HealthEquity (HQY) 2 Jun 202021 Q1 Earnings call transcript

Company Profile

Participants

Richard Putnam	IR
Jon Kessler	President and CEO
Dr. Steve Neeleman	Vice Chair and Founder
Darcy Mott	EVP and CFO
Ted Bloomberg	COO
Anne Samuel	JP Morgan
George Hill	Deutsche Bank
Chris Howe	Barrington Research
Robert Jones	Goldman Sachs
Donald Hooker	KeyBanc
Jamie Stockton	Wells Fargo
Greg Peters	Raymond James
Vikram Kesavabhotla	Guggenheim Securities
Stephanie Demko	SVB Leerink
Mark Marcon	Baird
Allen Lutz	Bank of America
Sandy Draper	SunTrust

Call transcript

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Operator

Welcome to HealthEquity’s First Quarter of Fiscal 2021 Earnings Call. Please note that this event is being recorded. Go ahead. Mr. Putnam?

Richard Putnam

Joelle. you, Thank and XXXX afternoon HealthEquity’s quarter first And conference welcome call. year earnings fiscal good to

Joining is Darcy Neeleman, Ted our Executive me Dr. President Bloomberg, Vice CEO; today Vice Officer. Chair Jon our Kessler, Chief and CFO; Founder; and Mott, Operating Company's and the and President Steve

to the three I important reminders Before I Jon, turn to call over have provide.

website, release afternoon on First, this which ir.healthequity.com. a earlier is copy is of posted today's Investor Relations press our

today. view your as might Second, uncertainties to today, materially to factors estimates, many as SEC, our There These business, that are management's statements made responses today, will of relating our statements information risk made to be X, forward-looking question our statements are which differ may subject to could actual comments defined and results XXXX that affect cause expectations, and which today. forward-looking. important or other June reflect here and forward-looking from considered the include include the statements predictions, forward-looking by

a reliance on against these placing result, undue statements. you forward-looking we As caution

of measures. factors turn these I'll for And call including encourage these third, the will press measures with stock you of the you or future current the non-GAAP price patience. this in Form release. Kessler, no to Mr. on new these financial our our you assume our regarding the review annual that obligation Jon your now comparable measures risks filed reference with reconciliations additional events. XX-K information our latest other CEO. revise over in results non-GAAP update report discussion our to subsequent disclosures measures, find market to GAAP these statements we of defined Thank may or of during well call, as will are certain There or as detailed light also future reports that We affect and in or SEC. We forward-looking

Jon Kessler

everyone hello, for us. and everyone joining joining Hello, Thank you, and for thank us -- Richard. you

technology During those recovery. have the since the and who the help loss, our we prayers with have favor permanently attainment. with frontlines cultural for are And to scale, the short-term on who financial accelerated and already foundations. with the performance certainly pandemic’s our its moment those also with disruption before in solid the and actually this evidence hit but personal those culture hearts with strengthened that with HealthEquity to has trends quarter, our determination pandemic with fighting we like operating they’ve proprietary pandemic market and product for drive week think dealing in that accelerated the are believe been And synergy filled gratitude were death,

adjusted assets healthcare our the on and XX% to speaks inability by HSA these members’ spend conditions margin adjusted well sales as revenue while QX, to HSAs, But, to CDBs, grew new fell we million. or XX% continued $XX despite the of saying six will lower previously and anticipated the in pandemic, X metrics call. potential and market performed a QX it will million, fallout use impacted CYXX pandemics the fade Steve yields, and our Similarly, of resilience Ted in $XX.X QX discuss will members EBITDA months. have. despite in market as on in way declines, started. reopening. our benefits COVID-XX the as expected of EBITDA a XX.X and join new QX QX HealthEquity partnerships impact they economy's and pandemic billion of XXX,XXX to CDB And give $XXX and earnings which already showed financial to hit year-over-year, team by by anticipated, in cash regulatory as has its when the us near term, will extended on respectively, of Darcy million gradual $XXX of the at we quarter fiscal doubt Fiscal opened and million On I new describe call. more on Custodial HSA will Q&A. were accounts, strategic results our our economic up performance call, HSAs to side depository fallout. X.X Total you and during from key second performance grew implications and fade held the with million kept interest lockdown as steady our commuter economic total steep the accounts of contribute. and hoped adding last That's capacity billion earnings our pandemic the operating its XX.X long No for performance. color than detail response half on as and $XX anticipated HSAs and include profit healthy, the anticipated revenue operational will a QX hell by the business, against will offset just though it as fiscal with CDBs likely runoff of during and to

the More is permanent. that we accelerated opportunity importantly, believe

more we're likewise we the total solution health ever searching accelerating accelerating for connecting and deployment employers and legacy win-win. migration achievement synergies our to from are integration; now platforms; who So, are accelerating from than of for of consumers WageWorks operating we're wealth and our

I'd team So, Ted to like course delivered detail on in Ted? have QX. the this what

Ted Bloomberg

Jon. Thanks,

our pandemic faster. to is to said, go Jon response the As

million target in QX, our will come like of $XX quarters promised this to than fully faster the achieving end net meant that year's benefits consolidation. you anticipate platform QX. QX, reached the net that I'd and six The So, million initially team achieved what before by achieving in we from synergy synergies and tell $XX and

cost eight team the will year. fourth more we standalone The improvement reduction to six not course. forward, Going platform as is benefits its and report and these track margin on to this as deliver in migration synergies, ordinary finished but legacy incremental

teams. migrated. half of more relationship of HSA have net As service more during management migrations these expectations, our has been hard work than the testament assets to today, delivery than a and Retention HSAs and of

pipeline, has of strong team discussions. new health despite HSA large FYXX meaningfully have providers, across sales RFPs are a sales Over And network bundled cross-sell partnerships our in built retirement we plans, Our are and managed launched one-third clients year-over-year. administrators. COVID-XX. benefits

calls, a have XX on-shoring member our We all an increased to transitioned successful do. could on bring while performance us our needed. were effective legacy XX% we frontline points, a QX, service made complete this of satisfaction good WageWorks team driven promise remarkable members accomplished believe so indefinitely to HealthEquity a In month. team scores work from Purple The posture on that process everything remote of status, remote maintain platforms we by we and will effort strong percentage this if to call

spirit recently that, In with internally Purple we finally, applied few three immediately all for And innovation we fact, a aid of that our ways. announced post-pandemic. in recovery our of offices to reopen smaller not and will members

savings excited from think we program. companies launch that proprietary our employees algorithm a and is retirement of health health to First, This their score are that readiness a individuals about perspective. formally helps their and

results. that happy comes It isn't are We improve actionable the number. to recommendations with especially just a score

clients to it love we pilot are broadly. roll more and out recommendations, excited both Our the the and score

with of newly tackle now in new unemployed staying May. you payrolls as many to jobless additional U.S. the beginning The XX.X in of fell Second, many just are April know, claims workers covered. by challenge million

confirms one eligibility of an health not multiple Purple continuation if COBRA largest, the few for leadership. options the managers present benefit COBRA as largest stay other we options As of opportunity programs, to covered, understand. and fully see the consumers situation

for working to members support their right coverage live check friends employer refunds pass the launched learn little to hundreds public members XX/X for launching providers transit team commuter what sponsored comprehensive is help parking needed facilitate and to out. and commuter be well, Dave our I nationwide only did with believe for online a consumers refunds. by resource to a Show, we've government addition monthly of about and in at with from resource where The So, of that encourage we our pass The you to all not commercial options. and as Ramsey healthequity.com/stay-covered,

accounts, strong in these are partners. public our and and do. scale, proud Finally, the I'll when we with like a ways. our platform only organization an within and for financials And a HealthEquity clients, members, ready culture depth, relief IRS to turn call things the ownership can solution authorized partners, be over the are and the helping clients disaster had These to now our review days, outlook. team Darcy to

Darcy Mott

today's I Ted. reconciliation of the will non-GAAP found quarter measures you, is measures review first press Thank non-GAAP GAAP financial release. and GAAP A to results. in our

WageWorks, of you in Our include acquired fiscal as year. operations financial first know, QX quarter results, was last which the

partially representing total on and representing increase primarily investments data legacy and cash yield XXX% in each growth. quarter, organically is to and Previously, acquisitions, revenue we XX% in only. HSA on interest provided of first revenue grew HSA yield. quarter yield in a The revenue cash including attributable in in categories. quarter and the sales. cash average XX% to $XX.X of HSA revenue year-over-year is and rate year-over-year, million, the to to our have grew new million in of yield grew The offset $XXX.X X.XX% increase growth. Service Custodial in with from WageWorks First quarter with the XX% overall primarily total growth annualized with lower accounts HSA of by growth both, yield XXX% three HealthEquity revenue XX% attributable year-over-year

platform. have to As with HSA disclosures assets those classic HealthEquity without of adjusted yield. Ted from now Accordingly, to HAS cash legacy WageWorks we the we have and half investments mentioned, our the yield separate migrated over

of a revenue migrated first HSA spend quarter. additional of mentioned quarter The in assets disclosure for interchange fourth the to the our nearly across growth X.XX% first the quarter the during year. continue will the XX% as today's quarter representing $XX.X grew blended assets. platforms Gross with revenue falloff until separate $XX.X negotiated HSA details. accounts million doubled, million, last was in to The versus cash and reaching table yield HSA offset the margin Jon second favorable XX% and rate this of XX% provides significant average increase a the quarter in growth. compared profit million all in in the have yield of total is half year-over-year to last Interchange year. by of release HSA XX% in quarter. non-yielding for quarter in become XX% total cash press for yielding quarter and more attributable the to primarily share the for is $XXX.X assets Gross we The We

of margin or cash yield, custodial WageWorks were in together intangible GAAP high the $XX the and first change team on million. revenue expenses, was the $X.X mentioned. of million million other interchange XX% decline represented including activities impacted in Operating mix per work quarter from transition COVID-XX-related operations remote loss for from expenses of in with assets basis. and Beyond a revenue, $X.XX Income amortization Ted the XX% which and to acquisition, of resulting was expenses QX associated of the by gross acquired the or $X.X had revenue. income net share EPS of We integration revenue, margin merger

for was $XX.X million. EBITDA XX%. was a income as to year. $X.XX EBITDA increased quarter Our million share Adjusted year share net per million per for last was Jon ago, And per a mentioned, XX% margin compared non-GAAP share increased. $XX.X adjusted $XX income to XX% $X.XX quarter to net Non-GAAP compared the the

XX, of credit. On debt our the $X.X drawn A million as of had XXXX, no outstanding of debt cash April of and term against line equivalents we amounts balance of billion with cash sheet, and outstanding $XXX

to Turning guidance.

that to remainder typically or guidance range use visibility our of the transit, and other limited as expect our fully COVID-XX are the for of provides of The reopening second other unclear prior July know, fiscal we fiscal average XX, a pace through was and not recovery business to performance. conversely, our spending withdrawing variables year quarter partially will impacted Across impact of perhaps on commuter their With quarter restrictions second number access the high benefit and more healthcare, wide and of recovery, operating pandemic, Specific for you full uptake new employment remainder outcomes the plausible beyond be and first XXXX as COBRA nature impact are our and fiscal there Due and results products other regarding a total to degree we COBRA to benefits for continuation current quarter XXXX. among highly are XXXX, providing guidance variables eligible a the reopen. prospects performance second As accounts will by of our of recurring or economic will currently we future pace fiscal than with year the parking but ending these quarter. as uncertainty workplaces and in exists that members. and of our XXXX. of fully include, shelter-in-place ease members’ significant

our the for these in conditions XXXX, recovery Importantly, significant further quarter, XX, assumes expect quarter significant guidance through July assumptions, we that our nor and between April million. declines. observed across $XXX and $XXX fiscal ending revenue will generate second continue in other QX neither Under variables these million i.e. XXXX HealthEquity range for a the

share resulting $X.XX and our between $XX and expect between net non-GAAP income share. income per non-GAAP $XX million, million per We net to $X.XX be in diluted

achieving having guidance million effect the of bottom synergies, approximately of Ted the $XX the top run as million includes total and and rate Today's of $XX million are end and well fiscal as adjusted in million QX expected to synergies of expect end lines of the goal XXXX. in rate We net between synergies to be as discussed, beyond. run in quarter, HealthEquity's achieved $XX XXXX fiscal QX year both $XX as of the Realization for QX. achieved additive of be EBITDA by annualized first to our

X.XX% cash with during We approximately QX. expect yield HSA on a of yield

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

Our range. of guidance GAAP the a in metrics the definition of earnings detailed is non-GAAP release. items provided a reconciliation the included at includes such And end to all of the

over excluded. acquired from while assets the revenue net for being intangible not acquired the turn I'll non-GAAP remarks. call With assets some generated of is intangible those Jon that, In to excluded back income, addition, is amortization closing from the

Jon Kessler

quarter, care of Thanks, specific our for begun they which teammates there you. the thank too recent in thank which some taken Floyd Darcy. people this and in In This just other remarkable the and involving and of I have to to in COVID, way extraordinary is normally many where have are process the the and thoughtful George supported each country. during have recently killing more the way other events way race

mission and really, that health that or our to acceleration as the positioned permanent events, the see members we advantage further to able we of as best we at the can very are can take market trends to fact capture leaders us place in to wealth, focused of best well we and try a sacrifices team that's going way stronger these and the that do. honor of to and of to trust and the you crisis. accelerate stay that that we're our and the to us can to think, as our that coming particular do are shareholders honor with this in into as leaves And we to all way I is do thing culture and in synergies what work permanently a they to that than attain fast stay connecting during

welcome with I and So, questions. that, will your stop

Operator

question Thank JP you. [Operator Instructions] from comes Samuel Morgan. Anne First with

is Your open. line now

Anne Samuel

guys. Thanks Hi, the taking question. for

kind XQ, not You're that should full of the COVID on business just with is particularly thinking it’s segments below but you we maybe to year guidance, help expecting? of how a little were different can Thanks. the be just providing up, about impact each us what where we bit in build given

Jon Kessler

in as sort into extrapolate of word. question think your the start, that to the little is I'll QX, and the business. I COVID -- extrapolate But, has that isn't impact has bit, then a divide right that our think you had about was to of the -- components COVID to ask maybe Sure. the Darcy way various

Anne Samuel

Yes.

Jon Kessler

month on And originally what know, to of is impact and QX biggest the saw. didn't that people's over that which The commuter, top in commuting spend where fees, was was now. as rates the the it of had particularly healthcare way impact goes -- of is, impact we that I to the we access that this and that we're in obviously And April. we was to spending, about to right fact which use expected, think individuals not have all the think on

in biggest QX. are with you start off you those us QX So, thought And that really Darcy, forecasted the of impacts about why as don't to that how kind then, QX? we speak

Darcy Mott

Yes.

and would mid-March the item. see the at then if results that's forward really So, Even which the been impact and notable started the to in fast -- the country QX that shutdown. -- has kind went when basically on spend look QX, of spend to it most was the we of you

that And impacted QX. so,

purposes for that's we And that we which like that full out. of so, what that of out see basically We and a that comes kind QX, was to we acknowledge we've played look of we how and to we done conservative -- rate for but spend probably way fast anticipate conservative in be saw it, April, as June, to took at month a May, that July. this shutdown,

We and watching are tracking his are spend closely. daily, very team this and Tyson

with the to took And so, that's approach interchange. we respect

spend less world, the with in In about or of think commuter. and or in then people associated HRAs, you we and save HSA interchange encourage always HSAs FSAs healthcare more. to spend If though, components

money interest earning And in HSAs, on so, still their that accounts earning it. they on and they're is interest it, spend their we're when and of still means don't money the still out

We long-term that, encourage need doesn't people do spend they when that concern so, And it to us to. a from but always to really perspective.

characterized already it. or generally extensions that basic money fashion spend will use but are of that spend there's front, will been that as is premise set the time FSA lose we're it the On that spending, back. will for exactly When of I know but come the do sure, or dollars we come in aside because delays has that that allowed believe some back, And exactly and back. HRA the some been all eventually not those it come

a happen. smaller going the but happen that relatively it's portion a derive, total On portion, that in which doesn't computer is to the when not April, spend interchange of we

anticipate revenue mass As back. up and opening people that we more, then where metropolitan the expect will cities we start lost areas come out that come that large recouped. primarily transit don't starts operating and will be But,

how kind with service some There's look been and will things, we will those maybe are commuter that at will offset some go. it And those We'll manifesting kind impact associated We revenue how a of of played that's like and of we some conservative. more But well, then, you'll what our revenue impacted. out took of for on and service service get at got loss fairly align. So, been we've talk we there's But, kind April. unemployed. were the in to-date. about, forth of And exactly unemployment on obviously so that it. hasn't too COBRA that forward. much don't see revenue itself know started how that We particularly in so those really things look of probably --

giving we're our and if deliver But, conservative approach say going to went of we always I color that a fairly gives QX. how do. enough for you what for we are, about try don't kind we So, know as our take to guidance we

Operator

Thank you.

comes next Our Bank. from with question Deutsche George Hill

open. Your line is now

George Hill

talk versus guide. the on quarter. there the willing kind appreciate think May? on Jon, balance seeing deposits there you of who can you're question you jobs? between comment saw as change investments would losing are basically market rate extrapolating about be like granularity you you what as And I the source you'd Is have great. things, an impact is seeing, the be the are balances and or stable? guys in through other guess, guys third you have two is, any people feel maybe I kind difference is be out the to from of or seeing might immediate products that April The remain funding of job question we [ph] what assets to account balance buy either the guess, of beneficiaries are their you my about HSAs risk generally healthcare you the I do of Any their

Jon Kessler

will if and I impact you are commuter in are if sources April, Darcy as a relative comment out bit negative You really on we got the that terms is the there. other consistent recognizing said look side May, And a are primary what think a moment concerned I it. plus at sort May, think little on of issues about whole ago, healthcare around this I of to with spend. about

member side, month? me your a April healthcare On spend none. many someone of doctor asked was as is it's but we're family from has marginal, -- this marginally answer the when up the how And yesterday, times been to any

as up So, there, might -- was from we're April, in pharmacy we careful. so, to exactly perhaps same $X.X April coming. place to about be you it's but commuter, thoughtful the revenue regard we us. in and expect April, which in especially for want and marginally of nobody's commuter areas is below million the is like. But, With monthly were the really And we're

anyone's bigger that things to people we -- I picture of But, in obviously who also really just is both Some not for that a going portion role. it's does remind it's that in work start would modest interested. if kind still commission could drive is are one talk is of the reasons the to about transit, parking, pay and a be of everyone, that But, thing. big arrangements, out coming revenue, rideshare reopen, and play until people for to type who transit that

about other one say about May, is -- COBRA. thing The second question which let me

percent XX% mid-May, week, basis, uptick and effects ask, were qualified begin we We mid then, makes events in to those to of we follow population, on who sort saw since in unemployed sense, and the a true. in another the job about this of up qualified like someone of on most we'll that people this COBRA into making -May talk depending addition, and elections mid-April And the a between the that's year-over-year if the the volume between uptick between and of XX% see year, are did more events are and in normal call -- are are modest to case and mid-April who about, moving not wants and or that. kind a

As our in unemployment has recent is a little it's weeks, off peaks, saw a that but stabilized little activity those we things in and May. there are bit early, its

to essentially As answer the people rating which are no. second to I is, of the their part a The That way of your appreciate [ph] was couple question, HSAs? which is points. put it, you short say is

about I employers with meaning all, their the the April actually accounts off table. member didn't ago me course some minute that see have let either. for levels out of with we And to contributions employers were quarter, to in declined with look contribution flat the behavior, at of strong access First not that respect of of year-over-year, If things. We from of healthcare. employer side has spending essentially the first talked and taken to remained the a start member our reasons contributions regard

invest sense of of by members who was sorry, faster level growth. account HSAs. We -- much regard number with members -- actually that head my people keeping their grew obviously about a XX%. is that are And our added So, the to I’m the than

perspective market the down, heads keeping a and sign long-term. for the kind from that long-term members a thing right So, up goes good trying as a their good and like to and thing are do that of seems

Operator

from comes question next Our Paris with Barrington Research. Alex

open. Your line is now

Chris Howe

afternoon, Chris everyone. This Alex. for Good in is sitting

some but be to talk a in want So, QX, we've to news, workforce, year, don't I you've are the a Company to makes seen it where be season. profitability? impact and in this the things selling in given environment Can later the flex with sustain what but what it you bearer to place, the extent, primary certain would your experienced first just some prepared? to scenario how COVID off, how the be able like I of similar don't an flu, current the about want comeback that assuming Company and has happen, would that, on with

Jon Kessler

risk This management is a Thank environment. you.

better for So, news plan have it's to bad of it. the be us hypothetical and bearer

to group that to -- to team have on think did go since suggest, up to early the that saved a work. as often, work from enough -- we operation just for tremendous work We to in the and us we in crisis in middle been a saved early call March, this management through February Steve has return that extent, has the we reasons switched the home some of probably that infections to return for put perhaps through don't you teeing over slow certainly thinking a lives. it followers, And an But, office. beginning or be to we intend use in phrase email, to

a at have not us people the knowledge, or be are ability from environment. we for productive the term perspective And but team's also confident work-from-home. of that incredibly the the to that about only -- special terms been in what of whatever the for are ability productive We near we any but not holds stay office, a regulatory not not to

and we're to it's think he one such is of you to we I is a but as true notice. of that previously, -- while them up the clients And offered. do are said HSA answers from to some in at With the presented CDBs. And quarters its better our of our which when include office those a early the middle we what at regard answer further numbers least our ready feel unique, But, number mitigation best And part risk of trigger win very more that what holding you to we are in is within the that's rates. sized is good so, that's actually emphasizing don't it, see from if raised. which the worth and We we And turn our transaction. cross maintain basis, and feel data our of about we fact, have means do perspective, sell year posture. is that like like in year-over-year, to this do win selling generally the strategy phased the intend are questions this of of in pull one our a absolutely remarkable. the intend we now own it's enterprise three selling, more third to employer history, the certainly services. discussions. will rates like rates stage both our have that of we RFPs is Ted RFP where RFPs can our business, be The And talking that to until even absolute on pre-transaction think RFPs sales kind cycle we bundled, business, while of about we And

confident have We taking stability that we our are and business can is now from that that are market. resonating the and wanted that really and clients offer they of competitors is there the in away we combination what breadth is out

best lot would we've get end, unique, conversation. real education educating potential it we -- before involves certainly online, begun thing concerned our fiscal it that will are a communicating existing people to be have new effort. abilities real of enrollment the but about work have And of back lot also of online or current period be though who people to all that ever going add are and the and forth members September. fully I'll done during materials with educating to to and the I most enrollment is have, members, how of and about have for And help a open that period? open open ability we members one are clients cycle XX/X of full the had item to members educational we we But we're for to think do a And access how we launched example, that tools is whether and are there next this other those or in year the So, the resources them our the during sales during terms one other enrollment.

economy clients, will our at that Purple a HealthEquity, fall. be that for members, our So, least without to to during I feel we entire at our create like will to the partners to deliver to minimize the wanting prepared our difficulties resurgence

Operator

Thank you.

comes Robert next Sachs. Goldman question from Our with Jones

now is line Your open.

Robert Jones

recent for least just what trying contemplated. Thanks I I clear you’re them taking me taking guess, It Great. around clarification and know COBRA. extrapolate trends questions. exactly one into to at obviously to the wasn't XQ.

weeks, So, ones from things the sure high one seeing obvious as customer situation wanted XQ? make guess, far unemployment to is a about recent recent COBRA in shared I Jon, just you your that step any then, understood I just base from on contribution, in folks you're is taking macro of if contemplated some from or level months different prior how to this I much as back, makes statistics And what holding benefits.

the So, Thanks. to situation layoffs, that benefits, willing from as those furloughed I'm severed be clients share on you'd versus curious have that had far as had those if within organizations? just been those any perspective permanently to holding more

Jon Kessler

Yes.

part Darcy you second to on would the broader potential willing that to essentially, I'll what going of -- billing order question be Darcy, was I'm the comment on QX? like. comment the you I use it on why as, and for your are rephrase effective said? of you unemployment the COBRA go we comment and And then, to the the I'll take discussion question ask and about don't don’t then about in why direct -- So, assuming

Darcy Mott

Sure.

we past I think, our consistent until with we don't practices, it. count it, see

COBRA a maybe will our put not that spike people start the into QX guidance. So, that our notwithstanding that rising, we get fact have the have possibility built revenue out or

carefully have respect revenue, the seeing of that watching qualifying get, not to included what kind in fruits happen the start uptake events with see We’re what we we to that but and we of guidance. until it

Jon Kessler

level have not returning we base, is So, are either and across than to some more client but not planning our clients implemented any perfect period, actually, to XX% a a are XX% the survey we interesting spot are some, your our seeing, a -- workforce. broader either or say. in workforce number, that XX% but of better question, not are were nobody's no XX% out seem get nonetheless of is during from importantly, our this layoffs or base have since clients other -- our results. to I'd to feel furloughs we're our really or of layoffs with and we survey able entire client or implement let's like be hesitantly of nonetheless, of the insulated planning than is say huge less unemployment their but

up a Beyond time that most, XX% those and do clients, And how of if plan for continuing coverage those is end getting impacted. today. people it are because to direct is It's during for workforce period our that of direct just do, that though, up benefits somewhere that thinking all thing what but versus product alternatives, laid COBRA means XX% is billing, they X% who because a to relative it's period, to make back the continue off, on of of a that this your is anyway. to person are question ton going not rehire our business expect that your about can COBRA a for we that direct on to if have not say that. and X% about kind end -- sense billing billing Today, actually between

employers those on provide keeping we people this interested in in -- obviously to But, billing been more will or a call as we to furlough it of that a health benefits. Historically, people COBRA who are company about has sort to hire them. the retirement health think benefits we situations. firm and is time them setting, think of retirees, continue are there see continuation. grow the a coverage we with this offer for of will And expect they amount really where because in regard direct possibility they benefits for more temporary will as So, in some of subset obviously, just leave period

-- So, we see But, is both billing and obviously, do pipeline COBRA it. in particular we growth there. think potential healthy. broadly quite there's to very want for our retiree healthy in some And

little about to into as get something And that's more the maybe a year. we think so, the of latter half

Operator

you. Thank

next Hooker Our Donald with comes question from KeyBanc.

is line now open. Your

Donald Hooker

the might services. afternoon. your but Good terms This to pain. competitive be as environment perspective in answer, love question about for to your feeling Everyone's think would of, tough Great. you hear a

a for quarter, you other obviously across bit cash as custodial a at how about seeing positive bit well you HealthEquity. providers your might they're competitors, of employers, and WageWorks talk Can to be less be which service similar how than little interest relative your and about what faring competitively? sort little of last you think talked exposure on we a think, to is some could I maybe

Jon Kessler

couple competitors Thank last the I'm of to thoughts an has our offer for Yes. I And to know There going some question. on. you some him since had color. the in opportunity I'm weeks, then, answer. of to to ask a going Steve to maybe few talk

the and of generated XX about of referenced, or the virtue about total you competitors business from to quarter, generates evolve, aware average environment as odd its HSA you all, as margin just was be evolved we for that more of are. a we of or continuing interest percent the of -- generates know, are of and model HSA about fact current reported, to the net First people that percent the key think, far so are are odd from that we about to that we I there revenue cash interest And, -- from average XX% XX The is income. revenue provider to from side. from by than gross have or current XX% of exposed actually,

feel don't. we So, you at capital an of we this they really when broadly, they to know, as with kind of out deploy downturns their generally look ahead. where happen, want opportunities to more at And people come where look take have a opportunity and and businesses scarce like

time capital in the think are one opportunities. reasons reasons to for opportunities. experience to regard. have the And is think Ted WageWorks And, in we given this how because is a gas not the about we environment. a activities we've markets -- that I lot of the to roll going be that the on particular good great are consolidated I be so, helpful And consolidate. winner M&A as our sometimes there different completed way to He's do one thinking in to last others gone it's that the it and competitors, there going do that. kind in through be consolidation -- offer to of we’re spending we structure. of those see rush onto want a the And with platform to handle thinking into of integration, And this? and keeping of all we then of to Don, to the out Steve, tide -- are prior bringing experience kinds we're that going those done till job We're that we're lot about and anything think But, and banks thank you've color transaction. really year those, you Wage as our how since a were. on wait to But, certainly you before how going the they're the about any in thinking talked

Dr. Steve Neeleman

add that Jon I Don. with. spectrum know, of what question. this we would broad concur and Hey, you Darcy as said. And just that certainly Sure. for Thanks I the competitors there's deal

product will banks tend HSAs they largely I the lot don't banks, them offer through most of have some direct and business the X,XXX their some single shops. of And that over We of products. relationships of of kind to a are consumer other mean, accumulate relationships.

that that’s it’s benefits. his consumer competitive whole the he put years suite shared little brought the HealthEquity now. Jon obviously the oh to the record over acquisition a capstone position And years, been in. XX in Wage, of with with think He -- accelerate Obviously joined coming a of us I years Jon, us acceleration. up man, that we offering XX about broader when on, of that XX and products then, XX had ago. And what, us are helped expertise

being same start of So, Recession, Great I then, that’s Company, dynamics obviously as that started downturn bit. a out major the this the saw people story. playing now second we And think little that, change a we since

So, it's dynamically. I think similar

we're they’re has But, not revenue. the a help getting as of CDBs and We to service offer is plays revenue qualified comes our on look, could the think, of starting like squeezed doing we've fantastic little always things in that I have that selling HSAs. today. that the things the that us basis more call shine. I regular are companies on always other see just leads and We've a their basically -- they're do on And think well. interest being is that sales realizing it things think doing banks bit the talk that choose. and And just them, allows HSA to service people to discussions on the there. We constant it discussions folks. with these really where But, drop provided to little margins put are the is sales for together which only benefits, was bit. scale are they're in consumer our that for impressed now HASs to When team but with I HealthEquity self our Purple like -- and the team the rates every it and I'm now side expanded who got course to on our some backend point industry I to open huddle the the with that, think at now different more then, operations we positioned groups CDBs they so in product best we're not a with a whole like what

provider so. do I to opened period, be the the that so, while, single I door well-positioned. for we HSAs lean when of just of we're pretty only, of ‘XX more a because away some going And think, we’re know the sourced time’s a in kind for acquisitions, time kind

Operator

you. Thank

Jamie question with Fargo. Wells comes next Stockton Our from

now Your line open. is

Jamie Stockton

through calculus this like we that is the about quarter, of talk last any would little move rest seems what but there are turn the as non-HFA Can maybe which making quick be color you that was again I great. high expectations in realize complicated, just the just those Wage, environment of a year? from accounts, your primarily Maybe more just one, quarter this kind one are accounts.

Jon Kessler

thanks. Jamie Yes.

fewer call, if now. ended at was we didn't, had we or XXX,XXX runoff some this just it. just on ever somehow And length talked XXX,XXX do the I we say net accounts, recall at think the than consisted That and remarks, but So, of we I'll had about report the that QX. about have of CDBs -- about as, them of runoff said accounts not a quarter QX that a it that like we we in and that in end those break we with give could we the couldn't you'll hoped place, take out -- first and the

we scale don't down don't out the can at COBRA don't prepared talked mean, And will are have most the that while scale. out I than employer bit part, and to, XX currently there's the that our think we of are these this grace we we're that government of of that I earn given But think referenced don't a on accounts so were have going of we acquisition, accounts going us little folks event, about kind to the employers do competitors to that with we funny side in of helps in takeaway doing up that extent left be has to it's able little our people and basis. are are about I calendar sequential we're take deliver but a Ted actual and not. think versus -- efforts helps will, few to payrolls, If my of in revenue accounts today the So, doing that factor, also that of the But any grace to simply we basis nonetheless, do you employed our aren't in there be to used in to things that as concerned comments, I any -- have extend help. which the but in talked a think are have quarter of was will to that certainly some a what plan -- for the a we on get actually have deliver event, the and about, I it, will that know note year the and card of option are the execute education on like. the of accounts prepared us the of the say, that, the quarter, fourth -- way competitors relative us. employed actually more I inclusive whether first prepared a some of and and not sequential service. were Purple lot think ending space. yesterday any runoff it been not we’ll not on in we'll from folks spend really a use, first at where event that claims opportunities going public, every that. I because competitors to that that. but non-HSA members terms I in picture, bit when quarter while things because million are longer, to forth. more during service prepared think I most to occur employers are kind some tremendous, word potentially. for that business about And the was closed well, we think to period -- They're a to the of interchange, not it's are some doing, we'll those year some and -- is that They is, that I may side XXXX do are it actually high it's And do those are period of the that

opportunity we're So, next the of going lot to few about have of a in course it. those excited I years. pretty And over markets takeaway actually think I'm

Operator

Thank you.

Peters comes with James. Raymond question from next Our Greg

Your line open. now is

Greg Peters

Purple. team afternoon, Good

out an guys we of context quarters? especially on the guidance for next First on the give in capital debt adjusted your that couple question the is structure. Can update revised us you EBITDA leverage, could analyze of

Jon Kessler

it over turn then turn last time? Darcy. to may go have. I to forget Did ahead, Well, Darcy. and I over one this start will to I Darcy Yes.

Darcy Mott

yes, So, Greg, carefully. very watch obviously we this

In And fact, of we completed our report this just just -- completed quarterly. quarter. I the review

derived get several will benefit next continue and of we going as synergies. about, to we benefit the we've derive And synergy the Over forward. talked quarters, the

that just periods. at Our but cash that million we a of cash actually impacted quarter, you for the FYXX quarter payout quarters cash, cash -- this in flows, it, portion down if in the big was the not look in even drain next $XX this were in bonuses is ensuing of the next that a

you think about devoted of through if cash as merger we activities end get a Additionally, the of to and the integration year. amount will we've integration resources that this fair dissipate it,

the that but of million, we the we position, first debt would things time knowing our one-time of flexibility enhance We these as same going Our absent the cash forward the been about and our comfortable that will our flow at quarter more but from operations only some it expense CapEx debt was pretty $XX have that some cash to with have help not for through and EBITDA and with have covenants payout. our feel conversions. will we both disappear covenants respect get achievement will

Jon Kessler

within plausible regard what forth, on the just so when would and scenario to or this deleveraging. managing I are on expectation with meet add otherwise, the capital I the that focused took is focused so and feel part of is to always And, it fine Greg, year even now. growth any debt dealing to Company. about. debt What I'm WageWorks really well the our Board I Well, as about structure we with COVID any We're while existing forth transaction, owe fairly in worried rest I to am I say to debt is and of the rapid we -- anyone a that obligations personally think was as our more with on of

fade, that As like that COVID reasons fade on impacts will impacts very you or the way less other, occasion. rates on the suspect for I interest will one of on and commiserate interchange I the quickly I sanguine the and said,

in is sacrifice is low dear change we're of I whether sales in aggressive. so to happen deter what the at to think our about want that. And forth is really that to I on given hold and from innovation, structure to and be and with investing, going already the whether there of don't aggressive delevering to that in what managing And believe from we But, us, existing encourage that to opportunity so, or that out going I'm our goes but that to being make to were And see presented debt trends allow we're that. what I very both, forth, being whatever that about to the this us what means rates. we fact so Right loan it's for it's this want we're on. to -- will market. in not growing idea to idea benefit the consolidative to onto very borrowed we continue whether of to be certainly to going acceleration aggressive that an time going and to in it's structure, now be thing what a life has terribly us the we'll we be and money as change not can M&A. the do And, to And, hesitant may also conventional do us capital fact

Greg Peters

you Thank it. Got the for answer.

Jon Kessler

a not part… There’s

Operator

you. Thank

Jon Kessler

like parts… this or five Was four

Greg Peters

I have to them. I'm ask but five parts not allowed

Jon Kessler

right. All

to come if we’ll go back. come back. We’ll the one. Stay, you want, Let’s next

Operator

you. Thank

Our question with next Securities. Guggenheim Kesavabhotla from Vikram comes

open. Your line is now

Vikram Kesavabhotla

curious I'm into question. we time far for of assumptions consideration given to like business. some year been taken on color fiscal Yes. impact the the you of the it the within you've prior trends just some the that so all that. at I seemed have back were go the embedded range, if the macro the appreciate guidance Thank taking and to

the into the few just surprises context. the helpful relative biggest And would assumptions, about Thanks. behavior consumer Any have here we been try if to be evolved market you talk in so, on has the can as initial last how curious, months. put based there commentary forward and I'm those what to color

Jon Kessler

from at adjusting were where made spend brought sort there reflecting guided system just but you therefore the less people outset, guidance at to our that, some to don't we was it's having would disruption what it that know, reflect to that we there the the clear I we interest time period from think the commuting said million We custodial all not would were sort might with be at it short. and not here's ability, certainly, of right, funds. funny that we about -- and of now, knew to we room time good and $XX that effect and we’re practical otherwise at rates that In long-term box not you. we When while were it access than think achieve. three other ability to our words, that you guidance speaking And -- revenue time, said, in that wanted of months put of thought might the the other the the healthcare to we and and about and consensus than relatively that and but the to the like, be that living I about we from later, be that my plus thinking floor were general the

And never longer from sure and but longer issues want revenue Darcy term our I'm so, taken impairment, few three somewhat a what feels But I longer like colloquial six by us don't know, longer term. of term, I certainly the months, this biggest think weeks, sense really maybe months. to me And use impairment the is it much in thing use of surprise is than and friends. are then but I side has the healthcare that commuter. longer believe maybe it. that that, spend term, word not accounting commuter type a are Where those to employers options. there the we that least will be FSA people one will back, on to the reasons of And that that on those options lot lose or use some reticent I side. fact good I which side, things. think visibility the is number around wish most There are had on use -- perfect of come to the Tyson

it's actually and is levels, wanted we will to it and spend. think makeup as that's the know I doing likely some So at very spend, least see may that I current come its we here. we're the see of what -- back to don't And, just we prior when. to call it,

safe even have has to So, other and really that's a spend I where our surprised that our money thinking. of period team adaptability we one thing sort functioning we later all extra worth to here their soon. that's so that expected so forth, get gotten of mentioning these that various point before ability the is to even that some synergies their And have migrating guess do everyone ability, the was me during keep halfway and to to of legacy and we generate platforms. we've to

to that means more come. So,

surprised have So, things the us. those are that

Operator

Thank you.

comes Stephanie question Leerink. SVB next Our with Demko from

is line now open. Your

Stephanie Demko

my closing now. Thank going thank remarks for Jon, right those And on taking guys. for everything touch on that you you questions. Hey,

Jon Kessler

Yes, ma'am.

Stephanie Demko

wins came XQ better expected we trend. than HSA recent the So, new than and the in better

sales WageWorks channels how So, versus the off? execution cross or in that new much of adding was

Jon Kessler

that biggest folks we who of wanted. part is, just is WageWorks crystal you we product offering work the so that, both in selling folks are a wouldn't market one WageWorks of -- -- so and is And great activities. I direct are. the -- advisory our sort sales. and guess the of what national the answer at to really have what a been both those firms then, It's of here look that understand people think, see sentiment decide. issue I regional clear of really have done its the when that the in I'll more, when breadth, something maybe folks you wheelhouse I job that and therefore, think channels, pretty add doing forth. relationships which have you in but what There I and were with to look just and thing cross the it's in but think and more their call of what But, I the some of was good leverage we're that as terms that also benefits, in offer, could there now kind we a And that's particular, version we depth, in at

that pretty what's that up, is again, would CDBs So, really and -- ‘XX flat. also I quarter reason that's runoffs, accounting for why be of were think net a in why same also the normally that's

So, seems if COVID, that you during going have okay. all that

Stephanie Demko

Is puts there so anything you right quantify quarter? there in the of it much and how the given of to kind was, just now takes can many help help give

Jon Kessler

to think when maybe a -- quarterly don't so. we I just can I on It's tough -- just I I that think so. I basis. see don't do mean, Normally, said

at try Now, to least I'm do going something. to

Stephanie Demko

I appreciate it.

Jon Kessler

come employer of I HSAs mean, a opened that XXX,XXX year. same And could that period look HSAs. lot of a be at quarter. some last from, than the those things. of opened normally, there a an or we if was Obviously, And about we people XXX,XXX this And XX% take? where adding HSAs I quarter, that employers lot added added and bunch like funky extra in you think give about it, weren’t it say XX,XXX they'll people more or we reflected, could I

had impact so, the really that factors the it's about And sales are new quarter. during that big a

think So, helpful somewhat lift I say, got really do that there. we that's to some

down. up, anyone week people or have it'll be know say, one what And and dealing to to would idea I it'll I keep Certainly, supposed say you -- what say. should Now, big that all be is some why a And to earlier should think referenced week freaking to seems challenge that challenge. every bring that be no we're one. I'm new what asking this with the

it out. figured haven't We

Stephanie Demko

have would global middle forget a that in of could there that was that us we're thought You the make anything pandemic.

Jon Kessler

me more going it would I'm to, I'm haven't trying. back years. figured sure though stop out guess, it for from least in to not we bring mundane. mean, I little at I -- something But any I event, XXX it a to Yes. won't

we had do you what sales to If pipeline results last we that heartbeat. given have had would and when spoke a take COVID starting had me asked quarter, we opportunity we if March, see me the that beginning do, the the of the sales to when just you in that were in I would

Stephanie Demko

helpful. Very Good.

is box a out more little question. of the this Now,

So, or Steve. might be maybe Jon

given and digesting look chance there uptick you’re in any in doing sales? market's uptick there consider stock even Wage aren't fine. the something as could the current I is an HSA Is well. if But, And right would now? So, asset of you there is out you at a see doing that, lot the an environment privates that

Jon Kessler

HSA probably to Wage work not acquisition team… on He is to The question. short say [indiscernible] Greg's from of first not here all, back how transactions. yes me doing It's -- In this, that, talk The a let do us would prevent to at yes. answer bit know we're he's and feel that. little I Ted, we the to doing get going and like all.

Stephanie Demko

working? busy He’s

Jon Kessler

just point. team accounts fifth incredible. was the like last good worth nothing, the multitasking. our a He’s it of And on They're that quite That's but Yes. was the item not and migrated, get billion, doing idea. you $X agenda. what, $X maybe He dollars like week,

things. a lot do we work think type What transactions, is HSA consolidation all we But, day. Now, to do. to they've I the would got more think though about two have

our it. matters, lives live we don't all, of edge, First capital the to much want and on structure anywhere our near less

of to to And tide's private -- the but you small terms have also what listening second, We we have do that prevent on well, talk -- each my talk don't call dot, to could think particularly occurred. those. out dot, that, know and all in many fact other. dot, dot, way of for have or people industry. has who need digestion the lot what How we of spoken to fine, we equity about so, I that. each then to if do to it's is And that we'll the these a think whatever's nickel after I spoken a people's others I say, providers dot for one in portfolio of a to, this

time period, took to water the the come XXXX So, I out. I of in for some look at all it, if way can XXXX I all say sort and that is the think it's

trying area, incremental not in be to as very well organically, confidence absolutely in -- there to as it's prepare we're are places are to there, so, And frankly, because anything return. can jumping high aggressive ourselves aggressive with with that we deploy if capital just but we be in

walk. But, return, more we we make is a happy. happen, at walking that's high can money we're structure deploy needs the to we be that say, So public We to will. way the think balance if balance to change capital to that of will shareholders

Operator

Thank you.

question comes Marcon next from Baird. Our with Mark

line is open. now Your

Mark Marcon

about them? through it clients balance went your bit to the some obviously that in How last you now? wondering, basis you mean, I pricing a long-term relates to with and fee then, as where that on monthly that talk adjusting relative it are partnership Just rates interest do the time? perspective can little relative competitive environment And unfold? how pressures the a to are does of you

Jon Kessler

ready. get This Ted, is Okay. it.

Ted Bloomberg

moment. big My

You go first.

Jon Kessler

them save money about let's more So, rather how we'd selling talk by people stuff.

Ted Bloomberg

about buy to talking resonating maybe that cheaper proposition they X question for is prospects Jon said, what and talking just get you more to to ways. than first, ago. talking And the Okay. of That brokers, is, are I a especially stronger it'll to kind powerfully, was savings going consultants, unit are was an very of basis. be which XX need to in a a months the the in to I environment central can from out a pretty going on cost answer do that. couple been we marketplace people value aggressively at us, the looking that's per where to clients faced

answer one. that that think I So,

the to The clients handling second I in that of one And think that was answers part distress? is second your question of kind -- are two we are question. how

that to literally seeking kind issues the to where far checking up there. that we're as team proactively. be we tried materialized. are think win we've daily extreme We've second of adjudicated a we piece where And partner and Tyson's issues experienced sure team are haven't those vigilance. Purple relief. with can, volume is is one first we that good thus partners be hasn't out of the can we and come and then, they've clients cash or flow really And The My having maybe but ton need

sales We another of coming have. powerful. reactivating one, in Right? out to business that empowering those although it's perhaps with offer Jon's and times that add, anecdote, not would representatives sometimes or been is we Wage and offering listening other organizations it's quantifying a our HealthEquity with especially just breadth business out had from. a story I to an a -- are important concessions think and to legacy to I simply them incredibly story, so, a to quantification, activate book of pricing win their relationships relationships but employer has didn't where many answer order legacy brokers reaching story of wins that And reaching multiple service pricing are was partner. just and to entire about And

we empower lost we interest fee a both compelling have price to us to revenue, for And are pretty but use it’s kind we feel recognize far the results. to we're of returns, to absolutely about in reseller but as thus versus term positive more volume, revenue a really dollar and trying to think for trying and drive volume broader partners, our we dollar perhaps, -- also make-up short So, weapon marketplace. not the story early

Mark Marcon

to some doing are of are much opportunity? think what and competitors an basically revenue really they does for that a you additional their going Are stream? interest degree I reliant income that, greater your that. or on then, do reliant -- appreciate And entirely to provided or adjusted on

Jon Kessler

Ted. ahead, Go

Ted Bloomberg

Yes.

you're right. I think,

service think, it but from candidly, in that is have team Because our and team upended frontline looking think also work service that transition that also to at team, make their actually an the seamless had pluses up some infrastructure revenue marketplace phones are day. service we back of both team, do -- And security we because is pretty one a as we've and provide significantly Huge operations is I we’re -- goes model a upended. the every opportunity. to model our as competitors that struggling, well. sure perspective the it because they're the really kudos them

have that, having we for less relevant. business this is whom particular Now, said of perhaps the revenue competitors

eye those stronger opportunities alone definitely not there well being stronger. on among for as because we're so We're the folks in so, And an us. are keeping

Operator

you. Thank

Lutz America. with Our question Allen from comes next of Bank

Your now line open. is

Allen Lutz

the it say the remains thought uncertainty Darcy, I on the for maybe Obviously, or deterioration? stable you employment you trend. I guess I guide, a thought assumption of as service then XQ revenue heard wasn't that And some level there's is clarification as a that that. lot of be, impacted around there's maybe would on

trying to you're Just a get what of thinking there. sense

Darcy Mott

of where impacted. to just associated clarify, service Yes. Particularly the commuter an revenue That element that. service was revenue accounts. No, believe no runoff no, the was the we anticipated have we is there's impacted. there's revenue The with if that they part account, don't in service the

know And first revenue we of quarter. so, that element in general And the just in impacted. that's a activity runoff there's service

it second QX I So, the that if question? What I And revenue was came across our was part also not impacted. that's service your said was impacted, in reflected guidance. of that

Allen Lutz

that it. then, just No, follow-up. And answered quick a

for XX% uptake business the XX% run before May, Thanks. for revenue? what KPIs in the Before that COBRA, to was rating

Darcy Mott

COBRA -- Our go business Jon. ahead,

Jon Kessler

have are make opportunity imposes gives is COBRA about don't turn we've The expand some opportunity new clients to whole, month revenue. more pie. serve. has side, But, perhaps I also to the in collections that the on right? on a But doesn't qualified of mentioned the uptick to into business, COBRA those se XX money. higher as to we be and event uptake the our qualified clients a the to It who running, but want and us But existing forth, money itself the COBRA therefore million basis. also, make in but saying, for the depending qualified annualized on on money, rate costs to so per more run clear just an and QEs, and us is I have events, premium in an -- So, and opportunities on There then therefore pipeline historically it. bring seen make seen sort seasonality more events on it

se think presage want clear. to the And in per there I but I opportunities so, are that I don't, it's case, both It be there, increase an just in increase revenue. Allen, produces activity may not it. just QE

Operator

Thank you.

Our comes Sandy with next question SunTrust. from Draper

Your now is open. line

Sandy Draper

$XXX your try very lot much million sort million a right. January, and to $XX simplify I assume sequential decline see at I Thanks over decline. the guidance, the A it's going just and good this if I'm afternoon. of If in of here. look When it $XX is decline. to a to got April midpoint digest I’ve that million

like you custodial quarter one impact the parts, you're last makes full But, well, I it think a sense, interchange you're of that assume pointed to better. actually out, in be can you just So, revenue another your obviously, relatively And actually hand now but should and sequentially, quarter That little got, expecting about assuming that I would when it up was as say, stable. look moving then, COVID versus down a step was down. be because on partial. where you've service. bit performed And revenue Jon, sounds

the think about to first to $XX trying interchange when revenue just how that the quarter off I'm think So, decline, million was stable.

get -- idea three the trying different the see puts quarter the that's to So, think a I'm of bit terms just whole but to about full it to I be and trying like And you. that segments. why happening. I'm it's in just takes whole the little Thank of going just seems impact,

Jon Kessler

Yes. to good. wants I'll Darcy start. chime sounds And in, if

of First essence. you've it usual all, information job distilling lot of done a taking excellent of your its to and

they contributions, two understand and if primary on period have Wage QX it certainly -- do. this have two on the always HSA forma a on because, you're with true that more HSA did the The impacts in a versus that QX and with side a little we spend then plan -- if years, reason though, pro to new, service didn't companies And interchange decline health would is to QX the also reason QX be the dealing really sequential legacy looked true. expect report is FSA I And which obviously they also and the way. in the more we get new I at the dealing more. we we members them during And QX it's this also equity you're are is - That grace quarter get fees are interchange standing. then interchange members full who fees. impacts case and over employer about think, basis, I who and of more most members FSA would

good comes and QX interchange it So, QX least comes in very historically quarter, always case. more round, then down the little is at that QX, bit was in back a

of for businesses as look how terms at to card to them And done. it's networks, potential call. fact in the true little the the And And to is yield was on I with a have time the this interchange lack part talked reason to saw with they of last we liked the so, that card what we book they proposals. we efficient big and spend be of higher, Visa. withstanding handle we of well that's We the QX the our to all take drop this QX The pleased say acquisition a The that I'm partners a saw interchange and earlier, the our that negotiated way that for book, the ended them, saw invited about very reason terms better say once bit growth with about reason talked in in not think turned, card -- thoughtful we it. we that in relate we and networks aggressive as our and a for deciding was make will in remain very long at that came that to come, proposals of the the and quarter try other as change the things we term a I'm Visa. in of fair

while spend achieving in said job’s -- is starting actual the that would of than realize. said in job’s in to continue done. synergy you're done, so, impacted, and see this terms see of will more achieve -- QX a it, And short-term we actually to because would again, and terms is we we And while we

returns. And you bit Darcy, to do so a tailwind for be that add us to will as spend of want that? a

Darcy Mott

Yes. And QX from on that of of money HealthEquity of that and fourth are reason it's quarter an HAS almost their one, further, go or January. the just that Sandy, year. in even that And FSA if you in a new there's historically, revenue just now the point on maybe into employer accounts spending will their basis, people, quarter. bunch who we've a whether pretty a for good interchange their And some is, certain standalone to an load the uplift every at to back spend QX look a -- make first or element there's in money a account added

they that spend if And maybe doing that. some elective things they so, to it, on or they go they and have want whatever, then, spend, plan

is open our So, identified That money an FSA about putting much can largest that enrollment, always the your our first from and through spend go how interchange largest HRA they've And really with aside. payroll. you change they revenue have is it you the same not an largely they're before did spend interesting deducted actually for merger. or people, thing The number. true their quarter FSAs, is

So, that on board. the comes of back a lot QX, a happens effect spend And up goes Jon in of then then in accounts there's the function and January kind QX, it quarter. coming of QX, first in said, then, of as new it primarily the down

would the an even by in though more. spend expected we And QX QX. we masked And increase to decrease seen so, have had interchange in in that lot a normally revenue from QX, it's we

Operator

any time. for to I to showing remarks. over not the this I'm you. further at turn Kessler Jon back call Thank questions now like would closing

Jon Kessler

one working as and be a our Thanks, Yes. at how it a possibly we as try can going going we'll things and take everybody. and at We're quarter and from are keep between less transparent all to now it enlightened clouds And be next off about butts by be but a we sky, here. more time also little speak, few time the both there'll maybe then. the hopefully in

week. stay great has hope And safe before a this. I that, with everyone with going sane. were I of guess, we rest all safe, the stay So,

sane. Now, of in let's throw an And you. operator extra thank dose Thanks,

Operator

Ladies and you gentlemen, Thank call. this concludes for participating. today's conference

disconnect. may You now

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