Healthequity, Inc. · NASDAQ:HQY
Healthequity — JP Morgan Conference 2022
19 slides from Healthequity's conference presentation, January 2022
Slide 1: JP Morgan Conference Investor presentation
JP Morgan Conference Investor presentation January 2022 Copyright © 2022 HealthEquity, Inc. All rights reserved. HealthEquity does not provide legal, tax or financial advice.
Slide 2: Safe harbor
Safe harbor This presentation does not constitute an offer or invitation for the sale or purchase of securities and has been prepared solely for informational purposes. This presentation is a summary of information contained in our public filings filed with the Securities and Exchange Commission (SE
Slide 3: Market Leader
Market Leader Employer ~7.2M HSA Members ~$19.8B HSA Assets ~120K Clients ~24% YoY growth ~38% YoY growth ~20% YoY growth 185 Network Partners ~20K Integrations 3 Note – management estimates for HealthEquity metrics for fiscal year ending January 31, 2022.
Slide 4: Sustainable market growth
Sustainable market growth 10% CAGR driven by Custodial Revenue HSAs will be ~70% of benefits market $11B Custodial Interchange Service 2020 CDB 2020 HSA $4.5B 2030F CDB 2030F HSA 2020 2030F 4 Market growth estimate from proprietary research June 2021 for the CDB and HSA markets and market revenue mi
Slide 5: Outgrowing the market
Outgrowing the market ▪ Expanding ecosystem 783% 307% ▪ Using our proprietary technology HQY HSA assets Market HSA Assets ▪ To help consumers connect health and wealth 470% 163% HQY HSAs Market HSAs 2014 2015 2016 2017 2018 2019 2020 2021 Market data from Devenir Mid-year reports 2012-2020 5 Cumulat
Slide 6: Record HSA sales
Record HSA sales Regional Sales 1 ~850 HealthEquity HSA Sales (Thousands) 21% 56% Opportunity Win Growth Rate 724 HSA Sales 686 669 674 24% 19% New Sales Cross-sell; Growth Growth FY18 FY19 FY20 FY21 FY22 6 1. – Regional Sales include employers with 2-2,000 employees
Slide 7: Expanding ecosystem
Expanding ecosystem 185 174 165 Health plan partners cover 5 #1 ~50% In market brand awareness FY20 FY21 FY21 with benefit advisors of commercially insured 2 Network Partners HSA channels1 Retirement plan partners manage 40% 3 35% 20% Growth in employer clients ~40% 4 25% of defined contribution pla
Slide 8: Example | BlueFit integration
Example | BlueFit integration HealthEquity is the integrated provider in the BlueFit product launched November 2021 All-in-one Built-in Wellness benefits HealthEquity Incentives for HSA behaviors ▪ Employer contributes 30% of the deductible to an HSA ▪ +$1,800 in HSA employer contribution per family
Slide 9: Balance growth
Balance growth HSA average balance growth $2,770 $2,479 37% Investing HSA members growth YoY $2,160 $1,992 $2,027 HSAs Assets FY18 FY19 FY20 FY21 FY22 Account maturity Balance Growth ~2x ~4x Average age 3.9 Years Average growth In five years In ten years 9 HealthEquity data estimated as of January 3
Slide 10: Example | Integrated Open Enrollment
Example | Integrated Open Enrollment ▪ Year-round engagement ▪ Personalized learn sites ▪ Employer-sponsored virtual events 10
Slide 11: Acquired portfolios
Acquired portfolios HealthEquity HSA portfolio acquisitions Portfolio Acquired HSAs Assets In thousands In millions ~38% YoY HSA asset growth Fifth Third Bank Q3 FY22 160 $490 Further Q4 FY22 580 $1,900 HSA Administrators Q1 FY23* 87 $1,300 ~22% YoY HSA asset growth Total 827 $3,690 excluding acquir
Slide 12: Improving yields
Improving yields Multi-year tailwinds ▪ Just 10% of HSA cash in enhanced rate products at FYE22 ▪ Improving rates on bank term deposits ▪ Fed rate hikes under policy normalization Yield outlook FY 2023 FY 2022(1) HSA cash yield 1.55% at or above ~1.75% 12 (1) Yield on HSA cash with yield only and do
Slide 13: Administrative CDBs
Administrative CDBs Market-wide HSA and CDB growth HealthEquity HSA and CDB growth ~$11B COBRA Commuter FSA HRA FY21 FY22 $4.5B COBRA HSA FY23(E) Commuter FSA HRA HSA 2020 2030F 13 Market growth estimate and CDB revenue mix from proprietary research June 2021.
Slide 14: FYE22 sales metrics outlook
FYE22 sales metrics outlook Sales metrics (1) HealthEquity at January 31, 2022 (E) YoY Growth 2021 (A) HSAs (millions) ~7.2 ~24% 5.8 HSA cash ($billions) ~$12.9 ~28% $10.1 HSA investments ($billions) ~$6.9 ~64% $4.2 Total HSA assets ($billions) ~$19.8 ~38% $14.3 Total accounts (millions) ~14.4 ~12%
Slide 15: FYE 22 capital structure outlook
FYE 22 capital structure outlook ($ in millions) January 31, 2022(E) October 31, 2021 January 31, 2021 Cash, cash equivalents ~$225 $6491 $329 & marketable securities Long-term debt, net of debt issuance costs ~$930 $930 $987 ($1B available LOC) Debt to EBITDA leverage ~3x ~2.5x ~3x 1Note – includes
Slide 16: HSA key metrics
HSA key metrics HSAs (000s) HSA Assets ($M) Net new HSAs Invested assets Acq HSAs Cash assets Beg HSAs 6,241 $16,428 5,460 621 5,031 160 429 $12,440 $5,959 597 $10,459 757 $3,423 $2,514 5,031 5,460 3,677 $9,017 $10,469 $7,945 Q3FY20 Q3FY21 Q3FY22 Q3FY20 Q3FY21 Q3FY22 ▪ 151K new + 160K acquired HSAs
Slide 17: Fiscal third quarter financial results
Fiscal third quarter financial results (1) Revenue ($M) Adjusted EBITDA ($M) Three Months Nine Months Three Months Nine Months $545.4 $553.3 $184.1 $185.6 $330.8 $135.1 $179.4 $180.0 $61.1 $61.1 $157.1 $55.5 FY20 FY21 FY22 FY20 FY21 FY22 FY20 FY21 FY22 FY20 FY21 FY22 ▪ 0% growth in Q3 revenue YoY ▪
Slide 18: Foundation of promises kept
Foundation of promises kept 42% 5-yr revenue CAGR 1 30 Beating adjusted Consecutive QUARTERS 43% 5-yr Adjusted EBITDA +10yrs Increased market EBITDA consensus 2 CAGR 1 share 3 Growth Visibility Profitable Sustainable 1- HealthEquity data based on changes from fiscal years 2016 to 2021 18 2- Based on
Slide 19: HealthEquity
HealthEquity’