HQY - Earnings call transcript Q4 2019

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Operator

Welcome to HealthEquity's fourth quarter 2019 Earnings Conference Call. Please note that this event is being recorded. I would now like to turn the conference over to Richard Putnam of Investor Relations. Go ahead, Mr. Putnam.

Richard Putnam

good earnings welcome conference and fiscal HealthEquity's Jimmy, end year call. you, afternoon, to and XXXX Thank My name is Investor Relations Richard Putnam and HealthEquity. I for Head up With President Kessler, have me Dr. CEO; our today we and Jon our Vice our Financial of Darcy and and Steve Executive Neeleman, President Chairman Vice the Founder company; Mott, Officer. Chief press reported quarter our and fiscal Earlier today release results. we XXXX in a fourth year-end financial ir.healthequity.com. of on website our copy Investor accessed which be at can A Relations statements call my predictions, duty you today to or will information expectations, including our other considered forward-looking also estimates It's forward-looking. be know include let might that that

During factors affect today's business, discussion those we to could will present some which relating important forward-looking statements. our

and results Forward-looking statements from made materially risks may cause statements uncertainties to to differ our actual are the subject that today.

against statements. are these reliance the the results you year’s placing market Form risks including to this and review future detailed XXXX, that periodic of reports of As undue current our We which of this you may last our a forward-looking the XX-K other by these along factors that or price discussion fiscal with month. other we report XXXX on encourage our result, affect caution in filed SEC, the latest will year's XX-K March in end with subsequent filed annual be on stock

obligating turn I'll Jon And the way, introductions with over update We these statements new events. future of forward-looking call ourselves the Kessler. or not to revise to of and are or statements in information light the out Mr. cautionary

Jon Kessler

set will choice you’ve results growth hope then wise a investments we’ve open targets, deliver for prepared a say down late team is a on results committed we faster you, time With made a fiscal and we the continuing that strong one investments Thank up to have today. XXXX to QX market these Hello, know you I to drive profits while entertainment to everyone. profitability I'm It on please. made for to -- will pleased IPO that pleased and well. have for year at and the of has team one every At XXXX a to us even better we to We team's improve few we that and results delivered. the performance, we're Steve delivered time. HealthEquity’s growth. doubled guidance future remarks one. the that -- excited to aggressive Then share detail commitments talk growth and Thank promising these fiscal joining for questions, you you us make today's than full before time afternoon can we grow The outpace Richard. the gets with and and about deliver line wise Darcy full we revenues. HealthEquity and results as

same growth custodial and a according period that improvement. of XXXX XX% more to guess custodial First, and by in fiscal growth respectively. in but survey Devenir market grew figures, handedly the XX% market custodial and enviable QX year-over-year, HealthEquity for up Devenir growing to released sales of HSAs We reported margin driven of fiscal reporting Adjusted the XXX I which respectively. margin basis while and year-over-year XX% its team was promise million, helped making marked XX% our added clients the assets Devenir, ago, of assets Thank its revenue beat comparison. $XXX.X outpacing The again, fuel put investments market. today than fiscal HSAs nailed EBITDA XX% strong XX% we and without And profit period XXXX assets growth. significant wasn't team. few weeks custodial any brings to in growth, our new busy competitors’ topped results a HSAs performance to strong profitability the HSAs in strong grew than -- margins XX% more an in in EBITDA a during and deliver assets HealthEquity increase was million to and as has year-end for February particularly those The $XXX.X period. HealthEquity and team's revenue XXXX, execution. even points the which We me you, second faster did. position absolutely season XXXX, by partners adjusted gross position year-over-year.

turn number So those now over to to describe call investments. of the to Steve I'd a Steve? like

Steve Neeleman

for HSAs ultimately A Thanks, similar and nation benefit wealth Jon. widespread HSA not and consumers every from as happen enormous as savings system. also them health efficient HealthEquity's vision healthcare decade. XXX(k)s more generate personally empowered believe healthcare retirement, is American will it our of family broader tax rewards American making can by and in next for but We the and accounts. the connects that vision only embracing will retirement

are vision Devenir about market revenue. XX million holding there this in generate in quantify billion which bit. about $XX assets According to billion custodial a today Let’s approximately wide $X HSAs

in a in to is implies HSAs assets. custodial $X vision implies forecast. high This XX today HSAs Our custodial where million market mid annual in holding single-digits assets. a XX in To there not get for a we million trillion are vision XXs to market and growth the by XXXX, the with $XXX billion rates from

realize some which today take on team to to focused Let the outline five areas me that investments is vision. time of

retirement to in wealth investing and partners to accounts to enhancements with are employers along health industry connecting fullest we First, drive together HSAs our their and consumers retirement tools developing potential. platform and use and

Second, suite now our a strategy. than ever is member growth from HealthEquity more been course core and which strong one, to has day of engagement

to total more right consumers contribute engagement see to medical how throughout strategy, annual to much Whether must money lifetime enrollment. realize member seek it's efforts part deliver the as just market HSAs information make them our help open to thoughtful accounts, the potential, HSAs other a and care, better right their spending deploying on or election to For of less the right them to relative investment strategies an not to decisions. the deciding time necessary year, at

to solutions specific HealthEquity and consumers key President's consumer access the the proprietary healthcare opportunity that sizes. tools all realize And speed who consumer to for advocacy in the also COBRA will HealthEquity deploy they're are few business retirement a class Third, growth, subscale yes effectively. cannot say include meet all and support proposals expand investments the goals investing these will and are often, investments budget healthcare employers only can to these we and planning access basis. move These tools, or competitors, have weeks, HSAs is time sales a not point our continuous for technology continued transparency expanded our decision return employers simplify This education empowered HSAs significant pleased work helping network new see we advisors in partnerships we're finance broadening be to fairness we've is sizes. employers to a past FSA/HRA deliver ground in years, and their of the HealthEquity's to billing. enterprise of In full to or XXXX power versus and Washington security which and partners security. healthcare it's congressional for and of D.C. administration our added shared long-term next to just that growth. over base finally, investing making. achieve not on the resource two market market price grows. directly of allow code market industry's the and several prudent goals for The deployment the on perhaps team platform. capital our first When are employees capability, consumer in more increases and on fast Fourth, sustainable best giving as The opportunity in In the bipartisan healthcare is spirit, and profitable

footprint for partners hope there. in York HealthEquity's We XXth will the and discussions investments on employers see Market site our NASDAQ expand Day strategy. consumer on all within This that is an to these Investor team relationship. depth with leadership opportunity the and more of growth expect our Square. to New We network consumer on penetration to increase you at footprint grow be Times at of each the and June value to

call fiscal year and some Darcy? I'd guidance term, to to shorter review quarter like provide ended ahead. for to much Darcy to our fourth the and over turn Now just for the results year the operating

Darcy Mott

into that Steve, I discuss of press a in Thanks, to will first XX% release grew provide revenue review revenue I'll XXXX. the will the Service from continue of XX% service, their here of our in I today. to Breaking total $XX.X percent our earlier HSA quarter, fourth GAAP quarter. decrease year. as service year-over-year is was revenue each was XXXX, on fiscal that three discuss growth non-GAAP quarter, and the in revenue we in XX% quarter the revenue represented the revenue year-over-year in A provided We Service average of the in partially and million. a grew an both quarter the and the nearest then financial custodial quarter results in by quarter. fourth published Revenue components: our revenue HSAs full measurement average fiscal to interchange down basis. into year-end became results increase revenue fourth GAAP attributable growth XX% revenue non-GAAP XX% the custodial fourth guidance year year-over-year down are to and in for for that $XX.X total to million see more during X% quarter our during reconciliation results the Service as a during the last per was predominant. and revenue and offset

X.X% benefited compared of million was XX% The year. the year. million quarter, average compared year. account in operations discussed XX% $XX.X or quarter $XX.X revenue year-over-year revenue fourth fourth account $XX.X to to the for year-over-year was operations and XX% fourth quarter Gross XXXX fourth calls, compared service last expected XX% in or balances the million our revenue revenue of XX% per compared for quarter fourth quarter year-over-year. Operating on $XX.X for in profit fiscal average million Income as to $XX.X decline custodial increase interchange revenue of to last $XX.X interest driving an in from Custodial the the the in revenue revenue million in from compared quarter last the increased We quarter, XX% custodial million earnings cash growth the margin by on the average our for $XX.X expanding accounted quarter. to yield was Custodial asset revenue higher the during year. XX% were were several in fourth rate the year. to the compared the last $X.X to the of margin increase increase to net gross was yield As assets HSAs with of during offset of in year fourth last fourth fourth annualized XX% X.X% and in prior of generated in quarter last the XXXX. million custodial custodial fourth quarter for fourth per the the the a $XX.X total during from fourth income in an $XX.X compared income expenses million quarter XX% the XX% prior assets year, a cash to up Interchange representing an XX% and for million custodial XX% of from in of quarter year. The factors quarter cash growth grew quarter, fiscal revenue quarter generated year. last million the in

was year. diluted prior XXXX share fiscal EPS the quarter per GAAP fourth per for $X.XX compared of for $X.XX the to share Our

fiscal Excluding net for compensation and stock quarter tax our for of $XX per stock fourth income net and year compared the share and were income expenses per to and exercises, the per $X.XX million $X.X million of impact XXXX non-GAAP $X.XX year. of net share the tax option share prior

year Full and year-over-year XX% XXXX million in gross million year. in Our XX% operations margin the we our business to the as for EBITDA was $XX.X include: compared margins to was Operating $XXX.X net $XX.X last year. EBITDA to $XX.X compared grew million million; prior for Non-GAAP Adjusted to XX% $XXX.X adjusted increased the to scale XX% results Adjusted $X.XX share quarter EBITDA XX% fiscal to last to grew Revenue margin model. were XX% year; income to year. to share. grew compared growing per compared million, profit income quarter XX%. XX% last our adjusted by margin XX% XX% from and per XX% EBITDA income net continued were

Turning to sheet. the balance

As of generated flow January a compared XXXX during million We of million outstanding fiscal cash from operations increase. $XX year-over-year to XX, million no equivalents XXXX, $XXX we of cash during cash and had XXXX, debt. $XXX XX% fiscal with

XXXX. fiscal for guidance to Turning

several As Jon XXXX broaden continue have we fiscal just our outlined, from us Steve to distance will competition. that and investments capabilities and have identified our for

consideration, investments for we and or However, are into expect to year, EBITDA we today fiscal where revenue ended these XXXX fiscal the our XXXX guidance even that margins month. notes Based on we provided last taking we fiscal between for deliver still in reported $XXX near those guidance XXXX. initially at iterating our adjusted million million $XXX that

$XXX and net per $XX non-GAAP $X.XX million share expect $XX income net between million between EBITDA and to $X.XX per million, non-GAAP and adjusted We share be and between million. income diluted $XXX

an weighted outstanding provided outlook the assumes income rate diluted a income net XXXX of effective for projected on million estimated fiscal approximately approximately non-GAAP The Our of diluted shares XX based for estimate shares is average XX%. year. share tax per

Before Jon, I like I back reflected in the call turn would to four to our guidance. highlight items

the between operating a investment combined will of outlined increased approximately and XXXX, CapEx. in that evenly First, result operating for expenses million expense expenditures Steve fiscal capital split and for $XX investments

on Second, XXXX for XXXX rate for increasing we guidance to fiscal to just are compared approximately completed. our X.XX% fiscal be assets interest custodial the cash X.XX%

With range that we recent done be between reconciliation fiscal includes XX% of of the Third, anticipated of today's for end guided exercises Jon does to option year. will management’s as our and over GAAP revenue for at X% year. periods, This remarks. detailed the consistently call taxes, we HSA And for of we've have the stock closing expenses, but metrics the turn XXXX. believe will We high guidance press include full includes amortization, four, income decrease end I'll non-GAAP year a and in per release. this at and service a this fiscal depreciation per estimates compensation stock some not and in that, back forecast

Jon Kessler

you you person A sorry, can when say more wise you. a Thank once day. had good that you've I'm me told often than thank

and veterans that like fiscal highlight So and customers our a season moment go before again perspective. to questions, thank we take both from for to highly HealthEquity newcomers XXXX successful in to our I'd and a enrollment the spirit, partners team, open

work say, it And connect And projects, is spoke provide rated in did prospective cetera, HealthEquity more of growth with health drives team for highly. style to from we Members, et our wealth. provided as value high extraordinary ever members phone which During partners in of more clients, partners members simple very, and very calls quality they speed purple season. such how handled to as and they busy were of history., style. the the QX our the we the answer together. and or our their the with before interactions purple than implementation education, they complex more calls transactions, Service we members, assets and custodial hard, chats metrics deep education the they the company's it of in did and rapid evident to

that thank operator some So Instructions]. we're again, one a you. time. reminder with let's Thank with the With take that you. at going [Operator questions

Our first with Anne JPMorgan. from Samuel question comes

line Your open. is now

Anne Samuel

you of inclusion was market recent Thanks to HealthEquity? those kind questions. of I could think and for a for for taking speak budget little items and HSAs guys. the bit Hi President's the hoping means maybe the you two in the what

Jon Kessler

Steve? Sure.

Steve Neeleman

time inequity currently eligible Anne, unqualified are in for and Yes, the been for folks on that Medicare. for but an a happy talking an are maybe working We've there's they're plan to, long thanks question. that

what's the individuals elevate to proponent allowance. problem is only MSA. best HSA and is the budget to to ability now, -- your they contributions. there not the of the Medicare the there that in or be contributions The will to that HSA think contributions that to we up is the to Medicare and would limits up ability HSAs make this the Right so the MSA right a have continue of can up, And component the

into And XX% can as total seniors of be these still them eligible are full they contributions working are XX,XXX for Medicare absolute HSAs are And about population, day even are allow estimates an would think a to single their every working, that to we Medicare to We to market absolutely in these become HSAs still make to some great growth that market. there's And be plans, if as income I so but the Medicare that that the there mean so folks ability us. working expansive because fall still plan. get would that much which defer and have people lot time a of to HSA eligible. qualified in done. then there’s now of those are have they XX% continue people expander if to

the ways around component a couple other The to this. value, view actual different there's

Our has some that easier meds or for meds to like things offer current diabetic the like asthma, to richer then who a that we never for of that's want things current always been in the clear thing. can good opinion benefit very coverage and it employers that, make anytime been law and regulations, allow have direct

it the out medicine approach and preventive the drugs You actuarial said for been and other of have be should just some over there can care like quibble cover what's kind of an bills past things in that covered whether that that. in

it’s deferring think expand areas the of would can been It's to XX tax And creating income, and we in market type a kind to think overdue. years healthcare have that's the been they their is long people of line. thing, to needs. we since these focus the on both on HSAs step it's retirement more be this that but expansion either the market direction be just or so of the really a expansion we've benefit And right again, in seen great of savings, something long-term so HSA of in spend ought overall

Operator

you. Thank

Our next question comes Hooker from with KeyBanc. Donald

is line now Your open.

Donald Hooker

this conference one. I’ll about -- I'll call it Yes, guess asked I last Great. I’ll just ask this we all -- and ask again

and I about larger I like you Vanguard, excited companies interested were think these to see quarter tech Nationwide talked think all principal. retirement we and last

relationships kind of from as in? I upfront maybe revenue there the when your start in curious know lot of mentioned update timing, there into any in an that Just expenses terms might you to a as is of comments prepared those but update going kick

Jon Kessler

Yes, this is thanks question. Don, Jon, the for

commented the be we’ve elsewhere, into 'XX. sales As on primary in XXXX will impact fiscal going

I and However, calendar quarter we on it's second can or say in -- and say in partnerships see or that -- our to case. any these depending will customers I on want ours second the whether first either first

there to we well up. starting some trying really we we're cycle. from direct what that you're is about his what really as put are another. really health lifetimes and But ramp opening still as going nicely who offline our here. We is of Steve about these you're one about both people So in annual terms I we're talked people well into think it talk election annual before, as progress. the what as our And average terms is where And of I think talk are our the channels who interesting and is really feel things to of is work to trying is And and in pretty get seeing that's together to more issues -- about than an biggest about do in seeing things more new are selling Obviously activity. people here this see effectively. to HSA this the value retirement in in pipeline one understanding that people work comments elections really saying do as good

Operator

you. Thank

question comes next with Oppenheimer. Mohan Our Naidu from

line is Your now open.

Mohan Naidu

want it Thanks getting you repeat in from through is to for benefit expectations can could level beneficiaries Anne's if guess that Steve, the purpose question gets to And comfort this there. through? the this taking in I D.C.? I back question. your my Medicare What get go

Steve Neeleman

Yes.

D.C. consumer I watching have idea consumer comfort President's no the and a And, I to me, I transparency benefit. these whenever it’s drug what is, Kentucky I that on that like yes, what’s is trust compare So, think becoming But thing and nice -- mean, are out Mohan Derby. and we the like know really the level, about more that. pricing of budget even you recently come billing bipartisan with some with things when efforts think address

to starting through see XX are that and millions if the families I I think behind of million, weight this. numbers, going you're mean American you're millions,

there’s there obviously, feel that's They traction. some talking need so, like we about will keep And to where be it, trade-offs.

of keep Other know been any it, can't things means it, talking budget type bit, have confidence our was. a so from about that things by And that. number on put the priced office I what that they fact like you're these level any are they than and about

feel we something would with is Medicare benefit comfortable it was was -- So what think question that. to the -- your Getting market or side, Mohan the to different? be back I the

Mohan Naidu

that’s No, right.

Steve Neeleman

Well mean this. about it think I like

at boomers, million born baby think If you're and there baby boomers XXXX were were XXXX. between XX that looking I

math, And some you suggest working. mean XX% about people I that the do are still about that these of estimates if

XXX(k)s then you having to pocket And to they there about $X,XXX take mandatory apparently that’s talk income can't bipartisan, all you their to for having it our point parents time, spend, out different donut working it yourself -- that plan example, their are want buy distribution families but that XXs and an some even or at XXX(k), Medicare I into the through still, out be the put the lot to take plan a and to our best we the in out point fill that of had a if have mid in to that still design. million coverages for have pay So happens it's would stop or current my at types they're you some they XX XX -- hole think fact to they’re XX% put put fairly Medicare HSA me turned pay starting of have income, we of they going an the to high pay that why and of a in million year they're and out they're distributions HSA. way really for into HSA for say or is at $X,XXX look in consumer their to if that can a that the that

So I Jon, people tell expand it millions would do the benefit addition tens can it's you, of of have that any would you market. and to this?

Jon Kessler

I just thought to sort I a education. useful always find of it with administer even category

in there's of one that is that of that’s that Medicare challenges but amount federal certainly in one way So programs. might plan, why of by another potential reason and controlled remind the some high that say a consumer responsibility is Medicare bit way and factor there an the there significant the has expense fun deductible exists in in a it people from I ultimate Washington out tongue that perspective, little pocket is a cheek, be

to those And that without fully the is, you same have to the working comes, And why with you tax answer against is Medicare your question so in or plan, should why your tax are healthcare question the your the can't shouldn't. pay dollars? seniors system

whatever going the out, think with a saving less employment who've had little -- later trying on system, for more a million might in I look Washington healthcare the on team and get and hopeful, and let’s what there's from hey, just to year, give of way take puzzle. haven't particularly to as around so of I them relevant gotten money mean healthcare ideology really they a less we're million balance. empowered, build help naive, people a one for And really based opportunity we is and the this think particularly looks and at Steve in little And give -- than out odd I bring them save to This prism or is tools to is sense HSAs little the or to the of kind to which practical, are a people family. maybe let’s part so it. help said, And the be the XX some there's bit those start a informed regard figure that's little Medicare a then the piece get XXX makes

President's have going have is you whether the it. bill just is, an Washington and is additional we're now budget And or have Congress, a out to efforts here think So that can that the in want you that introduced time message to resources our we hammering where in education what we keep we way determined was some appropriate of you give to it's return. put we

Operator

Thank you.

question with comes Our next from Paris Alex Barrington Research.

is line Your now open.

Chris Howe

This is Alex. in Chris for Howe

of So of as you far as some where level are with like we at and mentioned face-to-face as look the platform building key you the awareness enhancements.

to engagements? towards higher specifically that we should how investments are a vision think As that's you’ve and category? and we the optimal outlined, look move we at these cash driving goals mix the what you as seeing within as engagement, momentum between internally And saver these two factors how healthy transitions they member about drive long-term proportion

Jon Kessler

excellent are questions. Those

and been that market XX% not going in -- assets. in you increasingly election perspective from on the I is election. the to growth, use that annual you accounts it's opportunity requires mean, with point we've Steve that's the as really full to growth to essentially one get And do come work big piece one. But second how how of these when start the comments, lifetime them annual his your the importance about if they our for use of in accounts. why right? our is bad say great, which the me outlined backwards. since to a day invest of using question, think of these is So thing vision sub I about, people is you but from a part really market understand your Let of people talk reporting Steve would to it kind that growth is penetration decade. in lays members can accounts your with to versus over to invested evolving a evolving understand there that that discussed, And

is one-third likely on -- two-thirds Our the average cash perhaps to at non-investors give or that accounts balances mature know that this in maturity from win-win. build. either additive will the take investments we will market be it’s be cash, it’s the investments that, and a balance of in that's in that is fact our view good but way are The news is

to emails, was, deliver that one that, you. maybe PowerPoint has And years about it working, was it. it put so And the We’re and that And possible that personalized; say it We -- context, and the a you of uniquely right? relevant point good of by really but at so attention, that highly all thing our a has single come in we’ve the tries that need yes occur relevant back you in create area to service how to think there's in a that, no effort you because get healthcare question occur. kind all of your that education. the that's that's of As to first of are or to ago supported and to answer. us, ability often create Getting have paying can two, having people products, important be you’re that for where much where right? we're side use XX a something to takes get relevant. that's delivered our you and get consumer’s emails want, delivering okay, be can that, the our we it function that of it's that takes kinds now no view doing this to with have what but now whatnot that from experience. I kind Internet which will for to we exactly platform education take driving would kinds be which the There's it on a our to that's the about investing reasons someone to send when things to is they our and is And about, of in to to the And if why friends make in about; perspective up that. said just as we're And information on Because search has interact, takes to alike, turn, to of mindsets, information think of personalized the then that perspective? allows create being market context retirement when all increases effort. part really it one, like effort comes personalized, right so lead they And members. suited plans why you as a really our and people be platform what these information right, to be from opportunities it

to I from a really And so place better being alike. there perspective, those credits, support my uniquely and things just to really keys, the platform are fund our think calculate balances and industry that debits the are the versus and

so And forth. more area so investments this that more and our that's and for kind in about doing people, are really of -- in ways

are call of part a advantage it's be there. routing, able rolling this year, that do one. sort your your out part receive deliver not something or vacuum it that enrollment more to or starts at best But us as full largest for open you on handle really puzzle scale and as get Education we smaller ready it, having who be where and the to where not personalized, time it's information, notion the you. is processes to the situation, it's that on are for to we what relevant we voice that taking our agent activity you route based simple again even personalized, to about enhancements doing type into convenient just all later systems point it is know be more we're specific, whether think more generic, during can will for what groups provides So, employer other be Those of the to we and it's I it some as investment to this our our groups. you, has with has or party of of so

Operator

Thank you.

comes Baird. with from question Marcon Mark next Our

Your open. line is now

Mark Marcon

trajectory? for We in he's you changed should in afternoon. how you. term term you're how the terms add And terms competitive from And good about think sneak if that's the the little Could talk perspective? little and of investments XX, I'm of I I that on and talk how afraid the a out. about environment. the bit couple of could about left you Darcy, we profile that evolution could changing? if longer over of Hi, margin congrats. seeing just upcoming what bit the the you of foresee being longer And years a last margin Thank understand wondering was in some coming it but a then are in

Jon Kessler

go You want first? to

Darcy Mott

Sure.

although investors, and that are And So being and expansion that but but we have about as seen more not yes, occurs have margin the people we've that healthy larger and kind savers, new really by more investors people the that balances. who we've balance, as even and when certainly savers average call always we accounts, dampens them. happen, becoming margin add expansion becoming only talked of we people facilitated

these fact And have continue notwithstanding the would call, we first margin year XX% we've that, expand actually And may expect a we investments. year, the we're into we're EBITDA even can was into margin so that we that expect that over that mentioned And for XXs. further our we got this making time is these on the The -- that we been reason investments that margin making to that. time.

to results. that these revenue, investments of some been which producing a helps a we've in these you investments between we've maintain But margin. we're always the they and time Now, fund of grown there's little the bit when fact making still lag make start and custodial fortunate that

that time pretty to the we public improvement That's like, I been last the that So, say in years the future. would will we've we've Mark that continue we reason see expect the that over improvement five shown investments. And making we're over steady would and margin. expanding

Jon Kessler

with they percent all, UnitedHealth and this, of say I as make fidelity the relative first landscape, your make guess I’d and you assessments other, on each that marketplace: the up suppose heard and Mark, your Optum ourselves, competitors the are of question XX% almost Bank to three Group, of competitive regard then first And part according to there Devenir to if how And HSA from XX%. I there to them own Bank. have all get in of doing I Webster's throw with couple we're a to investors

encourage there what take view we that believe assessment can deal we're are the is. are saying own you at so and I'll and to win assessments. where -- Our and planning, where would a tell field investors We what people in out our make look their we we with.

It we can say people for Yes, this want I from helps -- other in prepared side. environments Looking wherein we're just than from saying, mentioned stuff, able was we understand as this And retirement this it. to I HSAs, Devenir, added health assets HSAs, at one. their gain cases a more for gross more the investments and circumstances lot I added to the not looking what merge again me? a that able in get yes, we of do say But field we're I making yes. I as said, Steve I'm be position that want to from A are you. thing. a they're we're to to help it’s I on you to retirement going yet. it's in data the thing remarks, I'm In be are year, anyone. now clear added the market says, product where buy sure plan the were get someone want on share not to more understood to

it's about continues folks part position the so be at going a what's be being leading us in those to a and huge in authority this to of same time And with on healthcare.

build there. to continuing out So

looked year-after-year-after-year, drive perspective. I we we et I perspective, they in being I say best able product feature how offer in the we a do it's a in when to the really It's yes, about from position to often of And asked. growth should way more marketplace, from have a continue market be to share guess that's we think I more function, do. take and which share we're that perspective, market about we're So at being cetera if investments And saying committed. from think places about, really making our

Mark Marcon

year in. just of back That's great. the just effort. terms of and look gaining terms prospects. And and just as business sneak one of With a in update had an How go you the down ended you've the then you give HSA can and of smaller and you does in penetrating analyze accounts you us the sized little break to bit the smaller regards gains that terms I last medium up more the just that over Can in business-market? that there

Jon Kessler

one I feel is like three. the with more Peters Greg this is Greg it may masquerading third the your know -- I …. be part time

Mark Marcon

back I hardly wanted ever on to do that, but it. get just

Jon Kessler

where is had which the is progress is felt Without to are said I work where it's we area in in we in good I do. going work an we've into that And mentioned February think we the already details, that doing this or two may helpful means sales definitely I call of more is got that because is it the particular broader on that some broker. vendors two in helpful definitely have one made One but a I've the suite layers. definitely fewer you XXX one product benefits person having and -- product your is and to having a matter, because helpful more and also group places HR middle in complete what it's market your people which helpful

again to money want are ability this the is So also valuable. from buy people when the also difficulty] you to saying and yes, [technical do say you I sit if

retirement the side would and as the decision when we how marketplace, we've the is this of again literally And are database earlier been in often though as advisors important approach making so many process. the the me they brokers late for need. we point a what to they to drug. people administration have and learned very enter way view advisors the my important only as there's in thing to think that And side. I HR suffer we well incredibly -- on both now of health is I on advisory communities here always were are second The advisors mention But the in support

are day basis. functionality to have our on that able of we sort we terms that employers as well administer do what the helping team already in at to expand day pulled really So advisors added to of product sales

areas that And growth still this, to strategy. have maybe be an we'll -- I some talked those it'll been it part year So important about think to clearly we I two. committed and of now think our this But we for do. are we've there get work

Operator

Thank Stephanie Citi. question Demko from you next comes with

is line open. Your now

Joy Zhang

Specifically line a bid could or great? Hi, for the one this Stephanie. raising Hi consumer this in you the in different on in can for have positioning pull to contract you RSP? you’re that's whether Zhang [PCM] talk rate, walk that competitive you how RFP Can yourself through process year. your Joy coming a is other largest for your of levers up if us you any lowering strategies the

Jon Kessler

thanks we and for the well her travels. Well do question wish Stephanie in

key three large do I and general, uniquely. to actual and ultimately to look that's we But to I get moment approach employers approach and try value is be this. as to, a ago, to think each that value the that’s to advisors, I delivered And when to me opportunities. want do process. said we then I that’s upfront able consumers the we ultimately in think opportunity as there's it I in we show the think comes leads we to first And obviously really at things

think you the sell going first of check opportunities to value to the all and to about course box we have I and thing but is nice have You’re the large opportunity value sell. foremost

mentioned is thing boxes. item which second also I checking The was an

some their they I specialized that needs, and process of that something as the in look but be trainers it's supporting they providing whether members and in public largest you. reached I'm and one things distributed So an and deliver well that's are therefore we United will education do and to we the all other that takers tell impressions the with to And some area there population, just we're And better online you you all or reference that we with therefore as of highly for and I I resources done first larger we really your place you train can be resources. think we've are telephone about team it's on getting is to lastly produces as And about the forth, supporting for ultimately that robotics and and want tell sure that's Darcy are and so value is employer relates key relationship it kind to RFP in then things talks tell States these better again bring outcomes. educational understanding of the pricing something and And including will and is -- specialized very lot to sometimes meaningful suited and a you're private there to seems the think there honest the often long-term. do the opportunities calls. key at case me excel

the employer have for and greater willing that And we're the grow getting costs about to reduce that the we have certainty assets provider to to always we the or so, that commitment balance. been extent

but customer anything a don't our fees, to see. we competitive that is it's for strategy. the and in or lack your be set been with guidance do continue it's helpful. discretionary in as and strategy certainly mentioned Darcy in way customers and with is to mean, view key to sees and I the when drive I think year a think that basis, regard this highly effective his And interest to of going our that terms strategy we funny going we're do. fees along that's can on term effectively appropriate. question what to we're that will competitive lines our better of try regard. that extremely be And understanding We think it's be individual side, as we suggests those so a on what wants we of I And the market really underwrite down. a think course, I rates money really would cases, interest in We works we in paying our And very rather

anyone why are than the of more winning those keys want to, think, really and business it So, we I else.

Operator

of Thank with Bank Allen you. And our next question Lutz comes from America.

open. is now line Your

Allen Lutz

talked partnerships Hey about Jon everyone, for questions. you thanks online. the taking coming

early. in the like, the winning areas, maybe you're do you you learning know then to are I you But not throughout line? process guys get what think certain why guys winning, then and you're didn't feedback so if think you it's And where the you far? finish winning do do Now what's why

Jon Kessler

far So I'll my call, for feels but But then I this marketplace meeting that extraordinary, with been good in to you. well I market invite least you're as that take lot products midway people perspective, on well to a links, time always have a I the at the given partners like Steve is much seems And was to of expectations get very fabulous. the of then comfortable you're from status on cautious one. to about we're think new use can’t doing, this ready have out of with what we retirement offering quite used marketplace, meet. products, on and he's what a these to really, on say, as feedback world in From this which too word thus bit And has the as what terms takes for interest understand in then been a it we're for say, the really the that doing, group of we're it. that and

money and a look you not gets market look employers, actually say because drive together, so to for you pass. in subject at that that better for save members products lifetime, go is the can that it and so their them if outcomes dollars you over are these at And

tangible in success aside moving the from the really has contribution HSA as members the well, save. And value so very helping some of

than rather has something that's the partnerships because, whatever, unique merchant, that employers, about brings think the something needs the been really And the way say, And the to focus not market. is the that's And In of partners we're trying I reach as just bringing thing can well, partner truly to we on to table. that's not our we're we're each segment problem. not, So this. been case, have thought that second then positive. very

is, I employers. people. forth. typically of -- each And term happen, long two don't serving this other many those by of in made different conversations. will our new take And which by a is past sure have so they of in needs in they talk But the that to their it’s employers, large a with enough that one. that, before the the is market them can't challenge something mentioned the on think based reach not benefits of biggest overall products plan, we the sort here decisions I case about else, it. and issue that the think and the feedback, within that is, we so say, are get that still anywhere still people is understand And even how several I'm to And cases, they to cycles ready familiar people And some And are they earlier. terribly are that about health probably are can it it's fantastic. for The field, retirement them. the terms ultimately decisions one I'll

their direction. I that's, you there amount not, goal partners we're you same But within single do -- about advisors. think each to -- doing there's and other as to work this that know, whenever trade So constituencies the roll have whenever with for a is I'm you're how together something bringing something in people learning trying something the we're I truly is we certain alone, other think, within not always of saying doing even in customers are themselves and to

see. positives challenges and anything? are those the that's I so that And Steve

Steve Neeleman

thought think years, really third a think about market this good we share XX And enthusiasm Yes were. about I retirement continues really channel the market been is by probably we're the our broader the and covered last add, strategy Jon’s can to I only we for in for to it when we're line I plus of as covering health at that certainly thing years, we we've starting a I channel analysis yield couple results. health this line did mean, and partnerships. the over really of slot and XX fact,

with other -- really, the that win these in plan two-thirds other to keep I yes and us other so said the way will take part our people FSAs to is then more, of front to They take want Allen to of we’re in of to expanding And relationships, market. one our we're and suite do there. say is by through sell of and able they'll being retirement there. as market, get and that offering us this two-thirds all also they business, expanded the more how HRAs now want market this COBRA to go that able to of that of we directly so And third

So and letting retirement teams terms tthat approaching bank, think on our of easy and believe health excites XXX, always that's I market thing rest think would really this wow plans whether front up Jon, and the or do just laurels it's we've or what on health the in of new of save partners we that direct us. XXX, been appreciate It's HealthEquity. to we how Darcy people opportunity but that's of have that I been and through we've It more of solution been for to of all kind help invested XXX in where plans have and us best the in employers. on is filled kind our or get them I we course. never really got keep focusing just at say and retirement Darcy

Jon Kessler

you. We was thought it

Steve Neeleman

before these both no, team’s joke No, the it my sound investments, There those investments. but like the no. investments, were call of this was were these

Jon Kessler

part financial the Everyone little knows American as having health look plan retirement. around a and but fund mission financial camping around of -- up achieving healthcare around is families it’s we and campy after our that

goes but the fold And And I'll only we if here's earlier and this we're competitors have like right? You Where asked goes the of frankly on, as all we to are with in secondary those what, with to relevant committed about do as everyone would vision as us, clear outcome. they're one like think along insurer, important you as when comes as at that how that look of saying it's retirement well, using money are of we we our wrong is they bills, the the we to right, we're way. us folks an lot that I this speak, and of are can't banks of that own clear account carry that their of back in pay field. is, these where lot it pretty it, Nothing products, have we driving the stress to educating with see with We in achieving that shows account really all that it's ask we longer -- can the is it's particularly it committed field, education you the I any about that health feel as over for stops people a pounding ones money, kind with they that compete down these enough focused We unlikely the carrying to this in care all down with primary the a at, to as on it it spend that to just now if on space, going like don't our to their compete marketplace. of field. to really simply effective education a And the interested the do health question plans this with think pretty stay how you term. to don't that sort the efficiently tell to source $X,XXX next questions, your really a put way source please and to that. but as plans. going we extended how interest it. unlikely your life they into have in accounts side, put They you is that almost products, they and are but agency, deposits. kind the investing it partners simply continue educate that we to segments that see time and And unlikely of fund. who as look can't of the investment. are a that the cost on an of the and in up And who of organization long it comes on education to be people how central down and period podium really believe, we sounds of wrong right folks managed allocate Nothing in take the of the are What the terms

Operator

over Thank any you. at And the the like no time. this to closing to I'm Jon further questions I’d remarks. showing queue call Kessler turn back for in

Jon Kessler

thanks to Welcome spring. Well again, everybody.

being really do we while everyone, lot promoting for work we're don't we anything away. you we're and and we'll in early a we our melted is -- quarter in here get into promoting see again, put Let's see it. all And hope heavily or will suspect regards There -- I but we'll to get don't all not with first we're June of encourage talk early then ticket we -- heavily our June paid Day. Investor

in taking it types here, to We fancy to are we are even this are going know stuff. fancy make NASDAQ not spend we and all not about appointment it's as strategy an going informative long-term. your over of super role to little But a I happen. Investor near glamorous term it, appointment money the both But it's bit the -- you must part beg high there. an a the -- we're for -- is then on this not growth And got And -- Day. it’s company's

hope So in June everybody. York. you New will us Thanks we in here join

Operator

a And and disconnect. This have day. Ladies all for in may participation conference. program. gentlemen, your conclude you does thank you great Everyone today's your

HealthEquity (HQY) 18 Mar 192019 Q4 Earnings call transcript