Healthequity, Inc. · NASDAQ:HQY
Healthequity — J.P. Morgan Healthcare Conference 2021
20 slides from Healthequity's conference presentation, January 2021
Slide 1: J.P. Morgan Investor presentation
J.P. Morgan Investor presentation January 2021 Copyright © 2021 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: An industry leader
An industry leader 12.8-13.0M 100K Total Accounts Employer Clients 5.7-5.8M 174 HSA members Network partners $13.6-13.8B 15K Melissa Jacinto HSA assets Integrations Team member since 2017 3 HealthEquity metrics estimated as of January 2021. See additional information in press release dated January 1
Slide 4: Why HSAs
Why HSAs Family Plan Deductible $5,000 $4,500 HMO PPO POS HDHP min $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $- 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 The differences in deductibles among health plans are narrowing as plans trend toward HSAs PPO Plans
Slide 5: Expanding market
Expanding market 1 Devenir HSA Research Report as of June 30, 2020 2 Management estimate as of January 2021 5 3 HealthEquity information estimated as of January 2021 4 Proprietary research June 2019
Slide 6: Gaining market share
Gaining market share 826% HQY HSA assets 654% HQY HSAs 306% Market HSA assets 2014 2015 2016 2017 2018 2019 2020 221% Market HSAs HealthEquity HSA market share By HSA assets 19% 15% 16% 16% By HSAs 13% 12% 13% 14% 12% 12% 10% 9% 8% 9% 8% 7% 6% 7% 2012 2013 2014 2015 2016 2017 2018 2019 2020 #5 #4/5
Slide 7: FY21 sales results and yield outlook
FY21 sales results and yield outlook Sales metrics (1) HealthEquity at January 31, • HSAs up ~10% YoY 2021 (E) 2020 (A) net of migration loss 5.7 to 5.8 5.3 • HSA investments $9.6 to $9.7 $8.7 +43%-46% YoY $4.0 to $4.1 $2.8 • Total HSA assets $13.6 to $13.8 $11.5 +18%-20% YoY 12.8 to 13.0 12.8 • Tot
Slide 8: Powerful monetization
Powerful monetization Interchange Service Investing Custodial Cash FY19 Card Service Interchange Service Custodial FY21 YTD 8 Note: FY21 YTD is through Fiscal Year 2021 Q3 ended October 31, 2020
Slide 9: Market growth
Market growth 3-yr CAGR Forward market growth rate1 HSAs Assets 32% 7% 14% HSAs Assets 24% 25% 21% 18% • Win/win response to renewed cost pressures 12% • Growing consumer understanding • Increasing regulatory flexibility Market HQY organic HQY Market HQY organic HQY NOTE – market growth CAGRs based
Slide 10: A total solution from one partner
A total solution from one partner Network partners 2 Advisors and brokers 174 5 #1 Mind share Health plan partners cover How employers ~50% find their HSA of commercially insured Direct sales to partner1 3 ~100K Clients that employ 1 in 7 working Americans Retirement plan partners manage 4 ~35% of d
Slide 11: Innovation driving engagement
Innovation driving engagement Health Savings Score HealthEquity e360 Virtual open enrollment Next gen platform Integrated service Onshoring member service Rollout of initial Fed strong cross-sell Improved satisfaction 14% from Dec components in Q4 opportunities 2019 to Dec 2020 11
Slide 12: Leaning into cross-sell opportunity
Leaning into cross-sell opportunity Existing Client Penetration • $400 million cross-sell opportunity 1 Account type with managed clients alone 2 Account types 3+ Account types / bundle uptake • 12 network partners expanded account offerings in FY21 8% 89% 12 HealthEquity data as of January 2021
Slide 13: M&A and growth investment
M&A and growth investment HQY Opportunity Other top 4 Portfolio acquisitions Capability tuck-ins Dry powder and deep integration experience 13 Source: Devenir 2020 Midyear Report
Slide 14: Regulatory tailwinds
Regulatory tailwinds Year end relief for FDIC brokered FSA and HRA deposit rule Potential COBRA Potential HSA subsidy expansion for stronger ACA and Medicare 14
Slide 15: Foundation of profitability
Foundation of profitability 43% 5-yr revenue CAGR 1 26 Beating adjusted Consecutive QUARTERS 820bps Increased Adjusted +10yrs Increased market EBITDA consensus 2 EBITDA margin 1 share 3 Growth Visibility Profitable Sustainable 1- HealthEquity data base on changes from fiscal years 2015 to 2020 15 2-
Slide 16: Third quarter FY21 HSA key metrics
Third quarter FY21 HSA key metrics HSAs (000s) HSA Assets ($M) Net new HSAs Invested assets Acq HSAs Cash assets Beg HSAs 5,460 5,031 $12,440 429 597 $10,459 $3,423 3,677 757 $2,514 664 $7,090 5,031 $1,507 3,677 $9,017 3,013 $7,945 $5,583 Q3FY19 Q3FY20 Q3FY21 Q3FY19 Q3FY20 Q3FY21 • 104K Q3 new organ
Slide 17: Fiscal third quarter financial results
Fiscal third quarter financial results (1) Revenue ($M) Adjusted EBITDA ($M) Three Months Nine Months Three Months Nine Months $545.4 $184.1 $135.1 $179.4 $330.8 $157.1 $61.1 $91.1 $55.5 $211.5 $70.5 $29.7 FY19 FY20 FY21 FY19 FY20 FY21 FY19 FY20 FY21 FY19 FY20 FY21 • 14% Q3 revenue growth YoY • 10%
Slide 18: Capitalization
Capitalization ($ in millions) October 31, 2020 January 31, 2020 Cash, cash equivalents $299 $192 & marketable securities Long-term debt, net of debt issuance costs $1,001 $1,221 ($350M available LOC) Total stockholders’ equity $1,355 $1,030 18
Slide 19: Next up
Next up FY21 sales metrics final results FY22 initial revenue guidance February 8, 2021 19
Slide 20: HealthEquity
HealthEquity:
HealthEquity — J.P. Morgan Healthcare Conference 2021 on 6ix