Thank you, Gary. Love the classical hold music, it was great. Hello, everyone, and welcome to HealthEquity's fourth quarter fiscal year-end 2025 earnings conference call. My name is Richard Putnam. I do Investor Relations for HealthEquity. Joining me today is Scott Cutler, President and CEO; Dr. Steve Neeleman, Vice Chair and Founder of the company; James Lucania, Executive Vice President and CFO. Before I turn the call over to Scott, I have a couple of reminders. First, a press release announcing the financial results for our fourth quarter and fiscal year-end 2025 was issued after the market closed this afternoon. These financial results include the contributions from our wholly-owned subsidiaries and accounts they administer. The press release includes definitions of certain non-GAAP financial measures that we will reference today. You can find a copy of today's press release on our Investor Relations website, including the reconciliations of these non-GAAP measures with comparable GAAP measures and a recording of this webcast. That website is ir.healthequity.com. Second, our comments and our responses to your questions today reflect management's view as of today, March 18, 2025, and will contain forward-looking statements as defined by the SEC, which include predictions, expectations, estimates, or other information that might be considered forward-looking. There are many important factors relating to our business, which could affect the forward-looking statements made today. These forward-looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from the statements made here today. We caution against placing undue reliance on these forward-looking statements and then we also encourage you to review the discussion of these factors and other risks that may affect our future results or the market price of our stock as detailed in our latest annual report on Form 10-K and any subsequent periodic reports filed with the SEC. We assume no obligation to revise or update these forward-looking statements in light of new information or future events. Now, over to Scott.

Thank you, Richard. Hello, everyone. Welcome to my first official earnings call with HealthEquity. I will discuss the momentum in Q4 across key metrics and for those of you who caught our Assist portfolio press release, that pun is intended. Jim will provide details on Q4 and full-year financial results as well as our outlook for fiscal year '26. Steve will join us for Q&A. It has been a busy and exciting first few months since I was introduced to you in December during the Q3 earnings call. A month later, I dove right in with our team to help close out our record-breaking peak season, which included 1 million new HSAs from sales. It has been an eventful start to this next chapter with Team Purple, and I am thrilled to be here. In Q4, without missing a beat, the team achieved strong year-over-year growth across key metrics, including a 19% revenue increase, a 9% rise in adjusted EBITDA, a 14% growth in HSAs, a 2% increase in CDB accounts, a 9% rise in Total Accounts, and a 27% increase in HSA Assets. HealthEquity ended Q4 with 17 million Total Accounts, including 9.9 million HSAs holding $32 billion in HSA Assets, which increased by $6.9 billion year-over-year. The number of HSA members who invest grew by 23% year-over-year, helping to drive invested assets up 44% to $14.7 billion. HSA cash reached $17.4 billion, and our HSA members increased their average balances by 12% this year. Team Purple opened 471,000 new HSAs from sales in the quarter, totaling 1 million new HSAs from sales for the year, marking a milestone achieved for the first time in our history. Net CDB accounts grew by 200,000 quarter-over-quarter and up 2% year-over-year, continuing a positive trend. Our operations team was exceptionally busy in Q4 across various initiatives, serving a record number of new HSA members and CDB accounts. While Q4 is always our peak season, we also rolled out the final stages of our new chip-enabled stacked benefits card to our millions of members and continued migrating existing clients to our latest platforms. Like other financial services companies, we have seen increased cyber threats and fraud attacks from bad actors using sophisticated technology and methods. These activities led to excess service expenses, which Jim will detail further. We remain committed to reducing our service costs while delivering the exceptional experiences our customers expect from us. Our team is dedicated to exceeding these expectations. As I embark on this journey, I am focusing the team on creating a member-first secure mobile experience. Our members expect seamless and frictionless mobile and digital-first experiences to help them save, invest, and spend on their healthcare needs. We have made significant progress consolidating platforms acquired through acquisitions and moving our platforms to the cloud. We are now well-positioned to leverage these investments and continue our push in technology, mobility, and AI. I am encouraged by several achievements this year, including a new app experience that has been downloaded by over 1 million members, expedited claims using AI technology that now serves more than 7,000 clients and 1 million members, and a stacked chip card that serves as the foundation for our upcoming digital wallet. Building on these foundations, I am confident we can efficiently and effectively deliver on our mission of saving and improving lives by empowering healthcare consumers. As we have communicated before, we are addressing the market's demand for greater healthcare transparency and affordability. We are excited to see that vision come to life through our new Assist portfolio announced today. Assist is a growing collection of owned and partnered solutions designed to help employers and their employees maximize their benefits offerings, featuring two immediate offerings in market. First, Analyzer provides real-time data on inefficiencies, trends, and benefit program design to assist employers in making smarter benefits decisions. Next, Navigator supports more informed employee healthcare decisions and offers potential rewards for choosing high-quality, affordable care. The third Assist offering, Momentum, will encourage employees to take full advantage of their company benefits through personalized AI-driven recommendations. Momentum aims to promote healthy behaviors, reduce healthcare costs for both employers and employees, and improve the ROI of employer benefits plans. Momentum is being developed alongside an exclusive group of innovative clients who share our vision for equipping their employees with greater transparency, relevant information, and incentives to take positive action. Together with our core offerings, the Assist portfolio adds to a growing array of technological innovations that deliver exceptional experiences for our clients, partners, and members while lowering our cost-to-serve. Now, let’s turn it over to Jim for a deeper dive into their impact on our financials.

Thanks, Scott. I'll briefly highlight our fiscal fourth quarter and fiscal year GAAP and non-GAAP financial results. As always, we provide a reconciliation of GAAP measures to non-GAAP measures in today's press release. Fourth quarter service revenue increased 19% year-over-year. Service revenue was a record $124.2 million, up 5% year-over-year, reflecting growth in Total Accounts, HSA investor accounts and invested assets, partially offset by lower average unit service revenue as product mix continues to shift toward HSAs. Custodial revenue grew 37% to a record $144.1 million in the fourth quarter. The annualized yield on HSA cash was 3.23% for the quarter as a result of higher replacement rates and continued mix shift to enhanced rates. Enhanced rate placements now make up 49% of our HSA cash placements, putting us well on our way toward our goal of 60% by the end of fiscal 2027. Interchange revenue grew 13% to $43.5 million, notably faster than account growth as members increased contributions and distributions and conducted more payments on platform versus requesting cash reimbursements for payments made off platform. Gross profit of $189 million was 61% of revenue for the fourth quarter, down slightly from 62% in the fourth quarter last year. As Scott mentioned, in addition to seasonal factors, gross profit during the quarter was reduced by approximately $17 million of additional service costs incurred to protect members from and reimburse those impacted by sophisticated fraud activity and to assist members during our card processor consolidation. We continue to invest in our fraud prevention and detection capabilities and we believe these event-driven costs will continue in the first half of FY '26, but normalize towards the end of the year. Net income for the fourth quarter was $26.4 million or $0.30 per share on a GAAP EPS basis. Non-GAAP net income was $61.3 million or $0.69 per share. Adjusted EBITDA for the quarter was $107.8 million, up 9% compared to Q4 last year and adjusted EBITDA as a percentage of revenue was 35% compared to 38% in the fourth quarter last year and it was, of course, impacted by the event-driven service costs referenced earlier. For our full fiscal year 2025, revenue was $1.2 billion, up 20% year-over-year, adjusted EBITDA rose 28% to $471.8 million, adjusted EBITDA margin increased 240 basis points to 39%. Turning to the balance sheet as of year-end January 31, 2025, cash on hand was $296 million as we generated $340 million of cash flow from operations in FY '25. The company repaid $50 million of revolver borrowings during the year, leaving approximately $1.1 billion of debt outstanding net of issuance costs. The company also repurchased $122 million of its outstanding shares during fiscal 2025, leaving $178 million remaining on our previously announced $300 million share repurchase authorization. Our fiscal '26 guidance reflects the expected carry-forward of our strong sales trajectory into next year, technology and security investments to reduce fraud and drive operational efficiencies and continued tailwinds from current forward interest rate curves. We expect revenue in a range between $1.28 billion and $1.305 billion. GAAP net income in the range of $164 million to $179 million, or $1.85 to $2.01 per share. We expect non-GAAP net income to be between $318 million and $333 million, or $3.57 and $3.74 per share based upon an estimated 89 million shares outstanding for the year. Finally, we expect adjusted EBITDA to be between $525 million and $545 million. We expect the average yield on HSA cash will average approximately 3.45% during fiscal '26. As a reminder, we base custodial yield assumptions embedded in guidance on projected HSA cash deployments and rollovers, a schedule of which is contained in today's release, as well as analysis of forward-looking market indicators such as the secured overnight financing rate and mid-duration treasury forward curves. These are, of course, subject to change and not perfect predictors of future market conditions. Seasonally, our fourth quarter is usually our highest service cost quarter of the year, as our busy onboarding season peaks. We usually see member service costs normalize starting in Q1. We continue to invest in protecting our members' assets and data, while providing them a remarkable experience. We expect heavier than normal costs in our first two quarters towards that effort, followed by better margins in the later quarters from those investments. Our guidance includes additional expected share repurchases under the $300 million repurchase authorization and further reductions in revolver borrowings in the fiscal year. With continued strong cash flows and available borrowings on our revolver, we will maintain ample capacity for portfolio acquisitions should they become available. We assume a non-GAAP income tax rate of approximately 25%, and a diluted share count of 89 million, including common share equivalents. We also assume a GAAP tax rate for fiscal '26 at about 25%. As we've done in previous reporting periods, our fiscal 2026 guidance includes a reconciliation of GAAP to the non-GAAP metrics provided in the earnings release and a definition of all such items is included at the end of the earnings release. In addition, while the amortization of acquired intangible assets is being excluded from non-GAAP net income, the revenue generated from those acquired intangible assets is included. And with that, operator, let's open up the line for questions.

We will now begin the question-and-answer session. Our first question today is from Glen Santangelo with Jefferies. Please go ahead.

Yeah, thanks, Scott and Jim. Thanks for taking the question. Hey, Jim, I just want to follow-up on these incremental service costs you're talking about. I think in your prepared remarks, you said you incurred about an incremental $17 million in 4Q. And so, I'm kind of curious, did anything specific happen or is that just the decision you all decided to make on the investment front? And then, just as a follow-on to that, the cadence throughout fiscal '26, you said it's obviously going to be more weighted to the first half. Are these one-time costs, or are these costs that are going to be sort of included in the base going forward? If you could just help us think about the cadence through fiscal '26, that would be helpful. Thanks.

Thank you, Glen, for your question. We're still addressing the same issues we discussed last quarter. We are dealing with sophisticated fraud actors, which means we are facing costs from reimbursing members for fraudulent activities in their accounts, as well as the expenses associated with our contact centers handling these calls, verifying the fraudulent activity. This results in both actual reimbursement costs and additional expenses to manage these situations. In Q3, we mentioned an $8 million impact. We anticipated some of this to carry into Q4, but we were overly optimistic about our ability to mitigate it. The impact was greater than we expected in Q4, and we expect this trend to continue into the first half of the year. While we don't provide specific quarterly guidance, we want to convey that we foresee a slight continuation of these costs before they taper off into a more normalized state in the latter half of the year.

Okay. Thank you.

The next question is from Gregory Peters with Raymond James. Please go ahead.

Well, good afternoon, everyone. I think my question around the earnings guidance, probably the answer might deal with this cyber security issue you were talking about, but when I look at your range for the fiscal year '26, yeah, I'm just curious what kind of levers or what kind of issues can pop-up that can drive the result towards the bottom-end of the range? I think the consensus numbers are steering towards the top-end of the range. So, I'm just curious inside your modeling, what are the factors you're seeing that could lead to result towards the bottom-end of the range?

Jim, you want me to take that? I'll take it.

Yeah. Go ahead.

We are optimistic about the trends driving our business. Regarding the custodial line, we are confident in the ongoing adoption of enhanced rates. Our long-term goal is to reach 60% in a few years. Currently, 85% of new members are opting for the enhanced rate product. We anticipate benefits from upcoming maturities, including $2.3 billion at 2.5% in fiscal year '26 and $4.1 billion at 1.9% in fiscal year '27. The recent growth in HSA sales, combined with these factors, reinforces our confidence in routine business operations and the overall growth trajectory. Additionally, we are focusing on our margins and services, as highlighted by Jim. We plan to manage our expenses in such a way that they increase at a slower rate than our revenue. We see opportunities stemming from our service modernization initiatives, which will help us achieve margin expansion. The momentum we've built this year positions us well as we look forward to the next year with optimism.

Got it. Just a clarification on your answer. And you may have said this, but what was the percentage in enhanced yield at year-end?

49%.

Got it. Thank you very much for your answers.

Thanks, Greg.

The next question comes from Stan Berenshteyn with Wells Fargo Securities. Please go ahead.

Hi, thanks for taking my questions. On the Assist initiative, is there any direct monetization associated with any of these products? And can you disclose which partners are involved in the partner solutions? Thanks.

Yeah, I'll take that on. First of all, as we look at the overall strategy here and I've communicated, the focus here is on a member-first secure mobile experience, which is maybe slightly different language than you've heard us talk and it is consistent with what we outlined in our 3D strategy. And I think that's really informed by me coming in where today's consumers expect a digital-first mobile experience. They expect kind of security as a seamless part of that process. And when we look at the market opportunity that Assist is really going after, Stan, it's really focused on enrollment, adoption and engagement. And so, Analyzer as an example is a product that's internally developed and we're leveraging the data, the insights, the integration that we have with plans, the insights that we have on reimbursement to actually help our clients or employers manage increasing healthcare cost that's growing faster than wages. And just to give you a couple of stats on that, 3% of our HSA members max their HSA contribution and about 8% of HSA members have invested. And so, we think there's a significant opportunity to help clients effectively drive savings in healthcare costs while also helping their members maximize the benefits associated with that product. The other product that we announced, Navigator, this is in partnership with TALON, and this is really designed to help on that engagement side. And this is really also driven by changes in the regulatory environment that's requiring transparency for plan providers, helping clients also driving compliance as well as engagement on that. We've talked a little bit this last year on HPA, which is in partnership with Paytient, and this is really meant to drive access to have more HSA clients use this product to help drive adoption of a high deductible health plan. And then probably the last one that we highlighted, which is Momentum, which again, this is going to be a product that is leveraging our unique open system that's connected again with our partners as well as plans and providers that we're going to leverage technology, insights, data and AI to drive better behavior, give our members better nudges so that they can make more informed healthcare decisions. So, hopefully, that gives you a sense of partially the things that we're doing on our own and in the areas where we'll use partners.

Yeah, thanks. Maybe just a quick follow-up on this. You had record number growth this year. Has any of this been a result of better engagement to drive enrollment within your client population? Does that translate in better conversion rates on the member side? Thanks.

The growth we experienced this year on the client side was largely driven by small and medium-sized businesses, which reflects our focused efforts. We see a significant opportunity within our existing client base, as I've mentioned previously. Our sales and relationship management teams are implementing various initiatives. For instance, Analyzer has been utilized by several clients to enhance engagement and enrollment. We believe there is an opportunity to digitize the sales experience by using data that our clients can leverage to create improved plan designs that encourage greater enrollment. It's a combination of all our initiatives that is fostering assisted growth through data and insights, along with the proactive efforts of our sales team to engage network partners as we approach the market.

Great. Thank you so much.

The next question is from Anne Samuel with JPMorgan. Please go ahead.

Hi. Thanks so much for the question. You've been highlighting a lot more of your technology enhancements recently. I was maybe just hoping you could speak to how we should be thinking about investment in R&D going forward. Is this something you plan to ramp as you lean a little bit more to tech enablement, or is that kind of being reallocated from other areas?

Thank you. I don't anticipate any significant change in the percentage of our revenue dedicated to product and technology spending. However, since I am new to this role, I expect our focus on a member-first experience will influence our priorities. As we plan our future roadmap, we will continue building on our recent successes in technology. For instance, we have surpassed 1 million app downloads since launching last summer, and I foresee ongoing efforts to encourage more members to adopt the app. This provides a more engaging and digital-first experience that our members expect, along with a reliable and secure method for user authorization and authentication on our platform. I'm also pleased with our continued investments in AI, particularly in Claims AI, which utilizes data and insights to automate the reimbursement process for claims. This has already been implemented with thousands of clients, covering over 1 million members, streamlining both the claims and reimbursement processes. Looking at the financial framework for our product and technology, I expect us to improve our efficiency in cost management. Our main focus will be reallocating resources to ensure we deliver a secure mobile experience that enhances both effectiveness and speed for our clients and members.

Really helpful. Thank you.

Thanks, Anne.

The next question is from David Roman with Goldman Sachs. Please go ahead.

Thank you and good afternoon, everyone. I wanted to follow up on your earlier comment regarding HSA member growth to ensure we grasp the trend and its potential implications. You mentioned that a growing percentage of HSA member growth is coming from smaller employers. Could you clarify our current position regarding this trend? Are those types of companies essential for maintaining our growth rate moving forward? Additionally, as you consider capital allocation, you briefly touched on the balance sheet. The WageWorks acquisition seems to have gone well for the company. Could you share your thoughts on the M&A environment and your current priorities between internal and external investments?

So, there were several questions in that one. Let me try to address them. Regarding our HSA growth, we're focused on leveraging insights to drive adoption and enrollment within our existing client base. In terms of new clients, we did see growth in small and medium-sized businesses last year. We are not changing our approach significantly; rather, we're utilizing technology to provide our sales team with accessible data that can enhance the engagement experience for both clients and brokers. This year has been remarkable, with our team surpassing 1 million new HSA accounts, a milestone that has never been achieved in our industry. Looking ahead, we remain optimistic about our business growth as we await market share numbers in the coming weeks. As for the M&A environment, I want to clarify whether you were asking about our general strategy or something more specific.

Yeah, I was talking more about your strategy and how you're thinking about organic investment in the business versus M&A and then the interplay between the two?

From an M&A perspective, we will have a very high standard for inorganic growth opportunities. We have a strong history of evaluating portfolios, non-operating businesses, and portfolio acquisitions that align with our goals. Anything outside of that will need to meet a very high standard in terms of financial performance and alignment with our mission. We see more potential in focusing on our execution to drive growth within the industry. When considering the awareness and understanding of the benefits of HSAs among both clients and members, we identify significant opportunities for growth. This is why our emphasis is on our 3D strategy, which involves deepening partnerships, utilizing technology to enhance the digital sales experience, improving connectivity, and developing new products to encourage enrollment, adoption, and contributions. We believe these strategies will enable us to actively shape our growth trajectory.

Great. Thanks for taking the questions.

The next question is from Scott Schoenhaus with KeyBanc. Please go ahead.

Hey team, thank you for answering my question. I wanted to focus more on the trend of the gross margins in the services segment. Is the improvement in the latter half of the year due to an expectation of fewer fraudulent actors, or is it more about transitioning more users onto the app to reduce the service cost per call? Can you clarify what is driving the increase in margins in the second half of the year? Thank you.

Yeah...

Jim, do you want to take the first part of that...

Yes, I can address the first part. The answer is yes to both aspects. Regarding the excess costs we mentioned, if it weren't for those, we would have reported another significant decrease in service cost per account. This metric is crucial for my service and operations teams, and they have achieved commendable results throughout the year despite some temporary challenges. We are factoring into our guidance that the measures we are implementing will help reduce issues related to fraud, which includes excessive calls and unnecessary workload for our service center. However, the daily performance of that team has been outstanding, and we expect that positive trend to continue into next year. Essentially, if we can remove these event-driven costs, it will lead to a natural reduction in service costs, and we will return to normal operations moving forward. Our target for fraud is around 1 basis point of our total assets on an annual basis, which is a very minimal figure.

I would also like to address our strategic focus on fraud and security. My first hire as CEO was our Chief Security Officer, Sunil Seshadri. We are prioritizing a secure mobile experience for our members and investing in that area. We remain committed to security and fraud prevention, as we have been in the past, and we will continue to build a strong team while enhancing our systems, platform, and applications from a security standpoint. We anticipate that our investments will lead to a moderation of costs associated with fraud. Additionally, as we delve deeper into service modernization, we recognize the opportunity to improve our operations. We handle millions of phone calls from our members each year, many of which are related to authentication or routine inquiries such as account balances, address changes, or password resets. We see a significant opportunity to automate many of these interactions, which would help reduce both contact drivers and service costs per account. By leveraging technology, we can decrease these costs while simultaneously improving the quality of the experience and the channels through which our members engage with us. Ultimately, this will result in a lower service cost per account over time.

Great. Thank you.

The next question is from Mark Marcon with Baird. Please go ahead.

Good afternoon, and thanks for taking my question. With regards to these issues that came up during the third and now the fourth quarter, can you talk a little bit about what the member reaction is and what the employer reaction is? And can you let us know, what client retention from an employer perspective was over the course of this year?

Yeah, I'll take that. Our highest priority is delivering a remarkable experience for our clients and for our members, protecting our members' accounts is kind of a joint opportunity in the sense that the members with respect to physical card or their passwords as an example, need to be protected. But we stand behind the service that we provide and the experience that we provide. And so, our team, which is Team Purple, so committed to delivering that remarkable experience. We really do and the team prides itself on how we handle those issues when they come up. And certainly for a member or a client that has something less than remarkable, our team does everything that we can do to make sure that we make that right. How that translates into our business, obviously, as we look at that, we want to make sure that we're retaining clients and members and proud to say on top of really strong sales momentum, we're really proud of our retention results, which are in the high-90%s in terms of clients that we retain. And so, that has been unchanged even as we've gone through some of these challenges associated with Q3 and Q4. But I think, again, continuing to drive differentiation in our service, differentiation in our product and then delivering on both of those things, I think is the promise that we expect from our clients and we're certainly seeing a strong trend in that regard for them.

That's good to hear. Thank you.

Thanks, Mark.

The next question is from Allen Lutz with Bank of America. Please go ahead.

Good afternoon, and thanks for taking the questions. I wanted to ask one for Steve. Last quarter, you talked a lot about just general excitement around expanding access to affordable health accounts. I think you mentioned the HOPE Act, HSA modernization and then other things the incoming administration can do. Can you just give us an update on where things stand today relative to December if anything has moved? And then, a quick one for Jim. Do you have insurance for the fraud activity that took place? Thanks, guys.

I'll start. Thanks, Allen. The good news is that the government is currently operational, allowing them to continue their work on the reconciliation process. As we mentioned, there are still three clear pathways: the reconciliation bill, which we are actively discussing with legislators, and we believe there's a component in this package that could facilitate HSA expansion or the introduction of HOPE accounts. Additionally, there is bipartisan legislation that is gaining traction, having been reintroduced in early February. It's encouraging to see legislators working together on this. There were also significant regulatory changes during the previous administration that could help employers expand their HSA offerings. We're aware that this package is estimated to be around $4.5 trillion to $5 trillion, and they are moving towards a reconciliation budget resolution. From what we gather, they are making efforts to create space for HSA expansion. Public discussions have highlighted several bills beyond the HOPE Act focused on HSA growth. Many legislators view this as crucial given the tax package's developments. We remain optimistic, although we won't know more until it progresses out of committee in the upcoming month or two. Some believe it could be finalized before Memorial Day, but we will see. Regardless, we stay hopeful, and there is a lot of conversation regarding HSA extensions. We will continue to support efforts related to HSAs and HOPE.

Yeah, thanks, Stephen. On the insurance question, right, there's not really a lot to talk about yet on it, but like yes, under sort of a general crime policy, we will work with our insurers over the next quarter or so to see what can be recovered there from those policies.

Great. Thank you.

Thanks, Allen.

The next question is from David Larsen with BTIG. Please go ahead.

Hi. It appears you are developing a technology platform that aligns with RFK Junior's vision, aimed at motivating members to maintain their health and pursue quality care at more affordable facilities, which would ultimately be advantageous for the overall Medicare costs in the long run. I hope the Congressional Budget Office considers this in their assessments. My question pertains to the fraud activities; it seems there was a significant single perpetrator involved. Has this issue been addressed? Did the expenses from this incident involve external security professionals who handle software breaches? Have you implemented a dual mobile identification system for all members to ensure they are verified when they call in? Was a ransom involved, and was law enforcement contacted? Were the responsible individuals apprehended? Essentially, has this situation been resolved so we can expect your gross margin to rise to about 65% in the fourth quarter? Thank you.

Thank you, David. I’ll address that. First, I want to clarify a couple of points. When we talk about securing personal information, that's not the main focus here. We're discussing fraud, which involves multiple actors. As we examine the current situation in the market, we have consistently implemented measures to keep our platforms, data, and systems secure and available. Additionally, the number of malicious actors, including state-sponsored groups, targeting financial services like ours is increasing. This is complex because there isn't just one bad actor or party involved. Therefore, when considering our strategy, we need to evaluate various security levels, including our internal controls and protections from network, application, and identity perspectives. We consider everything holistically, focusing on protecting accounts from takeover and identifying fraud that may impact our members or their cards. This conveys the range of issues we are addressing. As we improve the member experience and enhance mobility, we are also increasing our efforts on multi-factor authentication. We believe that these combined actions will help us address the recent trends in fraud. Jim, do you have anything to add?

Yeah. No, that's the core point. I think a couple of questions or comments from the group, right? Like, this is not a cybersecurity incident, right, like this is your good old fashioned account takeover, bad actors impersonating you, right, and entering your accounts. Like, I'm sure many of you have had bad credit card payments or bank account transactions that you didn't recognize. This is the type of activity that we're talking about and vis-a-vis that insurance claim, that's why we're talking about the crime insurance policy, not some sort of cybersecurity incident. So, just want to make that distinction crystal clear.

Jim, when do you think you'll get back up to a 65% gross margin? Thanks.

We don't provide quarterly or detailed guidance, but we anticipate elevated service costs in the first half of the year, with a return to more normal levels in the latter half. We expect to finish the year strong regarding service costs. We're not specifically targeting a service or gross margin; instead, our goal is to reduce the unit cost to serve since that is within our control. Interchange will remain stable, while our ability to sell and contribute will enhance both the interchange and custodial lines, which should help improve gross margin. Ultimately, our focus is on lowering unit service costs as it is the most manageable expense we can influence.

Thanks very much.

The next question is from Steve Valiquette with Mizuho. Please go ahead.

Hi, team. Thanks for taking the question. This is Sam Hasanov asking for Steve. Just wanted to gauge your guys' thoughts on any incremental or high-level color on EBIT growth by segment for 2026, particularly in custodial EBIT? Thanks.

Again, yeah...

Jim, do you want to take that?

Yeah. So, the comment that we just made, right, we don't provide any detailed guidance at that level. We don't have segments or report EBIT or operating income at that level. So, we're just not going to provide that kind of granularity.

Understood. Thank you.

This concludes our question-and-answer session. I would like to turn the conference back over to Scott Cutler for any closing remarks.

Thank you. I just want to thank our team, Team Purple for the great results from this last quarter. This is one of those quarters that it was a team effort. It was a team effort for the year. Our team is prepared for the years to come. We want to thank our shareholders. We want to thank each of you for your support. I look forward to meeting many of you face-to-face in the upcoming weeks and months and we'll continue to report to you our progress against these objectives. So, thank you, everybody.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.