HEALTHEQUITY INC

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. The following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Statements that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would” and similar expressions or variations intended to identify forward-looking statements. Such statements include, but are not limited to, statements concerning our ability to integrate acquired businesses, the anticipated synergies and other benefits of acquired businesses and any future acquisitions, health savings accounts and other tax-advantaged consumer-directed benefits, tax and other regulatory changes, market opportunity, our future financial and operating results, our investment and acquisition strategy, our sales and marketing strategy, management’s plans, beliefs and objectives for future operations, technology and development, economic and industry trends or trend analysis, expectations about seasonality, opportunity for portfolio purchases and other acquisitions, operating expenses, anticipated income tax rates, capital expenditures, cash flows and liquidity. These statements are based on the beliefs and assumptions of our management based on information currently available to us. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk factors” included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024, this Quarterly Report on Form 10-Q and our other reports filed with the SEC. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such events.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. The following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Statements that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements are often identified by the use of words such as, but not limited to, “anticipate,” “believe,” “can,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “seek,” “should,” “target,” “will,” “would” and similar expressions or variations intended to identify forward-looking statements. Such statements include, but are not limited to, statements concerning our ability to integrate acquired businesses, the anticipated synergies and other benefits of acquired businesses and any future acquisitions, health savings accounts and other tax-advantaged consumer-directed benefits, tax and other regulatory changes, market opportunity, our future financial and operating results, our investment and acquisition strategy, our sales and marketing strategy, management’s plans, beliefs and objectives for future operations, technology and development, economic and industry trends or trend analysis, expectations about seasonality, opportunity for portfolio purchases and other acquisitions, operating expenses, anticipated income tax rates, capital expenditures, cash flows and liquidity. These statements are based on the beliefs and assumptions of our management based on information currently available to us. Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled “Risk factors” included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024, our Quarterly Report on Form 10-Q for the period ended July 31, 2024, this Quarterly Report on Form 10-Q and our other reports filed with the SEC. Furthermore, such forward-looking statements speak only as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such events.

Previous wording

The core of our offerings is the HSA, a financial account through which consumers spend and save long-term for healthcare expenses on a tax-advantaged basis. As of July 31, 2024, we administered 9.4 million HSAs, with balances totaling $29.5 billion, which we call HSA Assets, as well as 6.9 million complementary CDBs. We refer to the aggregate number of HSAs and other CDBs that we administer as Total Accounts, of which we had 16.3 million as of July 31, 2024.

Current wording

The core of our offerings is the HSA, a financial account through which consumers spend and save long-term for healthcare expenses on a tax-advantaged basis. As of October 31, 2024, we administered 9.5 million HSAs, with balances totaling $30.0 billion, which we call HSA Assets, as well as 7.0 million complementary CDBs. We refer to the aggregate number of HSAs and other CDBs that we administer as Total Accounts, of which we had 16.5 million as of October 31, 2024.

Previous wording

We have increased our share of the growing HSA market from 4% in December 2010 to 20% as of December 2023, measured by HSA Assets. According to Devenir, as of December 2023, we were the largest HSA provider by both accounts and HSA Assets. In addition, we believe we are the largest provider of other CDBs. We seek to differentiate ourselves through our service-driven culture, product breadth, ecosystem connectivity, and proprietary technology. Our proprietary technology allows us to help consumers optimize the value of their HSAs and other CDBs and gain confidence and skills in managing their healthcare costs as part of their financial security.

Current wording

We have increased our share of the growing HSA market from 4% in December 2010 to 21% as of June 2024, measured by HSA Assets. According to Devenir, as of June 2024, we were the largest HSA provider by both accounts and HSA Assets. In addition, we believe we are the largest provider of other CDBs. We seek to differentiate ourselves through our service-driven culture, product breadth, ecosystem connectivity, and proprietary technology. Our proprietary technology allows us to help consumers optimize the value of their HSAs and other CDBs and gain confidence and skills in managing their healthcare costs as part of their financial security.

Previous wording

The BenefitWallet HSA portfolio acquisition was accounted for as an asset acquisition, and related acquisition costs were capitalized as part of the cost of the asset, which is included within intangible assets, net, on our condensed consolidated balance sheet. We capitalized $27.2 million of transaction costs associated with the acquisition during the six months ended July 31, 2024, which includes the reimbursement of $20.0 million of Conduent's transfer-related expenses. In addition, in May 2024, we assumed a contract with a Depository Partner representing approximately 7% of the total HSA Assets added through the acquisition, which provides a custodial yield that is below current market rates and expires in June 2026. We recorded deferred revenue of $20.3 million in May 2024 as a result of the assumed contract, which will be recorded as an increase to custodial revenue over the life of the assumed contract.

Current wording

The BenefitWallet HSA portfolio acquisition was accounted for as an asset acquisition, and related acquisition costs were capitalized as part of the cost of the asset, which is included within intangible assets, net, on our condensed consolidated balance sheet. We capitalized $27.2 million of transaction costs associated with the acquisition during the nine months ended October 31, 2024, which includes the reimbursement of $20.0 million of Conduent's transfer-related expenses. In addition, in May 2024, we assumed a contract with a Depository Partner representing approximately 7% of the total HSA Assets added through the acquisition, which provides a custodial yield that is below current market rates and expires in June 2026. We recorded deferred revenue of $20.3 million in May 2024 as a result of the assumed contract, which will be recorded as an increase to custodial revenue over the life of the assumed contract.

Previous wording

The number of our HSAs and CDBs are key metrics because our revenue is driven by the amount we earn from them. The number of our HSAs increased by 1.2 million, or 15%, from July 31, 2023 to July 31, 2024, driven by new HSAs added through the BenefitWallet HSA portfolio acquisition and new HSAs from sales. The number of our CDBs increased by 67 thousand, or 1%, from July 31, 2023 to July 31, 2024, primarily driven by an increase in HRA accounts, largely offset by a decrease in FSA and COBRA accounts.

Current wording

The number of our HSAs and CDBs are key metrics because our revenue is driven by the amount we earn from them. The number of our HSAs increased by 1.2 million, or 15%, from October 31, 2023 to October 31, 2024, driven by new HSAs added through the BenefitWallet HSA portfolio acquisition and new HSAs from sales. The number of our CDBs decreased by 29 thousand, or less than 1%, from October 31, 2023 to October 31, 2024, primarily driven by a decrease in FSA accounts, largely offset by an increase in HRA accounts.

Previous wording

HSA cash increased by $2.3 billion, or 17%, from July 31, 2023 to July 31, 2024, due to HSA cash added through the BenefitWallet HSA portfolio acquisition and net HSA contributions from new and existing HSA members, partially offset by transfers to HSA investments.

Current wording

HSA cash increased by $2.4 billion, or 17%, from October 31, 2023 to October 31, 2024, due to net HSA contributions from new and existing HSA members and HSA cash added through the BenefitWallet HSA portfolio acquisition, partially offset by transfers to HSA investments.

Previous wording

HSA investments increased by $3.9 billion, or 43%, from July 31, 2023 to July 31, 2024, due to the increased market value of invested balances, transfers from HSA cash, and HSA investments added through the BenefitWallet HSA portfolio acquisition.

Current wording

HSA investments increased by $5.0 billion, or 58%, from October 31, 2023 to October 31, 2024, due to the increased market value of invested balances, transfers from HSA cash, and HSA investments added through the BenefitWallet HSA portfolio acquisition.

Previous wording

Total HSA Assets increased by $6.3 billion, or 27%, from July 31, 2023 to July 31, 2024, primarily due to HSA Assets added through the BenefitWallet HSA portfolio acquisition, the increased market value of invested balances, and net HSA contributions from new and existing HSA members.

Current wording

Total HSA Assets increased by $7.4 billion, or 33%, from October 31, 2023 to October 31, 2024, primarily due to the increased market value of invested balances, HSA Assets added through the BenefitWallet HSA portfolio acquisition, and net HSA contributions from new and existing HSA members.

Previous wording

Our net income increased by $25.2 million, or 239%, from the three months ended July 31, 2023 to the three months ended July 31, 2024, due to an increase in gross profit, partially offset by increases in operating expenses, income tax provision, and other expense, as described more fully in the section entitled "Comparison of the three and six months ended July 31, 2024 and 2023."

Current wording

Our net income decreased by $9.0 million, or 61%, from the three months ended October 31, 2023 to the three months ended October 31, 2024, due to $30.0 million of expense during the three months ended October 31, 2024 to settle a lawsuit related to a lease termination (the "Lease Settlement"), as described in Note 5—Commitments and contingencies, and increases in other operating expenses and other expense, partially offset by an increase in gross profit and a decrease in income tax provision, as described more fully in the section entitled "Comparison of the three and nine months ended October 31, 2024 and 2023."

Previous wording

Our net income increased by $50.0 million, or 340%, from the six months ended July 31, 2023 to the six months ended July 31, 2024, due to an increase in gross profit and a decrease in other expense, partially offset by increases in operating expenses and income tax provision, as described more fully in the section entitled "Comparison of the three and six months ended July 31, 2024 and 2023."

Current wording

Our net income increased by $41.0 million, or 140%, from the nine months ended October 31, 2023 to the nine months ended October 31, 2024, due to an increase in gross profit and a decrease in income tax provision, partially offset by an increase in operating expenses, including the Lease Settlement, and other expense, as described more fully in the section entitled "Comparison of the three and nine months ended October 31, 2024 and 2023."

Previous wording

Our Adjusted EBITDA increased by $40.2 million, or 46%, from the three months ended July 31, 2023 to the three months ended July 31, 2024, primarily due to an increase in total revenue, partially offset by increases in professional fees and personnel-related costs.

Current wording

Our Adjusted EBITDA increased by $22.6 million, or 24%, from the three months ended October 31, 2023 to the three months ended October 31, 2024, primarily due to an increase in total revenue, partially offset by increases in professional fees and personnel-related costs.

Previous wording

Our Adjusted EBITDA increased by $71.0 million, or 41%, from the six months ended July 31, 2023 to the six months ended July 31, 2024, primarily due to an increase in total revenue, partially offset by increases in professional fees and personnel-related costs.

Current wording

Our Adjusted EBITDA increased by $93.6 million, or 35%, from the nine months ended October 31, 2023 to the nine months ended October 31, 2024, primarily due to an increase in total revenue, partially offset by increases in personnel-related costs and professional fees.

Previous wording

Our non-GAAP net income increased by $30.7 million, or 67%, from the three months ended July 31, 2023 to the three months ended July 31, 2024, primarily due to an increase in total revenue, partially offset by increases in personnel-related costs and interest expense.

Current wording

Our non-GAAP net income increased by $75.5 million, or 54%, from the nine months ended October 31, 2023 to the nine months ended October 31, 2024, primarily due to an increase in total revenue, partially offset by increases in personnel-related costs and professional fees.

Previous wording

Merger integration. Merger integration expenses include personnel and related expenses, including severance, professional fees, legal expenses, and facilities and technology expenses directly related to integration activities to merge operations as a result of acquisitions.

Current wording

Merger integration. Merger integration expenses include personnel and related expenses, including severance, professional fees, legal expenses and settlements, and facilities and technology expenses directly related to integration activities to merge operations as a result of acquisitions.

Previous wording

Service revenue. The $4.8 million, or 4%, increase in service revenue from the three months ended July 31, 2023 to the three months ended July 31, 2024 was primarily due to the increases in the number of HSAs and the amount of HSA investments, partially offset by lower average service fees per account.

Current wording

Service revenue. The $5.1 million, or 4%, increase in service revenue from the three months ended October 31, 2023 to the three months ended October 31, 2024 was primarily due to the increases in the number of HSAs and the amount of HSA investments, partially offset by lower average service fees per account.

Previous wording

The $11.9 million, or 5%, increase in service revenue from the six months ended July 31, 2023 to the six months ended July 31, 2024 was primarily due to the increases in the number of HSAs and the amount of HSA investments, partially offset by lower average service fees per account.

Current wording

The $17.0 million, or 5%, increase in service revenue from the nine months ended October 31, 2023 to the nine months ended October 31, 2024 was primarily due to the increases in the number of HSAs and the amount of HSA investments, partially offset by lower average service fees per account.

Previous wording

Custodial revenue. The $46.0 million, or 50%, increase in custodial revenue from the three months ended July 31, 2023 to the three months ended July 31, 2024 was primarily due to an increase in average annualized yield on HSA cash from 2.37% for the three months ended July 31, 2023 to 3.10% for the three months ended July 31, 2024 (due to both higher market interest rates and increased participation in our Enhanced Rates offering), the $2.4 billion, or 17%, increase in the average daily balance of HSA cash, as described above, and an increase in interest rates on the portion of our Client-held funds held by our Depository Partners in interest-bearing, demand deposit accounts that have a floating interest rate.

Current wording

Custodial revenue. The $40.9 million, or 41%, increase in custodial revenue from the three months ended October 31, 2023 to the three months ended October 31, 2024 was primarily due to an increase in average annualized yield on HSA cash from 2.58% for the three months ended October 31, 2023 to 3.17% for the three months ended October 31, 2024 (due to both higher market interest rates and increased participation in our Enhanced Rates offering), the $2.5 billion, or 18%, increase in the average daily balance of HSA cash, as described above, and an increase in interest rates on the portion of our Client-held funds held by our Depository Partners in interest-bearing, demand deposit accounts that have a floating interest rate.

Previous wording

The $79.2 million, or 44%, increase in custodial revenue from the six months ended July 31, 2023 to the six months ended July 31, 2024 was primarily due to an increase in average annualized yield on HSA cash from 2.34% for the six months ended July 31, 2023 to 3.02% for the six months ended July 31, 2024 (due to both higher market interest rates and increased participation in our Enhanced Rates offering), the $1.8 billion, or 13%, increase in the average

Current wording

The $120.1 million, or 43%, increase in custodial revenue from the nine months ended October 31, 2023 to the nine months ended October 31, 2024 was primarily due to an increase in average annualized yield on HSA cash from 2.42% for the nine months ended October 31, 2023 to 3.07% for the nine months ended October 31, 2024 (due to

Previous wording

-29- daily balance of HSA cash, as described above, and an increase in interest rates on the portion of our Client-held funds held by our Depository Partners in interest-bearing, demand deposit accounts that have a floating interest rate.

Current wording

-29- both higher market interest rates and increased participation in our Enhanced Rates offering), the $2.0 billion, or 15%, increase in the average daily balance of HSA cash, as described above, and an increase in interest rates on the portion of our Client-held funds held by our Depository Partners in interest-bearing, demand deposit accounts that have a floating interest rate.

Previous wording

Interchange revenue. The $5.6 million, or 14%, increase in interchange revenue from the three months ended July 31, 2023 to the three months ended July 31, 2024 was primarily due to an increase in Total Accounts and an increase in spend per account.

Current wording

Interchange revenue. The $5.2 million, or 15%, increase in interchange revenue from the three months ended October 31, 2023 to the three months ended October 31, 2024 was primarily due to an increase in Total Accounts and an increase in spend per account using our payment cards.

Previous wording

The $8.5 million, or 10%, increase in interchange revenue from the six months ended July 31, 2023 to the six months ended July 31, 2024 was primarily due to an increase in Total Accounts and an increase in spend per account.

Current wording

The $13.6 million, or 11%, increase in interchange revenue from the nine months ended October 31, 2023 to the nine months ended October 31, 2024 was primarily due to an increase in Total Accounts and an increase in spend per account using our payment cards.

Previous wording

Total revenue. Total revenue increased $56.4 million, or 23%, from the three months ended July 31, 2023 to the three months ended July 31, 2024 due to the increases in custodial, interchange, and service revenues, described above.

Current wording

Total revenue. Total revenue increased $51.2 million, or 21%, from the three months ended October 31, 2023 to the three months ended October 31, 2024 due to the increases in custodial, interchange, and service revenues, described above.

Previous wording

Total revenue increased $99.5 million, or 20%, from the six months ended July 31, 2023 to the six months ended July 31, 2024 due to the increases in custodial, service, and interchange revenues, described above.

Current wording

Total revenue increased $150.8 million, or 20%, from the nine months ended October 31, 2023 to the nine months ended October 31, 2024 due to the increases in custodial, service, and interchange revenues, described above.

Previous wording

Service costs. The $11 thousand, or less than one percent, increase in service costs from the three months ended July 31, 2023 to the three months ended July 31, 2024 was primarily due to increases in personnel-related costs to support the increase in Total Accounts, offset by efficiencies resulting from our technology investments and lower amortization expense.

Current wording

Service costs. The $11.1 million, or 15%, increase in service costs from the three months ended October 31, 2023 to the three months ended October 31, 2024 was primarily due to costs incurred to reimburse and protect members from outside fraud activity, as well as increases in costs to support the increase in Total Accounts and member interactions, partially offset by efficiencies resulting from our technology investments.

Previous wording

The $1.5 million, or 1%, increase in service costs from the six months ended July 31, 2023 to the six months ended July 31, 2024 was primarily due to increases in personnel-related costs to support the increase in Total Accounts, largely offset by efficiencies resulting from our technology investments and lower amortization expense.

Current wording

The $12.6 million, or 5%, increase in service costs from the nine months ended October 31, 2023 to the nine months ended October 31, 2024 was primarily due to costs incurred to reimburse and protect members from outside fraud activity, as well as increases in costs to support the increase in Total Accounts and member interactions, partially offset by efficiencies resulting from our technology investments.

Previous wording

Custodial costs. The $2.1 million, or 26%, increase in custodial costs from the three months ended July 31, 2023 to the three months ended July 31, 2024 was primarily due to the $1.8 billion, or 13%, increase in the year-over-year average daily balance of HSA cash, as described above, an increase in fees charged by our Depository Partners, and an increase in the average annualized rate of interest retained by HSA members on HSA cash from 0.22% during the three months ended July 31, 2023 to 0.23% during the three months ended July 31, 2024.

Current wording

Custodial costs. The $2.2 million, or 28%, increase in custodial costs from the three months ended October 31, 2023 to the three months ended October 31, 2024 was primarily due to the $2.5 billion, or 18%, increase in the year-over-year average daily balance of HSA cash, as described above, an increase in fees charged by our Depository Partners, and an increase in the average annualized rate of interest retained by HSA members on HSA cash from 0.22% during the three months ended October 31, 2023 to 0.23% during the three months ended October 31, 2024.

Previous wording

The $3.1 million, or 19%, increase in custodial costs from the six months ended July 31, 2023 to the six months ended July 31, 2024 was primarily due to the $1.8 billion, or 13%, increase in the year-over-year average daily balance of HSA cash, as described above, an increase in fees charged by our Depository Partners, and an increase in the average annualized rate of interest retained by HSA members on HSA cash from 0.22% during the six months ended July 31, 2023 to 0.23% during the six months ended July 31, 2024.

Current wording

The $5.3 million, or 22%, increase in custodial costs from the nine months ended October 31, 2023 to the nine months ended October 31, 2024 was primarily due to the $2.0 billion, or 15%, increase in the year-over-year average daily balance of HSA cash, as described above, an increase in fees charged by our Depository Partners, and an increase in the average annualized rate of interest retained by HSA members on HSA cash from 0.22% during the nine months ended October 31, 2023 to 0.23% during the nine months ended October 31, 2024.

Previous wording

On an annual basis, relative to the fiscal year ended January 31, 2024, we expect custodial costs to increase due to an increase in the year-over-year average daily balance of HSA cash and an increase in the average annualized rate of interest retained by HSA members on HSA cash.

Current wording

On an annual basis, relative to the fiscal year ended January 31, 2024, we expect custodial costs to increase due to an increase in the year-over-year average daily balance of HSA cash, an increase in fees charged by our Depository Partners, and an increase in the average annualized rate of interest retained by HSA members on HSA cash.

Previous wording

Interchange costs. The $1.9 million, or 28%, increase in interchange costs from the three months ended July 31, 2023 to the three months ended July 31, 2024 was primarily due to an increase in Total Accounts and certain costs associated with our transition to a single card processor, which transition was completed in August 2024.

Current wording

Interchange costs. The $18 thousand, or less than 1%, increase in interchange costs from the three months ended October 31, 2023 to the three months ended October 31, 2024 was primarily due to an increase in Total Accounts and certain costs associated with our transition to a single card processor, which transition was completed in August 2024, largely offset by efficiencies resulting from the transition to a single card processor.

Previous wording

The $3.9 million, or 28%, increase in interchange costs from the six months ended July 31, 2023 to the six months ended July 31, 2024 was primarily due to an increase in Total Accounts and certain costs associated with our transition to a single card processor, which transition was completed in August 2024.

Current wording

The $3.9 million, or 19%, increase in interchange costs from the nine months ended October 31, 2023 to the nine months ended October 31, 2024 was primarily due to an increase in Total Accounts and certain costs associated with our transition to a single card processor, which transition was completed in August 2024, partially offset by efficiencies resulting from the transition to a single card processor.

Previous wording

Total cost of revenue. As we continue to add Total Accounts, we expect that our cost of revenue will increase in dollar amount to support our Network Partners, Clients, and members. However, on an annual basis, relative to the fiscal year ended January 31, 2024, we expect our cost of revenue to decrease as a percentage of our total revenue, primarily due to an increase in custodial revenue, partially offset by increases in personnel costs. For the six months ended July 31, 2024, cost of revenue as a percentage of total revenue decreased to 33.4% from 38.5% for the six months ended July 31, 2023, due to total revenue increasing at a significantly higher rate (20%) than total cost of revenue (5%). Cost of revenue will continue to be affected by a number of different factors, including our ability to scale our service delivery, Network Partner implementation, and account management functions.

Current wording

Total cost of revenue. As we continue to add Total Accounts, we expect that our cost of revenue will increase in dollar amount to support our Network Partners, Clients, and members. However, on an annual basis, relative to the fiscal year ended January 31, 2024, we expect our cost of revenue to decrease as a percentage of our total revenue, primarily due to an increase in custodial revenue, partially offset by increases in personnel costs. For the nine months ended October 31, 2024, cost of revenue as a percentage of total revenue decreased to 33.8% from 37.7% for the nine months ended October 31, 2023, due to total revenue increasing at a significantly higher rate (20%) than total cost of revenue (8%). Cost of revenue will continue to be affected by a number of different factors, including our ability to scale our service delivery, Network Partner implementation, and account management functions.

Previous wording

Sales and marketing. The $2.4 million, or 13%, increase in sales and marketing expenses from the three months ended July 31, 2023 to the three months ended July 31, 2024 was primarily due to an increase in personnel-related expenses.

Current wording

Sales and marketing. The $3.0 million, or 15%, increase in sales and marketing expenses from the three months ended October 31, 2023 to the three months ended October 31, 2024 was primarily due to an increase in personnel-related expenses.

Previous wording

The $6.0 million, or 15%, increase in sales and marketing expenses from the six months ended July 31, 2023 to the six months ended July 31, 2024 was primarily due to an increase in personnel-related expenses.

Current wording

The $8.9 million, or 15%, increase in sales and marketing expenses from the nine months ended October 31, 2023 to the nine months ended October 31, 2024 was primarily due to an increase in personnel-related expenses.

Previous wording

Technology and development. The $3.8 million, or 7%, increase in technology and development expenses from the three months ended July 31, 2023 to the three months ended July 31, 2024 was primarily due to increases in personnel-related expenses and software costs.

Current wording

Technology and development. The $4.6 million, or 8%, increase in technology and development expenses from the three months ended October 31, 2023 to the three months ended October 31, 2024 was primarily due to increases in software costs, personnel-related expenses, and professional services expense.

Previous wording

The $6.7 million, or 6%, increase in technology and development expenses from the six months ended July 31, 2023 to the six months ended July 31, 2024 was primarily due to increases in personnel-related expenses and software costs.

Current wording

The $11.3 million, or 7%, increase in technology and development expenses from the nine months ended October 31, 2023 to the nine months ended October 31, 2024 was primarily due to increases in personnel-related expenses and software costs.

Previous wording

We expect our technology and development expenses to increase for the foreseeable future as we continue to invest in the development and security of our proprietary technology, including our ongoing modernization project described earlier. On an annual basis, relative to the fiscal year ended January 31, 2024, we expect our technology and development expenses to decrease slightly as a percentage of our total revenue. However, our technology and development expenses may fluctuate as a percentage of our total revenue from period to period due to the seasonality of our total revenue and the timing and extent of our technology and development expenses.

Current wording

-31- described earlier. On an annual basis, relative to the fiscal year ended January 31, 2024, we expect our technology and development expenses to decrease slightly as a percentage of our total revenue. However, our technology and development expenses may fluctuate as a percentage of our total revenue from period to period due to the seasonality of our total revenue and the timing and extent of our technology and development expenses.

Previous wording

General and administrative. The $4.4 million, or 16%, increase in general and administrative expenses from the three months ended July 31, 2023 to the three months ended July 31, 2024 was primarily due to professional services expense.

Current wording

General and administrative. The $4.6 million, or 17%, increase in general and administrative expenses from the three months ended October 31, 2023 to the three months ended October 31, 2024 was primarily due to professional services expense.

Previous wording

The $17.1 million, or 32%, increase in general and administrative expenses from the six months ended July 31, 2023 to the six months ended July 31, 2024 was primarily due to increases in professional services expense and accelerated stock-based compensation expense recognized with respect to certain performance restricted stock units granted during the current fiscal year, as described in Note 8—Stock-based compensation.

Current wording

The $21.8 million, or 27%, increase in general and administrative expenses from the nine months ended October 31, 2023 to the nine months ended October 31, 2024 was primarily due to increases in professional services expense and accelerated stock-based compensation expense recognized with respect to certain performance restricted stock units granted during the current fiscal year, as described in Note 8—Stock-based compensation.

Previous wording

Amortization of acquired intangible assets. The $7.8 million, or 34%, increase in amortization of acquired intangible assets from the three months ended July 31, 2023 to the three months ended July 31, 2024 was primarily due to the new intangible assets added through the BenefitWallet HSA portfolio acquisition.

Current wording

Amortization of acquired intangible assets. The $5.1 million, or 22%, increase in amortization of acquired intangible assets from the three months ended October 31, 2023 to the three months ended October 31, 2024 was primarily due to the new intangible assets added through the BenefitWallet HSA portfolio acquisition.

Previous wording

The $10.2 million, or 22%, increase in amortization of acquired intangible assets from the six months ended July 31, 2023 to the six months ended July 31, 2024 was primarily due to the new intangible assets added through the BenefitWallet HSA portfolio acquisition.

Current wording

The $15.3 million, or 22%, increase in amortization of acquired intangible assets from the nine months ended October 31, 2023 to the nine months ended October 31, 2024 was primarily due to the new intangible assets added through the BenefitWallet HSA portfolio acquisition.