HealthEquity, Inc.

Good day, and thank you for standing by, and welcome to Health Equity First Quarter 2023 Earnings Call. I would now like to hand the conference over to your host today, Richard Putnam.

Thank you, Justin. Good afternoon. Welcome to Health Equity's first fiscal year 2023 earnings conference call. My name is Richard Putnam. I do investor relations here for Health Equity, and joining me today is John Kessler, President and CEO, Dr. Steve Needleman, our Vice Chair and Founder of the company. Tyson Murdoch, the company's Executive Vice President and CFO, and Ted Bloomberg, Executive Vice President and Chief Operating Officer. Before I turn the call over to John, I have two important reminders. First, a press release announcing our financial results for the first quarter of fiscal year 2023 was issued after the market closed this afternoon. The financial results in this press release include contributions from our wholly owned subsidiary WageWorks and accounts it administers. The press release also includes definitions of certain non-GAAP financial measures that we will reference today. A copy of today's press release, including reconciliations of these non-GAAP measures and a comparable GAAP measure and a recording of the webcast can be found on our investor relations website, which is ir.helpequity.com. Second, our comments and responses to your questions today reflect management's view as of today, June 6, 2022, and will contain forward-looking statements as defined by the SEC, including predictions, expectations, estimates, or 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 today. These forward-looking statements are subject to risk and uncertainties that may cause our actual results to differ materially from the statements made here today. We caution 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, as well as our market price of our stock, detailed in our latest annual report on Form 10-K and any subsequent periodic reports filed 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 open up the call for our Q&A with the help of our operator. I'll now turn the call over to our CEO, John Kessler.

Thank you, Richard. Well done, as always. Hello, everyone, and thanks for joining us this lovely afternoon. Today, we are announcing a strong start to health equities fiscal 23, with results for the first quarter ended April 30th. I will discuss our Q1 results, and then I've got my three amigos with me here. Ted will review operations. Tyson will review the financial details of the quarter and provide updated guidance. And Steve will be here for Q&A. I guess that makes me El Guapo. Anyways, everyone has their own El Guapo. Looking first to the five key metrics that drive our business... Revenue grew 12% to $205.7 million versus $184.2 million in the first quarter of last year, which reflects our recent acquisitions and growth in accounts and assets. Adjusted EBITDA of $58.3 million was down 1% from the first quarter last year, which was $59.0 million. As we exited Q4 busy season with higher than normal service staffing levels that we discussed in March, and lower year-over-year custodial yields versus a year ago. HSA members reached 7.4 million, up 26% year-over-year, including 12% organically, and health equity HSA members grew their assets to a record 20.3 billion at quarter's end, up an even larger 35% from a year ago. Total accounts grew to 14.5 million at quarter's end. As Ted's going to detail, Team Purple started fiscal 23 with very strong sales results, including a fiscal first quarter record of 159,000 new HSAs, up 38% from 115,000 new HSAs opened in Q1 of last year. HSA investments grew a net $650 million in the quarter, and HSA members grew 36% year over year, even with the substantial market headwinds that we're all aware of. as members and their employers continue to contribute and invest. The average balance of HSA members is up a healthy 7% year-over-year, notwithstanding the above headwinds. Also in Q1, we welcomed members from Health Savings Administrators, which is the 11th largest or was the 11th largest HSA administrator on Deveneer's 2021 lead tables in its year-end market report, and adding As reported by Devanir, health savings administrators' assets to health equities would place health equity at the top of the league table in terms of both account and asset market share. That's good. As Tyson will detail, custodial yields in Q1 were stronger than previous guidance, driven by our members continuing to place more of their HSA cash in our enhanced rates product and by monetary tightening by central banks so far this year to contain inflationary pressures. Health equity and our team members are subject to those pressures as well, of course, but we expect the incremental revenue from higher yields will drive increased profit and reduce leverage even as we invest in our platform for future growth. I will now turn the call over to Ted to review operations.