HealthEquity's Q1 2026: Unpacking Contradictions in Fraud Costs, Market Expansion, and Sales Confidence

Fraud cost and service cost reductions, economic environment and enterprise sales confidence, fraud cost expectations, addressable market expansion, and fraud prevention investments are the key contradictions discussed in HealthEquity, Inc.'s latest 2026Q1 earnings call.



Strong Financial Performance and Revenue Growth:
- HealthEquity reported a 15% increase in revenue for Q1 fiscal 2026, with adjusted EBITDA up 19%.
- The growth was driven by strong year-over-year growth across key metrics, including HSA accounts growing 9% and CDB accounts increasing 4%.

HSA and Investment Asset Expansion:
- HealthEquity ended Q1 with over 17 million total accounts, including 9.9 million HSAs, holding over $31 billion in HSA assets.
- The number of HSA members who invest grew by 16% year-over-year, helping to drive invested assets up 24% to $14.2 billion.

Fraud Prevention and Security Improvements:
- HealthEquity significantly reduced fraud service costs from about $11 million in Q4 to $3 million in Q1.
- This reduction is attributed to improved fraud detection and advanced security measures, including the deployment of a secure mobile experience.

Proposed Legislative Changes and Market Expansion:
- The House passed a budget bill containing provisions that would expand the use of HSAs, including allowing Medicare Part A beneficiaries to contribute to HSAs.
- These changes are anticipated to increase the addressable market by potentially 20 million families, expanding HealthEquity's growth opportunities.