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HealthEquity's First-Quarter Revenue and Earnings Fall Short of Estimates

By Keith Speights – Jun 2, 2020 at 6:02PM

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The HSA administrator also withdrew its full-year guidance due to the COVID-19 pandemic.

HealthEquity (HQY -0.62%) announced its fiscal 2021 first-quarter results after the market closed on Tuesday. The consumer-directed benefits administrator reported revenue of $190 million, lower than the consensus Wall Street estimate of $193.3 million.

For the period, which ended April 30, the company posted GAAP earnings of $1.8 million, or $0.03 per diluted share. HealthEquity's adjusted (non-GAAP) earnings were $30.8 million, or $0.43 per diluted share. Analysts' average estimate for adjusted earnings had been $0.44 per share. 

Blocks spelling HSA next to a $100 bill rolled up

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Growth drivers

HealthEquity's revenue jumped 118% year over year. This growth was driven partly by its acquisition of WageWorks, which closed in August. The company reported the number of health savings accounts (HSAs) under management increased 33% year over year to around 5.4 million. 

GAAP earnings plunged 95% from the prior-year period due to higher operating expenses that were largely related to the addition of WageWorks. However, HealthEquity's non-GAAP earnings increased 12% year over year due primarily to its higher revenue and adjustments related to the amortization of acquired intangible assets, merger integration expenses, and income tax provisions.

Guidance

HealthEquity withdrew its fiscal 2021 guidance due to uncertainties related to the COVID-19 pandemic. The company projects fiscal Q2 revenues of between $168 million and $173 million. It also expects a Q2 GAAP net loss of between $20 million and $15 million, or $0.27 to $0.21 per diluted share. HealthEquity looks for Q2 non-GAAP earnings of between $17 million and $22 million, or $0.23 to $0.30 per diluted share.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends HealthEquity. The Motley Fool has a disclosure policy.

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HealthEquity, Inc. Stock Quote
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