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 September 6, 2016, announcing financial results for its second quarter ended July 31, 2016. |
HEALTHEQUITY, INC. | |||
Date: September 6, 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 September 6, 2016, announcing financial results for its second quarter ended July 31, 2016. |
• | Revenue of $44.2 million, an increase of 45% compared to Q2 FY16. |
• | Net income of $8.2 million, an increase of 86% compared to Q2 FY16. |
• | Net income per diluted share of $0.14 compared to $0.08 in Q2 FY16. |
• | Adjusted EBITDA of $18.4 million, an increase of 66% compared to Q2 FY16. |
• | Non-GAAP earnings per diluted share of $0.16, compared to $0.09 in Q2 FY16. |
• | HSA Members grew to 2.3 million, an increase of 50% compared to Q2 FY16. |
• | Total AUM grew to $4.2 billion, an increase of 60% compared to Q2 FY16. |
• | Increased FY17 outlook. |
• | Service revenue of $18.8 million, an increase of 28% compared to Q2 FY16. |
• | Custodial revenue of $14.8 million, an increase of 64% compared to Q2 FY16. |
• | Interchange revenue of $10.6 million, an increase of 56% compared to Q2 FY16. |
• | Cash AUM of $3.7 billion, an increase of 62% compared to Q2 FY16; and |
• | Investment AUM of $542.3 million, an increase of 46% compared to Q2 FY16. |
(in thousands, except par value) | July 31, 2016 | January 31, 2016 | |||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 109,169 | $ | 83,641 | |||
Marketable securities, at fair value | 40,292 | 40,134 | |||||
Total cash, cash equivalents and marketable securities | 149,461 | 123,775 | |||||
Accounts receivable, net of allowance for doubtful accounts of $39 as of July 31, 2016 and $40 as of January 31, 2016 | 16,681 | 14,308 | |||||
Inventories | 699 | 620 | |||||
Current deferred tax asset | — | 2,642 | |||||
Other current assets | 6,899 | 1,703 | |||||
Total current assets | 173,740 | 143,048 | |||||
Property and equipment, net | 4,251 | 3,506 | |||||
Intangible assets, net | 65,675 | 66,840 | |||||
Goodwill | 4,651 | 4,651 | |||||
Deferred tax asset | 505 | — | |||||
Other assets | 1,763 | 1,750 | |||||
Total assets | $ | 250,585 | $ | 219,795 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 1,801 | $ | 2,431 | |||
Accrued compensation | 4,353 | 7,776 | |||||
Accrued liabilities | 2,782 | 1,899 | |||||
Total current liabilities | 8,936 | 12,106 | |||||
Long-term liabilities | |||||||
Other long-term liabilities | 1,076 | 236 | |||||
Deferred tax liability | 1,114 | 3,996 | |||||
Total long-term liabilities | 2,190 | 4,232 | |||||
Total liabilities | 11,126 | 16,338 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity | |||||||
Preferred stock, $0.0001 par value, 100,000 shares authorized, no shares issued and outstanding as of July 31, 2016 and January 31, 2016, respectively | — | — | |||||
Common stock, $0.0001 par value, 900,000 shares authorized, 58,493 and 57,726 shares issued and outstanding as of July 31, 2016 and January 31, 2016, respectively | 6 | 6 | |||||
Additional paid-in capital | 219,648 | 199,940 | |||||
Accumulated other comprehensive loss | (110 | ) | (98 | ) | |||
Accumulated earnings | 19,915 | 3,609 | |||||
Total stockholders’ equity | 239,459 | 203,457 | |||||
Total liabilities and stockholders’ equity | $ | 250,585 | $ | 219,795 |
(in thousands, except per share data) | Three months ended July 31, | Six months ended July 31, | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenue: | |||||||||||||||
Service revenue | $ | 18,835 | $ | 14,692 | $ | 37,829 | $ | 29,306 | |||||||
Custodial revenue | 14,779 | 9,031 | 28,590 | 17,450 | |||||||||||
Interchange revenue | 10,571 | 6,771 | 21,779 | 13,588 | |||||||||||
Total revenue | 44,185 | 30,494 | 88,198 | 60,344 | |||||||||||
Cost of revenue: | |||||||||||||||
Service costs | 10,539 | 8,348 | 21,796 | 16,767 | |||||||||||
Custodial costs | 2,394 | 1,512 | 4,750 | 2,935 | |||||||||||
Interchange costs | 2,698 | 2,049 | 5,417 | 4,151 | |||||||||||
Total cost of revenue | 15,631 | 11,909 | 31,963 | 23,853 | |||||||||||
Gross profit | 28,554 | 18,585 | 56,235 | 36,491 | |||||||||||
Operating expenses: | |||||||||||||||
Sales and marketing | 4,190 | 2,737 | 8,373 | 5,570 | |||||||||||
Technology and development | 4,993 | 3,998 | 9,618 | 7,522 | |||||||||||
General and administrative | 5,550 | 3,943 | 10,124 | 7,101 | |||||||||||
Amortization of acquired intangible assets | 1,082 | 409 | 2,131 | 818 | |||||||||||
Total operating expenses | 15,815 | 11,087 | 30,246 | 21,011 | |||||||||||
Income from operations | 12,739 | 7,498 | 25,989 | 15,480 | |||||||||||
Other expense: | |||||||||||||||
Other expense, net | (37 | ) | (542 | ) | (678 | ) | (647 | ) | |||||||
Total other expense | (37 | ) | (542 | ) | (678 | ) | (647 | ) | |||||||
Income before income taxes | 12,702 | 6,956 | 25,311 | 14,833 | |||||||||||
Income tax provision | 4,469 | 2,535 | 9,005 | 5,435 | |||||||||||
Net income | $ | 8,233 | $ | 4,421 | $ | 16,306 | $ | 9,398 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.14 | $ | 0.08 | $ | 0.28 | $ | 0.17 | |||||||
Diluted | $ | 0.14 | $ | 0.08 | $ | 0.27 | $ | 0.16 | |||||||
Weighted-average number of shares used in computing net income per share: | |||||||||||||||
Basic | 58,246 | 56,730 | 58,035 | 55,909 | |||||||||||
Diluted | 59,651 | 58,932 | 59,501 | 58,318 | |||||||||||
Comprehensive income: | |||||||||||||||
Net income | $ | 8,233 | $ | 4,421 | $ | 16,306 | $ | 9,398 | |||||||
Other comprehensive loss: | |||||||||||||||
Unrealized gain/(loss) on available-for-sale marketable securities, net of tax | 27 | (11 | ) | (12 | ) | (33 | ) | ||||||||
Comprehensive income | $ | 8,260 | $ | 4,410 | $ | 16,294 | $ | 9,365 |
Six months ended July 31, | |||||||
(in thousands) | 2016 | 2015 | |||||
Cash flows from operating activities: | |||||||
Net income | $ | 16,306 | $ | 9,398 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 6,125 | 3,665 | |||||
Amortization of deferred financing costs | 36 | — | |||||
Deferred taxes | (738 | ) | (1,133 | ) | |||
Stock-based compensation | 4,331 | 2,771 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (2,373 | ) | (1,801 | ) | |||
Inventories | (79 | ) | 35 | ||||
Other assets | (5,245 | ) | (3,611 | ) | |||
Accounts payable | (1,069 | ) | (277 | ) | |||
Accrued compensation | (3,423 | ) | (1,989 | ) | |||
Accrued liabilities | 827 | 577 | |||||
Other long-term liabilities | 840 | (343 | ) | ||||
Net cash provided by operating activities | 15,538 | 7,292 | |||||
Cash flows from investing activities: | |||||||
Purchases of marketable securities | (177 | ) | (40,137 | ) | |||
Purchase of property and equipment | (1,250 | ) | (1,257 | ) | |||
Purchase of software and capitalized software development costs | (3,960 | ) | (2,982 | ) | |||
Net cash used in investing activities | (5,387 | ) | (44,376 | ) | |||
Cash flows from financing activities: | |||||||
Proceeds from follow-on offering, net of payments for offering costs | — | 23,492 | |||||
Proceeds from exercise of common stock options | 1,128 | 1,153 | |||||
Tax benefit from exercise of common stock options | 14,249 | 10,285 | |||||
Net cash provided by financing activities | 15,377 | 34,930 | |||||
Increase (decrease) in cash and cash equivalents | 25,528 | (2,154 | ) | ||||
Beginning cash and cash equivalents | 83,641 | 111,005 | |||||
Ending cash and cash equivalents | $ | 109,169 | $ | 108,851 | |||
Supplemental disclosures of non-cash investing and financing activities: | |||||||
Purchases of property and equipment included in accounts payable or accrued liabilities at period end | $ | 379 | $ | — | |||
Purchases of software and capitalized software development costs included in accounts payable or accrued liabilities at period end | 116 | — |
Three months ended July 31, | Six months ended July 31, | |||||||||||||||
(in thousands) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Cost of revenue | $ | 421 | $ | 208 | $ | 796 | $ | 436 | ||||||||
Sales and marketing | 353 | 259 | 566 | 487 | ||||||||||||
Technology and development | 446 | 237 | 803 | 387 | ||||||||||||
General and administrative | 1,289 | 973 | 2,166 | 1,461 | ||||||||||||
Total stock-based compensation expense | $ | 2,509 | $ | 1,677 | $ | 4,331 | $ | 2,771 |
July 31, 2016 | July 31, 2015 | % Change | January 31, 2016 | |||||||||
HSA Members | 2,300,007 | 1,537,147 | 50 | % | 2,140,631 | |||||||
Average HSA Members - Year-to-date | 2,241,378 | 1,484,990 | 51 | % | 1,600,327 | |||||||
Average HSA Members - Quarter-to-date | 2,270,896 | 1,510,403 | 50 | % | 1,850,843 | |||||||
HSA Members with investments | 52,722 | 38,501 | 37 | % | 44,680 |
(in thousands, except percentages) | July 31, 2016 | July 31, 2015 | % Change | January 31, 2016 | |||||||||||
Cash AUM | $ | 3,658,245 | $ | 2,260,111 | 62 | % | $ | 3,278,628 | |||||||
Investment AUM | 542,331 | 372,120 | 46 | % | 405,878 | ||||||||||
Total AUM | $ | 4,200,576 | $ | 2,632,231 | 60 | % | $ | 3,684,506 | |||||||
Average daily cash AUM - Year-to-date | $ | 3,560,117 | $ | 2,176,971 | 64 | % | $ | 2,326,506 | |||||||
Average daily cash AUM - Quarter-to-date | $ | 3,602,152 | $ | 2,214,287 | 63 | % | $ | 2,682,827 |
Three months ended July 31, | Six months ended July 31, | |||||||||||||||
(in thousands) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income | $ | 8,233 | $ | 4,421 | $ | 16,306 | $ | 9,398 | ||||||||
Interest income | (128 | ) | (109 | ) | (248 | ) | (185 | ) | ||||||||
Interest expense | 69 | — | 137 | — | ||||||||||||
Income tax provision | 4,469 | 2,535 | 9,005 | 5,435 | ||||||||||||
Depreciation and amortization | 2,097 | 1,506 | 3,994 | 2,847 | ||||||||||||
Amortization of acquired intangible assets | 1,082 | 409 | 2,131 | 818 | ||||||||||||
Stock-based compensation expense | 2,509 | 1,677 | 4,331 | 2,771 | ||||||||||||
Other (1) | 96 | 653 | 790 | 832 | ||||||||||||
Adjusted EBITDA | $ | 18,427 | $ | 11,092 | $ | 36,446 | $ | 21,916 |
(1) | For the three months ended July 31, 2016 and 2015, Other consisted of non-income-based taxes of $86 and $82, and acquisition-related costs of $10 and $571, respectively. For the six months ended July 31, 2016 and 2015, Other consisted of non-income-based taxes of $172 and $171, acquisition-related costs of $595 and $661, and other costs of $23 and $0, respectively. |
For the year ending | |
(in millions) | January 31, 2017 |
Net income | $23 - 25 |
Income tax provision | 13 -14 |
Depreciation and amortization | ~ 9 |
Amortization of acquired intangible assets | ~ 4 |
Stock-based compensation expense | ~9 |
Other | ~ 1 |
Adjusted EBITDA | $59 - 62 |
Three months ended July 31, | Six months ended July 31, | ||||||||||||||
(in thousands, except per share data) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Net income | $ | 8,233 | $ | 4,421 | $ | 16,306 | $ | 9,398 | |||||||
Stock compensation expense, net of tax (1) | 1,555 | 1,027 | 2,685 | 1,717 | |||||||||||
Adjusted net income | 9,788 | 5,448 | 18,991 | 11,115 | |||||||||||
Diluted weighted-average number of shares used in computing net income per diluted share | 59,651 | 58,932 | 59,501 | 58,318 | |||||||||||
Non-GAAP earnings per diluted share | $ | 0.16 | $ | 0.09 | $ | 0.32 | $ | 0.19 |
(1) | The company used an estimated statutory tax rate of 38% to calculate the net impact of non-cash stock-based compensation expense. |