Health In Tech, Inc. (HIT) Earnings

Management highlights

- Market Opportunity * The company addresses the large, underpenetrated self-funded stop-loss insurance market, which holds an estimated $1 trillion in annual stop-loss premiums, with over 1 million total industry insurance brokers. * Current broker distribution penetration is well below 0.1%, leaving massive long-term growth runway. 80% of large businesses already use self-funded plans, compared to just 27% of small and medium businesses, creating untapped demand. - Strategic Priorities for 2026 * 2025 proved the business model can scale and deliver profitability; 2026 is focused on deliberate, targeted investment to accelerate long-term growth by expanding distribution, adding capabilities, and growing market share. * In March 2026, the company closed a $7 million gross proceeds PIPE financing to fund growth initiatives. The raise was not driven by working capital need (the balance sheet remains fundamentally strong) but to broaden the institutional shareholder base with limited dilution and provide incremental capital for expansion. - Key Growth Initiatives * Expand sales distribution: Invest in growing the in-house sales team, add structured broker outreach and marketing, and increase industry conference participation to build a scalable, capital-light distribution engine. The sales team focuses on onboarding brokers (not direct employer sales) for efficient scaling, with a goal of becoming the core infrastructure layer for brokers serving self-funded clients. * Add new carrier partners: Expand the number and diversity of carrier partners on the platform to provide more pricing options for employers at renewal, reduce the impact of carrier risk appetite shifts, improve close and retention rates, and drive higher platform utilization. * Upgrade technology and AI capabilities: Partner with Siklim, an AWS Advanced Tier partner, to unify front- and back-end workflows (quoting, underwriting, administration, analytics), improve scalability, cybersecurity, and data reporting capabilities to support expansion into larger employer markets. A recent eDIBS platform update added workflow improvements, automated data parsing, AI-driven risk insights, and in-platform broker-to-underwriter messaging that has received positive early broker feedback. * Expand product and service offerings: Launched pre-configured end-to-end self-funded plan administration bundling plan design, stop-loss coverage, and vendor management, with over 100 curated pre-built plans that reduce complexity for brokers and employers. The three-year rate stabilization program (addressing employer pricing volatility) is on track for market testing in Q2-Q3 2026, with initial testing already generating broker interest. A new data-driven analytics solution combining psychological and claims data is entering beta testing in Q2 2026, with long-term potential for expansion beyond the core market.

Guidance

- Management reiterates full year 2026 revenue guidance of $45 million to $50 billion, representing 35% to 50% year-over-year growth. - As of Q1 2026, management estimates $31.7 million in total 2026 GAAP revenue will be reported (including the $8.8 million recognized in Q1 and $22.9 million remaining contracted revenue to be recognized in the final three quarters), before monthly adjustments. - Elevated investment levels across sales, marketing, product development, and technology are expected to continue throughout all of 2026 as the company builds out its scalable growth engine. - The three-year rate stabilization program is forecast conservatively to begin contributing revenue starting in Q4 2026, though management notes early traction could lead to first sales as early as Q2 2026.

Segment performance

Health in Tech operates as a unified AI-powered marketplace for self-funded health plans and stop-loss insurance, and does not report separate product segment financial performance in this call. For the consolidated company in Q1 2026: - Total GAAP revenue: $8.8 million, representing 9% year-over-year growth. - Adjusted EBITDA: negative $1.3 million, compared to positive $1.2 million in Q1 2025. - Net loss: $1.6 million, compared to net income of $0.5 million in Q1 2025. - Total operating expenses: $10.1 million (corrected from original transcript formatting, 115% of revenue), broken out as: - Sales and marketing: $2.3 million (26% of total revenue), double the $1.1 million (14% of revenue) from Q1 2025. - General and administrative: $3.5 million (39% of total revenue), up from $3.2 million (41% of revenue) in Q1 2025. - Research and development: $0.9 million (10% of total revenue), up from $0.5 million (7% of revenue) in Q1 2025. - New operating metrics introduced this quarter: - Contracted revenue (remaining three quarters of 2026): $22.9 million. - Platform-placed plan value (PPPV) for Q1 2026: $82 million, representing the full 12-month aggregate contractual value of all plans placed through the platform.

Risks & headwinds

- Forward-looking statements are inherently uncertain, and actual results may differ materially from projections due to unidentified risks and unanticipated events, as detailed in the company's upcoming Form 10-Q filing with the SEC. - The three-year rate stabilization program is still in the testing and refinement stage, with no closed deals finalized as of the Q1 earnings call, so near-term revenue contribution remains uncertain. - Broker adoption of new products and platform features can take longer than initially expected as the market educates itself on new offerings, which could delay expected revenue growth. - Near-term profitability is expected to decline due to deliberate planned investment in growth initiatives, with improved operating leverage only expected to materialize over the long term as scale increases.

Analyst Q&A

• Q: Can you update on progress across your key 2026 expansion areas (distribution, products, tech) and share early broker feedback? /

  A: The company has barely penetrated the total available broker market, so current expansion focuses on hiring 2-3 new outbound sales reps and increasing marketing to boost platform visibility. The 100+ pre-configured plan offering simplifies self-funded plan evaluation for brokers, who have historically found self-funded plans much more complex than fully insured options, and early response is positive. The three-year rate stabilization program has been revised to be carrier-agnostic, expanding its addressable market, and the company expects to close its first deal for the program in Q2 2026 if current pipeline progress continues. /

• Q: How should investors interpret the new Platform-Placed Plan Value (PPPV) metric, and how does it correlate to reported GAAP revenue? /

  A: PPPV represents the full 12-month aggregate value of all self-funded and stop-loss plans placed through the platform, including total premiums, claim funds, and administrative fees. GAAP revenue is recognized monthly over the full 12-month term of each policy, so only a portion of a quarter's new PPPV contributes to GAAP revenue in that same quarter. The new metric, paired with contracted revenue for future periods, gives investors better visibility into future revenue streams and overall platform activity. /

• Q: What is the sales cycle and revenue recognition for the three-year rate stabilization program, and do you require an upfront deposit? /

  A: The program targets larger employers, so it has a longer sales cycle than standard one-year plans, but the company is already seeing strong market interest, in part because the overall stop-loss market is currently tight. Revenue recognition follows the same monthly GAAP approach as standard plans, with revenue recognized each month over the 3-year term, and contracted revenue reporting will disclose the multi-year commitment to give investors full visibility. The company does not require an upfront deposit for the program, and rate increases are averaged evenly across the full three-year term to deliver predictable budgeting for employers. /

• Q: Could your new data analytics solution expand beyond your current core target market over time? /

  A: Management confirmed that the initial beta launch of the analytics solution is just the first step, and the company expects significant opportunity to expand the use cases and market reach of the data product beyond its original target market as capabilities are developed.