HealthEquity Q2 Earnings Call Highlights

HealthEquity Q2 Earnings Call Highlights Posted by Defense World Staff on Aug 29th, 2026 Share on Twitter Share on Facebook Share on LinkedIn Share on Stocktwits Get alerts: HealthEquity (NASDAQ:HQY) reported accelerated revenue growth and record profitability in its fiscal 2027 second quarter, citing HSA account expansion, higher member engagement and technology-driven service efficiencies. The company raised its full-year outlook after generating record adjusted EBITDA margin of 48%.

“Q1 demonstrated that the model is scaling, and Q2 showed that the model is becoming more durable,” President and CEO Scott Cutler said, pointing to stronger operating cash flow, disciplined capital allocation and lower service costs as health savings account, or HSA, accounts reached 10.7 million. Revenue, Profit and Cash Flow Second-quarter revenue rose 8% year over year. Service revenue reached a record $124.4 million, up 6%, while custodial revenue increased 10% to a record $175.9 million. Interchange revenue grew 5% to $50.4 million, which Chief Financial Officer James Lucania said reflected higher member spending and transaction activity. Gross profit totaled a record $258 million, representing about 74% of revenue, compared with 71% a year earlier. GAAP net income was a record $65.6 million, or $0.78 per diluted share. Non-GAAP net income was $103.8 million, or $1.24 per diluted share. Lucania said the quarter included $3.3 million of one-time disposal expense related to internally developed software that is no longer in use. Adjusted EBITDA rose 11% year over year to a record $167 million, while adjusted EBITDA margin expanded to 48% from 46% in the prior-year quarter. For the first six months of fiscal 2027, HealthEquity reported revenue of $705.4 million, up 7% year over year, and adjusted EBITDA of $331.5 million, up 14%. First-half adjusted EBITDA margin was 47%. The company ended the quarter with $256 million in cash and generated $136 million in operating cash flow. Debt outstanding, net of issuance costs, was approximately $931 million.

HSA Growth and Member Engagement HealthEquity said total HSA assets grew 14% year over year, total HSAs increased 8%, and new HSAs from sales rose 24%. New sales set a second-quarter record and marked the company’s strongest quarter outside the fourth-quarter open-enrollment period, according to Cutler. Client renewals are on pace to remain above 90% for the full year, he said. Management attributed account growth to a mix of expansion within existing clients, health-plan and broker partnerships, direct channels, individual and family plans, and new-logo sales. Cutler said healthcare affordability continues to support demand for high-deductible health plans paired with HSAs. He said HealthEquity’s advisory services help employers assess enrollment, adoption, contributions and plan-design strategies. The company has seen some clients increase HSA adoption from about 25% to more than 60% or 70%, according to Cutler. Vice Chair and founder Steve Neeleman said the company is also seeing interest in individual coverage health reimbursement arrangements, or ICHRAs, and individual and family plans. He noted that bronze and catastrophic plans became universally HSA-qualified following legislation passed more than a year ago, and said HSA-qualified plan participation in exchanges has approached 50% in some states, compared with 2% nationally before the law change.

Marketplace, Investing and App Development Management highlighted growing activity in its Marketplace offering, which connects members with health and wellness products and services. Marketplace had more than 14,000 active members at quarter end, with continued monthly growth. While Marketplace revenue remains immaterial to overall financial results, Cutler said subscriber growth and purchase activity have been encouraging. The company expanded Marketplace categories to include metabolic health, hormonal health, diagnostics, consumer health device...