HealthEquity, Inc (HQY) has reported a 29.86 percent rise in profit for the quarter ended Jan. 31, 2017. The company has earned $4.06 million, or $0.07 a share in the quarter, compared with $3.13 million, or $0.05 a share for the same period last year. Revenue during the quarter surged 30.45 percent to $46.81 million from $35.89 million in the previous year period. Gross margin for the quarter expanded 40 basis points over the previous year period to 51.76 percent. Total expenses were 86.80 percent of quarterly revenues, down from 87.85 percent for the same period last year. This has led to an improvement of 106 basis points in operating margin to 13.20 percent.
Operating income for the quarter was $6.18 million, compared with $4.36 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at $11.82 million compared with $8.86 million in the prior year period. At the same time, adjusted EBITDA margin improved 57 basis points in the quarter to 25.26 percent from 24.68 percent in the last year period.
“HealthEquity had another record setting year in fiscal year 2017 surpassing $5 billion in custodial assets and opening a record 668,000 new HSAs,” said Jon Kessler, president and chief executive officer of HealthEquity. “Our 37% growth of custodial assets and 28% growth of HSAs led to greater market share and generated year-over-year revenue growth of 41% and Adjusted EBITDA growth of 55%. Adjusted EBITDA margins reached a record 35% of revenue as we continue to scale our proprietary platform and unique healthcare ecosystem. Building on our successful fiscal 2017, we are poised for another strong growth year in fiscal 2018.”
HealthEquity, Inc projects revenue to be in the range of $220 million to $225 million for financial year 2018. For fiscal year 2018, HealthEquity, Inc expects net income to be in the range of $30 million to $34 million. For financial year 2018, the company forecasts diluted earnings per share to be in the range of $0.50 to $0.55.
Operating cash flow improves significantly
HealthEquity, Inc has generated cash of $45.59 million from operating activities during the year, up 71.78 percent or $19.05 million, when compared with the last year. The company has spent $13.05 million cash to meet investing activities during the year as against cash outgo of $90.55 million in the last year.
Cash flow from financing activities was $23.78 million for the year, down 35.12 percent or $12.87 million, when compared with the last year.
Cash and cash equivalents stood at $139.95 million as on Jan. 31, 2017, up 67.33 percent or $56.31 million from $83.64 million on Jan. 31, 2016.
Working capital increases sharply
HealthEquity, Inc has recorded an increase in the working capital over the last year. It stood at $185.12 million as at Jan. 31, 2017, up 41.37 percent or $54.17 million from $130.94 million on Jan. 31, 2016. Current ratio was at 12.79 as on Jan. 31, 2017, up from 11.82 on Jan. 31, 2016.
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