HQY Stock Falls as Q4 Earnings Miss Estimates, Revenues Up Y/Y

Core Viewpoint - HealthEquity, Inc. reported mixed financial results for the fourth quarter of fiscal 2025, with adjusted EPS missing estimates but showing year-over-year improvement, while revenues exceeded expectations and demonstrated significant growth [1][2][14]. Financial Performance - Adjusted EPS for Q4 fiscal 2025 was 69 cents, missing the Zacks Consensus Estimate by 2.82%, but improved by 9.5% year-over-year [1] - GAAP EPS was 30 cents, unchanged from the same quarter last year [1] - Revenues reached $311.8 million, beating the Zacks Consensus Estimate by 2.2% and increasing by 18.8% from the prior year [2] HSA Growth - Total Health Savings Accounts (HSAs) served as a non-bank custodian reached 9.9 million, up 14% year-over-year [3] - HSAs with investments totaled 753,000, reflecting a 23% year-over-year increase [3] - Total accounts, including HSAs and Consumer Direct Benefits (CDBs), reached 17 million, an 8.2% increase year-over-year [3] HSA Assets - Total HSA assets were $32.1 billion at the end of January 31, 2025, up 27% year-over-year [4] - HSA cash was $17.4 billion, a 16% increase year-over-year, while HSA investments were $14.7 billion, up 44.1% year-over-year [4] Revenue Sources - Service revenues totaled $124.2 million, up 4.6% year-over-year [6] - Custodial revenues reached $144.1 million, a 36.7% increase from the previous year [7] - Interchange revenues amounted to $43.5 million, up 13.3% year-over-year [7] Profitability Metrics - Gross profit increased by 15.6% to $189 million, but gross margin contracted by 160 basis points to 60.6% [8] - Operating profit was $42.2 million, an 8.4% improvement year-over-year, with operating margin contracting by 130 basis points to 13.5% [10] Financial Position - Cash and cash equivalents at the end of Q4 fiscal 2025 were $295.9 million, down from $322.2 million a year ago [11] - Total debt was $1.06 billion, slightly down from $1.08 billion at the end of the previous fiscal year [11] - Cumulative net cash provided by operating activities was $339.9 million, compared to $242.8 million a year ago [12] Future Guidance - For fiscal 2026, revenues are projected between $1.28 billion and $1.30 billion, with adjusted EPS expected in the range of $3.57-$3.74 [13]