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HealthEquity, Inc. (NASDAQ:HQY) Q1 2020 Results Earnings Conference Call June 4, 2019 5:00 PM ET
Richard Putnam - VP of IR
Jon Kessler - President and CEO
Steve Neeleman - Founder and Vice Chair
Darcy Mott - EVP and CFO
- Richard Putnam - IR副总裁
- Jon Kessler - 总裁兼首席执行官
- Steve Neeleman - 创始人兼副主席
- Darcy Mott - 执行副总裁兼首席财务官
Jamie Stockton - Wells Fargo
Sandy Draper - SunTrust
Greg Peters - Raymond James
Donald Hooker - KeyBanc
Mohan Naidu - Oppenheimer
Stephanie Demko - Citi
Allen Lutz - Bank of America
- 杰米斯托克顿 - 富国银行
- Sandy Draper - SunTrust
- 格雷格彼得斯 - 雷蒙德詹姆斯
- 唐纳德胡克 - KeyBanc
- Mohan Naidu - 奥本海默
- Stephanie Demko - 花旗
- Allen Lutz - 美国银行
Welcome to HealthEquity's First Quarter of Fiscal 2020 Earnings Call. Please note that this event is being recorded.
Go ahead Mr. Putnam.
欢迎来到HealthEquity 2020财年第一季度的收益电话会议。 请注意，此活动正在录制中。
Thank you, Jimmy. And good afternoon everyone. Welcome to HealthEquity's first quarter earnings conference call.
With me today, we have Jon Kessler, President and CEO; Steve Neeleman, Founder and Vice Chair; Darcy Mott, our Executive Vice President and CFO. Before I turn the call over to Jon, I would like to remind those that are listening, that there is a copy of today's earnings release, an accompanying financial information posted on our Investor Relations website which is ir.healthequity.com.
We also claim safe harbor concerning this forward-looking statements included in today's earnings release and that will be made during this conference call. They include predictions, expectations, estimate and other information that might be considered forward-looking. Throughout today's discussion we will present some important factors relating to our business which could affect those forward-looking statements. These forward-looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from statements made today. As a result, we caution you against placing undue reliance on these forward-looking statements. We encourage you to review the discussion of these factors and other risks that may affect our future results or the market price of our stock detailed in our Annual Report on Form 10-K filed with the SEC in March 2019, along with any other subsequent periodic concurrent reports filed with the SEC. We are not obligating ourselves to revise or update these forward-looking statements in light of new information or future events.
With all that out of the way, I'll turn the call over to Mr. Jon Kessler.
Thank you Richard, and thanks everyone for joining us on a lovely late spring day out here in Utah for our first quarter 2020 earnings call.
I will speak to Q1 operating results of key performance metrics. Our celebrity spokesman Darcy Mott will provide a more detailed review of our financial results and update our guidance. He is our CFO as well. And then Steve Neeleman will join us during the Q&A.
So looking first to the four key metrics that drive our business. HealthEquity continued the trend of outperformance on year-over-year measures of profitability and custodial assets, on top of robust revenue and HSA member growth.
Revenues of $87.1 million were up 25% year-over-year, adjusted EBITDA $38.9 million was up an even larger 31% year-over-year. HSA members at quarters' end reached $4.1 million, up 17% year-over-year and custodial assets at quarter's end grew to $8.3 billion up and even larger 21% from a year ago.
Custodial, interchange and service fees all exceeded our expectations. Strong gross margins resulted from a team effort to finish the annual busy season as well as it began in Q4. Adjusted EBITDA margins expanded by more than 230 basis points year-over-year to 45% and all of that occurred notwithstanding the ramping up of the investment program that Steve detailed on our last call.
The sales team also got off to a strong start. HealthEquity opened 89,000 new HSAs in the quarter. Custodial assets increased by $223 million or more than 3 times the growth seen in the comparable period a year ago. And that was the result of increased contributions as well as market gains. Invested assets grew 42% compared to last year. The number of HSA members investing was up 32%.
Although, there was no portfolio acquisition activity in Q1, the pipeline of smaller portfolio acquisitions, regained some health with the softening of the macro interest rate environment and we hope to have good results over the rest of the year. So we believe that HealthEquity continues to substantially outpace the market, our largest competitors and all of this adds up to a terrific start to FY '20.
What enabled this outperformance? We often describe HSAs as being at the intersection of four established industries: managed care, banking, retirement and benefits administration. Firms in each of these industries have chosen to partner with HealthEquity as part of a complete solution. Our focus on partnership, the proprietary technology that enables it and the Purple - and our Purple service culture are what makes HealthEquity unique relative to our largest competitors. One a health insurer, another a bank and a third an asset manager.
With our partners, HealthEquity has the tools and the incentive to meet every member and employer where they are today, establish trust and help them take the next steps in connecting health and wealth.
Q1 featured a number of interesting examples of the power of technology enabled partnership and Purple, that's a lot of peace. The team went live with the first integrated 401(k) HSA clients under our new retirement record keeper partnerships. We saw a strong year-over-year renewals and wins among employer clients associated with our health plan partners and we grew custodial margins despite the softer rate environment and that's thanks in part to the strength of our relationships with a dozen depository partners.
我将谈谈关键绩效指标的第一季度运营结果。我们的名人发言人Darcy Mott将对我们的财务业绩进行更详细的审查，并更新我们的指导。他也是我们的首席财务官。然后Steve Neeleman将在问答期间加入我们。
销售团队也取得了良好的开端。 HealthEquity在本季度开设了89,000个新的HSA。保管资产增加了2.23亿美元，是一年前同期增长的3倍多。这是捐款增加和市场收益的结果。投资资产较去年增长42％。 HSA会员投资人数增加了32％。
是什么促成了这一优异表现？我们经常将HSA描述为四个既定行业的交叉点：管理式医疗，银行业务，退休和福利管理。每个行业的公司都选择与HealthEquity合作，作为完整解决方案的一部分。我们专注于合作伙伴关系，支持它的专有技术以及紫色 - 以及我们的紫色服务文化，这使得HealthEquity相对于我们最大的竞争对手而言是独一无二的。一家是健康保险公司，另一家是银行，第三家是资产经理。
The investment and consumer directed benefits or CDB capabilities that Steve has talked about in the past, also saw promising early results during the quarter. HealthEquity grew its FSA HRA business by 4% year-over-year which we believe is ahead of the market and was essentially all taken from competitors and sold its first COBRA clients in partnership with benefits brokers and advisors seeking a single HSA-centric consumer directed solution for their clients and members.
To achieve our investment goals faster and to go further, HealthEquity also during the quarter proposed to acquire WageWorks a leading provider of FSA HRA, COBRA, commuter benefits and other CDB services to employers. Prior to making the proposal, HealthEquity acquired approximately 1.6 million shares of WageWorks common stock or about 4% of the company through open market purchases. We continue to evaluate this and other alternatives to accelerate our progress in connecting health and wealth.
Now let's return to the strong performance during the quarter upon which Darcy is here to shine a brighter light. Darcy?
史蒂夫过去谈到的投资和消费者导向的福利或CDB能力，在本季度也看到了有希望的早期结果。 HealthEquity将其FSA HRA业务同比增长4％，我们认为该业务领先于市场，基本上全部来自竞争对手，并与寻求单一HSA中心消费者指导的福利经纪人和顾问合作出售其首批COBRA客户为客户和会员提供解决方案。
I will discuss our results on both the GAAP and a non-GAAP basis. A reconciliation of non-GAAP results that we discuss here to the nearest GAAP measurement is provided in the press release that was published earlier today.
I will first review our first quarter financial results of fiscal 2020 and then I'll provide an update to our guidance for the full fiscal 2020. Revenue for the first quarter grew 25% year-over-year to $87.1 million. Breaking down the revenue into our three categories, we continue to see growth in each of service, custodial and interchange revenue during the quarter.
Service revenue grew 8% year-over-year to $26.8 million in the first quarter. Consistent with the strategy we have outlined over the last five years, service revenue as a percent of total revenue declined to 31% in the quarter down from 36% of total revenue that it represented in the first quarter last year.
As custodial revenue has become more predominant, service revenue growth was attributable to a 17% year-over-year increase in average HSAs during the quarter, partially offset by an 8% decrease in service revenue per average HSA.
Remember HSA service fees are paid primarily by employers on behalf of their employees, and so by bringing these down over time, we deliver more value to our employer and network partners. As we indicated last quarter, we expect a decrease in service revenue for HSA to be towards the high end of our historical 5% to 10% guidance for fiscal 2020.
Custodial revenue was $42 million in the first quarter, representing an increase of 48% year-over-year. The increase was the result of the 21% growth in average custodial assets and a higher annualized interest rate yield on average custodial cash assets of 2.53% during the quarter compared to 2.04% in Q1 last year. We expect that the yield on custodial cash assets for fiscal 2020 will be in a range consistent with our first quarter approximately 2.5%.
Interchange revenue grew 10% in the first quarter to $18.3 million compared to $16.6 million in the first quarter last year. Interchange revenue benefited from the 17% year-over-year increase in average HSAs in the quarter, compared to the first quarter last year, offset by a decrease in spend per average HSA.
Gross profit for the first quarter was $57.8 million compared to $44 million in the prior year, increasing the gross margin level to 66% in the quarter from 63% in the first quarter last year. The higher gross margin was the result of the increasing mix to custodial revenue and a higher yield on custodial cash assets.
Operating expenses were $30.1 million or 35% of revenue compared to $23.8 million or 34% of revenue in the first quarter last year. Income from operations was $27.7 million in the first quarter, generating an income from operations margin of 32% during the quarter.
We expect that as the investments in sales, technology and development that were discussed in our March fourth quarter conference call continue to ramp up through the year, operating margins will be lower through the rest of fiscal 2020.
We generated net income of $41.8 million for the first quarter of fiscal 2020 compared to $22.6 million in the prior year. Net income included $17.9 million, net of tax of unrealized gain on the equity investment in WageWorks that Jon mentioned earlier.
Our GAAP diluted EPS for the first quarter of fiscal 2020 was $0.65 per share compared to $0.36 for the prior year. Excluding stock compensation net of tax, the tax impact of stock option exercises and the equity investment adjustment, our non-GAAP net income and net income per share for the first quarter of fiscal 2020 were $26.2 million and $0.41 per share. Our non-GAAP adjusted EBITDA for the quarter increased 31% to $38.9 million compared to $29.6 million in the prior year. Adjusted EBITDA margin in the quarter was 45%.
Turning to the balance sheet as of April 30, 2019, we had $329 million of cash and cash equivalents with no outstanding debt.
Turning to guidance for fiscal 2020, based on where we ended the first quarter of fiscal 2020, we are raising our revenue guidance for fiscal 2020 to a range between $339 million and $345 million. We expect non-GAAP net income to be between $83 million and $87 million. Non-GAAP diluted net income per share between $1.28 and $1.34 per share and adjusted EBITDA between $135 million and $140 million.
Our non-GAAP diluted net income per share estimate is based on an estimated diluted weighted average shares outstanding of approximately 65 million shares for the year. The non GAAP outlook for fiscal 2020 includes a projected statutory income tax rate of approximately 24%.
Before I turn the call back to Jon, I would like to highlight two items reflected in our guidance. First, now that all of this year's custodial cash deposits are placed in interest rate contracts, we expect our interest rate yield for the fiscal 2020 on the custodial cash assets to be in the range of what we reported in this quarter approximately 2.5%.
Second, as we have done in recent reporting periods our full year guidance includes a detailed reconciliation of GAAP and non GAAP metrics. This includes management's estimates of depreciation and amortization of prior capital expenditures and anticipated stock compensation expenses. But this does not include a forecast of stock option exercises for the remainder of the fiscal year and excludes any additional mark-to-market adjustments for our equity investment.
With that I'll turn the call back over to Jon for some closing remarks.
Thanks to team Purple and our partners for a quarter in which you stayed focused and once again exceeded expectations. I want to close by mentioning that on June 19 we will briefly celebrate five years as a public company by ringing the NASDAQ opening bell, and then we turn our focus forward. We'll host an Investor Day from 10:00 am to 1:00 pm again also on the 19th at the NASDAQ market site in Times Square. If you would like to join us and have not done so already, please get in touch with Richard through our Investor Relations site. The entire HealthEquity leadership team Steve, Ted, Darcy and I, we all hope to see all of you there.
With that let's take some questions.
感谢Purple团队和我们的合作伙伴在一个季度中保持专注并再次超出预期。 最后我要提到的是，在6月19日，我们将通过敲响纳斯达克开幕式铃声，简要庆祝五年作为一家上市公司，然后我们将重点转向。 我们将于19日在时代广场纳斯达克市场举办投资者日，时间为上午10:00至下午1:00。 如果您想加入我们并且尚未加入我们，请通过我们的投资者关系网站与Richard联系。 整个HealthEquity领导团队Steve，Ted，Darcy和我，我们都希望在那里看到你们所有人。
[Operator Instructions] Our first question comes from Jamie Stockton with Wells Fargo. Your line is now open.
[操作员说明]我们的第一个问题来自Jamie Stockton和Wells Fargo。 你的生产线现已开放。
I guess maybe the first one on the yield, because I know there'll be a lot of focus there. Darcy, the yield curve is obviously well inverted right now or at least part of it. Can you talk about as we kind of think about the cash that you're likely to put toward next year? Would you guys come in from a duration standpoint or a maturity standpoint on how long you're putting the cash to work to maybe enhance the yield that you would be getting versus the historical kind of three year-ish timeframe you've used? And if you did that, do you think you could get the same kind of let's say premium over where a comparable treasury is with a jumbo CD or with the partners not be willing to give you the same level of premium for a shorter duration?
我想也许是屈服的第一个，因为我知道那里会有很多焦点。 达西，收益率曲线现在显然已经很好地反转了，或者至少是它的一部分。 你可以谈谈我们对你明年可能提出的现金的看法吗？ 您是否会从持续时间或成熟度角度出发，了解您将现金用于工作多长时间，以提高您将获得的产量与您使用的历史三年时间框架相比？ 如果你这样做了，你认为你可以获得相同类型的溢价而不是可比较的财政部门使用大型CD，或者合作伙伴不愿意在较短的时间内给你相同水平的溢价吗？
Yes. Good question, Jamie. And we've talked about this before. Our approach to the placement of funds and the duration and the yields has been fairly consistent. We don't actually try to maximize the yield necessarily. What we're trying to do is deliver consistency and predictability and to manage the laddering off of custodial assets. As you know, every year we roll some of the expiring contracts into new contracts and we bring new depository agreements on every year.
And so generally we've followed this practice of - at the beginning of the year we're generally at about a three year duration and then it works its way down to closer to two years throughout the year. And then we kind of bump it back up into a three year duration. And so we are managing that at the same time, we're managing expirations that will happen in any given year.
We don't want to be caught in one year with a whole bunch of expirations and be limited to whatever the rates are at that particular point in time. So we have a great deal of confidence that that strategy has worked well for us in the past. It gives us a great deal of predictability, not only for to tell you what we expect to do on a revenue basis, but also on yields and on duration.
I would also add that as we go through this process, we have a great deal of confidence in the guidance that we've given today, because we have contracts in place that will cover capacity for the remainder of this year and going into January, yes, we'll add some more capacity and we'll roll some contracts.
But given the contracts that we'll roll and even given the current rate environment, if it remain even flat with what it's at - what our rate environment is today, we would still see an uplifting in going into 2021 as a result of new placements this next year. So we're confident in that approach. We like it. We like the laddering effect that it does and it's very easy for us to manage through that.
因此，我们一般都遵循这样的做法 - 在年初我们通常持续三年左右，然后全年接近两年。然后我们将其恢复到三年的持续时间。因此，我们正在管理这个问题，同时，我们正在管理任何特定年份都会发生的事情。
但考虑到我们将推出的合同，甚至考虑到目前的利率环境，如果它与现在的情况保持平衡 - 我们今天的利率环境是什么，我们仍然会看到由于新的展示位置进入2021年的情况明年这个。所以我们对这种方法充满信心。我们喜欢它。我们喜欢它的阶梯效应，我们很容易通过它来管理。
And maybe just as my follow-up. On the investments that you guys are making this year from a growth standpoint, I think you kind of quantified it as $30 million, half of that capital investments, half of that expenses this year. How does the wage situation impact that? Or has it impacted it at all? Because presumably some of those investments were probably going into solutions that might ultimately end up being duplicative. I think maybe you made that offer there kind of after probably you made the plans for those investments if you could just talk about that that would be great.
也许就像我的后续行动一样。 关于你们今年从增长的角度进行的投资，我认为你可以将其量化为3000万美元，占资本投资的一半，是今年的一半。 工资情况如何影响？ 或者它对它有影响吗？ 因为可能这些投资中的一些可能会进入最终可能重复的解决方案。 我想也许你提出这样的提议之后，如果你可以谈谈那些很棒的话，你可能已经制定了这些投资的计划。
Yes. Thanks, Jamie. This is Jon. Good to talk to you. As far as what we've done to date, the offer to acquire WageWorks has not affected either the pace or the nature of our investments at all. And that's by design, we want our teams to be working in - we want them to be working, but also very candidly one way or the other we will learn a lot, and we are learning a lot from the investments we're making and the activities in market.
So to date, there's been no real impact and I would not expect and until and unless there were a transaction more definitively that there would be any impact, we're going to continue with our investment program.
是。 谢谢，杰米。 这是乔恩。 很高兴和你说话。 至于我们迄今为止所做的事情，收购WageWorks的提议并没有影响我们投资的速度或性质。 这就是设计，我们希望我们的团队在工作 - 我们希望他们能够工作，但也非常坦诚地以一种方式或者我们将要学到很多东西，而且我们从我们正在进行的投资中学到了很多东西。 市场活动。
And our next question comes from Sandy Draper with SunTrust. Your line is now open.
我们的下一个问题来自Sandy Draper和SunTrust。 你的生产线现已开放。
I guess the first question, I'm not sure how much you can answer it. It's around the wage situation. Now there is no maybe specific update, but can you just - are there sort of next steps? Or is it - are you just waiting to hear back? Is there any conversation going on? Just any type of update as to sort of what the next steps are and at what point do you just - it's an investment and you figure out what to do with the stock? Just that would be helpful.
我想第一个问题，我不确定你能回答多少问题。 这是围绕工资情况。 现在没有具体的更新，但你可以 - 有下一步吗？ 或者是 - 你只是在等待回复？ 有没有谈话？ 只是任何类型的更新，以确定接下来的步骤是什么，以及你在什么时候 - 这是一项投资，你弄清楚如何处理股票？ 只是这会有所帮助。
Well, it's probably useful to just reiterate the steps that have occurred to date. We made our proposal on April 11th. The proposal, there was - was evidenced that the proposal had entered the public domain and both companies responded quickly to that by issuing confirmatory press releases on the evening of the 29th or the morning of the 30th, I can't remember. And we've indicated here that prior to April 11, we as part of making the proposal that we had built up this position.
I guess I would say that was one piece, but by no means the only piece of an effort over the course of a number of months to approach our overall strategic objectives the ones that we've talked about on this call and others in a very thoughtful way.
And so we'll have to see what happens, I don't have really anything else to update you on in terms of the company's response or potential next steps or what have you. I will say - the last part of your question that in making the investments that we made, we answered two questions and I think our Board was very thoughtful and deliberate in approaching its role in approving this process.
The first question was did the investment support our strategic objectives. And we concluded that it did. The second question and here I have to admit I felt a much more empathy for the kind of work that you do and Jamie does covering the company for example. We had to make an assessment of whether it was a good investment, and that very carefully and concluded - as the Board concluded that it was. And that was the basis on which we made the investment.
So at what point we would do something else, I think at this point it's better to not speculate but that's how we got here. And that's exactly where we are.
所以我们必须看看会发生什么，我没有其他任何事情来更新你的公司的回应或潜在的后续步骤或你有什么。我会说 - 你问题的最后一部分，在我们进行投资时，我们回答了两个问题，我认为我们的董事会非常考虑并且有意识地在批准这个过程中发挥作用。
第一个问题是投资是否支持了我们的战略目标。我们得出结论，确实如此。第二个问题，在这里我不得不承认，我对你所做的工作感到更加同情，而Jamie确实覆盖了公司。我们必须对这是否是一项良好的投资进行评估，并且非常仔细地得出结论 - 正如理事会得出结论的那样。这是我们进行投资的基础。
And I guess maybe just a follow-up and more operational instant here, I think you said you got your first 401(k) joint, wasn't clear that you maybe also did some - I'm sure it's commuter benefits or COBRA. I'm just trying to get the update on what parts of the platform are fully operational which are sort of coming down the pipe over maybe the next 12 to 18 months, and just get update in terms of that product strategy. that would be great.
我想这可能只是一个后续和更多的操作瞬间，我想你说你得到了你的第一个401（k）联合，不清楚你是否也做了一些 - 我敢肯定它是通勤福利或COBRA。 我只是想了解平台的哪些部分完全正常运行的更新，这可能会在未来12到18个月内出现，并且只是在产品策略方面得到更新。 那太好了。
The way we're approaching it. Thank you for the question. The way we're approaching it is to get in market as quickly as we can and learn. And so we were very pleased to have our first - not only our first sales with our 401(k) partnerships, but actually to be in market with product operating with our 401(k) partners. Does the product today have every feature that it eventually will. I don't think so, because we will learn what customers really like, what's valuable, what helps them grow savings et cetera and we'll make adjustments.
By the same token, we also in this quarter made our first sales of COBRA product and there to we are pleased to be not just in market from selling perspective and learning but in market from a product perspective and learning.
And this is as we outlined, this is going to be a multi-year process for us, but we think that the way to do that is sort of - this is where the technology people roll their eyes, but in a more agile product approach, where end market, we learn things, we make adjustments, et cetera, as opposed to in 18 months we will deploy something and then we'll see how it does.
I'd also add there during the quarter that we also saw - we don't usually give quarter-on-quarter estimates on our HRA FSA business, but we thought it was useful to do so here since we did indicate that that's also an area where we're investing to improve our capabilities along with some other areas. And we did see some uplift from that during the quarter as well.
So that seemed like a good thing. And if - I guess the major lesson I draw from all of that is at the very least, I think we can take the view that the process of feedback in iteration that needs to occur for an effort like this to be successful over the course of multiple years is underway.
我们接近它的方式。感谢你的提问。我们接近它的方式是尽可能快地进入市场并学习。因此，我们非常高兴能够拥有我们的第一个 - 不仅是我们与401（k）合作伙伴的第一次销售，而且实际上是与我们的401（k）合作伙伴一起在市场上运营产品。今天的产品是否具有最终的所有功能。我不这么认为，因为我们将了解客户真正喜欢什么，什么是有价值的，什么能帮助他们增加储蓄等等，我们会做出调整。
这就像我们所概述的那样，这对我们来说将是一个多年的过程，但我们认为这样做的方式有点 - 这是技术人员睁大眼睛的地方，但是采用更灵活的产品方法，在终端市场，我们学习东西，我们做出调整等等，而不是在18个月内我们将部署一些东西，然后我们将看到它是如何做的。
在本季度我们也看到了我们也看到了 - 我们通常不会对我们的HRA FSA业务进行按季度估算，但我们认为这样做很有用，因为我们确实表明这也是一个我们正在投资以改善我们的能力以及其他一些领域的领域。我们确实也看到了本季度的一些提升。
所以这似乎是一件好事。如果 - 我想我从所有这些中得到的主要教训至少是，我认为我们可以认为迭代中的反馈过程需要在这样的过程中发生才能在此过程中取得成功。多年正在进行中。
And our next question comes from Greg Peters with Raymond James. Your line is now open.
我们的下一个问题来自Greg Peters和Raymond James。 你的生产线现已开放。
I'm in the spirit of my reputation apparently. I'm going to try and load up several questions into my two question allocation.
We loosen the reins just a little bit and here we go.
Why are you referring to Darcy as your celebrity spokesman? I think that's what investors really want to know.
Well, thank you for the first of your two questions, Greg. The reason for that is as you may know is that or as others may know, I don't know how closely you read the sports pages, but Darcy is now a sports celebrity, and I'll encourage folks who are not aware of that to watch more ESPN. And he's done a fantastic job of representing the company in his sporting endeavors.
好的，谢谢你的两个问题中的第一个，格雷格。 原因就像你可能知道的那样，或者正如其他人所知，我不知道你对体育页面的阅读有多紧密，但达西现在是体育名人，我会鼓励那些不知道这一点的人 观看更多ESPN。 而且他在代表公司参加体育运动方面做得非常出色。
In the spirit of that answer, maybe I know you started to answer this question.
I actually think, in fact that as I recall, I think a member of Raymond James leadership may also have joined the PGA Tour. But I don't want to...
Yes. So in the spirit of that, just can you circle back, talk about Vanguard principle nationwide? And give us sort of an update on those initiatives. I know you started to answer some of it in your prior answer.
是。 那么本着这种精神，你可以回过头来，在全国范围内谈谈先锋原则吗？ 并提供有关这些举措的最新信息。 我知道你在之前的回答中开始回答其中一些问题。
Yes. And I'll just say Darcy has not joined the PGA Tour, but in case anyone is new to our calls and doesn't realize we're kidding. But he did shoot well and under intense pressure. And so - but in any event look, we're really pleased with this from two perspectives. I mean first of all looking at the pipeline we were just talking about this morning as we get our weekly sales update.
We have good strong cases in the pipeline from each of the three partnerships that have been publicly announced as well as from others that is where we followed our more typical approach of not doing product and partnership announcements, and our partners have been comfortable with that.
So, that's a really good thing at this point in the year as you can imagine. And we're particularly pleased with - if you look at those partnerships and you look at the level of one of our sort of thesis here is that you're going to be able to have in the context of the retirement plan, you're going to be able to have and our partners are going to be more willing to have really thoughtful long-term discussions with the employees that are the beneficiaries of the plans.
And I've been particularly pleased with the level of engagement between our teams that do research on this and we had a great experience a few weeks ago Greg where a number of us happened to all be together at an event that we all contribute to that is support some of the deep research behind some of these saving strategies and the logic behind them and it was just great to see all of these firms really working together to try and obviously some of them compete, but really working together to try and understand how we can get employees of their customers and ours to as quickly as possible to the place where they're really using HSAs as they were intended as long term savings vehicles and either growing their savings faster or meaningfully reducing the cost investing.
And so that's kind of where we are. It's still early days but we certainly feel good about what we're seeing from a pipeline perspective as well as actually this early seeing customers and revenue operation is pretty good.
是。我只是说Darcy没有加入美巡赛，但万一有人对我们的电话不熟悉并且没有意识到我们在开玩笑。但他确实在很大的压力下投篮得很好。所以 - 但无论如何看，我们从两个角度对此非常满意。我的意思是首先看看今天早上我们刚刚谈到的管道，因为我们得到了每周的销售更新。
所以，在你可以想象的今年的这一点上，这是一件非常好的事情。我们特别满意 - 如果你看看这些合作关系，你看看我们的论文之一就是你能够在退休计划的背景下，你是能够拥有，我们的合作伙伴将更愿意与作为计划受益者的员工进行真正深思熟虑的长期讨论。
So thank you for that answer Jon. And I wanted to follow-up just around the HSA members. You have...
谢谢你的回答乔恩。 我想围绕HSA成员进行跟进。 你有...
Well that was two. And now you got - now you on three.
那是两个。 现在你得到了 - 现在你三岁了。
Come on. You can't count the first one as a real question. I mean...
来吧。 你不能把第一个算作真正的问题。 我的意思是...
We'll - we might pull you on - on you but probably not.
我们 - 我们可能会拉你 - 但可能不是。
So, the HSA members. So I'm looking at the total number increased 17%. That has only increased 13% and what I was particularly struck by is the sequential change in actives versus a sequential change in HSA members and the sequential change in actives is only up 4% compared with something substantial - different in the HSA members. So maybe you could provide us an update on why these pieces are moving differently?
所以，HSA成员。 所以我看着总数增加了17％。 这只增加了13％，而我特别感到震惊的是，活动人数的连续变化与HSA成员的连续变化相比，活动人数的连续变化仅比HSA成员的实质性差异高出4％。 那么也许您可以向我们提供有关这些碎片移动方式不同的最新信息？
Yes, I can actually, although now I wish I'd helped you two question, but no kidding, but the first quarter as you know is one where we see a lot of different things occurring with both - it's the quarter where oftentimes you'll see, if you lost folks or they're moving on it's where you see the accounts close. It's also the quarter where you see HSA assets come on from folks that you've won.
And what we saw in this year's first quarter was, we didn't see as many, I mean you can see this in the year-on-year comparisons, we didn't see as many new HSAs come in, but those that we saw come in as well as those that remain saw really substantial growth in assets. So - and that was reflected in both market growth, but much more so in terms of contributions and rollovers from the takeaway.
So it's just a slightly different flavor of things, but I think if you sort of put it all together, the basic picture from our perspective and we won't know what the market grew this year for quite a while, because there will be a while before that this kind of a comparison can be reported.
But we feel pretty good that we continue to outpace the market and certainly, when we sort of think about if you will know our basic model which is, we're going to grow revenues in HSA and we're going to try and grow earnings and assets even faster, you really just saw more of that and that seems like a good thing.
是的，我实际上可以，虽然现在我希望我能帮助你两个问题，但不是开玩笑，但是你知道的第一季我们看到两者都发生了很多不同的事情 - 这是你经常出现的季度我会看到，如果你失去了人们，或者他们继续前进，那么你会看到帐户关闭。这也是你看到HSA资产来自你赢得的人的季度。
我们在今年的第一季看到的是，我们没有看到那么多，我的意思是你可以在同比比较中看到这一点，我们没有看到很多新的HSA进来，但那些我们看到进来以及那些仍然看到资产真正大幅增长的人。所以 - 这既反映在市场增长上，也反映在外卖的贡献和翻滚方面。
Okay. Thank you for your answers.
I think we got your HSA in the first quarter last year though, Greg. So that's how I played a huge role. If you would put another $200 million in, I mean we couldn't be making these positive compares.
我想我们去年第一季度就获得了你的HSA，格雷格。 这就是我扮演重要角色的方式。 如果你再投入2亿美元，我的意思是我们无法做出这些积极的比较。
And by the way, I'm one of the leading reasons why your interchange is down.
It's okay. As we've said many times as Darcy always says, we're happy to help you save for a lifetime when you spend it. It only gives us revenue once. So it's good for you and good for us.
没关系。 正如达西总是说的那样，我们已多次说过，我们很乐意帮助您在消费时节省一生。 它只给我们一次收入。 所以这对你有好处，对我们有好处。
And our next question comes from Donald Hooker with KeyBanc. Your line is now open.
我们的下一个问题来自Donald Hooker和KeyBanc。 你的生产线现已开放。
Maybe I guess while we have you on - in a public forum here, if you can maybe just talk about your thinking around sort of potential revenue cost synergies from WageWorks and kind of what you're thinking is in making that proposal and what is the right debt ratio for HealthEquity over time? Obviously you guys have carried a cash rich balance sheet for a long time. You talked about acquisitions, but how comfortable would you be taking that debt ratio up?
也许我想，虽然我们有你 - 在这里的公共论坛上，如果你可以谈谈你对WageWorks的潜在收入成本协同效应的想法，以及你在制定该提案时的想法以及什么是 HealthEquity的权利债务比率随着时间的推移？ 很明显，你们已经持有现金丰富的资产负债表很长一段时间了。 你谈到了收购，但你拿这个债务比率有多舒适？
On the first part of that question we have not commented, I think publicly on synergies and I think that's probably for the best. I think we probably think it's better to just hold off on that until we feel like we have all of the facts together and can give you something we feel comfortable with.
So I'm going to hold off on that other than to say what we said in the release which is that we obviously in making the proposal we felt that there were significant short-term synergies, but also to remind everyone that the objective of this from our perspective and its the same objective of our overall strategy which is to grow our HSA market share and to continue to help Americans move down that journey of connecting health and wealth and that's why we're doing it, not because of cost savings or whatever. And so that's sort of the first part of your question. I think on the second part or say that's why we proposed doing.
On the second part of your question, I'm going to - I think the right way to answer that is to speak generally to how we as an organization and I would include our Board since we've had active Board dialogue on this topic for a long time as we should, how we think about debt. And then you can apply it to this situation.
First of all, we think that - we recognize that this is a business that has and hope you recognize that no you do don't --but this is a business that has highly predictable and stable cash flow and that's a good prerequisite for a decision to put the shareholders money at risk by borrowing money from somebody else.
Secondly I think it would generally be the case that where we to incur debt in this or any other context, it's likely to be for assets that have similarly stable and predictable free cash flow. Again reinforcing the view that if we use that we're going to use it responsibly and we're going to use it for things where we can have a high degree of comfort with regard to the free cash flow that's there to service it.
The last point I would make here is that we are confident to some extent - the last point. The next point I make is that we're confident to some extent by the fact that the company has a very strong track record of over delivering on its promises and has clearly shown an ability to forecast. And by the company I really mean the people many of whom are in this room with me who have been doing our forecasting for years in some cases more than a decade.
And so that gives us a lot of confidence that makes sense. That having been said as I think this is one of these old testament deals pride goes before the fall. And so that's something we are absolutely mindful in all cases of the fact that any leverage reduces our margin for error on behalf of the shareholders and reduces our ability to take other actions that might be beneficial for the shareholders down the road.
And so those are the principles that we've used in thinking about debt in the past. We don't - we have never identified and frankly don't believe in the idea that there is some kind of ideal debt ratio for the company, that at some level depends on the attractiveness of what you're spending the money on relative to the attributes we just talked about. And so those are the principles that we would apply here and have generally applied as we thought about other things we might do.
在你的问题的第二部分，我将 - 我认为回答这个问题的正确方法是大致说明我们作为一个组织的方式，我将包括我们的董事会，因为我们就此主题进行了积极的董事会对话。我们应该花很长时间，如何思考债务。然后你可以将它应用于这种情况。
首先，我们认为 - 我们认识到这是一项业务，并且希望您认识到，不，你不这样做 - 但这是一项具有高度可预测和稳定的现金流的业务，这是一个良好的先决条件。决定通过向其他人借钱来将股东的资金置于风险之中。
我在这里要说的最后一点是，我们在某种程度上有信心 - 最后一点。我提出的下一个观点是，我们在某种程度上对公司在履行其承诺方面具有非常强大的记录并且已经明确显示出预测能力这一事实充满信心。在公司里，我的意思是很多人和我一起在这个房间里，他们多年来一直在做我们多年的预测。
因此，这些是我们在过去考虑债务时所使用的原则。我们没有 - 我们从未发现并且坦率地不相信公司存在某种理想的债务比率的想法，在某种程度上取决于你花钱的吸引力相对于我们刚才谈到的属性。因此，这些是我们在这里应用的原则，并且在我们考虑我们可能做的其他事情时通常会应用这些原则。
And then maybe just real quick one on the interchange you've done a good job explaining why services fees per member are declining due to your strategic pricing strategy and tiered pricing by the interchange fees per member, would that continue to be declining? Or can you just talk about sort of your thinking there going forward?
Yes. On a per HSA at a basis that that has been occurring on a regular basis. The rate or the yield that we get off of interchanges is relatively constant. We do see some seasonality as we've talked about in the past about spend patterns whether it's in an HSA or in a RA, that we see usually our first quarter actually has been higher, it starts coming down and then it builds back up towards the end of the year. And so we would like to think that a lot of this is because people are becoming educated about not spending or spending more wisely with their HSA dollars.
But frankly I think that it's a somewhat a function of how much money they have to spend, what kind of bills they have and it's not a rate issue, and we've talked about the growth in the number of accounts, et cetera. So it really comes down to the spend for HSA.
是。 以每个HSA为基础，定期发生。 我们从交汇处获得的汇率或收益率相对恒定。 我们确实看到了一些季节性，因为我们过去曾谈到花费模式，无论是在HSA还是在RA中，我们通常看到我们的第一季度实际上已经更高，它开始下降然后它重新建立起来 今年年底。 因此，我们想要认为很多这是因为人们正在接受教育，不会花费更多的钱来花费更多的钱，也不会花更多的钱购买他们的HSA资金。
I would ask Steve to speak to this. I mean one thing without going crazy, we just completed our - we have an annual what we call key partner summit and it's not like a super fancy there aren't - there's no...
我会请史蒂夫对此说话。 我的意思是有一件事没有发疯，我们刚刚完成了 - 我们有一年一度的我们所谓的关键合作伙伴峰会，它不像超级幻想没有 - 没有......
Celebrity. While - were you there?
名人。 虽然 - 你在吗？
No, I was elsewhere.
Right our celebrity wasn't there. And but that's true. You were actually outselling them. So that's good. And celebrities. But in any event, it's not fancy, but we really think of it as a learning experience. And one of the things we do is we ask our clients to present on not just their experience with HealthEquity, but more broadly their experience in managing a health plan which is really what they're doing, using all of the tools that are available to them well beyond HealthEquity.
And one of the things and Steve I was going to thought you could elaborate on this little bit is we heard this year as we heard a number of examples of folks who are really having a significant amount of success at keeping their overall spending very much under control and implicit in that keeping not just - and I mean total spend, not just what the company spends and implicit in that, keeping members out of pocket spending under control. So do you want to speak to that at all.
对，我们的名人不在那里。 但那是真的。 你实际上超过了它们。 这很好。 和名人。 但无论如何，它并不华丽，但我们真的认为它是一种学习体验。 我们要做的一件事就是让我们的客户不仅要介绍他们在HealthEquity方面的经验，而且更广泛地介绍他们在管理健康计划方面的经验，这正是他们正在做的事情，使用所有可用的工具。 他们远远超出HealthEquity。
其中一件事和Steve我认为你可以详细说明这一点我们今年听到的，因为我们听到了一些人们的例子，他们在保持他们的总体支出方面确实取得了很大的成功。 控制并隐含在保持不仅仅是 - 我的意思是总支出，而不仅仅是公司花费和暗示的内容，保持成员自掏腰包的控制权。 所以你想要谈谈这个。
Sure. Yes. So there used to be research studies that they would publish every year that would show that as a percentage in a population goes towards health savings accounts that really spend starts to go down. In fact, the general rule of thumb was if you can get more than 50% of your population and you have a large enough population that it's real numbers into an HSA type plan that your overall trend over what it was when you were in nutritional (ph) plan would be cut by about 50%. They don't tend to publish those studies anymore, because I think it's almost become self-evident.
And as we know with our key partners last month, it was remarkable to hear not only that they were having that exact experience where they would talk about in their presentations, yes, we're now over 50% and our trend is half what it used to be.
But also that they were - they just have almost a favor to try and educate people to help them understand the importance of saving money in their health savings accounts. And I think where we've seen the change and I think part of its because we've tried to be a leader talking about how HSA can be used as a long-term investment vehicles. Is it rather than meeting with an employer and saying hey, you need to do HSAs and all your people need to do them because you're going to see your trend go down.
We've led with a different message decidedly. And its if we can educate people that this is better for them, better for their families long-term, they're going to need the money as they age. And this is the best device to put it in, because of the tax attributes that that will benefit the employee member to us.
But then almost consequently it benefits the employer. And so it's kind of a need to see it just being realized and then saying look help us in our educational efforts. And so - and it's little stuff and we talk about this all the time but just making a shift from a name brand drug to a generic or making an extra call and going to couple of walks down the street, if you do need to get a radiology study or MRI or something like that and saving a couple thousand dollars.
They're still getting the care they need, it's just they're spending less which leads to this perhaps part of the trend on the spending down. But it great for us because then we can help manage that money and we'll make the money over the next 12 months.
但他们也是 - 他们只是有利于尝试和教育人们帮助他们理解在他们的健康储蓄账户中存钱的重要性。而且我认为我们已经看到了这一变化，我认为它的一部分是因为我们试图成为一个领导者，谈论HSA如何被用作长期投资工具。是不是与雇主会面并说嘿，你需要做HSA，所有人都需要这样做，因为你会看到你的趋势下降。
但几乎所以它对雇主有利。所以有必要看到它被实现，然后说看看帮助我们的教育工作。所以 - 它是小东西，我们一直在讨论这个问题，但只是从一个名牌药物转变为一个通用或者打一个额外的电话，然后去街上散步，如果你确实需要得到一个放射学研究或MRI或类似的东西，节省了几千美元。
I do think there is - there are some opportunities here for us that where we can have real win-win that also increase the revenue line and the one that really comes to mind is when people do have incidents, a lot of people as we talked about they still think of these like Flexible Spending Accounts and one way they think about in that way is well I made my election and at open enrollment and that's the end of it. But as we all know with an HSA you're not tied to that number.
And so when people have incidents during the year that caused individuals a spike in those expenses running those extra dollars through the HSA that year can meaningfully reduce that unanticipated expense and that's one of a number of areas that Ted and the team are working on in terms of really continuing to tighten up what we're doing on the engagement front. So it's something we pay attention to and there's a little bit of sort of crosscurrents in terms of some of its good, some of it's not as good but that's just - this commentary should give you a feel for the depth of that.
我确实认为 - 这里有一些机会，我们可以实现真正的双赢，同时增加收入线，真正想到的就是当人们确实发生事故时，我们谈的很多人关于他们仍然认为这些像弹性支出账户，他们以这种方式思考的一种方式是我参加选举和公开报名，这就是结束。但是，正如我们所知道的HSA，你并没有被这个数字所束缚。
因此，当人们在一年中发生事故导致个人通过HSA运行这些额外资金的那些费用激增时，这一年可以有意义地减少意外费用，这是Ted和团队正在研究的一些领域之一真正继续收紧我们在订婚方面所做的事情。所以这是我们关注的东西，并且有一些关于某些优点的交叉电流，其中一些不是那么好但是只是 - 这个评论应该让你感受到它的深度。
And our next question comes from Mohan Naidu with Oppenheimer. Your line is now open.
我们的下一个问题来自Mohan Naidu和奥本海默。 你的生产线现已开放。
Two questions for me. One on the technology investments. Can you update us on where you are in the cycle and what we should expect to see through the year? And the second one maybe for Steve, just what your thoughts are on Medicare for all. As unlikely that seems to be, but curious about your views and potentially implications of such an event on your business.
对我来说有两个问题。 一个关于技术投资。 您能否告诉我们您在这个周期中的位置以及我们应该在一年中看到的内容？ 第二个可能是史蒂夫，你对医疗保险的想法是什么。 似乎不太可能，但对您的观点以及此类事件对您业务的潜在影响感到好奇。
Yes. I'll take the first question briefly. It's obviously early in the cycle. We said in the commentary at the beginning of this call that the investment program we described is beginning to ramp up, but as our guidance implies, there's a little more ramp to come over the course the rest of the year and we'll see how that goes.
So that's sort of, I mean it's early, but we've tried to focus as you can tell by some of the other commentary on investing where we can get things into the hands whether there are our own people for efficiency sake or security sake or at the market and learn stuff quickly that's the way we're trying to order things. Steve, on the - on MFA, do you want to talk about that?
是。 我将简要地提出第一个问题。 这显然是在周期的早期。 我们在本次电话会议开头的评论中说，我们所描述的投资计划正在开始增加，但正如我们的指导所暗示的那样，在今年余下的时间里会有更多的进展，我们将看到如何 这些都不在了。
所以那就是那种，我的意思是它的早期，但我们已经尝试着重点关注投资的其他一些评论，我们可以把事情掌握在手中，无论是为了效率还是为了安全起见，我们都有自己的人或者 在市场上快速学习东西，这就是我们尝试订购东西的方式。 史蒂夫，关于MFA，你想谈谈这件事吗？
Yes. So of course, I mean this is something that we spend a lot of time. We talked to that earlier this year and at the end of last year that we were planning to spend more time in Washington DC and we've done so. And we've really taken the time to spend educating on both sides of the aisle. And I think what we're hearing is it sure there's I think a minority of the party that really believes of the third-party in this case really believes that Medicare fraud could happen in the near term.
That being said Medicare is not what it used to be, it's not what's the old phrase it's not like your father's old mobile or whatever. A recent study came out from the American Medical Association that said that if a patient is on Medicare today and they get cancer, and that happens to be when most patients get cancer is when they get older that they would have to spend over $10,000 a year out of pocket above and beyond the cost of what would be reimbursed through Medicare.
And the easy answer is these folks should be spending that money out of health savings account, because if they're paying 401(k), that probably have to take close to $14,000, $15,000 out of the 401(k) to pay their $10,000 or $11,000 cancer bill. And so we don't know exactly where this will go.
We do know that from the folks that have been there the longest, not that maybe the newest voices there but the ones who have been there the longest, they say they just don't think it's going to happen in the short-term. We will be spending some time talking a little bit about this in our Investor Day.
But the bottom line is that we remain hopeful that no matter where kind of the trade winds latest in DC that kind of at the end of the day, there's a health savings account to help whatever plan someone send, whether it's in Medicare, whether it's in traditional care, whether it's in Medicaid Tricare, you name it every American should have a health savings account, because every American independent of what plan you're in is going to have out-of-pocket spending. And so that's kind of been our position.
And our next question comes from Stephanie Demko with Citi. Your line is now open.
我们的下一个问题来自花旗的Stephanie Demko。 你的生产线现已开放。
Just a quick one. When we think about the differing end markets that you've got participate in. You did talk about how WageWorks kind of help your competitive dynamic in the mid-employer market. Could you just walk us through those win rate and compare it maybe to the up market with payers? How we should see the comparative sizing of each opportunity?
只是一个快速的。 当我们考虑您参与的不同终端市场时。您确实谈到了WageWorks如何帮助您在中等雇主市场中的竞争动态。 您是否可以直接告诉我们这些赢率并将其与付款人的高端市场进行比较？ 我们应该如何看待每个机会的比较大小？
I'll try. What, I would generally say is that historically HealthEquity has been - it's not as much when rates. It's really where we've been on the field. And historically we've been on the field with our enterprise customers and obviously with our network partners. And we've relied pretty much exclusively on our network partners to be on the field outside of the enterprise in the - with a regional commercial - regional and even in some areas commercial space.
And that's really what's changed over the course of - as we've sort of dipped our toe in and certainly a scenario where the - we identified previously that whether it's through the proposed transaction or other means, we intend to increase our sort of shelf space for lack of a better churn and with these employers and with the brokers and advisors who really in many ways are far the key to their decision making and that's what we're going to do one way or the other.
One piece of - one measure of all of that is if you look at our RFP activity last year, this gets to your question, almost half 49% of the RFPs we received, included at least one of these non HSA services as a request, meaning the other CDBs. And I'm not saying we didn't win any of those because obviously in some cases we offer those products and we're able to meet needs and others the partner clients sort of satisfies and said you can do what you do well and so forth, but there are a lot that we didn't.
And so we just feel like there's the part of this that is having a footprint and a part of it that is having the right product for that footprint that kind of go together and again whether it's ultimately - whether ultimately our proposal is successful or we get there through other means, we're going to get there, because we concluded that that's something that will really help us down the road that we're really trying to help consumers lot. So that's kind of where we are.
I think, I'm not - I think that's probably the best I can do in terms of trying to give you some color around it, but it is material and I think we even saw that in the first quarter, if you look at the wins that we got for some of the services that I described and virtually all of them were in connection with a core service that we offer.
And in other words, people weren't buying standalone COBRA from us as I suppose a few did, but for the most part it was recognition that you know the future of this is in HSA-centric business, where we're really helping people, learn how to spend less today, save today and put that money away in the most efficient way that's available to them for the future and we're meeting them where they are, whether that's as someone who's in a traditional copay type plan with an FSA where they can save money and put it in a 401(k) or whether that's someone who's in an HSA plan where they can save spend less today and save more for more.
我会尽力。什么，我通常会说，历史上HealthEquity已经 - 它的价格并不高。这真的是我们在这个领域的所在。从历史上看，我们一直与我们的企业客户合作，并且显然与我们的网络合作伙伴合作。我们几乎完全依赖于我们的网络合作伙伴，在企业之外的领域 - 与区域商业 - 区域甚至在某些领域的商业领域。
这真的是在整个过程中发生了什么变化 - 因为我们已经在我们的脚趾中徘徊，当然我们之前发现 - 无论是通过拟议的交易还是其他方式，我们打算增加我们的货架空间由于缺乏更好的流失，以及这些雇主以及经纪人和顾问，他们在很多方面确实是他们决策的关键，而这正是我们将以某种方式做的事情。
因此，我们只是觉得有一部分是有足迹和部分内容，正在为这个足迹提供合适的产品，无论是最终的 - 最终我们的提案是否成功，或者我们得到了什么？通过其他方式，我们将实现这一目标，因为我们得出的结论是，这将真正帮助我们走上正确的努力帮助消费者的道路。这就是我们所处的位置。
我想，我不是 - 我认为这可能是我能做的最好的尝试给你一些颜色，但它是重要的，我想我们甚至在第一季看到，如果你看看我们为我所描述的一些服务获得了胜利，而且几乎所有这些服务都与我们提供的核心服务相关。
Now, that's super helpful. Thank you, Jon. Just a quick follow-up on that. You guys, do you have some HRA and FSA capabilities correct? So what are the puts and takes when you try to fit your own platform?
现在，这非常有帮助。 谢谢你，乔恩。 只需快速跟进即可。 你们，你们有一些HRA和FSA能力是否正确？ 那么当你尝试适合自己的平台时，有什么看法？
Well, I think probably, it's - those are probably best talked about in the context of where we're in markets. I think what's fair to say generally is that what we've added this year is the ability to serve customers who were not connected to our health plan partners. Historically, we really built the platform for that purpose. And so that's new capability. But that doesn't mean we can't be doing more, and it doesn't mean we can't be doing it at scale.
So while we're pleased with the progress, we're making there and certainly it's not a tiny business at this point. We've talked about elsewhere the number of accounts and all that. It's as part of our core HSA offering, it's something that we've indicated again whether it's through this transaction or otherwise, we'll continue to invest in. And I think that at some level, the core of that investment if these products are ultimately about helping consumers use these sort of tax benefits to save money right now.
And as we've talked about elsewhere, need to complete that circuit. So it has to be about making that part easy. And then about what do you do with that money. Right. Because if it just disappears, it hasn't really done anyone any good. It really helps when you keep the circle and so that's kind of where I think we really feel like ultimately the investment will need to go. It's not just getting parity from our perspective. It's taking this industry in a place that it hasn't been before.
Understood. Thank you Jon. That's really helpful.
了解。 谢谢Jon。 这真的很有帮助。
Thank you. It kind of wandered there, but got to the right place at the end. Maybe.
谢谢。 它在那里徘徊，但最后到了正确的地方。 也许。
And our next question comes from Allen Lutz with Bank of America. Your line is now open.
我们的下一个问题来自Allen Lutz和美国银行。 你的生产线现已开放。
Can you talk about how the current selling season is progressing versus last year? Where you guys winning more and where are you winning less? And then how is this tracking versus your expectations? And then secondarily is there anything that you can say specifically about the 401(k) contract win?
你能谈谈当前的销售季节与去年相比的进展情况吗？ 你们哪里赢得更多，哪里赢得更少？ 那么跟踪与您的预期相比如何呢？ 其次，有没有什么可以说明401（k）合同的胜利？
Go ahead with the first part and I'll...
Yes. Let me start with the first part Allen. Good to hear your voice. So you know look we remain excited about this season. We talked a little bit about it in the last call that we were already starting our fees and things like that. And we think teams done a great job. We've announced wins already on the COBRA market which we talked about which was excited to stand that up and start selling COBRA. We've announced these partnerships to come in a little bit with the - on the record keeping side and we've even announced wins there.
And as our practice we don't do any names and logos or anything like that. But we're excited to see it working. In fact on the sell side all day they talk specifically about reps that are starting to even have repeat wins and working with record keepers. And that's we think that's a great thing to see happen in a really relatively short period of time since these partnerships have been signed and announced.
I think that what our salespeople are doing is they're realizing that - that in the past they could rely a lot on these health partners and so what we're trying to do is to subdivide the team and have part of team continue to focus on the health plan channels and the different channels we've dedicated to and then, the other half is doing more direct sales.
And so that's the other part that is exciting for us to actually see kind of inside sales function or direct sales that we've invested in adding over a dozen new sales folks since last year in that effort and we're pleased - we're pleased seeing that working hard to announce wins and to be very busy. And that's - everyone knows that there's nothing happier than a busy salesperson so we're happy to be supporting them in those efforts.
是。让我从第一部分艾伦开始。很高兴听到你的声音。所以你知道我们对这个赛季感到兴奋。我们在最后一次电话会议上谈了一点，我们已经开始收取费用等等。我们认为团队做得很好。我们已经宣布已经在COBRA市场赢得了胜利，我们谈到了这一点，我很高兴能够站起来并开始销售COBRA。我们已经宣布这些合作伙伴关系有点 - 记录保持方面，我们甚至宣布在那里获胜。
我认为我们的销售人员正在做的是他们意识到 - 过去他们可以非常依赖这些健康合作伙伴，所以我们要做的就是细分团队并让团队的一部分继续关注在健康计划渠道和我们致力于的不同渠道，然后，另一半是更直接的销售。
所以这是令我们兴奋的另一部分让我们真正看到内部销售功能或直接销售，我们已经投入了自去年以来增加了十几个新的销售人员，我们很高兴 - 我们很高兴很高兴看到努力宣布胜利并且非常忙碌。那就是 - 每个人都知道没有什么比忙碌的销售人员更快乐，所以我们很乐意在这些努力中支持他们。
I mean it's early in the cycle Allan as you know. So it's hard to be too - it's hard to be concrete, but I guess you know a couple basic thought I think is look, we are off to a good start. It's a similar start to the one we were off to last year. We ended up finishing last year reasonably strong, but the fourth quarter was a little weaker than we wanted it to be as you know.
And so if we can - as they say in NBA finals when pit play four strong quarters here, we should be in pretty good shape. And so that's kind of the way we're thinking about it and everything we see in terms of the pipeline size, RFP volume, the nature of RFPs, the performance of new partnerships all tells us we have that opportunity. And so that's what we are trying to go on right now.
我的意思是，如你所知，这是艾伦周期的早期。 所以很难做到这一点 - 很难具体，但我想你知道我认为有一些基本的想法，我们有一个良好的开端。 这与我们去年的开局类似。 我们去年的表现相当强劲，但第四季度比我们想要的要弱一些。
所以如果我们能够 - 正如他们在NBA总决赛中所说的那样，在这里进行四个强有力的比赛，我们应该处于相当不错的状态。 这就是我们思考它的方式以及我们在管道规模，RFP数量，RFP性质，新合作伙伴关系表现方面所看到的一切都告诉我们我们有这样的机会。 所以这就是我们现在正在努力的方向。
And then Darcy, you said that operating margins will be lower through the rest of the year. Can you give us a sense of the cadence and then the relative size of the step down for the last three quarters?
Yes, I think it'll be a ratable through the three quarters. I mean we're - we continue to ramp up part of the initiatives that we're spending money on. The biggest challenge is just bringing people onboard and getting up to speed and having them be being productive. And so I think that will continue through all the course throughout the remainder of the year.
If you look at our overall guidance and just take a midpoint of EBITDA, I think we continue to be true to what we said that we'll be in the range of where we were last year. And it's not going to be where we were in the fourth quarter. So I think that you're going to see that ratchet down each quarter throughout the year.
是的，我认为通过三个季度这将是一个好评。 我的意思是我们 - 我们继续增加我们花钱的部分举措。 最大的挑战是让人们加入并加快速度并提高工作效率。 所以我认为这将在今年剩下的时间里继续贯穿整个过程。
如果你看一下我们的总体指导并且只考虑EBITDA的中点，我认为我们继续忠实于我们所说的我们将在去年的范围内。 而且它不会像我们在第四季度那样。 所以我认为你会看到全年每个季度都在减少。
Thank you. And I'm showing no further questions in the queue at this time. I'd like to turn the call back Jon Kessler for any closing remarks.
谢谢。 而且我现在没有在队列中显示任何进一步的问题。 我想把关于Jon Kessler的电话转回任何结束语。
Yes, thanks. I just want to say a little more strongly thank you to the team. This is - and that includes our partners. I think this is probably the largest amount by which we have ever raised revenue guidance in a quarter that we've done here. I'm looking to Darcy to shake his head up and down. And that's not happening, because we're clever and some chess game associated with investors. It's happening, because we watch what our team members are doing and we have - we just - I think about the concerns we expressed in December, the increasing optimism that we expressed in March and now in June, we feel very, very optimistic about where we are as a business and where the team is focused and so forth and so the credit for that to the extent there is credit really goes to the team and the work. So thank you everybody.
对了谢谢。 我只想更强烈地向团队表示感谢。 这是 - 包括我们的合作伙伴。 我认为这可能是我们在这里完成的季度中提高收入指导的最大数额。 我期待达西上下摇头。 这种情况并没有发生，因为我们很聪明，还有一些与投资者有关的国际象棋游戏。 它正在发生，因为我们看到我们的团队成员在做什么，我们有 - 我们只是 - 我想到我们在12月表达的担忧，我们在3月和现在6月表达的越来越乐观，我们对于哪里感到非常非常乐观 我们作为一个企业，在团队专注的地方等等，所以在信用的程度上真正归功于团队和工作。 谢谢大家。
Ladies and gentlemen, thank you for your participation in today's conference. This does conclude your program and you may all disconnect. Everyone have a great day.
女士们，先生们，感谢您参加今天的会议。 这确实结束了你的程序，你可能都会断开连接。 每个人都有美好的一天。
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