Founded in 2002, HealthEquity has built its business around a simple premise: help Americans spend and save smarter on healthcare through tax-advantaged accounts. With employer healthcare costs hitting $25,000 per employee in 2026 - up 9% YoY - and one in three adults having skipped or postponed care due to cost, the company's value proposition has never been more timely. Let's take a closer look.
HealthEquity's platform centers on a suite of consumer-directed benefit (CDB) products designed to shift healthcare from a passive expense into a manageable financial asset. Its flagship Health Savings Accounts offer triple tax advantages — pre-tax contributions, tax-free growth, and tax-free withdrawals — and are paired with high-deductible health plans. Balances are fully portable and never expire, following the member through job changes and into retirement. Alongside HSAs, the company offers an investment platform ranging from self-directed options to automated portfolio management, with risk diversification tools and personalized guidance built in.
Healthcare FSAs let employees set aside pre-tax dollars for medical co-pays, vision, and dental costs while reducing employer payroll tax burdens. Dependent Care FSAs serve a similar function for childcare and eldercare expenses. Health Reimbursement Arrangements are employer-funded, fully customizable accounts with rollover capability on unused balances. COBRA services handle end-to-end continuation coverage for departing employees — billing, eligibility, and federal and state compliance all in one place. Rounding out the offering, commuter programs provide pre-tax transit and parking benefits supported by real-time commute planning tools, a feature particularly relevant in hybrid-work environments.
Revenue flows from three distinct streams. Service fees — earned from administering HSAs and CDBs across the company's network of partners, clients, and members — represent the largest share. Custodial revenue is earned on HSA cash held by depository and insurance partners. Interchange fees, collected on transactions processed through physical and virtual payment cards, round out the mix.
HealthEquity holds 10.6 million HSAs, up 8% YoY, and manages $37.1 billion in total HSA assets — a 19% increase from the prior year, driven predominantly by a 38% surge in invested assets to $19.6 billion. Total accounts across all product types stand at 17.8 million, including 3.3 million FSAs, 2.5 million HRAs, and 0.6 million commuter accounts. The company now holds roughly 1 in 4 HSAs in the United States, cementing its position as the country's largest HSA custodian by account count.
The group was partly built through a series of targeted acquisitions: the Luum commuter platform in March 2021 ($56 million), Fifth Third Bank's HSA book in September 2021 ($61 million, adding 160,000 HSAs), Further in November 2021 ($455 million, adding 580,000 HSAs and $1.9 billion in assets), HealthSavings in March 2022 ($60 million, adding 87,000 HSAs and $1.3 billion), and BenefitWallet (266,000 HSAs, $1.1 billion in assets, with the transfer now substantially complete). Each deal extended either geographic reach, asset depth, or product capability.
The competitive landscape remains intense. HealthEquity goes up against Optum (UnitedHealth Group), Webster Bank, Fidelity, major commercial banks, and a range of HR consultants and health insurers. Despite this, the company has grown its market share from under 5% in 2010 to over 20% today. The broader HSA market has expanded accordingly — from roughly $10 billion in assets and 6 million accounts in 2010 to a multi-hundred-billion dollar pool today — and the runway ahead remains substantial.
Revenue reached $1.31 billion in 2026, up roughly 9.5% from the prior year, and consensus estimates point to $1.41 billion in fiscal 2027, $1.53 billion in fiscal 2028, and $1.62 billion in fiscal 2029. On a quarterly basis, Q1 2027 revenue came in at $354.6 million, up 7% YoY, with custodial revenue growing 11% and interchange up 5%.EBITDA for fiscal 2026 reached $566 million, with a margin of approximately 43% — compared to 37% in fiscal 2024. Net income jumped to $215 million in 2026 from $97 million in 2025 and just $56 million in 2024. Analysts expect net income to reach $249 million in 2027 and $299 million in 2028. On an adjusted EBITDA basis, Q1 2027 delivered $164.5 million — up 17% YoY— at a 46% margin.
Net debt has declined from $760 million at the end of 2025 to $639 million at the end of 2026, and consensus estimates show it turning net cash positive by 2028 as FCF compounding takes hold. FCF itself has grown from $241 million in 2024 to $455 million in 2026, with projections approaching $480 million by 2028. Debt/EBITDA has fallen from 1.61x in 2025 to 1.13x in 2026, and is expected to drop below 1x in 2027. ROE reached 16.6% in 2026 versus 4.7% in FY25; ROA improved to 10.3% from 2.9%. Analysts forecast revenue of $1.41–$1.42 billion, net income of $242–$248 million, and adjusted EBITDA of $625–$633 million for 2029. EV/EBITDA sits at roughly 14x on 2026 and should decrease to 10x by 2028, while P/E is around 35x trailing but declines toward 24x on 2028 estimates.
Regarding risks, legislative changes that curb HSA tax advantages remain the most existential threat, given how directly that drives account formation and asset accumulation. Dependence on depository partners for custodying HSA cash introduces counterparty exposure. And despite the recent integration progress, the company's inorganic growth history means execution complexity is always a background variable.
HealthEquity occupies an increasingly defensible position. Its 1-in-4 HSA market share, multi-year custodial yield tailwind from the maturing rate book — 2027 contracts roll off at just 1.8% average yield, repricing meaningfully higher as they mature — and expanding AI-powered platform, including agentic customer support and automated claims processing. It benefits from a compounding business in a structurally underpenetrated market.
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