HealthEquity, Inc.

And welcome to the Health Equity Third Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Richard Putnam. Please go ahead.

Thank you, Sarah. Happy holidays to everybody, and welcome to Health Equity's third quarter fiscal year 2023 earnings conference call. My name is Richard Putnam. I do Investor Relations for Health Equity. Joining me today is John Kessler, President and CEO, Dr. Steve Neelaman, Vice Chair and Founder of the company, and Tyson Murdoch, the company's Executive Vice President and CFO. Before I turn the call over to John, I have two important reminders. First, the press release announcing our financial results for the third quarter of fiscal year 2023 was issued after the market closed this afternoon. The financial results in the press release include the contributions from our wholly owned subsidiary, WeightWorks, and accounts 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 reconciliations of these non-GAAP measures with comparable GAAP measures, and a recording of this 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, December 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 risks and uncertainties that may cause the actual results to differ materially from the statements made here today. We caution against placing undue reliance on these forward-looking statements. We also encourage you review the discussion of these factors and other risks that may affect our future results or the market price of our stock, which are detailed in our latest annual report on Form 10-K and also 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 Q&A. call over to our CEO, John Kester.

Thank you, Richard. Hello, everyone, and thanks for joining us this afternoon. Today, we are announcing strong results for health equity's fiscal 2023 third quarter. We're raising our full-year outlook for fiscal 2023, and we are providing an early view, that's a preview to some, to fiscal 2024. I'll discuss Q3 operating results. Tyson will review the financial results in detail and provide updated guidance. and Steve is here for Q&A. Let's start with reviewing the five key metrics that drive our business. Revenue of $216.1 million in the quarter grew 20% versus the third quarter of last year, thanks to strong growth in HSA members, their assets, and improving custodial yields and the inclusion of the acquired further business. Adjusted EBITDA of $73.4 million also grew 20% versus the third quarter of last year, reflecting revenue growth Total accounts grew to $14.5 million, up 9%, compared to last Q3. HSA members reached $7.7 million, up 23% year-over-year, and health equity HSA members grew their assets to $20.2 billion at quarter's end, which was also up 23% from a year ago. Team Purple continued its strong FY23 sales effort, adding 170,000 HSAs, up 13% from 151,000 new HSAs opened in Q3 last year. Organic account growth of 12% over the last year is well ahead of the market's 9% growth reported in Devonier's mid-year assessment, which was published in September. As we complete open enrollment, we're particularly excited about what appears to be a strong showing from our network partners and conversion of enterprise cross-sell opportunities, as well as increasing usage by our enterprise clients of our max enroll engagement product. Continued volatile market conditions contributed to a sequential decline in HSA invested assets of $333 million in the quarter, even while HSA investing members grew 23% year over year and continued to fund their HSA investments. The average HSA balance of our members increased slightly year over year. Custodial revenue growth was very strong, with higher than expected custodial yields in the quarter driven by robust adoption of health equity's enhanced rates offering and the actions of the Federal Reserve. We continue to build our enhanced rates partnerships, which will allow us to further grow HSA cash balances in that product, adding to yields in the future. Today's results and the guidance Tyson will detail in a moment include the softness in CDB administration services that we highlighted last quarter. Year-to-date service fees from CDBs themselves declined in fiscal 23 versus the same period in fiscal 22. However, with commuter growth and partially recovering some of the FSA revenue attrition we saw earlier in the year in Q3, we are reporting a sequential and year-over-year increase in service fees. Excluding COBRA accounts, CDB accounts grew 3%, and we remain optimistic that our CDB services can continue to grow. With that, I will turn the call over to Tyson for more details.