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DATE

Thursday, May 28, 2026, at 4:30 p.m. ET

CALL PARTICIPANTS

• President and Chief Executive Officer — Scott R. Cutler
• Vice Chair and Founder — Stephen D. Neeleman
• Executive Vice President and Chief Financial Officer — James Lucania
• Vice President, Investor Relations — Richard Putnam

TAKEAWAYS

• Adjusted EBITDA Margin -- Reached 46%, up from 42% in the prior year period, reflecting margin expansion driven by operational efficiencies.
• Revenue -- Increased 7% year over year, with custodial revenue at $174 million, service revenue at a record $123 million, and interchange revenue growing 5% to $57.4 million.
• HSA Assets -- Grew 19% overall, with 172,000 new HSAs added (15% increase from sales), and total HSA account growth of 8%, exceeding Devenir's industry growth of 6% (calendar year 2025).
• HSA Investors -- Increased 18%; invested HSA assets grew 38%, highlighting more members using tax-advantaged investment features.
• Mobile Engagement -- Monthly active mobile usage increased 90% year over year; more than two-thirds of marketplace transactions now occur on the mobile app.
• AI and Automation Impact -- AI-driven tools reduced manual handling of member and client service emails by 25%; targeted workflows such as card servicing and claims saw over 90% reduction in manual processing, with processing times accelerated by up to 50%.
• Fraud Cost -- Fraud costs declined nearly 90% versus the prior year, with service costs including $300,000 in member fraud reimbursements (down from $3.2 million last year).
• Net Income -- Recorded $69.4 million GAAP net income ($0.82 per diluted share) and $105 million non-GAAP net income ($1.24 per diluted share).
• Cash Flow and Debt -- Generated $98 million in operating cash flow, ended with $265 million in cash, and reported approximately $943 million in debt net of issuance costs.
• Share Repurchases and Authorization -- Repurchased $123 million in shares during the quarter; board increased share repurchase authorization by $1 billion.
• Yield on HSA Cash -- Annualized yield on HSA cash reached 3.84% (3.78% excluding a one-time depository breakage fee); forward treasury contracts lock rates of approximately 3.9% for portions of cash maturing through fiscal 2029.
• Guidance Update -- Fiscal 2027 guidance raised: revenue now expected between $1.41 billion and $1.42 billion, GAAP net income of $242 million-$248 million ($2.88-$2.95 per share), non-GAAP net income of $392 million-$398 million ($4.66-$4.73 per share), and adjusted EBITDA between $625 million-$633 million (based on 84 million shares outstanding).
• Marketplace (Mark) Expansion -- “Mark” now serves more than 10,000 members; product scope expanded to include diagnostics and men's health, with no significant marketing spend required to drive participation.
• Medical Claims Utilization -- CFO Lucania said, "our medical claim usage utilization for our teammates was way down... below our expectations," accounting for about $2 million of service cost improvement; this decline is viewed as temporary and has been pushed out in the forecast.
• Capital Allocation -- Company emphasized continued share buybacks, debt reduction, and flexibility for strategic acquisitions, supported by consistent cash flow and revolver availability.

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RISKS

• CFO Lucania stated, “our medical claim usage utilization for our teammates was way down. And below, like, below our expectations,” indicating the improvement in service cost from low claims may be temporary and not indicative of sustainable lower cost; guidance assumes these costs will return.
• Management noted that “Interchange revenue grew 5% to $57.4 million reflecting higher member spend, and transaction activity.” slowed to just above 5%, with Lucania saying, “that is a little slower. Than it is been growing,” possibly reflecting reduced healthcare utilization.

SUMMARY

HealthEquity (HQY 3.72%) advanced its growth strategy by reporting notable margin expansion, robust digital engagement, and an increased share repurchase program, while management raised fiscal 2027 guidance. AI-driven operational improvements significantly reduced fraud and service costs, enabling the company to achieve new efficiencies without requiring higher levels of cash retention or increased regulatory capital. The company continued to gain market share in health savings accounts, outperforming industry-wide growth and benefiting from expanding product offerings within its digital marketplace platform.

• Management described the enterprise sales pipeline as “the, largest pipeline of enterprise sales that we have seen in years” and attributed improved client win rates to the combined impact of mobile app innovation, data-driven cost savings strategies, and enhanced security credentials.
• The “Mark” digital marketplace generated rapid, week-on-week member adoption across new program categories without “any marketing rhythm against it,” with management noting administrative fees as high as $90-$100 per participant per month in leading programs.
• Company leaders highlighted their ability to scale participation among both large organizations and small employers, and discussed working closely with partners and channels to capture accelerated growth in HSA-eligible segments, particularly among “bronze” plan enrollees.
• CFO Lucania explained that HealthEquity's trust and investment adviser businesses require relatively low regulatory capital compared to banks or insurance companies, enabling ongoing capital allocation flexibility and accelerated share repurchases without additional borrowing.
• AI adoption and digital self-service are still early in client integrations and claims automation, suggesting further room for efficiency gains and future cost structure improvements as these initiatives scale.

INDUSTRY GLOSSARY

• HSA (Health Savings Account): Tax-advantaged savings account available to individuals with high-deductible health plans, enabling tax-free saving and spending on qualified health expenses.
• Marketplace (Mark): HealthEquity’s proprietary digital platform for members to access curated health-related products, programs, and services eligible for HSA spending, often facilitated through the mobile app.
• Bronze Accounts/Plans: Health insurance plans with low premiums and higher deductibles, typically resulting in more members being HSA-eligible.

Full Conference Call Transcript

Richard Putnam: Thank you, Chuck. Hello, everyone. Thank you for joining us this afternoon. HealthEquity's first quarter fiscal 27 Earnings Conference Call. My name is Richard Putnam. I do Investor Relations for HealthEquity, and joining me today are Scott R. Cutler, President and CEO, Dr. Steve Neeleman, Vice Chair and founder of the company, and James Lucania, Executive Vice President and CFO. A press release announcing our first quarter financial results was issued after the market closed this afternoon and includes certain non GAAP financial measures that we will reference. Can find a copy of today's press release, including reconciliations of these non GAAP measures with comparable GAAP measures. On our Investor Relations website, ir. Healthequity.com.

Our comments and responses to your questions reflect management's view as of today. 05/28/2026. And will contain forward looking statements as defined by the SEC, including predictions, expectations, estimates, and other information that might be considered forward looking. There are many important factors relating to our business which could affect our results. These forward looking statements are subject to risks and uncertainties. May cause our actual results to differ materially from statements made here today.

Caution against placing undue reliance on these forward looking statements, and we encourage you to review the discussion of these factors and other risks that may affect our future results or the market price of our stock as detailed in our latest annual report on Form 10-K and subsequent periodic reports filed with the SEC. We assume no obligation to revise or update these forward looking statements in light of new information or future events. With that, let's go over to Scott.

Scott R. Cutler: Thank you, Richard, and welcome, everyone. Our first quarter results demonstrate disciplined execution against our mission and the strength of HealthEquity's financial model. We delivered higher profitability, expanded adjusted EBITDA margin to 46%, and are raising our fiscal 27 guidance. Execution of our strategy alongside accelerating growth is reinforcing confidence in the long term growth outlook for the business. That confidence is reflected in our raised fiscal 27 guidance and disciplined capital allocation including our decision to increase our share repurchase authorization by $1 billion Healthcare affordability remains among the biggest financial challenges families face. While rising healthcare costs are driving a structural shift among employers that continues to expand the overall market.

Against that backdrop, this quarter's results reflect our ability to empower health care consumers while driving operational leverage and durable growth across the business. HealthEquity is not simply an administrator. We operate a scaled health care financial platform that connects accounts, assets, payments, investing, marketplace, digital engagement, investment advisory capabilities, and service. Our strategy is to make that platform the healthcare financial operating system for members and clients. Expanding the value of each relationship while improving efficiency as we scale. The quarter, we outpaced industry account growth, grew assets, deepened engagement and applied technology and AI to improve service speed, strength and security, and lower cost to serve.

At a high level, our growth is driven by 2 forces working together. Growth in accounts and assets and expansion in lifetime value of each member relationship. Together, these support durable compounding as accounts mature. Let me start with account growth. Structural challenge of health care affordability continues to support demand for HSAs in health care financial solutions as more cost shift to consumers and employers and members need better ways to prepare for, manage, and pay for health care. We believe this dynamic supports long term category growth. The HSA remains the entry point to a long duration financial relationship. In the first quarter, total HSA assets grew 19%.

New HSAs from sales grew 15%, introducing 172 thousand new HSAs to our platform. Importantly, we bent the growth curve with total HSA growth of 8%, outperforming Devenir's reported market growth of 6%, for calendar year 2025. We are encouraged by the early momentum in our selling season. Client retention remains strong and we continue to see opportunities to win new clients in expand existing relationships. Our data and analytics capabilities are an important differentiator as clients look for ways to improve adoption, increase contributions, and manage health care costs over the long term. While account growth remains an important entry point, it is only 1 driver of our business. That brings me to engagement.

Members are engaging more deeply as they save, spend, and invest. That engagement expands the value of each relationship over time. Mark is an emerging driver of engagement. Mark is helping more than 10 thousand+ members access health related programs and products. This month, we expanded into diagnostics and men's health. We expect Mark to become an increasingly meaningful contributor to the lifetime value of each member. On investing, HSA investors grew 18%,. And invested assets held by our HSA members grew 38%,. With only about 10% of HSAs using the full tax benefits of investing industry wide, this represents a substantial long term opportunity.

As a reminder, investors tend to hold larger balances exhibit higher engagement, have higher average contributions, and spending over time. Over the past year we have significantly expanded digital engagement. With mobile monthly active usage increasing by 90% year over year in the quarter over 2-thirds of marketplace transactions occurred through our mobile app. Underscoring our long term strategy to deliver an engaging secure, and trusted digital experience that meets members where they are, Together account growth, asset growth, engagement, marketplace and investing support a flywheel that expands value per member and strengthens the durability of our revenue engine. Third part of the story is efficiency. We are applying technology and AI to improve the member experience.

Strengthen security, and lower cost to serve. We view AI as an operational amplifier. The quarter, AI driven tools reduced manual handling of member and client service emails by 25%,, improving response times and lowering workload. Certain targeted workflows such as card servicing and claims inquiries, AI enabled automation reduced manual efforts by more than 90% and accelerated processing times by up to 50%. AI enabled self-service and automation contributed to more than 50 thousand fewer card related service center contacts. Fraud remained below target card acceptance improved, and fraud cost declined nearly 90% compared with the first quarter of last year. For members, that means fewer calls and faster access. For clients, less administrative complexity.

For HealthEquity, a more scalable operating model. As we scale revenue driven by assets and transaction activity enhances durability and visibility. As accounts mature, they become more economically meaningful reducing reliance on new account volumes in any single year. Taken together, these dynamics reflect our evolution beyond administration to a health care financial operating system that helps members and clients address healthcare affordability while expanding value per member and improving efficiency over time. With that, I will turn it over to Jim to walk through our first quarter financial results, the drivers of our margin expansion and our raised fiscal 27 outlook.

James Lucania: Thanks, Scott. Hi, everyone. I will review our first quarter of our fiscal year 2027 GAAP and non GAAP financial results. Reconciliations of GAAP to non GAAP measures are included in today's press release. First quarter revenue increased 7% year over year, Service revenue was a record $123 million up 3% year over year, supported in part by marketplace activity. Custodial revenue grew 11% to a record 174 million. Annualized yield on HSA cash was 3.84%, reflecting higher replacement rates, increased participation in enhanced rates, and a 1-time breakage fee from a depository partner that exited a custodial cash contract early. Excluding this onetime revenue, our annualized yield on HSA cash would have been 3.78%,.

Interchange revenue grew 5% to $57.4 million reflecting higher member spend, and transaction activity. Gross profit was a record $250 million or 72% of revenue compared to 68%, in the first quarter last year. Service costs included approximately $300 thousand fraud reimbursements to members, down from approximately $3.2 million in the first quarter last year. Reflecting improved fraud prevention and detection capabilities and higher adoption of our secure mobile tools. Net income was $69.4 million or $0.82 per diluted share on a GAAP basis, Non GAAP net income was $105 million or $1.24 per diluted share.

Adjusted EBITDA was $165 million up 17% year over year Adjusted EBITDA was 46%, of revenue compared to 42% in the first quarter last year. Turning to the balance sheet. We ended the quarter with $265 million in cash, generated $98 million of operating cash flow and had approximately $943 million of debt outstanding net of issuance costs. During the quarter, we accelerated our share repurchase program buying $123 million of our outstanding shares. This week, the board increased our share repurchase authorization by $1 billion We expect to remain an active buyer of our shares while the market continues to, in our opinion, undervalue our consistent revenue growth and margin expansion.

Before discussing our raised guidance, I want to briefly address the HSA cash maturity schedule included in today's earnings release. We have $3.2 billion of remaining HSA cash contracts maturing in fiscal 27 weighted toward the back half of the year. We also have forward treasury contracts outstanding that effectively lock in 5-year treasury rates at approximately 3.9% net of costs on $3.5 billion of maturities across fiscal years 2027 through 2029. With current 5-year treasury yields higher than our average locked forward rates, we remind you that the purpose of this program is to reduce volatility, and narrow the range of potential outcomes tied to movements in the 5-year treasury benchmark.

Because these forward contracts are tied to future depository contract maturities We will have greater visibility into the economics of custodial cash placements into enhanced rates contracts. We will continue to evaluate additional forward hedges as appropriate. We now expect average yield on HSA cash will be approximately 3.85% during fiscal 27. As a reminder, our custodial yield assumptions are based on projected HSA cash deployments and rollovers, schedule of which is contained in today's release. As well as analysis of forward looking market indicators such as the secured overnight financing rate, and mid duration treasury forward curves.

These indicators are subject to change and may not accurately predict future market Our raised fiscal 27 guidance reflects the expected carry forward of the trajectories for revenue and margins the remainder of this year. Including technology and security investments to drive operational efficiencies. Mark adoption and expansion, and reduced volatility of yield placements this year benefiting from our rate lock. Program. For fiscal 27, we now expect revenue between 1.41 million+,000 and $1.42 billion GAAP net income of $242 million to $248 million or $2.88 to $2.95 per share. Non GAAP net income of $292 million to 2 sorry. $392 million to $398 million. Or $4.66 and $4.73 per share.

Based upon an estimated 84 million shares outstanding for the year. Adjusted EBITDA between $625 million and $633 million continue to invest in protecting our members' assets and data while providing them with a remarkable experience. Our guidance also reflects expected capital allocation activity, including additional share repurchases under the expanded authorization and potential reductions in revolver borrowings during the fiscal year. With continued strong cash flows and revolver availability, we expect to maintain ample capacity for portfolio acquisitions should attractive opportunities become available.

We assume a GAAP and a non GAAP income tax rate of approximately 25%, And as in prior periods, our fiscal 27 guidance includes a reconciliation of GAAP to the non GAAP metrics provided in the earnings release and definitions of these items are included at the end of the earnings release. In addition, while amortization of acquired intangible assets is being excluded from non GAAP net income, the revenue generated from those acquired intangible assets is included.

Operator: And with that, operator, please open the line for questions. Thank you. We will now begin the question and answer session. Please press star then 1 on your telephone If you are using a speakerphone, please pick up your handset before pressing the keys. Please limit yourself to 1 question and 1 follow-up. If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. And our first question for today will come from Stan Berenshteyn with Wells Fargo. Please go ahead.

Analyst (Stan Berenshteyn): Yes. Hi. Thanks for taking my questions. First, on Mark, would just love your thoughts on the strategic reinvestment there. Just I do not know, not to make this a multiple choice question here, but what is the gating function for you to start investing in sales or marketing to drive marketplace? Is it broader app adoption? Is it more products within Mark? Like, what is the gating function there?

Scott R. Cutler: Thank you. Yeah. there is there is really no gating function because it is not a channel that is dependent on marketing spend like other ecommerce sites would be. So it actually starts with engagement, Stan. So in driving that, we need to get people into the mobile experience. Mark is available in mobile and on the portal experience. Wanna drive engagement to our monthly active users. And then to be able to expose those members to the marketplace opportunities. And so as we look at where we are at, Q4 was just a proof of concept on marketplace.

Q1 was about scaling the foundations which included expanding the footprint of how visible it is across the interface, enhanced capabilities around MarkTech which is really just marketing to our existing members and then adding new programs We added TRT and diagnostics, into the marketplace. And so again, as we look at how that grows over time, it really is how we were converting our active members that are captive to HealthEquity into the marketplace experience. And so that really is just again driven by first and foremost, getting him into the digital experience. Got it. that is helpful. For the follow ups, so maybe on services, it was nice to see progress on services gross margins.

Obviously, you have some easy comps there versus last year, but excluding those, can you just update us on the progress you are seeing in AI automation and the efficiencies they are they are unlocking and maybe how that may progress through the balance of this year? Thank you. Yeah. We are really pleased with the progress that we have made around, improving our service cost per account, which is really the metric that we are driving across our teams. And we are driving that first and foremost by reducing contacts.

And reducing contacts is purely reflection of the quality of the product experience that we are delivering principally to our members and making sure that those experiences are seamless and that their ability to get a response can be driven by more self-service and automation. So when we look at the gains that we have experienced over the last year, we are seeing you know, call reductions associated with reduced fraud. Call reductions associated with no longer needing your password because you have adopted passkey, automating journeys, like replacing a card, checking a balance, and then increasingly more claims automation.

So collectively, the reduction of contacts, the automation of those contacts, is what drives efficiencies and we actually still believe while we have made great progress year over year, that we have so much more to go. And that opportunity is gonna continue to be unlocked by more and more of those journeys and those experiences in self-service in real time. In a digital experience as well as just improving the overall quality of service that we provide. Thanks, Dan.

Operator: Thank you. The next question will come from Greg Peters with Raymond James. Please go ahead.

Analyst (Greg Peters): Well, good afternoon, everyone. Hey. I wanted to kinda stick on the AI theme.

Scott R. Cutler: And, you know, you talked about some of the substantial progress that you have reported as a result of AI adoption. And I was just curious, how this might manifest itself, like, in I am I am looking in your statement of cash flows, looking at the software and capitalized software development costs, Because I guess, Scott, at some point, I would anticipate that this investment phase in AI would yield some savings on the on the expense side in that area.

James Lucania: Or category.

Scott R. Cutler: Yeah. You mean in tech and dev? Yes. Yeah.

James Lucania: Okay. So, yeah, a couple of things. As we introduce more AI into these journeys, we are obviously seeing the cost reduction associated with that.

Scott R. Cutler: The offset can be token usage and, you know, our use of compute to be able to drive that. Now while we are seeing that increase of cost associated with token use in our in our company, keeping that within the framework of our percentage of revenue associated with tech and dev which we believe across all of our lines, sales and marketing, G&A, tech and dev, we are gonna continue to be able to drive operating efficiency even with some of that spend shift happening.

So again, we think of our spend overall within the envelope of tech and dev And, you know, I think, again, speaking to the opportunity I highlighted in my remarks, across journeys that we are automating we are seeing that manual process or that time to resolve being reduced by 90%. The effort associated with the member getting resolution be able to be resolved automatically, seamlessly, self-service. So these are significant improvements in the member journey. I would say the other 2 areas that I would highlight where we are we are barely in the first inning, I would say first pitch, is really in client integrations So that is kind of that second bucket within the service cost.

And then and then the back office and claims automation, where we have millions of claims over the course of the year, we are still at the very beginning of that journey. Introducing AI in those areas. So, we are we are we are very excited about what we are seeing.

James Lucania: Yeah.

Analyst (Greg Peters): I am going to pivot for my follow-up question. Just to the balance sheet and capital management initiatives. Including a stock repurchase, 1 of the line items I track you know, pay attention to is the cash and cash equivalents you guys are holding at the at the company, you know, quarter to quarter and year to year. And you know, even as the company has grown both with accounts and revenue, and earnings, you are not seeing a increase in the demand or the necessary need to hold on to more cash to hold the co level to cover costs. So I was wondering maybe if you could sort of bridge the gap on what the cash requirements are.

James Lucania: Maybe they are coming down because of these improved efficiencies. But that is sort of what I wanted to focus on for my second question. Thanks for the answers, by the way. Yeah. Maybe I can take that 1. Yeah. Like, we are you know, regulated entities are pretty light at HealthEquity. So, like, there is not this we are not a bank. Right? So this require, like, massive capital requirement that you would expect to grow with that with assets. Like, that just does not exist in the company as it is currently formed. Like, sure, our trust company has capital requirements, and our registered investment adviser will have some capital requirements.

But, but, yeah, you should not think of it like a financial or an insurance company with this massive regulatory capital that would grow that would grow significantly with scale. You know, I think in the history of the company is sort of sat with lots of excess cash, and, you know, there is less of a less of a need less of a need to do so. Going forward. But, you know, the yeah. This is probably the lowest the lowest cash number that you have seen in a little bit.

But you know, but just read into that as a function of we have we have not had to drive every last dollar of discipline out of out of the cash, but have the ability to do so. You know, obviously, we repurchase more shares than we planned. And that is why we had the flexibility to do that. Without having to borrow. Thanks, Greg.

Operator: The next question will come from Alan Lutz with Bank of America. Please go ahead.

Analyst (Alan Lutz): Good afternoon, good afternoon. Thanks for taking the questions. 1 for Jim to follow-up on Stan's question on the service cost line item here. So it was it was much better than, I think, the street expected. Even if you back out about 3 million of fraud, from last year, it was still down. The service costs were down about $6 million year over year. Is there anything that is onetime in that in the first quarter here?

And as we think about the trajectory for the rest of the year, how should we think about taking that $6 million and kind of applying it as an improvement, is there anything we should contemplate, as we think about the improvement seeing within that line item?

James Lucania: Thanks. Yeah. Yeah. Thanks for that question. Yeah. So you will if you read the details in the queue, we do highlight 1 particular area And whether it is 1 time or not, we will we will see. But relative to what we guided to, our medical claim usage utilization for our teammates was way down. And below, like, below our expectations. So we have pushed that beat back out into the forecast. So talking to our outside adviser, talking to our contacts at the various payers, This appears to be a phenomenon seen across the market, and we are not declaring victory on that. Right?

I do not have any particular intel that says my 2.8 thousand people are miraculously much healthier than they were 3 months ago when we had the last medical claims forecast. So just in the service line alone, that was about $2 million. Of the year over year improvement. And that just feels seasonal to me. So our current expectation is that cost is gonna come back. So we push that we push that beat back out into the forecast and, you know, hopefully, that proves to be to be conservative. But, you know, this sort of you know, nothing has changed in the, in the cost assumptions that the actuaries are telling, our corporate clients to expect.

Scott R. Cutler: Okay.

James Lucania: Really interesting. And then included.

Scott R. Cutler: Yeah. Ourselves included.

James Lucania: Yeah.

Scott R. Cutler: Okay.

James Lucania: Thanks for that, Jim. And then as a follow-up And the rest is real beef. The rest is real, year-over-year efficiency.

Scott R. Cutler: Yeah. Super strong.

Analyst (Alan Lutz): Perfect. And then, for my follow-up here, around the market marketplace, you mentioned more than 10 thousand+ members utilizing that. Which I think is could be low millions of revenue. Can you remind us that Mark revenue in the guide as of, the update here? Thanks. Yeah.

James Lucania: So Yeah. So go ahead, Scott.

Scott R. Cutler: Jim, you can speak to the guide. I can Yeah.

James Lucania: So that so that current like, that exit rate is reflected in our Outlook now. And then Scott can speak to the to the rest of that question.

Scott R. Cutler: Yeah. So, Alan, when we when we when we look at that yeah. So we are we crossed over well over 10 thousand+ actually But I think when you look at it and you look at it over time, in building that model, from a from a member perspective, it is gonna be what member how many members are transacting in the marketplace, what are they transacting in, Do they stay in those programs? And so if you look at the 5 things that we have in the program today, men's and women's health, metabolic through GLP, Oura Ring, diagnostics. Each of those have a different revenue profile, and a fee profile associated with that.

And, you know, I think we are still very pleased with what we are seeing at launch and quite frankly, the week on week growth of participating members in the marketplace that we are experiencing. Just last week when we launched diagnostics and men's health. We saw a very rapid uptake in the absence of any marketing rhythm against it. Just introducing new tiles into the marketplace, which again gives us a significant amount of confidence that even the adoption curve of our early products and marketplaces are being followed by other programs as we add them into the marketplace. Thanks, Alan.

Operator: Your next question will come from Sean Dodge with BMO Capital Markets. Please go ahead.

Analyst (Sean Dodge): Yeah. Thanks. I guess afternoon. Maybe just on the app downloads, now. And, Scott, you talked about the flywheel effect of all this starting to kind of have. Which with the new app users, when we think about the app and how it mitigates, customer service costs and increases engagement, also provides you the conduit for the marketplace, If we add all of those things up, is there a way to kinda quantify, like, how does an app user compare economically both in terms of kinda, like, the revenue benefits and the cost benefits? How does an app user compare economically to a non app user?

Scott R. Cutler: Yeah. So it is not exact, but in terms of like right now there are a few features in the app that allow you to, for example, activate a card with a push of a button. As an example. As the app develops over time and this is 1 of our key product priorities, is bringing together all of our products into 1 single app, powered by AI, powered by personalization, including self-service across all of our different service functions, and be able to do that digitally. And so that will come at a lower cost because you are able to self serve a lot of those things.

But going to engagement engagements is really important part of driving lifetime value. So when you look at 2 thirds of our transactions happening on app, in the marketplace, that is an example of driving lifetime value. As you look at our ability to drive investors and certainly the significant growth that we had in investors on a year-over-year basis is really driven by enrollment through the app add enrollment to be able to get you to sign up and become an investor very early on and as we introduce new experiences in that flow on the app, we saw improvements there. And so I see it as both a service and a revenue benefit.

The revenue again being more of the engagement flywheel for all that means. And all of the different areas where we drive lifetime value and then service being able to introduce AI self-service education, and help right into the app experience. And again, when we can do that, it is also part of that flywheel because if you are going to the app for self-service then you are actually seeing the other things that we can offer and provide. So that a nutshell is the digital strategy.

Analyst (Sean Dodge): Okay. that is great. And then maybe just going back to the marketplace. So said well over 10 thousand+ members now. I know you said they are they are some variation in terms of what people can participate in the difference per or the different programs. Is there anything you can share more specifically around, like, how much revenue is Mark contributing now And then the 3 initial programs you launched, the Oura Ring, the GLPs, and the HRT, is there 1 of those in particular you are kinda seeing most traction with?

Scott R. Cutler: Yeah. So we are not breaking out marketplace revenue at this time, and I think it will be a while before it is material relative to our overall revenue. It will actually show up in service revenue. I think of our 3 earliest programs metabolic health through access to weight loss is the most active program. The economics in terms of administrative fee per member 90 to $100 per member per month participating in that program. that is our most robust program so you just you know, do the member math on that as long as they stay on. that is very active program.

I will say even though it is new adding in Menthal through TRT just in a week, we are seeing actually very significant daily adoption already at a very aggressive growth curve and that while not as large of an economic opportunity as maybe more of a longer term subscription. That will likely be longer lasting than potentially weight loss and the economics of that are you know, north of $50, per participating member. Per month. Again, as we develop this over time we will have other areas in marketplace.

For example, we are part of and we will be launching Oura Ring 5 next week, which we are excited about, and we are, you know, receiving a per transaction charge associated with that. Diagnostics as another example, a different program, different economics. You are you are signing up for an annual subscription and then it is gonna be a function of that annual subscription and that renewal. So again, on a on a blended basis, what we are looking for is know, putting in front of our members very valuable products and programs and services that are very much informed by what we know they are already spending dollars on. Okay. Greg. Thanks again.

Operator: Next question will come from Scott Schuhaus with KeyBanc. Please go ahead.

Analyst (Scott Schoenhaus): Hey, guys. Thanks for taking my question. I kind of want to focus on account growth. Clearly, you are taking market share. Any color from where we stood last quarter on the bronze accounts what you are seeing in the marketplace, what you are seeing in terms of taking market share in that category, and what their comp Yeah.

Scott R. Cutler: I would say bronze opportunity is still very early. The market expansion has been real. You have actually seen bronze adoption be significant higher. Given expiring subsidies. But that being said, the materiality of bronze right now in terms of both a accounts or contribution of revenue is very low. We expect them to come in over time. A portion of our 172 thousand new accounts came through the retail channel that we would associate with that with that bronze opportunity. So that is how we think about it. Relative to the overall market, I think what we are very pleased with is bending the curve in the growth rate of the business overall represented by HSA account growth.

So to be able to see quarter on quarter acceleration there, if you spent any time looking at, the Devenir report, 60% of new account growth in the industry last year came from the top 2 players. Most other players not really seeing, growth. And so it is a winner take most. In terms of growth and who is capturing that growth in industry. So we are very pleased with what we see there.

I would say the other factor that we see and I commented on it is that we are seeing a very active enterprise sales pipeline which you will see later on in the year as those you know, as we finish integration and go into open enrollment, but it is it is the, largest pipeline of enterprise sales that we have seen in years and I think we are very encouraged by both our win rate and what we are selling to those new clients in terms of the vision of this flywheel and product experience to those prospective new clients.

Analyst (Scott Schoenhaus): that is fantastic on the pipeline side. Okay. And then my follow-up is we are talking about this mix shift on the consumer marketplace. Given this growth that you are seeing and eventually this mix shift, where do you see service gross margins expanding to given that there is high degree of incremental margins that flow through from the consumer marketplace?

Scott R. Cutler: Thanks. Well, so marketplace has no you know, real cost of acquisition nor cost to serve, and so most of that flows through. But I think Jim and I repeatedly say there is no such thing as service gross margin. Our service costs which go against all of the things that we do go against all of revenue, not just service revenue. So just a bit of a clarification associated with how we how we think about that. But the incremental margin on a marketplace transaction obviously is very, high, because there is no marketing cost of acquisition or cost to serve. Thanks, Scott.

Operator: Your next question will come from Steven Valiquette with Mizuho Securities. Please go ahead.

Analyst (Steven Valiquette): Thanks. Good afternoon, everyone. Yeah. I guess for us, coming back to the health care utilization question for a moment, I guess, aside from your commentary about the low health care utilization trends of the internal HealthEquity employees in the quarter, I guess, with more of a growing view in the investment community that we could see just a slowdown in overall U. S. Health care utilization for the full year, calendar 2026 versus calendar 2025 Can you just remind us how that would sort of flow through your financials and your guidance, either positive or negative?

James Lucania: I think the most visible variable in my view would just be less money flowing out of HSAs medical bills, which would be positive. But just curious on the other moving parts we should be thinking about if that does not start to Yeah. No. It would be a great, yeah, great question. Yeah. I yeah. I think you are exactly right. Like, where are we seeing it a little bit? it is in you can see it in the interchange line. Right now. Right? We grew interchange little more than little more than 5%. Like, that is a little slower. Than it is been growing. So that is 1 of those lines where we will we will watch it.

Right? We are not calling we are not calling, like, a big behavior shift, but it may be just as simple as folks went to the doctor a little bit less, and we are seeing you know, slight downshift in average transaction per account. Slight downshift in average ticket, size per account. Right? So it is, it is a trend that we will watch and we have reflected a little bit of interchange conservatism. In the current outlook versus the last 1. But, again, like, our base expectation is that is that we expect it to snap back to the to the prior actuarial assumption for the year. And then, yeah, you are right.

If folks do not spend money, then the money stays in their accounts if they do not if they do not change their savings. So, like, it is probably a you know, a positive to, a little bit of positive to balances and a little bit of positive to investment. Revenue, right, if the dollars are in the market as opposed to being spent at spent at the doctor. Okay. Alright. that is helpful. Thank you.

Operator: Your next question will come from George Hill with Deutsche Bank. Please go ahead.

Analyst (Max Young): Yeah. Hi. it is Max Young for George. Thanks for taking the question. 1 of your major competitor is getting acquired by the largest insurer in The US. How do you see the competitive environment change post the deal? And have you seen any change in partner conversations or pipeline activity as health plans and employers evaluate the implication of more vertical integration in the space? Thanks.

Scott R. Cutler: Yeah. So I think you are you are speaking to the Allegiant acquisition. By UnitedHealth. So Alegis is a, a white labeled software provider. We do not compete, providing white labeled products. We sell direct in into the in into our client base. We will note that you know, what we will be watching for our those existing clients that, you know, may view that tie up as competitive in terms of sharing data or opportunity. Which could be interesting for us. And so we will track and watch what that movement.

But the acquisition itself, we view it as a result of what I just said, as it being a net positive, from a health equity perspective in the market.

Operator: Next question will come from Destiny Jackson with JPMorgan. Please go ahead.

Analyst: Hi. This is Destiny on for Gogler. Thanks for taking my question. I was excited to hear the additional programs you added to Mark. But how are you prioritizing which Mark categories to add next And then as it relates to the GLP cohort, I know it is early. But any color you can give on just behavior of this group specifically as it relates to retention and program duration. Thanks.

Scott R. Cutler: Sure. So we prioritize what we add first informed by what our members are spending their dollars on. So we have billions of dollars of spend and so we look at that spend. I think we look at what we are trying to accomplish in the market as a curated set of products and experiences, rather than commoditized products that anybody could spend that would qualify for re for reimbursement. And as we look at that, we think about it from a category perspective, as I have highlighted metabolic, men's and women, dermatology, sleep, allergy, diagnostics, wearables, those are all programs that we could bring in that are not a large number of SKUs.

And then what is also very interesting to us is the growth that we are seeing of merchants of high quality brands selling products that could qualify for an HSA directly or be unlocked for qualification through a letter of medical necessity. And those are some really interesting brands, and we would be expecting to bring in those brands and products into the marketplace overall. that is kind of like how we think about building out the catalog of marketplace. And then with respect to your question around cohort performance, you know, it is still it is still very early when you when you think about it. Particularly on the metabolic side.

You know, the adoption rate overall, what we are looking at is know, what is the churn of those of those subscribing members how long do they stay into the program, and that is another reason for us to be conservative because these are we are literally only months into this cohort to truly understand what they are gonna perform like. But again, now that we are know, seeing growth particularly on the metabolic side, of growth week on week and we have seen week on week growth since we started We are very pleased with, you know, probably how those cohorts are gonna build quite aggressively over time. Thanks, Destiny.

Operator: Next question will come from Mark Marcon with Baird. Please go ahead.

Analyst (Mark Marcon): Most of my questions have been asked, but I just want follow-up on 1 element. Scott, you mentioned the pipeline is as big as it is been. I am wondering it is pretty early with regards to the marketplace. You know, the mobile first kind of approach.

And so what I am wondering is, when you are when you are approaching, you know, you know, enterprises and medium sized businesses now, What sort of reaction are you getting from those you know, clients that would make the decision from an employer perspective you know, in terms of the direction that the company is going in Obviously, you have been winning share, but I am just wondering are they even more excited now? Do you think your win rate is gonna be even higher you know, on a go forward basis, or how are you thinking about that?

Scott R. Cutler: Yeah. Greg question. Mark, we actually do see our win rate as higher. Our ability to and win more large logos in competition. Is higher than it has been before. And what I would say is the 3 top areas of focus for new customers, and this is also applied to our existing customer base. But particularly when we are pitching a new customer, it is 3 things. Number 1, show us the mobile experience and show us the future road map of what that mobile experience is going to look like.

And when and when we lay out the vision of our mobile and digital engagement, across bringing our products together AI enabled, personalized, driving towards health and wellness behaviors. Our clients are thrilled and our prospective clients are thrilled with the direction and the vision that we are painting from a product perspective. Number 2, is data services.

When we look at the integrations that we have with our plan partners as well as the data that we have across all of our enterprise base, we are able to go in very specifically with data to be able to tell our clients this is the opportunity for cost savings that you can have and here are the 3 or 4 strategies that you could deploy to go after those cost savings quite frankly are much greater than the fees or the administrative fees that you would pay us associated with that. And number 3 is security. Trust and security is at the forefront of every client.

We are obviously a financial technology platform Trust and security is very important. And so, our security team is typically involved in all of those conversations. Our roadmap obviously, the great progress that we have made. And also, you know, this is this also supported by a white paper from Visa that actually shows that we are best in class in terms of the lowest fraud rates in the industry. 6 and 7 times better than most industry participants with also card approval rates 10 percentage points higher than others which just means that a more secure platform and using your card and having that approved more than others.

Those are really key features to the quality experience and those would be the 3 things that I believe that we are winning on, but we are also differentiated against versus the competition. that is great. Thank you. Thanks, Mark.

Operator: Your next question will come from Brian Tanquilut with Jefferies. Please go ahead.

Analyst (Brian Tanquilut): Hey, good afternoon. Congrats on the quarter. Maybe, Scott, as I think about the broader macro backdrop here, are you seeing any change in HSA contribution levels tied to, say, consumer pressure or employment churn especially as we think about the lower balance accounts? And then maybe another way I would ask the question is, is the demand for HSA you know, is that is there a worry that at some point with utilization levels across commercial health care, softening or decelerating. Does that decrease the demand for HSAs, or is there any sensitivity to just curious for your thoughts on that 1.

Scott R. Cutler: Yeah. So, you know, I will talk first about what is the you know, dynamic that is driving HSA adoption and a reacceleration of the industry and maybe Steve can comment on this as well, is really health care affordability. So health care affordability is the pressure that enterprises face relative to health care costs. And driving high deductible health plan and HSA adoption is certainly a way to get after that. that is the first point. And I will give 1 more and I will turn it over to Steve. Second is contributions.

So if you looked at the industry report last year, we were actually able to drive contributions quite greater than industry, growth rate where contributions grew by 1%. We grew contributions across our book of business at multiples of that. And that is largely because of what we are doing in the digital experience to drive contribution as well as what happens with the flywheel of spend which is when you spend, you contribute more. So I think that again speaks to the industry maybe Steve, you have anything more to add?

Stephen D. Neeleman: I think you did a great job. I mean, Scott's learning the industry so fast and it is I think you have nailed it. The only thing I would add is, friend, that you know, we have seen these countercyclical times where, you know, maybe the economy is a bit shaky and then employers are likely going to save money and they all of a sudden wake up and say, why are not we getting more people in health savings accounts? We have done some independent research. We have mentioned this before. Look at our own book of business and then interviewed clients.

We have got several case studies out there that show that you know, if clients can go from 30% adoption in HSAs to 60% or 70%, they can save a lot of money per person. But I think that is only half the story. The most important part of the story is the people that go into the HSAs have money put aside We talk about having personal health care financial security for those people. And ultimately, that saves money. Because if people avoid care because they do not think they can pay for it, that is horrible for the whole system. it is a horror it is horrible for affordability. People delay care.

And so this concept that we have been preaching now for over 20 years of empowering healthcare consumers is right and embedded in our mission. Is so critical to this. And so actually see the opposite. Know, when times get a little tough for people, they kinda finally wake up and they say, what is the best way to provide the most efficient benefit for our people? And so they will take care of medicine. HSA and so I think this is a real opportunity for us now in this time where affordability is so critical. Costs are up. I do not know what is gonna happen with inflation, but we are we are really leaning in.

And I think we have got a fantastic team we have put together. And then I think it is gonna drive more account growth, then Scott's done a fantastic job of saying, okay. Once we have the account, how do we then help that person better save spend and invest for health? Know, that brings in the marketplace and these other initiatives. So we are I think we are as bullish on where we are right now as we ever have been. Mark. I can tell you that right now. Awesome. Thank you. Thanks, Brian.

Operator: The next question will come from Peter Warrandorf with Barclays. Please go ahead.

Analyst (Peter Warrandorf): Hey, thanks for the question. I just wanted to clarify on the HSA cash maturity schedule that you guys talked about. It looks like the 2027 cash number that you reported this time is a little bit lower than what was on the last quarter. Just kind of curious what is going on there and if that is maybe related to the onetime partner cost that you mentioned earlier. And yeah, just what is driving that dynamic?

James Lucania: Thanks. Yeah. For the current year, it is just 1 less quarter is in there. So those are amounts that matured, either basic rates, renewals, basic to enhance rate, switches. And then, yeah, the then the last piece is just organic the organic growth. Right? So they are not so static pools. So if my members contribute more, the balance goes up. If they if they withdraw more, the balance the balance goes down, but it is just normal activity. The maturity pull forward was actually not in this current year. But we were able to pull forward Sort of future maturity into the current Q1. Greg.

Analyst (Peter Warrandorf): And then maybe just on accelerating repo, I mean, it seems like you guys are pulling some of that forward. I am curious if there is anything to read through into maybe what private valuations look like and what you are seeing on the m and a front. Yeah. And how you just waive repo versus maybe m and a. Thanks.

Scott R. Cutler: Yes. So our capital allocation philosophy has not changed and our priorities have really been buying back stock, paying down debt, being prepared for m and a. Know, on the on the repurchase program itself, you know, given our growing confidence in the long term cash generation of the business, the accelerating growth that we are seeing, we see our capacity to put more into the repurchase program as being enhanced, and that is up obviously reflected by how that program has increased. And at the same time, it does not impact our ability to finance and to go after the right m and a opportunities as they present themselves. So we have maintained the flexibility to do both.

While actually being in a really strong position not adding not adding debt associated with that in a in a repurchase. But using our cash flow to do so. So that is really our capital allocation philosophy. Thanks, Peter.

Operator: The next question will come from Ryan Hallstad with RBC. Please go ahead.

Analyst: Good afternoon. Thanks for taking the question. I wanted to go back to the bronze account questioning. So you know, considering the growth in enrollment in these plans, just curious if you have you know, had further discussion with your channel partners or other sort of engagement in trying to maybe capture more of that new HSA eligibility earlier either through, you know, driving education or other ways. I appreciate that.

Stephen D. Neeleman: Sure. Yeah. Thanks for the question. We have thought a lot about it. You know, we 1 of the I think really remarkable things about the health equity model because we sell to all sizes of employers, and even down to, like, 2 life employers all the way up to, you know, obviously, some very, very big employers, is that we have always kind of thought about HSA growth from an evergreen perspective.

And this even makes almost more sense the in the case of bronze plans because even though, you know, there is this big push for people to get their bronze plans and then hopefully sign up for HSAs right around end of the year when the, the portals open up and exchanges open up. Reality is they can fund those accounts throughout the course of the year. So always kind of thinking about what is the best channel and so you said the word channel partner and we were kind of thinking very deeply about that.

Many, many of our Blues plans, many of our other vertically integrated plans plan partners throughout the country, are often if not the biggest, close to the biggest providers of Bronze plans in the market. 1 of the challenges is people just still do not know, so there is an education perspective to that. Give you just a little bit of perspective. Know, only 2% of people a year ago that bought on exchanges were in an HSA qualified plan. Now nationally, it is 30%. Are an HSA qualified plan just because of the brown stuff. there is some markets where it is 50% of people. You gotta get the word out.

And so and so we work through the channel partners. there is brokers out there that sell a lot of these plans. there is there is even, you know, a lot of talk about Hickers and stuff like that. I think they are still pretty early. We are looking at every 1 of these channels. We have we have people that are in charge of each of those channels to really push this because look, we do not really know how these are all gonna perform at the end of the day.

Maybe there is less funding, It could be even in the subchannels like maybe in, like, an ICR channel where there is an employer around that funding will be comparable to what we have seen in our traditional core market. So, yes, we are looking at every 1 of those channels. We do everything we can to get people into these accounts. You know, it is almost like a public good honestly. it is like a PSA. it is like if you if you gonna have any medical expenses, and you have to pay that higher deductible that comes with a bronze plan, you have to run that through an HSA.

Not only that, if you have an HSA, you can start doing things like Mark and run it through. So yes, we are all over it. But we also want to temper like, this enthusiasm because this is a new muscle for not really health equity. Again, we have been doing this for a long time. But it is a new muscle for consumers because they do not even know Right? It went from 2% of people in an HSA qualified plan a year ago and now it is 30%. So we are after it, but we are still trying to learn a lot from it. Very helpful. Thank you. Thanks, Ryan.

Operator: Next question will come from David Larsen with BTIG. Please go ahead.

Analyst (David Larson): Hey. Steve, can you talk a little bit about the environment, and the timing of it? So what happened from 01/01/2026 through 12/31/2026? How does that change in 2020 like, 01/01/2027 and going forward? And then just any comments on, the stacked-card product. When can you stop using plastic or paper cards? Thanks.

Stephen D. Neeleman: Yeah. I will take the first half. You wanna talk about stacked card?

Scott R. Cutler: Yes. Yeah.

Stephen D. Neeleman: So, you know, I mean, obviously, there is a there is a lot going on in DC right now. And we are always looking for these little windows of opportunity to insert like happened like what happened last year. And so David, to start your question, a lot of these changes that happened in the big beautiful bill around bronze and things like that really all kinda went into effect on 01/01/2026. The lobbying passed last July. And so we have been doing a lot of work in implementing those changes We continue to look for opportunities to insert things that were left out of the final bill that did pass the house bill.

These are things like letting people roll their HRAs and FSAs into HSAs. That makes a lot of sense. Actually, quite low score when they came out of the congressional budget office scoring process. And so, you know, that would not cost a lot. there is a lot of people that would be like, yeah. I would love to convert my FSA or HRA into that. Medicare for working seniors or sorry. HSAs for working seniors. We talked a lot about that. As well. So I think from just the congressional calendar perspective, I think right now, the big focus is to try and get this reconciliation 2.0 bill Republicans have talked a lot about. They were close. Backed off.

You know, that was the 1 where the ballroom came out of it and all that other stuff. there is no health care stuff in that we have seen. And then understanding is if reconciliation gets done 2.0, then there is a lot of legislators who are saying, hey. Look. We still have 6 months of legislating to do, and we got a lot of people to help. And so gonna keep looking for those opportunities. Just a little kinda cool fact. Know, 1 of the bigger kind of expansions of HSAs that happened in 2006, I mean even prior to the big beautiful bill, in the lame duck session.

2006, and it was after the house was lost in November You know, we were pushing hard then, and they, you significantly increased the amount of money that people could put in their HSAs. And it was a lame duck session. It was in the end the year, There was a new congress who is gonna be seated. So they got it done. But all that being said, as we have said all along, we actually think that HSAs are bipartisan more than people appreciate. When you do the surveying out there, Democrats, Republicans, Independents, they all love health savings accounts. So we are gonna just keep pushing, and no matter what happens in November, we are not going away.

And people are gonna just keep hearing about why consumers need accounts. And so for the question, and we are all over it.

Scott R. Cutler: On digital card, as you as you know, David, a few years ago, we have moved to a single card processor, which allowed us to offer a stacked card, which we have had in the market now for little over a year. That product today is already we have what I will call digital integrations into wallets. A lot of the digital wallets, today that are very popular is already integrated. And then I think kind of like the next step is digital issuance. Where you could issue without plastic.

And, you know, as we look at what our single app experience is going to look like and also having a wallet and digital wallet integrated that experience that will be, you know, kinda like rolling out into the future. And then and in that in that world, it may not be all cards replaced that way because people do like having something to carry with them. A physical card is a strong sense of loyalty. that is why most banks still have physical cards. Again, from a convenience perspective, we think there is a even more efficient way to issue cards for those that just want integration into wallets. And, again, functionally, we already provide that. Thanks, David.

Operator: The next question will come from David Roman with Goldman Sachs. Please go ahead.

Analyst (David Roman): Excuse me. Thank you for taking the questions here. Maybe I will come back to something you mentioned in your prepared remarks around 10% of the tax benefit being fully utilized by members. What are some of the actions that you can take to increase the increase that utilization rate, and how do you think we would see that kind of flow through the performance of the business? And then maybe I will just ask my here. Just given where we are at time on the call.

James Lucania: Jim, can you just help us think through just that putting the pieces together here in the AI investment cycle and the AI benefits?

Analyst: So, for example, is the service margin today depressed even though it is improving because you are deploying resources from an investment standpoint such that as you start to see the benefits, we see an even bigger uptick in the margin?

Scott R. Cutler: How we think about the handoff there from investment to benefit? Yeah. So I will I will kinda, like, again, go back to the strategy and why it matters. An investor is a bigger spender and a bigger contributor. And an investment and investment balances are obviously growing significantly, for the industry and for health equity. Number of investors we have also been driving, and so that growth in number of investors which you saw 18%,, year on year, is really again driving towards the flywheel of the y, which is again bringing you from a contributor to a saver to an investor.

And again, it is virtuous because they actually do hold higher cash balances and they and they do spend more. The way we are doing that again is through the digital experience. And so it really critical at enrollment that we that we do that. You can also see that flow through a bit because many of those as they are going through that enrollment are also signing up for robo adviser. Which is, you know, which is kinda like automating that flow for that member to make it simple and easy.

And we are looking at other ways to essentially streamline how you become an investor and making sure that fund lineup and in our integration on the brokerage side gives you total flexibility to invest wherever you want to, as a as a as a member.

James Lucania: Jim, I think you will take part 2. Yeah. And then as for the, you know, the current sort of deployment of tech, right, like, the cost is primarily hitting the tech line. So you are not you are seeing, like, investment in the product solution that helps drive down service cost. The investment is in 1 place, and the benefit is in another place. Now as the sort of future state of, like, widespread deployment of AI tools and token based pricing, like, I do think you are gonna start to see that change a bit. You know, currently and probably for some time, like, the primary beneficiaries of these tools are in the technology development realm.

But as, you know, my finance team, as marketing teams are starting to use the tools for efficiency within their own departments, I think you are more likely to see us, like, start distributing that cost out like, hey. Finance or other g and a department, you need to cover your own cost of AI and then offset that with benefits. But we are we are just not in that in that in that world yet. But I but I do think the world and many of our fellow companies reporting publicly are gonna head in that in that direction too.

Analyst (David Roman): Greg. Thanks so much.

James Lucania: Thanks, David.

Operator: And this will conclude our question and session.

Scott R. Cutler: I would like to turn the conference back over to Mr. Scott R. Cutler for any closing remarks. Please go ahead. Thanks, everybody, for the thoughtful discussion and questions. To close, hope your takeaway is that our execution and performance continue to translate into strong cash generation gives us increasing flexibility to invest in the business, return capital to our shareholders, And I think the acceleration in the growth underpins also our decision and confidence to increase our share repurchase authorization by $1 billion, reflecting our confidence in the long term out outlook for health equity. So we really appreciate your interest, your support. Look forward to updating you next quarter. Thanks.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.