HealthEquity is the market-leading HSA “toll booth,” with a legislative tailwind expanding the TAM—yet the stock is weighed down by rate-sensitivity and rising zero-fee competition.
Overview
HealthEquity (HQY) is the leading pure-play administrator/custodian platform for U.S. Health Savings Accounts (HSAs) and adjacent consumer-directed benefits, operating at the crossroads of fintech and healthcare cost-sharing. The platform connects health plans, employers, and members, enabling saving, paying, and investing for healthcare. By FY-end **Jan 31, 2025**, it administered **9.9M HSAs** and **$32.1B** of HSA assets (+27% YoY); by **Oct 31, 2025**, it grew to **10.1M HSAs** and **$34.4B** assets, supporting an estimated **~21% share of total HSA assets** (mid-2024). Including FSAs/HRAs and other CDBs, it manages **~17.0M total accounts**. The revenue model is diversified and largely recurring across **custodial (spread on cash; ~45.5% FY25)**, **service (admin/advisory fees; ~39.9%)**, and **interchange (payments; ~14.7%)**. Distribution is a B2B2C model via **200+ network partners**, creating high switching costs and strong retention due to deep HR/payroll integration. The strategic backdrop is improving: the **One Big Beautiful Bill Act (July 2025)** expands eligibility beginning 2026 (ACA Bronze/Catastrophic plans become HSA-compatible) and broadens use cases, likely expanding the TAM more than at any time in two decades.