Health In Tech Q2 2026 Earnings Report

Health In Tech EPS Results

• Actual EPS: -$0.04
• Consensus EPS: -$0.03
• Beat/Miss: Missed by -$0.01
• One Year Ago EPS: N/A

Health In Tech Revenue Results

• Actual Revenue: $8.06 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Health In Tech Announcement Details

• Quarter: Q2 2026
• Date: 8/13/2026
• Time: After Market Closes
• Conference Call Date: Thursday, August 13, 2026
• Conference Call Time: 5:00PM ET

Health In Tech (NASDAQ:HIT) engages in the provision of insurance technology platforms which offer a marketplace of processes in the healthcare industry. Its services include Stone Mountain Risk, eDIYBS, HI Card, HI Performance Network, and Ancillary Products. The company was founded by Tim Johnson in 2014 and is headquartered in Stuart, FL.

Health In Tech Q2 2026 Earnings Call Transcript

Key Takeaways

• Negative Sentiment: Q2 GAAP revenue fell 13.5% year over year to $8.1 million, while Adjusted EBITDA declined to negative $1.3 million from positive $1.6 million a year ago. Management attributed the revenue decline to policy effective-date shifts during a new carrier onboarding, but operating expenses continued to rise as the company invested in sales, marketing, and technology.
• Positive Sentiment: Management reaffirmed full-year 2026 revenue guidance of $45 million to $50 million, citing $32.3 million of contracted revenue in the first half and $66.3 million of pipeline revenue as of July 31. The company said the contracted revenue is largely locked in but recognized over 12- to 36-month policy terms.
• Positive Sentiment: The distribution network grew 19.9% year over year to 933 brokers, TPAs, and agencies. Health In Tech expects to launch its HitRix large-group marketplace within weeks, giving existing partners access to automated data parsing, simultaneous underwriter submissions, real-time comparisons, and faster closing capabilities.
• Positive Sentiment: The company secured its first employer under its Three-Year Rate Stabilization Program and is pursuing additional large government and municipal organizations. Management also expects an A-rated carrier to be added within roughly 30 days, potentially opening access to larger brokerage firms and increasing future business opportunities.

Presentation

[Operator]

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Health In Tech second quarter 2026 earnings conference call. Currently, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Now I would like to turn the conference over to Ms. Lori Babcock, Chief of Staff for the company. Ms. Babcock, please proceed.

[Lori Babcock, Chief of Staff at Health In Tech]

Thank you, operator, and hello, everyone. Welcome to Health In Tech's second quarter 2026 earnings conference call. Joining us today are Mr. Tim Johnson, Chief Executive Officer, and Ms. Julia Qian, Chief Financial Officer. Full details of our results can be found in our earnings press release and in our related Form 10-Q, recently filed with the SEC. These documents will be available on our investor relations website at healthintech.investorroom.com. As a reminder, today's call is being recorded, and a replay will be available on our IR website as well. Before we continue, please note that today's discussion includes forward-looking statements made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.

[Lori Babcock, Chief of Staff at Health In Tech]

These statements are based on information available as of today and involve risks, uncertainties, and assumptions that could cause actual results to differ materially from those expressed or implied, including those discussed in our quarterly report on Form 10-Q for the period ended June 30, 2026, filed with the SEC. Please review the forward-looking and cautionary statement section at the end of our earnings release for various factors that could cause actual results to differ materially from forward-looking statements made during our call today. Except as expressly required by the federal securities law, we undertake no obligation to update and expressly disclaim the obligation to update these forward-looking statements to reflect events or circumstances after the date of this call or to reflect new information or the occurrence of unanticipated events.

[Lori Babcock, Chief of Staff at Health In Tech]

We may also refer to certain financial measures not in accordance with generally accepted accounting principles, such as Adjusted EBITDA, for comparison purposes only. Our GAAP results and reconciliations of GAAP to non-GAAP measures can be found in our earnings press release. With that, I now turn the call over to our CEO, Mr. Tim Johnson.

[Tim Johnson, CEO and Director at Health In Tech]

Thanks, Lori, and good afternoon, everyone. We appreciate you joining us today. Before I get into the quarter, I want to take some time to reiterate, because I think it's important for everyone on this call to understand exactly what kind of company we are building. Health In Tech is a young and very dynamic company. We are still early in our journey, but we operate with a business model, a technology foundation, and a market opportunity in front of us that we believe will continue to drive enterprise value for the company. That is not about next quarter. It is a statement about the architecture and foundation of this business, and I want to spend some time explaining why we believe that, because I think it matters more than any single quarter's revenue print. Let's start with the macro picture.

[Tim Johnson, CEO and Director at Health In Tech]

We are living through the most consequential technology shift in enterprise software in a generation. Every industry that has historically run on manual, paper-based, relationship-only processes is being rebuilt around artificial intelligence, and insurance and self-funded health insurance specifically, is one of the most underdeveloped, most opaque corners of the broader economy. As we've discussed before, self-funding health plans are estimated to generate around 20%-30% savings for business employers through actively managing vendors and customizing its health plans. It represents nearly a $1 trillion self-funded insurance market distributed through more than 1 million insurance brokers nationwide, and today, our platform works with 933 of them. That is a fraction of 1% of the addressable distribution universe. Most AI implementations you read about in the news today are bolted onto legacy systems, built to automate a single task or wrapped around a call center.

[Tim Johnson, CEO and Director at Health In Tech]

That is not what we have built. We have built a marketplace that is connecting brokers, Third-Party Administrators, and carriers into one secured, AI-enabled health insurance platform that's efficient, transparent, and ultimately reduces cost through removing frictions. That distinction matters enormously in this market. I want to direct something not every company that says AI has actually built something differentiated. A lot of passes for AI in the financial services and insurance today is a thin layer of automation on top of decades-old infrastructure. What we have built in Health In Tech goes well beyond that. Our platform doesn't just speed up a form, it ingests census data, parses experience data automatically, enables the carrier to build its specific underwriting criteria in system in real time, and returns a bindable, execution-ready quote in a fraction of the time it takes using legacy tools.

[Tim Johnson, CEO and Director at Health In Tech]

That is fundamentally different value proposition than what brokers have access to historically, and it is a fundamentally different value proposition than most of what our would-be competitors have brought to the market. I want to spend time here to talk about our Chief Technology Officer, Sri Rajagopalan, and the engineering team he has built. Sri spent the majority of his career at SAP and IBM, two of the largest enterprise software companies in the world, leading enterprise architecture and large-scale platform engineering for global mission-critical systems. That is exactly the caliber of technical leadership a company like ours needs as we scale from a promising platform serving hundreds of brokers to critical infrastructure serving thousands of brokers, larger carriers, and larger employer groups.

[Tim Johnson, CEO and Director at Health In Tech]

Under Sri's leadership and through our partnership with Ciklum and Amazon Web Services Advanced Tier Service Partner, we have spent this year upgrading the front and back-end architecture of our platform, consolidating quoting, underwriting, administration, and analytics in a single unified environment, and building the data infrastructure that will allow us to layer in increasingly sophisticated AI capabilities without having to re-architecture the platform every time we do it. That is the kind of investment that doesn't always show up in a single quarter's income statement, but it's exactly the kind of investment that determines whether a platform company can actually scale or whether it's hitting a ceiling. We do not intend to hit a ceiling. I'm also proud of what this has translated into for our distribution partners and practice. In the second quarter, we grew our distribution partner network to 933 brokers.

[Tim Johnson, CEO and Director at Health In Tech]

Third-party administrators and agencies are up nearly 20% from a year ago. We've rolled out a significant platform update that included enhanced census insights, expanded large group quoting functionality, automated experience data parsing, AI-driven risk insights, and direct broker-to-underwriter messaging inside the platform itself. Brokers are telling us in real time that this is changing how they work. The adoption curve is leading indicator for everything else we are going to talk about today. I want to spend a meaningful amount of time on why we are changing how we talk about our business, because I think this is a single most important thing for investors to understand about where Health In Tech is today. For the last several quarters, we have talked about Health In Tech primarily as a revenue growth story. To be fair, we earned that framing.

[Tim Johnson, CEO and Director at Health In Tech]

But a revenue growth story on its own undersells what is actually happening inside the business. Frankly, we believe it paints a limited picture quarter to quarter because of how GAAP revenue recognition interacts with the way our policies are actually sold and onboarded. Here is the reality. This is not a company we believe should be judged quarter by quarter on a single reported revenue line. This is a young, still evolving platform business continuing to establish itself in the small cap world with a business model that generates contractually locked-in revenue well ahead of when that revenue actually gets recognized on our income statement. When we sell a policy, we don't recognize that revenue all at once. It gets recognized ratably month by month over the 12 to 36-month life of that policy.

[Tim Johnson, CEO and Director at Health In Tech]

That means the revenue we report in any given quarter is really a lagging indicator of the underlying momentum of the business. In our review, the leading indicator, the one that actually tells you where this company is headed, is what we've contracted and what we've sold, and what is already locked in and simply waiting to be recognized. That is precisely what happened this quarter, and I want to explain it plainly rather than let anyone read more into a single number than they should. During the second quarter, we onboarded a new carrier partner, and as part of that onboarding, the effective dates of a number of policy placements shifted into subsequent quarters. That timing shift is the primary reason our reported GAAP revenue for the second quarter came in at $8.1 million, down from $9.3 million a year ago. I want to be unambiguous.

[Tim Johnson, CEO and Director at Health In Tech]

This was not a demand problem. This was a churn problem. It was not a platform problem. It was a timing factor tied to onboarding a new carrier into our platform. The very kind of carrier expansion that we discussed in the last quarter is core to our long-term growth strategy because more carriers means more underwriting choice, better pricing outcomes for employers, and higher conversions for our brokers. This is exactly why we believe contracted revenue and pipeline revenue are metrics that actually help tell you what's happening inside of Health In Tech, and it's why you should expect us to highlight these metrics from this point forward. Contracted revenue, meaning revenue that is contractually committed under active policies and that simply has not yet been recognized under GAAP, totaled $32.3 million for the first half of 2026.

[Tim Johnson, CEO and Director at Health In Tech]

Beyond what's already contracted, our pipeline revenue, policies currently in quoting or binding status, plus policies contracted since quarter end, stood at $66.3 million as of July 31st this year. Julia is going to walk you through the details in a moment because I want to spend more of our time today on where business is going, not rehashing a single quarter. Let me talk about what is coming because this is where I think the growth story really comes into focus. Excuse me. We made a genuine proof point this quarter on our Three-Year Rate Stabilization Program. We contracted, secured our first employer group under that program, taking it from concept to a live bound plan. This is an important milestone as we advance toward the program's anticipated launch in the capital markets.

[Tim Johnson, CEO and Director at Health In Tech]

The program is designed to provide budgetary certainties for healthcare costs, often the second largest expense on the P&L for many corporations. For large enterprises, particularly governmental agencies and municipalities, multi-year budget certainly is well-received compared to the potential for unpredictable annual healthcare cost hikes. We are certainly currently engaged in several high-profile government organizations evaluating participation, and we expect to provide additional updates in the coming months. We also remain on track to officially launch HitRix in the second half of this year. This platform is genuinely new because HitRix is not an incremental feature update. We believe it is the first true marketplace built for large group self-funded stop loss market, which is a segment defined by claims data complexity, multiple MGUs, and carriers competing for business, and a manual fragmented process that has not meaningfully changed in decades.

[Tim Johnson, CEO and Director at Health In Tech]

To put this in context, eDIYBS, our existing platform, serves the small group market where the process is very different. The small groups market itself is highly concentrated with only a handful of stop loss carriers. HitRix, conversely, is purposely built for large groups, generally 100 lives on plan and above, where the underwriting process is fundamentally different and the marketplace opportunity is much larger. HitRix introduces several first-of-their-kind capabilities to this market. Proprietary data parsing that transforms hours of broker preparation into minutes, a competitive marketplace that lets brokers efficiently reach an unlimited number of underwriters simultaneously, real-time comparison and analytics tools that no other platform in the market offers today, and a buy now function that can compress what has historically been a weeks-long negotiation into a single-day close.

[Tim Johnson, CEO and Director at Health In Tech]

It is a marketplace distinct from anything we have brought to the platform to date, and we believe it opens up a meaningful new growth avenue for this company. We expect and look forward to sharing more at launch. I also want to set the stage for how we intend to fund the next phase of growth. I want to close my remarks the way I opened them. Health In Tech is a fast-growing young company. We have a technology foundation built by world-class engineering team, a business model that generates real contractually locked-in revenue well ahead of recognition, a distribution network that is growing nearly 20% year over year, and a market opportunity measured in the hundreds of billions of dollars where our current penetration remains below 1/10 of 1%.

[Tim Johnson, CEO and Director at Health In Tech]

We believe the combination of these four key things should help us continuously drive the enterprise value of the company. That is the story we are building, and I could not be more excited about where this is headed. Before Julia walks through the financials, let me give you a little bit more on how our distribution engine performed this quarter. To put a finer point on the partner number I mentioned earlier, we ended the second quarter at 933 distribution partners, brokers, Third-Party Administrators, and agencies, up 19.9% from 778 a year ago. That growth came from the same way it has all year, through a capital-light, partner-driven model where our in-house team focuses on onboarding and activating partners rather than selling directly into the employer accounts.

[Tim Johnson, CEO and Director at Health In Tech]

That's what allows us to keep growing our distribution footprint with a linear increase in fixed costs. The carrier onboarding that affected the timing of some of this quarter's revenue is a good example of the trade-off we were willing to make. Short term, it shifted some policy effective dates into later quarters. Long term, it gives our brokers more underwriting choice on the same employer groups, which we believe improves close rates and strengthens retention. We will make that trade every time. We continue to see this industry as relationship-driven today, but structurally underserved by technology, and that is the gap we intend to keep closing through direct broker engagement, industry conferences, and a platform that keeps getting easier for brokers to use and harder for them to walk away from. With that, I will now turn it over to Julia.

[Julia Qian, CFO and Director at Health In Tech]

Thank you, Tim, and good afternoon, everyone. I'm going to keep my remarks focused and brief because Tim has already walked you through certain of the consideration around this quarter's number. I want to use my time simply to talk through the figures itself through lenses of the metrics we introduced the last quarter, contracted revenue and the platform place-to-plan value, because those are the numbers we believe quietly, holistically reflect on the health of this business. Contracted revenue means the revenue that is contractually committed under the active policies that simply has not been recognized on the GAAP accounting. There are total $32.3 million for the first half of 2026. Of that, $17.3 million was already recognized as GAAP revenue in the first half of this year, with the remaining $14 million expected in the second half of this year and $1 million in 2027.

[Julia Qian, CFO and Director at Health In Tech]

Beyond what's already contracted, our pipeline revenue policies currently in quoting or binding stage or plus the policy contracted single quarter end stood at $66.3 million as of July 31st, of which $1.9 million was contracted. The remaining $64.4 million with an expected conversion rate of 15%-40%. With five more months remaining in 2026, the expanded sales team will continue to sell, to expand its pipeline revenues through adding more brokers, TPAs, and our distribution partners. Together, these numbers I would encourage you to assess for the future revenue visibility, and they underpin our decision to reaffirm full year 2026 revenue guidance of $45 million-$50 million. That is real forward revenue visibility extend well into next year, and we believe it provides a more extensive picture than just a single quarter top-line print can tell you.

[Julia Qian, CFO and Director at Health In Tech]

Now running to platform placed plan value or PPV, which represents the aggregate contractual value of the self-funded stop loss plans placed through our platform, including premium, claim funding, and administrative fee. Measure our overall each plan's full contractual term, PPV stood at $84 million as of June 30th, 2026. I want to be clear that PPV is a measurement of platform transaction value, not indicator of own revenue or take rate. On reported GAAP revenue, total revenue for the second quarter was $8.1 million, down 13.5% from $9.3 million in the second quarter of last year. As Tim explained, this decrease reflect the timing of the new carrier onboarding that shift certain policy effective date into the future period, not a change in underlying demand.

[Julia Qian, CFO and Director at Health In Tech]

The onboarding of a new carrier and the certain related portfolio transfer between the carrier were designed to provide great options and flexibility to our employer customers. As a result, the number of accounts receivable day or AR days in the first half of the year was 55 days, versus 20 days in the first half of 2025, which is not uncommon to us. We have ample experience and the track record of managing accounts receivable day. For example, there were 42 days accounts receivable day in 2023, and then we bring down to 29 in 2024, and further down 14 accounts receivable days in 2025. So it's a remarkable change and the improvement once the carrier will start to work with us. We actively manage these financials as well.

[Julia Qian, CFO and Director at Health In Tech]

For the first six months of 2026, total revenue was $16.8 million, compared to $17.3 million for the first half of the year last year. Turning to the profitability, Adjusted EBITDA was -$1.3 million for the quarter and -$2.6 million for the first half of the year, compared to the positive EBITDA $1.6 million and $2.8 million respectively. In the prior year period, net loss for the quarter was $2.5 million or $0.04 per diluted share, compared to net income of $0.6 million or $0.01 per diluted share. The net loss for the same period compared with the same period, the net loss was $1.4 million for the first half of 2026 or $0.07 per diluted share, compared to the net income of $1.1 million or $0.02 per diluted share.

[Julia Qian, CFO and Director at Health In Tech]

This reflects our continued planned investment in sales, marketing, and technology to support long-term growth consistent with what we have described entering into this year. Our total operating expenses for the quarter was $7.3 million, compared to $5.6 million for the same period last year. Sales and marketing expenses were $2.2 million, compared to $1.2 million for the same period last year. As we continue to invest in expanding our distribution footprint, the sales expanding has increased. General and administrative expenses was $4.3 million, compared to $3.8 million for the same period last year. Research and development expenses were $0.9 million, and we capitalized $0.8 million of the software development cost, compared to $0.6 million and $0.9 million respectively for the same period of last year, reflecting continued investment in our technology platform underwrites leadership.

[Julia Qian, CFO and Director at Health In Tech]

Turning to our balance sheet, we ended the quarter with $6.5 million in cash and cash equivalent, and $11.8 million in working capital compared to $8.1 million in cash and cash equivalent and $9.5 million in working capital a year ago. Operating cash used improved to $2.9 million in the second quarter, compared to $3.3 million in the first quarter, reflecting continued discipline in working capital management. Total assets at the quarter end were $29.6 million, and total stockholder equity was $19.4 million, compared to $22.2 million and $16.4 million respectively for the same period of last year. Our balance sheet remains healthy and positioned to execute on our product and development plan. In summary, this was a quarter of continued deliberate investment. The GAAP revenue number reflects a timing shift, not a change in the trajectory for the business.

[Julia Qian, CFO and Director at Health In Tech]

We believe contracted revenue, platform placed revenue, are clear windows into where the company is actually heading. We also report pipeline revenue, give you more visibility on where the company, the trajectory is. With that, now I turn it back to Lori.

[Lori Babcock, Chief of Staff at Health In Tech]

Thank you, Julia and Tim, for these prepared remarks. Now we would like to open the call up to our community for any questions they might have.

[Operator]

Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. Our first question for today will come from George Sutton with Craig-Hallum. Please go ahead.

[George Sutton, Analyst at Craig-Hallum]

Thank you. Hi, guys. Tim, a lot of this confusion on the timing, I think, relates to a stop loss carrier change you made, and you were really improving the capabilities that your customers would have with a stop loss carrier going forward and the ratings involved. Can you just kind of walk through that outcome? You may be on mute.

[Tim Johnson, CEO and Director at Health In Tech]

Sorry, guys. I was on mute, yeah. Good to talk to you, George. Thanks for the question. Understanding how insurance carriers are rated and even stop loss carriers have a rating, certain brokers around the country, and especially the bigger ones, we call them the alpha houses, they require to, under their corporate charter, to only write business with A carriers. We weren't with an A carrier that They were admitted, they just didn't have an A rating. We are changing carriers that financially can support an A rating, and we hope to have that done in the next, I don't know, in the next 30 days, probably at the far end. We're very close. I was on the phone with them earlier. We can pick up more business with larger brokers that are requiring that rating, and that's one of the reasons why we switched.

[George Sutton, Analyst at Craig-Hallum]

Just help us understand the impact of having that A rating and what that might mean broadly for the business opportunity.

[Tim Johnson, CEO and Director at Health In Tech]

Yeah. Zane, our Chief Growth Officer, is sitting on the sideline with a lot of business that people want to put with us. It's a significant amount of business. I would say that our projections, we try to be conservative in our projections, but it will bump our projections at least, I don't know, 20%-30% higher, if we can get an A carrier. It just depends on how fast you get it, because the sales cycle takes a while. Once you start talking to a broker, then a client, as we're coming up in January is our biggest time of the year by far. Most effective dates are in January. We're going to pick up a lot more business and I'm trying to not be too direct with that answer. I don't think I'm supposed to be on here.

[George Sutton, Analyst at Craig-Hallum]

Got you.

[Julia Qian, CFO and Director at Health In Tech]

Yeah. George, I want to add on a little bit. Because the small group is really normally people pay less attention of the category of the carrier, which we add on one more. That's also the reason. Even the pipeline revenue we reported, it's all not relating to adding on more A carrier, which we're also working on.

[Julia Qian, CFO and Director at Health In Tech]

Just give a little bit of background. Our software, we talk about HitRix, is really real market in the large group. Not only just that we expand dramatically our addressable market, but also that means we can offer the total complete solution, including the small employers and the medium to large employers. That will dramatically change how our business outlook is when we have a pipeline revenue, we do not even include that part. [inaudible]

[George Sutton, Analyst at Craig-Hallum]

Now, on the HitRix platform, which I understand is a dramatic improvement on what exists out there today, can you just talk about how quickly you think you can bring users on that platform? What do you think that does for the business once it is up and running?

[Tim Johnson, CEO and Director at Health In Tech]

Good question. Well, the existing 933 brokers are automatically, because as I said in the discussion we just had, they are all going to get access to it immediately, which means, and Julia has pointed out, it is the larger market space. They can now market to multiple MGUs as easy as it was to create a submission on the small group side. This marketplace that we have created, it is just not out there today. So all 933 brokers that are on it and TPAs and other access distribution points will have immediate access in the next It is supposed to be launched coming up in, I am looking at my calendar, in the next two, three weeks. So that will come on.

[Tim Johnson, CEO and Director at Health In Tech]

We are doing our UAT testing and everything right now, and we already know some other people who want to use it, some MGUs that are waiting to get it. We have done lots of demos. We have a demo page we created, and we are doing demos for everybody now, so there is a lot of excitement on that product.

[George Sutton, Analyst at Craig-Hallum]

Okay, then lastly for me, the Three-Year Rate Stabilization Program, that is something we are very excited about and see great applicability, particularly in municipal governments, for example. Can you just give us a sense of what that pipeline looks like and what the feedback has been since you have signed this first customer?

[Tim Johnson, CEO and Director at Health In Tech]

Yeah. I can tell you the pipeline. One of our partners in the program, MassMutual Ascend, the actuary who helped create and build this program, they've hired specific salespeople for it. We have trained our sales guys on it. The anticipation and the word is that we'll probably have about 30 submissions a month, or more. These are large, as you can imagine. They're municipalities, government agencies, counties, cities, everything in between. They're not small. Our pipeline is already I can't tell you who we're talking to. You would know everybody that we're already talking to, and they are Yeah, they're cities that everybody on this call would know for sure. Some probably live in them. It's a big opportunity that's coming in really fast.

[George Sutton, Analyst at Craig-Hallum]

Beautiful. Thanks, guys.

[Tim Johnson, CEO and Director at Health In Tech]

Thanks, George.

[Operator]

Your next question will come from Allen Klee with Maxim Group. Please go ahead.

[Allen Klee, Analyst at Maxim Group]

Yes, hi. Hope everyone's well. When you were talking about the change in the insurance rating, did you make a comment that said you thought that impacted your results by a certain amount, not having that? Or I'm not sure.

[Tim Johnson, CEO and Director at Health In Tech]

Yeah, because a lot of our growth in the large and small, we call them alpha, the bigger brokerage firms, they won't be able to participate in our programs if we don't have an A carrier. It's just in their charter, and people say it's in their E&O policy. There's different reasons for it. But that's why we're going to grow if we can get that A carrier on. The faster we can get an A carrier on, the sooner we can start picking up more business from those alpha houses.

[Allen Klee, Analyst at Maxim Group]

Yeah. As a former Moody's Senior Analyst covering insurance companies, I appreciate the value of the higher ratings. But did you make a statement that it hurt the particular quarter 2Q by a certain amount? Or was it more like going forward it has this opportunity?

[Tim Johnson, CEO and Director at Health In Tech]

It's more going forward.

[Julia Qian, CFO and Director at Health In Tech]

Yeah. We clearly mentioned on the call because of the adding additional carrier, it's not demand problem, it's a shifting, right? Because now we're seeing the new income carriers and the preparation and the old carriers. That's the reason we're reporting even the pipeline revenue to see what is pipelined here. It's a timing shift. As you know, for the GAAP accounting, it's really based on the amortization upon effective day. When you shift a quarter, some of revenue is going to shift a quarter to the next year. It's just the facts. Even you can sell the most you can sell. That's why we reported the pipeline revenue when we're looking at, we have 5 more months to continue to sell. So the revenue itself already give people pretty good indication on this year and what the possibility and the range and the beyond.

[Allen Klee, Analyst at Maxim Group]

Okay. How do you feel about your preparation with your offerings and having the time to educate the brokers and the clients for the amount of renewals towards the end of the year? Do you feel like you're going to be fully able to work on that and be successful?

[Tim Johnson, CEO and Director at Health In Tech]

That's a very good question. I never feel like I have enough time, just between us. But this timeframe right now, it needs to come out because everybody's starting to market their one business. They go out with the larger groups. That's what HitRix is. That's a new product for them. I wish that it could have been done six months ago. I want my tech built yesterday. I always do. But by 1/1, we'll have a lot more opportunity running through it because of HitRix. Again, I wish I could've built it a year ago. It just takes time to get it done. But right now, we have sufficient time to get into that space because everybody's just now getting their groups out, and everybody's starting to look at them, how are they running, what are they doing, and we're hitting it right, just right.

[Tim Johnson, CEO and Director at Health In Tech]

Again, I wish it was done three months ago, but we're hitting it at the right time right now. It's so easy to use. The people already using our system, they're going to see a better look, a better feel, a better flow, and really it's just point, click, and drag and drop. We've made it so easy for them to submit the opportunity in the system. There should be no real training on it, people who are already using it. The new people, it's really quick. We do a lot of demos every day.

[Allen Klee, Analyst at Maxim Group]

That's great. If you could just help me understand the path to getting to your guidance a little. I you said that contracted revenues, that's going to show up in the second half, you believe is going to be $14 million. You said pipeline revenue, based on conversion rates, could be $3 million-$8 million. If you add those two pieces up, that gets you to $17 million-$22 million. In the first half, you did $17 million. If you add both of them up, you're not quite at the 45. Is it just new business in addition, as you mentioned, pipeline? Or what gets you to the, from what I just said, to your target as well?

[Julia Qian, CFO and Director at Health In Tech]

Yeah, that's a great question, Allen. What you're looking at is as of June and the one month of the pipeline. That gets us, right? We have five more months to continue to sell, to continue to build this pipeline, to convert to the business. That's the reason we even give the range to look at that. While conversion rate is a range about 15%-40%, when you do this calculation, clearly, we were adding on more salespeople with five more months to go. These numbers you provided do not have five more months, the sales. The pipeline we built is as of July.

[Allen Klee, Analyst at Maxim Group]

That makes perfect, that's what I thought. Thanks. Maybe, I know as you use more referral partners, which is essentially some sales and marketing for you, your gross margin goes down, but you benefit in other ways. Your gross margin this quarter was like 48.7%. That compared to 51.4% in the first quarter. Is it reasonable to think that that may stay at a lower level than it had been like in the past based on this quarter?

[Julia Qian, CFO and Director at Health In Tech]

Yes. When we offer the plan and work with various partners, inevitably, there will be the compromise of the gross margin. That is trade-off of expanding through our distribution partner. But at least I want to point that this is a very assets light of distribution. We do not have these people on payroll fixed, so it really goes through whatever we can grow quickly with very little investment we have into the sales team. We do not have all the sales team, sales force, but through the partner. They also, in future, we should be seeing when we have HitRix offer in the market, we have a different way. There will be a mix of the gross margin, which should be around the range of 45%-50% of the gross margin, still pretty healthy considerably for our sectors.

[Allen Klee, Analyst at Maxim Group]

Okay. So 45%-46% in the future is what you are thinking? Is that what I heard?

[Julia Qian, CFO and Director at Health In Tech]

Yes.

[Allen Klee, Analyst at Maxim Group]

Okay, great. One last question. On the Three-Year Rate Stabilization Program, which I am praying my company will do it this next year. That is a side question, conversation. If a lot of that is going to municipalities, remind me the government year-ends. Is that September? When are the year-ends for a lot of these that kind of the focus is to try to win a lot of this?

[Tim Johnson, CEO and Director at Health In Tech]

Yeah. Typically, they all run towards the year-end as well. A lot of them are in July. But to be honest with you, the people we are talking to, none of these effective dates that we are talking to right now, I do not know if they are because we really do not talk to them a lot about their effective date on their stop loss policy. They are more concerned about figuring out how to do this faster and get it above their existing one, even if it is in place today. Because we are agnostic to the carrier, even the effective date of their policy. It really works better if you do have it that way, but some of the people we are talking to, it is just math, and we can figure out how to move it around.

[Allen Klee, Analyst at Maxim Group]

That's great. That's exciting. Okay. Thank you. Keep it up.

[Operator]

The next question will come from Marla Marin with Zacks. Please go ahead.

[Marla Marin, Analyst at Zacks]

Thank you. I wanted to drill down a little bit on some of what you've already discussed during the Q&A, which is the difference between contracted revenue and pipeline revenue. Pipeline has reached the stage where you've already provided a quote, where some other element that revolves around actual commitment. Is it fair to think that if you do get this new partner that you've been talking about, that could have a significant impact on the pipeline revenue and then the conversion?

[Julia Qian, CFO and Director at Health In Tech]

Yes, that's absolutely yes. I want to remind everybody again, this pipeline revenue is as of July. When we continue to execute and adding on a carrier more, you should see a much higher pipeline and also the higher conversion rate. The pipeline revenue means there are the employer plan proposal being quoted, some at different stage of the implementation, some in the stage of being reviewed. This is really representing a huge part of the opportunity run through our system. Obviously, contracted revenue means it's through the effective date, it's already contracted, and the policy bonded, and everything is signed. We are really commissioned to recognize all the revenues through the effective date of the next either 12 months or 36 months, depends on the term of the policy.

[Marla Marin, Analyst at Zacks]

Okay. That's helpful. Can you also give us a sense of what you would say the sales cycle is? How long it takes to get to that stage where something is placed in the pipeline revenue category? I'm thinking that it doesn't just happen on day one when an inquiry is made or when there's outreach. It takes a little while before you actually get to that stage, and it doesn't happen with every touchpoint. Do you have a sense for how long that process takes?

[Julia Qian, CFO and Director at Health In Tech]

I will let Tim to address that question.

[Tim Johnson, CEO and Director at Health In Tech]

Yeah. It depends on the size of the group. Appreciate the question. Small groups, they'll make a decision in a day. If it's a larger group, you're right, the conversation takes longer with talking about plan designs, carriers, everything that goes into it. Some of the smaller groups, and you can see that from the business that we have, our brokers are writing new business daily, through simple conversations because of the way we set it up with they already have their plan designs and everything in there. It's really just point and click. All the options are taken away from them. It's just easier for them to pick the cost versus what PBM, what TPA, all of these other things. The larger groups, yeah, it's a 90-day turn, probably, from a conversation.

[Tim Johnson, CEO and Director at Health In Tech]

The smaller guys, I've got producers that walk around with their computer and walk into a company, and they'll sell it right while they're sitting there talking to them because the machine can quote it that fast.

[Marla Marin, Analyst at Zacks]

Okay. Thank you. That's helpful. Those are quantitative numbers. You can actually identify where a contract or potential contract is in the process. You've touched upon this already in the Q&A, as well as I think in the prepared remarks. If you were to give us a sense of the kind of feedback you're getting, given all of the improvements you made to the platform and your new products that are coming online. If you were to give us a sense of the kind of positive feedback you're seeing, can you try to put some, not numbers around it, but where do you think that might go over the next year or two in terms of taking up some of these pipeline and contract figures?

[Tim Johnson, CEO and Director at Health In Tech]

I'll let Julia answer that. I'll get myself in trouble.

[Julia Qian, CFO and Director at Health In Tech]

Okay. Can you just re-form your question again so I could.

[Marla Marin, Analyst at Zacks]

Yes.

[Julia Qian, CFO and Director at Health In Tech]

Yeah.

[Marla Marin, Analyst at Zacks]

The numbers you've provided, and you've termed contracted and pipeline. Those are some quantifiable. You have a certain number of potential contracts that are already in the stage where you're providing a quote or where it's moving forward. But given how early days, would it be right to think that if you were to give us a number that was not quantifiable, but that was qualitative in terms of the feedback you're getting from your partners, from the brokers, and even from the market, if you were to give us a sense of the feedback that you're getting, that the number, the qualitative number, could grow significantly over the next, I don't know, several quarters?

[Julia Qian, CFO and Director at Health In Tech]

Yes, that's right. One thing I want to just re-emphasize. The contract revenue is the revenue we already contract from effective date in the last six months. It's actual sales, is not something is going to sell, will be sold. It is contract is done, is sold.

[Julia Qian, CFO and Director at Health In Tech]

We are collecting revenue for doing the 12 months or 36 months. With the new anticipate, the platform launch and the carrier add A-rated, you should be able to see the pipeline revenue increase because the pipeline revenue we reported is as of July. We have five more months to building up. The matter of fact, if you ask me at the end of the August to now, the revenue will be dramatically different, improved. Also, there will be some of the pipeline convert to sales, and the $66 million on the pipeline, when we do these earnings call, we already have $1.9 million already inked to the contract. With the sales cycle, it's about 3 months for the large group, and we can ink the contract earlier. We have effective date end of September, maybe October, but the contract already signed.

[Julia Qian, CFO and Director at Health In Tech]

Those are including in the pipeline because it's not on the financial reporting period, then we will just able to seeing this is a pipeline, $60.6 million, and then $1.9 million is already sold. The rest is being sold with a conversion rate. When we look at a conversion rate, we look back what is the conversion rate, actual conversion rate from January to June, then we know the range. The low end is 15%, the high end is 40%. But with all the improvements, that would drive two things. One is pipeline will continue to build. There's five more months to go for the year, and the conversion rate should be a little bit higher because now we offering a paper solution other employers really like to enter into.

[Julia Qian, CFO and Director at Health In Tech]

If I give some of the commentary about the trajectory of the business, this is a conservative review we're looking at. The pipeline will be growing, and the conversion rate will be higher.

[Marla Marin, Analyst at Zacks]

Okay, got it.

[Tim Johnson, CEO and Director at Health In Tech]

Yeah. The feedback is from the demos, because again, the product's getting launched here in the next 15, 20 days. If we're talking about HitRix, the Three-Year one's already out there, but the HitRix one, if that's what you're talking about, the feedback is great. We're really selling a lot of convenience here, and it's making the brokers' lives easier to do their job, and that's what they like about it.

[Marla Marin, Analyst at Zacks]

That is what I was trying to get at. In other words, the contracted revenue is already in hand. The pipeline revenue, there'll be a conversion rate, which could be significant. But beyond that, there's probably pre, before it even hits that stage in pipeline revenue, there's a lot of feedback that you're getting right now from partners.

[Tim Johnson, CEO and Director at Health In Tech]

A lot.

[Marla Marin, Analyst at Zacks]

Right and I'm just trying to gauge, you mentioned that it is positive. I am just trying to gauge what it could mean to that pipeline as it develops going forward. That was it, and I think you answered that. My last question is, you mentioned a couple of times that there are five more selling months in the year. Just remind us, please, in terms of the seasonality of the selling of these products. Are we in a heavier selling period now in the back half of the year?

[Tim Johnson, CEO and Director at Health In Tech]

It will pick up in November and December for the small group, for sure. Excuse me. Yeah, for sure, because when the Affordable Care Act happened, there was a lot of groups that moved because they wanted to get grandfathered in years ago, before January 1, so they would have to pay the price for the Affordable Care Act plans and everything else. So we have a lot of business in November and December, but between now and then, it will be moderate on the small group. They can change, and they do frequently change or pull themselves out of fully insured.

[Tim Johnson, CEO and Director at Health In Tech]

But it is not as high as July, for example, June and July. August is a down month, but yet we had a I think our August was I do not remember what our August was, to be honest at this time, but I know our September was pretty good. It is starting to pick up now as we transition to this new carrier.

[Marla Marin, Analyst at Zacks]

Okay. Thank you.

[Tim Johnson, CEO and Director at Health In Tech]

Yep.

[Operator]

This will conclude our question and answer session. I would like to turn the conference back over to Mr. Johnson for any closing remarks. Please go ahead.

[Tim Johnson, CEO and Director at Health In Tech]

Thanks, operator, and thanks to everybody for joining us today. Before we close, I'd like to leave you with this. Health In Tech was not built to be a marginally better version of how self-funded health insurance has always been sold. We built this company to replace a process that has been slow, opaque, and expensive for employers for decades, and we are doing exactly that every single day at scale. Every quote our platform generates in minutes instead of weeks, every carrier we add widens competitive pricing, every plan we streamline into a single transparent framework, that is real money staying in the pockets of businesses and employees who trust us with their healthcare plans. Collectively, our platform has already helped employers avoid hundreds of thousands of dollars in unnecessary costs, and as we scale into larger employer groups and expand our carrier network, that number grows with us.

[Tim Johnson, CEO and Director at Health In Tech]

This team knows how to execute. We have grown this business profitably. We have built and shipped technology most companies our size couldn't attempt, and we have done it with capital discipline every step of the way. We're not asking you to take our growth story on faith. We are asking you to look at what we've already built and to measure us against what we do next. We are just getting started. Thank you all for continued partnership and trust. We look forward to updating you again next quarter. With that, I'll turn it over to Lori for the closing statement.

[Lori Babcock, Chief of Staff at Health In Tech]

This is all the time that we have for today. This concludes the Health In Tech Q2 2026 investor earnings conference call. We encourage our community to continue to reach out to us, and we can answer any questions that you have individually. You can send your questions to us at ir@healthintech.com. We would like to thank our listeners, shareholders, analysts, and others who have taken the time to listen to our earnings call. We urge you to refer to our latest SEC filings for any information that you need. This call will be available from our website in the investor section, and you will find the link there. To be alerted to news, events, and other information in a timely manner, we recommend following us on all of our social media channels, sign up to our newsletter, and explore our website at www.healthintech.com.

[Lori Babcock, Chief of Staff at Health In Tech]

Thank you everyone for participating and listening to the call today.

[Operator]

Thank you all again. This concludes the call. You may now disconnect.

Participants

Executives

• Lori Babcock, Chief of Staff
• Tim Johnson, CEO and Director
• Julia Qian, CFO and Director

Analysts

• George Sutton, Analyst at Craig-Hallum
• Allen Klee, Analyst at Maxim Group
• Marla Marin, Analyst at Zacks