Healthequity, Inc. · NASDAQ:HQY
Healthequity — Raymond James Conference 2023
21 slides from Healthequity's conference presentation, March 2023
Slide 1: Raymond James Conference Investor Presentation
Raymond James Conference Investor Presentation March 2023 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 8.0M 14.9M $22.1B HSAs Total accounts HSA Assets 200+ 120K+ #1 Network partners Employer clients HSA Administrator - Devenir Note – HealthEquity HSAs, HSA Assets and other metrics as of January 31, 2023, except Devenir ranking is as of the Devenir June 30, 2022 report. Michele Krutke T
Slide 4: Outpacing a secular growth market
Outpacing a secular growth market FY23 sales results YoY HealthEquity doubled 2023 2022 Growth market growth the HealthEquity past 5 years HSAs 8.0M 11% 7.2M HSA Market HSA cash $14.2B 10% $12.9B 10% CAGR market growth HSA to 2030 $7.9B 19% $6.7B investments Total HSA $22.1B 13% $19.6 assets Total 1
Slide 5: HSA openings
HSA openings HealthEquity HSA sales 971 (Thousands) 918 724 686 669 674 FY18 FY19 FY20 FY21 FY22 FY23 HSA Sales for HealthEquity fiscal year ending January 31, 2023. Figures exclude HSAs from previously announced acquisitions 5
Slide 6: Value chain from channel partner to member
Value chain from channel partner to Asset growth driven by engagement Improved reach from MaxEnroll member programs +4x Employee reach +90% Increased contribution rate Strong channel partners 200+ Network partners Retention, cross-sell, access 97% Retention rate Asset growth metric refers to increas
Slide 7: Expanding channel partnerships drive sales; client relationships
Expanding channel partnerships drive sales; client relationships HealthEquity Further + 75% +8 “ Partnerships are extremely important to us as we realize Sales originate with Health Plan Partnerships channel partners we can’t do it all. Corey Tauer ” BCBS Minnesota +50% +$1.9B Greater win rate with
Slide 8: HSAs build financial stability and resilience for the entire workforce
HSAs build financial stability and resilience for the entire workforce Case Study Results Plan Design 1 in 3 “ This was a compassionate, kind, thoughtful design that we really Contribution Matching Colleagues hoped would be looked to as an Tiered Contribution chose the HSA example of how a health pl
Slide 9: Deeper adoption by existing clients
Deeper adoption by existing clients Self-serve education Best Practice Education at Scale Digital-first Open engagement +24% +20% Enrollment New HSA adoption for Clients using group Smart clients using best- education reminders practice program 4x 73k Focus on Non-HSA members Visits from employers t
Slide 10: Ongoing HSA member engagement drives positive financial outcomes
Ongoing HSA HSA Avg. Balance Change YoY member engagement Industry HealthEquity drives positive +0.3% financial outcomes Engage 360 vs Unenrolled Clients +90% +10% 368k higher increase in more likely to begin members took action amount contributed contributing to personalize Q1 FY’ 22, all numbers a
Slide 11: A broader, connected ecosystem, enabled by data and integrations
A broader, connected ecosystem, enabled by data and integrations Technology Investments Privacy & Security Connectivity Cloud Data Platform Janice Harper Member since 2019 11
Slide 12: Collaboration for the member
Collaboration for the member Data and Adaptive AI Claim processing ▪ Immediate reimbursement complete ▪ Easier claim submission ▪ Lower administrative cost Embedded Banking ▪ Instant card availability ▪ Payment deferral options ▪ Easier check-in with provider Mobile Experience ▪ Timely reminders Jan
Slide 13: Improving yields on HSA cash
Improving yields on HSA cash Treasury CD HQY Yield ▪ Enhanced Rates adoption ▪ Increasing bank demand ▪ Diversified partner base ▪ Laddered portfolio HQY yield FY 2023 FY 2024 FY 2019 FY 2020 FY 2021 FY 2022 (outlook) (outlook) 2.15% 2.45% 2.10% 1.75% ~1.90% ~2.25% HealthEquity yield on HSA cash est
Slide 14: Guidance
Guidance Business Outlook HealthEquity fiscal year ending January 31, 2023 Guidance as of: December 6, 2022* September 6, 2022 June 6, 2022 March 22, 2022 ($ in millions, except per share) Revenue $850 - $860 $834 - $844 $827 - $837 $820 - $830 Non-GAAP net income** $106 - $114 $103 - $111 $103 - $1
Slide 15: Fiscal year 2024 outlook
Fiscal year 2024 outlook Business Outlook HealthEquity fiscal year ending January 31, 2024 Outlook as of: December 6, 2022* Revenue ($ in millions) $950 - $970 Adjusted EBITDA (as a % of revenue) 33%-34% Outlook based on HSA cash yield of approximately 2.25% **A reconciliation of our Adjusted EBITDA
Slide 16: Foundation of promises kept
Foundation of promises kept Growth Visibility Profitability Sustainability 31% 34 26% +10 5-yr revenue Consecutive 5-yr Adjusted Years increased CAGR1 quarters beating EBITDA CAGR1 market share3 adjusted EBITDA consesus2 1- HealthEquity data based on Q3FY23 LTM changes from fiscal years 2018 to YTD
Slide 17: Company Financials
Appendix Company Financials 17
Slide 18: Capital structure
Capital structure ($ in millions) October 31, 2022 January 31, 2022 Cash, cash equivalents $210 $225 & marketable securities Long-term debt, net of debt issuance costs $927 $931 ($1B available LOC) Debt to Adjusted EBITDA leverage ~3x ~3x Cash used in Q1FY23 for HealthSavings Administrators acquisit
Slide 19: HSA Key metrics
HSA Key metrics HSAs (000s) HSA Assets ($M) Total Accounts (000s) Net new HSA sales Invested assets Acq HSAs Cash assets Beg HSAs 7,984 $22,146 HSA 8.0M 7,207 687 $19,618 685 FSA 3.3M 90 $7,947 5,782 740 $14,335 $6,675 438 HRA 1.9M $4,216 7,207 COBRA 0.5M 5,344 5,782 $12,943 $14,199 $10,119 Commuter
Slide 20: Fiscal third quarter financial results
Fiscal third quarter financial results Revenue ($M) Adjusted EBITDA(1) ($M) Three Months Nine Months Three Months Nine Months $627.9 $545.4 $553.3 $198.7 $184.1 $185.6 $216.1 $73.4 $179.4 $180.0 $61.1 $61.1 FY21 FY22 FY23 FY21 FY22 FY23 FY21 FY22 FY23 FY21 FY22 FY23 20% Q3 revenue growth YoY 20% Adj
Slide 21: HealthEquity
HealthEquity: