HealthEquity Q2 FY26 Earnings Call: Navigating the Future of Healthcare

HealthEquity, Inc. (HQY) reported Q2 2026 earnings, with CEO Scott Cutler and CFO James Lucania discussing the results. The company's financial performance included certain non-GAAP measures. KeyBanc Capital Markets' Scott Schoenhaus and Deutsche Bank AG's George Hill were among the analysts on the call.

HealthEquity, Inc. (HQY) reported its second-quarter 2026 earnings, highlighting robust financial performance and raising its fiscal 2026 guidance. The company's CEO, Scott Cutler, and CFO, James Lucania, discussed the results during the earnings call, addressing analysts' queries from KeyBanc Capital Markets' Scott Schoenhaus and Deutsche Bank AG's George Hill.

The company reported a 9% year-over-year increase in revenue, with service revenue growing 1% to $117.9 million and custodial revenue surging 15% to a record $159.9 million. Gross profit reached a record 71% of revenue, up from 68% in the second quarter of 2025. HealthEquity's adjusted EBITDA margin also improved to 46%, an all-time quarterly high. The company ended the quarter with over 17 million total accounts, nearly 10 million HSAs, and HSA assets exceeding $33 billion.

HealthEquity's HSA assets increased by $3.7 billion year-over-year, with the number of HSA members who invest growing by 10% and driving invested assets up 23% to $16.1 billion. The company's V5 platform transition to 100% cloud-based resulted in a 92% faster response time and an 80% reduction in delays.

CEO Cutler highlighted the company's ongoing adoption of AI-driven services and mobile-first platforms, noting that the company has processed millions of dollars in reimbursements while driving member satisfaction scores up and reducing processing costs. He also discussed the impact of the July budget bill, which expanded the market for HSA adoption by allowing direct primary care arrangements and the use of low-cost telehealth before consumers meet their deductibles.

CFO Lucania reported that the company repurchased approximately $66 million of its outstanding shares during the quarter and expects to continue this strategy. He also noted that the company generated $200 million in cash flow from operations in the first half of fiscal 2026.

HealthEquity raised its fiscal 2026 guidance, now expecting revenue between $1.29 billion and $1.31 billion, GAAP net income of $185 million to $200 million or $2.11 to $2.28 per share, non-GAAP net income between $329 million and $344 million or $3.74 to $3.91 per share, and adjusted EBITDA between $540 million and $560 million. The company plans to invest in sales and marketing efforts related to the bronze planned HSA expansion and expects continued strong cash flows and available borrowings on its revolver to support further portfolio acquisitions if available.

Analysts questioned the company on various aspects, including fraud reduction, market expansion, and interest rate exposure. Management responded confidently, highlighting new market opportunities, ongoing efficiency gains, and increased investments in technology and marketing.

HealthEquity's Q2 call emphasized significant progress on fraud reduction, AI-driven service efficiency, and cloud migration, while raising full-year guidance on both revenue and earnings. The company is actively preparing to capitalize on the largest HSA market expansion in two decades by investing in mobile technology, targeted marketing, and operational scalability, with management expressing confidence in sustaining margin expansion and market share gains despite ongoing macroeconomic and regulatory uncertainties.

References:
[1] https://seekingalpha.com/news/4491485-healthequity-raises-fiscal-2026-guidance-to-1_31b-revenue-and-3_91-eps-while-advancing-ai