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 December 6, 2016, announcing financial results for its third quarter ended October 31, 2016. |
HEALTHEQUITY, INC. | |||
Date: December 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 December 6, 2016, announcing financial results for its third quarter ended October 31, 2016. |
• | Revenue of $43.4 million, an increase of 42% compared to Q3 FY16. |
• | Net income of $6.0 million, an increase of 47% compared to Q3 FY16. |
• | Net income per diluted share of $0.10, compared to $0.07 in Q3 FY16. |
• | Adjusted EBITDA of $14.5 million, an increase of 47% compared to Q3 FY16. |
• | HSA Members grew to 2.4 million, an increase of 48% compared to Q3 FY16. |
• | Total AUM grew to $4.3 billion, an increase of 59% compared to Q3 FY16. |
• | Service revenue of $18.8 million, an increase of 24% compared to Q3 FY16. |
• | Custodial revenue of $15.0 million, an increase of 64% compared to Q3 FY16. |
• | Interchange revenue of $9.6 million, an increase of 55% compared to Q3 FY16. |
• | Cash AUM of $3.7 billion, an increase of 61% compared to Q3 FY16; and |
• | Investment AUM of $570.6 million, an increase of 48% compared to Q3 FY16. |
(in thousands, except par value) | October 31, 2016 | January 31, 2016 | |||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 125,346 | $ | 83,641 | |||
Marketable securities, at fair value | 40,352 | 40,134 | |||||
Total cash, cash equivalents and marketable securities | 165,698 | 123,775 | |||||
Accounts receivable, net of allowance for doubtful accounts of $34 as of October 31, 2016 and $40 as of January 31, 2016 | 14,064 | 14,308 | |||||
Inventories | 944 | 620 | |||||
Current deferred tax asset | — | 2,642 | |||||
Other current assets | 5,352 | 1,703 | |||||
Total current assets | 186,058 | 143,048 | |||||
Property and equipment, net | 5,373 | 3,506 | |||||
Intangible assets, net | 65,688 | 66,840 | |||||
Goodwill | 4,651 | 4,651 | |||||
Deferred tax asset | 696 | — | |||||
Other assets | 2,003 | 1,750 | |||||
Total assets | $ | 264,469 | $ | 219,795 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 1,582 | $ | 2,431 | |||
Accrued compensation | 4,659 | 7,776 | |||||
Accrued liabilities | 4,195 | 1,899 | |||||
Total current liabilities | 10,436 | 12,106 | |||||
Long-term liabilities | |||||||
Other long-term liabilities | 1,295 | 236 | |||||
Deferred tax liability | 149 | 3,996 | |||||
Total long-term liabilities | 1,444 | 4,232 | |||||
Total liabilities | 11,880 | 16,338 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity | |||||||
Preferred stock, $0.0001 par value, 100,000 shares authorized, no shares issued and outstanding as of October 31, 2016 and January 31, 2016, respectively | — | — | |||||
Common stock, $0.0001 par value, 900,000 shares authorized, 59,306 and 57,726 shares issued and outstanding as of October 31, 2016 and January 31, 2016, respectively | 6 | 6 | |||||
Additional paid-in capital | 226,794 | 199,940 | |||||
Accumulated other comprehensive loss | (134 | ) | (98 | ) | |||
Accumulated earnings | 25,923 | 3,609 | |||||
Total stockholders’ equity | 252,589 | 203,457 | |||||
Total liabilities and stockholders’ equity | $ | 264,469 | $ | 219,795 |
(in thousands, except per share data) | Three months ended October 31, | Nine months ended October 31, | |||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Revenue: | |||||||||||||||
Service revenue | $ | 18,781 | $ | 15,201 | $ | 56,610 | $ | 44,507 | |||||||
Custodial revenue | 14,967 | 9,142 | 43,557 | 26,592 | |||||||||||
Interchange revenue | 9,610 | 6,213 | 31,389 | 19,801 | |||||||||||
Total revenue | 43,358 | 30,556 | 131,556 | 90,900 | |||||||||||
Cost of revenue: | |||||||||||||||
Service costs | 12,675 | 9,395 | 34,471 | 26,162 | |||||||||||
Custodial costs | 2,461 | 1,536 | 7,211 | 4,471 | |||||||||||
Interchange costs | 2,331 | 1,949 | 7,748 | 6,100 | |||||||||||
Total cost of revenue | 17,467 | 12,880 | 49,430 | 36,733 | |||||||||||
Gross profit | 25,891 | 17,676 | 82,126 | 54,167 | |||||||||||
Operating expenses: | |||||||||||||||
Sales and marketing | 4,391 | 3,067 | 12,764 | 8,637 | |||||||||||
Technology and development | 6,209 | 4,419 | 15,827 | 11,941 | |||||||||||
General and administrative | 5,166 | 3,477 | 15,290 | 10,578 | |||||||||||
Amortization of acquired intangible assets | 1,083 | 409 | 3,214 | 1,227 | |||||||||||
Total operating expenses | 16,849 | 11,372 | 47,095 | 32,383 | |||||||||||
Income from operations | 9,042 | 6,304 | 35,031 | 21,784 | |||||||||||
Other expense: | |||||||||||||||
Other expense, net | (256 | ) | 121 | (934 | ) | (526 | ) | ||||||||
Total other expense | (256 | ) | 121 | (934 | ) | (526 | ) | ||||||||
Income before income taxes | 8,786 | 6,425 | 34,097 | 21,258 | |||||||||||
Income tax provision | 2,778 | 2,338 | 11,783 | 7,773 | |||||||||||
Net income | $ | 6,008 | $ | 4,087 | $ | 22,314 | $ | 13,485 | |||||||
Net income per share: | |||||||||||||||
Basic | $ | 0.10 | $ | 0.07 | $ | 0.38 | $ | 0.24 | |||||||
Diluted | $ | 0.10 | $ | 0.07 | $ | 0.37 | $ | 0.23 | |||||||
Weighted-average number of shares used in computing net income per share: | |||||||||||||||
Basic | 58,938 | 57,353 | 58,338 | 56,397 | |||||||||||
Diluted | 60,073 | 59,263 | 59,693 | 58,664 | |||||||||||
Comprehensive income: | |||||||||||||||
Net income | $ | 6,008 | $ | 4,087 | $ | 22,314 | $ | 13,485 | |||||||
Other comprehensive loss: | |||||||||||||||
Unrealized loss on available-for-sale marketable securities, net of tax | (23 | ) | (34 | ) | (36 | ) | (67 | ) | |||||||
Comprehensive income | $ | 5,985 | $ | 4,053 | $ | 22,278 | $ | 13,418 |
Nine months ended October 31, | |||||||
(in thousands) | 2016 | 2015 | |||||
Cash flows from operating activities: | |||||||
Net income | $ | 22,314 | $ | 13,485 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 9,543 | 5,730 | |||||
Amortization of deferred financing costs | 53 | — | |||||
Deferred taxes | (1,880 | ) | (1,505 | ) | |||
Stock-based compensation | 6,399 | 4,254 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 244 | (868 | ) | ||||
Inventories | (324 | ) | (190 | ) | |||
Other assets | (3,955 | ) | (1,421 | ) | |||
Accounts payable | (973 | ) | 415 | ||||
Accrued compensation | (3,117 | ) | (1,403 | ) | |||
Accrued liabilities | 1,666 | 568 | |||||
Other long-term liabilities | 1,059 | (293 | ) | ||||
Net cash provided by operating activities | 31,029 | 18,772 | |||||
Cash flows from investing activities: | |||||||
Purchases of marketable securities | (275 | ) | (40,213 | ) | |||
Purchase of property and equipment | (2,705 | ) | (1,882 | ) | |||
Purchase of software and capitalized software development costs | (6,799 | ) | (4,757 | ) | |||
Purchase of other investments | — | (500 | ) | ||||
Acquisition of intangible member assets | — | (33,821 | ) | ||||
Net cash used in investing activities | (9,779 | ) | (81,173 | ) | |||
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 | 4,546 | 1,751 | |||||
Tax benefit from exercise of common stock options | 15,909 | 11,315 | |||||
Deferred financing costs paid | — | (153 | ) | ||||
Net cash provided by financing activities | 20,455 | 36,405 | |||||
Increase (decrease) in cash and cash equivalents | 41,705 | (25,996 | ) | ||||
Beginning cash and cash equivalents | 83,641 | 111,005 | |||||
Ending cash and cash equivalents | $ | 125,346 | $ | 85,009 | |||
Supplemental disclosures of non-cash investing and financing activities: | |||||||
Purchases of property and equipment included in accounts payable or accrued liabilities at period end | $ | 569 | $ | 221 | |||
Purchases of software and capitalized software development costs included in accounts payable or accrued liabilities at period end | 185 | 215 | |||||
Deferred financing costs | — | 150 |
Three months ended October 31, | Nine months ended October 31, | |||||||||||||||
(in thousands) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Cost of revenue | $ | 462 | $ | 304 | $ | 1,258 | $ | 740 | ||||||||
Sales and marketing | 364 | 218 | 930 | 705 | ||||||||||||
Technology and development | 487 | 290 | 1,290 | 677 | ||||||||||||
General and administrative | 755 | 671 | 2,921 | 2,132 | ||||||||||||
Total stock-based compensation expense | $ | 2,068 | $ | 1,483 | $ | 6,399 | $ | 4,254 |
October 31, 2016 | October 31, 2015 | % Change | January 31, 2016 | |||||||||
HSA Members | 2,378,353 | 1,602,156 | 48 | % | 2,140,631 | |||||||
Average HSA Members - Year-to-date | 2,278,994 | 1,516,821 | 50 | % | 1,600,327 | |||||||
Average HSA Members - Quarter-to-date | 2,354,227 | 1,580,482 | 49 | % | 1,850,843 | |||||||
HSA Members with investments | 58,226 | 40,695 | 43 | % | 44,680 |
(in thousands, except percentages) | October 31, 2016 | October 31, 2015 | % Change | January 31, 2016 | |||||||||||
Cash AUM | $ | 3,713,290 | $ | 2,307,914 | 61 | % | $ | 3,278,628 | |||||||
Investment AUM | 570,553 | 385,243 | 48 | % | 405,878 | ||||||||||
Total AUM | $ | 4,283,843 | $ | 2,693,157 | 59 | % | $ | 3,684,506 | |||||||
Average daily cash AUM - Year-to-date | $ | 3,596,571 | $ | 2,207,732 | 63 | % | $ | 2,326,506 | |||||||
Average daily cash AUM - Quarter-to-date | $ | 3,669,480 | $ | 2,269,253 | 62 | % | $ | 2,682,827 |
Three months ended October 31, | Nine months ended October 31, | |||||||||||||||
(in thousands) | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Net income | $ | 6,008 | $ | 4,087 | $ | 22,314 | $ | 13,485 | ||||||||
Interest income | (137 | ) | (116 | ) | (385 | ) | (302 | ) | ||||||||
Interest expense | 69 | 23 | 206 | 23 | ||||||||||||
Income tax provision | 2,778 | 2,338 | 11,783 | 7,773 | ||||||||||||
Depreciation and amortization | 2,335 | 1,656 | 6,329 | 4,503 | ||||||||||||
Amortization of acquired intangible assets | 1,083 | 409 | 3,214 | 1,227 | ||||||||||||
Stock-based compensation expense | 2,068 | 1,483 | 6,399 | 4,254 | ||||||||||||
Other (1) | 323 | (29 | ) | 1,113 | 804 | |||||||||||
Adjusted EBITDA | $ | 14,527 | $ | 9,851 | $ | 50,973 | $ | 31,767 |
(1) | For the three months ended October 31, 2016 and 2015, Other consisted of non-income-based taxes of $86 and $77, other costs of $237 and $81, and acquisition-related costs of $0 and $(187) respectively. For the nine months ended October 31, 2016 and 2015, Other consisted of non-income-based taxes of $260 and $249, acquisition-related costs of $595 and $474, and other costs of $258 and $81, 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 |