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HealthEquity Stock Gains as Q4 Earnings Top Estimates, Revenues Up Y/Y
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Key Takeaways
HealthEquity Q4 EPS beat estimates by 6.7%, with revenues up 7.3% year over year.
HQY saw HSA accounts grow 7% and assets jump 14%, boosting custodial and service revenues.
HQY projects FY27 revenues of $1.405B-$1.415B and EPS of $4.56-$4.65.
HealthEquity, Inc. (HQY - Free Report) reported adjusted earnings per share (EPS) of 95 cents for fourth-quarter fiscal 2026, surpassing the Zacks Consensus Estimate by 6.7%. The bottom line improved 37.7% on a year-over-year basis.
GAAP EPS in the fiscal fourth quarter was 58 cents, up from the year-ago quarter’s EPS of 30 cents.
Shares of HQY gained 1.4% in after-market trading following the earnings call.
HealthEquity Revenues in Detail
In the fiscal fourth quarter, the company generated revenues of $334.6 million, which beat the Zacks Consensus Estimate by 0.5%. The top line improved 7.3% from the prior-year quarter.
For fiscal 2026, HQY registered total revenues of $1.31 billion, up 9.5% year over year. Adjusted EPS amounted to $2.46, up from $1.09 a year ago.
HSA Details of HQY
As of Jan. 31, 2026, the total number of Health Savings Accounts (HSAs) for which HealthEquity served as a non-bank custodian was 10.6 million, up 7% year over year.
HealthEquity reported 832,000 HSAs with investments as of Jan. 31, 2026, up 10% year over year. Total accounts, as of Jan. 31, 2026, were 17.8 million. This uptick included total HSAs and 7.2 million Consumer Direct Benefits (CDBs).
Total HSA assets were $36.5 billion at the end of Jan. 31, 2026, up 14% year over year. This included $18 billion of HSA cash and $18.5 billion of HSA investments.
Client-held funds, which are deposits held on behalf of HealthEquity’s clients to facilitate the administration of its CDBs and from which the company generates custodial revenues, were $1.1 billion as of Jan. 31, 2026.
Revenue Sources of HealthEquity
HealthEquity derives revenues from three sources: Service revenues, Custodial revenues, and Interchange revenues.
Service revenues totaled $127.1 million in the quarter, up 2.3% year over year. This reflected a higher number of HSAs and invested HSA Assets.
Custodial revenues totaled $161.4 million, up 11.9% from the year-ago period.
Interchange revenues totaled $46.1 million, up 6% year over year.
HealthEquity, Inc. Price, Consensus and EPS Surprise
In the quarter under review, HealthEquity’s gross profit rose 20.7% year over year to $228.1 million. The gross margin expanded 760 basis points (bps) to 68.2%.
Sales and marketing expenses increased 7.9% to $24.9 million year over year, whereas technology and development expenses climbed 8.8% year over year to $70.4 million. General and administrative expenses increased 11.8% year over year to $33.5 million. Total operating expenses of $157.1 million decreased 6.9% year over year.
Operating profit totaled $71.1 million, improving significantly by 68.6% from the prior-year quarter, mainly driven by lower service costs and merger integration expenses. Thus, the operating margin in the quarter expanded by 770 bps to 21.2% compared with the prior-year quarter.
Financial Position of HQY
The company exited the fourth quarter of fiscal 2026 with cash and cash equivalents of $318.9 million compared with $309.3 million at the third quarter of fiscal 2026-end. Total debt (net of issuance costs) at the end of fourth-quarter fiscal 2026 was $957.4 million compared with $982.1 million at the end of third-quarter fiscal 2026.
Cumulative net cash provided by operating activities at the end of fourth-quarter fiscal 2026 totaled $457.1 million compared with $339.9 million a year ago.
HealthEquity’s FY27 Guidance
HealthEquity has provided its revenue and EPS projections for fiscal 2027.
For fiscal 2027, revenues are projected to be between $1.405 billion and $1.415 billion. The Zacks Consensus Estimate is currently pegged at $1.39 billion.
Adjusted EPS is expected to be in the range of $4.56-$4.65. The Zacks Consensus Estimate is currently pegged at $4.58.
Our Take on HQY
HealthEquity exited fourth-quarter fiscal 2026 with better-than-expected results. The company witnessed solid top-line and bottom-line performances in the reported quarter. Solid growth in HSAs also drove the top line. The solid uptick in total HSA assets in the reported quarter is promising. Significant improvements in operating and gross margins also bode well.
HealthEquity reported strong account growth momentum exiting fiscal 2026, adding a record 550,000 HSAs in the fiscal fourth quarter and more than 1 million new HSAs for the full year, bringing total accounts to 17.8 million. Management emphasized that this growth reflects robust execution across new sales, high retention levels (above 98%) and continued adoption of HSA-qualified plans. At the same time, improving digital engagement is playing a key role; with over 3.6 million app downloads, the company is seeing more members interact through its mobile-first platform. Enhancements in onboarding, analytics and user experience are driving higher engagement, which in turn supports greater contributions, spending activity and ultimately stronger HSA asset growth, a core driver of long-term revenue expansion.
Management acknowledged that macro conditions remain somewhat constrained, with modest U.S. job creation acting as a natural limiter on new account formation. However, the company continues to outperform this backdrop, highlighting that structural healthcare affordability pressures are driving increased HSA adoption even in a softer employment environment. To navigate this, HealthEquity is focusing on deepening employer relationships, expanding distribution channels, including retail and ACA-linked opportunities, and enhancing enrollment and engagement tools. While labor market softness may moderate near-term account growth, management remains confident that strong demand for consumer-directed healthcare, coupled with its platform scale, AI-driven efficiencies and expanding distribution, will sustain growth momentum in the future.
Zacks Rank & Key Picks
Currently, HealthEquity carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Intuitive Surgical (ISRG - Free Report) , Align Technology (ALGN - Free Report) and Cardinal Health (CAH - Free Report) .
Intuitive Surgical, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 15.7%. ISRG’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 13.24%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Intuitive Surgical’s shares have gained 10.9% against the industry’s 6.8% decline over the past six months.
Align Technology, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.1%. ALGN’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6.16%.
ALGN’s shares have rallied 27.8% compared with the industry’s 16.7% growth over the past six months.
Cardinal Health, carrying a Zacks Rank of 2, has an estimated long-term growth rate of 15%. CAH’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 9.3%.
CAH’s shares have rallied 45% compared with the industry’s 16.7% growth over the past six months.
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HealthEquity Stock Gains as Q4 Earnings Top Estimates, Revenues Up Y/Y
Key Takeaways
HealthEquity, Inc. (HQY - Free Report) reported adjusted earnings per share (EPS) of 95 cents for fourth-quarter fiscal 2026, surpassing the Zacks Consensus Estimate by 6.7%. The bottom line improved 37.7% on a year-over-year basis.
GAAP EPS in the fiscal fourth quarter was 58 cents, up from the year-ago quarter’s EPS of 30 cents.
Shares of HQY gained 1.4% in after-market trading following the earnings call.
HealthEquity Revenues in Detail
In the fiscal fourth quarter, the company generated revenues of $334.6 million, which beat the Zacks Consensus Estimate by 0.5%. The top line improved 7.3% from the prior-year quarter.
For fiscal 2026, HQY registered total revenues of $1.31 billion, up 9.5% year over year. Adjusted EPS amounted to $2.46, up from $1.09 a year ago.
HSA Details of HQY
As of Jan. 31, 2026, the total number of Health Savings Accounts (HSAs) for which HealthEquity served as a non-bank custodian was 10.6 million, up 7% year over year.
HealthEquity reported 832,000 HSAs with investments as of Jan. 31, 2026, up 10% year over year. Total accounts, as of Jan. 31, 2026, were 17.8 million. This uptick included total HSAs and 7.2 million Consumer Direct Benefits (CDBs).
Total HSA assets were $36.5 billion at the end of Jan. 31, 2026, up 14% year over year. This included $18 billion of HSA cash and $18.5 billion of HSA investments.
Client-held funds, which are deposits held on behalf of HealthEquity’s clients to facilitate the administration of its CDBs and from which the company generates custodial revenues, were $1.1 billion as of Jan. 31, 2026.
Revenue Sources of HealthEquity
HealthEquity derives revenues from three sources: Service revenues, Custodial revenues, and Interchange revenues.
Service revenues totaled $127.1 million in the quarter, up 2.3% year over year. This reflected a higher number of HSAs and invested HSA Assets.
Custodial revenues totaled $161.4 million, up 11.9% from the year-ago period.
Interchange revenues totaled $46.1 million, up 6% year over year.
HealthEquity, Inc. Price, Consensus and EPS Surprise
HealthEquity, Inc. price-consensus-eps-surprise-chart | HealthEquity, Inc. Quote
HQY Margin Details
In the quarter under review, HealthEquity’s gross profit rose 20.7% year over year to $228.1 million. The gross margin expanded 760 basis points (bps) to 68.2%.
Sales and marketing expenses increased 7.9% to $24.9 million year over year, whereas technology and development expenses climbed 8.8% year over year to $70.4 million. General and administrative expenses increased 11.8% year over year to $33.5 million. Total operating expenses of $157.1 million decreased 6.9% year over year.
Operating profit totaled $71.1 million, improving significantly by 68.6% from the prior-year quarter, mainly driven by lower service costs and merger integration expenses. Thus, the operating margin in the quarter expanded by 770 bps to 21.2% compared with the prior-year quarter.
Financial Position of HQY
The company exited the fourth quarter of fiscal 2026 with cash and cash equivalents of $318.9 million compared with $309.3 million at the third quarter of fiscal 2026-end. Total debt (net of issuance costs) at the end of fourth-quarter fiscal 2026 was $957.4 million compared with $982.1 million at the end of third-quarter fiscal 2026.
Cumulative net cash provided by operating activities at the end of fourth-quarter fiscal 2026 totaled $457.1 million compared with $339.9 million a year ago.
HealthEquity’s FY27 Guidance
HealthEquity has provided its revenue and EPS projections for fiscal 2027.
For fiscal 2027, revenues are projected to be between $1.405 billion and $1.415 billion. The Zacks Consensus Estimate is currently pegged at $1.39 billion.
Adjusted EPS is expected to be in the range of $4.56-$4.65. The Zacks Consensus Estimate is currently pegged at $4.58.
Our Take on HQY
HealthEquity exited fourth-quarter fiscal 2026 with better-than-expected results. The company witnessed solid top-line and bottom-line performances in the reported quarter. Solid growth in HSAs also drove the top line. The solid uptick in total HSA assets in the reported quarter is promising. Significant improvements in operating and gross margins also bode well.
HealthEquity reported strong account growth momentum exiting fiscal 2026, adding a record 550,000 HSAs in the fiscal fourth quarter and more than 1 million new HSAs for the full year, bringing total accounts to 17.8 million. Management emphasized that this growth reflects robust execution across new sales, high retention levels (above 98%) and continued adoption of HSA-qualified plans. At the same time, improving digital engagement is playing a key role; with over 3.6 million app downloads, the company is seeing more members interact through its mobile-first platform. Enhancements in onboarding, analytics and user experience are driving higher engagement, which in turn supports greater contributions, spending activity and ultimately stronger HSA asset growth, a core driver of long-term revenue expansion.
Management acknowledged that macro conditions remain somewhat constrained, with modest U.S. job creation acting as a natural limiter on new account formation. However, the company continues to outperform this backdrop, highlighting that structural healthcare affordability pressures are driving increased HSA adoption even in a softer employment environment. To navigate this, HealthEquity is focusing on deepening employer relationships, expanding distribution channels, including retail and ACA-linked opportunities, and enhancing enrollment and engagement tools. While labor market softness may moderate near-term account growth, management remains confident that strong demand for consumer-directed healthcare, coupled with its platform scale, AI-driven efficiencies and expanding distribution, will sustain growth momentum in the future.
Zacks Rank & Key Picks
Currently, HealthEquity carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are Intuitive Surgical (ISRG - Free Report) , Align Technology (ALGN - Free Report) and Cardinal Health (CAH - Free Report) .
Intuitive Surgical, carrying a Zacks Rank #2 (Buy) at present, has an estimated long-term growth rate of 15.7%. ISRG’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 13.24%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Intuitive Surgical’s shares have gained 10.9% against the industry’s 6.8% decline over the past six months.
Align Technology, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.1%. ALGN’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 6.16%.
ALGN’s shares have rallied 27.8% compared with the industry’s 16.7% growth over the past six months.
Cardinal Health, carrying a Zacks Rank of 2, has an estimated long-term growth rate of 15%. CAH’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 9.3%.
CAH’s shares have rallied 45% compared with the industry’s 16.7% growth over the past six months.