UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K |
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
March 21, 2017
Commission File Number: 001-36568
HEALTHEQUITY, INC. | ||
Delaware | 7389 | 52-2383166 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) | ||
15 West Scenic Pointe Drive
Suite 100
Draper, Utah 84020
(801) 727-1000
(Address, including Zip Code, and Telephone Number, including Area Code, of Registrant’s Principal Executive Offices)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial Condition
On March 21, 2017, HealthEquity, Inc. issued a press release announcing its financial results for its fourth quarter and year ended January 31, 2017. The full text of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
This information is intended to be furnished under Item 2.02 of Form 8-K, “Results of Operations and Financial Condition” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit No. Description
99.1 | Press release issued by HealthEquity, Inc. dated March 21, 2017, announcing financial results for its fourth quarter and year ended January 31, 2017. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
HEALTHEQUITY, INC. | |||
Date: March 21, 2017 | By: | /s/ Darcy Mott | |
Name: | Darcy Mott | ||
Title: | Executive Vice President and Chief Financial Officer | ||
EXHIBIT INDEX
Exhibit no. | Description | |
99.1 | Press release issued by HealthEquity, Inc. dated March 21, 2017, announcing financial results for its fourth quarter and year ended January 31, 2017. | |
HealthEquity Reports Fourth Quarter and Year Ended January 31, 2017 Financial Results
Highlights of the fiscal year include:
• | Revenue of $178.4 million, an increase of 41% compared to FY16. |
• | Net income of $26.4 million, an increase of 59% compared to FY16. |
• | Net income per diluted share of $0.44 compared to $0.28 in FY16. |
• | Adjusted EBITDA of $62.8 million, an increase of 55% compared to FY16. |
• | HSA Members of 2.7 million, an increase of 28% compared to FY16. |
• | Total Custodial Assets of $5.0 billion, an increase of 37% compared to FY16. |
Highlights of the fourth quarter include:
• | Revenue of $46.8 million, an increase of 30% compared to Q4 FY16. |
• | Net income of $4.1 million, an increase of 30% compared to Q4 FY16. |
• | Net income per diluted share of $0.07 compared to $0.05 in Q4 FY16. |
• | Adjusted EBITDA of $11.8 million, an increase of 33% compared to Q4 FY16. |
Draper, Utah – March 21, 2017 – HealthEquity, Inc. (NASDAQ: HQY) ("HealthEquity" or the "Company"), the nation's largest health savings account ("HSA") non-bank custodian, today announced financial results for its fourth quarter and year ended January 31, 2017.
“HealthEquity had another record setting year in fiscal year 2017 surpassing $5 billion in custodial assets and opening a record 668,000 new HSAs,” said Jon Kessler, President and CEO of HealthEquity. “Our 37% growth of custodial assets and 28% growth of HSAs led to greater market share and generated year-over-year revenue growth of 41% and Adjusted EBITDA growth of 55%. Adjusted EBITDA margins reached a record 35% of revenue as we continue to scale our proprietary platform and unique healthcare ecosystem. Building on our successful fiscal 2017, we are poised for another strong growth year in fiscal 2018.”
Dr. Steve Neeleman, Vice Chairman and Founder of HealthEquity, added, “With our commitment to remarkable ‘purple’ service combined with favorable tailwinds politically, and economically, and general market tides favoring HSAs, we are well-positioned to continue our efforts to outpace the market in helping build health savings for our members and driving down healthcare cost growth for our Network Partners.”
Full year financial results
For the year ended January 31, 2017, HealthEquity reported revenue of $178.4 million, an increase of 41% compared to $126.8 million for the year ended January 31, 2016. Revenue consisted of:
• | Service revenue of $77.3 million, an increase of 25% compared to FY16. |
• | Custodial revenue of $59.6 million, an increase of 58% compared to FY16. |
• | Interchange revenue of $41.5 million, an increase of 51% compared to FY16. |
Net income was $26.4 million for the year ended January 31, 2017, compared to $16.6 million for the year ended January 31, 2016.
Net income per diluted share was $0.44 for the year ended January 31, 2017, compared to $0.28 for the year ended January 31, 2016.
Non-GAAP Adjusted EBITDA was $62.8 million for the year ended January 31, 2017, an increase of 55% compared to $40.6 million for the year ended January 31, 2016. Adjusted EBITDA was 35% of revenue for the year ended January 31, 2017, compared to 32% for the year ended January 31, 2016.
As of January 31, 2017, we had $180.4 million of cash, cash equivalents and marketable securities and no outstanding debt. This compares to $123.8 million in cash, cash equivalents and marketable securities and no outstanding debt as of January 31, 2016.
Fourth quarter financial results
For the fourth quarter ended January 31, 2017, HealthEquity reported revenue of $46.8 million, an increase of 30% compared to $35.9 million for the fourth quarter ended January 31, 2016. Revenue consisted of:
• | Service revenue of $20.6 million, an increase of 21% compared to Q4 FY16. |
• | Custodial revenue of $16.0 million, an increase of 44% compared to Q4 FY16. |
• | Interchange revenue of $10.1 million, an increase of 33% compared to Q4 FY16. |
Net income was $4.1 million for the fourth quarter ended January 31, 2017, compared to $3.1 million for the fourth quarter ended January 31, 2016.
Net income per diluted share was $0.07 for the fourth quarter ended January 31, 2017, compared to $0.05 for the fourth quarter ended January 31, 2016.
Non-GAAP Adjusted EBITDA was $11.8 million for the fourth quarter ended January 31, 2017, an increase of 33% compared to $8.9 million for the fourth quarter ended January 31, 2016.
HSA Member and Custodial asset metrics
The total number of HSAs for which we serve as a non-bank custodian ("HSA Members") as of January 31, 2017 was 2.7 million, an increase of 28% from 2.1 million as of January 31, 2016.
Total Custodial Assets as of January 31, 2017 was $5.0 billion, an increase of 37% year over year, consisting of:
• | Custodial Cash Assets of $4.4 billion, an increase of 34% compared to Q4 FY16; and |
• | Custodial Investment Assets of $658.6 million, an increase of 62% compared to Q4 FY16. |
Business outlook
For the year ended January 31, 2018, we expect our revenue to be between $220.0 million and $225.0 million. Our outlook for net income is a range of $30.0 million to $34.0 million, resulting in a net income per diluted share range of $0.50 to $0.55 (based on an estimated 61.5 million weighted-average shares outstanding). Our Adjusted EBITDA outlook is a range of $77.0 million to $82.0 million. The business outlook for the year ended January 31, 2018 assumes a projected effective income tax rate of approximately 37%.
A reconciliation of the non-GAAP financial measure used throughout this release to the most comparable GAAP financial measure is included with the financial tables at the end of this release.
Conference call
HealthEquity management will host a conference call at 5:00 pm (Eastern Time) on Tuesday, March 21, 2017 to discuss the fiscal year 2017 fourth quarter and full year financial results. The conference call will be accessible by dialing 884-791-6252, or 661-378-9636 for international callers, and referencing conference ID 79091036. A live audio webcast of the call will also be available on the investor relations section of our website at http://ir.healthequity.com.
Non-GAAP financial Information
To supplement our financial information presented on a GAAP basis, we disclose Adjusted EBITDA, which is a non-GAAP financial measure. We define Adjusted EBITDA as adjusted earnings before interest, taxes, depreciation and amortization, stock-based compensation expense, and other certain non-operating items.
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. 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. 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.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding the company’s industry, business strategy, plans, goals and expectations concerning our market position, product expansion, future operations, revenue, margins, profitability, future efficiencies, capital expenditures, liquidity and capital resources and other financial and operating information. When used in this discussion, the words “may,” “believes,” “intends,” “seeks,” “anticipates,” “plans,” “estimates,” “expects,” “should,” “assumes,” “continues,” “could,” “will,” “future” and the negative of these or similar terms and phrases are intended to identify forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the control of the company. The company’s actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to, the continued availability of tax-advantaged consumer-directed benefits to employers and employees, the company’s ability to acquire and retain new network partners and to cross-sell its products to existing network partners and members, the company’s ability to successfully identify, acquire and integrate portfolio purchases or acquisition targets, the company’s ability to raise awareness among employers and employees about the advantages of adopting and participating in consumer-directed benefits programs, and the company’s ability to identify and execute on network partner opportunities. For a detailed discussion of these and other risk factors, please refer to the risks detailed in the company’s filings with the Securities and Exchange Commission, including, without limitation, our most recent Annual Report on Form 10-K and subsequent periodic and current reports. Past performance is not necessarily indicative of future results. The company undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing the company’s views as of any date subsequent to the date of this press release.
HealthEquity, Inc. and its subsidiaries
Consolidated balance sheets (unaudited)
(in thousands, except par value) | January 31, 2017 | January 31, 2016 | |||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 139,954 | $ | 83,641 | |||
Marketable securities, at fair value | 40,405 | 40,134 | |||||
Total cash, cash equivalents and marketable securities | 180,359 | 123,775 | |||||
Accounts receivable, net of allowance for doubtful accounts of $75 and $40 as of January 31, 2017 and 2016, respectively | 17,001 | 14,308 | |||||
Inventories | 592 | 620 | |||||
Current deferred tax asset | — | 2,642 | |||||
Other current assets | 2,867 | 1,703 | |||||
Total current assets | 200,819 | 143,048 | |||||
Property and equipment, net | 5,170 | 3,506 | |||||
Intangible assets, net | 65,020 | 66,840 | |||||
Goodwill | 4,651 | 4,651 | |||||
Deferred tax asset | 1,615 | — | |||||
Other assets | 1,861 | 1,750 | |||||
Total assets | $ | 279,136 | $ | 219,795 | |||
Liabilities and stockholders’ equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 3,221 | $ | 2,431 | |||
Accrued compensation | 8,722 | 7,776 | |||||
Accrued liabilities | 3,760 | 1,899 | |||||
Total current liabilities | 15,703 | 12,106 | |||||
Long-term liabilities | |||||||
Other long-term liabilities | 1,456 | 236 | |||||
Deferred tax liability | 37 | 3,996 | |||||
Total long-term liabilities | 1,493 | 4,232 | |||||
Total liabilities | 17,196 | 16,338 | |||||
Commitments and contingencies | |||||||
Stockholders’ equity | |||||||
Preferred stock, $0.0001 par value, 100,000 shares authorized, no shares issued and outstanding as of January 31, 2017 and 2016 | — | — | |||||
Common stock, $0.0001 par value, 900,000 shares authorized, 59,538 and 57,726 shares issued and outstanding as of January 31, 2017 and 2016, respectively | 6 | 6 | |||||
Additional paid-in capital | 232,114 | 199,940 | |||||
Accumulated other comprehensive loss, net | (165 | ) | (98 | ) | |||
Accumulated earnings | 29,985 | 3,609 | |||||
Total stockholders’ equity | 261,940 | 203,457 | |||||
Total liabilities and stockholders’ equity | $ | 279,136 | $ | 219,795 | |||
HealthEquity, Inc. and its subsidiaries
Consolidated statements of operations and comprehensive income (unaudited)
(in thousands, except per share data) | Three months ended January 31, | Year ended January 31, | |||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenue | |||||||||||||||
Service revenue | $ | 20,644 | $ | 17,101 | $ | 77,254 | $ | 61,608 | |||||||
Custodial revenue | 16,036 | 11,163 | 59,593 | 37,755 | |||||||||||
Interchange revenue | 10,134 | 7,622 | 41,523 | 27,423 | |||||||||||
Total revenue | 46,814 | 35,886 | 178,370 | 126,786 | |||||||||||
Cost of revenue | |||||||||||||||
Service costs | 17,397 | 13,256 | 51,868 | 39,418 | |||||||||||
Custodial costs | 2,556 | 2,051 | 9,767 | 6,522 | |||||||||||
Interchange costs | 2,632 | 2,148 | 10,380 | 8,248 | |||||||||||
Total cost of revenue | 22,585 | 17,455 | 72,015 | 54,188 | |||||||||||
Gross profit | 24,229 | 18,431 | 106,355 | 72,598 | |||||||||||
Operating expenses | |||||||||||||||
Sales and marketing | 5,556 | 4,665 | 18,320 | 13,302 | |||||||||||
Technology and development | 6,548 | 4,891 | 22,375 | 16,832 | |||||||||||
General and administrative | 4,861 | 3,535 | 20,151 | 14,113 | |||||||||||
Amortization of acquired intangible assets | 1,083 | 981 | 4,297 | 2,208 | |||||||||||
Total operating expenses | 18,048 | 14,072 | 65,143 | 46,455 | |||||||||||
Income from operations | 6,181 | 4,359 | 41,212 | 26,143 | |||||||||||
Other expense | |||||||||||||||
Other expense, net | (158 | ) | (63 | ) | (1,092 | ) | (589 | ) | |||||||
Total other expense | (158 | ) | (63 | ) | (1,092 | ) | (589 | ) | |||||||
Income before income taxes | 6,023 | 4,296 | 40,120 | 25,554 | |||||||||||
Income tax provision | 1,961 | 1,168 | 13,744 | 8,941 | |||||||||||
Net income | $ | 4,062 | $ | 3,128 | $ | 26,376 | $ | 16,613 | |||||||
Net income attributable to common stockholders: | |||||||||||||||
Basic | $ | 4,062 | $ | 3,128 | $ | 26,376 | $ | 16,613 | |||||||
Diluted | $ | 4,062 | $ | 3,128 | $ | 26,376 | $ | 16,613 | |||||||
Net income per share attributable to common stockholders: | |||||||||||||||
Basic | $ | 0.07 | $ | 0.05 | $ | 0.45 | $ | 0.29 | |||||||
Diluted | $ | 0.07 | $ | 0.05 | $ | 0.44 | $ | 0.28 | |||||||
Weighted-average number of shares used in computing net income per share attributable to common stockholders: | |||||||||||||||
Basic | 59,438 | 57,673 | 58,615 | 56,719 | |||||||||||
Diluted | 60,645 | 59,420 | 59,894 | 58,863 | |||||||||||
Comprehensive income: | |||||||||||||||
Net income | 4,062 | 3,128 | 26,376 | 16,613 | |||||||||||
Other comprehensive loss: | |||||||||||||||
Unrealized loss on available-for-sale marketable securities, net of tax | (31 | ) | (64 | ) | (67 | ) | (98 | ) | |||||||
Comprehensive income | $ | 4,031 | $ | 3,064 | $ | 26,309 | $ | 16,515 | |||||||
HealthEquity, Inc. and its subsidiaries
Consolidated statements of redeemable convertible preferred stock and stockholders' equity (deficit) (unaudited)
Stockholders’ equity (deficit) | ||||||||||||||||||||||||||||||
Redeemable convertible preferred stock | Convertible preferred stock | Common stock | Common stock warrants | Additional paid-in capital | Accumu- lated compre- hensive loss | Accumu- lated earnings (deficit) | Total stock- holders' equity (deficit) | |||||||||||||||||||||||
(in thousands, except exercise prices) | Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||
Balance as of January 31, 2014 | 17,349 | $ | 46,714 | 6,156 | $ | 8,129 | 7,038 | $ | 1 | $ | 2,334 | $ | — | $ | — | $ | (23,170 | ) | $ | (12,706 | ) | |||||||||
Issuance of series D-3 redeemable convertible preferred stock cash dividend | — | — | — | — | — | — | — | (347 | ) | — | — | (347 | ) | |||||||||||||||||
Issuance of common stock cash dividend | — | — | — | — | — | — | — | (50,000 | ) | — | — | (50,000 | ) | |||||||||||||||||
Issuance of common stock: | — | |||||||||||||||||||||||||||||
Exercise of 2,972 warrants at $0.8008 per share | — | — | — | — | 2,972 | — | (2,334 | ) | 4,714 | — | — | 2,380 | ||||||||||||||||||
Exercise of 1,841 options at $1.3204 per share | — | — | — | — | 1,841 | — | — | 2,430 | — | — | 2,430 | |||||||||||||||||||
Conversion of preferred stock to common stock upon initial public offering | (17,349 | ) | (42,693 | ) | (6,156 | ) | (8,129 | ) | 32,486 | 3 | — | 50,819 | — | — | 42,693 | |||||||||||||||
Issuance of common stock | — | — | — | — | 10,465 | 1 | — | 132,586 | — | — | 132,587 | |||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | 2,525 | — | — | 2,525 | |||||||||||||||||||
Tax benefit on stock options exercised | — | — | — | — | — | — | — | 3,429 | — | — | 3,429 | |||||||||||||||||||
Redeemable convertible preferred stock accretion | — | (4,021 | ) | — | — | — | — | — | 4,021 | — | — | 4,021 | ||||||||||||||||||
Reclassification of series D-3 redeemable convertible preferred stock derivative liability | — | — | — | — | — | — | — | 6,917 | — | — | 6,917 | |||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | — | 10,166 | 10,166 | |||||||||||||||||||
Balance as of January 31, 2015 | — | $ | — | — | $ | — | 54,802 | $ | 5 | $ | — | $ | 157,094 | $ | — | $ | (13,004 | ) | $ | 144,095 | ||||||||||
Issuance of common stock: | ||||||||||||||||||||||||||||||
Exercise of 1,951 options at $0.98 per share | — | — | — | — | 1,951 | 1 | — | 1,914 | — | — | 1,915 | |||||||||||||||||||
Issuance of common stock | — | — | — | — | 973 | — | — | 23,492 | — | — | 23,492 | |||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | 5,883 | — | — | 5,883 | |||||||||||||||||||
Tax benefit on stock options exercised | — | — | — | — | — | — | — | 11,557 | — | — | 11,557 | |||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | — | — | — | — | (98 | ) | — | (98 | ) | |||||||||||||||||
Net income | — | — | — | — | — | — | — | — | — | 16,613 | 16,613 | |||||||||||||||||||
Balance as of January 31, 2016 | — | $ | — | — | $ | — | 57,726 | $ | 6 | $ | — | $ | 199,940 | $ | (98 | ) | $ | 3,609 | $ | 203,457 | ||||||||||
Issuance of common stock: | ||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of options, and for restricted stock units | — | — | — | — | 1,812 | — | — | 7,142 | — | — | 7,142 | |||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | 8,398 | — | — | 8,398 | |||||||||||||||||||
Tax benefit on stock options exercised | — | — | — | — | — | — | — | 16,634 | — | — | 16,634 | |||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | — | — | — | — | — | (67 | ) | — | (67 | ) | |||||||||||||||||
Net income | — | — | — | — | — | — | — | — | — | 26,376 | 26,376 | |||||||||||||||||||
Balance as of January 31, 2017 | — | $ | — | — | $ | — | 59,538 | $ | 6 | $ | — | $ | 232,114 | $ | (165 | ) | $ | 29,985 | $ | 261,940 | ||||||||||
HealthEquity, Inc. and its subsidiaries
Consolidated statements of cash flows (unaudited)
Year ended January 31, | |||||||||||
(in thousands) | 2017 | 2016 | 2015 | ||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 26,376 | $ | 16,613 | $ | 10,166 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 13,186 | 8,601 | 5,890 | ||||||||
Deferred taxes | (2,891 | ) | (2,178 | ) | 1,593 | ||||||
Stock-based compensation | 8,398 | 5,883 | 2,525 | ||||||||
Loss on revaluation of redeemable convertible preferred stock derivative | — | — | 735 | ||||||||
Loss on other investments | — | — | 24 | ||||||||
Bad debt expense | 35 | 24 | 31 | ||||||||
Amortization of deferred financing costs | 68 | 23 | — | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | (2,728 | ) | (5,174 | ) | (3,380 | ) | |||||
Inventories | 28 | 5 | (234 | ) | |||||||
Other assets | (1,343 | ) | (107 | ) | (1,608 | ) | |||||
Accounts payable | 567 | 1,011 | (1,156 | ) | |||||||
Accrued compensation | 946 | 2,475 | 1,167 | ||||||||
Accrued liabilities | 1,729 | (383 | ) | (802 | ) | ||||||
Other long-term liabilities | 1,220 | (252 | ) | 95 | |||||||
Net cash provided by operating activities | 45,591 | 26,541 | 15,046 | ||||||||
Cash flows from investing activities: | |||||||||||
Purchase of marketable securities | (379 | ) | (40,291 | ) | — | ||||||
Purchase of property and equipment | (3,645 | ) | (2,376 | ) | (1,712 | ) | |||||
Purchase of software and capitalized software development costs | (9,030 | ) | (6,896 | ) | (6,420 | ) | |||||
Purchase of other investments | — | (500 | ) | (305 | ) | ||||||
Acquisition of intangible member assets | — | (40,489 | ) | — | |||||||
Net cash used in investing activities | (13,054 | ) | (90,552 | ) | (8,437 | ) | |||||
Cash flows from financing activities: | |||||||||||
Dividend payments | — | — | (50,347 | ) | |||||||
Proceeds from initial public offering, net of payments for offering costs | — | — | 132,587 | ||||||||
Proceeds from follow-on offering, net of payments for offering costs | — | 23,492 | — | ||||||||
Proceeds from exercise of common stock options | 7,142 | 1,915 | 2,430 | ||||||||
Proceeds from exercise of common stock warrants | — | — | 2,380 | ||||||||
Tax benefit from exercise of common stock options | 16,634 | 11,557 | 3,429 | ||||||||
Deferred financing costs paid | — | (317 | ) | — | |||||||
Net cash provided by financing activities | 23,776 | 36,647 | 90,479 | ||||||||
Increase (decrease) in cash and cash equivalents | 56,313 | (27,364 | ) | 97,088 | |||||||
Beginning cash and cash equivalents | 83,641 | 111,005 | 13,917 | ||||||||
Ending cash and cash equivalents | $ | 139,954 | $ | 83,641 | $ | 111,005 | |||||
Stock-based compensation expense (unaudited)
Total stock-based compensation expense included in the consolidated statements of operations and comprehensive income is as follows:
Three months ended January 31, | Year ended January 31, | ||||||||||||||
(in thousands) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Cost of revenue | $ | 522 | $ | 348 | $ | 1,780 | $ | 1,088 | |||||||
Sales and marketing | (16 | ) | 198 | 914 | 903 | ||||||||||
Technology and development | 613 | 336 | 1,903 | 1,014 | |||||||||||
General and administrative | 880 | 747 | 3,801 | 2,878 | |||||||||||
Total stock-based compensation expense | $ | 1,999 | $ | 1,629 | $ | 8,398 | $ | 5,883 | |||||||
HSA Members (unaudited)
% change from | % change from | ||||||||||||||
January 31, 2017 | January 31, 2016 | January 31, 2015 | 2016 to 2017 | 2015 to 2016 | |||||||||||
HSA Members | 2,746,132 | 2,140,631 | 1,426,785 | 28 | % | 50 | % | ||||||||
Average HSA Members - Year-to-date | 2,339,091 | 1,600,327 | 1,087,962 | 46 | % | 47 | % | ||||||||
Average HSA Members - Quarter-to-date | 2,519,382 | 1,850,843 | 1,230,256 | 36 | % | 50 | % | ||||||||
HSAs with investments | 65,906 | 44,680 | 30,552 | 48 | % | 46 | % | ||||||||
Custodial assets (unaudited)
% change from | % change from | ||||||||||||||||
(in thousands, except percentages) | January 31, 2017 | January 31, 2016 | January 31, 2015 | 2016 to 2017 | 2015 to 2016 | ||||||||||||
Custodial cash | $ | 4,380,487 | $ | 3,278,628 | $ | 2,075,741 | 34 | % | 58 | % | |||||||
Custodial investments | 658,580 | 405,878 | 286,526 | 62 | % | 42 | % | ||||||||||
Total custodial assets | $ | 5,039,067 | $ | 3,684,506 | $ | 2,362,267 | 37 | % | 56 | % | |||||||
Average daily custodial cash - Year-to-date | $ | 3,661,058 | $ | 2,326,506 | $ | 1,553,845 | 57 | % | 50 | % | |||||||
Average daily custodial cash - Quarter-to-date | $ | 3,854,518 | $ | 2,682,827 | $ | 1,698,402 | 44 | % | 58 | % | |||||||
Net income reconciliation to Adjusted EBITDA (unaudited)
Three months ended January 31, | Year ended January 31, | ||||||||||||||
(in thousands) | 2017 | 2016 | 2017 | 2016 | |||||||||||
Net income | $ | 4,062 | $ | 3,128 | $ | 26,376 | $ | 16,613 | |||||||
Interest income | (146 | ) | (112 | ) | (531 | ) | (414 | ) | |||||||
Interest expense | 69 | 68 | 275 | 91 | |||||||||||
Income tax provision | 1,961 | 1,168 | 13,744 | 8,941 | |||||||||||
Depreciation and amortization | 2,559 | 1,890 | 8,889 | 6,393 | |||||||||||
Amortization of acquired intangible assets | 1,083 | 981 | 4,297 | 2,208 | |||||||||||
Stock-based compensation expense | 1,999 | 1,629 | 8,398 | 5,883 | |||||||||||
Other (1) | 236 | 106 | 1,348 | 910 | |||||||||||
Adjusted EBITDA | $ | 11,823 | $ | 8,858 | $ | 62,796 | $ | 40,625 | |||||||
(1) | For the three months ended January 31, 2017 and 2016, Other consisted of non-income based taxes of $101 and $85, and other costs of $135 and $21, respectively. For the years ended January 31, 2017 and 2016, Other consisted of miscellaneous taxes of $358 and $334, acquisition-related costs of $631 and $471, and other costs of $359 and $105, respectively. |
Reconciliation of net income outlook to Adjusted EBITDA outlook
For the year ending | |
(in millions) | January 31, 2018 |
Net income | $30 - 34 |
Income tax provision | 18 - 19 |
Depreciation and amortization | ~ 12 |
Amortization of acquired intangible assets | ~ 4 |
Stock-based compensation expense | ~ 12 |
Other | ~ 1 |
Adjusted EBITDA | $77 - 82 |