Attn:
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Aamira Chaudhry and Doug Jones
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Division of Corporation Finance
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Re:
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HealthEquity, Inc.
Form 10-K for the Fiscal Year Ended January 31, 2022 Filed March 31, 2022 Form 10-Q for the Interim Period Ended April 30, 2022
Filed June 8, 2022
File No. 001-36568 |
1.
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You present your non-GAAP measure "adjusted EBITDA" as a percentage of revenue. Please present on this basis in your periodic filings with equal or greater prominence the comparable GAAP
measure to "adjusted EBITDA." Refer to Item 10(e)(1)(i)(A) of Regulation S-K.
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2.
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You disclose technology and development operating expense include the costs of operating your on-demand technology infrastructure. Please explain to us your consideration of classifying these
costs in cost of revenue as it appears you generate revenue from operating your platforms.
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3.
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Your discussion of cash flows from operating activities appears to be a recitation of the items presented in your statement of cash flows of how the amount of operating cash flow was derived
for each period. Your discussion also refers to noncash items that do not impact cash. Pursuant to Item 303 of Regulation S-K, your discussion should be an analysis of why operating cash materially changed between periods presented. This
includes discussing material changes in underlying factors, particularly in regard to working capital, between periods. Refer to the introductory paragraph of section IV.B and paragraph B.1 of Release No. 33-8350 for guidance. Please revise
the disclosure in your annual and interim period filings as appropriate.
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4.
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Please revise to present accumulated amortization for each major intangible asset class. Refer to ASC 350-30-50-2.a.1 for guidance.
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5.
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We note the loss from operations in each three months ended period from the interim period ended July 31, 2021 to the current interim period. Please disclose the reason(s) for this apparent
trend and provide other relevant trend information pursuant to Item 303 of Regulation S-K. Also refer to Release Nos. 33-6835 and 33-8350 for further guidance.
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•
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our discussion of custodial revenue (“Although interest rates have increased, we expect our custodial revenue to continue to be adversely affected . . .” See page 20.);
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cost of revenue (“On an annual basis, we expect our cost of revenue to continue to increase as a percentage of our total revenue, primarily due to the inclusion of a full year of Further's results of operations
and expected increases in stock-based compensation.” See page 28.);
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sales and marketing expense (“We expect our sales and marketing expenses to increase for the foreseeable future as we focus on our cross-selling program and marketing campaigns. On an annual basis, we expect
our sales and marketing expenses to increase as a percentage of our total revenue, primarily due to the inclusion of a full year of Further's results of operations and expected increases in stock-based compensation.” See page 28.);
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technology and development expense (“We expect our technology and development expenses to increase for the foreseeable future as we continue to invest in the development and security of our proprietary
technology. On an annual basis, we expect our technology and development expenses to increase as a percentage of our total revenue, primarily due to the inclusion of a full year of Further's results of operations, expected increases in
stock-based compensation, and our growth initiatives.” See page 28.);
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general and administrative expense (“We expect our general and administrative expenses to increase for the foreseeable future due to the additional demands on our legal, compliance, and accounting functions
that we incur as we continue to grow our business. On an annual basis, we expect our general and administrative expenses to increase as a percentage of our total revenue, primarily due to the inclusion of a full year of Further's results
of operations, expected increases in stock-based compensation, and our growth initiatives.” See page 29.); and
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interest expense (“On an annual basis, we expect interest expense to increase, primarily from the inclusion of a full year of interest expense on the $600.0 million aggregate principal
amount of the Notes, which were issued in October 2021, and due to the impact of increased interest rates on our term loan facility, which had an outstanding principal balance of $345.6 million as of July 31, 2022.” See page 29.).
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cc:
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Tyson Murdock
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Delano Ladd
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