Revenue during the quarter grew 6.93 percent to $88.92 million from $83.16 million in the previous year period. Gross margin for the quarter contracted 267 basis points over the previous year period to 65.63 percent. Total expenses were 89.38 percent of quarterly revenues, up from 84.71 percent for the same period last year. That has resulted in a contraction of 467 basis points in operating margin to 10.62 percent.

Operating income for the quarter was $9.44 million, compared with $12.71 million in the previous year period.

However, the adjusted operating income for the quarter stood at $21.30 million compared to $21.90 million in the prior year period. At the same time, adjusted operating margin contracted 238 basis points in the quarter to 23.95 percent from 26.33 percent in the last year period.

"I am very pleased with our strong third quarter results. We are in the midst of another record setting new sales year driven by increased interest across all of our products from employers of all sizes. The successful transition of the existing participants on the United States Office of Personnel Management’s Federal Flexible Spending Account Program to our platform marks the largest transition of accounts in our history. We continue to enter into new carrier and channel partnerships, which are producing additional opportunities and solid growth. Finally, we are excited about our pending acquisition of ADP’s Consumer Health Spending Account and COBRA businesses and our new ongoing partnership with ADP. We are poised to finish 2016 with strong momentum, as we are clearly executing on our multiple avenues for growth," said Joe Jackson, Chief Executive Officer of WageWorks.

The company has spent $41.31 million cash to meet investing activities during the nine month period as against cash outgo of $33.64 million in the last year period.

Cash flow from financing activities was $11.18 million for the nine month period, up 31.48 percent or $2.68 million, when compared with the last year period.

Cash and cash equivalents stood at $666.63 million as on Sep. 30, 2016, up 39.47 percent or $188.64 million from $477.99 million on Sep. 30, 2015.

Working capital increases sharply
WageWorks, Inc has recorded an increase in the working capital over the last year. It stood at $154.51 million as at Sep. 30, 2016, up 43.70 percent or $46.98 million from $107.52 million on Sep. 30, 2015. Current ratio was at 1.25 as on Sep. 30, 2016, up from 1.24 on Sep. 30, 2015.

Days sales outstanding went up to 74 days for the quarter compared with 66 days for the same period last year.