Frode Jensen - General Counsel Jon Kessler - CEO Darcy Mott - EVP and CFO Steve Neeleman - Founder and Vice Chairman.

Lisa Gill - JP Morgan Sandy Draper - SunTrust Greg Peters - Raymond James Peter Costa - Wells Fargo Steven Wardell - Leerink Partners Randy Reece - Avondale Partners Mark Marcon - Robert W. Baird.

Good day everyone and welcome to today’s HealthEquity First Quarter Earnings Conference Call. Please note this event is being recorded. And I would now like to turn the call over to Frode Jensen, General Counsel. Please go ahead..

Thank you, Ray. Good afternoon and welcome. My name is Frode Jensen and I’m General Counsel of HealthEquity. Please be advised that today’s discussion includes forward-looking statements including predictions, expectations, estimates or other information that might be considered forward-looking.

In this afternoon’s discussion, we will present important factors relating to our business, which could affect those forward-looking statements. These forward-looking statements are also subject to risks and uncertainties that may cause 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 risk factors detailed in our Annual Report on Form 10-K, which we filed with the SEC on March 31, 2016 and any subsequent periodic or current reports, for a discussion of these risk factors and other risks that may affect our future results or the market price of our stock.

Finally, we are not obligating ourselves to revise our results or publicly release any updates to these forward-looking statements in light of new information or future events. With that, I will turn the call over to Jon..

Thank you, Darcy. Joining me this afternoon are -- I said thank you, Darcy..

Yes..

Thank you, Forde. We already got to great start. Joining me this afternoon -- hi everybody, are Darcy Mott, our EVP and CFO; Steve Neeleman, our Founder and Vice Chairman. And both Steve; Frode as well as I will have prepared remarks and then we will be available to answer questions.

So, HealthEquity delivered a very positive first quarter for fiscal ‘17 with substantial growth in a four key metrics that drive our business, revenue; adjusted EBITDA; HSA Members; and assets under management or AUM. Revenue increased by 47% year-over-year in the first quarter to $44 million.

Adjusted EBITDA increased 66% year-over-year to $18 million. HSA Members grew 51% year over year to 2.2 million. And total AUM grew 61% year-over-year, reaching $4.1 billion at the end of the fiscal quarter. Note that growth continued to accelerate on a multiyear basis.

HSA growth of 51% exceeded the 46%, experienced in Q1 FY16, which in turn had exceeded the 45% in Q1 FY15. AUM growth of 61% exceeded the 50% experienced in Q1 FY16 and the 39% in Q1 FY15. Revenue growth of 47% was comparable to the 48% in Q1 FY16 and significantly exceeded the 38% experienced in Q1 FY15.

At the same time, adjusted EBITDA margins continued their expansions, reaching a Company record, 41% in Q1. That supports our view that growth and profitability at HealthEquity at least can be achieved hand in hand. Sales also got off to a fast start.

HealthEquity opened 71,994 new HSAs in Q1 FY17 that’s versus 53,492 in the year ago period, which is a 35% increase year-over-year in incremental sales. AUM grew by $338 million organically versus a $182 million in the year ago period, an 86% increase year-over-year.

This sales growth is on top of the 35,000 HSAs and $63 million in AUM that the team successfully transitioned from M&T Bank’s platform during the quarter. To provide a bit more detail on some of the factors that drove first quarter results, I would like to turn the call over to Dr.

Steve Neeleman, our Founder and Vice Chair, and my partner in leading the business.

Steve?.

First, our high rate of HSA rollovers and AUM transfers from other custodians; Second, our record interchange revenue; and third, the scalability of our platform that allows us to rapidly expand our membership base, while reducing our servicing cost and still delivering remarkable purple service for which HealthEquity is known.

HSA rollovers and AUM transfers are particularly funded to discuss because they represent a win for our members and a vivid example of HealthEquity beating our competition.

Our team did a phenomenal job during the open enrollment season and in the first quarter, executing these transfers and educating new HSA members on the benefits of moving their existing HSA balances from previous facility custodians to HealthEquity.

We added approximately $240 million of transfer AUM in the first quarter, which does not include the 63 million of transfer AUM from the M&T acquisition. It represented a record for us and is up significantly from the approximately 90 million of transfer AUM we saw in the first quarter of last year.

During the quarter, we also realized record levels of interchange revenue as a result of increased card spend and more favorable interchange terms, which Darcy will elaborate a bit later in the call.

We made an important business decision early in our history to opt for the efficiency and reduce stride of HSA debit cards and electronic payments over the market accepted practice of issuing paper checkbooks. Our platform makes this innovative decision possible because of the integrated claims we receive for most health plans throughout the country.

This business decision is now paying dividends with more interchange revenue and lower cost. We are most excited by our platform’s ability to deliver increasing value for our network partners and our shareholders. We are starting to see the leverage in our business model that we talked about during our IPO.

I want to highlight a few particular items that prove at this point. Our scalability has allowed us to smoothly onboard a record number of new HSA members and the 173 new network partners this past selling season. Our people and processes have provided every new HSA member with top notch customer service.

We have now met or exceeded our aggressive service levels for more than a 112 consecutive months. Our platform has allowed us to gain efficiencies, resulting in record gross and EBITDA margins.

Our sheer scale as a leading HSA provider coupled with our flexible and efficient technology, allows us to obtain more favorable terms with our interchange and bank depository partners.

And by sharing these efficiencies and cost savings with our network partners and HSA members, for example in the form of highly competitive service fees, HealthEquity drives even more growth and scale.

We are creating a strong and sustainable business with higher AUM, more interchange revenue, and increasingly efficient but still remarkable every hour of every day customer service. Of course, we could not do this without all of our purple team members’ commitments to each other and help our members build health savings.

I will now turn the time over to Darcy to discuss our financial details for the quarter..

Thanks Steve. Today, I will discuss our results on both a GAAP and a non-GAAP basis. I’d like to review our first quarter of fiscal 2017 financial results and then I will update our guidance for the full fiscal year 2017. This was a very strong quarter for HealthEquity. Overall, our revenue for the first quarter grew 47% year-over-year to $44 million.

We also saw each component of our revenue, service revenue; custodial revenue; and interchange revenue grow significantly. Service revenue of $19 million in the first quarter increased 30% year-over-year and represented 43% of total revenue for the quarter compared to 49% in the prior year.

The growth was attributable to a 52% year-over-year increase in average HSAs offset by a 14% decrease in service revenue per average HSA. Let me remind you of the three primary reasons for the decrease in service revenue for average HSA.

First, we have historically and we will continue to offer lower service fees per HSA for more HSA volume from our network partners, particularly when they come to us with higher balances. This tiered pricing approach to service fees is a key element of our business strategy; and based upon our operating results, it is working.

We proactively offer lower service fees for more volume because the profitability of an HSA in our business model increases as balances grow. Also, our servicing costs per HSA have consistently decreased over time due to the scalability of our platform.

We think about HSAs holistically and recognize that the revenue and profitability of an individual HSA comes from all three of our revenue sources, even though the mix of those revenue sources have changed and will continue to change over time.

Second, service revenue also includes revenue from flexible spending and health reimbursement arrangements, what we call RAs which are complementary too but are not growing rapidly. And third, acquired HSA portfolios typically have lower service revenues per HSA and no RAs.

Custodial revenue was up $13.8 million, representing an increase of 64% year-over-year. It represented 31% of total revenue compared to 28% in the prior year.

A significant factor for this growth is that our average daily cash AUM increased 64% year-over-year, partially fueled by acquisition cash AUM, and increased HSA rollovers and AUM transfers that Steve referred to earlier. Our annualized interest yield on cash AUM was 1.55% in the first quarter of fiscal ‘17 compared to 1.56% in the prior year.

Interchange revenue was $11.2 million, representing an increase of 64% year-over-year. It represented 26% of total revenue compared to 23% in the prior year.

Our first quarter is typically the highest spend quarter of the year as many deductibles reset on January 1st; additionally, though to a lesser extent, we also benefited from obtaining a higher percentage of the interchange rate pie due to our higher spend volumes.

Gross profit for the quarter was $27.7 million compared to $17.9 million in the prior year. We also reached a record gross margin level of 63% in the quarter versus 60% in the prior year. Income from operations of $13.2 million in the quarter increased 66% year-over-year and generated an operating margin of 30% compared to 27% in the prior year.

We generated net income of $8.1 million for the first quarter of fiscal 2017 compared to $5 million in the prior year. Our non-GAAP adjusted EBITDA for the quarter increased 66% to $18 million compared to $10.8 million in the prior year. Adjusted EBITDA margin in the quarter was 41% compared to 36% last year.

Our GAAP diluted EPS for the first quarter of fiscal 2017 was $0.14 per share compared to $0.09 in the prior year. Non-GAAP diluted EPS was $0.15 per share for first quarter of fiscal 2017 compared to $0.10 for the prior year.

Turning to the balance sheet, as of April 30, 2016, we had $133 million of cash, cash equivalents, and marketable securities, and no outstanding debt. Before I turn the call back over to Jon for a few closing remarks, I want to comment on our increased outlook for the full fiscal year 2017.

We now expect revenue between $173 million and $177 million, up from our prior guidance of $170 million to $174 million; adjusted EBITDA between $58 million and $60 million, up from our prior guidance of $56 million to $58 million; and non-GAAP diluted EPS between $0.47 and $0.49 per share, up from our prior guidance of $0.45 to $0.47 per share.

Our non-GAAP diluted EPS estimate is based on an estimated diluted weighted average shares outstanding of approximately 60.5 million shares and is calculated by adding back to net income all non-cash stock compensation expense net of tax. We expect total stock compensation expense net of tax for fiscal 2017 to be between $5 million and $6 million.

The outlook for the full fiscal year 2017 assumes a projected effective income tax rate of approximately 36%. With that, I will turn the call back over to Jon for some closing remarks..

Thank you, Darcy. As Steve mentioned, we cannot do this; in fact, we cannot do anything without the partnership of our health plan and total and ecosystem partners, our members, and most of all, the purple team here at HealthEquity.

That team is pleased to invite you, our fellow shareholders, analysts, and other members of the investment community to the Company’s 2016 Analyst and Investor Day to be held two weeks from today, on Tuesday, June 21st from 8 AM to 12:30 PM at the Western New York Hotel in Time Square.

Presentations will feature HealthEquity’s products, sales, service, and technology leaders as well as representatives of health plan and employer network partners, and personal finance powerhouse and best-selling author Suze Orman. Suze will provide a consumer’s perspective on the value of HSX.

Now, we’re going to be slightly off Broadway, [ph] but you will laugh, you will cry but most importantly you will learn. RSVP, webcast, and event details can be found at our Investor website which is ir.healthequity.com With that, operator, let’s go ahead and take some questions..

[Operator Instructions] And first from JP Morgan, we have Lisa Gill..

Let me just start with one of the comments I think Steve made around scale of platform and your ability to leverage that.

Darcy, are you comfortable giving any kind of longer term targets as to where you think margins can go over time, and will you have to make incremental investments at some point to the platform, or is it just you’ve made the investments that you need to make and therefore we could really see margins continue to improve?.

No, we’ll continue to make -- every year, we look at our platform and we make additional investments and we do them within the constraints of what we feel our operating objectives are.

What we have commented on before and that we will continue to comment is the profitability of an HSA increases largely over time, not only because of the scalability but more importantly because of the balance growth.

And so, in our presentations that we’ve made to investors many time, our average margins this quarter, they were 63%, but they have been in the mid to high 50s, and we are comfortable in that range. But, as an account grows, an individual account, the margin of that when the balance grows, it can get up north of 70%.

And so, over the longer term, as these accounts mature -- of course, that is brought down somewhat by our fast growth rate, but we are bringing on lower balanced newer accounts that kind of have a balancing effect on that overall margin. But, we think that the margins will continue to grow over time, particularly as the balances grow..

Okay, that’s helpful.

And then just secondly, either Jon or for Steve, can you maybe just talk about without giving a way too much of what you talk about in the off Broadway [ph] production around partnerships on the platform, is there anything new that you added or anything of note that you think is maybe driving some of the utilization in addition to normal utilization in the first quarter?.

Well, I read yesterday -- this is Jon, and it’s great to hear your voice, Lisa. I read yesterday that J.K. Rowling is urging people to go to the Harry Potter play, not to give away the plot. And I suppose, we should follow the same strategy.

That having been said, I think one of the things that’s interesting that we are seeing is, and we have talked about this for some time, but as people use the platform, we get tremendous visibility into what they are really using, what consumers are gravitating towards in terms of the various ecosystem partners that are out there.

I think that’s what you really asked me about..

Right..

As you will know, it’s really a challenge in a lot of these areas to identify content that attracts people to itself versus what’s the content you have to pay them or conjure them, or nag them to get to.

And so, what -- one of the things I think we’ll talk about a little bit, but nonetheless, the depth there is how are we using that knowledge, where can we use it to help us, help our partners be more effective.

And so, I think that’s something that again as scale really shows up and as we get more longitudinal data about what’s actually happening out there and it’s truly valuable to us in ways that maybe are not immediately monetized per se but some are.

But, I think it’s also something that really strengthens our partnerships and allows us to talk about value with whether it’s with our employer, partners or our health claim partners or our ecosystem partners, and you’ll hear I think some of them talk about that a little as well. So that’s what I would expect..

And Jon, does that help you to -- so, if you have an employer that doesn’t have every one of their employees on an HSA today, these kinds of discussion around value; do you find that that’s starting to resonate where they are adding more employees to the platform because of that, or do you think it’s still too early to make that call?.

Well, I think and I am going to encourage Steve to comment on this.

But, the way to think about that issue is that -- let me backup, as we have always said, I think if you look back 5, 10 years, the reason that people -- that employers did not immediately flock to these products because the economic are pretty obvious was the fear -- appropriate fear that these are significant changes for people’s lives and reasonable questions about whether, broadly speaking, the infrastructure was there to support those changes.

And you can define that however you want, but certainly, a piece of it is the content there for the people to be reasonably informed. Can they operate in this world and feel like they’re still getting high quality health benefits.

And I think what I would say is the availability of connectivity to the various sort of pieces of an ecosystem that employer creates and kind of a leveraging of that, I think just provide the level of comfort to the employer about expanding the HSA population and whether that’s in from plan design choices or otherwise, making these plans more available.

And Steve, what you think and what color would you add?.

I think the only color is, we have talked a little bit about this before is that our team members, and we talked a lot about purple and what gets them excited everyday and it’s -- I think what we are seeing is this virtuous business where people can actually save more money, they save more money on taxes, they see their account balances grow, they are pleased with the services and ecosystem we are providing, they get positive feedback to their office peers and maybe didn’t sign up for in the previous year.

You start to feel the more acceleration of adoption. And then what -- there are stats out there that are really exciting for us when you look at the annual retention year-over-year when people have a choice, Lisa. They have a choice to go back to the old plan and yet high majority of them stick around.

And so, it’s a virtuous business cycle that people are having a great experience and something that they’re talking about. And then they tell their friends about it, and then they figure out, oh, I can put more money in. We are obviously educating people on, and trying to do it in a very thoughtful way.

We don’t want to educate the wrong folks on the wrong thing but educate right people on right information, for example having next healthcare [ph] account for that year. And we think we get better at that. But, it’s certainly exciting for our team members to have this kind of virtuous cycle that just happens over and over again every day..

Great. Well, I am looking for actually Analyst Day and I’ll see you in two weeks..

Next, we’ll move to Sandy Draper with SunTrust..

First maybe, don’t know, Jon or Steve, if you are willing to comment [technical difficulty] fairly sizable transaction occurred in the space with one of your large competitors buying another bank business.

I don’t know if you can make any comments on that but also just the general environment for banks getting out of the business but also maybe just remind us what you look for, is it just a multiple, is it a type of account, what type of business are you willing to go after and what do you want to walk away from? Thanks..

Yes, I assume you are referring to the Wells Fargo’s exit of the business.

Yes?.

Yes..

So, what we think is that the decision by Wells to exit, and Wells was the fifth largest provider in the space, give or take, really validates the thesis that HealthEquity has been executing on really for more than a decade.

And that thesis is that the HSA market would not only be fast growing but that it would ultimately consolidate around those who can best help consumers wisely save and spend for healthcare and provide real differentiated value to employers, health plans and others who are -- who introduce us to consumers.

And so, different way to put that might be, our view was and remains that those who control and invest in their own platforms and their own distribution networks and in the ability to create third party content ecosystems will win. And we think I guess fundamentally that the big news about this is really that it kind of validates that point.

We think that’s sort of more important than ultimately who acquired the portfolio.

And after all the number of HSAs that HealthEquity on-boarded in fiscal ‘16 alone as we have reported in our public filings and all that; it really exceeded the total number of HSAs at Wells Fargo, which by the way presumably includes accounts of Well Fargo’s own team members as they have reported or has been reported by folks like [indiscernible] and the like.

And then, beyond that, obviously this kind of consolidation does create organic growth opportunities for us, particularly when you are already in the position of being growth leader on the organic side as we are and have an outstanding sales team as we do.

So, while I think HSAs are generally pretty sticky, I think that affected employers and others will take this opportunity to review their partnerships, and some of them will go with the best. And we obviously believe we are the best.

So, I guess my first point on this really just boils down to we think that the important point really is that a party like Wells that obviously had a strong market position, looked at this and said you know what, we see where this market’s headed and we see where it’s headed too; and we are out.

And we are going to benefit from that whether or not we we’re the acquirer and obviously in this case we weren’t. The second part of your question was about kind of how we think about these sorts of portfolio transactions. And I guess, I’d say, obviously we are and we intend to be an active acquirer as this consolidation continues.

If we think we have completed more of these portfolio transactions than anyone and including our Bancorp and M&T transactions, and not just transactions but actual transfers that occurred in the last couple of quarters.

And we also think we offer some really unique advantages to the sellers in proven execution, independence including from their competitors, and a strong service reputation. As far as how we kind of value the deals and all of that, obviously we are not going to comment on any specific transaction or the like.

But I said even when we announced these things, we look at these as incremental to the industry’s strongest organic growth story and frankly strongest growth story overall, rather than somehow transformational where you get into a multiples type discussion.

So, as result, the way we actually do this is, we carefully consider each opportunity kind of the old fashion way, and that’s leveraging our experience, having done a lot of these things, and having done a lot of them over a long period of time, we can figure out the possible return on investment of our shareholders’ capital and playing all IRR, and we do.

And if on that basis and the basis of the advantages we offer to, would be exciter, [ph] we can make something work, then we do; and if we can’t, then we don’t. And so that’s kind how we think about it. And I think obviously, we see this as an opportunity that will be out there significantly over time.

And it was one of the important reasons we went public in the first place. So, those are my thoughts. I hope that’s helpful..

That’s very helpful; I really appreciate. And maybe one other just follow-up and then, I’ll get back in the queue. I wonder as you guys continue to do really well obviously with the assets under management, and when I think about it a couple of different ways, one is that accounts you are bringing on board going to have higher balances.

But also, are you guys able to look at the people that are saving, are they maxing out more, are they just spending less, what are the trends that are driving the growth in accounts? And just trying to think of longer term, do we -- can we continue to see people more and more people max out and that drives the growth or people maxing out but also not spending what they are putting in? Just can you guys get into the data that must really see what the behavioral patterns are of the people as they start to put money in the accounts?.

Yes, it’s a great question. I’ll say, one of the advantages of being unique in our business and having access to kind of a rich set of claims information and the like for the bulk of our members is you really can actually see what they spend, not just what they spend with us, but what they spend in total.

And I do think that the answer is a mix of both. Clearly, if you look at accounts over time, well obviously for the most part, an individual health spending is going to be a function of things like, their actual health conditions, stuff that happens over the course of the year and so forth.

You can see -- and there is third party research that has come to same conclusion, you can see them adopting behaviors that any of us would adopt in face with the right marginal incentives. And you see it and you see it in the spend patterns as well as their actual activity. And so that’s a piece of the puzzle.

I think that piece contributes somewhat, but it’s not going to be a huge source of annual balance growth because obviously there is also variability in the actual experience of individuals in terms of their health trends [ph] needs and the like.

The second factor probably accounts for the bulk of balance growth in any given year, and that is the fact that people, as they begin to understand what you can do with an HSA and the sort of unique power of an HAS, they will put more money in and that is intended to be therefore a longer period of time.

And whether that’s maxing out or not, I know most people can afford to max out.

But, certainly recognizing the advantages of putting that money and keeping as much there as they can as opposed to putting it somewhere else is something that I think people -- it’s like any social education process, it is slow and it’s hand-to-hand combat, but you sort of see it year-over-year as accounts age that second component kind of really starts to drive things.

And ultimately we do see people kind of marching down a path where they start out as pure spenders of whatever money the employer gives them and then they become contributors and then they become in this fashion, modest savers and then ultimately really begin to understand that it’s also about how you allocate money across different savings vehicles, and they start to become max savers.

And I don’t think we’ve begun to see the power of that yet and remotely. So, we have a long way to go in terms of growing these balances and then ultimately growing the value of that to HealthEquity and its shareholders..

Jon, can I just add a couple of comments?.

Yes..

So, kind of in reverse, so on the hand-to-hand combat, I agree with you, it takes a lot of work.

We are deploying technology and we’ve made investments to help people understand; Jon mentioned that we’re really able to see their spend, and remind them hey, some of the dollars for some of the people they spend were not spent through HSA, right? In other words, you have claim expense in excess of what you contributed to your HSA.

You got to at least put it in, you need to take it out the next day over the tax deduction, decrease your cost of claims by 20% or 30%, depending on your tax bracket. So, we’re deploying technology to help us in that hand-to-hand combat, which I think is really important and that’s some of the spend we make on investment side.

I think the other point I would make is that, you asked the question early around the people that invest and save more, spend less. And the best data we have now is they spend about the session. It’s just they’re putting more in their account.

So, this is not a case as they were in the early days of HSAs that was the total people are going to hold their HSA dollars and they are going to end up sick and debt [ph] all over this. There is no evidence of that.

There’s been study up for study that says the people still spend about the same amount, either out of their HSA or maybe through their linked bank account. So, they’re spending about the same amount, we are trying to help them understand lower cost alternatives and things like that but they are saving a lot more..

And moving on, we have Greg Peters with Raymond James. .

If you don’t mind, could we back up on the M&A and maybe -- and take even a broader look on uses of cash because of the positive cash flow characteristics of your business? And can you talk about perhaps other capabilities content or services that might be interesting from an M&A perspective and of course in the context of IRR, as you pointed out Jon?.

Yes. I’ll say this. We are certainly cognizant, Greg that shareholders are not paying us to hold their money and notwithstanding the fact that we get a decent return on cash, I’m sure that in the longer term, shareholders themselves can get a bet on. So, we are cognizant of that fact. That having been said, I guess here is the mindset we enter this way.

First of all, let’s repeat what we’ve always said. One, our primary -- when we look at M&A, first of all, we start with these competitive portfolio transactions.

We’re certainly looking at other things, but what we are not going to do is we are not going to go into the content business in the sense, if I think of a lot of what our ecosystem partners do, it is -- you can think of it as content and content is hard.

I mean I really cheer what these folks can do because what they are doing is extraordinarily difficult; it’s perishable, and we don’t prove ourselves in thinking of that. We may learn a lot about content as we see it, but creating it is hard. And that’s probably not where we look.

We do certainly look at what we can do that adds value, whether it’s at the consumer level or in terms of our network partners or for that matter our ecosystem partners. So, there are things we look at in that regard. And whether we pursue those through M&A or through direct investment, that’s what we’re going to do.

And to the best of our ability, we will always apply an IRR type framework to it. It is just that the beta gets higher depending on what you are doing. I guess I’d say one more thing, which is kind of hard to tackle Lisa’s question about investment.

One of the luxuries that we have and that I think we will need to continue to pay attention to is, we talked about this a little bit at the end of last year is when we see a backup of investments in our own platform that generates strong returns, we are happy to accelerate the pace of our internal investment.

We are just as careful with those as we are with external investments, probably more so, because it’s easy to drink you own Kool-Aid. And so, they deserve certainly a level of skepticism.

[Ph] But to the extent that -- it is not only true that we will, we are investing in not just adding things, but in growing the scale itself, because we believe this is going to be a company at some point that is many times its current size. And obviously that is occurring rather rapidly.

And so it’s not just that we could invest in further things or the like, or scale is that we are. And you see that in our CapEx and to some extent, we build [indiscernible] as well. And again, we’ll talk little bit more about this at the Investor Day.

But I think that there might be a tendency to believe because profitability continues to grow and profit margins continue to grow that somehow our platform is static. Our members certainly don’t see it that way; our partners certainly don’t see it that way; and we don’t see it that way.

If anything, we’ve increased relative to our expectations platform investment over the last couple of years. And so, I just think that’s worth noting. And again, it’s a high class problem to have. That’s how we think about it..

Right, excellent color to the question. Thank you, Jon. And the one other question I have, perhaps for you and Darcy and Steve would be just on the average cash yield that seems that seems to be relatively stable or at least for the last year, moving by a basis-point here or there.

And I was just curious if there is any impactful contracts that are coming due this year that might impact that yield number by yearend. I suppose this is sort of an attempted cute way to ask about what your embedded average cash yield assumption is in your revised guidance, but any color on this would be helpful..

Sure. Thanks, Greg. One of our objectives is to try to keep this as stable as we can. And this is consistent with what our guidance would be. The way that these wok, we enter into these longer term contracts, so we don’t see a lot quarterly variation up and down.

And for right now, we’ve placed all the money that we got not only from our yearend but also through the rollovers. And we think that that’s got a stable home for through the remainder of this year.

What will come up is when we start placing the large amount of cash AUM saying our fourth quarter and then we’ll enter into new contracts for those, we don’t have any particular ones that are rolling off that are going to impact us either positively or negatively in the near term. But, we’ll manage that as we have done in the past.

I will say that kind of funny way as we’ve grown higher balances that our baking relationships are growing and we have more opportunities to partner with some of our existing partners and bring other people. So, I think it’s partially because of our visibility. But, I guess the short answer is, we feel pretty good about a consistent yield..

It is worth noting that this is certainly an area of we try and promote stability on. Why, I mean $1million of net income, which obviously would be significant for us is, what, 2.5 basis points on $4 billion. So, stability becomes important to us. And we have a very good team that works on this and has been working on it for, again, a decade now.

So, I feel very fortunate that we’ve been able to do it. Will it always be quite stable? I don’t know, but certainly that’s been a goal..

And just as a follow-up, I mean you’re talking about this expanded banking relationship you have with some of these vendors.

Have you seen just in the last quarter or two any change in their demand for your deposits or is it just -- I mean, is this also relatively consistent? And I guess what I am trying to reconcile that with this the mix data we see coming out of the United Sates in terms of economic and employment?.

I would say -- maybe I should ask Cordell to comment on; he is sitting in the room. He’s the one who’s talking with the banks day in and day out. As we talk to them -- we keep in touch with these banks all the time. And they know that what our pattern is and how we grow and what is going to be in the year.

So, we have a long lead-time with them to say, do you have more appetite et cetera, et cetera, and then can we work in. And we’ve added new banking relationships every year as we go. So, I would that it’s a healthy dialogue that we have within and we have apparently long lead-time time and their appetite has been pretty good so far..

I’d say to you, Greg, it’s not that we -- I don’t think what we see -- I mean obviously over extended periods what we see and what broader economic conditions dictate are pretty similar, and we commented on that before.

But I will say while ultimately all dollars are fungible, if you ask any banker, I think, they will tell you that all depositors are not created equally in terms of the predictability they bring, do they do what they say they’re going to do. And bankers make judgments about those issues with regard to their material depositors.

And so, a big piece of the question is proving through these over time that if you say that irrespective of what your contractual agreements are that the deposits are going to look like this at a given point in time that they will.

And conversely if for whatever reason, again, irrespective of what our contractual agreements are, if one of our -- and we definitely do think of our banking partners as partners. If they have lead from us in one direction or the other and can meet it that we do. And so that’s a big piece of the puzzle too.

It’s not about -- it really is about quality of the relationships. I mean obviously diversification is extremely important in this area but it’s also true that you want every relationship you have to be a high quality relationship.

And when it’s a high quality relationship, there is a willingness to perhaps be a little looser with the basis points because you really are getting something in return in terms of knowledge about what’s actually going to happen as opposed to what -- let’s say, I were a generic large corporate depositor, as anyone who has done corporate treasury at a large corporation knows there are unpredictable factors and the treasurer whom you are dealing with is not the last word necessarily and what cash needs might be out there.

We try to assure that that is not the case in terms of our partnerships in this area anymore then that would be true in our other partnerships..

And next, we will hear from Peter Costa with Wells Fargo..

Some of your competitors’ websites portals are starting to improve and others with the weaker portals are getting out of the business.

How do you see your growth being maintained at double the market, if others are sort of starting to catch up to you and the weaker ones are going away? And then, do you think, first off that they are catching up to you; have you maintained a lead against them? And then, do you think that you are -- what will eventually happen, if they do catch up to you, will you get your growth rate decelerate towards where the market growth is, or will the market growth start to rise more in line with where your growth rate has been? And then just lastly, what’s more important, scale or the strength of the portal? I know they are both important, but which is more important?.

Luckily that last question is the only one you asked that I think I know the answer to. I was getting worried there and then at the end I hope there is something we can answer. Because in all seriousness with regard to a number of those points, I wouldn’t -- we obviously don’t give extended forward guidance, you know that.

But more importantly, I think we -- generally, I think we have the opportunity in part, to define what this market looks like. That’s what leaders do.

And, I think to give you a simple example of that, I mean Steve is the one who made the decision long before I was here to say, an HSA is about care in part; it’s not just a financial account; it has other elements to it. And we need to be open to that data.

At that time, I very much remember, I was certainly involved in the industry broadly, and I remember people thinking well that’s stupid, why would anyone do that; that’s going to create a lot of cost and why will people even need that? They can go to their health plan website and get all that information, not to worry, or whatever it might be.

And this company has defined what’s accessible. And now, if you say others are trying to get to that place and our job at HealthEquity is to go beyond it.

And what I’ll say is and this sort of gets to your last question, scale is important to us and it’s important to us in terms of generating returns to our shareholders and generating value for our -- as Darcy talked about little bit, generating value to our network partners and the like. But scale is not important to me as a concern.

I don’t go to a company because they got scale, I go to a company because they [indiscernible]. And so, the answer is not only that it could be both but that it has to be both. And we cannot look at it; we do not look at it like oh, we have scale, so we don’t have to be the best. We have to be the best at what we do.

And in fact, up on the wall underneath the logo or actually part of logo, it says building health savings. And that’s a reminder to all of us and the team purple. And that’s reminder to us two things.

One that our mission here and what we think we can be the best in the world at, not saying we are but can be because we think we have a long way to go, is helping people wisely saving spend of dollars. And so that’s what that’s reminder of. And the purples are reminder of our commitment to deliver remarkable service to people.

And that’s what we try and do in improving the platform. So, I guess -- I mean, I am trying, I know I am sounding a little but that’s really our view of that is that if you start to get into scale versus product excellence straight off, which frankly many of our competitors do.

And we don’t have to be the best into this because it’s just part of investment platform and we have got a highly scaled investment platform or it’s -- we are -- you are pushing easy button with us. So, whatever it might be, that’s fine. But that’s not defining the market.

And what we are about is defining the market in terms of what consumers should expect from this product. And it looks you’re itching to say something..

Well, yes, I think that the fact that the early entrants into this space for the last 12 years, the fact that portals were lousy, sent to the growth of the market, to be honest with you. I mean a lot of our business early on was take away business.

So, I don’t know what the answer is part of your last question, which is will they catch up, but this is kind of the exactly why companies go public and the benefits of capital is you can continue to invest and try and be best. And we see it in every industry.

And we make a lot of investments to continue to do that; and try to stay humble because we know that there is always a competitor on the corner that wants to compete. But, I do believe that they’re getting better.

I think the ones that don’t want to make the investment to get better are exiting and I think that will continue and it’s that we need to hustle; we do it every day..

Yes, Pete. This is Darcy, I’m just going to add another nuance to that. And I think that the portal does help and there’s differentiation -- part of that differentiation is the network partners that content with that portal.

And those -- you just can’t go out and build that network overnight like you can enhance the portal or provide some more data to somebody. You have to have these relationships and partnerships, which we’ve been building for 10 plus years, particularly with our health plans and with our employers.

And so, it doesn’t -- the growth doesn’t just come because you have a better portal; it’s the broader what we would call the whole ecosystem related to that, the peak of that portal that’s been very really beneficial for us..

I think to that point, not meaning to pile on the -- we try not to do the circular answer thing, but I’m going to do it anyway.

It’s interesting what a consumer can see as value add is one piece of the puzzle, but we have to remember, we’re in unusual business where our network partners, the reason we call them network partners is because they are our partners in introducing us to consumers who ultimately have quite literally a trust relationship that’s employers and health plans.

We have to deliver value to them too. And that value comes -- a lot of it comes from that integration in that platform. And I’m kind of thinking about what was something I was working on earlier today was this is one of our health plan partners who is trying to win a significant piece of business.

It’s something they’ve been hammering and taken away from one of their competitors for probably 10 years. And I’m not saying they’re going to win it because of what we’re doing. What I am saying though is we are in the fight with them. And we have tools that they can use.

We’re bringing days to the table; we’re bringing functionality to the table; we’re creating ways in which the functionality they’re bringing to the table really shows well in areas that consumers are going to traffic, which obviously HAS is; by doing the other accounts, we’re simplifying the lives of this would be process, the RA and the like.

And we are -- it’s not just like software that we’re developing, they buy it and pay our fees fantastic. We are in there with them swinging as hard as you can. And so, that’s a piece of the value equation as well. And I don’t want to minimize the consumer piece, much they have. But as Steve said, that’s a big piece of the puzzle.

And I do think there are certain advantages of both scale and the platform ownership that you really can only get, if you’re in a leadership position that can help you really build and cement that sort of network what some might call, distribution partnership environment..

Thanks. That’s helpful. And then you had some good margin improvements this quarter and you’ve compiled it over the years here. But some of that comes from scalability; it came a little bit differently than I was expecting it to come. I know your service costs were a little bit lower than I thought; your G&A was a little bit higher than I thought.

Can you talk about what, if there is some variability in your G&A line relative to revenues or was it some one-time things that caused that to jump up as much as it did this quarter? And then can you maintain that scalability improvement on the service cost line?.

Yes, so two items. On service cost, we’ve looked at back this over time. And since we’ve been public, we’ve had improvements in our service cost line, efficiencies and scalability ranging from 3% to 10%.

What I’m saying that we aren’t guaranteeing whatever that would be, but we’re continually looking for opportunities to leverage our robust service offering. And there is some benefit that comes with our size and growth, the scalable. And so, we’ll continue to strive to do that at the margin level.

And the other thing at the margin level is as the revenue mix changes that margin changes as we’ve pointed out.

On the operating expense line, particularly in G&A, we went through a period as public company, and I think I said this before, people tell you the estimates of being a -- costs of being a public company are high; you always look at those and we’ll never spend that much money.

And we went through this process last year becoming SOX compliant that we had to do by January 31. And so we started to ramp up outside professional fees, internal resources et cetera, et cetera to do that. And we were successful at that. Now, we have those expenses that we’ve incurred in order to maintain and keep that and in the full quarter.

Over time, we certainly hope that there is some leverage in the operating expense lines that the investments that we’ve made to become compliant that they’ll become more routine and there will be in there. And we hope that they will continue to grow at the rates that they were growing before.

So, there is some scalability in there, but that, Pete, I would say, there wasn’t any one-time special thing; it was just a ramp up from compliance and regulatory standpoint..

Yes.

And I think, I suppose the high class problem but in one of the simple factors of putting up with these numbers is that it’s hard to justify not being very conservative, when it comes to being conservative being over spend in terms of some of these areas of G&A as you build up, whether it is our audit risk management function which as an distinct entity didn’t exist six month ago.

As a distinct organization unit reporting to CEO or whether it’s in information security or whether it’s in governance or whether it’s including board composition and having the best possible board members or whether it’s in preparing for the bumps that will happen, through things like making sure that you have as much training as many as much DR and alike the vast recovery as you can, it’s probably fair to say that if we didn’t have something to protect, we would probably be spending less on G&A line and but we do.

And we feel we’re something to protect for the very long-term, so it’s tough to argue that you shouldn’t be again as conservative which in this case really means over prepare, over invest, built out into little early may be than you would.

And then hopefully, I never like to be in the position of saying, trust me that will leave in itself out and appreciate Darcy medicines to do so.

So let’s not but certainly as our expectation is that we’re front loading some of these things and that that certainly will pay dividends to our shareholders so to speak in ways that they may never see and that the shoe that doesn’t drop or what have you as well as in ways that they will see..

And next up we have Steven Wardell with Leerink Partners..

So I think there is a concern in investors’ minds that there is some sort of growing competition in account fees, that there is growing competition is looking to pressure on account fees, just in the last three to six months, are you seeing that competitively are you seeing a recent increasing pressure, competitive pressure on account fees?.

Want to comment?.

Sure, I would say Steve that the only place where we actually really see that is in the large employer space where people are making decision to move into HSAs and so they are usually done in a -- they have a benefits consultant and they are probably in RFP and they are bringing a packaged deal to us and that’s where we will evaluate it on the complete fixture of the HSA, how much AUM do they have existing HSA, is there some, do they -- current load contributions and all of that and so in that regard there is a competition on that price and we fell like that we actually have a competitive advantage, because we do all our phases of the HSA, we do the servicing for the account fee but we also are the custodian and we also provide interchange services for them on their card platform.

The other, when you look at our and we try to highlight this and run away from it, part of our service fee decrease per custodial account for HSA has been building over a long period of time and is by design, that we have these lower fees when they get to a higher volumes of HSAs they bring to us and frankly our health plans are bringing us more HSAs.

And we’re getting further penetration with our employers and some of those employers are getting to a level where they are getting a lower fee. We’re absolutely happy with that because we know when they get to that point, where they are adding an HSA that that HSA will grow and will become more profitable overtime.

So yes there is some market competition and we see it in certain pockets and we will be very responsive to that, but that has actually been part of our whole business strategy all along and that’s how we intend to complete and we think we will do it aggressively..

And in addition, I think there was some concern around the December timeframe that the Cadillac tax had been postponed and that this represented kind of the removal of a positive catalyst for HSAs in general and that, if by clients and employers might just be a little less eager to get HSAs that they had been in the past.

Have you noticed any and now of course it’s going to June, have you noticed any effect any slowing down of interest effect in this postponement of the Cadillac tax or do you think that recent results show that there hasn’t been a slowing down in interest?.

Yes in short no, that is to say, we have not seen any kind of slowing down along those lines and I think perhaps the best evidence of that’s, that you can verify is really if you look at the sort of new account sales in the quarter and compare it to the same period last year or the same period a year before or the same period a year before that.

And what you see is that to add 80,000 accounts give or take the sell not add sell 80,000 new accounts in Q1, which is not exactly the heaviest quarter to grow that second derivative for a lack of a better term by 35%, that speaks to sales effectiveness. And I mean our team is good but they are not that good the demand is there.

So I guess the short answer is at least in our view, is as we said previously that is that the demand for HSA is ultimately a function of the fact that they are a reunion the economics makes sense and so that’s really what’s driving things and look again as we said before that the Cadillac tax has the effect of pushing forward demand that would ultimately be there during its period of implementation, we still believe that, so if the thing is implemented in 2020 that will be good for us in 2020.

But we don’t turn on that sort of thing and our -- either our short not long-term expectation in the business are built on it, it’s additive to the growth that we’re seeing..

Steve just to clarify he meant to say 72,000 accounts in the quarter..

I’m sorry my mistake 72,000. Thanks..

All right, next from Avondale Partners we have Randy Reece..

Okay. First of all the interchange fee I’d like to say unit fee per member was quite a bit higher in this quarter than I would have anticipated.

I’m wondering if any change in the account composition might have driven that and whether we should be conservative and expect that to tail up quite a bit as the rest of the year goes on?.

So if you look at the overall interchange revenue year-over-year quarter-to-quarter comparison it was up 64%. 52% of that is attributable to just to higher average HSAs right. And then the delta between that is attributable to a little bit better rate that we got.

We are getting a bigger share I guess is the best way for us to say it of the dollars that are available from interchange because of our volume.

And as we’ve grown the sources of that revenue has provided to us a little bit better pricing on that interchange pie, and so it’s very incremental, I think it had a it was probably one fifth of the increase that we 20% versus the 80% coming from volume.

The other thing that we, as you pointed out and I would caution everybody, our first quarter is our highest spend quarter.

Typically just to ensure dollar volume spend decreases a little bit in Q2 and as you will recall, we had a lower Q3 spend last year but overall on the rate it wasn’t dramatic we kind of gauge it up like Q3 our Q1 spend levels are and so there will be some probably decrease a little bit in Q2 and Q3 but it’s seasonal and it’s really kind of hard to predict.

Usually our Q4 levels come back up because we had so many more accounts in January and so if you look at our interchange kind of revenue in the cycle that we have had in our quarterly basis in the past years, we would expect it would be somewhat consistent with that but there is some seasonality that is hard to predict in that regard..

For those for whom it might not be apparent I’m sure it is to you Andy. The source of that seasonality really blows down to the timing of when deductibles reset.

So for most people their deductible resets in January, and so that’s why you get a lot of first quarter spend and also why in the fourth quarter, which of course includes January tends to in our case tends to come up so -- plus the additional accounts for us.

Just to point that out that that’s really the source of the seasonality, where by the time you get to the sort of the end of the year there, the end of the calendar year and particularly a Q3 you are kind of straight to bottom in that regard..

And you have heard plenty of talk about companies attempting to compete more aggressively in this business.

And are there areas to invest, where you can push either competitive advantage or sales success? Any harder than you are because you just have an incredible 40% EBITDA margin quarter?.

Well interesting we have this discussion, when you sue as a private company have this discussion I would say we could allocate about a third of each four of these through it and that’s how we are going to benefit and we still have it internally obviously, so that is to say, we want to grow and so where we want the investor to grow, but so I guess in short our answer is to the extent that that investments are within our core competency and meet our investment criteria when we do them and we do them.

From our earlier comments, I will say we guard our core competency somewhat jealously, we’re cognizant of the competitive points that others have made and so we are always biased towards spending to improve our competitive advantages whether that’s functionally or by better understanding what our customers want delivering it or by trying new things what have you.

And so we’re -- it’s probably fair say that in that regard, we’re cautious people.

But I think what you should think about and then certainly what we think about is, we obviously believe that the balance sheet capacity that exists in the Company and the profits that the Company is generating in terms of either account profits or free cash flow are worth more than the cash sitting there that is to say, if we didn’t think that and we were going to have on an ongoing basis significant opportunities to deploy that capital in ways that produce material returns to the shareholder well in excess of kind of what it is producing is just sitting there.

Being conservative people, we wouldn’t be hold on to so that is something we think about too. We’re not -- we may be a growth company but we absolutely understand our obligation shareholder in that regard.

So I guess, Randy, what I’d say is that, you should -- the fact that we continue to build up that store and the fact that we’re conservative about it, should -- the conclusion of that you should come to is we have a strong self base whether it turns out to be justified or not we will see but we have a self base that the kinds of things we’re looking at today and we will look at in the future will be very good uses of that capital..

Jon just one comment, Darcy mentioned earlier when we think about our competitive advantage, our number of network partners and so we’re investing everyday in supporting them.

And so that is kind of starting with beachhead that we have that we want to maintain and expand on, and so whether it’s building technology links with them or putting more support in market to support them and so that’s I think to your point, we want to make investments that we feel like are the closest to actually driving more value and more business and so that is certainly something we do in every quarter we add investments to our....

Yes and it’s funny, I mean to Steve’s point as you can obviously tell what we’re -- we maybe a movie shop company, but it’s only one. We’re not going to make five.

And so there is no alphabet equivalent of HealthEquity here, and so I am not sure what that would be, but in any event and so it’s about supporting the one movie shop we have here which is our view is that overtime most everyone is in our house in HSA and they’re going to be supported by tools that help people spend and take wisely and the result is we’re all going to have better healthcare system that’s more responsive to consumers.

And that’s our vision, that’s what we see out there in the future and darn it we’re not going to try and make the investments that have us leaving that and that’s what we’re going to do. We’re not going to do -- I mean I don’t say we won’t do the other things because we do, but we’re going to do them in support of that picture..

All right and next we will take Mark Marcon with Robert W. Baird..

I was wondering a lot of questions have been asked, the incremental questions that I have, on the R&D spend I wonder what sort of pace should we look at in terms of technology development?.

Yes the thing that that affects the R&D spend is somewhat more than in other areas is that when we do internal development on our platform to the extent that it’s enhancing the platform, we capitalize it and then we amortize generally those expenses once they have been capitalized over three years.

And so not only do we have the pace of just growth in OpEx that’s coming in to our technology and development, but we’re also adding that incremental CapEx that was added in the prior year of our CapEx in any given year probably about 50% of it is probably capitalized development.

And so what that has the tendency to do Mark is to increase the component of expense that is sitting there in technology development, but it is characterized as amortization so that’s why you’ll see variance between net income per se and adjusted EBITDA which backed up that amortization, so the pace of that it has been pretty consistent relative to the size and when we look at our CapEx dollars, we’ve been in this high single-digits, low double-digits percentage of revenue and we think that we will probably continue in that realm, going forward it might trickle down a little bit.

But every year we go through and say what thinking of -- speaking about the platform enhancements there seems to be more requests than what we have the wherewithal to spend and so we do a prioritization and we reinvest in the things that we think are most valuable to our partners and to our customers and so we think that will continue similar to the patterns that we have been having..

And then I fully appreciate the -- all the enhancements that you have made over the years, I am just wondering if there is anything specific to the rollovers that you ended up experiencing, that weren’t related to the M&T, I mean that was a really impressive number, I was wondering, was there anything different in the approach in terms of getting those fall overs to come through or is it just continued execution?.

This is Steve, Mark. Look, generally it’s just -- I think getting better at kind of focused on the details on execution, clearly when we start to see larger employer cases for example, that we are bringing with them the balance, let’s say they have 10% or 15% adoption.

And let’s say it’s a large employer and you can imagine that those dollars add up pretty quickly on the potential transferring.

So that will affect our aggressiveness on pricing and everything else and so as we go into those opportunities what we try and explain to the employer is that -- and there is some required blackout periods and things like that as you might have guessed anything you transfer an account, they were transferred in IRA to another custodian arithmetic that you have a blackout period, and so we try and get really into the details from an implementation about explaining the particulars.

And saying let’s make this a smooth process because even though there is some required windows where they can’t use the one account and tell they will use the second account.

We think we are just getting better at it, and plus we have a lot more opportunities because there are cases out there that are coming over that have already started in the industry and we think this will continue.

So there are some processed that we would consider beyond proprietary in the way that we communicate with members and say to avoid having to spend down your other account, or having to take a withdrawal and then send it to us which is technically in IRSC called a rollover versus a custodian transfer.

We think that we can remove all the friction, and just make it a custodian and custodian transfer, and make it easy for the members. And ultimately obviously we are going to benefit, and we are going to see a lot more deposits.

But the sweet thing is again and getting back to my comments on this new virtual cycle, the members love it, he was like yes it was a little bit hassle but HealthEquity made this happen and we worked with other custodian to bring the money over.

And I think as most importantly best for the member which is what we always going to stand around and it also makes it easier for the employer as well. So look other than maybe just trying to enhance that process was in technology investments and things like that, I think it really is execution.

Jon, do you agree?.

Yes, I mean just to add a three points. First is as we said in our comments after the fourth quarter part of what drove this number is -- I mean and this sort of does speak to I guess it was Steve’s question about outsized market growth. This was the first year where we more of our new wins were takeaways than not.

And so of course the more takeaways you have by definition, there are more accounts to rollover. The problem is that for most people they think about this like it’s a real hassle it does have enough running stance to it.

And just let them spend the money down, what is a big deal it is $1,000, they will spend it down and they will have a new account it will be fine. Well that’s a $1,000 of hard earned savings. To the question that, I think Randy asked about how the people spend, it’s hard to spend less.

So that’s $1,000 of hard earned savings, that you rather have people keep than somehow like you spend it down and now that was just from that aspect. So I guess point one is really this is impart a function of us being successful at being a competition.

Second point is I think more directly to your question about kind of functionality is -- and Steve’s cut on this is -- a lot of this is resourcing the function and having the scale to resource the function and understand the difference between maybe we don’t understand all 2,200 odd competitors out there, but we should we understand the larger ones and we understand what bumps are going to be there, and what we need to do and make this an easy process and some of that does come with scale and that is proprietary knowledge.

And it helps us be successful and these maybe more so than otherwise would that we can go fairly far down the list and say yes, we have done a transfer with them and we know what that’s going to look like and we know what kind of file format they will going to need in order to except our bulk transfer as oppose to request, as oppose to 500 individual pieces of paper and all that.

So that’s a piece of it. And the last point I want to make about this is about data. And this does go a little bit to the question about where do you invest, do you invest in the core. One of the areas that we are investing in the core is in the use of data to help us do better for our members and partners and then to do better for our shareholders.

And this is a great example of the opportunity there. So what’s interesting is, is peoples’ HSA balances are not a matter of public record, I don’t know coming in what a particular new member’s balance was at a prior custodian. If there’s no file that is provided to us that’s their information, their personal private info and I don’t know it.

So we have to get good at figuring out to some extent where we can put effort and that’s a matter of using data on the rollovers and transfers that we’ve done to try and predict who is going to be in an effective candidate not just at the end -- beginning of the year in this example but as new people join firms over the course of the year.

So, there’s and this same point could we made and I think we will talk a little bit about this at the, not to tease it but a little bit about this at the Investor Day is the same point can be made about how you help people grow their balances.

I mean I don’t pretend that we’re going to invent money for people but for people that given the knowledge will do it, the issue is how do we identify those people using data and then provide messaging that helps them do it sooner than they otherwise would.

And so, the last point I guess I made there is, is that I think there are both some of what we’re doing today and we can do more scale-ably as we continue to invest in the platform is using the data that we have about our customers which is part of scale because we’ve more of it and more customers to serve those new customers better.

So, maybe went along a bit but those are factors that I think are relevant as you look at the rollover story..

And then something that you said was really interesting was that this year you had more competitive takeaways, can, is that on purpose or it just happened to fall that way?.

I think that what it reflects really is just the fact that there is -- it is usually people talk about well there’s Greenfield and that’s easier and then there’s brownfield and that’s harder.

That’s not our experience and it’s not -- quite the opposite in fact, I think about to customers that have been almost kind of partners, they’ve been our longest standing partners that we used as examples during the IPO. The American Expresses of the world we were not their first HSA partner.

But still it was the case for many years that most of our new network partners new employers differ were new to the HSA.

I mean that’s not true today, particularly in the large fruit market, it’s what they’re trying to do that is in it, meaning they had a generic experience, they’re looking to grow this piece of -- they’re looking to bring more members into the HSA, they see the opportunity and they’re looking to partner with someone who can help get them there.

And that’s really I think where we’ve seen that, it certainly wasn’t a function of targeting or what have you it’s a function of what is available and whether other parties are delivering what the market really needs or whether we are..

All right, at this time we have no further questions. I’ll turn things back to management for any additional or closing remarks..

So, if it wasn’t obvious all ready, June 21st 8:30 AM.

8:30..

8:30?.

8 O’clock?.

8 O’clock. 8 AM till 12.30. Great show on 3rd well probably not. But probably there will be no cheers, but we worked your time but we in all seriousness, we’re putting effort into this. I don’t want to build it up too much, it is an Investor Day. But we are putting effort into this. We know it’s the first time we’ve done it.

In particular I want to say that one thing that is really nice about this is that Steve, Darcy and I will not be doing much of any talking now that then perhaps in the wrap up and in the introductions.

And you will hear mostly from and have opportunities to engage with other members of our management team, some of whom you’ve heard on these calls and elsewhere and some of whom you haven’t as well as members of our network partner base and of course [indiscernible] who I will say has -- she has an incredible track record on this HSA stuff, she’s on it and has worked with a number of employers including a number of our clients to really try and think through how this stuff works for a consumer and is really impressive on the topic when she gets going.

So, I’d encourage you to come, I’m sure that it will be as Steve said work to be done. And with that thanks everyone and we’ll see you in a couple of weeks..

Once again ladies and gentlemen, that does conclude today’s conference. Thank you for your participation..