HealthEquity, Inc.

Welcome. I would now like to hand the conference over to your speaker today, Richard Putnam. Please go ahead.

Thank you, May, and good afternoon. Welcome to HealthEquity's second quarter fiscal year 2022 earnings conference call. My name is Richard Putnam. I do investor relations here for HealthEquity, and joining me today is John Kessler, our President and CEO of Dr. Steve Neileman, our vice chair and founder of the company, Tyson Murdoch, the company's EVP and CFO, and Ted Bloomberg, EVP and COO. Before I turn the call over to John, I have two important reminders. First, a press release announcing our financial results for the second quarter of fiscal year 2022 was issued after the market closed this afternoon. The metrics reported in the press release include contributions from our wholly owned subsidiary, WageWorks, and the account it administers. The press release also includes definition of certain non-GAAP financial measures that we will reference here today. A copy of today's press release, including the reconciliations of these non-GAAP measures with comparable GAAP measures, And a recording of the webcast can be found on our investor relations website, which is ir.healthequity.com. Second, our comments and responses to your questions today reflect management's view as of today, September 8, 2021, and will contain forward-looking statements as defined by the SEC, including predictions, expectations, estimates, and other information that might be considered forward-looking. There are many important factors relating to our business which could affect the forward-looking statements made here today. These forward-looking statements are subject to risk and uncertainties that may cause the actual results to differ materially from the statements made here today. As a result, we caution you against placing undue reliance on these forward-looking statements and we also encourage you to review the discussion of these factors and other risks that may affect our future results or the market price of our stock. And they are detailed in our latest annual report on Form 10-K and in subsequent periodic reports that we file with the SEC. We assume no obligation to revise or update these forward-looking statements in light of new information or future events. At the conclusion of our prepared remarks, we will turn the call over to the operator to provide instructions and to host our Q&A. With that, I'll turn the call over to our CEO, John Kessler.

Thank you, Richard. Gets better every time. Hello, everyone, and thanks for joining us this afternoon. Today, we have good news to report. We're announcing strong results for health equity second quarter of fiscal 22, ended July 31st, and we are reaffirming guidance for the fiscal 22 full year. I will discuss our Q2 results and pending acquisitions. Ted will review operations and integration progress. And Tyson will review the financial details of the quarter and provide updated guidance for fiscal 22. Steve is here to join us for Q&A. As always, let's start with the five key metrics that drive our business. The team delivered strong year-over-year growth in HSA members and assets, while commuter yield headwinds continue to impact revenues. Revenue of $189.1 million grew 7% versus the second quarter of last year due to improving year-over-year HSA member asset and other CDB growth, along with one-time COBRA subsidy revenue that hit largely in Q2. And that was all partially offset, of course, by lower custodial yields and commuter benefit utilization, which remains well below pre-pandemic revenue levels. Adjusted EBITDA of $65.5 million grew similarly sequentially and up from... the second quarter of last year of $60.0 million. Total accounts ended the quarter at $13.1 million, which does not include the nearly 700,000 commuter accounts that went into suspense since the beginning of the pandemic. HSA members at quarter's end reached $6.0 million, up 11% year over year, and HSA assets at quarter's end reached a record $15.5 billion, up a larger 27% from a year ago. The team delivered Very strong first half sales results, including a fiscal second quarter record of 180,000 new HSAs, up 67% from 108,000 opened in Q2 last year. To date, this fiscal year, we have welcomed 295,000 new HSA members, up 38% year over year, and more than in the same period in any year of our history. HSA assets grew by $458 million during the quarter, with most of that growth ending up in investments as members and their employers continue to contribute and invest. Investing HSA members, in fact, grew 42% year-over-year, with more of our members connecting health and wealth. The average balance of HSA members grew a robust – I think it was incredible last quarter, now it's robust – 14% year-over-year, even during a quarter where member spend increased significantly. interchange revenue by 23% year-over-year. So people were spending and still contributing. CDB accounts also continued to grow as well, even without a commuter rebound. The strong organic results in Q2 do not include the acquisitions of further or fifth-third banks' HSA portfolio, which have not yet closed. We believe the further and fifth-third transactions will enhance health equities market leadership and scale in our core and growing HSA business. adding approximately 0.7 million HSAs and $2 billion of custodial assets upon their closings in total later this year. Further, we'll also strengthen the network partner strategy that has helped fuel health equities HSA growth from the start, with significant new partners, increased commitment to the Blue Cross and Blue Shield system, new API-based platform capabilities to support flexible branding, and deeper integration of health equity into partner offerings. There truly are exciting things on the way. As was reported in this morning's 8K filing, the further agreement has been amended, moving the target date for close for the bulk of the business to November and creating a separate closing process for the $0.3 billion of Viva assets. This provides Viva fiduciaries time for review before transfer while protecting deal value through an earn-out structure negotiated with the sellers. The fifth third portfolio transfer will occur shortly. We are pleased with the results we're reporting today in light of the pandemic's continuing impact. Commuter revenue remains well under 50% of pre-pandemic levels, with the Delta variant leading many employers to push back return to office plans, as you all know. Card spend plateaued in Q2, which we also see as an effect of the Delta variant. These headwinds will eventually abate, of course, and the team has the opportunity for a strong second half, capitalizing on a great sales start to the year. I will now turn the call to Ted to review operations and integration. Mr. Bloomberg.