What are the early engagement trends for users of the new marketplace offerings, and how does this impact cash contributions?

Early trends for the three initial marketplace programs (weight loss, hormone replacement, wearables) are very positive, with good sign-ups and retention. The company observes that members who spend in the marketplace tend to contribute more to their HSAs, reinforcing the 'spend flywheel.' Marketplace revenue is not materially included in the FY27 guidance, indicating potential upside. “The early trends are very positive. And again, we expect that program to expand over time.”

Can you comment on the conversion rates and cadence of members coming from the ACA exchange Bronze plans?

It's still early innings for the ACA cohort, as the enabling law was signed in July and plans were already filed. The company is working with health plan partners to simplify the enrollment process for Bronze plan members. They are encouraged by early progress seen in January and believe there's significant opportunity as awareness of HSA eligibility grows among these consumers. “Early innings, but we're encouraged and now at least we have a little bit of a running head start because the law did not pass after the plans were filed, if that makes sense.”

How are current unemployment trends and the broader macro environment factored into the fiscal 2027 guidance?

Despite a weak macro environment, with only 181,000 jobs created in the U.S. last year, HealthEquity delivered record HSA sales. This is attributed to the persistent challenge of healthcare affordability for both employers and consumers, which drives greater adoption of HSAs. Management expects these counteracting forces to continue enabling strong performance despite ongoing macro headwinds. “We don't see the macro environment changing. We think it's going to continue into this year. But we think the other counteracting forces there around health care affordability and driving greater adoption are things like we've seen this year that have enabled us to be able to drive significant performance in the business despite that weaker macro backdrop.”

HQY

HealthEquity (HQY) Q4 FY26 earnings call: guidance and Q&A

Earnings call· Jan 2026 (Q4 FY26)· Health Care· Mar 17, 2026

Source: earnings call transcript

Executive summary

HealthEquity Q4 FY26 — Record HSA Sales and Strong Margin Expansion

HealthEquity delivered a strong Q4 FY26, marked by record HSA sales, significant margin expansion, and robust earnings growth, driven by the operating leverage of its platform. The company is strategically investing in AI and expanding its marketplace offerings, while benefiting from a constructive policy environment for HSAs, particularly with the ACA exchange expansion. Management expects continued growth and margin expansion in FY27, aiming for a fourth consecutive year in the 'Rule of 50' club.

Highlights

Record 550,000 HSAs added in Q4, contributing to over 1 million new HSAs from sales for the year, bringing total accounts to 17.8 million and HSA Assets to over $36 billion.
Adjusted EBITDA grew 23% in Q4, with adjusted EBITDA margin expanding over 500 basis points to 40%.
Gross margin expanded over 700 basis points to 68% in Q4, driven by reduced fraud costs and service efficiency.
Non-GAAP net income per diluted share grew 38% to $0.95 in Q4, reflecting meaningful margin expansion.
Returned over $300 million to shareholders through share repurchases in FY26, reducing diluted shares outstanding by approximately 3%.

Concerns

The U.S. economy added only 181,000 jobs in FY26, presenting a macro headwind against which the company still achieved record HSA sales.

Guidance & targets

Category	Target	Timeline	Confidence
Revenue	$1.405 billion to $1.415 billion high materiality	FY27	High
GAAP Net Income	$239 million to $246 million high materiality	FY27	High
GAAP EPS	$2.78 to $2.85 per share high materiality	FY27	High
Non-GAAP Net Income	$392 million and $400 million high materiality	FY27	High
Non-GAAP EPS	$4.56 and $4.65 per share high materiality	FY27	High
Adjusted EBITDA	$618 million and $628 million high materiality	FY27	High
GAAP and Non-GAAP Income Tax Rate	approximately 25% medium materiality	FY27	High
Diluted Share Count	86 million medium materiality	FY27	High
Average Yield on HSA Cash	approximately 3.8% medium materiality	FY27	High

HQY operating KPIs by quarter

HQY operating KPIs stated on its earnings calls, by fiscal quarter
KPI	This call Jan 2026 Q4 FY26	Apr 2026 Q1 FY27	Jul 2026 Q2 FY27	Change vs prior quarter
New HSAs added	550K In the fourth quarter, we delivered 23% adjusted EBITDA growth and more than 500 basis points of adjusted EBITDA margin expansion, while adding a record 550,000 HSAs, resulting in more than 1 million new HSAs from sales for the year, bringing total accounts to 17.8 million and HSA Assets to more than $36 billion. Source: earnings call transcript	172K New HSAs from sales grew 15%, introducing 172,000 new HSAs to our platform. Source: earnings call transcript	—	-68.7%
App downloads	3.6M+ We now have more than 3.6 million downloads of our app, reflecting the growing adoption of digital-first healthcare. Source: earnings call transcript	—	5M+ Monthly active users on the app reached 1.4 million in July, up 62% year-over-year, while total app downloads exceeded 5 million. Source: earnings call transcript	—
Clients	100K+ That level of growth reflects the deeply integrated proprietary compliant platform with more than 200 network partners in over 100,000 clients, supported by a member first secure mobile experience. Source: earnings call transcript	—	~100K So, look, I mean, one of the benefits of having around 100,000 or more clients is we see all different types, right? Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Product announcements

Product	Type	Timeline	Details
Marketplace	launch	Q4 FY26

Risks & headwinds

Macroeconomic environment / low job growth FY26, expected to continue into FY27

U.S. economy added just 181,000 jobs in FY26.

Mitigation:Healthcare affordability pressures drive HSA adoption, counteracting macro headwinds.

Interest rate volatility impacting custodial revenue Contracts mature between March 2026 and January 2028

Notional amount of $2.4 billion in forward contracts at 3.92% blended rate lock.

Mitigation:Use of interest rate forward contracts and migration to enhanced rates program (58% of cash in enhanced rates, targeting 80%).

What to watch in Q1 FY27

Gross margin expansion from AI and service efficiency

Next quarter / FY27

Current Q4 gross margin 68%, up 700 bps YoY. Service costs declined $17M YoY.

Target Continued expansion, further automation of client integration processes.

Why it matters

Demonstrates operating leverage and efficiency gains from technology investments, impacting profitability.

I really think that we've got tremendous opportunities to continue to drive that gross margin expansion with a particular focus on the way that we deliver our service.

Find out whether HQY delivers this. Inve re-checks your case every morning.

Q&A highlights

How should gross margin evolve going forward, considering fraud cost reductions, AI initiatives, and app adoption?

Management is very proud of the fraud cost reduction and service efficiency gains. They believe there are tremendous opportunities to further drive gross margin expansion, particularly through AI, by automating manual and phone-based interactions and improving client integration processes. They are still in the early stages of AI deployment but expect meaningful progress.

“I really think that we've got tremendous opportunities to continue to drive that gross margin expansion with a particular focus on the way that we deliver our service.”

asked by Mark Marcon · answered by Scott Cutler

2 min read 6 chapters

Detailed narrative

HSA Growth and Engagement Flywheel

HealthEquity's core strategy revolves around a 'flywheel' where members save, spend, and invest for healthcare. Total HSA assets increased 14% to over $36 billion, with asset growth outpacing account growth. Invested assets now represent over 50% of total HSA assets, and mobile app downloads reached 3.6 million, reflecting growing digital adoption.

The company notes that 95% of HSA members do not reach contribution limits and over 90% have not yet invested, indicating significant future growth potential through engagement.

Margin Expansion and Efficiency

The company achieved significant margin expansion in Q4 FY26, with adjusted EBITDA growing 23% and its margin expanding over 500 basis points to 40%. Gross margin expanded over 700 basis points to 68%, primarily driven by reduced fraud costs, which reached an exit run rate of 0.1 basis points in Q4, well below the 1 basis point target.

Service efficiency, enhanced by technology and AI investments, also contributed to a $17 million year-over-year decline in service costs.

AI Integration and Future Strategy

AI is a central component of HealthEquity's next-generation healthcare financial operating system. The company is embedding AI to elevate member experience (e.g., faster reimbursements, intelligent support tools), drive operational efficiency (reducing service costs, improving resolution speed), and unlock personalization (optimizing contributions, identifying tax savings).

AI is expected to become an 'earnings engine' by improving member experience, lowering costs to serve, and increasing lifetime value per account.

Marketplace Expansion

In Q4 FY26, HealthEquity launched its marketplace with initial offerings focused on weight loss programs, hormone replacement therapy, and health wearables. These categories represent a global market spend of over $100 billion. The marketplace aims to expand engagement within the HSA platform, introduce new recurring revenue streams, and increase the share of healthcare spend flowing through the platform.

Early adoption has shown encouraging retention rates among participating members, with management noting that marketplace revenue is not yet materially incorporated into FY27 guidance.

Policy Tailwinds and ACA Expansion

The policy environment for HSAs is described as the most constructive in two decades, largely due to the Working Families Tax Cuts Act. This legislation expanded HSA eligibility to Bronze plans on ACA exchanges, representing a significant structural change and democratization of HSAs.

HealthEquity is actively engaged with policymakers and health plan partners to simplify the enrollment process for newly eligible members and convert this policy momentum into growth, leveraging its network of over 200 partners and 100,000 clients.

Custodial Revenue and Interest Rate Management

HealthEquity ended FY26 with 58% of its HSA cash in enhanced rates contracts, with a goal to reach 80% in the near future. The company uses interest rate forward contracts, with a notional amount of approximately $2.4 billion tied to maturities between March 2026 and January 2028 at a blended rate lock of 3.92%.

This strategy aims to de-risk potential interest rate volatility and stabilize custodial revenue, making it more predictable over time.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.