What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-17 compared with 2025-03-18 · 212 added, 163 removed, 668 unchanged (36% of the section changed)

5 unchanged sentences

Consolidated balance sheets as of January 31, 2026 and 2025

Consolidated statements of operations and comprehensive income (loss) for the years ended January 31, 2025, 2024 and 2023

Consolidated statements of operations for the years ended January 31, 2026, 2025 and 2024

Consolidated statements of comprehensive income for the years ended January 31, 2026, 2025 and 2024

Consolidated statements of stockholders' equity for the years ended January 31, 2026, 2025 and 2024

5 unchanged sentences

We have audited the accompanying consolidated balance sheets of HealthEquity, Inc.

and its subsidiaries (the "Company") as of January 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive income (loss), of stockholders’ equity and of cash flows for each of the three years in the period ended January 31, 2025, including the related notes (collectively referred to as the "consolidated financial statements").

and its subsidiaries (the "Company") as of January 31, 2026 and 2025, and the related consolidated statements of operations, of comprehensive income, of stockholders’ equity and of cash flows for each of the three years in the period ended January 31, 2026, including the related notes (collectively referred to as the "consolidated financial statements").

We also have audited the Company's internal control over financial reporting as of January 31, 2026, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

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Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit and risk committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

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To generate service revenue, the Company administers its platforms, prepares statements, provides a mechanism for spending funds, and provides customer support services.

In addition, once a member’s HSA cash balance reaches a certain threshold, the member is able to invest his or her HSA assets through the Company's investment partner from which the Company earns recordkeeping fees, calculated as a percentage of the member's HSA investments.

In addition, once a member’s health savings account (HSA) cash balance reaches a certain threshold, the member is able to invest their HSA assets through the Company's investment partner from which the Company earns recordkeeping fees, calculated as a percentage of the member's HSA investments.

All of these services are consumed as they are received.

The Company recognizes service revenue, in an amount that reflects the consideration it expects to be entitled to in exchange for those services, on a monthly basis as it satisfies its performance obligations.

The principal consideration for our determination that performing procedures relating to service revenue recognition is a critical audit matter is a high degree of auditor effort in performing procedures related to the Company’s revenue recognition.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the revenue recognition process for service revenue.

These procedures also included, among others, evaluating the recognition of service revenue for a sample of revenue transactions by obtaining confirmation from customers or obtaining and inspecting source documents, including invoices, sales contracts, and cash receipts.

These procedures also included, among others, evaluating the recognition of service revenue by obtaining confirmations from third parties, on a sample basis, obtaining and inspecting source documents, such as invoices, sales contracts, and cash receipts, on a sample basis, and developing independent expectations of certain service revenue and comparing the independent expectations to the amounts recorded.

/s/ PricewaterhouseCoopers LLP

10 unchanged sentences

123,696 118,006

Other current assets 63,795 48,564

Prepaid expenses and other current assets 69,658 63,795

Total current assets 512,281 477,749

25 unchanged sentences

Accumulated earnings 195,906 209,274

Accumulated other comprehensive loss ( 5,707 ) —

Total stockholders’ equity 2,107,196 2,114,911

3 unchanged sentences

and subsidiaries

Consolidated statements of operations and comprehensive income (loss)

Consolidated statements of operations

Year ended January 31,

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Total other expense ( 45,024 ) ( 46,300 ) ( 42,659 )

Income (loss) before income taxes 116,034 75,040 ( 38,096 )

Income tax provision (benefit) 19,331 19,328 ( 11,953 )

Net income (loss) and comprehensive income (loss) $ 96,703 $ 55,712 $ ( 26,143 )

Net income (loss) per share:

Income before income taxes 277,432 116,034 75,040

Income tax provision 62,231 19,331 19,328

Net income $ 215,201 $ 96,703 $ 55,712

Net income per share:

Basic $ 2.50 $ 1.11 $ 0.65

Diluted $ 2.46 $ 1.09 $ 0.64

Weighted-average number of shares used in computing net income (loss) per share:

Weighted-average number of shares used in computing net income per share:

Basic 86,132 86,870 85,564

3 unchanged sentences

and subsidiaries

Consolidated statements of comprehensive income

Year ended January 31,

(in thousands, except per share data)

2026 2025 2024

Net income $ 215,201 $ 96,703 $ 55,712

Other comprehensive loss

Cash flow hedges

Net unrealized losses ( 5,695 ) — —

Reclassification of net gains included in net income ( 12 ) — —

Net change, net of income tax benefit of $ 1,854 for the year ended January 31, 2026

( 5,707 ) — —

Total other comprehensive loss ( 5,707 ) — —

Comprehensive income $ 209,494 $ 96,703 $ 55,712

See accompanying notes to consolidated financial statements.

HealthEquity, Inc.

and subsidiaries

Consolidated statements of stockholders’ equity

Common stock Additional

capital Accumulated earnings Total

capital Accumulated earnings Accumulated other comprehensive loss Total

stockholders'

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Stock-based compensation — — 77,151 — — 77,151

Net loss — — — ( 26,143 ) ( 26,143 )

Net income — — — 55,712 — 55,712

Balance as of January 31, 2024 86,127 $ 9 $ 1,829,384 $ 205,628 $ — $ 2,035,021

1 unchanged sentence

Stock-based compensation — — 96,425 — — 96,425

Repurchases of common stock ( 1,361 ) — ( 29,190 ) ( 93,057 ) — ( 122,247 )

Net income — — — 96,703 — 96,703

3 unchanged sentences

Repurchases of common stock ( 3,254 ) ( 1 ) ( 73,105 ) ( 228,569 ) — ( 301,675 )

Other comprehensive loss — — — — ( 5,707 ) ( 5,707 )

Net income — — — 215,201 — 215,201

7 unchanged sentences

Cash flows from operating activities:

Net income (loss) $ 96,703 $ 55,712 $ ( 26,143 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net income $ 215,201 $ 96,703 $ 55,712

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 154,657 162,451 153,078

1 unchanged sentence

Amortization of debt issuance costs 1,078 2,067 2,852

Amortization of gains on derivatives ( 16 ) — —

Loss on extinguishment of debt — 1,576 1,157

Other non-cash items — — 268

Deferred taxes 39,730 ( 12,836 ) ( 13,995 )

1 unchanged sentence

Accounts receivable ( 5,690 ) ( 13,113 ) ( 8,058 )

Other assets ( 11,790 ) ( 32,790 ) 4,620

Prepaid expenses and other current and non-current assets ( 12,663 ) ( 11,790 ) ( 32,790 )

Operating lease right-of-use assets 6,785 6,664 10,190

6 unchanged sentences

Purchases of software and capitalized software development costs ( 46,515 ) ( 51,129 ) ( 41,123 )

Acquisitions of HSA portfolios ( 452,241 ) ( 3,257 ) ( 70,583 )

Purchases of property and equipment ( 1,969 ) ( 2,084 ) ( 1,694 )

Acquisitions of HSA portfolios ( 293 ) ( 452,241 ) ( 3,257 )

Settlement of derivatives, net 1,637 — —

Net cash used in investing activities ( 47,140 ) ( 505,454 ) ( 46,074 )

1 unchanged sentence

Principal payments on long-term debt ( 100,000 ) ( 561,875 ) ( 54,375 )

Repurchases of common stock ( 299,254 ) ( 121,493 ) —

Proceeds from long-term debt — 736,875 —

Payment of debt issuance costs — ( 3,748 ) —

Repurchases of common stock ( 121,493 ) — —

Settlement of client-held funds obligation, net 867 ( 1,620 ) 865

14 unchanged sentences

Supplemental disclosures of non-cash investing and financing activities:

Non-cash purchase consideration related to acquisitions of HSA portfolios 20,325 — —

Purchases of software and capitalized software development costs included in accounts payable, accrued liabilities, or accrued compensation 4,332 5,971 3,145

Repurchases of common stock included in accrued liabilities 754 — —

Purchases of property and equipment included in accounts payable or accrued liabilities 16 45 263

Increase in goodwill due to measurement period adjustments, net — — 2,309

Repurchases of common stock included in accrued liabilities 3,174 754 —

Non-cash purchase consideration related to acquisitions of HSA portfolios — 20,325 —

Settlement of derivatives included in other current assets 2,465 — —

Exercise of common stock options receivable — 10 429

14 unchanged sentences

The Company is managed as a single operating segment that provides administration services in connection with HSAs and other CDBs, which reflects the way in which its chief operating decision maker (“CODM”), the Chief Executive Officer, reviews the Company's financial performance and makes decisions about resource allocation.

The CODM assesses the performance of the Company, monitors actual financial results against budgets, and makes resource allocation decisions with a focus on the Company’s consolidated results as presented in the consolidated statements of operations and comprehensive income (loss).

The Company’s measure of profitability is net income (loss).

The Company’s measure of profitability is net income.

Single segment-level financial information, including total assets, significant non-cash transactions, and capital expenditures, is contained in the accompanying consolidated financial statements and related notes.

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Other long-term liabilities consists of long-term deferred revenue and other liabilities that the Company does not expect to settle within one year.

Derivative Financial Instruments and Hedging Activities

As required by ASC 815, Derivatives and Hedging (ASC 815) , the Company records derivative financial instruments at fair value as of each reporting date.

Each of the Company's derivatives is designated as a cash flow hedge and presented on a gross basis within assets or liabilities in the Company's consolidated balance sheets.

The change in fair value of the derivatives is recorded to accumulated other comprehensive income or loss ("AOCI") in the Company's consolidated balance sheets and reclassified to custodial revenue in the period the hedged transactions affect earnings.

Cash flows from hedging activities are classified as cash flows from investing activities in the consolidated statements of cash flows.

The Company assesses each derivative, both at inception and on an ongoing basis, to determine if the requirements for applying hedge accounting are met.

The Company does not use derivative financial instruments for trading purposes.

See Note 11—Derivative financial instruments and hedging activities for further information.

Revenue recognition

7 unchanged sentences

Disaggregation of revenue.

The Company's primary sources of revenue are service, custodial, and interchange revenue and are disclosed in the consolidated statements of operations and comprehensive income (loss).

The Company's primary sources of revenue are service, custodial, and interchange revenue and are disclosed in the consolidated statements of operations.

All of the Company's sources of revenue are deemed to be revenue contracts with customers.

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Accordingly, the amortization period of the assets has been determined to be the average economic life of an HSA or other CDB relationship, which is estimated to be 15 years and 7 years, respectively.

Amortization of capitalized sales commission contract costs is included in sales and marketing expenses in the consolidated statements of operations and comprehensive income (loss).

Amortization of capitalized sales commission contract costs is included in sales and marketing expenses in the consolidated statements of operations.

The Company has applied the practical expedient which allows an entity to account for incremental costs of obtaining a contract at a portfolio level.

5 unchanged sentences

The Company administers its platforms, prepares statements, provides a mechanism for spending funds, and provides customer support services.

In addition, once a member’s HSA cash balance reaches a certain threshold, the member is able to invest his or her HSA assets through the Company's investment partner from which the Company earns recordkeeping and advisory fees, calculated as a percentage of the member's HSA investments.

In addition, once a member’s HSA cash balance reaches a certain threshold, the member is able to invest their HSA assets through the Company's investment partner from which the Company earns recordkeeping and advisory fees, calculated as a percentage of the member's HSA investments.

All of these services are consumed as they are received.

1 unchanged sentence

Custodial revenue.

The Company earns custodial revenue primarily from HSA assets deposited with depository partners or placed in group annuity contracts or similar arrangements with insurance company partners and Client-held funds deposited with depository partners.

The placement of funds represents a service that is simultaneously received and consumed by the depository partners and insurance company partners.

The Company earns custodial revenue primarily from HSA cash placed in group annuity contracts or similar arrangements with insurance company partners or deposited with depository partners and Client-held funds deposited with depository partners.

The placement of funds represents a service that is simultaneously received and consumed by the insurance company partners and depository partners.

The Company recognizes custodial revenue each month, in an amount that reflects the consideration it expects to be entitled to in exchange for the service.

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The Company incurs cost of revenue related to servicing member accounts, managing customer and partner relationships, and processing reimbursement claims.

Expenditures include personnel-related costs, depreciation, amortization, stock-based compensation, common expense allocations, new member and participant supplies, and other operating costs of the member account servicing departments.

Expenditures include personnel-related costs, depreciation, amortization, stock-based compensation, common expense allocations, costs to reimburse members from outside fraud activity, new member and participant supplies, and other operating costs of the member account servicing departments.

Other components of the Company’s cost of revenue include interest retained by members on custodial assets held and interchange costs incurred in connection with processing card transactions initiated by members.

1 unchanged sentence

The Company grants restricted stock units ("RSUs") to certain team members, executive officers, and directors.

Historically, the Company also granted stock options and restricted stock awards ("RSAs").

The Company recognizes compensation expense for stock-based awards based on the grant date estimated fair value.

Expense for stock-based awards is generally recognized on a straight-line basis over the requisite service period and is reversed as pre-vesting forfeitures occur.

The fair value of RSUs is based on the current value of the Company's closing stock price on the date of grant less the present value of future expected dividends discounted at the risk-free interest rate.

The fair value of RSUs is based on the current value of the

Company's closing stock price on the date of grant less the present value of future expected dividends discounted at the risk-free interest rate.

For stock-based awards with performance conditions, the Company evaluates the probability of achieving the performance criteria and of the number of shares that are expected to vest, and compensation expense is then adjusted to reflect the number of shares expected to vest and recorded over the requisite service period.

6 unchanged sentences

Other income, net, consists of interest income earned on corporate cash and other miscellaneous income and expense.

Income tax provision (benefit)

Income tax provision

The Company accounts for income taxes and the related accounts under the asset and liability method as set forth in ASC 740, Income Taxes .

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For tax positions that are more likely than not to be sustained upon audit, the second step is to measure the tax benefit in the financial statements as the largest benefit that has a greater than 50% likelihood of being sustained upon settlement.

The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as a component of other income, net in the consolidated statements of operations and comprehensive income (loss).

The Company recognizes interest and penalties, if any, related to unrecognized tax benefits as a component of other income, net in the consolidated statements of operations.

Changes in facts and circumstances could have a material impact on the Company’s effective tax rate and results of operations.

6 unchanged sentences

Consideration paid for the acquisition of a business as defined by ASC 805-10 is allocated to the tangible and intangible assets acquired and liabilities assumed based on their fair values as of the acquisition date.

Acquisition-related expenses incurred in conjunction with the acquisition of a business are recognized in earnings in the period in which they are incurred and are included in other income, net on the consolidated statements of operations and comprehensive income (loss).

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Management has made estimates for the allowance for doubtful accounts, capitalized software development costs, evaluating goodwill and long-lived assets for impairment, useful lives of property and equipment and intangible assets, accrued compensation, accrued liabilities, grant date fair value of performance restricted stock units, and income taxes.

Management has made estimates in several areas, including the average economic life of an HSA or CDB customer relationship, the allowance for doubtful accounts, capitalized software development costs, the valuation of derivative assets and liabilities, evaluating goodwill and long-lived assets for impairment, the useful lives of property and equipment and intangible assets, accrued compensation, accrued liabilities, the grant date fair value of performance restricted stock units, and income taxes.

Actual results could differ from those estimates.

Recently adopted accounting pronouncements

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 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.

The Company adopted ASU 2023-07 during the fiscal year ended January 31, 2025.

The adoption of this guidance did not have a material impact to our consolidated financial statements or disclosures given our consolidated statements of operations and comprehensive income (loss) already include disclosure of our significant segment expenses that are regularly provided to our CODM.

Recently issued accounting pronouncements not yet adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

In December 2023, the Financial Accounting Standards Board ("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;

however, the impact is not expected to be material.

The Company adopted ASU 2023-09 for the fiscal year ended January 31, 2026, and applied the new disclosure requirements retrospectively.

The impact of the adopted ASU is not material to our income tax disclosures.

Recently issued accounting pronouncements not yet adopted

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

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We are evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.

Net income (loss) per share

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

In September 2025, the FASB issued ASU 2025-06, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software , which removes all references to project stages and establishes new criteria for the capitalization of internal-use software costs.

The guidance will be effective for annual periods beginning after December 15, 2027, including interim periods within those annual periods.

Early adoption is permitted.

Upon adoption, the guidance may be applied prospectively, retrospectively, or on a modified retrospective basis, including for in-process projects.

We are evaluating the effect that this guidance will have on our consolidated financial statements and related disclosures.

Net income per share

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

Year ended January 31,

1 unchanged sentence

Numerator (basic and diluted):

Net income (loss) $ 96,703 $ 55,712 $ ( 26,143 )

Net income $ 215,201 $ 96,703 $ 55,712

Denominator (basic):

4 unchanged sentences

Diluted weighted-average common shares outstanding 87,473 88,828 86,957

Net income (loss) per share:

Net income per share:

Basic $ 2.50 $ 1.11 $ 0.65

Diluted $ 2.46 $ 1.09 $ 0.64

For the fiscal years ended January 31, 2025, 2024 and 2023, 0.1 million, 0.6 million, and 2.5 million shares, respectively, attributable to outstanding stock options and restricted stock units were excluded from the calculation of diluted net income (loss) per share as their inclusion would have been anti-dilutive.

For the fiscal years ended January 31, 2026, 2025 and 2024, 0.1 million, 0.1 million, and 0.6 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.

Supplemental financial statement information

Selected consolidated balance sheet and consolidated statement of operations and comprehensive income (loss) components consisted of the following:

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

Allowance for doubtful accounts

1 unchanged sentence

During the fiscal years ended January 31, 2026, 2025, and 2024, the Company recorded credit losses from trade receivables of $ 0.8 million, $ 0.2 million, and $ 1.7 million, respectively.

Prepaid expenses

As of January 31, 2025 and 2024, the Company had prepaid expenses of $ 32.5 million and $ 31.2 million, respectively, which are included within other current assets on the Company's consolidated balance sheets.

Costs to obtain a contract

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As of January 31, 2026 and 2025, the balance of deferred revenue was $ 6.7 million and $ 17.1 million, respectively.

The balance as of January 31, 2025 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—Intangible assets and goodwill.

The remainder of the balances as of January 31, 2025 and 2024 relates to cash received in advance for interchange and custodial revenue arrangements, other up-front fees and other commuter deferred revenue.

The balances are related to cash received in advance for custodial and interchange revenue arrangements, other up-front fees and other commuter deferred revenue.

The Company expects to recognize approximately 90 % of its balance of deferred revenue as revenue over the next 12 months and the remainder thereafter.

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Interest income $ 11,729 $ 13,914 $ 12,138

Acquisition costs — — ( 53 )

Other miscellaneous income (expense) 420 658 ( 439 )

Other miscellaneous income 378 420 658

Total other income, net $ 12,107 $ 14,334 $ 12,796

Interest expense

Based on the application of ASC 470-50, Debt - Modifications and Extinguishments, the Company recorded debt extinguishment losses of $ 1.6 million and $ 1.2 million during the fiscal years ended January 31, 2025 and 2024, respectively, which are included within interest expense in the consolidated statements of operations and comprehensive income (loss).

The Company has entered into various non-cancelable operating lease agreements for office space, data storage facilities, and other leases with remaining lease terms of approximately 1 to 6 years, often with one or more Company options to renew.

The Company has entered into various non-cancelable operating lease agreements for office space, data storage facilities, and other leases with remaining lease terms of less than 1 year to approximately 5 years, often with one or more Company options to renew.

These renewal terms can extend the lease term from 5 to 10 years and are included in the lease term when it is reasonably certain that the Company will exercise the option.

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Intangible assets and goodwill

BenefitWallet HSA portfolio acquisition

During the fiscal year ended January 31, 2025, the Company acquired the BenefitWallet HSA portfolio from Conduent Business Services, LLC ("Conduent").

The transfer closed in a series of three tranches, as follows:

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 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 consolidated balance sheet.

The Company capitalized $ 27.2 million of transaction costs associated with the acquisition during the fiscal year ended January 31, 2025, 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.

Intangible assets

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These amounts exclude contractual sublease income of $ 22.5 million, which is expected to be received through December 2030.

(4) Other contractual obligations consist of processing services agreements, software subscriptions, and other contractual commitments.

(4) Other contractual obligations consist of services agreements, purchase obligations, and other contractual commitments.

Contingencies

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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.

On November 27, 2024, the parties agreed to settle the lawsuit, with Union Mesa retaining the $ 2.8 million from the letter of credit and HealthEquity and WageWorks agreeing to pay an additional $ 30.0 million to Union Mesa.

The $ 30.0 million settlement amount was recorded as merger integration expense and paid during the fiscal year ended January 31, 2025.

The $ 2.8 million letter of credit was previously recorded as merger integration expense during the period in which it was drawn by Union Mesa.

As a result of a cybersecurity incident earlier in 2024 in which a business partner's user account containing personally identifiable information was breached, the Company is subject to multiple legal actions, including a consolidated putative class action lawsuit in federal court in the District of Utah, an individual lawsuit filed in Florida state court, and a mass arbitration action.

As a result of a cybersecurity incident in 2024 in which a business partner's user account containing personally identifiable information was breached, the Company is subject to multiple legal actions, including a consolidated putative class action lawsuit in federal court in the District of Utah.

The plaintiffs in these legal actions allege that the Company failed to implement reasonable data security practices, which resulted in a breach and disclosure of plaintiffs' and others' personally identifiable information and protected health information.

The plaintiffs are seeking, among other damages, unspecified monetary damages, equitable relief, costs and attorneys' fees arising out of the incident.

The plaintiffs are seeking,

among other damages, unspecified monetary damages, equitable relief, costs and attorneys' fees arising out of the incident.

With respect to the consolidated putative class action lawsuit, on August 22, 2024, the court issued an order granting a motion to consolidate the class action lawsuits, on October 15, 2024, a consolidated class action amended complaint was filed, on December 13, 2024, the Company filed a motion to dismiss the class action and a motion to compel arbitration, and on May 5, 2025, the court dismissed without prejudice the Company's motion to compel arbitration and the motion to dismiss, with the court noting that the Company could refile both motions after the conclusion of discovery.

The Company intends to vigorously defend these legal actions.

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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.

Except with respect to the settlement of the Lease litigation, described above, no loss accrual relating to these matters was recorded because, based on currently available information, the Company does not believe that any contingent liabilities relating to these matters are probable or that the amount of any resulting loss is estimable.

No loss accrual relating to these matters was recorded because, based on currently available information, the Company does not believe that any contingent 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.

5 unchanged sentences

Revolving Credit Facility 361,875 461,875

Prior Term Loan Facility — 286,875

Principal amount 961,875 1,061,875

3 unchanged sentences

Long-term debt, net $ 957,379 $ 1,056,301

(1) In addition to the $ 5.6 million and $ 11.9 million of unamortized discount and issuance costs related to long-term debt as of January 31, 2025 and 2024, respectively, $ 7.7 million and $ 2.5 million of unamortized issuance costs related to the Company's Revolving Credit Facility and Prior Revolving Credit Facility (as defined below) are included within other assets on the consolidated balance sheets as of January 31, 2025 and January 31, 2024, respectively.

(1) In addition to the $ 4.5 million and $ 5.6 million of unamortized discount and issuance costs related to the Notes as of January 31, 2026 and 2025, respectively, $ 5.9 million and $ 7.7 million of unamortized issuance costs related to the Company's Revolving Credit Facility are included within other assets in the consolidated balance sheets as of January 31, 2026 and January 31, 2025, respectively.

4.50 % Senior Notes due 2029

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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 Notes are redeemable at the Company’s option, in whole or in part, at a redemption price if redeemed during the 12 months beginning (i) October 1, 2025 of 101.125 %, and (ii) 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 be required to make an offer to purchase the Notes upon the sale of certain assets or upon specific kinds of changes of control.

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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).

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 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), a portion of which was used to refinance the Company's prior credit agreement.

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 January 31, 2025, the outstanding balance under the Revolving Credit Facility was $ 461.9 million, which is included within long-term debt, net of issuance costs, on the consolidated balance sheet.

The maturity date of the Revolving Credit Facility is August 23, 2029.

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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.”

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 ended 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 ended January 31, 2025.

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 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.

The Company was in compliance with all covenants under the Credit Agreement as of January 31, 2026 and for the period then ended.

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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;

(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).

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.

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.

The income tax provision (benefit) consisted of the following:

The income tax provision consisted of the following:

Year ended January 31,

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State 3,083 ( 943 ) ( 2,991 )

Total deferred tax benefit $ ( 12,829 ) $ ( 13,995 ) $ ( 17,181 )

Total income tax provision (benefit) $ 19,331 $ 19,328 $ ( 11,953 )

Total income tax provision (benefit) differed from the amounts computed by applying the U.S.

federal statutory tax rate to income before income taxes as a result of the following:

Total deferred tax provision (benefit) $ 39,762 $ ( 12,829 ) $ ( 13,995 )

Total income tax provision $ 62,231 $ 19,331 $ 19,328

Total income tax provision differed from the amounts computed by applying the U.S.

federal statutory tax rate to income before income taxes as a result of the following (pursuant to ASU 2023-09 disclosure requirements):

Year ended January 31,

(in thousands) 2025 2024 2023

Federal income tax provision (benefit) at the statutory rate $ 24,367 $ 15,759 $ ( 8,000 )

State income tax provision (benefit), net of federal tax provision (benefit) 4,365 5,382 ( 1,021 )

Other non-deductible or non-taxable items, net 1,194 447 225

(in thousands, except percentages) 2026 2025 2024

Federal statutory tax rate $ 58,261 21.0 % $ 24,367 21.0 % $ 15,759 21.0 %

State and local income taxes, net of federal income tax effect (1) 5,367 1.9 % 4,365 3.8 % 441 0.6 %

Research and development tax credits ( 2,413 ) ( 1.0 ) % ( 4,625 ) ( 4.0 ) % ( 3,019 ) ( 4.0 ) %

Other ( 123 ) 0.0 % ( 230 ) ( 0.2 ) % ( 112 ) ( 0.1 ) %

Nontaxable or nondeductible items

Share-based payment awards ( 5,080 ) ( 1.8 ) % ( 12,529 ) ( 10.8 ) % 258 0.3 %

Excessive employee remuneration 5,120 1.9 % 6,782 5.8 % 2,939 3.9 %

Excess tax (benefit) shortfall on stock-based compensation expense, net ( 12,102 ) 304 ( 2,479 )

Federal research and development credits ( 7,955 ) ( 9,202 ) ( 1,341 )

Change in uncertain tax position reserves, net of indirect benefits 3,227 6,137 ( 2,970 )

Deferred tax rate adjustment due to state apportionment changes 1,504 ( 1,039 ) ( 30 )

Adjustment from settlement of IRS examination — 2,461 —

Return-to-provision adjustments ( 1,155 ) ( 433 ) ( 38 )

Change in valuation allowance ( 96 ) ( 3,129 ) 733

Other items, net ( 800 ) ( 298 ) ( 278 )

Total income tax provision (benefit) $ 19,331 $ 19,328 $ ( 11,953 )

Other 1,014 0.4 % 1,240 1.1 % 587 0.8 %

Changes in unrecognized tax benefits 76 0.0 % ( 39 ) 0.0 % ( 47 ) ( 0.1 ) %

Other adjustments

IRS examination settlement — 0.0 % — 0.0 % 2,461 3.3 %

Other 9 0.0 % — 0.0 % 61 0.1 %

Effective tax rate $ 62,231 22.4 % $ 19,331 16.7 % $ 19,328 25.8 %

(1) The following states and local jurisdictions contribute the majority (more than 50%) of the tax effect to this category.

For the tax year ended January 31, 2026:

California, Pennsylvania, Texas, Utah, and Iowa.

For the tax year ended January 31, 2025:

California, Texas, New Jersey, Pennsylvania, Iowa, and Illinois.

For the tax year ended January 31, 2024:

California, Texas, and Utah.

The Company’s effective tax rate for the fiscal years ended January 31, 2026, 2025, and 2024 was 22.4 %, 16.7 %, and 25.8 %, respectively.

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federal statutory tax rate each period is impacted by a number of factors, including the relative mix of earnings among state jurisdictions, credits, excess tax benefits or shortfalls on stock-based compensation expense, changes in unrecognized tax benefits and valuation allowance, and other items.

The decrease in the effective tax rate for the fiscal year ended January 31, 2025 compared to the fiscal year ended January 31, 2024 was primarily due to an increase in tax deductible stock-based compensation compared to GAAP stock-based compensation expense and a decrease in expense from unrecognized tax benefits, partially offset by an increase in pre-tax book income, an increase in nondeductible executive compensation, and increased expense from deferred tax rate adjustments due to state apportionment changes.

The increase in the effective tax rate for the fiscal year ended January 31, 2024 compared to the fiscal year ended January 31, 2023 was primarily due to an increase in pre-tax book income, an increase in unrecognized tax benefits, adjustments from settlement of an IRS examination, and a decrease in tax deductible stock-based compensation compared to GAAP stock-based compensation expense, partially offset by an increase in research and development tax credits and a decrease in valuation allowance.

The increase in the effective tax rate for the fiscal year ended January 31, 2026 compared to the fiscal year ended January 31, 2025 was primarily due to an increase in pre-tax book income, a reduction in tax benefit from stock-based compensation expense, and a decrease in research and development tax credits net of unrecognized tax benefits, partially offset by tax benefit from deferred tax rate adjustments due to state apportionment changes and a decrease in excessive employee remuneration.

The decrease in the effective tax rate for the fiscal year ended January 31, 2025 compared to the fiscal year ended January 31, 2024 was primarily due to an increase in tax benefit from stock-based compensation expense and a decrease in expense from unrecognized tax benefits, partially offset by an increase in pre-tax book income, an increase in nondeductible executive compensation, and increased expense from deferred tax rate adjustments due to state apportionment changes.

Net income tax payments by jurisdiction consisted of the following (pursuant to ASU 2023-09 disclosure requirements):

Year ended January 31,

(in thousands) 2026 2025 2024

Federal $ 5,000 $ 20,000 $ 30,500

California 787 * *

Pennsylvania 441 * *

Other 1,814 6,069 4,852

State and local 3,042 6,069 4,852

Total net income tax payments $ 8,042 $ 26,069 $ 35,352

* Jurisdiction was below the 5% of total (net) income tax payments threshold for the period

Deferred tax assets and liabilities consisted of the following:

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The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

Management considered the scheduled reversal of deferred tax liabilities in making this assessment and determined that based on the weight of all available evidence, it is more likely than not (i.e., a likelihood of more than 50%) that the Company will be able to realize all of its federal deferred tax assets and the majority if its state deferred tax assets.

The Company recorded a valuation allowance of $ 1.1 million and $ 1.2 million as of January 31, 2025 and 2024, respectively, related to certain state deferred tax assets.

The $ 0.1 million decrease in valuation allowance recorded is primarily the result of a corresponding increase in unrecognized tax benefits.

The Company recorded a valuation allowance of $ 1.1 million as of both January 31, 2026 and 2025, related to certain state deferred tax assets.

As of January 31, 2026, the Company had recorded state net operating loss carryforwards of $ 11.2 million, which begin to expire at various intervals beginning with the tax year ending January 31, 2036.

As of January 31, 2025, the Company also had state research and development tax credits of $ 13.6 million, which begin to expire at various intervals beginning with the tax year ending January 31, 2026.

As of January 31, 2026, the Company also had state research and development tax credit carryforwards of $ 12.5 million, which begin to expire at various intervals beginning with the tax year ending January 31, 2027.

As of January 31, 2026 and 2025, the gross unrecognized tax benefit was $ 27.4 million and $ 24.1 million, respectively.

If recognized, $ 20.9 million and $ 16.2 million of the total unrecognized tax benefits would affect the Company's effective tax rate as of January 31, 2025 and 2024, respectively.

If recognized, $ 24.1 million and $ 20.9 million of the total unrecognized tax benefits would affect the

Company's effective tax rate as of January 31, 2026 and 2025, respectively.

Total gross unrecognized tax benefits increased by $ 3.3 million in the period from January 31, 2025 to January 31, 2026.

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Increases as a result of tax positions taken during a prior period — 1,004

Decreases as a result of tax positions taken during a prior period ( 96 ) —

Increases as a result of tax positions taken during the current period 4,012 5,076

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Gross unrecognized tax benefits at end of year $ 27,405 $ 24,140

Certain unrecognized tax benefits are required to be netted against their related deferred tax assets as a result of ASU 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar

Tax Loss, or a Tax Credit Carryforward Exists .

The resulting unrecognized tax benefit recorded within the Company's consolidated balance sheet excludes the following amounts that have been netted against the related deferred tax assets accordingly:

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Unrecognized tax benefits recorded on the consolidated balance sheet $ 19,403 $ 15,777

The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits as a component of other income, net in the statement of operations and comprehensive income (loss).

The Company’s policy is to recognize interest and penalties related to unrecognized tax benefits as a component of other income, net in the consolidated statements of operations.

During the fiscal years ended January 31, 2026, 2025, and 2024, the Company recorded penalties and interest of $ 0.7 million, $ 0.6 million, and $ 0.1 million, respectively, related to unrecognized tax benefits.

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The Company files income tax returns with U.S.

federal and state taxing jurisdictions and is currently under examination by the states of California and Texas.

Such examinations may lead to ordinary course adjustments or proposed adjustments to the Company's taxes, net operating losses, and/or tax credit carryforwards.

federal and state taxing jurisdictions and is currently under examination by the state of California.

Such tax examinations may lead to ordinary course adjustments or proposed adjustments to the Company's taxes, net operating losses, and/or tax credit carryforwards.

The Company concluded examinations by the states of Texas and New York during the fiscal year ended January 31, 2026, and all necessary adjustments were immaterial.

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.

In July 2025, the “One Big Beautiful Bill Act” was signed into law.

The most significant provision for the Company is the immediate expensing of domestic research and experimental expenditures.

Other changes include bonus depreciation allowance on qualified business asset purchases and modifications to the business interest expense limitation calculation.

Each of these changes may result in accelerated tax deductions during the current and future tax years.

Tax payments for the fiscal year ended January 31, 2026 were significantly reduced, and tax payments for the year ending January 31, 2027 are expected to be significantly reduced, as a result of the accelerated tax deductions.

However, the Company's total income tax expense and effective tax rate are not expected to materially change as a result of the new legislation.

Stock-based compensation

The following table shows a summary of stock-based compensation in the Company's consolidated statements of operations and comprehensive income (loss) during the fiscal years presented:

The following table shows a summary of stock-based compensation in the Company's consolidated statements of operations during the fiscal years presented:

Year ended January 31,

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Stock options — — 79

Restricted stock awards — — 22

Total stock-based compensation expense $ 73,063 $ 96,425 $ 77,151

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Incentive Plan.

During the fiscal year ended January 31, 2025, 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.

The HealthEquity, Inc.

2024 Equity Incentive Plan (the "Incentive Plan") 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, as of January 31, 2026, the aggregate number of shares of the Company’s common stock reserved and available for issuance pursuant to awards granted under the Incentive Plan was 2.9 million.

No further awards will be made under the Company’s 2014 Equity Incentive Plan.

Stock options

Under the terms of the Incentive Plan, the Company has the ability to grant incentive and nonstatutory stock options to team members, including officers, non-employee directors and consultants of the Company, and Company affiliates.

Under the terms of the Incentive Plan, the Company has the ability to grant incentive and nonstatutory stock options.

Such stock options are to be exercisable at prices, as determined by the board of directors, which must be equal to no less than the fair value of the Company's common stock at the date of the grant.

Stock options granted under the Incentive Plan generally expire 10 years from the date of issuance or are forfeited 90 days after

termination of employment.

Stock options granted under the Incentive Plan generally expire 10 years from the date of issuance or are forfeited 90 days after termination of employment.

No stock options were granted during the fiscal years ended January 31, 2026, 2025, or 2024.

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Exercised ( 236 ) $ 21.27 - 73.61

Forfeited ( 1 ) $ 25.45 - 25.45

Outstanding as of January 31, 2026 133 $ 24.36 - 73.61

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The Company grants RSUs to certain team members, officers, and directors under the Incentive Plan, which vest upon service-based criteria and performance-based criteria.

The weighted-average fair value of RSUs granted during the fiscal years ended January 31, 2025, 2024 and 2023 was $ 86.07 , $ 64.16 and $ 75.64 per share, respectively.

The weighted-average fair value of RSUs granted

during the fiscal years ended January 31, 2026, 2025 and 2024 was $ 93.70 , $ 86.07 and $ 64.16 per share, respectively.

Service-based restricted stock units.

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In addition, during the fiscal year ended January 31, 2026, the Company awarded 46,485 PRSUs subject to the achievement of certain financial criteria measured on January 31, 2028.

The PRSUs cliff vest upon approval by the Talent, Compensation and Culture Committee.

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.

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Each of the PRSUs granted during the fiscal year ended January 31, 2026 contains 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.

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Stockholders' equity

Stock repurchase program

In September 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.

Stock repurchase programs

In June 2025, the Company announced that its board of directors authorized a new common stock repurchase program (the “2025 Stock Repurchase Program"), supplementing the $ 300 million common stock repurchase program approved in August 2024.

Under the 2025 Stock Repurchase Program, the Company may purchase up to an additional $ 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.

The stock repurchase programs do not obligate the Company to repurchase any dollar amount or number of shares of common stock, and the programs may be suspended or discontinued at any time.

The following table sets forth the common stock repurchased and subsequently retired during the periods presented:

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(1) Shares repurchased include unsettled repurchases as of January 31, 2026.

Transaction fees and excise tax were recorded as part of the repurchase price.

All repurchases were made in open market transactions.

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As of January 31, 2026, $ 177.7 million of common stock remained authorized for repurchase under the Company's 2025 Stock Repurchase Program.

Accumulated other comprehensive loss

As of January 31, 2026, AOCI consisted of unrealized losses on cash flow hedges, net.

The following table summarizes the changes in AOCI:

(in thousands) Change in unrealized losses on cash flow hedges Income tax benefit Total

Beginning balance $ — $ — $ —

Other comprehensive loss before reclassifications ( 7,545 ) 1,850 ( 5,695 )

Amounts reclassified from AOCI ( 16 ) 4 ( 12 )

Net change in AOCI ( 7,561 ) 1,854 ( 5,707 )

Ending balance $ ( 7,561 ) $ 1,854 $ ( 5,707 )

Adequacy of net worth

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As of January 31, 2026, the Company's year-end for trust and tax purposes, the net worth of the Company exceeded the required thresholds.

Derivative financial instruments and hedging activities

Yields paid by the Company's insurance company partners and depository partners are impacted by the prevailing interest rate environment at the time HSA cash is placed with those partners.

The Company uses Treasury bond forwards to hedge a portion of the benchmark interest rate risk of expected future placements of HSA cash.

These derivatives involve the Company and its counterparty agreeing to fix the price of a specified Treasury bond on a future date, ranging from March 2026 to January 2028, resulting in cash settlement for the difference between the fixed price and the market price on that date.

The parties may elect net settlement of multiple transactions under certain conditions;

however, the Company presents its derivative assets and liabilities on a gross basis on its consolidated balance sheets.

The gain or loss on the derivative is recorded in AOCI and subsequently reclassified into custodial revenue in the same periods during which the hedged transaction affects custodial revenue earned from the Company's insurance company partners and depository partners.

As of January 31, 2026, each of the

Company's derivatives was designated as a cash flow hedge.

The Company did not use derivatives prior to fiscal 2026.

As of the January 31, 2026, the weighted average interest rate indicated by the Company's Treasury bond forwards was 3.92 %.

Notional amount of derivative contracts

The notional amount of the Company's derivative instruments was as follows:

(in thousands, except

number of instruments) January 31, 2026 January 31, 2025

Number of instruments Notional Number of instruments Notional

Treasury bond forwards 18 $ 2,350,000 — $ —

Fair value of derivative contracts

The table below presents the fair value of the Company’s derivatives as well as their classification in the consolidated balance sheet.

January 31, 2026

Derivative assets Derivative liabilities

(in thousands) Other current assets Other assets Accrued liabilities Other long-term liabilities

Treasury bond forwards $ — $ 3,285 $ ( 6,935 ) $ ( 7,997 )

Effect of derivatives on the consolidated financial statements

The pre-tax losses on the Company's cash flow hedges recognized in AOCI were as follows:

(in thousands) Year ended January 31,

2026 2025 2024

Treasury bond forwards $ ( 7,545 ) $ — $ —

Total amounts presented in the consolidated statements of operations

Year ended January 31, 2026

(in thousands) Custodial revenue Income tax provision Total reclassifications

Treasury bond forwards

Amount of gains reclassified from AOCI $ 16 $ ( 4 ) $ 12

As of January 31, 2026, the estimated amount of AOCI that is expected to be reclassified into earnings within the next 12 months is a net gain of $ 0.4 million.

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.

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.

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As of January 31, 2026, the fair value of the Notes was $ 587.0 million.

The Revolving Credit Facility is considered a Level 2 instrument and recorded at book value in the Company's consolidated financial statements.

The Revolving Credit Facility is considered a Level 2 instrument, and the amounts outstanding thereunder are recorded at book value in the Company's consolidated financial statements.

The Revolving Credit Facility reprices frequently due to variable interest rate terms and entails no significant changes in credit risk.

As a result, the fair value of the Revolving Credit Facility approximates carrying value.

The Company classifies derivative instruments as Level 2 within the fair value hierarchy.

These instruments are valued using industry standard valuation models that use observable inputs such as interest rate curves and implied volatilities.

Employee benefits

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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 8. Financial Statements and Supplementary Data