HealthEquity (HQY) reported strong financial results for the fourth quarter and fiscal year ended January 31, 2024. The company exceeded both revenue and earnings expectations and provided optimistic guidance for the fiscal year ending January 31, 2025. Shares have rallied to $85 in after hours trade. This marks its best level since February 2022.
In the fourth quarter, HealthEquity generated revenue of $262.4 million, a 12% increase compared to the same period last year. This growth was driven by a rise in service revenue, custodial revenue, and interchange revenue.
The company's net income for the quarter was $26.4 million, a significant improvement from a net loss of $0.2 million in the prior year's fourth quarter. Non-GAAP net income was $55.0 million, compared to $31.3 million in the same period last year. Adjusted EBITDA increased by 34% to $98.8 million, indicating strong operational performance.
For the full fiscal year, HealthEquity achieved revenue of $999.6 million, up 16% from the previous year. The company's net income was $55.7 million, compared to a net loss of $26.1 million in the prior fiscal year. Non-GAAP net income showed even stronger growth, reaching $195.5 million. Adjusted EBITDA for the fiscal year was $369.2 million, representing a 36% increase.
Looking ahead to the fiscal year ending January 31, 2025, HealthEquity expects revenue to range between $1.14 billion and $1.16 billion. Management anticipates net income to be in the range of $73 million to $88 million, leading to a net income per diluted share of $0.83 to $0.99. Non-GAAP net income is projected to be between $247 million and $262 million, resulting in a non-GAAP net income per diluted share of $2.79 to $2.96. Additionally, the company forecasts Adjusted EBITDA of $438 million to $458 million.
HealthEquity's strong financial performance can be attributed to increased revenue across its service, custodial, and interchange segments. The company's earnings growth was further supported by improved net income and Adjusted EBITDA margins. The favorable guidance for the upcoming fiscal year highlights HealthEquity's confidence in its ability to sustain growth and profitability. Investors should consider HealthEquity's robust financial performance and positive outlook for the future. The company's continued success in the healthcare industry positions it well for potential investment opportunities. However, as with any investment, it is essential to conduct thorough research and analysis to make informed decisions.