HealthEquity (HQY) Updates Business Outlook

HealthEquity, Inc. (NASDAQ: HQY) ("HealthEquity" or the "Company"), the nation's largest health savings account ("HSA") non-bank custodian, today announced an updated business outlook, superseding the business outlook announced by HealthEquity on June 7, 2021. The updated business outlook is being issued to exclude anticipated merger integration expenses related to the Further acquisition that were included in the previously announced business outlook.

Summary of revisions to the previously issued business outlook

The updated business outlook provided below has been revised as compared to the business outlook issued on June 7, 2021 to change the expected net loss from between $19 million and $15 million previously announced to an expected net loss of between $12 million and $8 million, resulting in a change in expected net loss from $0.23 to $0.18 per diluted share previously announced to an expected net loss of $0.14 to $0.10 per diluted share. The revision is due to the pre-tax exclusion of approximately $10 million of merger integration expenses related to the Further acquisition. The revision does not impact the business outlook for revenue, non-GAAP net income and per share estimates, or Adjusted EBITDA.

Updated business outlook

For the fiscal year ending January 31, 2022, management expects revenues of $755 million to $765 million. Its outlook for net loss is between $12 million and $8 million, resulting in net loss of $0.14 to $0.10 per diluted share. Its outlook for non-GAAP net income, calculated using the method described below, is between $122 million and $126 million, resulting in non-GAAP net income per diluted share of $1.45 to $1.50 (based on an estimated 84 million diluted weighted-average shares outstanding). Management expects Adjusted EBITDA of $241 million to $247 million.

This outlook does not include any potential impact from the acquisitions of Further or the Fifth Third Bank HSA portfolio.

See “Non-GAAP financial information” below for definitions of our Adjusted EBITDA and non-GAAP net income. A reconciliation of the non-GAAP financial measures used throughout this release to the most comparable GAAP financial measures is included below.

Non-GAAP financial information

To supplement our financial information presented on a GAAP basis, we disclose non-GAAP financial measures, including Adjusted EBITDA, non-GAAP net income, and non-GAAP net income per diluted share.

• Adjusted EBITDA is adjusted earnings before interest, taxes, depreciation and amortization, amortization of acquired intangible assets, stock-based compensation expense, merger integration expenses, acquisition costs, gains and losses on marketable equity securities, and other certain non-operating items.
• Non-GAAP net income is calculated by adding back to GAAP net income (loss) before income taxes the following items: amortization of acquired intangible assets, stock-based compensation expense, merger integration expenses, and acquisition costs, and subtracting a non-GAAP tax provision using a normalized non-GAAP tax rate.
• Non-GAAP net income per diluted share is calculated by dividing non-GAAP net income by diluted weighted-average shares outstanding.

Non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP and should not be considered as a substitute for, or superior to, GAAP results. We believe that these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to the Company's financial condition and results of operations. The Company cautions investors that non-GAAP financial information, by its nature, departs from GAAP; accordingly, its use can make it difficult to compare current results with results from other reporting periods and with the results of other companies. In addition, while amortization of acquired intangible assets is being excluded from non-GAAP net income, the revenue generated from those acquired intangible assets is not excluded. Whenever we use these non-GAAP financial measures, we provide a reconciliation of the applicable non-GAAP financial measure to the most closely applicable GAAP financial measure. Investors are encouraged to review the related GAAP financial measures and the reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measure as detailed in the tables below.

Reconciliation of net loss outlook to Adjusted EBITDA outlook (unaudited)

Reconciliation of net income (loss) to non-GAAP net income (unaudited)

Certain terms

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