What changed in this filing

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Item 1. Financial Statements

2026-05-28 compared with 2025-12-03 · 126 added, 133 removed, 373 unchanged (41% of the section changed)

3 unchanged sentences

Condensed consolidated balance sheets

(in thousands, except par value) October 31, 2025 January 31, 2025

(in thousands, except par value) April 30, 2026 January 31, 2026

Current assets

Cash and cash equivalents $ 265,369 $ 318,927

Accounts receivable, net of allowance for doubtful accounts of $ 918 and $ 2,070 as of October 31, 2025 and January 31, 2025, respectively

Accounts receivable, net of allowance for doubtful accounts of $ 953 and $ 924 as of April 30, 2026 and January 31, 2026, respectively

122,003 123,696

23 unchanged sentences

Stockholders’ equity

Preferred stock, $ 0.0001 par value, 100,000 shares authorized, no shares issued and outstanding as of October 31, 2025 and January 31, 2025, respectively

Common stock, $ 0.0001 par value, 900,000 shares authorized, 85,615 and 86,536 shares issued and outstanding as of October 31, 2025 and January 31, 2025, respectively

Preferred stock, $ 0.0001 par value, 100,000 shares authorized, no shares issued and outstanding as of April 30, 2026 and January 31, 2026, respectively

Common stock, $ 0.0001 par value, 900,000 shares authorized, 83,927 and 85,007 shares issued and outstanding as of April 30, 2026 and January 31, 2026, respectively

Additional paid-in capital 1,901,935 1,916,989

Accumulated other comprehensive income 8,837 —

Accumulated earnings 177,204 195,906

Accumulated other comprehensive loss ( 31,752 ) ( 5,707 )

Total stockholders’ equity 2,047,395 2,107,196

4 unchanged sentences

Condensed consolidated statements of operations (unaudited)

Three months ended October 31, Nine months ended October 31,

Three months ended April 30,

(in thousands, except per share data) 2026 2025

34 unchanged sentences

Condensed consolidated statements of comprehensive income (unaudited)

Three months ended October 31, Nine months ended October 31,

Three months ended April 30,

(in thousands, except per share data) 2026 2025

Net income $ 69,418 $ 53,915

Other comprehensive income

Other comprehensive loss

Cash flow hedges

Net unrealized gains, net of income tax expense of $ 2,935 and $ 3,005 for the three and nine months ended October 31, 2025, respectively

8,634 — 8,837 —

Total other comprehensive income 8,634 — 8,837 —

Net unrealized losses ( 25,897 ) —

Reclassification of net gains included in net income ( 148 ) —

Net change, net of income tax benefit of $ 8,463 for the three months ended April 30, 2026

Total other comprehensive loss ( 26,045 ) —

Comprehensive income $ 43,373 $ 53,915

3 unchanged sentences

Condensed consolidated statements of stockholders’ equity (unaudited)

Three months ended October 31, Nine months ended October 31,

Three months ended April 30,

(in thousands) 2026 2025

10 unchanged sentences

Ending balance 1,901,935 1,905,444

Accumulated other comprehensive income:

Beginning balance 203 — — —

Other comprehensive income 8,634 — 8,837 —

Ending balance 8,837 — 8,837 —

Accumulated earnings:

3 unchanged sentences

Ending balance 177,204 218,353

Accumulated other comprehensive loss:

Beginning balance ( 5,707 ) —

Other comprehensive loss ( 26,045 ) —

Ending balance ( 31,752 ) —

Total stockholders' equity, ending balance $ 2,047,395 $ 2,123,806

3 unchanged sentences

Condensed consolidated statements of cash flows (unaudited)

Nine months ended October 31,

Three months ended April 30,

(in thousands) 2026 2025

5 unchanged sentences

Amortization of debt discount and issuance costs

Loss on extinguishment of debt — 1,576

Amortization of gains on derivatives ( 196 ) —

Deferred taxes 10,106 1,324

11 unchanged sentences

Purchases of property and equipment ( 362 ) ( 86 )

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

Settlement of derivatives, net 2,388 —

Net cash used in investing activities ( 13,904 ) ( 16,143 )

Cash flows from financing activities:

Principal payments on long-term debt ( 75,000 ) ( 536,875 )

Repurchases of common stock ( 123,314 ) ( 59,065 )

Proceeds from long-term debt — 736,875

Payment of debt issuance costs — ( 3,748 )

Principal payments on long-term debt ( 15,000 ) —

Settlement of client-held funds obligation, net 716 1,451

Proceeds from exercise of common stock options 418 965

Net cash provided by (used in) financing activities ( 287,164 ) 145,973

Increase (decrease) in cash and cash equivalents 13,311 ( 81,816 )

Net cash used in financing activities ( 137,180 ) ( 56,649 )

Decrease in cash and cash equivalents ( 53,558 ) ( 8,054 )

Beginning cash and cash equivalents 318,927 295,948

4 unchanged sentences

Condensed consolidated statements of cash flows (unaudited) (continued)

Nine months ended October 31,

Three months ended April 30,

(in thousands) 2026 2025

1 unchanged sentence

Interest expense paid in cash $ 18,512 $ 20,809

Income tax payments, net 7,351 23,817

Income tax refunds, net ( 451 ) ( 46 )

Supplemental disclosures of non-cash investing and financing activities:

2 unchanged sentences

Repurchases of common stock included in accrued liabilities 2,858 2,000

Exercise of common stock options receivable 5,390 7

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

See accompanying notes to condensed consolidated financial statements.

13 unchanged sentences

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

The Company does not generate material international revenues.

The Company does not generate international revenues.

All long-lived assets are maintained in the United States of America.

Basis of presentation

The accompanying condensed consolidated financial statements as of October 31, 2025 and for the three and nine months ended October 31, 2025 and 2024 are unaudited and have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and the applicable rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting.

The accompanying condensed consolidated financial statements as of April 30, 2026 and for the three months ended April 30, 2026 and 2025 are unaudited and have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and the applicable rules and regulations of the Securities and Exchange Commission ("SEC") regarding interim financial reporting.

In the opinion of management, the interim data includes all adjustments necessary for a fair presentation of the results for the interim periods.

3 unchanged sentences

Significant accounting policies

Derivative Financial Instruments and Hedging Activities

As required by Accounting Standards Codification ("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 condensed consolidated balance sheets.

The change in fair value of the derivatives is recorded to accumulated other comprehensive income ("AOCI") in the Company's condensed 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 condensed 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 10—Derivative financial instruments and hedging activities for further information.

There have been no other material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2025.

There have been no material changes in the Company’s significant accounting policies as compared to the significant accounting policies described in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2026.

Recently adopted accounting pronouncements

Recently issued accounting pronouncements not yet adopted

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("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 is effective for annual periods beginning after December 15, 2024 and 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.

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

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses .

11 unchanged sentences

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

Three months ended October 31, Nine months ended October 31,

Three months ended April 30,

(in thousands, except per share data) 2026 2025

10 unchanged sentences

Diluted $ 0.82 $ 0.61

For the three months ended October 31, 2025 and 2024, 0.2 million and 0.1 million shares, respectively, attributable to outstanding stock options and restricted stock units were excluded from the calculation of diluted net income per share as their inclusion would have been anti-dilutive.

For each of the nine months ended October 31, 2025 and 2024, 0.1 million shares attributable to outstanding stock options and restricted stock units were excluded from the calculation of diluted net income per share as their inclusion would have been anti-dilutive.

For the three months ended April 30, 2026 and 2025, 0.4 million and 0.1 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

2 unchanged sentences

Property and equipment consisted of the following:

(in thousands) October 31, 2025 January 31, 2025

(in thousands) April 30, 2026 January 31, 2026

Leasehold improvements $ 14,673 $ 14,140

4 unchanged sentences

Property and equipment, net $ 3,800 $ 3,177

Depreciation expense was $ 0.4 million and $ 1.5 million for the three and nine months ended October 31, 2025, respectively, and $ 1.0 million and $ 3.7 million for the three and nine months ended October 31, 2024, respectively.

Depreciation expense was $ 0.5 million and $ 0.7 million for the three months ended April 30, 2026 and 2025, respectively.

Contract balances

2 unchanged sentences

Alternatively, when payment precedes the related services, the Company records a contract liability, or deferred revenue, until its performance obligations are satisfied.

As of October 31, 2025 and January 31, 2025, the balance of deferred revenue was $ 8.6 million and $ 17.1 million, respectively.

April 30, 2026 and January 31, 2026, the balance of deferred revenue was $ 5.0 million and $ 6.7 million, respectively.

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

1 unchanged sentence

Amounts expected to be recognized as revenue within a period of 12 months or less are classified as accrued liabilities in the Company's condensed consolidated balance sheets, with the remainder included within other long-term liabilities.

Revenue recognized during the three and nine months ended October 31, 2025 that was included in the balance of deferred revenue as of January 31, 2025 was $ 3.1 million and $ 9.5 million, respectively.

Revenue recognized during the three months ended April 30, 2026 that was included in the balance of deferred revenue as of January 31, 2026 was $ 3.1 million.

The Company expects to satisfy its remaining obligations for these arrangements.

The components of operating lease costs were as follows:

Three months ended October 31, Nine months ended October 31,

Three months ended April 30,

(in thousands)

2025 2024 2025 2024

Operating lease expense $ 2,209 $ 2,240

3 unchanged sentences

Other income, net, consisted of the following:

Three months ended October 31, Nine months ended October 31,

Three months ended April 30,

(in thousands) 2026 2025

Interest income $ 1,887 $ 2,733

Other income, net 22 851 49 385

Other miscellaneous income, net 161 —

Total other income, net $ 2,048 $ 2,733

1 unchanged sentence

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

Nine months ended October 31,

Three months ended April 30,

(in thousands) 2026 2025

5 unchanged sentences

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

October 31, 2025

April 30, 2026

(in thousands) Gross carrying amount Accumulated amortization Net carrying amount

15 unchanged sentences

Total amortizable intangible assets $ 1,999,408 $ ( 902,236 ) $ 1,097,172

Amortization expense was $ 38.4 million and $ 114.4 million for the three and nine months ended October 31, 2025, respectively, and $ 39.7 million and $ 119.5 million for the three and nine months ended October 31, 2024, respectively.

There were no changes to the carrying value of goodwill during the nine months ended October 31, 2025.

Amortization expense was $ 37.7 million and $ 38.1 million for the three months ended April 30, 2026 and 2025, respectively.

There were no changes to the carrying value of goodwill during the three months ended April 30, 2026.

Commitments and contingencies

The Company’s principal commitments consist of long-term debt, operating lease obligations, and other purchase obligations and contractual commitments.

There were no material changes during the nine months ended October 31, 2025, outside of the ordinary course of business, in the Company's commitments from those disclosed in its Annual Report on Form 10-K for the fiscal year ended January 31, 2025.

During the three months ended April 30, 2026, the Company prepaid $ 15.0 million under its credit agreement.

There were no other material changes during the three months ended April 30, 2026, outside of the ordinary course of business, in the Company's commitments from those disclosed in its Annual Report on Form 10-K for the fiscal year ended January 31, 2026.

Contingencies

In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications.

The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future but have

not yet been made.

The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future but have not yet been made.

The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

Legal matters

As a result of a cybersecurity incident in fiscal 2025 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 and a mass arbitration action.

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.

As a result of a cybersecurity incident in fiscal 2025 in which a business partner's user account containing personally identifiable information was breached, the Company is subject to a consolidated putative class action lawsuit in federal court in the District of Utah.

The plaintiffs in this legal action 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.

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 remaining legal actions.

On December 13, 2024, the Company filed a motion to dismiss the class action and a motion to compel arbitration.

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.

On May 15, 2026, the Company filed its renewed motion to compel arbitration.

The Company intends to vigorously defend itself against this legal action.

In addition, the Company is subject to several regulatory inquiries related to the cybersecurity incident.

The amount of the potential loss associated with these lawsuits and any potential regulatory action cannot be reasonably estimated based on currently available information.

The amount of the potential loss associated with the lawsuit and any potential regulatory action cannot be reasonably estimated based on currently available information.

The Company and its subsidiaries are involved in various other litigation, governmental proceedings, and claims, not described above, that arise in the normal course of business.

3 unchanged sentences

However, litigation is subject to inherent uncertainties and the Company’s view of these matters may change.

Were an unfavorable outcome to occur, there exists the possibility of a material adverse impact on the Company’s financial position, results of operations and cash flows for the period in which the unfavorable outcome occurs, and potentially in future periods.

an unfavorable outcome to occur, there exists the possibility of a material adverse impact on the Company’s financial position, results of operations and cash flows for the period in which the unfavorable outcome occurs, and potentially in future periods.

Long-term debt consisted of the following:

(in thousands) October 31, 2025 January 31, 2025

(in thousands) April 30, 2026 January 31, 2026

4.50 % Senior Notes due 2029

6 unchanged sentences

Long-term debt, net $ 942,656 $ 957,379

(1) In addition to the $ 4.8 million and $ 5.6 million of unamortized discount and issuance costs related to long-term debt as of October 31, 2025 and January 31, 2025, respectively, $ 6.4 million and $ 7.7 million of unamortized issuance costs related to the Company's Revolving Credit Facility are included within other assets in the condensed consolidated balance sheets as of October 31, 2025 and January 31, 2025, respectively.

(1) In addition to the $ 4.2 million and $ 4.5 million of unamortized discount and issuance costs related to the Notes as of April 30, 2026 and January 31, 2026, respectively, $ 5.5 million and $ 5.9 million of unamortized issuance costs related to the Company's Revolving Credit Facility are included within other assets in the condensed consolidated balance sheets as of April 30, 2026 and January 31, 2026, respectively.

4.50 % Senior Notes due 2029

3 unchanged sentences

The Notes will mature on October 1, 2029.

Interest on the Notes is payable on April 1 and October 1

of each year.

Accrued interest on the Notes was $ 2.3 million and $ 9.0 million as of October 31, 2025 and January 31, 2025, respectively, which is included within accrued liabilities on the Company's condensed consolidated balance sheets.

Interest on the Notes is payable on April 1 and October 1 of each year.

As of April 30, 2026 and January 31, 2026, the balance of accrued interest on the Notes was $ 2.3 million and $ 9.0 million , respectively, which is included within accrued liabilities on the Company's condensed consolidated balance sheets.

The effective interest rate on the Notes is 4.72 %.

6 unchanged sentences

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), a portion of which was used to refinance the Company's prior 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 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 October 31, 2025, the outstanding balance under the Revolving Credit Facility was $ 386.9 million, which is included within long-term debt, net of issuance costs, in the condensed consolidated balance sheet.

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

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

long as the Company’s pro forma first lien net leverage ratio would not exceed 3.85 to 1.00 as of the date such loans or commitments are incurred.

Borrowings under the Revolving Credit Facility bear interest at an annual rate equal to, at the Company’s option, either (i) the secured overnight financing rate published by the CME Group Benchmark Administration Limited (“Term SOFR”) (subject to a 0.10 % “credit spread adjustment”) plus a margin ranging from 1.25 % to 2.50 % or (ii) an alternate base rate plus a margin ranging from 0.25 % to 1.50 %, with the applicable margin determined by reference to a leverage-based pricing grid set forth in the Credit Agreement.

The Company is also required to pay certain fees to the Lenders, including, among others, a quarterly commitment fee on the average unused amount of the Revolving Credit Facility at a rate ranging from 0.25 % to 0.50 %, with the applicable rate also determined by reference to a leverage-based pricing grid set forth in the Credit Agreement.

As of October 31, 2025, the interest rate on the Revolving Credit Facility was 5.32 %.

As of April 30, 2026, the interest rate on the Revolving Credit Facility was 5.00 %.

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

The Credit Agreement contains customary affirmative and negative covenants, including covenants that limit, among other things, the ability of the Company and its subsidiaries to incur additional indebtedness, create liens, merge or dissolve, make investments, dispose of assets, engage in sale and leaseback transactions, make distributions and dividends and prepayments of junior indebtedness, engage in transactions with affiliates, enter into restrictive agreements, amend documentation governing junior indebtedness, modify its fiscal year and modify its organizational documents, in each case, subject to customary exceptions, thresholds, qualifications and “baskets.” In addition, the Credit Agreement contains financial performance covenants, which require the Company to maintain (i) a maximum total net leverage ratio, measured as of the last day of each fiscal quarter, of no greater than 5.00 to 1.00 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 October 31, 2025 and for the period then ended.

inaccuracy of any representation or warranty, failure to comply with covenants, cross-default to other material debt, material judgments, change of control and certain insolvency or bankruptcy-related events, in each case, subject to any certain grace and/or cure periods.

The Company was in compliance with all covenants under the Credit Agreement as of April 30, 2026 and for the period then ended.

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

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

The Company follows ASC 740-270, Income Taxes - Interim Reporting , for the computation and presentation of its interim period tax provision.

The Company follows Accounting Standards Codification ("ASC") 740-270, Income Taxes - Interim Reporting , for the computation and presentation of its interim period tax provision.

Accordingly, management estimated the effective annual tax rate and applied this rate to pre-tax income through the end of the latest fiscal quarter to determine the interim income tax provision.

For the three and nine months ended October 31, 2025, the Company recorded an income tax provision of $ 15.8 million and $ 51.1 million, respectively.

This resulted in an effective income tax rate of 23.5 % and 23.6 % for the three and nine months ended October 31, 2025, respectively, compared with an effective income tax rate of 8.3 % and 18.3 % for the three and nine months ended October 31, 2024, respectively.

For the three and nine months ended October 31, 2025, discrete tax items impacting the effective tax rate were primarily due to differences in tax deductible stock-based compensation compared to GAAP stock-based compensation expense and changes to net state deferred tax liabilities due to state apportionment changes.

For the three and nine months ended October 31, 2024, discrete tax items impacting the effective tax rate were primarily due to differences in tax deductible stock-based compensation compared to GAAP stock-based compensation expense , adjustments to research and development tax credits, and an increase in unrecognized tax benefits.

As of October 31, 2025 and January 31, 2025, the Company’s total gross unrecognized tax benefit was $ 26.8 million and $ 24.1 million, respectively.

If recognized, $ 23.4 million of the total gross unrecognized tax benefits would affect the Company's effective tax rate as of October 31, 2025.

For the three months ended April 30, 2026 and 2025, the Company recorded an income tax provision of $ 23.0 million and $ 17.0 million, respectively.

This resulted in an effective income tax rate of 24.9 % for the three months ended April 30, 2026, compared with an effective income tax rate of 24.0 % for the three months ended April 30, 2025.

For the three months ended April 30, 2026, discrete tax items impacting the effective tax rate were primarily due to tax benefit from stock-based compensation expense.

For the three months ended April 30, 2025, discrete tax items impacting the effective tax rate were primarily due to tax benefit from stock-based compensation expense and changes to net state deferred tax liabilities due to state apportionment changes.

As of April 30, 2026 and January 31, 2026, the Company’s total gross unrecognized tax benefit was $ 28.4 million and $ 27.4 million, respectively.

If recognized, $ 25.0 million of the total gross unrecognized tax benefit would affect the Company's effective tax rate as of April 30, 2026.

As of April 30, 2026, $ 17.2 million of federal income tax payable is included within accrued liabilities on the Company's condensed consolidated balance sheets.

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 New York.

Such 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 an examination by the state of Texas during the period ended October 31, 2025, and all necessary adjustments were immaterial.

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

This tax examination may lead to ordinary course adjustments or proposed

adjustments to the Company's taxes, net operating losses, and/or tax credit carryforwards.

As a result of the Company's net operating loss carryforwards and tax credit carryforwards, the Company remains subject to examination by one or more jurisdictions for tax years after 2006.

On July 4, 2025, President Trump signed into law the “One Big Beautiful Bill Act” (“OBBBA”), which contains several corporate tax provisions.

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

Other OBBBA 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 years ending January 31, 2026 and 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 condensed consolidated statements of operations during the periods presented:

Three months ended October 31, Nine months ended October 31,

Three months ended April 30,

(in thousands) 2026 2025

8 unchanged sentences

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 October 31, 2025, 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 3.0 million.

Subject to adjustment as provided in the Incentive Plan, as of April 30, 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 1.8 million.

Stock options

9 unchanged sentences

Exercised ( 15 ) $ 24.36 - 44.53

Outstanding as of October 31, 2025 148 $ 24.36 - 73.61

Outstanding as of April 30, 2026 118 $ 25.06 - 73.61

$ 50.01 1.5 $ 3,781

Vested and expected to vest as of October 31, 2025 148 $ 46.67 1.8 $ 7,097

Exercisable as of October 31, 2025 148 $ 46.67 1.8 $ 7,097

Vested and expected to vest as of April 30, 2026 118 $ 50.01 1.5 $ 3,781

Exercisable as of April 30, 2026 118 $ 50.01 1.5 $ 3,781

Restricted stock units

6 unchanged sentences

Forfeited ( 123 ) 94.43

Outstanding as of October 31, 2025 2,436 $ 81.66

Outstanding as of April 30, 2026 2,848 $ 86.13

Performance restricted stock units.

During the nine months ended October 31, 2025, the Company awarded 139,451 PRSUs subject to a market condition based on the Company’s total shareholder return relative to the Russell 3000 index as measured on January 31, 2028.

During the three months ended April 30, 2026, the Company awarded 240,239 PRSUs subject to a market condition based on the Company’s total shareholder return relative to the Russell 3000 index as measured on January 31, 2029.

The Company used a Monte Carlo simulation to determine that the grant date fair value of the awards was $ 28.8 million.

2 unchanged sentences

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

In addition, during the nine months ended October 31, 2025, the Company awarded 46,485 PRSUs subject to the achievement of certain financial criteria measured on January 31, 2028.

In addition, during the three months ended April 30, 2026, the Company awarded 80,081 PRSUs subject to the achievement of certain financial criteria measured on January 31, 2029.

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

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The vesting of the PRSUs will ultimately range from 0 % to 200 % of the number of shares underlying the PRSU grant based on the level of achievement of the performance goals.

Each of the PRSUs granted during the nine months ended October 31, 2025 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 at least 10 years of service at the Company).

Each of the PRSUs granted during the three months ended April 30, 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.

As a result, the expense associated with PRSUs granted to retirement-eligible individuals was recorded on the grant date.

Stockholders' equity

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 (the “2024 Stock Repurchase Program").

Under the 2025 Stock Repurchase Program, the Company may purchase up to an additional $ 300 million of its common stock, as market conditions warrant.

Stock repurchase program

In August 2024, the Company's board of directors authorized the repurchase of up to $ 300 million of its common stock.

In June 2025, the board of directors increased the common stock repurchase authorization by $ 300 million.

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 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 three and nine months ended October 31, 2025:

Three months ended October 31, 2025 Nine months ended October 31, 2025

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

The following table sets forth the common stock repurchased and subsequently retired during the three months ended April 30, 2026:

Three months ended April 30, 2026

(in thousands)

Shares Amount Shares Amount

Shares Amount

Common stock repurchases (1) 1,522 $ 122,998

(1) Shares repurchased include unsettled repurchases as of October 31, 2025.

(1) Shares repurchased include unsettled repurchases as of April 30, 2026.

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

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The excess of repurchase price over par value was allocated between additional paid-in capital and retained earnings.

As of October 31, 2025, $ 258.8 million of common stock remained authorized for repurchase under the Company's common stock repurchase program.

Accumulated other comprehensive income

As of October 31, 2025, AOCI consisted of unrealized gains on cash flow hedges, net.

As of April 30, 2026, $ 55.6 million of common stock remained authorized for repurchase under the common stock repurchase program.

In May 2026, the board of directors increased the common stock repurchase authorization by $ 1.0 billion.

Accumulated other comprehensive loss

As of April 30, 2026, accumulated other comprehensive income or loss ("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

Balances as of January 31, 2026

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

Other comprehensive loss before reclassifications ( 34,312 ) 8,415 ( 25,897 )

Amounts reclassified from AOCI ( 196 ) 48 ( 148 )

Net change in AOCI ( 34,508 ) 8,463 ( 26,045 )

Balances as of April 30, 2026

$ ( 42,069 ) $ 10,317 $ ( 31,752 )

Derivative financial instruments and hedging activities

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

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 January 2026 to August 2027, resulting in cash settlement for the difference between the fixed price and the market price on that date.

These derivatives involve the Company and its counterparty agreeing to fix the price of a specified Treasury bond on a future date, ranging from June 2026 to January 2029, 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 condensed 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 depository partners and insurance company partners.

As of October 31, 2025, 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 October 31, 2025, the weighted average interest rate indicated by the Company's Treasury bond forwards was 3.94 %.

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 April 30, 2026, each of the Company's derivatives was designated as a cash flow hedge.

As of the April 30, 2026, the weighted average interest rate indicated by the Company's Treasury bond forwards was 3.91 %.

Notional amount of derivative contracts

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(in thousands, except

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

number of instruments) April 30, 2026 January 31, 2026

Number of instruments Notional Number of instruments Notional

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Fair value of derivative contracts

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

October 31, 2025

The tables below present the fair value of the Company’s derivatives as well as their classification in the condensed consolidated balance sheet.

April 30, 2026

Derivative assets Derivative liabilities

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Treasury bond forwards $ 666 $ — $ ( 19,387 ) $ ( 27,161 )

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 condensed consolidated financial statements

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

Three months ended October 31, Nine months ended October 31,

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

Three months ended April 30,

(in thousands) 2026 2025

Treasury bond forwards $ 34,312 $ —

No reclassification from AOCI to earnings was recorded with respect to the Company's derivatives during the nine months ended October 31, 2025 or 2024.

The estimated net amount of existing gains reported in AOCI as of October 31, 2025 that is expected to be reclassified into earnings within the next 12 months is $ 1.0 million.

Total amounts presented in the condensed consolidated statements of operations

Three months ended April 30,

(in thousands) Custodial revenue Income tax provision Total reclassifications Custodial revenue Income tax provision Total reclassifications

Treasury bond forwards

Amount of gains reclassified from AOCI $ 196 $ ( 48 ) $ 148 $ — $ — $ —

As of April 30, 2026, the estimated amount of AOCI that is expected to be reclassified into earnings within the next 12 months is a net loss of $ 1.2 million.

Fair value measurements are made at a specific point in time based on relevant market information.

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The Notes are valued based upon quoted market prices and are considered Level 2 instruments because the markets in which the Notes trade are not considered active markets.

As of October 31, 2025, the fair value of the Notes was $ 584.3 million.

As of April 30, 2026, the fair value of the Notes was $ 583.5 million.

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

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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-Q

Item 1. Financial Statements