Form 8-K |
HEALTHEQUITY, INC. | ||
Delaware | 7389 | 52-2383166 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
99.1 | Press release issued by HealthEquity, Inc. dated June 7, 2016, announcing financial results for its first quarter ended April 30, 2016. |
HEALTHEQUITY, INC. | |||
Date: June 7, 2016 | By: | /s/ Darcy Mott | |
Name: | Darcy Mott | ||
Title: | Executive Vice President and Chief Financial Officer |
Exhibit no. | Description | |
99.1 | Press release issued by HealthEquity, Inc. dated June 7, 2016, announcing financial results for its first quarter ended April 30, 2016. |
• | Revenue of $44.0 million, an increase of 47% compared to Q1 FY16. |
• | Net income of $8.1 million, an increase of 62% compared to Q1 FY16. |
• | Net income per diluted share of $0.14 compared to $0.09 in Q1 FY16. |
• | Adjusted EBITDA of $18.0 million, an increase of 66% compared to Q1 FY16. |
• | Non-GAAP EPS of $0.15 per share, compared to $0.10 in Q1 FY16. |
• | HSA Members grew to 2.2 million, an increase of 51% compared to Q1 FY16. |
• | Total AUM grew to $4.1 billion, an increase of 61% compared to Q1 FY16. |
• | Increased FY17 outlook. |
• | Service revenue of $19.0 million, an increase of 30% compared to Q1 FY16. |
• | Custodial revenue of $13.8 million, an increase of 64% compared to Q1 FY16. |
• | Interchange revenue of $11.2 million, an increase of 64% compared to Q1 FY16. |
• | Cash AUM of $3.6 billion, an increase of 64% compared to Q1 FY16; and |
• | Investment AUM of $488.3 million, an increase of 41% compared to Q1 FY16. |
(in thousands, except par value) | April 30, 2016 | January 31, 2016 | |||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 92,766 | $ | 83,641 | |||
Marketable securities, at fair value | 40,159 | 40,134 | |||||
Total cash, cash equivalents and marketable securities | 132,925 | 123,775 | |||||
Accounts receivable, net of allowance for doubtful accounts of $36 as of April 30, 2016 and $40 as of January 31, 2016 | 15,706 | 14,308 | |||||
Inventories | 598 | 620 | |||||
Current deferred tax asset | — | 2,642 | |||||
Other current assets | 6,300 | 1,703 | |||||
Total current assets | 155,529 | 143,048 | |||||
Property and equipment, net | 3,388 | 3,506 | |||||
Intangible assets, net | 66,454 | 66,840 | |||||
Goodwill | 4,651 | 4,651 | |||||
Deferred tax asset | 345 | — | |||||
Other assets | 1,874 | 1,750 | |||||
Total assets | $ | 232,241 | $ | 219,795 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 1,226 | $ | 2,431 | |||
Accrued compensation | 2,603 | 7,776 | |||||
Accrued liabilities | 3,146 | 1,899 | |||||
Total current liabilities | 6,975 | 12,106 | |||||
Long-term liabilities | |||||||
Other long-term liability | 819 | 236 | |||||
Deferred tax liability | 1,711 | 3,996 | |||||
Total long-term liabilities | 2,530 | 4,232 | |||||
Total liabilities | 9,505 | 16,338 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity | |||||||
Preferred stock, $0.0001 par value, 100,000 shares authorized, no shares issued and outstanding as of April 30, 2016 and January 31, 2016, respectively | — | — | |||||
Common stock, $0.0001 par value, 900,000 shares authorized, 57,945 and 57,726 shares issued and outstanding as of April 30, 2016 and January 31, 2016, respectively | 6 | 6 | |||||
Additional paid-in capital | 211,185 | 199,940 | |||||
Accumulated other comprehensive loss | (137 | ) | (98 | ) | |||
Accumulated earnings | 11,682 | 3,609 | |||||
Total stockholders’ equity | 222,736 | 203,457 | |||||
Total liabilities and stockholders’ equity | $ | 232,241 | $ | 219,795 |
(in thousands, except per share data) | Three months ended April 30, | ||||||
2016 | 2015 | ||||||
Revenue: | |||||||
Service revenue | $ | 18,994 | $ | 14,614 | |||
Custodial revenue | 13,811 | 8,419 | |||||
Interchange revenue | 11,208 | 6,817 | |||||
Total revenue | 44,013 | 29,850 | |||||
Cost of revenue: | |||||||
Service costs | 11,257 | 8,419 | |||||
Custodial costs | 2,356 | 1,423 | |||||
Interchange costs | 2,719 | 2,102 | |||||
Total cost of revenue | 16,332 | 11,944 | |||||
Gross profit | 27,681 | 17,906 | |||||
Operating expenses: | |||||||
Sales and marketing | 4,183 | 2,833 | |||||
Technology and development | 4,625 | 3,524 | |||||
General and administrative | 4,574 | 3,158 | |||||
Amortization of acquired intangible assets | 1,049 | 409 | |||||
Total operating expenses | 14,431 | 9,924 | |||||
Income from operations | 13,250 | 7,982 | |||||
Other expense: | |||||||
Other expense, net | (641 | ) | (105 | ) | |||
Total other expense | (641 | ) | (105 | ) | |||
Income before income taxes | 12,609 | 7,877 | |||||
Income tax provision | 4,536 | 2,900 | |||||
Net income | $ | 8,073 | $ | 4,977 | |||
Net income per share: | |||||||
Basic | $ | 0.14 | $ | 0.09 | |||
Diluted | $ | 0.14 | $ | 0.09 | |||
Weighted-average number of shares used in computing net income per share: | |||||||
Basic | 57,820 | 55,063 | |||||
Diluted | 59,399 | 57,770 | |||||
Comprehensive income: | |||||||
Net income | $ | 8,073 | $ | 4,977 | |||
Other comprehensive loss: | |||||||
Unrealized loss on available-for-sale marketable securities, net of tax | (39 | ) | (22 | ) | |||
Comprehensive income | $ | 8,034 | $ | 4,955 |
Three months ended April 30, | |||||||
(in thousands) | 2016 | 2015 | |||||
Cash flows from operating activities: | |||||||
Net income | $ | 8,073 | $ | 4,977 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 2,947 | 1,750 | |||||
Amortization of deferred financing costs | 18 | — | |||||
Deferred taxes | 34 | (2 | ) | ||||
Stock-based compensation | 1,822 | 1,094 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (1,398 | ) | (1,425 | ) | |||
Inventories | 22 | (42 | ) | ||||
Other assets | (4,739 | ) | (871 | ) | |||
Accounts payable | (1,241 | ) | (340 | ) | |||
Accrued compensation | (5,173 | ) | (3,260 | ) | |||
Accrued liabilities | 1,164 | (99 | ) | ||||
Other long-term liability | 583 | (11 | ) | ||||
Net cash provided by operating activities | 2,112 | 1,771 | |||||
Cash flows from investing activities: | |||||||
Purchases of marketable securities | (86 | ) | (40,062 | ) | |||
Purchase of property and equipment | (321 | ) | (826 | ) | |||
Purchase of software and capitalized software development costs | (2,003 | ) | (1,451 | ) | |||
Purchase of other investments | — | — | |||||
Acquisition of intangible member assets | — | — | |||||
Net cash used in investing activities | (2,410 | ) | (42,339 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from exercise of common stock options | 145 | 493 | |||||
Tax benefit from exercise of common stock options | 9,278 | 3,931 | |||||
Net cash provided by financing activities | 9,423 | 4,424 | |||||
Increase (decrease) in cash and cash equivalents | 9,125 | (36,144 | ) | ||||
Beginning cash and cash equivalents | 83,641 | 111,005 | |||||
Ending cash and cash equivalents | $ | 92,766 | $ | 74,861 | |||
Supplemental disclosures of non-cash investing and financing activities: | |||||||
Purchases of property and equipment included in accounts payable or accrued liabilities at period end | $ | 8 | $ | — | |||
Purchases of software and capitalized software development costs included in accounts payable or accrued liabilities at period end | 111 | — |
Three months ended April 30, | ||||||||
(in thousands) | 2016 | 2015 | ||||||
Cost of revenue | $ | 375 | $ | 228 | ||||
Sales and marketing | 213 | 228 | ||||||
Technology and development | 357 | 150 | ||||||
General and administrative | 877 | 488 | ||||||
Total stock-based compensation expense | $ | 1,822 | $ | 1,094 |
Three months ended April 30, | |||||||
(in thousands, except for percentages) | 2016 | 2015 | |||||
Reconciliation of gross profit to non-GAAP gross profit: | |||||||
Gross profit | $ | 27,681 | $ | 17,906 | |||
Excluding: Stock-based compensation expense attributable to cost of revenue | 375 | 228 | |||||
Non-GAAP gross profit | $ | 28,056 | $ | 18,134 | |||
Reconciliation of gross margin to non-GAAP gross margin: | |||||||
GAAP gross margin | 63 | % | 60 | % | |||
Excluding: Stock-based compensation expense attributable to cost of revenue | 1 | % | 1 | % | |||
Non-GAAP gross margin | 64 | % | 61 | % | |||
Reconciliation of income from operations to non-GAAP income from operations: | |||||||
Income from operations | $ | 13,250 | $ | 7,982 | |||
Excluding: Stock-based compensation expense | 1,822 | 1,094 | |||||
Non-GAAP income from operations | $ | 15,072 | $ | 9,076 | |||
Reconciliation of operating margin to non-GAAP operating margin: | |||||||
GAAP operating margin | 30 | % | 27 | % | |||
Excluding: Stock-based compensation expense | 4 | % | 3 | % | |||
Non-GAAP operating margin | 34 | % | 30 | % |
Three months ended April 30, | ||||||||
(in thousands) | 2016 | 2015 | ||||||
Net income | $ | 8,073 | $ | 4,977 | ||||
Interest expense | 68 | — | ||||||
Income tax provision | 4,536 | 2,900 | ||||||
Depreciation and amortization | 1,898 | 1,341 | ||||||
Amortization of acquired intangible assets | 1,049 | 409 | ||||||
Stock-based compensation expense | 1,822 | 1,094 | ||||||
Other (1) | 573 | 103 | ||||||
Total adjustments | $ | 9,946 | $ | 5,847 | ||||
Adjusted EBITDA | $ | 18,019 | $ | 10,824 |
(1) | For the three months ended April 30, 2016 and 2015, Other consisted of interest income of $(120) and $(76), miscellaneous taxes of $84 and $90, acquisition-related costs of $585 and $89, and miscellaneous other costs of $24 and $0, respectively. |
April 30, 2016 | April 30, 2015 | % Change | January 31, 2016 | |||||||||
HSA Members | 2,228,041 | 1,474,327 | 51 | % | 2,140,631 | |||||||
Average HSA Members - Year-to-date | 2,211,860 | 1,459,578 | 52 | % | 1,600,327 | |||||||
Average HSA Members - Quarter-to-date | 2,211,860 | 1,459,578 | 52 | % | 1,850,843 | |||||||
HSA Members with investments | 49,761 | 35,699 | 39 | % | 44,680 |
(in thousands, except percentages) | April 30, 2016 | April 30, 2015 | % Change | January 31, 2016 | |||||||||||
Cash AUM | $ | 3,597,111 | $ | 2,198,800 | 64 | % | $ | 3,278,628 | |||||||
Investment AUM | 488,343 | 345,790 | 41 | % | 405,878 | ||||||||||
Total AUM | $ | 4,085,454 | $ | 2,544,590 | 61 | % | $ | 3,684,506 | |||||||
Average daily cash AUM - Year-to-date | $ | 3,518,081 | $ | 2,139,644 | 64 | % | $ | 2,326,506 | |||||||
Average daily cash AUM - Quarter-to-date | $ | 3,518,081 | $ | 2,139,644 | 64 | % | $ | 2,682,827 |
Three months ended April 30, | |||||||
(in thousands, except per share data) | 2016 | 2015 | |||||
Net income | $ | 8,073 | $ | 4,977 | |||
Stock compensation expense, net of tax (1) | 1,130 | 690 | |||||
Adjusted net income | 9,203 | 5,667 | |||||
Diluted weighted-average number of shares used in computing net income per diluted share | 59,399 | 57,770 | |||||
Non-GAAP earnings per diluted share | $ | 0.15 | $ | 0.10 |
(1) | The company used an estimated statutory tax rate of 38% to calculate the net impact of non-cash stock-based compensation expense. |