0001428336-24-000102 | 10-Q | XBRL Viewer

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Net income per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2024	Jul. 31, 2023	Jul. 31, 2024	Jul. 31, 2023
Numerator (basic and diluted):
Net income	$ 35,822	$ 10,581	$ 64,635	$ 14,675
Denominator (basic):
Weighted-average common shares outstanding (in shares)	87,131	85,533	86,805	85,286
Denominator (diluted):
Weighted-average common shares outstanding (in shares)	87,131	85,533	86,805	85,286
Weighted-average dilutive effect of stock options and restricted stock units (in shares)	1,515	808	1,801	1,070
Diluted weighted-average common shares outstanding (in shares)	88,646	86,341	88,606	86,356
Net income per share:
Basic (in usd per share)	$ 0.41	$ 0.12	$ 0.74	$ 0.17
Diluted (in usd per share)	$ 0.40	$ 0.12	$ 0.73	$ 0.17
Antidilutive securities excluded from computation of earnings per share (in shares)	100	1,600	100	900

Commitments and contingencies

6 Months Ended

Jul. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and contingencies

Commitments

The Company’s principal commitments consist of long-term debt, operating lease obligations for office space and data storage facilities, processing services agreements, software subscriptions, and other contractual commitments.

In September 2023, the Company entered into an agreement to acquire the BenefitWallet HSA portfolio from Conduent Business Services, LLC ("Conduent"). The transfer closed in a series of three tranches, as presented in the following table:


	Transfers to HealthEquity			Applicable purchase price
(in thousands, except HSA Assets)	HSAs	HSA Assets (in millions)		Paid using cash on hand		Paid using borrowings under the Prior Revolving Credit Facility		Total purchase price
March 7, 2024	266	$	1,071	$	163,974	$	—	$	163,974
April 11, 2024	134	555		34,925		50,000		84,925
May 9, 2024	216	1,047		1,101		175,000		176,101
Total	616	$	2,673	$	200,000	$	225,000	$	425,000

The BenefitWallet HSA portfolio acquisition was accounted for as an asset acquisition, and related acquisition costs were capitalized as part of the cost of the asset, which is included within intangible assets, net, on the Company's condensed consolidated balance sheet. The Company capitalized $27.2 million of transaction costs associated with the acquisition during the six months ended July 31, 2024, which includes the reimbursement of $20.0 million of Conduent's transfer-related expenses. In addition, in May 2024, the Company assumed a contract with a depository partner representing approximately 7% of the total HSA Assets added through the acquisition, which provides a custodial yield that is below current market rates and expires in June 2026. The Company recorded deferred revenue of $20.3 million in May 2024 as a result of the assumed contract, which will be recorded as an increase to custodial revenue over the life of the assumed contract.

There were no other material changes during the six months ended July 31, 2024, outside of the ordinary course of business, in the Company's commitments from those disclosed in its Annual Report on Form 10-K for the fiscal year ended January 31, 2024.

Contingencies

In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future but have not yet been made. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

Legal matters

In April 2021, WageWorks, Inc. ("WageWorks"), a wholly owned subsidiary of the Company, exercised its right to terminate a lease for office space in Mesa, Arizona that had not yet commenced, with aggregate lease payments of $63.1 million and a term of approximately 11 years, following the landlord's failure to fulfill its obligations under the lease agreement (the "Lease"). WageWorks' right to terminate the Lease was disputed by the landlord, Union Mesa 1, LLC (“Union Mesa”), which claimed that the Lease had commenced on December 1, 2020. On November 5, 2021, Union Mesa notified WageWorks that it was in default of the Lease for failure to pay rent, which Union Mesa claimed was due beginning in November 2021, after 11 months of abated rent. On November 24, 2021, Union Mesa drew $2.8 million, the full amount under the letter of credit that WageWorks had posted to secure its obligations under the Lease.

On December 1, 2021, WageWorks filed a lawsuit against Union Mesa in the Maricopa County Superior Court in the State of Arizona. On January 4, 2022, WageWorks filed an amended complaint, seeking a declaratory judgment that the Lease was properly terminated and recourse against Union Mesa for breach of contract, breach of the duty of good faith and fair dealing, and conversion, including return of the funds drawn under the letter of credit. In May and

June 2022, Union Mesa filed an answer, counterclaim, and third-party complaint against WageWorks and the Company, denying WageWorks' claims and separately seeking recourse against WageWorks for breach of contract and breach of the implied covenant of good faith and fair dealing, as well as against the Company under the terms of its guaranty of WageWorks' obligations under the Lease. On July 21, 2022, WageWorks and the Company filed an answer to the counterclaim and the third-party complaint on its declaratory judgment claim that WageWorks' termination was improper under the Lease. On December 8, 2023, representatives from the parties participated in a court-ordered mediation held in Phoenix, Arizona, which was unsuccessful. On December 29, 2023, the Superior Court issued an order denying Union Mesa’s motion for partial summary judgment after finding that genuine issues of material fact exist. A trial is scheduled to start on December 9, 2024.

WageWorks is seeking damages relating to Union Mesa’s breach of the Lease and conversion of the letter of credit, including consequential damages, pre-judgment interest, and its attorneys’ fees. Union Mesa has denied liability for these damages. Through its claims, Union Mesa is seeking direct and consequential damages in an amount to be proven at trial and an award of its reasonable attorney fees, plus interest, until any damages or fees that are awarded are paid. According to Union Mesa, these damages include (i) all rent payments due under the Lease accruing from December 2, 2020 (including abated rent), (ii) late charges of 3% on past due amounts, (iii) interest on past due amounts at an interest rate of the prime rate plus 5%, (iv) costs incurred in reletting the premises, (v) attorneys’ fees negotiating the lease and related agreements, and (vi) any other amounts necessary to compensate Union Mesa for the detriment proximately caused by WageWorks’ alleged breach of the Lease. In addition, Union Mesa states that it intends to re-assert periodic actions against WageWorks to seek all amounts due from time to time through the remaining term of the Lease or until the premises are successfully relet.

The Company is subject to several putative class action lawsuits seeking unspecified damages as a result of a cybersecurity incident earlier this year in which a business partner's user account containing personally identifiable information was breached. The Company intends to vigorously defend these lawsuits. The amount of the potential loss associated with these lawsuits cannot be reasonably estimated based on currently available information.

The Company and its subsidiaries are involved in various other litigation, governmental proceedings and claims, not described above, that arise in the normal course of business. It is not possible to determine the ultimate outcome or the duration of such litigation, governmental proceedings or claims, or the impact that such litigation, proceedings and claims will have on the Company’s financial position, results of operations, and cash flows.

As required under GAAP, the Company records a provision for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. No loss accrual relating to these matters was recorded because, based on currently available information, the Company does not believe that any liabilities relating to these matters are probable or that the amount of any resulting loss is estimable. However, litigation is subject to inherent uncertainties and the Company’s view of these matters may change in the future. Were an unfavorable outcome to occur, there exists the possibility of a material adverse impact on the Company’s financial position, results of operations and cash flows for the period in which the unfavorable outcome occurs, and potentially in future periods.

Cover Page - shares	6 Months Ended
Cover Page - shares	Jul. 31, 2024	Aug. 28, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jul. 31, 2024
Document Transition Report	false
Entity File Number	001-36568
Entity Registrant Name	HEALTHEQUITY, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	52-2383166
Entity Address, Address Line One	15 West Scenic Pointe Drive
Entity Address, Address Line Two	Suite 100
Entity Address, City or Town	Draper,
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84020
City Area Code	801
Local Phone Number	727-1000
Title of 12(b) Security	Common stock, par value $0.0001 per share
Trading Symbol	HQY
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		87,324,465
Entity Central Index Key	0001428336
Current Fiscal Year End Date	--01-31
Document Fiscal Year Focus	2025
Document Fiscal Period Focus	Q2
Amendment Flag	false

Stock-based compensation - Narrative (Details) $ in Millions	6 Months Ended
	Jul. 31, 2024 USD ($) shares
Performance Restricted Stock Units, Subject To Market Conditions
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance units awards (in shares)	182,044
Grant date fair value \| $	$ 20.2
Performance Restricted Stock Units, Subject To Market Conditions \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage (as a percent)	0.00%
Performance Restricted Stock Units, Subject To Market Conditions \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage (as a percent)	200.00%
Performance Restricted Stock Units, Subject To Certain Financial Criteria
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Performance units awards (in shares)	60,682
Performance Restricted Stock Units, Subject To Certain Financial Criteria \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage (as a percent)	0.00%
Performance Restricted Stock Units, Subject To Certain Financial Criteria \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting rights percentage (as a percent)	200.00%
Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common stock issuable (in shares)	4,100,000
Shares available for grant under incentive plan (in shares)	4,100,000

Stock-based compensation - Schedule of Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2024	Jul. 31, 2023	Jul. 31, 2024	Jul. 31, 2023
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 21,574	$ 20,073	$ 53,594	$ 38,277
Cost of revenue
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	2,934	4,393	7,459	7,999
Sales and marketing
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	3,850	3,478	8,173	6,257
Technology and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	6,454	4,283	12,394	9,175
General and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense	$ 8,336	$ 7,919	$ 25,568	$ 14,846

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

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+ Details

Income taxes	6 Months Ended
Income taxes	Jul. 31, 2024
Income Tax Disclosure [Abstract]
Income taxes	Income taxes The Company follows ASC 740-270, Income Taxes - Interim Reporting, for the computation and presentation of its interim period tax provision. Accordingly, management estimated the effective annual tax rate and applied this rate to pre-tax income through the end of the latest fiscal quarter to determine the interim income tax provision. For the three and six months ended July 31, 2024, the Company recorded an income tax provision of $10.8 million and $15.2 million, respectively. This resulted in an effective income tax rate of 23.2% and 19.1% for the three and six months ended July 31, 2024, respectively, compared with an effective income tax rate of 25.6% and 39.4% for the three and six months ended July 31, 2023, respectively. For the three and six months ended July 31, 2024 and 2023, discrete tax items impacting the effective tax rate were primarily due to differences in tax deductible stock-based compensation compared to GAAP stock-based compensation expense. As of July 31, 2024 and January 31, 2024, the Company’s total gross unrecognized tax benefit was $21.2 million and $19.2 million, respectively. If recognized, $18.1 million of the total gross unrecognized tax benefits would affect the Company's effective tax rate as of July 31, 2024. The Company files income tax returns with U.S. federal and state taxing jurisdictions and is currently under examination by California and Texas. These examinations may lead to ordinary course adjustments or proposed adjustments to the Company's taxes, net operating losses, and/or tax credit carryforwards. As a result of the Company's net operating loss carryforwards and tax credit carryforwards, the Company remains subject to examination by one or more jurisdictions for tax years after 2006.

- Definition

The entire disclosure for income tax.

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+ Details

Subsequent events	6 Months Ended
Subsequent events	Jul. 31, 2024
Subsequent Events [Abstract]
Subsequent events	Subsequent events As described in Note 6—Indebtedness, on August 23, 2024, the Company entered into the Credit Agreement, under which the Company borrowed $511.9 million to repay all outstanding obligations under the Prior Credit Agreement. On September 3, 2024, the Company announced that its Board of Directors authorized a common stock repurchase program. Under the program, the Company may purchase up to $300 million of its common stock, as market conditions warrant. The common stock may be repurchased at prices that the Company deems appropriate and subject to market conditions, applicable law and other factors deemed relevant in the Company's sole discretion. Such repurchases may be effected through open market purchases, privately negotiated transactions or otherwise, including repurchase plans that satisfy the conditions of Rule 10b5-1 under the Securities Exchange Act of 1934. The stock repurchase program does not obligate the Company to repurchase any dollar amount or number of shares of common stock, and the program may be suspended or discontinued at any time.

Intangible assets and goodwill

6 Months Ended

Jul. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible assets and goodwill

Intangible assets

The gross carrying amount and associated accumulated amortization of intangible assets were as follows:


	July 31, 2024
(in thousands)	Gross carrying amount		Accumulated amortization		Net carrying amount
Amortizable intangible assets:
Software and software development costs	$	284,097	$	(211,765)	$	72,332
Acquired HSA portfolios	737,011		(100,039)		636,972
Acquired customer relationships	759,782		(230,973)		528,809
Acquired developed technology	132,825		(116,728)		16,097
Acquired trade names	12,900		(12,900)		—
Total amortizable intangible assets	$	1,926,615	$	(672,405)	$	1,254,210


	January 31, 2024
(in thousands)	Gross carrying amount		Accumulated amortization		Net carrying amount
Amortizable intangible assets:
Software and software development costs	$	267,498	$	(197,388)	$	70,110
Acquired HSA portfolios	264,445		(81,059)		183,386
Acquired customer relationships	759,782		(205,127)		554,655
Acquired developed technology	132,825		(105,049)		27,776
Acquired trade names	12,900		(12,879)		21
Total amortizable intangible assets	$	1,437,450	$	(601,502)	$	835,948

Amortization expense was $42.3 million and $79.9 million for the three and six months ended July 31, 2024, respectively, and $36.3 million and $72.8 million for the three and six months ended July 31, 2023, respectively.

Goodwill

There were no changes to the carrying value of goodwill during the six months ended July 31, 2024.

Intangible assets and goodwill (Tables)

6 Months Ended

Jul. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Gross Carrying Amount and Associated Accumulated Amortization of Intangible Assets

The gross carrying amount and associated accumulated amortization of intangible assets were as follows:


	July 31, 2024
(in thousands)	Gross carrying amount		Accumulated amortization		Net carrying amount
Amortizable intangible assets:
Software and software development costs	$	284,097	$	(211,765)	$	72,332
Acquired HSA portfolios	737,011		(100,039)		636,972
Acquired customer relationships	759,782		(230,973)		528,809
Acquired developed technology	132,825		(116,728)		16,097
Acquired trade names	12,900		(12,900)		—
Total amortizable intangible assets	$	1,926,615	$	(672,405)	$	1,254,210


	January 31, 2024
(in thousands)	Gross carrying amount		Accumulated amortization		Net carrying amount
Amortizable intangible assets:
Software and software development costs	$	267,498	$	(197,388)	$	70,110
Acquired HSA portfolios	264,445		(81,059)		183,386
Acquired customer relationships	759,782		(205,127)		554,655
Acquired developed technology	132,825		(105,049)		27,776
Acquired trade names	12,900		(12,879)		21
Total amortizable intangible assets	$	1,437,450	$	(601,502)	$	835,948

Indebtedness - Narrative (Details)					6 Months Ended
Indebtedness - Narrative (Details)	Aug. 23, 2024 USD ($)	Jun. 01, 2023	May 31, 2023	Oct. 08, 2021 USD ($)	Jul. 31, 2024 USD ($)	Jan. 31, 2024 USD ($)
4.50% Senior Notes due 2029
Debt Instrument [Line Items]
Stated interest rate (as a percent)					4.50%
4.50% Senior Notes due 2029 \| Senior Notes
Debt Instrument [Line Items]
Stated interest rate (as a percent)				4.50%
Principal amount				$ 600,000,000
Accrued interest					$ 9,000,000.0	$ 9,300,000
Effective interest rate (as a percent)					4.72%
4.50% Senior Notes due 2029 \| Senior Notes \| October 1, 2024
Debt Instrument [Line Items]
Redemption price (as a percent)				102.25%
4.50% Senior Notes due 2029 \| Senior Notes \| October 1, 2025
Debt Instrument [Line Items]
Redemption price (as a percent)				101.125%
4.50% Senior Notes due 2029 \| Senior Notes \| October 1, 2026 and thereafter
Debt Instrument [Line Items]
Redemption price (as a percent)				100.00%
4.50% Senior Notes due 2029 \| Senior Notes \| Prior to October 1, 2024
Debt Instrument [Line Items]
Redemption price (as a percent)				100.00%
4.50% Senior Notes due 2029 \| Senior Notes \| Prior to October 1, 2024, 40% of Principal
Debt Instrument [Line Items]
Redemption price (as a percent)				104.50%
Percentage of principal amount redeemed (as a percent)				40.00%
Credit Agreement
Debt Instrument [Line Items]
Maximum leverage ratio					5.00
Minimum interest coverage ratio					3.00
Credit Agreement \| Subsequent Event
Debt Instrument [Line Items]
Maximum borrowing capacity of future commitments	$ 450,000,000
Maximum leverage ratio	3.85
Credit Agreement \| Secured Revolving Credit Facility \| Subsequent Event \| Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Credit spread adjustment on variable rate (as a percent)	0.10%
Credit Agreement \| Secured Revolving Credit Facility \| Subsequent Event \| Secured Overnight Financing Rate (SOFR) \| Minimum
Debt Instrument [Line Items]
Variable rate borrowing spread (as a percent)	1.25%
Credit Agreement \| Secured Revolving Credit Facility \| Subsequent Event \| Secured Overnight Financing Rate (SOFR) \| Maximum
Debt Instrument [Line Items]
Variable rate borrowing spread (as a percent)	2.50%
Credit Agreement \| Secured Revolving Credit Facility \| Subsequent Event \| Customary Base Rate \| Minimum
Debt Instrument [Line Items]
Variable rate borrowing spread (as a percent)	0.25%
Credit Agreement \| Secured Revolving Credit Facility \| Subsequent Event \| Customary Base Rate \| Maximum
Debt Instrument [Line Items]
Variable rate borrowing spread (as a percent)	1.50%
Credit Agreement \| Line of Credit \| Secured Revolving Credit Facility \| Subsequent Event
Debt Instrument [Line Items]
Facility term (in years)	5 years
Credit facility, amount	$ 1,000,000,000
Proceeds from revolving credit facility	511,900,000
Long-term line of credit	$ 511,900,000
Credit Agreement \| Line of Credit \| Secured Revolving Credit Facility \| Subsequent Event \| Minimum
Debt Instrument [Line Items]
Unused capacity commitment fee	0.25%
Credit Agreement \| Line of Credit \| Secured Revolving Credit Facility \| Subsequent Event \| Maximum
Debt Instrument [Line Items]
Unused capacity commitment fee	0.50%
Credit Agreement \| Letter of Credit \| Secured Revolving Credit Facility \| Subsequent Event
Debt Instrument [Line Items]
Credit facility, amount	$ 25,000,000
Prior Credit Agreement
Debt Instrument [Line Items]
Stated interest rate (as a percent)					6.70%
Effective interest rate (as a percent)					7.46%
Prior Credit Agreement \| Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Credit spread adjustment on variable rate (as a percent)		0.10%
Prior Credit Agreement \| Secured Overnight Financing Rate (SOFR) \| Minimum
Debt Instrument [Line Items]
Variable rate borrowing spread (as a percent)		1.25%
Prior Credit Agreement \| Secured Overnight Financing Rate (SOFR) \| Maximum
Debt Instrument [Line Items]
Variable rate borrowing spread (as a percent)		2.25%
Prior Credit Agreement \| Customary Base Rate \| Minimum
Debt Instrument [Line Items]
Variable rate borrowing spread (as a percent)		0.25%	0.25%
Prior Credit Agreement \| Customary Base Rate \| Maximum
Debt Instrument [Line Items]
Variable rate borrowing spread (as a percent)		1.25%	1.25%
Prior Credit Agreement \| London Interbank Offered Rate (LIBOR) \| Minimum
Debt Instrument [Line Items]
Variable rate borrowing spread (as a percent)			1.25%
Prior Credit Agreement \| London Interbank Offered Rate (LIBOR) \| Maximum
Debt Instrument [Line Items]
Variable rate borrowing spread (as a percent)			2.25%
Prior Credit Agreement \| Subsequent Event
Debt Instrument [Line Items]
Repayments of debt	$ 511,900,000
Prior Credit Agreement \| Line of Credit \| Secured Revolving Credit Facility
Debt Instrument [Line Items]
Facility term (in years)				5 years
Credit facility, amount				$ 1,000,000,000.0
Long-term line of credit					$ 225,000,000.0
Prior Credit Agreement \| Line of Credit \| Secured Revolving Credit Facility \| Minimum
Debt Instrument [Line Items]
Unused capacity commitment fee					0.20%
Prior Credit Agreement \| Line of Credit \| Secured Revolving Credit Facility \| Maximum
Debt Instrument [Line Items]
Unused capacity commitment fee					0.40%
Prior Credit Agreement \| Letter of Credit \| Secured Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility, amount				$ 25,000,000
Prior Credit Agreement \| Secured Debt \| Prior Term Loan Facility
Debt Instrument [Line Items]
Facility term (in years)				5 years
Credit facility, amount				$ 350,000,000
Long-term line of credit					$ 286,900,000

Condensed consolidated statements of stockholders' equity (unaudited) - USD ($) $ in Thousands	Total	Common stock:	Additional paid-in capital:	Accumulated earnings
Beginning balance at Jan. 31, 2023	$ 1,895,640	$ 8	$ 1,745,716	$ 149,916
Stockholders' Equity
Issuance of common stock upon exercise of stock options, and for restricted stock		1	1,021
Stock-based compensation			38,277
Net income	14,675			14,675
Ending balance at Jul. 31, 2023	1,949,614	9	1,785,014	164,591
Beginning balance at Apr. 30, 2023	1,918,592	9	1,764,573	154,010
Stockholders' Equity
Issuance of common stock upon exercise of stock options, and for restricted stock			368
Stock-based compensation			20,073
Net income	10,581			10,581
Ending balance at Jul. 31, 2023	1,949,614	9	1,785,014	164,591
Beginning balance at Jan. 31, 2024	2,035,021	9	1,829,384	205,628
Stockholders' Equity
Issuance of common stock upon exercise of stock options, and for restricted stock			3,787
Stock-based compensation			53,594
Net income	64,635			64,635
Ending balance at Jul. 31, 2024	2,157,037	9	1,886,765	270,263
Beginning balance at Apr. 30, 2024	2,097,784	9	1,863,334	234,441
Stockholders' Equity
Issuance of common stock upon exercise of stock options, and for restricted stock			1,857
Stock-based compensation			21,574
Net income	35,822			35,822
Ending balance at Jul. 31, 2024	$ 2,157,037	$ 9	$ 1,886,765	$ 270,263

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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Amount of equity (deficit) attributable to parent. Excludes temporary equity and equity attributable to noncontrolling interest.

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+ Details

Supplemental financial statement information - Schedule of Other Income, Net (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2024	Jul. 31, 2023	Jul. 31, 2024	Jul. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Interest income	$ 3,103	$ 2,484	$ 6,984	$ 4,082
Other income (expense), net	11	272	(466)	502
Total other income, net	$ 3,114	$ 2,756	$ 6,518	$ 4,584

Income taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Income taxes (Details) - USD ($) $ in Thousands	Jul. 31, 2024	Jul. 31, 2023	Jul. 31, 2024	Jul. 31, 2023	Jan. 31, 2024
Income Tax Disclosure [Abstract]
Income tax provision	$ 10,794	$ 3,643	$ 15,220	$ 9,561
Effective tax rate (as a percent)	23.20%	25.60%	19.10%	39.40%
Gross unrecognized tax benefits	$ 21,200		$ 21,200		$ 19,200
Unrecognized tax benefits that would impact the effective tax rate	$ 18,100		$ 18,100

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Net income per share

6 Months Ended

Jul. 31, 2024

Earnings Per Share [Abstract]

Net income per share

The following table sets forth the computation of basic and diluted net income per share:


	Three months ended July 31,				Six months ended July 31,
(in thousands, except per share data)	2024		2023		2024		2023
Numerator (basic and diluted):
Net income	$	35,822	$	10,581	$	64,635	$	14,675
Denominator (basic):
Weighted-average common shares outstanding	87,131		85,533		86,805		85,286
Denominator (diluted):
Weighted-average common shares outstanding	87,131		85,533		86,805		85,286
Weighted-average dilutive effect of stock options and restricted stock units	1,515		808		1,801		1,070
Diluted weighted-average common shares outstanding	88,646		86,341		88,606		86,356
Net income per share:
Basic	$	0.41	$	0.12	$	0.74	$	0.17
Diluted	$	0.40	$	0.12	$	0.73	$	0.17

For the three months ended July 31, 2024 and 2023, 0.1 million and 1.6 million shares, respectively, attributable to outstanding stock options and restricted stock units were excluded from the calculation of diluted net income per share as their inclusion would have been anti-dilutive.

For the six months ended July 31, 2024 and 2023, 0.1 million and 0.9 million shares, respectively, attributable to outstanding stock options and restricted stock units were excluded from the calculation of diluted net income per share as their inclusion would have been anti-dilutive.

Insider Trading Arrangements	3 Months Ended	6 Months Ended
Insider Trading Arrangements	Jul. 31, 2024 shares	Jul. 31, 2024 shares
Trading Arrangements, by Individual
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false
Robert Selander [Member]
Trading Arrangements, by Individual
Material Terms of Trading Arrangement		On July 9, 2024, Robert Selander, chairman of our board of directors, entered into a Rule 10b5-1 trading arrangement (the “Selander Arrangement”). The Selander Arrangement provides for the sale, between October 9, 2024 and April 16, 2025, of up to 28,000 aggregate shares of the Company’s common stock held directly by Mr. Selander and the exercise of up to 65,000 stock options. The Selander Arrangement was entered into during an open insider trading window and is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act.
Name	Robert Selander
Title	chairman of our board of directors
Rule 10b5-1 Arrangement Adopted	true
Adoption Date	July 9, 2024
Expiration Date	April 16, 2025
Arrangement Duration	189 days
Robert Selander Trading Arrangement, Common Stock [Member] \| Robert Selander [Member]
Trading Arrangements, by Individual
Aggregate Available	28,000	28,000
Robert Selander Trading Arrangement, Stock Options [Member] \| Robert Selander [Member]
Trading Arrangements, by Individual
Aggregate Available	65,000	65,000

Condensed consolidated statements of operations and comprehensive income (unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2024	Jul. 31, 2023	Jul. 31, 2024	Jul. 31, 2023
Revenue
Total revenue	$ 299,928	$ 243,549	$ 587,525	$ 487,981
Cost of revenue
Total cost of revenue	95,876	91,884	196,335	187,846
Gross profit	204,052	151,665	391,190	300,135
Operating expenses
Sales and marketing	21,525	19,123	45,019	39,058
Technology and development	58,580	54,767	114,670	107,959
General and administrative	32,260	27,825	70,496	53,363
Amortization of acquired intangible assets	30,981	23,166	56,526	46,332
Merger integration	1,777	2,044	3,920	5,502
Total operating expenses	145,123	126,925	290,631	252,214
Income from operations	58,929	24,740	100,559	47,921
Other expense
Interest expense	(15,427)	(13,272)	(27,222)	(28,269)
Other income, net	3,114	2,756	6,518	4,584
Total other expense	(12,313)	(10,516)	(20,704)	(23,685)
Income before income taxes	46,616	14,224	79,855	24,236
Income tax provision	10,794	3,643	15,220	9,561
Net income	35,822	10,581	64,635	14,675
Comprehensive income	$ 35,822	$ 10,581	$ 64,635	$ 14,675
Net income per share:
Basic (in usd per share)	$ 0.41	$ 0.12	$ 0.74	$ 0.17
Diluted (in usd per share)	$ 0.40	$ 0.12	$ 0.73	$ 0.17
Weighted-average number of shares used in computing net income per share:
Basic (in shares)	87,131	85,533	86,805	85,286
Diluted (in shares)	88,646	86,341	88,606	86,356
Service
Revenue
Total revenue	$ 116,720	$ 111,960	$ 234,934	$ 223,033
Cost of revenue
Total cost of revenue	76,915	76,904	159,262	157,777
Custodial
Revenue
Total revenue	138,684	92,676	260,328	181,156
Cost of revenue
Total cost of revenue	10,108	8,037	19,165	16,075
Interchange
Revenue
Total revenue	44,524	38,913	92,263	83,792
Cost of revenue
Total cost of revenue	$ 8,853	$ 6,943	$ 17,908	$ 13,994

Intangible assets and goodwill - Narrative (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jul. 31, 2024	Jul. 31, 2023	Jul. 31, 2024	Jul. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 42,300,000	$ 36,300,000	$ 79,900,000	$ 72,800,000
Change in goodwill			$ 0

Stock-based compensation

6 Months Ended

Jul. 31, 2024

Share-Based Payment Arrangement [Abstract]

Stock-based compensation

The following table shows a summary of stock-based compensation in the Company's condensed consolidated statements of operations and comprehensive income during the periods presented:


	Three months ended July 31,				Six months ended July 31,
(in thousands)	2024		2023		2024		2023
Cost of revenue	$	2,934	$	4,393	$	7,459	$	7,999
Sales and marketing	3,850		3,478		8,173		6,257
Technology and development	6,454		4,283		12,394		9,175
General and administrative	8,336		7,919		25,568		14,846
Total stock-based compensation expense	$	21,574	$	20,073	$	53,594	$	38,277

Stock award plans

Incentive Plan. During the six months ended July 31, 2024, the Company adopted the HealthEquity, Inc. 2024 Equity Incentive Plan (the "Incentive Plan"), which provides for the issuance of stock awards to team members, consultants, and directors of the Company. Subject to adjustment as provided in the Incentive Plan, the aggregate number of shares of the Company’s common stock reserved and available for issuance pursuant to awards granted under the Incentive Plan is 4.1 million. As of July 31, 2024, 4.1 million shares were available for grant under the Incentive Plan. No further awards will be made under the Company’s 2014 Equity Incentive Plan.

Stock options

A summary of stock option activity is as follows:


	Outstanding stock options
(in thousands, except for exercise prices and term)	Number of options	Range of exercise prices	Weighted- average exercise price		Weighted- average contractual term (in years)	Aggregate intrinsic value
Outstanding as of January 31, 2024	726	$14.00 - 73.61	$	36.91	2.5	$	28,067
Exercised	(219)	$14.00 - 47.21	$	17.30
Outstanding as of July 31, 2024	507	$21.27 - 73.61	$	45.38	2.8	$	16,780
Vested and expected to vest as of July 31, 2024	507		$	45.38	2.8	$	16,780
Exercisable as of July 31, 2024	507		$	45.38	2.8	$	16,780

Restricted stock units

A summary of restricted stock unit ("RSU") and performance restricted stock unit ("PRSU") activity is as follows:


	RSUs and PRSUs
(in thousands, except weighted-average grant date fair value)	Shares	Weighted-average grant date fair value
Outstanding as of January 31, 2024	3,363	$	67.96
Granted	1,027	85.01
Vested	(963)	65.88
Forfeited	(156)	71.95
Outstanding as of July 31, 2024	3,271	$	73.74

Performance restricted stock units. During the six months ended July 31, 2024, the Company awarded 182,044 PRSUs subject to a market condition based on the Company’s total shareholder return relative to the Russell 2000 index as measured on January 31, 2027. The Company used a Monte Carlo simulation to determine that the grant date fair value of the awards was $20.2 million. Compensation expense is recorded over the requisite service period if the service condition is met regardless of whether the market condition is satisfied. The market condition allows for a range of vesting from 0% to 200% based on the level of performance achieved. The PRSUs cliff vest upon approval by the Talent, Compensation and Culture Committee of the board of directors.

During the six months ended July 31, 2024, the Company awarded 60,682 PRSUs subject to the achievement of certain financial criteria measured on January 31, 2027. The PRSUs cliff vest and are issued upon approval by the Talent, Compensation and Culture Committee. The Company records stock-based compensation related to PRSUs over the requisite service period when it is considered probable that the performance conditions will be met. The Company believes it is probable that the PRSUs will vest at least in part. The vesting of the PRSUs will ultimately range from 0% to 200% of the number of shares underlying the PRSU grant based on the level of achievement of the performance goals.

Each of the PRSUs granted during the six months ended July 31, 2024 contain a provision such that upon the award holder's eligible retirement, the PRSUs would remain outstanding and eligible to vest based on achievement of their respective market or performance conditions without regard to the award holder’s continued employment on the vesting date. Based on the application of ASC 718, Compensation - Stock Compensation, expense is recognized over the requisite service period, which ends on the earlier of (1) the date of approval by the Talent, Compensation and Culture Committee or (2) the date the award holder becomes eligible for retirement (defined as at least 55 years old with least 10 years of service at the Company). As a result, the expense associated with PRSUs granted to retirement-eligible individuals was recorded on the grant date.

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Jul. 31, 2024	Jul. 31, 2023	Jul. 31, 2024	Jul. 31, 2023
Pay vs Performance Disclosure
Net income	$ 35,822	$ 10,581	$ 64,635	$ 14,675

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

Supplemental financial statement information - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Jul. 31, 2024	Jan. 31, 2024
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 44,998	$ 47,031
Accumulated depreciation	(40,406)	(41,018)
Property and equipment, net	4,592	6,013
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	14,461	14,455
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	7,087	7,087
Computer equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 23,450	$ 25,489

Indebtedness (Tables)

6 Months Ended

Jul. 31, 2024

Debt Disclosure [Abstract]

Schedule of Long-Term Debt

Long-term debt consisted of the following:


(in thousands)	July 31, 2024		January 31, 2024
4.50% Senior Notes due 2029	$	600,000	$	600,000
Prior Term Loan Facility	286,875		286,875
Prior Revolving Credit Facility	225,000		—
Principal amount	1,111,875		886,875
Less: unamortized discount and issuance costs (1)	10,475		11,903
Total debt, net	1,101,400		874,972
Less: current portion of long-term debt	—		—
Long-term debt, net	$	1,101,400	$	874,972

(1)In addition to the $10.5 million and $11.9 million of unamortized discount and issuance costs related to long-term debt as of July 31, 2024 and January 31, 2024, respectively, $2.0 million and $2.5 million of unamortized issuance costs related to the Company's Prior Revolving Credit Facility (as defined below) are included within other assets on the condensed consolidated balance sheets as of July 31, 2024 and January 31, 2024, respectively.

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(22))
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Reference 2: http://www.xbrl.org/2003/role/exampleRef
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Reference 4: http://www.xbrl.org/2009/role/commonPracticeRef
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+ Details

Stock-based compensation - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended	12 Months Ended
	Jul. 31, 2024	Jan. 31, 2024
Number of options
Outstanding, beginning balance (in shares)	726
Exercised (in shares)	(219)
Outstanding, ending balance (in shares)	507	726
Vested and expected to vest (in shares)	507
Exercisable (in shares)	507
Range of exercise prices
Beginning balance, minimum (in usd per share)	$ 14.00
Beginning balance, maximum (in usd per share)	73.61
Exercised, minimum (in usd per share)	14.00
Exercised, maximum (in usd per share)	47.21
Ending balance, minimum (in usd per share)	21.27	$ 14.00
Ending balance, maximum (in usd per share)	73.61	73.61
Weighted- average exercise price
Opening balance (in usd per share)	36.91
Exercised (in usd per share)	17.30
Ending balance (in usd per share)	45.38	$ 36.91
Vested and expected to vest, weighted-average exercise price (in usd per share)	45.38
Exercisable, weighted-average exercise price (in usd per share)	$ 45.38
Outstanding stock options, weighted-average contractual term (in years)	2 years 9 months 18 days	2 years 6 months
Vested and expected to vest, weighted-average contractual term (in years)	2 years 9 months 18 days
Exercisable, weighted-average contractual term (in years)	2 years 9 months 18 days
Aggregate intrinsic value	$ 16,780	$ 28,067
Vested and expected to vest, aggregate intrinsic value (in usd per share)	16,780
Exercisable, aggregate intrinsic value	$ 16,780

Commitments and contingencies - Schedule of Transfers to HealthEquity (Details) - BenefitWallet HSA Portfolio hSA in Thousands, $ in Thousands				2 Months Ended
	May 09, 2024 USD ($) hSA	Apr. 11, 2024 USD ($) hSA	Mar. 07, 2024 USD ($) hSA	May 09, 2024 USD ($) hSA
Loss Contingencies [Line Items]
Number of HSAs transferred \| hSA	216	134	266	616
Health savings account (HSA) assets, transferred amount	$ 1,047,000	$ 555,000	$ 1,071,000	$ 2,673,000
Paid using cash on hand	1,101	34,925	163,974	200,000
Paid using borrowings under the Prior Revolving Credit Facility	175,000	50,000	0	225,000
Total purchase price	$ 176,101	$ 84,925	$ 163,974	$ 425,000

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Stock-based compensation (Tables)

6 Months Ended

Jul. 31, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Stock-Based Compensation

The following table shows a summary of stock-based compensation in the Company's condensed consolidated statements of operations and comprehensive income during the periods presented:


	Three months ended July 31,				Six months ended July 31,
(in thousands)	2024		2023		2024		2023
Cost of revenue	$	2,934	$	4,393	$	7,459	$	7,999
Sales and marketing	3,850		3,478		8,173		6,257
Technology and development	6,454		4,283		12,394		9,175
General and administrative	8,336		7,919		25,568		14,846
Total stock-based compensation expense	$	21,574	$	20,073	$	53,594	$	38,277

Schedule of Stock Option Activity

A summary of stock option activity is as follows:


	Outstanding stock options
(in thousands, except for exercise prices and term)	Number of options	Range of exercise prices	Weighted- average exercise price		Weighted- average contractual term (in years)	Aggregate intrinsic value
Outstanding as of January 31, 2024	726	$14.00 - 73.61	$	36.91	2.5	$	28,067
Exercised	(219)	$14.00 - 47.21	$	17.30
Outstanding as of July 31, 2024	507	$21.27 - 73.61	$	45.38	2.8	$	16,780
Vested and expected to vest as of July 31, 2024	507		$	45.38	2.8	$	16,780
Exercisable as of July 31, 2024	507		$	45.38	2.8	$	16,780

Schedule of Restricted Stock Unit and Performance Restricted Stock Unit Activity

A summary of restricted stock unit ("RSU") and performance restricted stock unit ("PRSU") activity is as follows:


	RSUs and PRSUs
(in thousands, except weighted-average grant date fair value)	Shares	Weighted-average grant date fair value
Outstanding as of January 31, 2024	3,363	$	67.96
Granted	1,027	85.01
Vested	(963)	65.88
Forfeited	(156)	71.95
Outstanding as of July 31, 2024	3,271	$	73.74

Supplemental financial statement information - Narrative (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Apr. 30, 2023	Jul. 31, 2024	Jul. 31, 2023	Jul. 31, 2024	Jul. 31, 2023	Jan. 31, 2024
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Prepaid expenses		$ 42,700		$ 42,700		$ 31,200
Depreciation expense		1,300	$ 2,000	2,700	$ 4,500
Remaining performance obligation		22,600		22,600		$ 6,200
Revenue recognition		$ 1,300		2,800
Loss on extinguishment of debt				$ 0	$ 1,157
Prepayment of debt	$ 50,000
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-08-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation, percentage (as a percent)		56.00%		56.00%
Revenue, remaining performance obligation, expected timing of satisfaction, period		12 months		12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-08-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation, expected timing of satisfaction, period

Supplemental financial statement information - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	6 Months Ended
	Jul. 31, 2024	Jul. 31, 2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 4,839	$ 5,451
Right-of-use assets obtained in exchange for lease obligations	$ 1,469	$ 2,109

Summary of business and significant accounting policies (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2024	Jul. 31, 2023	Jul. 31, 2024	Jul. 31, 2023
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenue	$ 299,928	$ 243,549	$ 587,525	$ 487,981
Total cost of revenue	95,876	91,884	196,335	187,846
Gross profit	204,052	151,665	391,190	300,135
Total operating expenses	145,123	126,925	290,631	252,214
Total other expense	(12,313)	(10,516)	(20,704)	(23,685)
Income tax provision	10,794	3,643	15,220	9,561
Net income	35,822	10,581	64,635	14,675
Service
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenue	116,720	111,960	234,934	223,033
Total cost of revenue	76,915	76,904	159,262	157,777
Custodial
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenue	138,684	92,676	260,328	181,156
Total cost of revenue	10,108	8,037	19,165	16,075
Interchange
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenue	44,524	38,913	92,263	83,792
Total cost of revenue	$ 8,853	6,943	$ 17,908	13,994
Prior presentation
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenue		243,549		487,981
Total cost of revenue		92,619		189,225
Gross profit		150,930		298,756
Total operating expenses		126,190		250,835
Total other expense		(10,516)		(23,685)
Income tax provision		3,643		9,561
Net income		10,581		14,675
Prior presentation \| Service
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenue		105,719		210,831
Prior presentation \| Custodial
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenue		98,917		193,358
Prior presentation \| Interchange
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenue		38,913		83,792
Reclassifications
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenue		0		0
Total cost of revenue		(735)		(1,379)
Gross profit		735		1,379
Total operating expenses		735		1,379
Total other expense		0		0
Income tax provision		0		0
Net income		0		0
Reclassifications \| Service
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenue		6,241		12,202
Reclassifications \| Custodial
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenue		(6,241)		(12,202)
Reclassifications \| Interchange
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Total revenue		$ 0		$ 0

Supplemental financial statement information (Tables)

6 Months Ended

Jul. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Property and Equipment

Property and equipment consisted of the following:


(in thousands)	July 31, 2024		January 31, 2024
Leasehold improvements	$	14,461	$	14,455
Furniture and fixtures	7,087		7,087
Computer equipment	23,450		25,489
Property and equipment, gross	44,998		47,031
Accumulated depreciation	(40,406)		(41,018)
Property and equipment, net	$	4,592	$	6,013

Schedule of Components of Operating Lease Costs and Supplemental Cash Flow Information

The components of operating lease costs were as follows:


	Three months ended July 31,				Six months ended July 31,
(in thousands)	2024		2023		2024		2023
Operating lease expense	$	2,257	$	2,365	$	4,624	$	4,966
Sublease income	(985)		(619)		(1,957)		(981)
Net operating lease expense	$	1,272	$	1,746	$	2,667	$	3,985

Supplemental cash flow information related to the Company's operating leases was as follows:


	Six months ended July 31,
(in thousands)	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,839	$	5,451
Right-of-use assets obtained in exchange for lease obligations	$	1,469	$	2,109

Schedule of Other Income, Net

Other income, net, consisted of the following:


	Three months ended July 31,				Six months ended July 31,
(in thousands)	2024		2023		2024		2023
Interest income	$	3,103	$	2,484	$	6,984	$	4,082
Other income (expense), net	11		272		(466)		502
Total other income, net	$	3,114	$	2,756	$	6,518	$	4,584

Commitments and contingencies (Tables)

6 Months Ended

Jul. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Schedule of Transfers to HealthEquity

The transfer closed in a series of three tranches, as presented in the following table:


	Transfers to HealthEquity			Applicable purchase price
(in thousands, except HSA Assets)	HSAs	HSA Assets (in millions)		Paid using cash on hand		Paid using borrowings under the Prior Revolving Credit Facility		Total purchase price
March 7, 2024	266	$	1,071	$	163,974	$	—	$	163,974
April 11, 2024	134	555		34,925		50,000		84,925
May 9, 2024	216	1,047		1,101		175,000		176,101
Total	616	$	2,673	$	200,000	$	225,000	$	425,000

Condensed consolidated statements of cash flows (unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jul. 31, 2024	Jul. 31, 2023
Cash flows from operating activities:
Net income	$ 64,635	$ 14,675
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	82,548	77,387
Stock-based compensation	53,594	38,277
Amortization of debt discount and issuance costs	1,428	1,461
Loss on extinguishment of debt	0	1,157
Deferred taxes	(5,204)	(8,138)
Changes in operating assets and liabilities:
Accounts receivable, net	(3,561)	4,254
Other assets	(9,345)	(8,526)
Operating lease right-of-use assets	3,365	6,594
Accrued compensation	(12,706)	(14,675)
Accounts payable, accrued liabilities, and other current liabilities	7,267	3,970
Operating lease liabilities, non-current	(3,840)	(8,175)
Other long-term liabilities	(4,623)	384
Net cash provided by operating activities	173,558	108,645
Cash flows from investing activities:
Purchases of software and capitalized software development costs	(25,329)	(18,794)
Purchases of property and equipment	(1,462)	(590)
Acquisitions of HSA portfolios	(452,241)	0
Net cash used in investing activities	(479,032)	(19,384)
Cash flows from financing activities:
Proceeds from long-term debt	225,000	0
Principal payments on long-term debt	0	(54,375)
Settlement of client-held funds obligation, net	(828)	(161)
Proceeds from exercise of common stock options	4,216	1,354
Net cash provided by (used in) financing activities	228,388	(53,182)
Increase (decrease) in cash and cash equivalents	(77,086)	36,079
Beginning cash and cash equivalents	403,979	254,266
Ending cash and cash equivalents	326,893	290,345
Supplemental cash flow data:
Interest expense paid in cash	26,970	23,504
Income tax payments, net	13,471	15,113
Supplemental disclosures of non-cash investing and financing activities:
Purchases of software and capitalized software development costs included in accounts payable, accrued liabilities, or accrued compensation	3,370	3,228
Purchases of property and equipment included in accounts payable or accrued liabilities	70	300
Non-cash purchase consideration related to acquisitions of HSA portfolios	20,325	0
Exercise of common stock options receivable	$ 0	$ 50

Condensed consolidated balance sheets (Parenthetical) - USD ($) $ in Thousands	Jul. 31, 2024	Jan. 31, 2024
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 2,831	$ 3,947
Preferred stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Preferred stock, authorized (in shares)	100,000,000	100,000,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Common stock, par value (in usd per share)	$ 0.0001	$ 0.0001
Common stock, authorized (in shares)	900,000,000	900,000,000
Common stock, issued (in shares)	87,324,000	86,127,000
Common stock, outstanding (in shares)	87,324,000	86,127,000

Summary of business and significant accounting policies (Policies)	6 Months Ended
	Jul. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Reclassifications	Reclassifications Certain reclassifications have been made to prior year amounts to conform to the current year presentation. The reclassifications relate primarily to recordkeeping and advisory fees associated with HSA investments, which were reclassified from custodial revenue to service revenue to better align the Company's financial statement presentation with the underlying drivers of the Company's revenue streams. The Company also reclassified certain immaterial personnel-related costs from custodial costs to service costs or general and administrative costs. The reclassifications had no impact on the Company's total revenue, income from operations, net income, cash flows, or stockholders' equity.
Principles of consolidation	Principles of consolidation The Company consolidates entities in which the Company has a controlling financial interest, which includes all of its wholly owned direct and indirect subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.
Basis of presentation	Basis of presentation The accompanying condensed consolidated financial statements as of July 31, 2024 and for the three and six months ended July 31, 2024 and 2023 are unaudited and have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and the applicable rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. In the opinion of management, the interim data includes all adjustments necessary for a fair presentation of the results for the interim periods. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2024. The fiscal year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP.
Recent adopted accounting pronouncements and Recently issued accounting pronouncements not yet adopted	Recently adopted accounting pronouncements None. Recently issued accounting pronouncements not yet adopted In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss, an amount and description of other segment items, interim disclosure of a reportable segment’s profit or loss and assets, the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The ASU requires public companies with a single reportable segment to provide the segment disclosures required by Topic 280 and will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We are currently evaluating the ASU to determine its impact on our disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective for annual periods beginning after December 15, 2024. Early adoption is permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. We are currently evaluating the ASU to determine its impact on our income tax disclosures.
Fair value	Fair value measurements are made at a specific point in time based on relevant market information. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting standards specify a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair value hierarchy: •Level 1—quoted prices in active markets for identical assets or liabilities; •Level 2—inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and •Level 3—unobservable inputs based on the Company’s own assumptions.

Fair value	6 Months Ended
Fair value	Jul. 31, 2024
Fair Value Disclosures [Abstract]
Fair value	Fair value Fair value measurements are made at a specific point in time based on relevant market information. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Accounting standards specify a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs have created the following fair value hierarchy: •Level 1—quoted prices in active markets for identical assets or liabilities; •Level 2—inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and •Level 3—unobservable inputs based on the Company’s own assumptions. Cash and cash equivalents are considered Level 1 instruments and are valued based on publicly available daily net asset values. The carrying values of cash and cash equivalents approximate fair values due to the short-term nature of these instruments. The Notes are valued based upon quoted market prices and are considered Level 2 instruments because the markets in which the Notes trade are not considered active markets. As of July 31, 2024, the fair value of the Notes was $565.1 million. Borrowings under the Prior Credit Facilities were considered Level 2 instruments and recorded at book value in the Company's condensed consolidated financial statements. The Prior Credit Facilities repriced frequently due to variable interest rate terms and entailed no significant changes in credit risk. As a result, the fair value of the Prior Credit Facilities approximated carrying value.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 107
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-107

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 100
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-100

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(3)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2E
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 940
-SubTopic 820
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478119/940-820-50-1

+ Details

Condensed consolidated balance sheets - USD ($) $ in Thousands	Jul. 31, 2024	Jan. 31, 2024
Current assets
Cash and cash equivalents	$ 326,893	$ 403,979
Accounts receivable, net of allowance for doubtful accounts of $2,831 and $3,947 as of July 31, 2024 and January 31, 2024, respectively	108,454	104,893
Other current assets	60,280	48,564
Total current assets	495,627	557,436
Property and equipment, net	4,592	6,013
Operating lease right-of-use assets	46,484	48,380
Intangible assets, net	1,254,210	835,948
Goodwill	1,648,145	1,648,145
Other assets	65,408	67,868
Total assets	3,514,466	3,163,790
Current liabilities
Accounts payable	10,562	12,041
Accrued compensation	37,072	49,608
Accrued liabilities	63,379	46,038
Operating lease liabilities	9,895	9,404
Total current liabilities	120,908	117,091
Long-term liabilities
Long-term debt, net of issuance costs	1,101,400	874,972
Operating lease liabilities, non-current	46,158	48,766
Other long-term liabilities	25,497	19,270
Deferred tax liability	63,466	68,670
Total long-term liabilities	1,236,521	1,011,678
Total liabilities	1,357,429	1,128,769
Commitments and contingencies (see Note 5)
Stockholders’ equity
Preferred stock, $0.0001 par value, 100,000 shares authorized, no shares issued and outstanding as of July 31, 2024 and January 31, 2024, respectively	0	0
Common stock, $0.0001 par value, 900,000 shares authorized, 87,324 and 86,127 shares issued and outstanding as of July 31, 2024 and January 31, 2024, respectively	9	9
Additional paid-in capital	1,886,765	1,829,384
Accumulated earnings	270,263	205,628
Total stockholders’ equity	2,157,037	2,035,021
Total liabilities and stockholders’ equity	$ 3,514,466	$ 3,163,790

Subsequent events (Details) - Subsequent events - USD ($) $ in Millions	Aug. 23, 2024	Sep. 03, 2024
Secured Revolving Credit Facility \| Credit Agreement \| Line of Credit
Subsequent Event [Line Items]
Proceeds from revolving credit facility	$ 511.9
September 2024 Stock Repurchase Program
Subsequent Event [Line Items]
Share repurchase program, authorized amount		$ 300.0

Indebtedness

6 Months Ended

Jul. 31, 2024

Debt Disclosure [Abstract]

Indebtedness

Long-term debt consisted of the following:


(in thousands)	July 31, 2024		January 31, 2024
4.50% Senior Notes due 2029	$	600,000	$	600,000
Prior Term Loan Facility	286,875		286,875
Prior Revolving Credit Facility	225,000		—
Principal amount	1,111,875		886,875
Less: unamortized discount and issuance costs (1)	10,475		11,903
Total debt, net	1,101,400		874,972
Less: current portion of long-term debt	—		—
Long-term debt, net	$	1,101,400	$	874,972

4.50% Senior Notes due 2029

On October 8, 2021, the Company completed its offering of $600 million aggregate principal amount of its 4.50% Senior Notes due 2029 (the “Notes”). The Notes were issued under an indenture (the “Indenture”), dated October 8, 2021, among the Company, the guarantors party thereto, and Wells Fargo Bank, National Association, as trustee.

The Notes are guaranteed by each of the Company’s existing, wholly owned domestic subsidiaries that guarantees its obligations under the Credit Agreement (as defined below) and are required to be guaranteed by any of the Company’s future subsidiaries that guarantee its obligations under the Credit Agreement or certain of its other indebtedness. The Notes will mature on October 1, 2029. Interest on the Notes is payable on April 1 and October 1 of each year. As of July 31, 2024 and January 31, 2024, the balance of accrued interest on the Notes was $9.0 million and $9.3 million, respectively, which is included within accrued liabilities on the Company's condensed consolidated balance sheets. The effective interest rate on the Notes is 4.72%.

The Notes are unsecured senior obligations of the Company and rank equally in right of payment to all of its existing and future senior unsecured debt and senior in right of payment to all of its future subordinated debt.

The Notes are redeemable at the Company’s option, in whole or in part, at any time on or after October 1, 2024, at a redemption price if redeemed during the 12 months beginning (i) October 1, 2024 of 102.250%, (ii) October 1, 2025 of 101.125%, and (iii) October 1, 2026 and thereafter of 100.000%, in each case of the principal amount of the Notes being redeemed, and together with accrued and unpaid interest, if any, to, but excluding, the date of redemption. The Company may also redeem some or all of the Notes before October 1, 2024 at a redemption price equal to 100% of the principal amount of the Notes, plus the applicable “make-whole” premium as of, and accrued and unpaid interest, if any, to, but excluding, the date of redemption. In addition, at any time prior to October 1, 2024, the Company may redeem up to 40% of the aggregate principal amount of the Notes issued under the Indenture on one or more occasions in an aggregate amount equal to the net cash proceeds of one or more equity offerings at a redemption price equal to 104.500% of the principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. Furthermore, the Company may be required to make an offer to purchase the Notes upon the sale of certain assets or upon specific kinds of changes of control.

The Indenture contains covenants that impose significant operational and financial restrictions on the Company; however, these covenants generally align with the covenants contained in the Credit Agreement. See "Credit Agreement" below for a description of these covenants.

Credit Agreement

On August 23, 2024, the Company entered into a Credit Agreement (the “Credit Agreement”) among the Company, as borrower, each lender from time to time party thereto (the “Lenders”), JPMorgan Chase Bank, N.A., as administrative agent and the Swing Line Lender (as defined in the Credit Agreement), and each L/C Issuer (as defined therein) party thereto, pursuant to which the Company established a new five-year senior secured revolving credit facility (the “Revolving Credit Facility”) in an aggregate principal amount of up to $1.0 billion (with a $25 million sub-limit for the issuance of letters of credit). The Company borrowed $511.9 million under the Revolving Credit Facility to refinance the Prior Credit Agreement (as defined below). The Revolving Credit Facility may be used in the future for working capital and general corporate purposes, including the financing of acquisitions and other investments. As of August 23, 2024, the outstanding balance under the Revolving Credit Facility was $511.9 million.

Subject to the terms and conditions set forth in the Credit Agreement (including obtaining additional commitments from one or more new or existing lenders), the Company may in the future incur additional loans or commitments under the Credit Agreement in an aggregate principal amount of up to $450 million, plus an additional amount so long as the Company’s pro forma first lien net leverage ratio would not exceed 3.85 to 1.00 as of the date such loans or commitments are incurred.

Borrowings under the Revolving Credit Facility bear interest at an annual rate equal to, at the Company’s option, either (i) the secured overnight financing rate published by the CME Group Benchmark Administration Limited (“Term SOFR”) (subject to a 0.10% “credit spread adjustment”) plus a margin ranging from 1.25% to 2.50% or (ii) an alternate base rate plus a margin ranging from 0.25% to 1.50%, with the applicable margin determined by reference to a leverage-based pricing grid set forth in the Credit Agreement. The Company is also required to pay certain fees to the Lenders, including, among others, a quarterly commitment fee on the average unused amount of the Revolving Credit Facility at a rate ranging from 0.25% to 0.50%, with the applicable rate also determined by reference to a leverage-based pricing grid set forth in the Credit Agreement.

The loans under the Revolving Credit Facility may be prepaid, and the commitments thereunder may be reduced by the Company without penalty or premium, subject to the reimbursement of customary “breakage costs.”

The Credit Agreement contains customary affirmative and negative covenants, including covenants that limit, among other things, the ability of the Company and its subsidiaries to incur additional indebtedness, create liens, merge or dissolve, make investments, dispose of assets, engage in sale and leaseback transactions, make distributions and dividends and prepayments of junior indebtedness, engage in transactions with affiliates, enter into restrictive agreements, amend documentation governing junior indebtedness, modify its fiscal year and modify its organizational documents, in each case, subject to customary exceptions, thresholds, qualifications and “baskets.” In addition, the Credit Agreement contains financial performance covenants, which require the Company to maintain (i) a maximum total net leverage ratio, measured as of the last day of each fiscal quarter, of no greater than 5.00 to 1.00 beginning with the fiscal quarter ending January 31, 2025, and (ii) a minimum consolidated interest coverage ratio, measured as of the last day of each fiscal quarter, of no less than 3.00 to 1.00 beginning with the fiscal quarter ending January 31, 2025. The Company continues to be in compliance with all covenants under the Credit Agreement through the filing date of this Quarterly Report on Form 10-Q.

The repayment obligation under the Credit Agreement may be accelerated upon the occurrence of an event of default thereunder, including, among other things, failure to pay principal, interest or fees on a timely basis, material inaccuracy of any representation or warranty, failure to comply with covenants, cross-default to other material debt, material judgments, change of control and certain insolvency or bankruptcy-related events, in each case, subject to any certain grace and/or cure periods.

The Company’s obligations under the Credit Agreement are required to be unconditionally guaranteed by each of its existing or subsequently acquired or organized direct and indirect domestic subsidiaries and are secured by security interests in substantially all assets of the Company and the guarantors, in each case, subject to certain customary exceptions.

Prior Credit Agreement

On October 8, 2021, the Company entered into a credit agreement (as amended, the “Prior Credit Agreement”) among the Company, as borrower, each lender from time to time party thereto (the “Prior Lenders”), JPMorgan Chase Bank, N.A., as administrative agent and the Swing Line Lender (as defined in the Prior Credit Agreement), and each L/C Issuer (as defined therein) party thereto, pursuant to which the Company established:

(i)a five-year senior secured term loan A facility (the “Prior Term Loan Facility”), in an aggregate principal amount of $350 million; and

(ii)a five-year senior secured revolving credit facility (the “Prior Revolving Credit Facility” and, together with the Prior Term Loan Facility, the “Prior Credit Facilities”), in an aggregate principal amount of up to $1.0 billion (with a $25 million sub-limit for the issuance of letters of credit).

Prior to June 1, 2023, borrowings under the Prior Credit Facilities bore interest at an annual rate equal to, at the option of the Company, either (i) LIBOR (adjusted for reserves) plus a margin ranging from 1.25% to 2.25% or (ii) an alternate base rate plus a margin ranging from 0.25% to 1.25%, with the applicable margin determined in either scenario by reference to a leverage-based pricing grid set forth in the Prior Credit Agreement.

On June 1, 2023, the Company entered into an amendment to the Prior Credit Agreement which replaced interest rate provisions based on LIBOR with the forward-looking term rate based on Term SOFR. As a result, borrowings under the Prior Credit Agreement as so amended bore interest at an annual rate equal to, at the option of the Company, either (i) Term SOFR, plus a 0.10% credit spread adjustment, plus a margin ranging from 1.25% to 2.25%, or (ii) an alternate base rate, plus a margin ranging from 0.25% to 1.25%, with the applicable margin determined in either scenario by reference to a leverage-based pricing grid set forth in the Prior Credit Agreement (as amended). As of July 31, 2024, the stated interest rate on the Prior Credit Facilities was 6.70% and the effective interest rate on the Prior Term Loan Facility was 7.46%.

The Company was also required to pay certain fees to the Prior Lenders, including, among others, a quarterly commitment fee on the average unused amount of the Prior Revolving Credit Facility at a rate ranging from 0.20% to 0.40%, with the applicable rate also determined by reference to a leverage-based pricing grid set forth in the Prior Credit Agreement. As of July 31, 2024, the Company had $225.0 million outstanding under its Prior Revolving Credit Facility and $286.9 million under the Prior Term Loan Facility.

The Prior Credit Agreement contained significant customary affirmative and negative covenants. The Company was in compliance with all covenants under the Prior Credit Agreement as of July 31, 2024, and for the period then ended. The Company continued to be in compliance with all covenants under the Prior Credit Agreement through the date on which the Prior Credit Agreement was terminated.

On August 23, 2024, in connection with the entry into the Credit Agreement, the Company repaid all outstanding obligations in the amount of $511.9 million under the Prior Credit Agreement and terminated all commitments thereunder.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)(3)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/470/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 835
-SubTopic 30
-Name Accounting Standards Codification
-Section 45
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482925/835-30-45-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1C

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1C

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1C

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1E

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I

+ Details

Supplemental financial statement information

6 Months Ended

Jul. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Supplemental financial statement information

Selected condensed consolidated balance sheet and condensed consolidated statement of operations and comprehensive income components consisted of the following:

Prepaid expenses

As of July 31, 2024 and January 31, 2024, the Company had prepaid expenses of $42.7 million and $31.2 million, respectively, which are included within other current assets on the Company's condensed consolidated balance sheets.

Property and equipment

Property and equipment consisted of the following:


(in thousands)	July 31, 2024		January 31, 2024
Leasehold improvements	$	14,461	$	14,455
Furniture and fixtures	7,087		7,087
Computer equipment	23,450		25,489
Property and equipment, gross	44,998		47,031
Accumulated depreciation	(40,406)		(41,018)
Property and equipment, net	$	4,592	$	6,013

Depreciation expense was $1.3 million and $2.7 million for the three and six months ended July 31, 2024, respectively, and $2.0 million and $4.5 million for the three and six months ended July 31, 2023, respectively.

Contract balances

The Company does not recognize revenue until its right to consideration is unconditional and therefore has no related contract assets. The Company records a receivable when revenue is recognized prior to payment and the Company has unconditional right to payment. Alternatively, when payment precedes the related services, the Company records a contract liability, or deferred revenue, until its performance obligations are satisfied. As of July 31, 2024 and January 31, 2024, the balance of deferred revenue was $22.6 million and $6.2 million, respectively. The balance as of July 31, 2024 relates primarily to a contract with a depository partner, which the Company assumed in conjunction with the BenefitWallet HSA portfolio acquisition, as described in Note 5—Commitments and contingencies. The remainder of the balances as of July 31, 2024 and January 31, 2024 relates to cash received in advance for interchange and custodial revenue arrangements, other up-front fees and other commuter deferred revenue. The Company expects to recognize approximately 56% of its balance of deferred revenue as revenue over the next 12 months and the remainder thereafter. Amounts expected to be recognized as revenue within a period of 12 months or less are classified as accrued liabilities on the Company's condensed consolidated balance sheets, with the remainder included within other long-term liabilities. Revenue recognized during the three and six months ended July 31, 2024 that was included in the balance of deferred revenue as of January 31, 2024 was $1.3 million and $2.8 million, respectively. The Company expects to satisfy its remaining obligations for these arrangements.

Leases

The components of operating lease costs were as follows:


	Three months ended July 31,				Six months ended July 31,
(in thousands)	2024		2023		2024		2023
Operating lease expense	$	2,257	$	2,365	$	4,624	$	4,966
Sublease income	(985)		(619)		(1,957)		(981)
Net operating lease expense	$	1,272	$	1,746	$	2,667	$	3,985

Other income, net

Other income, net, consisted of the following:


	Three months ended July 31,				Six months ended July 31,
(in thousands)	2024		2023		2024		2023
Interest income	$	3,103	$	2,484	$	6,984	$	4,082
Other income (expense), net	11		272		(466)		502
Total other income, net	$	3,114	$	2,756	$	6,518	$	4,584

Interest expense

Based on the application of Accounting Standards Codification ("ASC") 470-50, Debt - Modifications and Extinguishments, the Company recorded a $1.2 million loss on extinguishment of debt due to the prepayment of $50.0 million under the Company's Prior Term Loan Facility (as defined in Note 6—Indebtedness) in April 2023, which is included within interest expense in the condensed consolidated statement of operations and comprehensive income for the six months ended July 31, 2023.

Supplemental cash flow information

Supplemental cash flow information related to the Company's operating leases was as follows:


	Six months ended July 31,
(in thousands)	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	4,839	$	5,451
Right-of-use assets obtained in exchange for lease obligations	$	1,469	$	2,109

Net income per share (Tables)

6 Months Ended

Jul. 31, 2024

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Net Income Per Share

The following table sets forth the computation of basic and diluted net income per share:


	Three months ended July 31,				Six months ended July 31,
(in thousands, except per share data)	2024		2023		2024		2023
Numerator (basic and diluted):
Net income	$	35,822	$	10,581	$	64,635	$	14,675
Denominator (basic):
Weighted-average common shares outstanding	87,131		85,533		86,805		85,286
Denominator (diluted):
Weighted-average common shares outstanding	87,131		85,533		86,805		85,286
Weighted-average dilutive effect of stock options and restricted stock units	1,515		808		1,801		1,070
Diluted weighted-average common shares outstanding	88,646		86,341		88,606		86,356
Net income per share:
Basic	$	0.41	$	0.12	$	0.74	$	0.17
Diluted	$	0.40	$	0.12	$	0.73	$	0.17

Stock-based compensation - Schedule of Restricted Stock Unit and Performance Restricted Stock Unit Activity (Details) - RSUs & PRSUs shares in Thousands	6 Months Ended
	Jul. 31, 2024 $ / shares shares
Shares
Outstanding, beginning balance (in shares) \| shares	3,363
Granted (in shares) \| shares	1,027
Vested (in shares) \| shares	(963)
Forfeited (in shares) \| shares	(156)
Outstanding, ending balance (in shares) \| shares	3,271
Weighted-average grant date fair value
Outstanding, beginning balance (in usd per share) \| $ / shares	$ 67.96
Granted (in usd per share) \| $ / shares	85.01
Vested (in usd per share) \| $ / shares	65.88
Forfeited (in usd per share) \| $ / shares	71.95
Outstanding, ending balance (in usd per share) \| $ / shares	$ 73.74

Summary of business and significant accounting policies

6 Months Ended

Jul. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of business and significant accounting policies

Business

HealthEquity, Inc. ("HealthEquity" or the "Company") was incorporated in the state of Delaware on September 18, 2002. HealthEquity is a leader in administering health savings accounts (“HSAs”) and complementary consumer-directed benefits (“CDBs”), which empower consumers to access tax-advantaged healthcare savings while also providing corporate tax advantages for employers.

Reclassifications

Certain reclassifications have been made to prior year amounts to conform to the current year presentation. The reclassifications relate primarily to recordkeeping and advisory fees associated with HSA investments, which were reclassified from custodial revenue to service revenue to better align the Company's financial statement presentation with the underlying drivers of the Company's revenue streams. The Company also reclassified certain immaterial personnel-related costs from custodial costs to service costs or general and administrative costs. The reclassifications had no impact on the Company's total revenue, income from operations, net income, cash flows, or stockholders' equity. The following table presents the impact of the reclassifications:


	Three months ended July 31, 2023						Six months ended July 31, 2023
(in thousands)	Prior presentation		Reclassifications		Current presentation		Prior presentation		Reclassifications		Current presentation
Service revenue	$	105,719	$	6,241	$	111,960	$	210,831	$	12,202	$	223,033
Custodial revenue	98,917		(6,241)		92,676		193,358		(12,202)		181,156
Interchange revenue	38,913		—		38,913		83,792		—		83,792
Total revenue	243,549		—		243,549		487,981		—		487,981
Total cost of revenue	92,619		(735)		91,884		189,225		(1,379)		187,846
Gross profit	150,930		735		151,665		298,756		1,379		300,135
Total operating expenses	126,190		735		126,925		250,835		1,379		252,214
Total other expense	(10,516)		—		(10,516)		(23,685)		—		(23,685)
Income tax provision	3,643		—		3,643		9,561		—		9,561
Net income	$	10,581	$	—	$	10,581	$	14,675	$	—	$	14,675

Principles of consolidation

The Company consolidates entities in which the Company has a controlling financial interest, which includes all of its wholly owned direct and indirect subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Basis of presentation

The accompanying condensed consolidated financial statements as of July 31, 2024 and for the three and six months ended July 31, 2024 and 2023 are unaudited and have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and the applicable rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting. In the opinion of management, the interim data includes all adjustments necessary for a fair presentation of the results for the interim periods. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Therefore, these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the fiscal year ended January 31, 2024. The fiscal year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP.

Significant accounting policies

There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2024.

Recently adopted accounting pronouncements

None.

Recently issued accounting pronouncements not yet adopted

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss, an amount and description of other segment items, interim disclosure of a reportable segment’s profit or loss and assets, the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. The ASU requires public companies with a single reportable segment to provide the segment disclosures required by Topic 280 and will be effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. We are currently evaluating the ASU to determine its impact on our disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective for annual periods beginning after December 15, 2024. Early adoption is permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. We are currently evaluating the ASU to determine its impact on our income tax disclosures.

Supplemental financial statement information - Schedule of Components of Operating Lease Costs (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 31, 2024	Jul. 31, 2023	Jul. 31, 2024	Jul. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Operating lease expense	$ 2,257	$ 2,365	$ 4,624	$ 4,966
Sublease income	(985)	(619)	(1,957)	(981)
Net operating lease expense	$ 1,272	$ 1,746	$ 2,667	$ 3,985

Summary of business and significant accounting policies (Tables)

6 Months Ended

Jul. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Impact of Reclassifications

The following table presents the impact of the reclassifications:


	Three months ended July 31, 2023						Six months ended July 31, 2023
(in thousands)	Prior presentation		Reclassifications		Current presentation		Prior presentation		Reclassifications		Current presentation
Service revenue	$	105,719	$	6,241	$	111,960	$	210,831	$	12,202	$	223,033
Custodial revenue	98,917		(6,241)		92,676		193,358		(12,202)		181,156
Interchange revenue	38,913		—		38,913		83,792		—		83,792
Total revenue	243,549		—		243,549		487,981		—		487,981
Total cost of revenue	92,619		(735)		91,884		189,225		(1,379)		187,846
Gross profit	150,930		735		151,665		298,756		1,379		300,135
Total operating expenses	126,190		735		126,925		250,835		1,379		252,214
Total other expense	(10,516)		—		(10,516)		(23,685)		—		(23,685)
Income tax provision	3,643		—		3,643		9,561		—		9,561
Net income	$	10,581	$	—	$	10,581	$	14,675	$	—	$	14,675

Indebtedness - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands	Jul. 31, 2024	Jan. 31, 2024
Debt Instrument [Line Items]
Principal amount	$ 1,111,875	$ 886,875
Less: unamortized discount and issuance costs	10,475	11,903
Total debt, net	1,101,400	874,972
Less: current portion of long-term debt	0	0
Long-term debt, net	$ 1,101,400	874,972
4.50% Senior Notes due 2029
Debt Instrument [Line Items]
Stated interest rate (as a percent)	4.50%
Principal amount	$ 600,000	600,000
Prior Term Loan Facility \| Credit Agreement
Debt Instrument [Line Items]
Principal amount	286,875	286,875
Prior Revolving Credit Facility
Debt Instrument [Line Items]
Debt issuance costs, net	2,000	2,500
Prior Revolving Credit Facility \| Credit Agreement
Debt Instrument [Line Items]
Principal amount	$ 225,000	$ 0

Commitments and contingencies - Narrative (Details) $ in Millions			1 Months Ended		6 Months Ended
	Dec. 29, 2023	Nov. 05, 2021	May 31, 2024 USD ($)	Sep. 30, 2023 tranche	Jul. 31, 2024 USD ($)	Nov. 24, 2021 USD ($)	Apr. 30, 2021 USD ($)
Loss Contingencies [Line Items]
Number of transfers \| tranche				3
Custodial
Loss Contingencies [Line Items]
Assumed contract liability			$ 20.3
BenefitWallet HSA Portfolio
Loss Contingencies [Line Items]
Asset acquisition, transferred, transaction cost					$ 27.2
Expense reimbursement					$ 20.0
Percentage of assets deposited with third party			7.00%
WageWorks, Inc
Loss Contingencies [Line Items]
Lease payments, not yet commenced							$ 63.1
Operating lease not yet commenced term of contract							11 years
Union Mesa \| WageWorks, Inc
Loss Contingencies [Line Items]
Abated rent, period		11 months
Letters of credit outstanding						$ 2.8
Late charge, percentage	3.00%
Variable rate borrowing spread (as a percent)	5.00%

Intangible assets and goodwill - Schedule of Gross Carrying Amount and Associated Accumulated Amortization of Intangible Assets (Details) - USD ($) $ in Thousands	Jul. 31, 2024	Jan. 31, 2024
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 1,926,615	$ 1,437,450
Accumulated amortization	(672,405)	(601,502)
Net carrying amount	1,254,210	835,948
Software and software development costs
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	284,097	267,498
Accumulated amortization	(211,765)	(197,388)
Net carrying amount	72,332	70,110
Acquired HSA portfolios
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	737,011	264,445
Accumulated amortization	(100,039)	(81,059)
Net carrying amount	636,972	183,386
Acquired customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	759,782	759,782
Accumulated amortization	(230,973)	(205,127)
Net carrying amount	528,809	554,655
Acquired developed technology
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	132,825	132,825
Accumulated amortization	(116,728)	(105,049)
Net carrying amount	16,097	27,776
Acquired trade names
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	12,900	12,900
Accumulated amortization	(12,900)	(12,879)
Net carrying amount	$ 0	$ 21

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Fair value (Details) $ in Millions	Jul. 31, 2024 USD ($)
Level 2 \| 4.50% Senior Notes due 2029
Defined Benefit Plan Disclosure [Line Items]
Fair value of the notes	$ 565.1