements. |
Summary of business and signi_3
Summary of business and significant accounting policies (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of estimated useful life of property and equipment | The useful life used for computing depreciation for all other asset classes is described below: Computer equipment 3-5 years Furniture and fixtures 5 years Property and equipment consisted of the following as of January 31, 2019 and 2018 : (in thousands) January 31, 2019 January 31, 2018 Leasehold improvements $ 3,583 $ 2,292 Furniture and fixtures 4,476 4,785 Computer equipment 9,242 8,174 Property and equipment, gross 17,301 15,251 Accumulated depreciation (9,078 ) (7,415 ) Property and equipment, net $ 8,223 $ 7,836 |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The cumulative effect of the changes made to the Company's consolidated balance sheet as of February 1, 2018 due to the adoption of ASU 2016-01 were as follows: (in thousands) January 31, 2018 Adjustments February 1, 2018 Deferred tax asset $ 5,461 $ (87 ) $ 5,374 Accumulated other comprehensive loss $ (269 ) $ 269 $ — Accumulated earnings $ 85,300 $ (356 ) $ 84,944 The cumulative effect of the changes made to the Company's consolidated balance sheet as of February 1, 2018 for the adoption of ASC 606 is as follows: (in thousands) January 31, 2018 Adjustments February 1, 2018 Other current assets $ 3,310 $ 1,366 $ 4,676 Deferred tax asset 5,461 (4,187 ) 1,274 Other assets 2,180 15,847 18,027 Deferred tax liability — 18 18 Accumulated earnings $ 85,300 $ 13,007 $ 98,307 The impact of adoption on the Company's consolidated statement of operations and comprehensive income for the year ended January 31, 2019 is as follows: (in thousands) As reported Without adoption of ASC 606 Effect of change higher (lower) Sales and marketing $ 29,498 $ 31,335 $ (1,837 ) Income from operations 77,670 75,833 1,837 Income tax provision 1,919 1,470 449 Net income $ 73,899 $ 72,511 $ 1,388 The impact of adoption on the Company's consolidated balance sheet as of January 31, 2019 is as follows: (in thousands) As reported Without adoption of ASC 606 Effect of change higher (lower) Other current assets $ 7,534 $ 5,815 $ 1,719 Deferred tax asset 1,677 5,415 (3,738 ) Other assets 21,122 3,790 17,332 Deferred tax liability 916 — 916 Accumulated earnings $ 171,850 $ 157,455 $ 14,395 |
Schedule of Finite-Lived Intangible Assets | The useful life used for computing amortization for all intangible asset classes is described below: Computer software and capitalized software development costs 3 years 401(k) customer relationships 10 years Acquired HSA intangible member assets 15 years During the years ended January 31, 2019 and 2018 , the Company capitalized the following amounts to acquire the rights to be the custodian of HSA portfolios: (in thousands) January 31, 2019 January 31, 2018 Acquired HSA intangible member assets $ 1,195 $ 18,953 The gross carrying amount and associated accumulated amortization of intangible assets is as follows as of January 31, 2019 and January 31, 2018 : (in thousands) January 31, 2019 January 31, 2018 Amortized intangible assets: Capitalized software development costs $ 40,583 $ 31,993 Software 4,252 8,863 Other intangible assets 2,882 2,882 Acquired intangible member assets 85,110 83,915 Intangible assets, gross 132,827 127,653 Accumulated amortization (53,161 ) (44,018 ) Intangible assets, net $ 79,666 $ 83,635 |
Net income per share (Tables)
Net income per share (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the computation of basic and diluted net income per share: (in thousands, except per share data) Year ended January 31, 2019 2018 2017 Numerator (basic and diluted): Net income $ 73,899 $ 47,362 $ 26,376 Denominator (basic): Weighted-average common shares outstanding 61,836 60,304 58,615 Denominator (diluted): Weighted-average common shares outstanding 61,836 60,304 58,615 Weighted-average dilutive effect of stock options and restricted stock units 1,534 1,550 1,279 Weighted-average common shares outstanding 63,370 61,854 59,894 Net income per share: Basic $ 1.20 $ 0.79 $ 0.45 Diluted $ 1.17 $ 0.77 $ 0.44 |
Cash, cash equivalents and ma_2
Cash, cash equivalents and marketable securities (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Cash, cash equivalents and marketable securities | Cash, cash equivalents as of January 31, 2019 consisted of the following: (in thousands) Cost basis Gross unrealized gains Gross unrealized losses Fair value Cash and cash equivalents $ 361,475 $ — $ — $ 361,475 Marketable securities: Mutual funds — — — — Total cash, cash equivalents and marketable securities $ 361,475 $ — $ — $ 361,475 Cash, cash equivalents and marketable securities as of January 31, 2018 consisted of the following: (in thousands) Cost basis Gross unrealized gains Gross unrealized losses Fair value Cash and cash equivalents $ 199,472 $ — $ — $ 199,472 Marketable securities: Mutual funds 41,153 270 (626 ) 40,797 Total cash, cash equivalents and marketable securities $ 240,625 $ 270 $ (626 ) $ 240,269 |
Property and equipment (Tables)
Property and equipment (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and equipment | The useful life used for computing depreciation for all other asset classes is described below: Computer equipment 3-5 years Furniture and fixtures 5 years Property and equipment consisted of the following as of January 31, 2019 and 2018 : (in thousands) January 31, 2019 January 31, 2018 Leasehold improvements $ 3,583 $ 2,292 Furniture and fixtures 4,476 4,785 Computer equipment 9,242 8,174 Property and equipment, gross 17,301 15,251 Accumulated depreciation (9,078 ) (7,415 ) Property and equipment, net $ 8,223 $ 7,836 |
Intangible assets and goodwill
Intangible assets and goodwill (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The useful life used for computing amortization for all intangible asset classes is described below: Computer software and capitalized software development costs 3 years 401(k) customer relationships 10 years Acquired HSA intangible member assets 15 years During the years ended January 31, 2019 and 2018 , the Company capitalized the following amounts to acquire the rights to be the custodian of HSA portfolios: (in thousands) January 31, 2019 January 31, 2018 Acquired HSA intangible member assets $ 1,195 $ 18,953 The gross carrying amount and associated accumulated amortization of intangible assets is as follows as of January 31, 2019 and January 31, 2018 : (in thousands) January 31, 2019 January 31, 2018 Amortized intangible assets: Capitalized software development costs $ 40,583 $ 31,993 Software 4,252 8,863 Other intangible assets 2,882 2,882 Acquired intangible member assets 85,110 83,915 Intangible assets, gross 132,827 127,653 Accumulated amortization (53,161 ) (44,018 ) Intangible assets, net $ 79,666 $ 83,635 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated amortization expense for the years ending January 31 is as follows: Year ending January 31, (in thousands) 2020 $ 13,824 2021 10,706 2022 7,930 2023 6,209 2023 6,209 Thereafter 34,788 Total $ 79,666 |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum rental payments for operating leases | Future minimum lease and other contractual payments required under non-cancelable obligations as of January 31, 2019 are as follows: Year ending January 31, (in thousands) Office lease Other agreements Total 2020 $ 3,690 $ 3,568 $ 7,258 2021 3,933 3,392 7,325 2022 5,589 1,739 7,328 2023 5,728 70 5,798 2024 5,872 11 5,883 Thereafter 44,252 — 44,252 Total $ 69,064 $ 8,780 $ 77,844 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | The income tax provision consisted of the following: Year ended January 31, (in thousands) 2019 2018 2017 Current: Federal $ 1,095 $ 392 $ 14,848 State 416 130 1,823 Total current tax provision $ 1,511 $ 522 $ 16,671 Deferred: Federal $ 1,258 $ 4,068 $ (2,308 ) State (850 ) 237 (619 ) Total deferred tax (benefit) provision $ 408 $ 4,305 $ (2,927 ) Total income tax provision $ 1,919 $ 4,827 $ 13,744 |
Schedule of Effective Income Tax Rate Reconciliation | Total income tax provision differed from the amounts computed by applying the U.S. federal statutory income tax rate to income before income taxes as a result of the following: Year ended January 31, (in thousands) 2019 2018 2017 Federal income tax provision at the statutory rate $ 15,922 $ 17,744 $ 13,641 State income tax provision, net of federal tax benefit 1,518 1,241 742 Non-deductible or non-taxable items 411 143 87 Excess tax benefits on stock-based compensation expense, net (14,255 ) (14,136 ) — Federal research and development credit (2,252 ) (729 ) (907 ) Deferred tax rate adjustment due to tax reform — 458 — Current statutory rate differential due to tax reform — (308 ) — Change in uncertain tax position reserves, net of indirect benefits 450 191 246 Other items, net 125 223 (65 ) Total income tax provision $ 1,919 $ 4,827 $ 13,744 |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities consisted of the following: (in thousands) January 31, 2019 January 31, 2018 Deferred tax assets: Accrued bonuses $ 808 $ 489 Other accrued liabilities 664 572 Deferred rent 626 520 Stock compensation 6,987 5,316 Net operating loss carryforward 68 666 Research and development credits 2,323 2,882 AMT credits — 857 Other, net 255 286 Total gross deferred tax assets 11,731 11,588 Less valuation allowance (97 ) — Deferred tax assets, net of valuation allowance $ 11,634 $ 11,588 Deferred tax liabilities: Fixed assets: depreciation and gain/loss $ (1,294 ) $ (1,170 ) Intangibles: amortization (4,798 ) (4,830 ) Incremental contract costs (4,654 ) — Other, net (127 ) (127 ) Total gross deferred tax liabilities (10,873 ) (6,127 ) Net deferred tax assets $ 761 $ 5,461 |
Schedule of Unrecognized Tax Benefits Roll Forward | A tabular reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows: (in thousands) January 31, 2019 January 31, 2018 Gross unrecognized tax benefits at beginning of year $ 889 $ 674 Gross amounts of increases and decreases: Increases as a result of tax positions taken during a prior period — — Decreases as a result of tax positions taken during a prior period (1 ) — Increases as a result of tax positions taken during the current period 805 215 Decreases as a result of tax positions taken during the current period — — Decreases resulting from the lapse of the applicable statute of limitations — — Gross unrecognized tax benefits at end of year $ 1,693 $ 889 |
Schedule of Unrecognized Tax Benefit Netted Against Deferred Tax Asset | The resulting unrecognized tax benefit recorded within the Company's consolidated balance sheet excludes the following amounts that have been netted against the related deferred tax assets accordingly: (in thousands) January 31, 2019 January 31, 2018 Total gross unrecognized tax benefits $ 1,693 $ 889 Amounts netted against related deferred tax assets (1,693 ) (889 ) Unrecognized tax benefits recorded on the consolidated balance sheet $ — $ — |
Stock-based compensation (Table
Stock-based compensation (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of share based compensation recognized | The following table shows a summary of stock-based compensation in the Company's consolidated statements of operations and comprehensive income during the years presented: Year ended January 31, (in thousands) 2019 2018 2017 Cost of revenue $ 2,837 $ 2,594 $ 1,780 Sales and marketing 3,536 2,030 914 Technology and development 5,117 3,318 1,903 General and administrative 9,567 6,368 3,801 Total stock-based compensation expense $ 21,057 $ 14,310 $ 8,398 The following table shows stock-based compensation by award type: Year ended January 31, (in thousands) 2019 2018 2017 Stock options $ 7,581 $ 7,826 $ 6,480 Performance stock options 681 1,378 1,685 Restricted stock units 7,657 3,224 233 Performance restricted stock units 2,419 1,882 — Restricted stock awards 570 — — Performance restricted stock awards 2,149 — — Total stock-based compensation expense $ 21,057 $ 14,310 $ 8,398 |
Summary of assumptions | The key input assumptions that were utilized in the valuation of the stock options granted during the years ended January 31, 2019 , 2018 and 2017 are as follows: Year ended January 31, 2019 2018 2017 Expected dividend yield — % — % — % Expected stock price volatility 36.53% - 37.84% 37.79% - 38.01% 38.01% - 38.37% Risk-free interest rate 2.52% - 2.79% 1.18% - 2.07% 1.18% - 2.18% Expected life of options 5.17 - 6.25 years 4.50 - 6.25 years 4.50 - 6.25 years |
Summary of stock options | A summary of stock option activity is as follows: Outstanding stock options (in thousands, except for exercise prices and term) Number of Range of Weighted- Weighted- Aggregate Outstanding as of January 31, 2018 3,699 $0.10 - 51.44 $ 22.83 7.26 $ 102,796 Granted 140 $50.41 - 82.39 $ 64.06 Exercised (1,276 ) $0.10 - 44.53 $ 17.97 Forfeited (119 ) $14.00 - 44.53 $ 30.50 Outstanding as of January 31, 2019 2,444 $0.10 - 82.39 $ 27.37 6.74 $ 85,971 Vested and expected to vest as of January 31, 2019 2,444 $ 27.37 6.74 $ 85,971 Exercisable as of January 31, 2019 843 $ 23.19 6.28 $ 33,023 A summary of stock options granted and exercised is as follows: Year ended January 31, (in thousands, except weighted-average fair value) 2019 2018 2017 Stock options granted 140 420 1,399 Weighted-average fair value at date of grant $ 64.06 $ 42.72 $ 28.85 Total intrinsic value of stock options exercised $ 65,463 $ 44,823 $ 50,094 |
Summary of restricted stock activity | A summary of the RSU and RSA activity is as follows: RSUs and PRSUs RSAs and PRSAs (in thousands, except weighted-average grant date fair value) Shares Weighted-average grant date fair value Shares Weighted-average grant date fair value Outstanding as of January 31, 2018 451 $ 44.10 — $ — Granted 321 67.69 275 61.92 Vested (88 ) 46.35 — — Forfeited (36 ) 49.00 (19 ) 61.72 Outstanding as of January 31, 2019 648 $ 55.20 256 $ 61.93 |
Fair value (Tables)
Fair value (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets measured at fair value on a recurring basis | The following table summarizes as of January 31, 2018 the assets measured at fair value on a recurring basis and indicates the level within the fair value hierarchy reflecting the valuation techniques utilized to determine fair value: January 31, 2018 (in thousands) Level 1 Level 2 Level 3 Marketable securities: Mutual funds $ 40,797 $ — $ — |
Supplementary quarterly finan_2
Supplementary quarterly financial data (unaudited) (Tables) | 12 Months Ended |
Jan. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | Three months ended (in thousands, except for per share amounts) January 31, 2019 October 31, 2018 July 31, 2018 April 30, 2018 Total revenue $ 75,777 $ 70,495 $ 71,067 $ 69,904 Total cost of revenue 31,332 24,678 24,492 25,548 Gross profit 44,445 45,817 46,575 44,356 Total operating expenses 27,864 26,831 25,012 23,816 Total other expense (221 ) (1,555 ) (75 ) (1 ) Income tax provision (benefit) 3,241 1,745 (1,029 ) (2,038 ) Net income $ 13,119 $ 15,686 $ 22,517 $ 22,577 Net income per share: Basic (1) $ 0.21 $ 0.25 $ 0.36 $ 0.37 Diluted (1) $ 0.21 $ 0.25 $ 0.36 $ 0.36 Three months ended (in thousands, except for per share amounts) January 31, 2018 October 31, 2017 July 31, 2017 April 30, 2017 Total revenue $ 60,436 $ 56,789 $ 56,879 $ 55,421 Total cost of revenue 28,790 23,062 21,077 21,680 Gross profit 31,646 33,727 35,802 33,741 Total operating expenses 23,212 20,165 19,307 17,814 Total other expense (1,706 ) (395 ) (38 ) (90 ) Income tax provision (benefit) 823 2,685 (489 ) 1,808 Net income $ 5,905 $ 10,482 $ 16,946 $ 14,029 Net income per share: Basic (1) $ 0.10 $ 0.17 $ 0.28 $ 0.23 Diluted (1) $ 0.09 $ 0.17 $ 0.27 $ 0.23 (1) Net income per share amounts do not sum to equal full year total due to changes in the number of shares outstanding during the periods and rounding. |
Summary of business and signi_4
Summary of business and significant accounting policies (Details) | 12 Months Ended | ||||
Jan. 31, 2019USD ($)segment | Jan. 31, 2018USD ($) | Jan. 31, 2017USD ($) | Feb. 01, 2018USD ($) | Jan. 31, 2016USD ($) | |
Schedule of Equity Method Investments [Line Items] | |||||
Cost method ownership | 1.00% | 1.00% | |||
Cost method investments | $ 500,000 | ||||
Number of segments | segment | 1 | ||||
Account fees receivable | $ 6,300,000 | $ 7,900,000 | |||
Accounts receivables | 13,800,000 | 9,000,000 | |||
Credit card receivables | 5,600,000 | 4,700,000 | |||
Allowance for doubtful accounts | 125,000 | 208,000 | |||
Finite-Lived Intangible Assets [Line Items] | |||||
Gain (loss) on disposal | (700,000) | ||||
Class of Stock [Line Items] | |||||
Capitalized contract cost | 19,100,000 | ||||
Remaining performance obligation | 300,000 | 400,000 | |||
Revenue recognized | 200,000 | ||||
Cash and cash equivalents | 361,475,000 | 199,472,000 | $ 139,954,000 | $ 83,641,000 | |
Cash covered by insurance | 1,000,000 | ||||
Accounts receivable | $ 25,668,000 | 21,602,000 | |||
HSA Member | |||||
Class of Stock [Line Items] | |||||
Capitalized contract cost, amortization period | 15 years | ||||
RA Customer Relationship | |||||
Class of Stock [Line Items] | |||||
Capitalized contract cost, amortization period | 7 years | ||||
401(k) | |||||
Class of Stock [Line Items] | |||||
Capitalized contract cost, amortization period | 10 years | ||||
Furniture and fixtures | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life of property, plant and equipment (in years) | 5 years | ||||
Adjustments | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||
Class of Stock [Line Items] | |||||
Capitalized contract cost | $ 17,200,000 | ||||
Minimum | Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life of property, plant and equipment (in years) | 3 years | ||||
Minimum | Computer equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life of property, plant and equipment (in years) | 3 years | ||||
Maximum | Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life of property, plant and equipment (in years) | 5 years | ||||
Maximum | Computer equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life of property, plant and equipment (in years) | 5 years | ||||
Healthbox Inc. | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership (percentage) | 22.00% | ||||
Equity method investments | $ 200,000 | ||||
Other Expense | |||||
Class of Stock [Line Items] | |||||
Acquisition related expenses | $ 2,100,000 | $ 2,200,000 | $ 600,000 | ||
Developed Technology Rights | Minimum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 3 years | ||||
Developed Technology Rights | Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 5 years | ||||
401(k) Customer Relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 10 years | ||||
Computer Software And Capitalized Software Development Costs | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 3 years | ||||
Acquired HSA Intangible Assets | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Useful life of intangible assets | 15 years |
Summary of business and signi_5
Summary of business and significant accounting policies - New Accounting Pronouncements (Details) - Accounting Standards Update 2018-02 - USD ($) $ in Thousands | Jan. 31, 2018 | Feb. 01, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect from adoption of accounting standard update | $ 0 | |
Retained Earnings | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect from adoption of accounting standard update | $ 45 | 45 |
AOCI Attributable to Parent | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect from adoption of accounting standard update | $ (45) | $ (45) |
Summary of business and signi_6
Summary of business and significant accounting policies - Adoption of New Accounting Pronouncements - Balance Sheet Effects (Details) - USD ($) $ in Thousands | Jan. 31, 2019 | Feb. 01, 2018 | Jan. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Other current assets | $ 7,534 | $ 4,676 | $ 3,525 |
Deferred tax asset | 1,677 | 1,274 | 5,461 |
Other assets | 21,122 | 18,027 | 2,180 |
Deferred tax liability | 916 | 18 | 0 |
Accumulated earnings | 171,850 | 98,307 | 85,300 |
Calculated under Revenue Guidance in Effect before Topic 606 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Other current assets | 5,815 | 3,310 | |
Deferred tax asset | 5,415 | 5,461 | |
Other assets | 3,790 | 2,180 | |
Deferred tax liability | 0 | 0 | |
Accumulated earnings | 157,455 | $ 85,300 | |
Adjustments | Difference between Revenue Guidance in Effect before and after Topic 606 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Other current assets | 1,719 | 1,366 | |
Deferred tax asset | (3,738) | (4,187) | |
Other assets | 17,332 | 15,847 | |
Deferred tax liability | 916 | 18 | |
Accumulated earnings | $ 14,395 | $ 13,007 |
Summary of business and signi_7
Summary of business and significant accounting policies - Adoption of New Accounting Pronouncements - Statement of Operations Effects (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Sales and marketing | $ 29,498 | $ 23,139 | $ 18,320 | ||||||||
Income from operations | 77,670 | 54,418 | 41,212 | ||||||||
Income tax provision | $ 3,241 | $ 1,745 | $ (1,029) | $ (2,038) | $ 823 | $ 2,685 | $ (489) | $ 1,808 | 1,919 | 4,827 | 13,744 |
Net income | $ 13,119 | $ 15,686 | $ 22,517 | $ 22,577 | $ 5,905 | $ 10,482 | $ 16,946 | $ 14,029 | 73,899 | $ 47,362 | $ 26,376 |
Calculated under Revenue Guidance in Effect before Topic 606 | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Sales and marketing | 31,335 | ||||||||||
Income from operations | 75,833 | ||||||||||
Income tax provision | 1,470 | ||||||||||
Net income | 72,511 | ||||||||||
Adjustments | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||
Sales and marketing | (1,837) | ||||||||||
Income from operations | 1,837 | ||||||||||
Income tax provision | 449 | ||||||||||
Net income | $ 1,388 |
Summary of business and signi_8
Summary of business and significant accounting policies - Schedule Of Deferred Tax Assets (Details) - USD ($) $ in Thousands | Jan. 31, 2019 | Feb. 01, 2018 | Jan. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred tax asset | $ 1,677 | $ 1,274 | $ 5,461 |
Accumulated other comprehensive loss, net | 0 | (269) | |
Accumulated earnings | $ 171,850 | 98,307 | 85,300 |
Previously Reported | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred tax asset | 5,461 | ||
Accumulated other comprehensive loss, net | (269) | ||
Accumulated earnings | $ 85,300 | ||
Accounting Standards Update 2018-03 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred tax asset | 5,374 | ||
Accumulated other comprehensive loss, net | 0 | ||
Accumulated earnings | 84,944 | ||
Accounting Standards Update 2018-03 | Restatement Adjustment | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred tax asset | (87) | ||
Accumulated other comprehensive loss, net | 269 | ||
Accumulated earnings | $ (356) |
Net income per share (Details)
Net income per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Numerator (basic and diluted): | |||||||||||
Net income | $ 13,119 | $ 15,686 | $ 22,517 | $ 22,577 | $ 5,905 | $ 10,482 | $ 16,946 | $ 14,029 | $ 73,899 | $ 47,362 | $ 26,376 |
Denominator (basic): | |||||||||||
Weighted-average common shares outstanding (shares) | 61,836 | 60,304 | 58,615 | ||||||||
Denominator (diluted): | |||||||||||
Weighted-average common shares outstanding (shares) | 61,836 | 60,304 | 58,615 | ||||||||
Weighted-average dilutive effect of stock options and restricted stock units (shares) | 1,534 | 1,550 | 1,279 | ||||||||
Weighted-average common shares outstanding (shares) | 63,370 | 61,854 | 59,894 | ||||||||
Net income per share: | |||||||||||
Basic (usd per share) | $ 0.21 | $ 0.25 | $ 0.36 | $ 0.37 | $ 0.10 | $ 0.17 | $ 0.28 | $ 0.23 | $ 1.20 | $ 0.79 | $ 0.45 |
Diluted (usd per share) | $ 0.21 | $ 0.25 | $ 0.36 | $ 0.36 | $ 0.09 | $ 0.17 | $ 0.27 | $ 0.23 | $ 1.17 | $ 0.77 | $ 0.44 |
Antidilutive securities excluded from computation of earnings per share (shares) | 100 | 600 | 1,400 |
Cash, cash equivalents and ma_3
Cash, cash equivalents and marketable securities (Details) - USD ($) $ in Thousands | Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | Jan. 31, 2016 |
Debt Securities, Available-for-sale [Line Items] | ||||
Cash and cash equivalents, cost basis | $ 361,475 | $ 199,472 | $ 139,954 | $ 83,641 |
Cash and cash equivalents, fair value | 361,475 | 199,472 | ||
Gross unrealized gains | 0 | 270 | ||
Gross unrealized losses | 0 | (626) | ||
Total cash, cash equivalents and marketable securities, cost basis | 361,475 | 240,625 | ||
Total cash, cash equivalents and marketable securities | 361,475 | 240,269 | ||
Mutual funds | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Marketable securities, cost basis | 0 | 41,153 | ||
Gross unrealized gains | 0 | 270 | ||
Gross unrealized losses | 0 | (626) | ||
Marketable securities, at fair value | $ 0 | $ 40,797 |
Cash, cash equivalents and ma_4
Cash, cash equivalents and marketable securities - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Feb. 01, 2018 | |
Cash and Cash Equivalents [Line Items] | |||
Marketable securities, realized gain (loss) | $ 400 | $ 900 | |
Accounting Standards Update 2016-01 | |||
Cash and Cash Equivalents [Line Items] | |||
Accumulated earnings | $ 87 | ||
Other Expense | |||
Cash and Cash Equivalents [Line Items] | |||
Marketable securities, realized gain (loss) | $ (100) | ||
Accumulated earnings (deficit) | Accounting Standards Update 2016-01 | |||
Cash and Cash Equivalents [Line Items] | |||
Accumulated earnings | $ 356 |
Property and equipment - Schedu
Property and equipment - Schedule of property and equipment (Details) - USD ($) $ in Thousands | Jan. 31, 2019 | Jan. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 17,301 | $ 15,251 |
Accumulated depreciation | (9,078) | (7,415) |
Property and equipment, net | 8,223 | 7,836 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 3,583 | 2,292 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 4,476 | 4,785 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 9,242 | $ 8,174 |
Property and equipment - Narrat
Property and equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 3.5 | $ 2.8 | $ 2 |
Intangible assets and goodwil_2
Intangible assets and goodwill - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | |||
Capitalized software development costs | $ 9,300 | $ 8,100 | $ 7,700 |
Software development costs incurred and expensed | 13,700 | 12,200 | 10,000 |
Amortization expense | 14,700 | 13,200 | $ 11,200 |
Gain (loss) on disposition of intangible assets | (700) | ||
Acquired HSA Intangible Assets | |||
Finite-Lived Intangible Assets [Line Items] | |||
Acquired intangible assets | $ 1,195 | $ 18,953 | |
Acquired finite-lived intangible assets, useful life | 15 years | ||
Customer relationships | Servicing Contracts, Portfolio of HSA Members Two, Custodian | |||
Finite-Lived Intangible Assets [Line Items] | |||
Contingent earn-out payment | $ 1,300 |
Intangible assets and goodwil_3
Intangible assets and goodwill - Schedule of finite-lived intangible assets (Details) - USD ($) $ in Thousands | Jan. 31, 2019 | Jan. 31, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 132,827 | $ 127,653 |
Accumulated amortization | (53,161) | (44,018) |
Intangible assets, net | 79,666 | 83,635 |
Capitalized software development costs | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 40,583 | 31,993 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 4,252 | 8,863 |
Other intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 2,882 | 2,882 |
Acquired intangible member assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 85,110 | $ 83,915 |
Intangible assets and goodwil_4
Intangible assets and goodwill - Schedule for future amortization expense (Details) - USD ($) $ in Thousands | Jan. 31, 2019 | Jan. 31, 2018 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2020 | $ 13,824 | |
2021 | 10,706 | |
2022 | 7,930 | |
2023 | 6,209 | |
2023 | 6,209 | |
Thereafter | 34,788 | |
Intangible assets, net | $ 79,666 | $ 83,635 |
Commitments and contingencies -
Commitments and contingencies - Future Minimum Rentals (Details) $ in Thousands | Jan. 31, 2019USD ($) |
Future minimum lease payments | |
2020 | $ 7,258 |
2021 | 7,325 |
2022 | 7,328 |
2023 | 5,798 |
2024 | 5,883 |
Thereafter | 44,252 |
Total | 77,844 |
Office lease | |
Future minimum lease payments | |
2020 | 3,690 |
2021 | 3,933 |
2022 | 5,589 |
2023 | 5,728 |
2024 | 5,872 |
Thereafter | 44,252 |
Total | 69,064 |
Other agreements | |
Future minimum lease payments | |
2020 | 3,568 |
2021 | 3,392 |
2022 | 1,739 |
2023 | 70 |
2024 | 11 |
Thereafter | 0 |
Total | $ 8,780 |
Commitments and contingencies_2
Commitments and contingencies - Narrative (Details) $ in Millions | 12 Months Ended | ||
Jan. 31, 2019USD ($)building | Jan. 31, 2018USD ($) | Jan. 31, 2017USD ($) | |
Operating Leased Assets [Line Items] | |||
Number of leases | building | 2 | ||
Annual increase in rent (percentage) | 2.50% | ||
Written notice required for contract termination (days) | 180 days | ||
Contract termination fees, as percentage of minimum processing fees (percentage) | 75.00% | ||
Office lease | |||
Operating Leased Assets [Line Items] | |||
Lease expense for office space | $ 5.5 | $ 4.3 | $ 3.3 |
Other agreements | |||
Operating Leased Assets [Line Items] | |||
Lease expense for office space | $ 0.6 | $ 0.5 | $ 0.3 |
Indebtedness (Details)
Indebtedness (Details) - Line of Credit - Secured Revolving Credit Facility | Sep. 30, 2015USD ($) | Jan. 31, 2019USD ($) | Jan. 31, 2018USD ($) |
Debt Instrument [Line Items] | |||
Secured revolving credit facility, aggregate principal | $ 100,000,000 | ||
Debt term | 5 years | ||
Amounts drawn under Credit Agreement | $ 0 | ||
Interest expense | 300,000 | $ 300,000 | |
Credit facility, deferred finance costs, net | $ 317,000 | ||
Minimum | |||
Debt Instrument [Line Items] | |||
Commitment fee | 0.20% | ||
Interest coverage ratio | 3 | ||
Minimum | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Variable rate borrowing spread | 1.50% | ||
Minimum | Customary Base Rate | |||
Debt Instrument [Line Items] | |||
Variable rate borrowing spread | 0.50% | ||
Maximum | |||
Debt Instrument [Line Items] | |||
Commitment fee | 0.30% | ||
Leverage ratio | 3 | ||
Maximum | London Interbank Offered Rate (LIBOR) | |||
Debt Instrument [Line Items] | |||
Variable rate borrowing spread | 2.00% | ||
Maximum | Customary Base Rate | |||
Debt Instrument [Line Items] | |||
Variable rate borrowing spread | 1.00% |
Income taxes - Components of In
Income taxes - Components of Income tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Current: | |||||||||||
Federal | $ 1,095 | $ 392 | $ 14,848 | ||||||||
State | 416 | 130 | 1,823 | ||||||||
Total current tax provision | 1,511 | 522 | 16,671 | ||||||||
Deferred: | |||||||||||
Federal | 1,258 | 4,068 | (2,308) | ||||||||
State | (850) | 237 | (619) | ||||||||
Total deferred tax (benefit) provision | 408 | 4,305 | (2,927) | ||||||||
Total income tax provision | $ 3,241 | $ 1,745 | $ (1,029) | $ (2,038) | $ 823 | $ 2,685 | $ (489) | $ 1,808 | $ 1,919 | $ 4,827 | $ 13,744 |
Income taxes - Reconciliation o
Income taxes - Reconciliation of Income tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||||||||||
Federal income tax provision at the statutory rate | $ 15,922 | $ 17,744 | $ 13,641 | ||||||||
State income tax provision, net of federal tax benefit | 1,518 | 1,241 | 742 | ||||||||
Non-deductible or non-taxable items | 411 | 143 | 87 | ||||||||
Excess tax benefits on stock-based compensation expense, net | (14,255) | (14,136) | 0 | ||||||||
Federal research and development credit | (2,252) | (729) | (907) | ||||||||
Deferred tax rate adjustment due to tax reform | 0 | 458 | 0 | ||||||||
Current statutory rate differential due to tax reform | 0 | (308) | 0 | ||||||||
Change in uncertain tax position reserves, net of indirect benefits | 450 | 191 | 246 | ||||||||
Other items, net | 125 | 223 | (65) | ||||||||
Total income tax provision | $ 3,241 | $ 1,745 | $ (1,029) | $ (2,038) | $ 823 | $ 2,685 | $ (489) | $ 1,808 | $ 1,919 | $ 4,827 | $ 13,744 |
Income taxes (Details)
Income taxes (Details) - USD ($) | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | |||
Effective income tax rate | 2.50% | 9.20% | 34.30% |
Current statutory rate differential due to tax reform | $ 0 | $ 308,000 | $ 0 |
Deferred tax rate adjustment due to tax reform | 0 | 458,000 | 0 |
Deferred tax asset, valuation allowance | 97,000 | 0 | |
Total gross unrecognized tax benefits | 1,693,000 | 889,000 | 674,000 |
Anticipated decrease in total gross unrecognized tax benefits within 12 months | 1,500,000 | 800,000 | |
Period increase (decrease) in unrecognized tax benefit | 800,000 | ||
Unrecognized tax benefits, income tax penalties and interest expense | 0 | 0 | 0 |
Unrecognized tax benefits, income tax penalties and interest accrued | 0 | $ 0 | |
Income tax examination, penalties and interest accrued | 0 | $ 0 | |
December 31, 2025 Through 2036 | State | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | 1,100,000 | ||
December 31, 2019 | Research | Federal | |||
Operating Loss Carryforwards [Line Items] | |||
Credit carryforward | 1,900,000 | ||
December 31, 2024 | Research | State | |||
Operating Loss Carryforwards [Line Items] | |||
Credit carryforward | $ 2,500,000 |
Income taxes - Deferred Tax Ass
Income taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jan. 31, 2019 | Jan. 31, 2018 |
Deferred tax assets: | ||
Accrued bonuses | $ 808 | $ 489 |
Other accrued liabilities | 664 | 572 |
Deferred rent | 626 | 520 |
Stock compensation | 6,987 | 5,316 |
Net operating loss carryforward | 68 | 666 |
Research and development credits | 2,323 | 2,882 |
AMT credits | 0 | 857 |
Other, net | 255 | 286 |
Total gross deferred tax assets | 11,731 | 11,588 |
Less valuation allowance | (97) | 0 |
Deferred tax asset | 11,634 | 11,588 |
Deferred tax liabilities: | ||
Fixed assets: depreciation and gain/loss | (1,294) | (1,170) |
Intangibles: amortization | (4,798) | (4,830) |
Incremental contract costs | (4,654) | 0 |
Other, net | (127) | (127) |
Total gross deferred tax liabilities | (10,873) | (6,127) |
Net deferred tax asset | $ 761 | $ 5,461 |
Income taxes - Unrecognized Tax
Income taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2019 | Jan. 31, 2018 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||||
Gross unrecognized tax benefits at beginning of year | $ 889 | $ 674 | ||
Increases as a result of tax positions taken during a prior period | 0 | 0 | ||
Decreases as a result of tax positions taken during a prior period | (1) | 0 | ||
Increases as a result of tax positions taken during the current period | 805 | 215 | ||
Decreases as a result of tax positions taken during the current period | 0 | 0 | ||
Decreases resulting from the lapse of the applicable statute of limitations | 0 | 0 | ||
Gross unrecognized tax benefits at end of year | 1,693 | 889 | ||
Gross unrecognized tax benefits at beginning of year | $ 889 | $ 674 | $ 1,693 | $ 889 |
Amounts netted against related deferred tax assets | (1,693) | (889) | ||
Unrecognized tax benefits recorded on the consolidated balance sheet | $ 0 | $ 0 |
Stock-based compensation (Detai
Stock-based compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation | $ 21,057 | $ 14,310 | $ 8,398 |
Cost of revenue | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation | 2,837 | 2,594 | 1,780 |
Sales and marketing | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation | 3,536 | 2,030 | 914 |
Technology and development | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation | 5,117 | 3,318 | 1,903 |
General and administrative | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation | 9,567 | 6,368 | 3,801 |
Employee Stock Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation | 7,581 | 7,826 | 6,480 |
Performance Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation | 681 | 1,378 | 1,685 |
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation | 7,657 | 3,224 | 233 |
Performance Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation | 2,419 | 1,882 | 0 |
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation | 570 | 0 | 0 |
Performance Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share based compensation | $ 2,149 | $ 0 | $ 0 |
Stock-based compensation - Narr
Stock-based compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | Jan. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized (shares) | 2,600,000 | |||||
Additional shares available for grants as percentage of capital stock outstanding | 3.00% | |||||
Shares available for grant (shares) | 4,100,000 | |||||
Expiration period after termination | 10 years | |||||
Expiration period from termination of employment | 90 days | |||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | |||
Options exercisable (shares) | 800,000 | 1,100,000 | ||||
Recognition period for stock-based compensation | 1 year 7 months | |||||
Unrecognized stock compensation expense to be recognized in future | $ 11,600 | |||||
Performance Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (in shares) | 1,500,000 | |||||
Performance Shares | Vesting criteria for FY 2016 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of options vested | 10.00% | |||||
Minimum adjusted EBITDA to be attained for shares to vest | $ 34,500 | |||||
Minimum adjusted EBITDA to be attained for shares to vest per share (usd per share) | $ 0.61 | |||||
Performance Shares | Vesting criteria for FY 2017 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of options vested | 20.00% | |||||
Annual growth rate of adjusted EBITDA per share of common stock to be achieved for options to vest | 30.00% | |||||
Performance Shares | Vesting criteria for FY 2018 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of options vested | 30.00% | |||||
Annual growth rate of adjusted EBITDA per share of common stock to be achieved for options to vest | 30.00% | |||||
Performance Shares | Vesting criteria subsequent to FY 2017 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Annual growth rate of adjusted EBITDA per share of common stock to be achieved for options to vest | 35.00% | |||||
Performance Shares | Vesting criteria for FY 2019 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of options vested | 40.00% | |||||
Annual growth rate of adjusted EBITDA per share of common stock to be achieved for options to vest | 25.00% | |||||
Restricted Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Recognition period for stock-based compensation | 2 years 6 months | |||||
Granted (in shares) | 321,000 | |||||
Aggregate intrinsic value | $ 6,400 | $ 700 | $ 21 | |||
Compensation not yet recognized, other than options | $ 25,900 | |||||
Award vesting period | 4 years | |||||
Performance Restricted Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (in shares) | 146,964 | |||||
Performance Restricted Stock Awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (in shares) | 227,760 | |||||
Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Recognition period for stock-based compensation | 2 years 4 months 24 days | |||||
Granted (in shares) | 275,000 | |||||
Compensation not yet recognized, other than options | $ 7,200 | |||||
Minimum | Performance Restricted Stock Awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of options vested | 0.00% | |||||
Maximum | Performance Restricted Stock Units | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of options vested | 150.00% | |||||
Maximum | Performance Restricted Stock Awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of options vested | 200.00% |
Stock-based compensation - Assu
Stock-based compensation - Assumptions (Details) | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected stock price volatility | 36.53% | 37.79% | 38.01% |
Risk-free interest rate | 2.52% | 1.18% | 1.18% |
Expected life of options | 5 years 2 months 1 day | 4 years 6 months | 4 years 6 months |
Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected stock price volatility | 37.84% | 38.01% | 38.37% |
Risk-free interest rate | 2.79% | 2.07% | 2.18% |
Expected life of options | 6 years 3 months | 6 years 3 months | 6 years 3 months |
Stock-based compensation - Stoc
Stock-based compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Number of options | |||
Opening balance (shares) | 3,699 | ||
Granted (shares) | 140 | 420 | 1,399 |
Number of shares exercised (shares) | (1,276) | ||
Forfeited (shares) | (119) | ||
Ending balance (shares) | 2,444 | 3,699 | |
Vested and expected to vest as of year end (shares) | 2,444 | ||
Exercisable as of year end (shares) | 843 | ||
Range of exercise prices (usd per share) | |||
Beginning balance, minimum (usd per share) | $ 0.10 | ||
Beginning balance, maximum (usd per share) | 51.44 | ||
Granted, minimum (usd per share) | 50.41 | ||
Granted, maximum (usd per share) | 82.39 | ||
Exercised, minimum (usd per share) | 0.10 | ||
Exercised, maximum (usd per share) | 44.53 | ||
Forfeited, minimum (usd per share) | 14 | ||
Forfeited, maximum (usd per share) | 44.53 | ||
Ending balance, minimum (usd per share) | 0.10 | $ 0.10 | |
Ending balance, maximum (usd per share) | 82.39 | 51.44 | |
Weighted- average exercise price (usd per share) | |||
Opening balance (usd per share) | 22.83 | ||
Granted (usd per share) | 64.06 | ||
Exercised (dollars per share) | 17.97 | ||
Forfeited (usd per share) | 30.50 | ||
Ending balance (usd per share) | 27.37 | $ 22.83 | |
Vested and expected to vest as of year end, weighted average exercise price (usd per share) | 27.37 | ||
Exercisable as of year end (usd per share) | $ 23.19 | ||
Weighted- average contractual term (in years) | 6 years 8 months 28 days | 7 years 3 months 5 days | |
Vested and expected to vest as of year end, weighted- average contractual term (in years) | 6 years 8 months 28 days | ||
Exercisable as of year end, weighted-average contractual term (in years) | 6 years 3 months 11 days | ||
Aggregate intrinsic value | $ 85,971 | $ 102,796 | |
Vested and expected to vest as of year end, aggregate intrinsic value | 85,971 | ||
Exercisable as of year end, aggregate intrinsic value | $ 33,023 |
Stock-based compensation - St_2
Stock-based compensation - Stock Options Granted and Exercised (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Stock options granted (shares) | 140 | 420 | 1,399 |
Weighted-average fair value at date of grant (usd per share) | $ 64.06 | $ 42.72 | $ 28.85 |
Total intrinsic value of stock options exercised | $ 65,463 | $ 44,823 | $ 50,094 |
Stock-based compensation - Rest
Stock-based compensation - Restricted Stock Activity (Details) shares in Thousands | 12 Months Ended |
Jan. 31, 2019$ / sharesshares | |
Restricted Stock Units | |
Shares | |
Unvested, beginning balance (in shares) | shares | 451 |
Granted (in shares) | shares | 321 |
Vested (in shares) | shares | (88) |
Forfeitures (in shares) | shares | (36) |
Unvested, ending balance (in shares) | shares | 648 |
Weighted-average grant date fair value | |
Unvested, beginning balance (usd per share) | $ / shares | $ 44.10 |
Granted (usd per share) | $ / shares | 67.69 |
Vested (usd per share) | $ / shares | 46.35 |
Forfeitures (usd per share) | $ / shares | 49 |
Unvested, ending balance (usd per share) | $ / shares | $ 55.20 |
Restricted Stock | |
Shares | |
Unvested, beginning balance (in shares) | shares | 0 |
Granted (in shares) | shares | 275 |
Vested (in shares) | shares | 0 |
Forfeitures (in shares) | shares | (19) |
Unvested, ending balance (in shares) | shares | 256 |
Weighted-average grant date fair value | |
Unvested, beginning balance (usd per share) | $ / shares | $ 0 |
Granted (usd per share) | $ / shares | 61.92 |
Vested (usd per share) | $ / shares | 0 |
Forfeitures (usd per share) | $ / shares | 61.72 |
Unvested, ending balance (usd per share) | $ / shares | $ 61.93 |
Fair value (Details)
Fair value (Details) - USD ($) $ in Thousands | Jan. 31, 2019 | Jan. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mutual funds | $ 0 | $ 40,797 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mutual funds | 40,797 | |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mutual funds | 0 | |
Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Mutual funds | $ 0 |
Employee benefits (Details)
Employee benefits (Details) - USD ($) | 12 Months Ended | ||
Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Maximum coverage per incident under self-insurance | $ 110,000 | ||
Accrued compensation | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Liability for self-insured medical claims | $ 1,400,000 | $ 1,700,000 | |
Supplemental Employee Retirement Plan | 401(k) | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Percent of employees eligible earnings | 3.50% | ||
Annual vesting | 25.00% | ||
Administrative expenses | $ 25,000 | 25,000 | $ 15,000 |
Employer matching contribution expense | $ 1,800,000 | $ 1,400,000 | $ 900,000 |
Supplementary quarterly finan_3
Supplementary quarterly financial data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Apr. 30, 2018 | Jan. 31, 2018 | Oct. 31, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Jan. 31, 2019 | Jan. 31, 2018 | Jan. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenue | $ 75,777 | $ 70,495 | $ 71,067 | $ 69,904 | $ 60,436 | $ 56,789 | $ 56,879 | $ 55,421 | $ 287,243 | $ 229,525 | $ 178,370 |
Total cost of revenue | 31,332 | 24,678 | 24,492 | 25,548 | 28,790 | 23,062 | 21,077 | 21,680 | 106,050 | 94,609 | 72,015 |
Gross profit | 44,445 | 45,817 | 46,575 | 44,356 | 31,646 | 33,727 | 35,802 | 33,741 | 181,193 | 134,916 | 106,355 |
Total operating expenses | 27,864 | 26,831 | 25,012 | 23,816 | 23,212 | 20,165 | 19,307 | 17,814 | 103,523 | 80,498 | 65,143 |
Total other expense | (221) | (1,555) | (75) | (1) | (1,706) | (395) | (38) | (90) | (1,852) | (2,229) | (1,092) |
Income tax provision (benefit) | 3,241 | 1,745 | (1,029) | (2,038) | 823 | 2,685 | (489) | 1,808 | 1,919 | 4,827 | 13,744 |
Net income | $ 13,119 | $ 15,686 | $ 22,517 | $ 22,577 | $ 5,905 | $ 10,482 | $ 16,946 | $ 14,029 | $ 73,899 | $ 47,362 | $ 26,376 |
Net income per share: | |||||||||||
Basic (usd per share) | $ 0.21 | $ 0.25 | $ 0.36 | $ 0.37 | $ 0.10 | $ 0.17 | $ 0.28 | $ 0.23 | $ 1.20 | $ 0.79 | $ 0.45 |
Diluted (usd per share) | $ 0.21 | $ 0.25 | $ 0.36 | $ 0.36 | $ 0.09 | $ 0.17 | $ 0.27 | $ 0.23 | $ 1.17 | $ 0.77 | $ 0.44 |
Uncategorized Items - hqy-20190
Label | Element | Value |
Accounting Standards Update 2014-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 13,007,000 |
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 13,007,000 |
Accounting Standards Update 2016-01 [Member] | AOCI Attributable to Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 269,000 |
Accounting Standards Update 2016-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 8,157,000 |
Accounting Standards Update 2016-09 [Member] | Additional Paid-in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 249,000 |
Accounting Standards Update 2016-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 7,908,000 |