HealthEquity's Q4 2025 Earnings: Revenue Surge Amidst Challenges

HealthEquity, Inc. (HQY) reported its fourth-quarter 2025 earnings, revealing a mixed performance with a revenue beat but an earnings per share (EPS) miss. The company’s revenue reached $3.11 billion, surpassing the forecast of $305.82 million, while EPS came in at $0.69, below the expected $0.72. Following the earnings release, shares dropped 11.59% in aftermarket trading, closing at $89.89. With a market capitalization of $8.8 billion, InvestingPro analysis suggests the stock is currently trading above its Fair Value, despite maintaining a "GREAT" overall financial health score of 3.27 out of 5.

HealthEquity’s revenue exceeded expectations, reaching $3.11 billion. EPS fell short of forecasts, reported at $0.69 versus $0.72 expected. The stock fell 11.59% in aftermarket trading post-earnings release. The company launched new products, including AI-driven benefits tools. HealthEquity opened 471,000 new Health Savings Accounts (HSAs) in Q4.

HealthEquity demonstrated strong revenue growth in the fourth quarter of 2025, with a 20% increase year-over-year, driven by significant gains in service, custodial, and interchange revenues. The company’s impressive 28% five-year revenue CAGR and robust gross profit margin of 65.3% underscore its strong market position. Despite these gains, the company faced challenges in meeting EPS expectations, which may have contributed to the negative market reaction. The company continues to expand its market presence, achieving a record number of new HSA accounts and maintaining high client retention rates. For deeper insights into HealthEquity’s growth metrics and valuation, InvestingPro subscribers have access to 13+ additional exclusive tips and comprehensive financial analysis.

HealthEquity’s EPS of $0.69 fell short of the forecasted $0.72, marking a miss of approximately 4.2%. This contrasts with the company’s historical trend of meeting or exceeding EPS expectations. However, the revenue of $3.11 billion surpassed expectations, reflecting strong operational performance.

Following the earnings announcement, HealthEquity’s stock experienced a significant drop, falling 11.59% in aftermarket trading to $89.89. This decline contrasts with the company’s 52-week high of $115.59 and indicates investor concerns over the EPS miss despite strong revenue growth. Notably, the stock has shown resilience with a 29.9% price return over the past six months, and InvestingPro data reveals a relatively low beta of 0.62, suggesting lower volatility compared to the broader market.

Looking ahead, HealthEquity has set a revenue guidance range for fiscal year 2026 between $1.280 billion and $1.305 billion. The company expects GAAP net income to be between $164 million and $179 million, with non-GAAP net income projected between $318 million and $333 million. Adjusted EBITDA is anticipated to range from $525 million to $545 million.

CEO Scott Cutler highlighted the company’s achievements in the HSA market, stating, "Surpassing the million new HSA accounts has never been done by anyone before in our industry." Cutler also emphasized HealthEquity’s commitment to healthcare transparency and affordability, saying, "We are addressing the market’s appetite for greater healthcare transparency and affordability."

Margin pressure from fraud-related expenses could impact profitability. Cybersecurity and fraud concerns remain a significant risk. Legislative changes affecting HSA contributions could alter market dynamics. Competition in the HSA market may intensify, affecting growth. Economic uncertainties could impact consumer spending and HSA contributions.

During the earnings call, analysts questioned HealthEquity’s strategies for addressing cybersecurity and fraud concerns. The company also discussed potential legislative changes that could expand HSA contributions, which could positively impact future growth. Additionally, analysts inquired about the impact of margin pressures related to fraud-related expenses, which the company is addressing through increased technology and security investments.