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Investing.com - Healthequity Inc (NASDAQ:HQY) shares tumbled 20% in early trading Wednesday after the health savings account provider reported fourth-quarter earnings that fell short of analyst expectations and issued subdued guidance for the current fiscal year.
The company posted adjusted earnings per share of $0.69 for the fourth quarter ended January 31, 2025, missing the analyst consensus of $0.72. Revenue came in at $311.8 million, surpassing estimates of $305.82 million and representing a 19% YoY increase.
For fiscal year 2026, HealthEquity forecasts earnings per share between $3.57 and $3.74, compared to the $3.66 analyst consensus. The company projects revenue of $1.28 billion to $1.305 billion, slightly below the $1.309 billion consensus estimate.
"Team Purple finished fiscal ’25 in strong fashion, with record revenues and major strides in advancing our strategic initiatives," said Scott Cutler, President and CEO of HealthEquity. However, the company noted concerns about potential future cybersecurity breaches and data interruptions.
HealthEquity reported 9.9 million health savings accounts as of January 31, 2025, a 14% YoY increase. Total (EPA:TTEF) HSA assets grew 27% YoY to $32.1 billion.
For the full fiscal year 2025, HealthEquity’s revenue increased 20% to $1.20 billion. Adjusted EBITDA rose 28% to $471.8 million, representing 39% of revenue compared to 37% in the previous year.
The company completed its acquisition of the BenefitWallet HSA portfolio during the fiscal year and repurchased 1.4 million shares of its common stock for $122.2 million.
Mizuho (NYSE:MFG) analyst Steven Valiquette highlighted the small cybersecurity expense "glitch", noting "EBITDA for both F4Q25 and FY26 guidance also would have been above expectations if not for some temporarily elevated cybersecurity expenses.." The analyst trimmed EPS slightly from $3.80 to $3.70 for FY26, $4.65 to $4.55 for FY27, and $5.45 to $5.40 in FY28 mainly on slightly lower gross margins for higher service costs, including a higher base for cybersecurity costs. However, the analyst maintained an Outperform rating and $126 price target on HQY.