HealthEquity | 10-Q: FY2026 Q3 Revenue Beats Estimate at USD 322.16 M

Revenue: As of FY2026 Q3, the actual value is USD 322.16 M, beating the estimate of USD 320.96 M.

EPS: As of FY2026 Q3, the actual value is USD 0.59, beating the estimate of USD 0.4837.

EBIT: As of FY2026 Q3, the actual value is USD 89.88 M.

Segment Revenue

• Service Revenue: Increased by $1.1 million, or 1%, from the three months ended October 31, 2024, to the three months ended October 31, 2025, primarily due to increases in the number of Total Accounts and the amount of HSA investments, offset by lower average service fees per account.
• Custodial Revenue: Increased by $18.1 million, or 13%, due to an increase in average annualized yield on HSA cash and a $0.5 billion increase in average daily HSA cash.
• Interchange Revenue: Increased by $2.5 million, or 6%, primarily due to an increase in Total Accounts.

Operational Metrics

• Net Income: Increased by $46.0 million, or 806%, primarily due to an increase in gross profit and a decrease in operating expenses.
• Gross Margin: Improved as total revenue increased at a significantly higher rate (10%) than total cost of revenue (2%).
• Operating Expenses: Decreased by $28.0 million, or 16%, primarily due to a decrease in merger integration expenses.

Cash Flow

• Operating Cash Flow: Net cash provided by operating activities increased by $75.1 million, primarily due to increased cash receipts with respect to custodial, interchange, and service revenues.
• Free Cash Flow: Not explicitly detailed, but the increase in operating cash flow suggests improved free cash flow.

Unique Metrics

• HSA Assets: Total HSA Assets increased by $4.5 billion, or 15%, primarily due to the increased market value of invested balances and net HSA contributions from new and existing HSA members.

Future Outlook and Strategy

• Core Business Focus: The company expects service revenue to continue to increase due to increases in Total Accounts and HSA investments, partially offset by lower average service fees per account. Custodial revenue is expected to increase as existing agreements with Depository Partners are renewed or replaced with higher rates, and as the percentage of HSA cash held in Enhanced Rates offering increases.
• Non-Core Business: No specific plans related to divestitures or emerging segments were detailed in the report.