HealthEquity Raises Fiscal 2027 Guidance as HSA Assets Reach Record $37.9 Billion

HealthEquity’s second-quarter results combined higher revenue and earnings with record HSA accounts, assets and Adjusted EBITDA margin, prompting management to increase its full-year outlook.

Key Investor Takeaways

• HealthEquity (NASDAQ:HQY) raised fiscal 2027 guidance after second-quarter revenue increased 8% year over year to $350.7 million.
• Adjusted EBITDA rose 11% to $167.0 million, while the Adjusted EBITDA margin reached a company-record 48%, up from 46% a year earlier.
• HSA Assets climbed 14% to a record $37.9 billion, alongside 10.7 million HSA accounts and faster growth in accounts with investments.
• New HSAs from sales increased 24% to 202,000, providing another indicator of underlying account growth.
• The company repurchased $108.1 million of shares during the quarter and had $948.4 million remaining under its existing authorization.

Why HQY Stock Is in Focus

HealthEquity (NASDAQ:HQY) delivered year-over-year growth across its key second-quarter financial measures and raised its fiscal 2027 outlook, giving investors fresh benchmarks for the second half of the year.

Revenue for the quarter ended July 31 rose 8% to $350.7 million from $325.8 million a year earlier. Custodial revenue contributed $175.9 million, service revenue totaled $124.4 million and interchange revenue was $50.4 million.

Net income increased to $65.6 million, or $0.78 per diluted share, from $59.9 million, or $0.68 per share. The net income margin improved to 19% from 18%.

On a non-GAAP basis, net income reached $103.8 million, or $1.24 per diluted share, compared with $94.6 million, or $1.08 per share, in the prior-year quarter.

Operating leverage was another notable feature of the results. Adjusted EBITDA increased 11% to $167.0 million, with the margin expanding two percentage points to a record 48%.

Why This Matters for Investors

The combination of revenue growth and faster Adjusted EBITDA expansion suggests HealthEquity is converting a larger proportion of its revenue into adjusted operating earnings. That may strengthen the efficiency component of the investment narrative as the company scales.

Account and asset trends also provide investors with evidence of continued expansion in the underlying HSA platform. Total HSAs increased 8% year over year to 10.7 million, while HSA Assets grew faster, rising 14% to $37.9 billion.

Within that total, HSA investments reached $20.6 billion and HSA cash stood at $17.4 billion. The number of HSAs with investments increased 20% to 0.9 million, outpacing overall HSA account growth and indicating deeper participation among a portion of the member base.

Management’s decision to raise guidance adds another positive operating signal. HealthEquity now expects fiscal 2027 revenue of $1.411 billion to $1.421 billion, net income of $242 million to $248 million and Adjusted EBITDA of $628 million to $636 million.

Non-GAAP net income is projected at $392 million to $398 million, equivalent to $4.66 to $4.73 per diluted share based on an estimated 84 million diluted weighted-average shares outstanding.

Capital returns provide an additional consideration. HealthEquity spent $108.1 million repurchasing 1.2 million shares during the quarter, while retaining substantial capacity under its authorization.

What to Watch Next

Investors can watch whether HealthEquity sustains its record 48% Adjusted EBITDA margin while progressing toward the newly raised fiscal 2027 targets.

HSA account additions, growth in invested HSA assets and the pace of further share repurchases may also help determine whether the second-quarter momentum carries through the remainder of the fiscal year.

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