Healthequity 2026 Q3 Earnings Net Income Surges 806% as Guidance Raised

HealthEquity (HQY) reported Q3 2026 earnings that beat expectations, with EPS rising 757.1% to $0.60 and revenue up 7.2% to $322.16 million. The company raised fiscal 2026 guidance, reflecting strong performance and strategic momentum.

Revenue

HealthEquity’s total revenue grew to $322.16 million in Q3 2026, driven by robust contributions across segments. Service revenue accounted for $120.29 million, while custodial revenue reached $159.07 million, the largest segment. Interchange revenue added $42.81 million, rounding out the total. The performance underscores the company’s diversified revenue streams and operational strength.

Earnings/Net Income

Earnings per share (EPS) surged 757.1% year-over-year to $0.60, while net income jumped 806.4% to $51.69 million. These figures highlight the company’s profitability expansion and efficiency gains, with the 13-year high in Q3 net income underscoring long-term strategic success. The significant EPS and net income growth reflect strong cost management and operational leverage.

Post-Earnings Price Action Review

The strategy of buying Healthequity shares 30 days after earnings reports with raised revenue forecasts showed moderate returns over three years. While achieving a 16.75% CAGR, the strategy underperformed the benchmark by 14.91% in excess returns, with a Sharpe ratio of 0.45 and zero maximum drawdown. Despite resilience in volatile markets, the performance suggests alignment with the benchmark rather than outperformance, emphasizing stability over aggressive growth.

CEO Commentary

CEO Scott Cutler emphasized Q3’s 7% revenue growth, 806% net income surge, and 20% adjusted EBITDA expansion, driven by a 71% gross margin. Strategic priorities include expanding HSA adoption through new clients, ACA exchange retail HSAs, and a streamlined digital platform. Cutler highlighted progress in the “save, spend, invest” flywheel, AI-driven service efficiency, and regulatory tailwinds, expressing confidence in Q4 and 2027 outlooks.

Guidance

HealthEquity raised fiscal 2026 revenue guidance to $1.302B–$1.312B and non-GAAP net income to $341M–$348M ($3.87–$3.95 EPS). Adjusted EBITDA guidance of $555M–$565M reflects margin expansion via AI and operational efficiency. The company also reaffirmed share repurchase plans and expects to provide 2027 guidance in January.

Additional News

HealthEquity launched a GLP-1 platform and direct HSA enrollment service, enhancing access to affordable healthcare solutions. The company returned $93.7 million to shareholders via share repurchases in Q3, with $259 million remaining in its buyback program. Additionally, HealthEquity expanded its digital marketplace to offer GLP-1 programs, aligning with growing demand for integrated health and wellness solutions.

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