What changed in this filing

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Item 1A. Risk Factors

2026-03-17 compared with 2025-03-18 · 88 added, 91 removed, 318 unchanged (36% of the section changed)

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If the laws or regulations are changed to limit or eliminate the tax benefits available through these accounts, such a change would have a material adverse effect on our business.

Failure to adequately place and safeguard HSA cash and Client-held funds, or the failure of any of our depository or insurance company partners, could materially and adversely affect our business, financial condition and results of operations.

As a non-bank custodian, we rely on our federally insured custodial Depository Partners and our insurance company partners to hold HSA cash that we custody.

Failure to adequately place and safeguard HSA cash and Client-held funds, or the failure of any of our insurance company partners or Depository Partners, could materially and adversely affect our business, financial condition, and results of operations.

As a non-bank custodian, we rely on our insurance company partners and federally insured custodial Depository Partners to hold HSA cash that we custody.

The portion of HSA cash held by our insurance company partners continues to increase with the increasing adoption of our Enhanced Rates program.

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In addition, we deposit Client-held funds with our Depository Partners in interest-bearing demand deposit accounts, and federal deposit insurance may not be available for certain Clients.

If any material adverse event were to affect one of our Depository Partners or our insurance company partners, including a significant decline in its financial condition, a decline in the quality of its service, a loss of deposits, its inability to comply with applicable banking, insurance or other regulatory requirements, systems failure or its inability to return principal or pay interest thereon, our business, financial condition and results of operations could be materially and adversely affected.

If any material adverse event were to affect one of our insurance company partners or Depository Partners, including a significant decline in its financial condition, a decline in the quality of its service, a loss of deposits, its inability to comply with applicable insurance, banking, or other regulatory requirements, systems failure, or its inability to return principal or pay interest thereon, our business, financial condition, and results of operations could be materially and adversely affected.

In addition, in the event of such a failure of, or breach by, one of our insurance company partners, the HSA cash held through that insurance company partner would be at risk and no assurance can be given that our contractual arrangements with that insurance company partner would be sufficient for our members to fully recover their HSA cash, which would in turn result in reputational and financial harm to the Company.

In addition, certain of our insurance company partners have commitments to us with respect to the interest rates paid;

however, some of these commitments are conditional upon certain market events and/or satisfaction of our obligations to the partner.

however, some of these commitments are conditional upon certain market events or the satisfaction of our obligations to the partner.

A reduction of the interest rate payable, or a requirement that we post collateral in lieu of any such reduction, could have a material and adverse impact on our business, financial condition, and results of operations.

Failure to adequately manage the liquidity of the custodial assets held by our Depository Partners and insurance company partners could materially and adversely affect our business, financial condition, and results of operations.

Certain of our arrangements with our Depository Partners and insurance company partners require that we keep a minimum amount of HSA cash with such partner.

Failure to adequately manage the liquidity of the custodial assets held by our insurance company partners and Depository Partners could materially and adversely affect our business, financial condition, and results of operations.

Certain of our arrangements with our insurance company partners and Depository Partners require that we keep a minimum amount of HSA cash with such partner.

If we fail to comply with those minimum HSA cash requirements, including as a result of withdrawals by our members, we may be subject to penalties payable to our partners or a reduction in the interest paid to us under such arrangements.

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A decline in interest rates would reduce our income on our HSA Assets and Client-held funds and our ability to attract HSA contributions.

We partner with our Depository Partners and insurance company partners to hold our HSA Assets and other Client-held funds.

We earn a substantial portion of our revenue from fees we earn from our Depository Partners and insurance company partners, which comprised approximately 45%, 39%, and 30% of our revenues during the fiscal years ended January 31, 2025, 2024, and 2023, respectively.

We partner with our insurance company partners and Depository Partners to hold our HSA Assets and other Client-held funds.

We earn a substantial portion of our revenue from fees we earn from our insurance company partners and Depository Partners which comprised approximately 48%, 45%, and 39% of our revenues during the fiscal years ended January 31, 2026, 2025, and 2024, respectively.

A decline in prevailing interest rates would negatively impact our business by reducing the yield we realize on our HSA Assets and other Client-held funds.

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A decline in the value of invested HSA Assets would adversely affect our results of operations.

If the value of the invested HSA Assets our members hold declines, whether due to market conditions or other factors, our fees, which are based on a percentage of the asset values, would be adversely affected, which would in turn negatively impact our results of operations.

Integration of our acquisitions may not be successful, and we may not realize the synergies anticipated from our acquisitions.

The success of our acquisitions depends in part on our ability to realize the anticipated business opportunities from combining the operations of the acquired businesses with our business in an efficient and effective manner.

Integration of our acquisitions could take longer and be more costly than anticipated, and it could result in the loss of key team members, the disruption of our ongoing business and the acquired business, tax costs or inefficiencies, or inconsistencies in standards, controls, information technology systems, procedures and policies, any of which could adversely affect our ability to maintain relationships with team members, Clients, Network Partners or other third parties, and could harm our financial performance.

In addition, we may not realize the anticipated cost, revenue, and other synergies associated with successfully integrating our acquisitions.

O ur management team and other team members continue to spend time on integration efforts relating to our recent acquisitions, including the Further acquisition.

As part of that integration process, we are working to migrate certain Clients and Network Partners to different technology platforms.

We have experienced challenges and increased costs related to Clients' and Network Partners' dissatisfaction as well as technological issues in integrating acquisitions, which could continue to occur as we continue integrating past and future acquisitions.

If the value of invested HSA Assets that our members hold declines, whether due to market conditions or other factors, our fees received on invested HSA Assets, which are based on a percentage of the asset values, would be adversely affected, which would in turn negatively impact our results of operations.

If we are not successful in adapting to our rapidly evolving industry, our growth may be limited, and our business may be adversely affected.

The market for our products and services is subject to rapid and significant change and competition.

The market for administering HSAs and other CDBs is characterized by rapid technological change, new product and service introductions, evolving industry standards, changing customer needs, existing competition, and the entrance of non-traditional competitors.

In addition, there may be a limited-time opportunity to achieve and maintain a significant share of this market due in part to our rapidly evolving industry, industry consolidation, and the substantial resources available to our existing and potential competitors.

In order to remain competitive, we are continually involved in a number of projects to develop new services or compete with these new market entrants.

These projects carry risks, such as cost overruns, delays in delivery, performance problems, and lack of acceptance by our Clients, Network Partners and members.

Achieving our business strategy depends in large part on the success of our recent CEO transition.

On January 6, 2025, our longtime President and Chief Executive Officer, Jon Kessler, retired, at which time Scott Cutler joined the Company as his successor.

Any significant leadership change involves inherent risk and can be difficult to manage.

Our new CEO is critical to executing on and achieving our business strategy, and our success depends, in large part, on the effectiveness of this transition.

If our new CEO is unsuccessful at leading the Company and our management team, or is unable to successfully execute the Company’s strategy, our business may be harmed and our financial condition and results of operations may be adversely affected.

These projects carry risks, such as cost overruns, delays in delivery, performance problems, and lack of acceptance by our Clients, Network Partners, marketplace partners, and members.

Any diminution in the use of HSAs or other CDBs would materially adversely affect us.

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If our members do not fully use their HSAs or CDBs, if employers reduce or cease to offer HSAs or other CDB programs, if the rate of adoption of these accounts decreases, if existing Clients, Network Partners, and members do not recognize or acknowledge the benefits of our services or we do not drive engagement, then the market for our services might decline or develop more slowly than we expect, which could adversely affect our operating results.

The use or anticipated use of AI technologies, including generative AI, by us or third parties, may increase or create new operational and competitive risks.

The expanding use or anticipated use of AI technologies, including generative AI, by us or third parties, may increase or create new operational and competitive risks.

AI technologies – including generative AI – present numerous opportunities, such as benefits from increased operational efficiencies and innovative new products.

We expect the use of AI technologies in the marketplace to increase as we, our service providers, and our competitors seek to leverage and maximize those benefits.

However, the development and deployment of such technologies also poses certain risks.

For example, new products and services incorporating or utilizing AI and machine learning may raise technological, security, legal and other risks and challenges related to, among other items, the use of personal information or the information of clients who have not granted permission for the use of their data in such AI systems, flaws in our models or training datasets that may result in biased or inaccurate results or other unanticipated outcomes, ethical considerations regarding AI, potential infringement of third-party intellectual property rights, exposure of data, and our ability to safely deploy and implement governance and controls for AI systems.

The use of AI technologies by us, our service providers, and our competitors has increased recently, and we expect it to further increase rapidly.

We utilize AI to streamline administrative processes and improve the experience for our members.

These applications have and likely will continue to become increasingly important to our operations.

However, the development and deployment of such technologies also pose significant risks.

For example, new products and services incorporating or utilizing AI and machine learning may raise technological, security, legal, reputational, and other risks and challenges related to, among other items, the use of personal information or the information of clients who have not granted permission for the use of their data in such AI systems, flaws in our models or training datasets that may result in biased or inaccurate results, or other unanticipated outcomes, ethical considerations regarding AI, potential infringement of third-party intellectual property rights, exposure of data, and our ability to safely deploy and implement governance and controls for AI systems.

We are also exposed to risks arising from the use of AI technologies by bad actors, who may use such technologies to commit fraud, misappropriate funds, and facilitate cyberattacks.

Further, our competitors may adopt AI or generative AI more quickly or more effectively than we do, causing competitive harm.

Any of these risks could negatively impact our reputation, the demand for our products and services, our financial condition and results of operations, and otherwise draw adverse regulatory scrutiny.

AI is subject to rapidly evolving domestic and international laws and regulations, the scope and requirements of which may be inconsistent across jurisdictions and which could impose significant costs and obligations on us.

Any of these risks could negatively impact our reputation, the demand for our products and services, and our financial condition and results of operations.

We may be unable to compete effectively against our current and future competitors.

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Our other CDB administration competitors include health insurance carriers, human resources consultants and outsourcers, payroll providers, national CDB specialists, regional third-party administrators, and commercial banks, and these competitors have entered, and others may also enter, the HSA market or expand existing HSA offerings to compete with us.

Our marketplace initiative also faces competition from telehealth companies with whom we are not affiliated, other providers of similar marketplaces, the producers of products and services competitive with the products and services made available through our marketplace, as well as from similar initiatives by our direct HSA competitors.

An increased focus on HSA-favorable healthcare regulatory reforms may create renewed interest and investment by our competitors in their HSA offerings and lead to greater competition, which could make it harder for us to maintain our growth trajectory.

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If one or more of our competitors were to merge or partner with another of our competitors, the change in the competitive landscape could materially adversely affect our ability to compete effectively.

Our competitors have and may continue to establish or strengthen cooperative relationships with our current or future Network Partners or other strategic partners, thereby limiting our ability to promote our solution with these parties.

Our competitors have and may continue to establish or strengthen cooperative relationships with our current or future Network Partners, marketplace partners, or other strategic partners, thereby limiting our ability to promote our solution with these parties.

We have seen an increase in Network Partners that have decided to offer HSAs or other CDBs directly to their customers, and a continuation of this trend would significantly reduce our channel partner opportunities and result in account attrition.

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These fees represent a percentage of the expenses transacted on each card.

For example, the COVID-19 pandemic had a materially adverse impact on the interchange fees generated due to decreased usage of our payment cards in our commuter product and in healthcare spending.

If our customers do not use these payment cards at the rate we expect, if they elect to withdraw funds using a non-revenue generating mechanism such as direct reimbursement, or if other alternatives to these payment cards develop, our results of operations, business, and prospects would be materially adversely affected.

If we fail to operate our marketplace effectively, if our Network Partners, Clients, or members respond negatively to our marketplace, or if our marketplace partners, products, or services are disrupted, our business may be adversely affected.

We generate revenue from our marketplace partners who provide the HSA or FSA eligible products and services, including access to telehealth consultations, certain healthcare programs, and certain prescription medications through a third-party partner, to our members.

The growth of our marketplace is dependent on our ability to operate the marketplace in a regulatorily compliant manner, market to members effectively and in a cost-efficient manner, and adapt to demands of our Network Partners, Clients, and members.

Failure to operate the marketplace effectively could have a negative impact on our growth opportunities.

In addition, negative publicity concerning our marketplace, our marketplace partners, or member experience using our marketplace could limit acceptance of this offering by our Network Partners, Clients, or members, which would adversely affect our revenue and future growth opportunities.

We are dependent upon the partnerships we have entered into for certain of the products, programs, and services available in our marketplace which could be negatively affected if those partnerships are disrupted or experience negative publicity.

Such disruption of our partners, along with any negative developments regarding the products, programs, and services made available through the marketplace, could damage our brand, subject us to liability, affect our ability to retain Network Partners, Clients and members, and harm our business and financial results.

The products, programs, and services made available through our marketplace may also subject us to additional federal, state, and local laws and regulations, and a failure to comply with any such law or regulation could have a negative effect on our business, financial condition, and results of operations, and may expose us to civil and criminal penalties.

For example, one of our marketplace partners, in addition to offering branded GLP-1 medications as part of its weight loss programs, also offers access to compounded GLP-1 medications, and the regulatory environment around compounded GLP-1 medications has been volatile.

The products, programs, and services made available through the marketplace are part of highly competitive markets, and introduce new and more sophisticated competitors to us, which could result in scrutiny, competitive pressures, and litigation from these competitors.

Failure to maintain effective internal control over financial reporting could have a material adverse effect on our reputation, results of operations, and financial condition.

Effective internal control over financial reporting is necessary for us to provide reliable financial reports, prevent fraud, and operate successfully as a public company.

A ny failure, whether in connection with our growth, acquisitions, or otherwise, to execute on our internal controls and continue to maintain effective internal controls, to timely implement any necessary additional improvement to our internal controls or to effect remediation of any future material weakness or significant deficiency could, among other things, result in losses from fraud or error, harm our reputation or cause investors to lose confidence in our reported financial information, all of which could have a material adverse effect on our reputation, results of operations, or financial condition.

A ny failure, whether in connection with our growth, acquisitions, or otherwise, to execute on our internal controls and continue to maintain effective internal controls, to timely implement any necessary additional improvement to our internal controls, or to effect remediation of any future material weakness or significant deficiency could, among other things, result in losses from fraud or error, harm our reputation, result in regulatory fines, penalties, or investigations, or cause investors to lose confidence in our reported financial information, all of which could have a material adverse effect on our reputation, results of operations, or financial condition.

Management reviews and updates our systems of internal controls and procedures, as appropriate.

Any system of controls is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met.

Any failure or circumvention of our controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on our reputation, results of operations and financial condition.

Any failure or circumvention of our controls and procedures or failure to comply

with regulations related to controls and procedures could have a material adverse effect on our reputation, results of operations and financial condition.

Data security, technological, and intellectual property risks

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As a result, we are frequently the target of cyber attacks, including ransomware attacks, which means we must continue to monitor and take steps to secure each of our technology platforms, making sure these platforms are aligned to our industry benchmark security posture.

geopolitical events, including the war between Russia and Ukraine, have resulted in, and may continue to result in, an increase in cyber-attacks.

In addition, geopolitical events, including the war between Russia and Ukraine, have resulted in, and may continue to result in, an increase in cyber attacks.

Substantially all of our workforce works remotely.

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We rely on standard Internet and other security systems to provide the security and authentication necessary to effect secure transmission of data.

Despite our security measures, our information technology and infrastructure are vulnerable to cybersecurity threats, including attacks by hackers and other malfeasance.

Despite our security measures, our information technology and infrastructure are vulnerable to cybersecurity threats, including attacks by hackers, AI-powered threats, human error, insider threats, and other malfeasance or outages.

Such threats could result in actual security events that compromise our networks, or those of third-party service providers on which we rely, and result in the information stored or transmitted there to be accessed, modified, or used in an unauthorized manner, publicly disclosed, lost, or stolen.

Such access, use, disclosure, or other loss of information may result in regulatory scrutiny, and legal claims and liability, including under laws that protect the privacy of personal information, as it has in the past.

Cybersecurity events disrupt our operations and the services we provide to our Clients, damage our reputation, and cause a loss of confidence in our products and services, which could adversely affect our business, operations, and competitive position.

Security breaches, including a major breach of our network security and systems, could result in serious negative consequences for our business, including the loss of sensitive information, theft or loss of actual funds, litigation, indemnity obligations to our Clients, fines, penalties and other liabilities, including under laws that protect the privacy of personal information, disrupt our operations and the services we provide to our members, Clients and Network Partners.

We have been the victim of such breaches, which have damaged our reputation and caused a loss of confidence in our products and services, and may lead to a reduction in demand and result in an unwillingness of members, Clients, Network Partners and other data owners to provide us with their payment information or personal information, and otherwise harm our brand.

Security breaches, including a major breach of our network security and systems, could result in serious negative consequences for our business, including the loss of sensitive information, theft or loss of actual funds, litigation, indemnity obligations to our Clients, fines, penalties, regulatory scrutiny, and other liabilities, including under laws that protect the privacy of personal information, and disrupt our operations and the services we provide to our members, Clients and Network Partners.

We have been the victim of such breaches, which have damaged our reputation and caused a loss of confidence in our products and services, and which may lead to a reduction in demand and result in an unwillingness of members, Clients, Network Partners, and other data owners to provide us with their payment information or personal information, and otherwise harm our brand.

Furthermore, when third parties improperly obtain and use the personal information of our members, we are required to expend significant resources to investigate and resolve these problems.

While we have security measures in place, we have experienced data privacy incidents in the past, including an incident in 2024 in which a business partner's user account containing personally identifiable information was breached.

As a result of the incident, we are now subject to several putative class action lawsuits seeking unspecified damages, and we are subject to regulatory inquiries related to the incident.

As a result of the incident, we are now subject to a consolidated putative class action lawsuits seeking unspecified damages, and we are subject to regulatory inquiries related to the incident, which may lead to fines or other enforcement by these regulators.

Whether as a result of these incidents, or if our security measures are breached again or unauthorized access to data is otherwise obtained as a result of third-party action, team member error, or otherwise, our reputation could be significantly damaged, our business may suffer, and we could incur substantial liability, which could result in loss of sales, Clients and Network Partners.

Because techniques used to obtain unauthorized access to or sabotage systems change frequently and such novel techniques may not be identified until they are launched against a target, we may be unable to anticipate, or to implement adequate preventative measures to address, these techniques.

Any or all of these issues could negatively impact our ability to attract new, or increase engagement by, members, Clients and Network Partners, and subject us to third-party lawsuits, regulatory fines, contractual liability, and other action or liability, thereby harming our operating results or financial condition.

Because techniques used to obtain unauthorized access to or sabotage systems change frequently and such novel techniques, including by use of AI technologies by threat actors, may not be identified until they are launched against a target, we may be unable to anticipate, or to implement adequate preventative measures to address, these techniques.

Any or all of these issues could negatively impact our ability to attract new, or increase engagement by, members, Clients and Network Partners, and subject us to third-party lawsuits, regulatory actions or fines, contractual liability, and other action or liability, thereby harming our operating results or financial condition.

Fraudulent activity, whether involving member accounts or our third-party service providers, has led, and could continue to lead, to financial and reputational damage to us and could reduce the use and acceptance of our products and services.

Criminals are using increasingly sophisticated methods to obtain personal information, which they then use to commit fraud.

Criminals are using increasingly sophisticated methods, including AI, to obtain personal information, which they then use to commit fraud.

As a non-bank custodian of HSAs, we are frequently targeted by sophisticated and persistent bad actors for fraudulent activity, through various tactics such as high-volume credential stuffing attacks, denial of service attacks, and social engineering attacks, among others.

We have experienced a significant increase in the volume and sophistication of outside fraudulent activity targeting member accounts, resulting in a significant loss to us as we incurred service costs to reimburse and protect impacted members.

For example, in the fiscal year ended January 31, 2025, and the fiscal quarter ended April 30, 2025, we experienced a significant increase in the volume and sophistication of outside fraudulent activity targeting member accounts, resulting in a significant loss to us as we incurred service costs to reimburse and protect impacted members.

Losses due to fraud committed against us and our Clients, members, and Network Partners may not be covered by insurance policies, and losses not covered by insurance may be material.

Even in the event that losses relating to fraudulent activity are covered

by insurance, premiums and/or deductibles related to our insurance coverage may increase or the scope of our coverage may decrease, any of which could have an adverse impact on our financial results.

Even in the event that losses relating to fraudulent activity are covered by insurance, premiums and/or deductibles related to our insurance coverage may increase or the scope of our coverage may decrease, any of which could have an adverse impact on our financial results.

We are also vulnerable to criminal fraudulent activity through our third-party service providers.

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Our facilities, our third-party data centers, and our cloud service providers are vulnerable to interruption or damage from a number of sources, many of which are beyond our control, including, without limitation:

• extended power loss;

• extended power loss or other failure of critical infrastructure;

• telecommunications failures from multiple telecommunications providers;

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Our data recovery centers are equipped with physical space, power, storage and networking infrastructure and Internet connectivity to support our technology platforms in the event of the interruption of services at our data centers.

Even with these data recovery centers, our operations can be interrupted during transition processes when our primary and other data centers experienced failures.

Even with these data recovery centers, our operations can be interrupted during transition processes when our primary and other data centers experience failures.

Disruptions at our data centers may cause disruptions to our technology platforms and lead to data loss or corruption.

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Our technology platforms may incorporate software covered by open source licenses.

The terms of various open source licenses have not been interpreted by United States courts, and there is a risk that such licenses could be construed in a manner that imposes unfavorable conditions on us.

The terms of various open source licenses have not been interpreted by United States courts, and there is a risk that such licenses could be

construed in a manner that imposes unfavorable conditions on us.

For example, by the terms of certain open source licenses, we could be required to offer our technology platforms that incorporate the open source software for no cost, that we make publicly available source code for modifications or derivative works that we created based upon, incorporating or using the open source software, and/or that we license such modifications or derivative works under the terms of the particular open source license.

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Healthcare laws and regulations are rapidly evolving and may change significantly, which could adversely affect our financial condition and results of operations.

These changes may accelerate under the new U.S.

administration (and through reactions to the administration) in ways we cannot predict.

In addition, proposals to implement a single payer or "Medicare for all" system in the U.S.

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Changes to the regulatory landscape impacting our products require substantial time and costs for us to ensure our products are compliant.

For example, regulatory changes related to our FSA and COBRA products enacted in the wake of the COVID-19 pandemic created uncertainty and additional workload on our team members and resulted in additional costs.

In addition, federal or state governments could impose laws that limit the eligibility requirements for our products, which could limit our ability to grow or cause us to lose existing members, or such governments could change the eligibility requirements we must meet to maintain the licenses we need to offer our products.

We cannot predict if any new reforms will ultimately become law, or if enacted, what their terms or the regulations promulgated pursuant to such reforms will be, and such reforms could have a material adverse effect on our business.

We are subject to privacy regulations, including regarding the access, use, and disclosure of personally identifiable information, and the privacy breaches that we or our third-party service providers have experienced or may experience in the future could result in substantial financial and reputational harm, including possible criminal and civil penalties.

State and federal laws and regulations govern the collection, dissemination, access, and use of personally identifiable information, including HIPAA and the Health Information Technology for Economic and Clinical Health Act ("HITECH"), which govern protected health information, and the Gramm-Leach-Bliley Act, which governs nonpublic personal information.

In the provision of services, we and our third-party service providers collect, access, use, maintain, and transmit personally identifiable information in ways that are subject to these laws and regulations.

Although we have implemented measures to comply with these privacy and data protection laws and regulations, we have experienced data privacy incidents, including an incident in 2024 in which a business partner's user account containing personally identifiable information was breached, though none have materially impacted our operations or financial condition.

Any further unauthorized disclosure of personally identifiable information experienced by us or our third-party service providers that process such information on our behalf could result in substantial financial and reputational harm to us, including possible criminal and civil penalties.

In situations where we are subject to HIPAA and HITECH, for which we are a business associate providing services to covered entities, the covered entities direct HIPAA compliance matters in the event of a security breach, which complicates our ability to address harm caused by the breach.

Additionally, as we have in connection with prior security incidents, we may be required to notify impacted individuals, plan sponsors, and regulatory authorities depending on the severity of the breach, our role, legal requirements, and contractual obligations.

We are subject to privacy regulations, including regarding the access, use, and disclosure of personal information, and the privacy breaches that we or our third-party service providers have experienced or may experience in the future could result in substantial financial and reputational harm, including possible criminal and civil penalties.

We and certain third party service providers process sensitive personal information in connection with our services, including, where applicable, protected health information and nonpublic personal information.

A failure to comply with evolving privacy and data protection requirements including sector-specific regimes such as HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act ("HITECH"), which govern protected health information, the Gramm-Leach-Bliley Act, which governs nonpublic personal information, and various state privacy and breach-notification laws, or a failure to prevent unauthorized access to or disclosure of personal information due to cyberattack, human error, system misconfiguration, third‑party compromise, or other security incident or event could result in regulatory investigations, penalties, litigation (including class actions), contractual claims, member losses, remediation and monitoring costs, operational disruption, and reputational harm.

We experienced privacy/security incidents in the past (including an incident in 2024 involving a third-party user account) and future incidents could have greater impact.

While we maintain formal privacy and security programs, third‑party oversight, and incident response and notification processes designed to mitigate risks to the confidentiality, integrity, and availability of the sensitive information, including personal information that we hold, residual risk remains.

Compliance costs may increase as requirements and expectations continue to change, along with the possibility of costly penalties in the event we are deemed to not be in compliance with such laws and regulations.

Privacy and data protection regulation have become priority issues in many states, and, as such, the regulatory environment is continually changing.

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Additional privacy requirements are expected as new state and federal privacy laws are enacted.

Compliance with current and potential new privacy and data protection laws and regulations, and meeting expectations with respect to the control of personal data in a rapidly changing technology environment, could result in higher compliance and technology costs for us, as well as costly penalties in the event we are deemed to not be in compliance with such laws and regulations.

Legislative, regulatory, and legal developments involving taxes could adversely affect our results of operations and cash flows.

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Significant judgment is required in determining our provisions for income taxes.

tax rates, enactments of new tax laws, revisions of tax regulations, and claims or litigation with taxing authorities could result in substantially higher taxes.

Changes in tax rates, enactments of new tax laws, revisions of tax regulations, and claims or litigation with taxing authorities could result in substantially higher taxes.

We do not collect sales and use taxes in all jurisdictions in which our customers are located, other than from sales of certain commuter services, based on our belief that such taxes are generally not applicable to our services.

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Such additional sales and use tax liability could adversely affect the results of our operations.

Regulatory changes and changes in the enforcement environment under the new U.S.

administration may have an adverse result on our business.

administration has already made, and expects to further make, many changes to the federal government and federal law and enforcement.

These include changes to federal workforce headcount, a high volume of executive orders, and many new or modified regulations and guidance.

Such changes create uncertainty around our business and our Clients.

Regulatory changes and changes in the enforcement environment may have an adverse result on our business.

Changes to regulations and the enforcement environment create uncertainty around our business and our Clients.

In addition, changes to the legal, regulatory, or political environment may require management's attention, divert resources from other areas, and expose us to potential liability.

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We are subject to complex regulation, and any compliance failures or regulatory action could adversely affect our business.

including IRS, Health and Human Services (“HHS”), and Department of Labor (“DOL”) regulations;

Our business, including HSAs and many of the CDBs we administer and our investment adviser and trust company subsidiaries, is subject to extensive, complex, and frequently changing federal and state laws and regulations, including IRS, Health and Human Services (“HHS”), and Department of Labor (“DOL”) regulations;

ERISA, HIPAA, HITECH, and other privacy and data security regulations;

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Our sales process is highly dependent on the reputation of our products, services, and business and on positive recommendations from our existing members, Clients and Network Partners.

Further, we use third-party service providers for certain call centers and COBRA claims and transaction processing, including certain offshore service providers for member chat service, which service providers may not provide the same quality of support services for our Clients and members.

Further, we use third-party service providers for certain call centers and COBRA claims and transaction processing, including certain offshore service

providers for member chat service, which service providers may not provide the same quality of support services for our Clients and members.

Any failure to maintain high-quality education and technical support, or a market perception that we do not maintain high-quality education support, could adversely affect our reputation, our ability to sell our products and services to existing and prospective customers, and our business and operating results.

We promote 24/7/365 education and support along with our proprietary technology platforms.

Interruptions or delays

that inhibit our ability to meet that standard have hurt our reputation and ability to attract and retain customers, and any such interruptions or delays in the future would likely also do so.

We rely on our management team (including our new CEO) and team members and our business could be harmed if we are unable to retain qualified personnel.

Our success depends, in part, on the skills, working relationships and continued services of our executive team, including our new CEO, and other key personnel.

Interruptions or delays that inhibit our ability to meet that standard have hurt our reputation and ability to attract and retain customers, and any such interruptions or delays in the future would likely also do so.

We rely on our management team and team members, and our business could be harmed if we are unable to retain qualified personnel.

Our success depends, in part, on the skills, working relationships and continued services of our executive team and other key personnel.

While we have entered into employment agreements with our executive officers, all of our team members are “at-will” employees, and their employment can be terminated by us or them at any time, for any reason, and without notice, subject, in certain cases, to severance payment rights.

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We have invested substantial time and resources in building our team.

As we continue to grow, including through the integration of team members joining us through our acquisitions, we have found it difficult to maintain these important aspects of our corporate culture.

As we continue to grow, including through our acquisitions, we have found it difficult to maintain these important aspects of our corporate culture.

In addition, it is difficult to instill our culture in our now predominantly remote workforce.

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Our BIN sponsor enables us to link the payment cards that we offer our members to the VISA network, thereby allowing our members to use our payment cards to pay for expenses with a “swipe” of the card.

If any material adverse event were to affect our BIN sponsor, including a significant decline in the financial condition of such BIN sponsor, a decline in the quality of service provided by our BIN sponsor, the inability of our BIN sponsor to comply with applicable banking and financial service regulatory requirements or industry standards, systems failure or the inability of our BIN sponsor to pay us fees, our business, financial condition, and results of operations could be materially and adversely affected because we may be forced to reduce the availability of, or eliminate entirely, our payment card offering, which would

materially impact our interchange revenue.

If any material adverse event were to affect our BIN

sponsor, including a significant decline in the financial condition of such BIN sponsor, a decline in the quality of service provided by our BIN sponsor, the inability of our BIN sponsor to comply with applicable banking and financial service regulatory requirements or industry standards, systems failure, or the inability of our BIN sponsor to pay us fees, our business, financial condition, and results of operations could be materially and adversely affected because we may be forced to reduce the availability of, or eliminate entirely, our payment card offering, which would materially impact our interchange revenue.

In addition, we do not have long-term contracts with our BIN sponsor, and our BIN sponsor may increase the fees charged to us or terminate our relationship.

If we were required to change BIN sponsor, we could not accurately predict the success of such change or that the terms of our agreement with a new BIN sponsor would be as favorable to us, especially in light of the regulatory scrutiny of the payment card industry, which has rendered the market for BIN sponsor services less competitive.

If we were required to change our BIN sponsor, we could not accurately predict the success of such change or that the terms of our agreement with a new BIN sponsor would be as favorable to us, especially in light of the regulatory scrutiny of the payment card industry, which has rendered the market for BIN sponsor services less competitive.

Replacing our third-party service providers would be difficult and disruptive to our business.

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Growth-related risks

Our acquisition strategy may not be successful.

Our acquisition and investment strategies may not be successful.

As a key part of our strategy, we seek to acquire or invest in assets, businesses, products, or technologies that we believe would complement or expand our products and services, enhance our technical capabilities, or otherwise offer growth opportunities.

There is no assurance that we will be successful in consummating such acquisitions, or even if consummated, realize the anticipated benefits of these or any future acquisitions.

The pursuit of potential acquisitions may divert the attention of management and cause us to incur various expenses related to identifying, investigating, and pursuing suitable acquisitions, whether or not they are consummated.

Acquisitions also increase the risk of unforeseen legal liability, including for potential violations of applicable law or industry rules and regulations, arising from prior or ongoing acts or omissions by the acquired businesses that are not discovered by due diligence during the acquisition process.

Generally, if an acquisition fails to meet our expectations, our operating results, business, and financial condition may suffer.

Certain of our past acquisitions also resulted in dilutive issuances of equity securities and the incurrence of additional debt, and future acquisitions could result in additional dilutive issuances of equity securities or the incurrence of additional debt, which could adversely affect our business, results of operations, or financial condition.

There is no assurance that we will be successful in consummating such acquisitions or investments, or even if consummated, realize the anticipated benefits of these or any future acquisitions or investments.

Acquisitions and investments also increase the risk of unforeseen legal liability, including for potential violations of applicable law or industry rules and regulations, arising from prior or ongoing acts or omissions by the acquired businesses or businesses we invest in that are not discovered during the due diligence process.

If an acquisition or investment fails to meet our expectations, our operating results, business, and financial condition may suffer.

Certain of our past transactions also resulted in dilutive issuances of equity securities and the incurrence of additional debt, and future acquisitions or investments could result in additional dilutive issuances of equity securities or the incurrence of additional debt, which could adversely affect our business, results of operations, or financial condition.

Failure to manage future growth effectively could have a material adverse effect on our business, financial condition, and results of operations.

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As of January 31, 2026, we had approximately 10.6 million HSAs and $36.5 billion in HSA Assets representing growth of 7% and 14%, respectively, from January 31, 2025.

Our growth strategy contemplates further increasing the number of our HSAs, CDBs and our HSA Assets at relatively higher growth rates than industry averages.

Our growth strategy contemplates further increasing the number of our HSAs, CDBs, and HSA Assets at relatively higher growth rates than industry averages.

However, the rate at which we have been able to add new HSAs, CDBs, and HSA Assets in the past may not be indicative of the rate at which we will be able to grow in the future.

Our success depends in part upon the ability of our executive officers to manage growth effectively.

Our ability to grow also depends upon our ability to successfully hire, train, supervise, and manage new team members, obtain financing for our capital needs, expand our systems effectively, control increasing costs, allocate our human resources optimally, maintain clear lines of communication between our operational functions and our finance and accounting functions, and manage the pressures on our management and administrative, operational, and financial infrastructure.

There can be no assurance that we will be able to accurately anticipate and respond to the changing demands we will face as we continue to expand our operations or that we will be able to manage growth effectively

or to achieve further growth at all.

Our ability to grow also depends upon our ability to successfully hire, train, supervise, and manage new team members, obtain financing for our capital needs, leverage and expand our systems and data effectively, control increasing costs, allocate our human resources optimally, maintain clear lines of communication between our operational functions and our finance and accounting functions, utilize cost saving measures including artificial intelligence efficiently, enter and grow new initiatives such as our marketplace, and manage the pressures on our management and administrative, operational, and financial infrastructure.

If our business does not continue to grow or if we fail to effectively manage any future growth, our business, financial condition, and results of operations could be materially and adversely affected.

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Any new product or service we develop or acquire may not be introduced in a timely or cost-effective manner and may not achieve the broad market acceptance necessary to earn significant revenue.

If we are unable to successfully develop or acquire new products or services or enhance our existing products or services to meet member or network partner requirements, our results of operations, financial condition, business or prospects may be materially adversely affected.

If we are unable to successfully develop, ourselves or through partnerships, or acquire new products or services or enhance our existing products or services to meet member or network partner requirements, our results of operations, financial condition, business, or prospects may be materially adversely affected.

We may need to record write-downs from future impairments of identified intangible assets and goodwill.

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Any future determination that these assets are carried at greater than their fair value could result in substantial non-cash impairment charges, which could significantly impact our reported operating results.

Integration of our acquisitions may not be successful, and we may not realize the synergies anticipated from our acquisitions.

Integration of our acquisitions could take longer and be more costly than anticipated, and it could result in the loss of key team members, the disruption of our ongoing business and the acquired business, tax costs or inefficiencies, or inconsistencies in standards, controls, information technology systems, procedures and policies, any of which could adversely affect our ability to maintain relationships with team members, Clients, Network Partners, or other third parties, and could harm our financial performance.

In addition, we may not realize the anticipated cost, revenue, and other synergies associated with successfully integrating our acquisitions.

Financing and related risks

Our substantial debt could limit our ability to fund operations, expose us to interest rate volatility, limit our ability to raise additional capital, and have a material adverse effect on our ability to fulfill our obligations under our Credit Agreement and Indenture and to our Network Partners, Clients, and members.

We are party to a credit agreement (the "Credit Agreement"), which consists of a five-year senior secured revolving credit facility in the aggregate principal amount of $1 billion (the “Revolving Credit Facility”), of which $461.9 million was outstanding as of January 31, 2025 .

was outstanding as of January 31, 2026 .

We have also issued $600 million of 4.50% unsecured Senior Notes due 2029 (the "Notes").

Under the Credit Agreement, we have the right to request additional loans or commitments for in an amount up to $450 million, plus (ii) an additional amount so long as the pro forma First Lien Net Leverage Ratio (as defined in the Credit Agreement) does not exceed 3.85 to 1.00 as of the date such loans or commitments are incurred.

Under the Credit Agreement, we have the right to request additional loans or commitments in an amount up to $450 million, plus (ii) an additional amount so long as the pro forma First Lien Net Leverage Ratio (as defined in the Credit Agreement) does not exceed 3.85 to 1.00 as of the date such loans or commitments are incurred.

We also have the right to incur additional debt from time to time, subject to the restrictions contained in the Credit Agreement and the indenture under which the Notes were issued (the "Indenture") .

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• our level of debt may make it more difficult for us to satisfy our obligations with respect to our debt, and any failure to comply with the obligations under any of our debt instruments, including restrictive covenants, could result in an event of default under the Credit Agreement or the Indenture and the agreements governing such other debt;

• we use a portion of our cash flow from operations to pay principal and interest on our debt, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, strategic acquisitions, investments and alliances and other general corporate requirements;

• we use a portion of our cash flow from operations to pay principal and interest on our debt, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, strategic acquisitions, investments, alliances, and other general corporate requirements;

• our interest expense has increased substantially, and could continue to increase if interest rates increase beyond current levels, because any outstanding borrowings under the Revolving Credit Facility are based on variable interest rates;

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• our debt service obligations could limit our flexibility to plan for, or react to, changes in our business and the industry in which we operate;

• our level of debt may restrict us from raising additional financing on satisfactory terms to fund working capital, capital expenditures, strategic acquisitions, investments and joint ventures and other general corporate requirements;

• our level of debt may restrict us from raising additional financing on satisfactory terms to fund working capital, capital expenditures, strategic acquisitions, investments, joint ventures, and other general corporate requirements;

• our level of debt may prevent us from raising the funds necessary to repurchase all of the Notes tendered to us upon the occurrence of a change of control, which would constitute an event of default under the Indenture;

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• limit our ability to plan for or react to market conditions or meet capital needs or otherwise restrict our activities or business plans;

• adversely affect our ability to finance our operations, strategic acquisitions, investments or alliances or other capital needs or to engage in other business activities that would be in our interest.

• adversely affect our ability to finance our operations, strategic acquisitions, investments, alliances, or other capital needs or to engage in other business activities that would be in our interest.

A breach of any of these restrictive covenants or our inability to comply with the required financial ratios would result in a default under some or all of the debt agreements.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors