HQY - Earnings call 3 2024 | HealthEquity, Inc.

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Operator

Hello, and welcome to the HealthEquity's Third Quarter 2024 Earnings Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the call over to Richard Putnam.

Richard Putnam

Thanks, Anje. Hello, everyone. third fiscal HealthEquity's conference XXXX to call. welcome quarter year of earnings And Richard name Putnam. My is Investor for do I Relations HealthEquity.

of James Joining me CFO.Before I Neeleman, Founder have Steve and I CEO; Company; today is over reminders. Jon Vice Kessler, turn the X Chair to President important Executive Vice Lucania, President call Dr. the and and Jon, and

from these forward-looking reliance questions relating made the our uncertainties undue subject comments by today, materially a might contributions to forward-looking. market release These contain First, many from defined administer. and results as of here information responses XXXX results that was actual fiscal third today's of quarter placing to a or be expectations, can statements forward-looking business press of subsidiaries financial owned statements other factors we risks on press release certain will and There statements. today this non-GAAP reflect is our wholly The X, definitions that estimates These announcing reconciliations considered today.We XXXX, found against after of Investor including December our on and the closed the important and may affect copy financial these of include they statements that which afternoon. forward-looking view the could including our A results comparable also for will recording to the predictions, our differ of SEC, that be as non-GAAP to release, this the issued measures measures accounts and today. ir.healthequity.com.Second, webcast reference includes caution website, made management's statements are are forward-looking cause financial which Relations press with today. measures GAAP our your

subsequent the report in results stock review latest these price annual that affect risks may the you and light reports of or update SEC. Jon. our We our as and our We also detailed in no revise future factors future periodic other XX-K obligation to market discussion new filed events.Now, encourage of to the of or assume on Form statements or to information forward-looking with these over

Jon Kessler

Thank Richard. you,

the on more caution lot. but feel you on, you know I know like than a let you know emphasis Your me word made

grew assets XX% grew members double members, HealthEquity that Total accounts million HSA grew X%. HSA year-over-year ended quarter and accounts.Turning XX.X also end X%. which narrowed quarter, and QX HSA added rates year-on-year we last to as third quit the year sales. QX. growth the job X% lap HSA And members from to initial HSA hello, you with total X.X again is Q&A. double-digit he plus joining I will financial way. performance the Jim and QX than So our was view happy current metrics guidance us fiscal for conditions. everyone, by will 'XX. QX of EBITDA on, and thank anything which he's outlook and results, Richard provide and know Steve, here raised and course, revenue, growth in for an and QX XXX,XXX team relative in XX%. team detail assets then billion to gap key in fiscal doesn't holidays. $XX.X of discuss Adjusted against letting management's The more for toward year-over-year million delivered for new at 'XX at will fiscal and the XX%. QX, the In to begin grew

declined billion account 'XX throughout not higher ago, well year XX%. therefore, our strong by same ended negative they network to members declined more driven as invested in continued offsetting assets to by total a quarter team growth XX% HSA declines. performance market during our ended but QX drive of $X.X due fiscal assets, of partially Year-over-year, invested to balances, at as billion HSA than I'm amount. as has balanced HSA market HSA invest QX their footprint partner the fiscal growth assets investors, QX, logo however, it Sequentially, only -- reflecting by assets date.HSA became action, a by Members the sorry, up our to New just growth. expanded and also helping helped $X.X

long-term invested account from of assets HSAs. in all members, now fact, XX% mission assets.As for you and benefit we our of our growth investing believe continued the In nearly know, HSA that performance our financial

team revenue HSA a the year-over-year we progress sequential costs pattern higher followed drive a help grew following cyclicality.While sequentially strongly and their and as the on expected, We its modest less seasonal custodial of despite by also revenue higher and softness expansion.Interchange modest margin and year-over-year basis choose to with pre-COVID QX. is longer delivered volumes, on declined strength more drove performance, rates especially service QX now continue see to QX, believe, in course, and or in enhanced yield QX we margin in to members custodial cash, Service actually and, also for leading growth fee line.

We expect in QX. sequential again strengthening

detail growth Our more expansion and addition preview will pretty good a is detail and 'XX providing half. new margin CFO in fiscal QX 'XX on first outlook for fiscal our to raised results.Double-digit revenue

The yes, portfolio by completion be ever.Today, the allocation such cloud, AI technology over upon improve value transaction health largest to accretive will science And Jim. and I to turn creating scale our However, that at of will HSA of team CDB and, It trajectory adding the HSA cash. integrating ecosystem of by by through every the and by by tomorrow, investing that, Jim? to HSA enhanced be network, with each API, innovating mission at market the out is save consumers.With and WageWorks. applying drivers which care capital turn. pioneering for increased team capabilities HealthEquity's HSA affordable grew it BenefitWallet, current to your It of quick acquisitions, data empowering and lives raised Jim resiliency it partners including the was would and client program years accessible rates responsiveness uncovering growth HealthEquity's point making. in enabled value trajectory HSA the

James Lucania

Thank you, Jon.

say over months. investors team clients and our reporting many makes the me team been linked opportunity pleasure financial results directly I'll HealthEquity X we're to to to let join the to the day every our First, of today service highlight third purple to members. and GAAP deliver a commitment past have our the it's and non-GAAP are meet The quarter our results.

GAAP As we of a always, reconciliation release. provide in today's measures to press measures non-GAAP

revenue year-over-year. X% revenue year-over-year. to increased XXX the for cash Custodial quarter. basis revenue Service $XXX.X The down was $XXX.X Third grew on annualized quarter in revenue million, the HSA X% million rate points was to XX% interest revenue was as XX% grew quarter. of Interchange the third on third for a quarter share third million profit $X.XX was per XX% XX% EPS year. third percentage quarter the from last in year, a this GAAP the or $XX.X income million.Gross quarter Net up $XX.X in basis.

quarter, as million the $XXX.X X.X%.Adjusted than income X the million X adjusted also balance million EBITDA diluted per of first interest $XX.X the the the was adjusted Term And and share interest per year. A diluted we and of this was $XX.X income, or last XXX up the year.Turning generated revenue year, a of fiscal period versus percentage 'XX fiscal custodial net for year. first a third up prior or was income months $XX.X last to last net net XX% $X.XX compared months the same from XX%, quarter $XXX.X the adjusted share $X.XX same increased share. of pay EBITDA as per months the improvement million, basis the million in was year.While more EBITDA $XXX for was the up remaining to $XXX.X higher GAAP XX% over to EBITDA revenue XX% point X rate to they last additional for interest share, per million Non-GAAP up was percentage or first revenue quarter of approximately XX% was year.For non-GAAP Loan Our compared sheet. $X.XX income $X.XX rates of million, increased of yields on resulting

HSA share. credit in $XXX to fiscal million raise in the strong $X.XX results from $XX of a fiscal QX billion net using BenefitWallet with $XXX on of $X.XX XXXX in cash company line year-to-date. cash undrawn was million million, and available, of the operations and GAAP to October the between of XXXX, we million, range to or line per acquisition.These have million and combined by $XX QX costs.We As both to XX, revenue cash million of and had busy expectations boosted credit drawing of net million outstanding debt $XXX for hand our in as income flow continue connection anticipate the on million of of with $X follows: a range generated us $XX closing issuance allow XXXX in $XXX season $XXX guidance The

share and in We income $X.XX shares expect the XX upon $XXX year. non-GAAP diluted be outstanding non-GAAP $X.XX million to resulting between net million per an for million, based net estimated income between $XXX and

We fiscal expect between expectations fiscal basis on XXX the for average $XXX cash is million revenue to and to on million.Our points adjusted yield revised XXXX $XXX 'XX. approximately be EBITDA primarily based increase for HSA

primarily we debt the the market intangible XX%.As As the non-GAAP in positive by XX% GAAP slightly a impacts as rates from in assets tax from items to reflects the expectation overnight tax as provided at amount net year low metrics we of guidance impact variable million, guidance providing fiscal These reminder, GAAP current earnings full is the change.Our such of interest higher 'XX guidance definition being intangible the income. income, assets funds versus Based rate curves a forward subject offset rate addition, approximately the indicators for rate guidance, year. in non-GAAP GAAP our to items acquired we financing excluded while acquired and average is level done full income of to tax discussed, mid of income also GAAP share futures. we a reconciliation included.We're included embedded diluted secured common net this have guidance positive rate all year, those are, HealthEquity's Discrete release includes initial of a we tax reporting now base year.As rate recent on may income last for course, statutory rate, also the rate count the moving our fiscal year and amortization on XXXX. of following this net includes expect a pretax the below of end periods, fiscal generated revenue XXXX of variable is earnings of such tax debt treasury assume outstanding. strangely non-GAAP GAAP the release.In the custodial an Fed a which the duration analysis on on yield calculated reduced have expect forward-looking assumptions share of also projected We equivalents and XX of our

We to between and expect billion. billion be $X.XX $X.XX revenue

migration ramp-up and outlook included in We EBITDA XX% launch forward the items expect the extend expand of our adjusted A because EBITDA, income, available conditions, we an depreciation based on as season about provision net This ultimate Day as we're unreasonable will to based this at it's certain QX. measure, adjusted initial stock-based directly BenefitWallet yields offices in me our cash Investor comparable February January excluded net will to XX to margins fiscal this non-GAAP and for tax anticipated our than efforts X% begin plug interest our or ending of of current of into outlook XXXX. outcome HSA Draper, outlook year amortization, fiscal reconciliation of expense year is revenue such into positive with is income on Utah. not measure, in give XX, significant GAAP income the HSAs to another most effect for new of estimated future average expect yield unable net period benefit.Before the fiscal predict not costs XX% and our XXXX.We the with Q&A, scheduled to next impacts compensation let approximately for from without further XXXX, our is for for growing rate guidance expected in by BenefitWallet fiscal year usual busy

we about share to initiatives initiatives impacts expect model our multiyear the information HealthEquity's these and partner and on anticipate to outcomes relationships and business remarkable have drive We deliver experience, strategic enhance as innovations may with health deepen the financial well next into our being see nearing clients financial to capacity. partners plans rates. will our product several dive to as the performance over and shared a We're deep accelerate and transition years.You

you or to IR have So a we if website to register there, and want contact will do see our you need questions. you be quickly. you Please be that, want number Richard.With know to there, of

So to let's operator right our Q&A. go off to kick

Operator

[Operator from Instructions] Raymond Peters with James. Our today Greg comes first question

Charles Peters

market kick state year. of in I'll to relates more large Richard, be next have of will and of first through monetizing I competitor the But of to close a working commented question know with working HSA it asset sale. first Jim the M&A. maybe -- their off the you're Steve, Jon, on BenefitWallet half the the possibility another as yours

appetite So in your you maybe this view can for looks you players like just talk what about how behaving your M&A? environment? And market additional

Jon Kessler

Yes. I mean, thank think all, question. for -- of Greg, I you, first the

we're at for work trend market a this deploy is that to over the which this for time. of, and look competitive honed for that term, pleased scale think one a when around kind that of I -- of shareholders' I a has first been done transactions. be on of continued point is a capital it that this we over of couple group at about players. really going we've point And period is And lack our head while, consolidation thinking strong think really we the the hard the reflects very better how kind a of things at

there I transactions secondly, thing. that of a we're position so -- -- in feel for win resort accretion -- else we're that demonstrates effectively is and terms be something a way confident the should to out to a think that the seller, to you without is that magic.And in it extent this that that that shape going banker extent investment kind timing that that for having very we're of to win and to going And also but able the a our -- -- shareholders fortunate one, evaluate the BenefitWallet kind all to of to is that in and of

this puts if at our think I more Day. the of talk in -- and envisions models But we'll that kind Investor the external guidance that certainly happen.I to transactions a position as generally cash an and think obviously good if us about -- So earnings believe company return from and will only is secondly, significant continue a that our ways and start generate you ultimately think to I little suggest cash before, free us grow.So I've that numbers place will ideal deploy operations and those flow to we shareholders. to to said that capital flow in for real this forward generate

them clear, to be because genuinely. and it. not to for a with carefully. in if the that. year, don't be competitors at those be don't our also us. more saying, We past that's, be price in beating So the also our no going having opportunities bushes market, to that it's to it didn't kinds something that.That to -- carefully we'd and present valuation.So very I interested might not happen, view we've in decided And going said, why It's been evaluate and to guess, shareholders. comes also something are because our see we evaluated idea time I think look think And long way know that next my And that well.So at I we're Greg, things year we these where have challenged. We're a reflected you looked as to hear going take next to be rumors. not mid of and of -- benefit great fact done from -- we we the be where been It's know, very -- going those I we've sometimes for our of do they late happy I

Charles Peters

the assuming it. that permit Richard sense. That will enforcer a have I follow-up question makes

Jon Kessler

But I'll you We want you to And the Can Bigglesworth. -- -- I it's we challenges. one. let's of a favor? be ask get do murmurings don't I did be angry. to more want Mr. like

go let's one. We'll So do there. from

Charles Peters

One follow-up?

Jon Kessler

Yes.

Charles Peters

Perfect.

you product yield. higher made enhanced your will in yield custodial opening give you Just a remarks the about how for longer comment

questions to custodial how interest perform of rates is your go start inbound One yield if might the popular down. comes will that

that my you help question. you That's what us maybe last by can meant comment. explain So

Jon Kessler

me one? first Well, why you take this Jim, well, let â€“ actually, don't

James Lucania

Yes, I can. Yes. yes. Sure

we have -- I short outlook. expect overnight cash. our in of for obviously, expectations expected rates term really initial reflected the on the headwind that outlook based client-held And the rates. down will come And some time that we forward-looking funds, mean, that's And has the -- small So a is are small next market provided we will headwind have held a and on to our right, deposits year.

yield maturing year. at small a than next rates is the that's significantly seeing So rates reinvestment to higher we're the But still our headwind at. cash

So in short-term declining a rate environment. interest yields growing HSA rate are average interest we --

Charles Peters

Okay. the I've expired it my yield enhanced But in did I'm higher your comment X -- for you questions. longer. gives that sorry. said And

Jon Kessler

might I'm topic. another this one be about guessing there

So we're next? happy to Who's go into more.

Operator

next Fargo. Wells with Berenshteyn The question is from Stan

Stanislav Berenshteyn

preliminary Maybe you flowing assets on these first in? to a -- guess, we going what in extent into have layer BenefitWallet And are assets that I us to that, the timing on how getting first, any about of Can the benefit the give of Do I'll think tranches of should sense come the questions with there. in? we those accounts? preliminary moving are your when guidance, a We'll maybe on are fees To through pay start the you custodial associated here. couple the more year?

Jon Kessler

take I Yes, this one. I can think

the start So of your let me Stan. part second with question,

a WageWorks pay. that had that a in transactions, where the recall, had to custodian we we've in prior a seller, As there's transaction. We third-party you component have

as I the paying fees. We is believe baked if it agreement and the we we I And purchase million cover, the the -- at in me we agreed works the here.That's -- of I'm into way of technically have -- such wrong someone have agreed have seller part the time correct think it's -- signed, fees within that case was $XX to price. this disclosed this

impact go-forward purchase part projection mentioned any accounts. way. income It's is to to we of back we briefly -- with were accounting your ramp his then of just -- this, again.So -- a will this to into season the extending even fiscal see the -- year see regard issue.And then first incremental that I about and on is doesn't ramp bring that service and these up our the first that remarks still our or price effectively a fully bit So in Jim opening think, it's prepare statement would be in income we of we way think would to busy incremental down the there'll be expense the as if silly and It doing that, costs. question, some

guidance by we'll incremental rate. accretes discussed these So kind see very to transitions to And should service so these we onboard start our idea some of of at here kind to half out placements a reflects of accounts.And quickly. QX, then, that as run positive we you'll kind be in costs. this begin that occur of elsewhere, that as of net second these time will the -- sorry, we've kind in the year, frame. And And

often helpful And current I you. that's our would some that's as here there say, there's if can't is, expectation. for uncertainty So -- but we

Stanislav Berenshteyn

you're on the target-based members and tangible recognizing a side adoption That's on maybe you're with updates that's the some services gross whether gross Clearly, margin. any communications making some on of progress your improvements quick or share -- here. one not your Can there? margin Maybe helpful. you just

Jon Kessler

about Yes. gross the generally. on talked Well, margin Jim progress

ability in fighting speaks good making, growth. growth the at obviously, expense relative that things you're also the area. you be a kind volume that if There here look point the headwinds to in think, and wage are I this spot particularly like to given we're like, of service to

month-over-month. we ultimately, better that opportunity it's this And progress. in voice of, so, -- while experience quarter-over-quarter -- elsewhere would get also live chat, out commented mean just from of through suggested a of from service never yes, take -- to but -- we've just the delivering we significant continue terms delivery move in And not are terms elsewhere, say -- clearly there the AI. ironic I we're to say, move magic those.And costs trying and the ultimately not for And I but lot actually alterative the what this, bullet, for made members members really look It's do at part is to of value it's it's areas in was kind we've to really see in so of a to to as I've is automated it ultimate generative -- that. sort a out digitization.I a this applications of said is no-brainer of where --

stuff it really Just damn, this works. --

it -- And as we think so continue. we way. that because to always to peoples' generate always we And And -- aren't it's be we it's And exactly right because an same do want will the simple. application as think actually able that not questions the precisely answers. formed what is excellent in for yet,

Operator

The next from Bank question Lutz is of with Allen America.

Allen Lutz

side. A Jim. couple on the financial welcome, And

want just have the next year. BenefitWallet fully contracts custodial follow-up. then ask guide? I of been 'XX related one for X% I So much those a have the And set? How yield follow-up incorporated fiscal to then And guide already Is into financials. on the to

Jon Kessler

That's X. X. like that's sounds That

James Lucania

Yes.

benefit having the Jon and -- accounts the both are as the cost, then, on expectation of course, said, in migration the So costs about to the ramp-up built transition our our guide. platform cost, the of XXXX

which assets the be As will rates, earned yield. invested are on pull obviously the those -- rate at market HSA average will up

is So yield yes, to the guiding higher here. contributor to to that to be going and we're a BenefitWallet revenue

Jon Kessler

we where first part the to do then different your just of year. enhanced little a question is rates placements. with throughout And can placements The about the now, math

-- about But cut.So does is would about bit. the of and money kind and do if happens benefit do point. I sort rate when X/X -- little will period.But X/X sorry, in out bulk, placements way I to are -- think moves draw that rates that about just to So have terms relevant. a think a of of I QX it's a want that I'm in caution is on in Enhanced change QX, when that that -- caution less would say mostly year-end allows we it rates a calendar that us to then you X/X that it's about little we fiscal that of of last in

And so waiting that time going get think the over as the those to given much have not rate what you'll kinds is what day, matter and I to will for this good and is -- be used that's placements. be -- for sitting it's to going is on of a to

Operator

The David BTIG. next question comes with from Larsen

David Larsen

hold say, or 'XX? they in and 'XX, maybe could guidance an quarter. fiscal on next Obviously, yield would fiscal decline custodial just business, excellent your benefit of book let's Congratulations But in slightly maybe years obviously expectations steady which slightly a for longer wouldn't for rates about re-contract Can still decline X fiscal since takes bit go it your 'XX. year yield term? to you I ask talk little for up,

Jon Kessler

take you Jim, to one? want this

James Lucania

Simple yes. stable, Obviously, yes, in decline. expect rate answer you are to -- number. I is continue. think remain rates it There that then, we'd strong how tailwinds if far said yes, the rates average But depends

Jon Kessler

that about one appreciate are replacing, -- get is those think think we year, if that of, that will contracts year The I the about first replacing it years, duration think contracts, of pandemic point the your -- benefit really era. ones the right, key but be be we're duration if like going next you we're that what things next issue you do about X to about

to key your in So think, consistent current projections the or about significant so above have being with be, still at question, are what as I sort take for those replace relative stuff will without I you're yield over guidance, of And mean placing re-priced course while to some is the will at. what will what very be a we well tailwinds can appear where market re-priced to And for quite actually. rates you beyond in both for pretty scenario new to give rates the had money quite going continue that's that, those placing be particular of tailwinds And what that favorably. if those it's and current several I current of years. guide factors. be any our X%.And to year time And be wanting reasonable money again, you you a before next money new the of under at

David Larsen

allow maybe. And I think more Great. Richard one Okay. will me

was it the year-over-year. X% see up, So nice revenue to interchange think, I

longer-term For unusual service of When was to expect And there's year-over-year. you think maybe some that. sort of think revenue to more in I service X% growth growth down should see it to that return causing the revenue, would a things we expect that? is normalized sort What service driver But normalized of I revenue rate? what rate be?

Jon Kessler

You want to hit that Jim? one,

James Lucania

that take one. Sure can I Yes. Yes.

the QX. that revenue those slightly on serve lot -- headline of But We've line held think slightly and you within is yes, for -- within you moving slightly down, cost the hit parts effectively down, up. really story on numbers. So right that with there's a I margin stories

at this And and good the making custodial much the as margin bundle a we're do at see look They as price. a been it price buyers valve a on you you we're it story the higher really. we price and mix sort look volume revenue by And product. especially understand occurring So the on at cash. is look They where -- this headwind, making release if has in HSA of RA, on understand there, cash interchange.

That's it's of significantly been the as custodial fee product higher. revenue price little seeing the always attached the per mix HSAs bit the highest we're So and we're impact lowest price growing unit headwind.We it. of interchange of see HSA a percentage shift fixed to dollar as especially towards got

that, margin So going of then sort that see business we're that call our mix volumes. and on mix much line.And and as our the you revenue price higher impact half-and-half that the to line by towards can pressure offset and being

price, million line. about just the on positive revenue So volume, delta that's out mix, to $X negative negative

Operator

JPMorgan. The next question Anne with is Samuel from

Anne McCormick

the kind should you're with In gradual you've past for But enhanced that want quarter. to you going to a going the big into you mix. Where be that? the deposits on your to up to percentage rates as hoping are Are about where see with time? of that a we product. the a of Or Congrats in get BenefitWallet, talked over jump kind to expect increase kind mix of now? you of continue increase

Jon Kessler

step expect can think it so a over there's of or time. extremely in, should adoption get out on as listen -- percentage aspects pleased of couple talk that has to we program. make time. a more the of Salt City a about we'll I willing great. consumer you're we're a clear is people the if that a And it to You increase And view the mix -- to been that -- voluntary But over is basis, this one Lake of with

among we're way do us pay I this having understand feel what really who from been attention -- to to also educate think the I impose has they been has great a to extremely receptivity other has our that to have product reinvest be very And other and attributes know actually us to on I what's the the question went just grow. business.I'm for great. to done the side to into what has we -- the who great. lot possible names. to we've haven't a -- insurance team kept a in the with of partners had trying don't that been stable costs like this within very there -- with but we them, of it conservative on with great And those has product. the was can the pleased say employers see high-quality market It's receptivity is going consumer them acceptance biggest the the any work best this how appropriately fact in mind before.And for that this just continues that done

I'm if out options the the at the into we'll looking Day absolutely we're and little anything, so guessing a talk more this its And And that product. shift years. in impact to Investor at accelerate, about

Anne McCormick

this with bigger a basis as as like get still think premium product, kind as helpful that traditional really time kind bigger point as of to over to I That's yield? right can it And it well? XX change then. XX kind is to of think guess of of we you your Or about and

Jon Kessler

probably I still think that's it's still I probably answer. think mean -- that's right. right I

Operator

Hill The comes next George with Bank. from Deutsche question

George Hill

being Jon And know redeployed BenefitWallet housekeeping could fiscal actually me. just just XX as remind lumpiness of us of kind on in waterfall so we have kind come one, is, of be we that tune and the the of of contribution pieces guys I cash number around of months. to couple look effects models EBITDA questions you big off some guess, my you follow-up kind committed from guys rolling out fine you I to Could for a talk over about our expected or the the XX off 'XX?And next can recommitted get that? Jim,

Jon Kessler

take Why first want you me and don't half I -- take to Jim? second you do the half, the

James Lucania

Sure. Yes, sure.

Jon Kessler

Okay.

to impact. going we're than could know. I of that, year say I way X/X more as to So you earlier, BenefitWallet know. impact. is could you I suggested year think Maybe say don't little don't get -- bit a Maybe a half about a

highly Somewhere this is transactions around And this like be going product to -- we've done prior year. there this that accretive. transaction

to -- You is ultimately forth.So do it's and EBITDA So you about better way delivering question I for to get you a And were margins I return we just nice between with offering "Can a of lack several saying, But ]?"We're anticipating has some think that accelerate, sort the return now would we were handle we us me company a mature helped the think implied to next already boost think of me could I felt -- have point. -- this encourage we would would as back bit want? where be and I modeling. you first certainly whether were you accounts a what's asking [ at the guidance a the margins. George, remember, of EBITDA we term, And right little in so I bit, their some for years I poking guys XX%. think being little XX, word I year -- poor

Jim, seems think to do half, I this timing we of of process. the thing. about accelerated was of second one, some -- you take that about And a so on like deployed... sort good And that want has the which that assets

James Lucania

going of there's block will to you're blocks fiscal be better where of throughout the a bumps be much maturing years sort year. a next word a to wage assets being be not maturing. reinvested fiscal yes, right. are in to assets And X some Like so exactly relatively of Or and reinvestments. is in going exactly lumpier those of And that got maturing are Yes, year We've it actually this following say. year. QX next block smaller of

Jon Kessler

going the think 'XX is core deployed is calendar about roll because 'XX. calendar you I'm that -- The will kind of get 'XX. year, of idea. know it since to There's say, piece wage X-year, this we over right? And original way where over to of that see all the of lot that it assets middle in, a the we 'XX. in no, You'll in And a but were of well little calendar the we roll just

Operator

The with comes Marcon question from Mark Baird. next

Mark Marcon

Let me my congratulations. add

that seeing you Just you a on about coming little I'm competitive both HDHPs, more the accelerating if about perspective, part of care what follow-up. if light are got the terms wondering health in of -- a but the a you're And good terms had particularly bit costs side to can of little logo new just wondering the I've bit talk talk sales. from in desire to then you shift enterprise employee in population through. can also of a

Jon Kessler

one? hit Steve, this you to want

Stephen D. Neeleman

you'll expect in Sure, And be February. happy I out to.

Mark Marcon

Absolutely.

Stephen D. Neeleman

get Because weekend. from first our this snow Anyway. biggest we did

this members comments evolve think kind is to mean, pleased it. suite think of brought we refined seeing talked message time enterprise not continuing new some on I our product there, in order. hustling there.So did we've I has progress logos. So our of bottom the that mean work only in progress into line I I made things in their nice really of some we're lot on this some is we've And but and marketing needs. was We've these the logos. about on good the and with we're sales lot -- the also new bringing are a a great that Yes, team to take of been care

and $X,XXX Kaiser maybe HSA let's at it's PPO just average non-HSA Mark, as year, because Now, that know, average country little -- a about family from amazed every I'm deductible study. the fact, The continually is for a -- is the you -- is this to tell plan. plan $X,XXX. deductible, plan say, about the high that qualified is And per in you

to numbers And So world, for And doesn't of in a perfect sense just us getting around keep to employers. the HSA, employees account. keep make so we the right?And of to the great benefits directly they for of the then And promoting their course, that they're really savings, our kind closer, hard people to seeing of also, because as going relationship those opt lot that, up and just can great teams any And else from then gap it, then it into not narrowing, a everything heck speak are job and get employer the like that narrowing it. argue right?So health they some deductibles tax they tax close the to delivering really about benefits it's a allow savings not with delta helping marketing team and basically management sign with just keep should their uptake. we're on doing we message. -- contributions

and of complete. with making to And employers is client means to lot adopters, we year. messaging. good can tree. time check everything There And that there's still trees. a we're so But tend never in to our progress be is of the are slower we're great do still which continuing a fruit sectors this work And

growth thumbs good good both logo on work So market and and I'd growth. also actually then new cases; more bringing in and team up good enterprise a with say

Mark Marcon

continue That's more addition a there's environment? fantastic. players. that to about rates Obviously, the obviously, market of you consolidated. the And the up, over fees share, With more and then and we just But competitive us but of more other can service on I some get than that. comment going year may next big you're about there's share nature? players gain how fair if then comments your big that little things should give just bit in to think mean, can you wondering gaining that

Stephen D. Neeleman

break do up? that Yes. want you Jon, how to

Jon Kessler

service hit don't talk I'll discussion. about fee Why the you competition the and piece,

Stephen D. Neeleman

Yes. Perfect.

we've as you more is see family, some be good now a So used mean, HealthEquity or ones part to bit, the the we little that I Wage is has it of which there's added because these mentioned. competition evolved a pretty lot partly consolidation, of some awesome. Whether are the competitors. been recent companies pretty of

fish It's -- same services health we been that have health large that a pretty If I somebody And buying in many single-focused with bring able there. said, out for care you're so same is if that's it's and plan of But the plan kind powerful and on But partners things out it's And to take that.We and really differently. in competitors you the I lot think it's care being of mean, then do plan on some large some of their like health of mean, they the evolved think field the storied level now the where kind sees from care a the side, thing. message. we health I'd earlier success look, there that it HSAs the like ponds. on your that our side. independent, us land. consumers. pretty retirement up that game that we been have empowering that's retirement get people got great the of -- I just fish And years, those of can And of settings playing too.So HealthEquity there, might and broader get love that like I is But all right? XX then single got around within of our being what's with because Because plan partners. pond. more I hard.We to the But -- we've the on is HealthEquity we've see win provider health in if is push got a I And own right, -- do will we're some of has doing, same us things a Jon carried think footprint competitive partnerships, kind environment know competitors, focus of we've large threat I our been, our and even kind in it kind consolidating. don't CDBs that that. And was think one think, have I this the that can nail the you kind bundle we've great of much. things know partnership mentioned some health health to product has -- you than plan

Jon Kessler

remarks. we succeed.As preventive, helping to with you the obviously, pay. is I in fees is working is. where just I consumers the to of Yes. about rocket way think employers' grow.If helping you think and what's bulk base, continue do Jim the you supposed to your clients do rest out. I are as the within mean competitors it's certainly, our And think without our relative things on that cetera.So There's mean, at been that going what's And the love about that's using as to an and that environment of going it look But understand dictating in do the health on be be more product. one we perspective place I -- in these do these we're products always just actually cool I it and expand sort we think whatnot, about ecosystem from balance on of look with -- with right yields stuff continue continues really talking not on science. the some they're the but first I it that using we finance, to employers et far custodial always the of or and, in stuff people But competitors, and prepared pricing, also and cross rolling do commented of -- where more actually you their is of what what in going effective elasticity to a not side, we're our succeed we'll terms to plans, free or the the

Jim things so year-over-year. as you've lower there. next come on if right, HRAs the stuff accounts got, fee more And number reduction.The you've right, stabilize mix speaking fee actual versus or time you've roughly But math. and will half X% year? -- is think earlier, roll if commented mix And About quite basis, I right, the unit going of half -- current at you HSAs that. done don't that take, a give of we of and the go. is a Will and that.But it we do I is component sell got with know. And we're to total -- to look on got you over look we've successfully quarter, can you at

as I there product -- we're fees. realistic, don't a our we treating money.At I trying particularly want think I'll think in people fees, ways there's want losing is -- We of core because you assuming really conservative don't business I over to that be we're on the to to fairly certainly what So I -- be, same time, be stop. to make and with lot recognizing think,

course nonetheless is impact which had to over rolling but wasn't profitability and being As of result of raise such, us and help really in products, the still year, you where example. of of little out as still a fees. WageWorks bit COBRA we project wage a a recall, the like but the next ancillary may will our some is, very an large We not felt -- there.

I with I'd is unit don't thing HSAs.Last like rising it. it it sense. of to some say for So The do and base assets, makes can comes as then, us us sense you afraid But has the it like that It of you where and are is come just sense said extremely course, to there's makes retail. produces to stability fees that. do your that they to employers when level where is of are that base. underwrite our because client of does where what stability competitive, be substantially. here. a going diversity distribution. we're We more versus it it not And things in I've that.And therefore, do fee can't gives before, And a be again, areas want to And enterprise makes where like have think smaller competitive the so you that is

a of forth, a service in not of relatively and fee you that's think can we're if to what product see consistent there, of to so kind distribution see mix the and that little numbers long fundamentally, reflects level maybe obviously modest so bottom I much of I But a impact, price with pay tapping in that's line.So at look the guidance we way that also benefits a diversity conservatism impact. big of account actually saying And a stability guess of that of And so that price terms what bit for the reporting our lends picture. as of It's line. in becoming more we're ultimately of you profitable. terms here

Operator

Wallace with Jack from comes question next Guggenheim. The

Jack Wallace

for Congrats got sure wanted understanding just make here. monkey up to quarter. yield you. clearing of I questions purple, model another couple a the to I've we're great

the on book gets duration cash X deployed. or average? Is when X-year is on X it duration? one a, years to on First it Or years the

Jon Kessler

hit You one, this to want Jim?

James Lucania

X-year all as yes, modeling your But should X-year investment been, X the -- REIT. Yes. of treasury be baseline it's think should years our contracts. baseline product you historically, I and mean X, is answer generally you I X, as using the above,

Jack Wallace

step comment Or that there? to looks think have gets I the one. the yield. related this going the daily there's that's AUM cash to that impact also versus cash exposed earlier the it on December, down about, else Just of end And then some so year, to thinking fourth in front a AUM just about the the an for like quarter is X/X would of that there implied sequential in positive re-priced curve? would negative something Is the speak, a of

Jon Kessler

if you front in have Maybe down be of in not. could I Yes. step I it's numbers you, wrong. Jim, think don't the if, there's QX, a

James Lucania

treatment about we some may stands big There's shifts you're coming talking see you No. may about short -- if down, right, the that we're short that impact rate. -- any assuming no, But last out. quarter. talking like not the we Yes, our of the like about talked Like client-held you're dollars there, no. as nothing funds and in

Jon Kessler

the rate to know, HSA been I Maybe offline make be -- mean, we revert it's what higher rest cash to the you we rates next year, But you the to right. be the in will QX. it math can on year-to-date. than got get and going are of in in CHF, X QX short And QX, has

I lot on think there. there's So don't in a not

Operator

question-and-answer This for closing like turn back remarks. the session. our call to concludes to I'd Jon Kessler

Jon Kessler

done. didn't know Wow! were I Okay. we

bump with if of other really at even be are, a to my than a doubt for certain no Day about be to do And belong wouldn't any. if get tried unnamed of that does and as And we've and activity This before is care just that, that. So that mind, you as do be January, Jim he and time in Day to to wanted I we'll to to where you our we conferences Investor about his credit our Investor remarks going well partners. that, And you bunch in the can, team can't if I say got and our clients kind investment great doubt feel say opening happening. was better to come it. to I'm than better that in making you cap or

And working year, with and it year, go work. I'm doing pleased done. And for retirement a at done our but the right the for have to come. health all our the so scenes gets partnership not it the team the of but perfectly, company of hard. a are seeing gets -- see lot We may not tough level we're who at all, really many behind people but all you plan, on our level of it And plans just partnership what all it's doesn't ton up next stuff just employers not set it and following with now.We're of expansion, then to years

So want thank I on to spend you minute just a that. say

Operator

has today's conference for presentation. concluded. you attending now The Thank

may You now disconnect.

HealthEquity (HQY) 5 Dec 232024 Q3 Earnings call transcript