stockrowWhat it does
HealthEquity administers health savings accounts, or HSAs, and other employee benefits in the United States. An HSA lets an eligible person save, spend and invest money for healthcare with tax advantages. The account belongs to the individual and remains theirs if they change jobs, change health plans or retire.
Employers offer HealthEquity’s services to employees, often through health plans, benefits administrators and other partners. Alongside HSAs, the company administers flexible spending accounts for healthcare and dependent care, health reimbursement arrangements funded by employers, and commuter benefits. It also administers continuation of health coverage under COBRA.
Members can use HealthEquity’s online platform, mobile app and payment cards to manage accounts and pay eligible expenses. Those with sufficient balances can choose to invest, with or without automated advice. A marketplace provides access to healthcare products and services from third-party providers, with payment through eligible HealthEquity accounts.
As of January 31, 2026, HealthEquity administered 10.6 million HSAs holding $36.5 billion in assets, along with 7.2 million other consumer-directed benefits accounts. The company was incorporated in 2002 and is headquartered in Draper, Utah. Scott Cutler is president and chief executive officer.
How it makes money
HealthEquity earns revenue from three main sources: custodial, service and interchange. Its revenue is tied to the accounts it administers, the cash and investments held in those accounts, and members’ payment activity.
Custodial revenue primarily comes from HSA cash placed with insurance company partners and federally insured bank and credit union partners, as well as client-held funds deposited with those partners. The company generally earns a higher yield on cash in its insurance-backed Enhanced Rates offering than on cash held by its depository partners in Basic Rates. Contract terms and prevailing interest rates affect the yield HealthEquity can earn. The company also uses Treasury bond forwards to hedge some benchmark interest-rate risk on expected future cash placements.
Service revenue mainly consists of administration fees paid by employers, network partners and account holders. It also includes revenue from invested HSA assets and the marketplace. Members who use the investment platform or automated advice pay asset-based fees. The company has also launched SimplyInvest, an investment lineup without an administrative fee. In the second quarter of fiscal 2027, HealthEquity said its marketplace revenue was immaterial to overall financial results.
Interchange revenue mainly comes from merchant fees when members use HealthEquity’s physical cards or virtual payment system. This revenue depends on payment activity rather than simply holding an account.
Revenue for the first six months of fiscal 2027 was $705.4 million; second-quarter revenue grew 8% year over year. HealthEquity expects fiscal 2027 revenue between $1.411 billion and $1.421 billion.
| Product or service | Revenue, FY2026 | Share | Change on the year |
|---|---|---|---|
| Custodial | $636.8 million | 48.5% | 16.8% |
| Service | $485.0 million | 36.9% | 1.40% |
| Interchange | $191.6 million | 14.6% | 8.84% |
Customers and how it sells
HealthEquity’s sole geographic market is the United States. It reaches consumers primarily through employers, which offer the accounts and benefits to their employees. Account holders use the services to manage healthcare savings and spending, while employers and their advisers select and help communicate the benefits.
The company reaches employers through its own sales force, benefits brokers and advisers, and a network of health plans, benefits administrators and retirement plan recordkeepers. These network partners integrate with HealthEquity’s platforms and promote its services alongside their own offerings. As of January 31, 2026, the platforms were integrated with more than 200 Network Partners.
The company’s total included 17.8 million accounts as of that date, comprising HSAs and other consumer-directed benefits accounts. HealthEquity reported that HSAs reached 10.7 million in the second quarter of fiscal 2027. It also said monthly active users of its app reached 1.4 million in July, while marketplace active members exceeded 14,000 at the end of the quarter.
Members retain ownership of their HSAs when they leave an employer, change health plans or retire. HealthEquity also provides support directly to members by telephone, email and chat.
Suppliers and costs
HealthEquity relies on insurance companies, banks and credit unions to hold HSA cash under contractual arrangements. Insurance partners hold cash through group annuity contracts or similar arrangements, while depository partners hold cash under agreements that typically run from three to five years. The interest-rate environment affects the terms of new and renewing agreements.
The company’s technology is delivered through cloud-based services hosted in third-party data centers or on a virtual private cloud. Third-party marketplace providers are responsible for clinical services where applicable, fulfillment and ongoing member support. HealthEquity also uses a third-party partner for a self-directed brokerage option.
Operating costs include payroll, technology and communications systems, customer support, interest payments and capital expenditures. HealthEquity is investing in platform modernization, security and automation. It says service costs for a customer typically decline after onboarding and education. In the second quarter of fiscal 2027, the company reported lower service costs per account and said enhanced self-service and operating efficiencies helped reduce human-handled calls 25% year over year. The company also said automation has computing costs, including token usage.
- Revenue$1.3B
- Cost of revenue−$400.3M
- Research and development−$262.5M
- Selling, general and administrative−$215.2M
- Other operating costs−$113.0M
- Operating income$322.5M
Competitive position
HealthEquity competes directly with HSA custodians and other providers of consumer-directed benefits. Named competitors include Fidelity Investments, UnitedHealth Group’s Optum and Webster Bank. Other competitors include health insurers, payroll providers, benefits specialists, human resources consultants and banks. Benefits administrators can also partner with banks and other custodians to compete, while network partners may choose to offer competing services themselves.
HealthEquity’s share of HSA assets was 20% as of June 2025. Its services combine HSAs with other benefits, and its platforms were integrated with more than 200 Network Partners as of January 31, 2026. The company says switching an individually owned HSA requires effort and can result in closure fees. It also says some named competitors can devote more resources to their products and services.
Our reading: Partner integrations and distribution relationships provide a meaningful competitive advantage because they connect HealthEquity to employers and members, although those partners can also work with competitors. Our reading: Member ownership and the effort of moving an account support retention, but they do not prevent employers or members from choosing another provider. Our reading: The bundled offering and technology broaden the company’s proposition, though competition and service-price reductions constrain its pricing power.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Fidelity Investments | HSA custody and consumer-directed benefits | High |
| UnitedHealth Group’s Optum | HSA custody and consumer-directed benefits | High |
| Webster Bank | HSA custody and consumer-directed benefits | High |
Growth opportunities
HealthEquity seeks to add accounts through employer sales and network partnerships, while encouraging existing members to save, spend and invest more through its platform. In the second quarter of fiscal 2027, it reported that total HSAs grew 8% and HSA assets grew 14% year over year. It also reported that new HSAs from sales grew 24% year over year.
The company is expanding its marketplace and developing a next-generation app intended to bring accounts, education, reimbursements and marketplace access together. Its marketplace categories include metabolic and hormonal health, diagnostics, consumer health devices, skincare and recovery. HealthEquity expects to roll out the app in the coming months, while noting that marketplace revenue was immaterial to overall results in the second quarter.
Investing is another focus. HealthEquity said approximately 9% of its HSA population was investing in the second quarter of fiscal 2027, and it introduced the no-administrative-fee SimplyInvest lineup. It is also using automation in service workflows and investing in its technology platforms.
Changes in eligibility can expand the population able to use HSAs. A law enacted in July 2025 expanded availability to individuals with Bronze and Catastrophic health plans. HealthEquity also expects to continue evaluating acquisitions of HSA portfolios and businesses, though its results depend partly on integrating what it buys.
- $756.6MFY2022
- $861.7MFY2023
- $999.6MFY2024
- $1.2BFY2025
- $1.3BFY2026
- $1.4BFY2027 guidance
Structural risks
- Tax and healthcare policy: A reduction, elimination or change in the availability of tax benefits for HSAs and other consumer-directed benefits could materially affect HealthEquity. Changes in healthcare policy may also affect demand for its services in ways the company cannot predict.
- Interest rates: Sustained changes in prevailing rates affect the custodial revenue the company can realize on HSA cash and the interest retained by members. Floating-rate balances and cash outside fixed-rate contracts can also affect custodial yield.
- Partners and competition: Network partners may reduce or stop offering HealthEquity’s services or choose other providers. The company also faces service-revenue pressure from year-over-year price reductions.
- Security and service: Cyberattacks, ransomware or other data-security incidents could materially affect the business. Failures in member, employer or partner support could also damage relationships and operating results.
- Debt and acquisitions: Substantial debt could limit funding flexibility and expose the company to interest-rate volatility. Acquisition and investment strategies may not succeed, and acquired portfolios must be integrated effectively.
Bottom line
Our reading
HealthEquity combines benefits administration with revenue from member cash, investments and payments, so account growth is only one driver of its results (item1; item7). Its integrated partner network and the effort involved in moving HSAs support retention, but partners can also become competitors and service pricing is under pressure (item1; call_qa). The business remains exposed to changes in tax rules, interest rates and data security, while marketplace expansion has yet to contribute material revenue (item1a; item7; call_prepared).