The meeting reviewed the strong financial performance of Healthy Equity Corporation in the second quarter of the 2026 fiscal year, including significant growth in revenue, net profit, and adjusted EBITDA, as well as the continued expansion of HSA accounts and assets. Management emphasized the team's readiness for the growth season, discussed the latest developments in HSA expansion policies, and the financial report showed the quarterly financial results and optimistic predictions for the full year performance.

The conversation highlighted the widespread use of Health Savings Accounts (HSA) in businesses, as well as measures to improve the efficiency and security of healthcare services through AI technology. It emphasized the role of data analysis in optimizing health plan designs, as well as enhancing user experience through mobile applications and passwordless login technology. Additionally, it mentioned the role of legislation in promoting HSA growth, and significant achievements in reducing fraud and improving service response times.

The positive impact of the new budget proposal on HSAs was discussed, including allowing for DPC and low-cost telemedicine, expanding eligibility for individuals and families on the ACA exchanges to use HSAs. It is expected that starting in 2026, all individual bronze and catastrophic plans will be able to be combined with HSAs, benefiting approximately 7 million existing enrollees. The Health Equity Team is currently optimizing the registration process, improving user experience, and raising awareness of the new eligibility through marketing activities, with the goal of benefiting 3 to 4 million American families with the benefits of HSAs, marking the largest expansion of the HSA regulatory framework in 20 years.

Thank you to the government affairs team for helping to promote understanding of the HSA plan and improve the affordability of health insurance. In the second quarter, our income grew by 9% year-on-year, with trustee income increasing by 15% to reach $159.9 million. Total profit was $232.6 million, accounting for 71% of income, setting a new record. Service costs have decreased, and fraud costs are expected to return to normal in the second half of the year. Cash holdings are at $304 million, with operating cash flow of $200 million. We expect to save $65-75 million in federal cash taxes over the next three years. In the first half of the year, income was $656.7 million, up 12% year-on-year.

The company updated its financial guidance, expecting revenue to be between $1.29 billion and $1.31 billion, GAAP net income to be between $185 million and $200 million, and non-GAAP net income to be between $329 million and $374 million. Discussions were held on the risk reduction effects of interest rate contracts on HSA cash placement contracts, as well as investment plans for technology, security, and marketing. Additionally, planned stock buybacks and potential reduction in credit lines were mentioned to maintain sufficient acquisition capabilities.

The company discussed enhancing the security and convenience of the members' mobile experience by introducing safer mobile applications and passkey authentication methods. It emphasized the continuous progress made by the fraud and security team in reducing fraud rates, and highlighted the future optimization of security measures to provide a better member service experience. Instead of setting specific milestones, the company is focused on continuously implementing a member-centric, secure mobile experience strategy.

Discussed the importance of the recently passed HSA extension bill and potential opportunities for HSA reform in future legislation. Emphasized the need to improve user experience and increase market participation to accommodate the growing number of HSA-eligible individuals. Additionally, expressed optimism towards future HSA reform opportunities and looked forward to further policy support.

The discussion emphasized the importance of around 25% of elderly people still participating in the workforce and potentially having HSA accounts, and the importance of combining employer plans with Medicare to reduce medical costs. It was pointed out that for companies with more than 20 employees, allowing employees to keep their employer insurance while enrolling in Medicare can effectively alleviate the financial pressure on Medicare. Additionally, it was mentioned that in future legislative opportunities, such as reconciliation bills or end-of-year legislation, efforts will be made to expand Medicare coverage to include direct primary care and bronze-level insurance plans, seen as the biggest opportunity for Medicare expansion in the past 20 years.

The discussion revolved around how financial institutions can lock in interest rates for the next year, involving strategies for locking in rates after the expiration of basic rate contracts and the application of enhanced yield products. At the same time, the addition of HSA accounts and the growth in asset management size were explored, pointing out that the growth trend of HSA business is good, with some seasonal differences.

Discussed the outperformance in the second quarter results, attributed to proactive market strategies and improvements in product experience. In the face of the macroeconomic environment, the company plans to increase marketing investment in the fourth quarter, optimize the enrollment experience, to seize market opportunities, especially in the expansion of enterprise sales channels and high retention rates of existing customers. Emphasized the importance of execution capability and product experience, as well as the synergistic effect with partners, to address market challenges and achieve business growth.

Discussed the relationship between the number of members downloading the app and business growth, pointing out that the goal is to increase member activity and engagement, rather than simply increase the number of downloads. Emphasized the importance of the app as a platform for providing a better experience and increasing the efficiency of saving, spending, and investing for members in health consumption. It was pointed out that in the future, the penetration rate will reflect the number of active members, rather than the total number of accounts.

The impact of the slowing growth in the job market on businesses was discussed, and despite the unfavorable macro environment, companies were able to achieve a contrary growth in performance by optimizing sales processes, enhancing customer service quality, and improving product experiences through technological advancements. The companies emphasized the advantages of being market leaders and the significant improvement in customer satisfaction, which together contributed to better-than-expected performance.

Discussed the market growth potential, emphasizing the expansion of new users through marketing and partnerships, as well as increasing the engagement of existing users, especially encouraging more people to choose high deductible health plans and reach maximum contribution limits to promote overall market growth. Meanwhile, attracting more investors and driving industry growth through optimizing product design and enhancing consumer experience, such as mobile app services.

The conversation discussed the reasons for the decrease in HSA cash, including account holders shifting towards investment activities and the impact of health care inflation. At the same time, strategies for adjusting algorithms to increase HSA cash in the future were explored.

Discussed the growth strategy of the HSA platform, emphasized the importance of increasing the proportion of investors to increase the activity and amount of funds in the accounts. Also pointed out that revenue growth comes not only from account and cash growth, but also from the increase in investment balance and platform consumption. Mentioned the volatility of quarterly income and the seasonal impact of cash inflows.

Discussed in the context of a challenging macroeconomic environment and rising healthcare costs, how to achieve growth targets by increasing the attractiveness and participation of HSA plans. Emphasized the importance of long-term value, member education, and employer communication, as well as strategies to enhance product appeal in adversity.

Discussed the limiting factors of signing forward contracts, including market liquidity and execution of hedging strategies, emphasized the application of the dollar cost averaging method in yield management, and clarified that with high market participation and no counterparty issues, only timely hedging is needed to reduce risk.

Discussed the reasons for the increase in service gross profit margin, including efficiency improvement and technological innovation, while also mentioning the possible impact of interest rate decline on custody income, but without quantifying specific forecasts.

The potential market for HSA eligibility in the ACA plan was discussed, estimating that there are millions of families who could immediately open HSA accounts. Through consumer education and partnership marketing, the goal is to attract these families to join and contribute to HSA accounts, in order to achieve pre-tax savings and payment of medical expenses. The company has committed to increasing marketing efforts, using various channels for promotion, and expects to significantly increase the number of HSA account holders.

Discussed the application of AI in enterprises, especially in reducing service costs and improving efficiency through automation and intelligence. Emphasized the potential of AI in improving service call centers, product development, and engineering efficiency, as well as enhancing member experience and optimizing cost structure.

At this meeting, the host thanked all participants for their active contributions, especially recognizing the role of team members in creating excellent performance. Looking ahead to the future, expressed a strong confidence in helping more customers and members enjoy the benefits of a healthy lifestyle, and encouraged all members to continue working hard to collectively advance the company's mission.