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WageWorks (NYSE:WAGE) reported first-quarter results on May 5. The manager of consumer-directed benefits (CDBs) such as Flexible Spending Accounts, Health Savings Accounts, and commuter benefit services continues to win new business at a steady clip.

WageWorks results: The raw numbers

Metric 

Q1 2016

Q1 2015

Growth (YOY)

Revenue

$87 million

$85.3 million

2%

Net income

$5.8 million

$5.6 million

3%

Earnings per share

$0.16

$0.15

7%

Data source: WageWorks Q1 2016 earnings press release.

What happened with WageWorks this quarter?

  • Total revenue rose 2% year over year to $87 million, driven by sales increases in Wageworks' healthcare (up 7% to $50.4 million), commuter (up 9% to $17.4 million), and COBRA (up 22% to $15.4 million) segments. Other revenue, however, declined to $3.9 million from $9.5 million in the year-ago quarter, due to a public exchange relationship that the company ended in 2015. 

  • EBITDA (earnings before interest, taxes, depreciation, and amortization) -- adjusted to exclude stock-based compensation, acquisition-related expenses, and certain other items -- grew 14% to $25.1 million.

  • Adjusted (non-GAAP) operating income was $20.2 million, up 12% from the prior-year quarter. And non-GAAP net income rose 13% to $11.9 million, or $0.33 per share.

What did management have to say?

CEO Joe Jackson said in a press release:

We see encouraging results in our commuter business and demand across all of our healthcare offerings remains strong, especially as it relates to Health Savings Accounts. Our channel partnership and exchange business is growing, and we are successfully fostering existing relationships and continuously developing new opportunities. As we move through 2016, we are well positioned to execute on our multiple avenues for growth and drive leverage in the business.

Looking forward

WageWorks expects second-quarter revenue of $86 million to $88 million and adjusted EBITDA of $26 million to $27 million. The company is also targeting non-GAAP net income of $12.4 million to $12.9 million, or $0.34 to $0.35 per share, for the quarter.

Additionally, management issued its 2016 full-year outlook, including:

  • Revenue of $356 million to $366 million
  • Adjusted EBITDA of $107 million to $111 million
  • Non-GAAP net income of $49.7 million to $51.9 million
  • Non-GAAP EPS of $1.35 to $1.41

Peering even further into the future, Jackson highlighted the favorable long-term trends that should help to propel WageWorks' growth in the years ahead during the company's earnings conference call:

Our products are becoming more popular with working families, as they see these pre-tax benefits, particularly HSAs and FSAs as their only defense against the rising cost of out-of-pocket healthcare expenses. Going forward, I believe people will utilize our products as a kind of healthcare nest egg in much the same way as they use 401(k)s to save for retirement. As we look at our leadership position in this market and the long runway for growth, it's easy to see why we believe we're just getting started.

Joe Tenebruso has no position in any stocks mentioned. The Motley Fool recommends WageWorks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.