Health In Tech, Inc. Q1 FY2025 earnings call

• Q1 2025 marked strong growth with $8 million in revenue, 56% YOY growth, and $0.7 million in income before income tax, a 257% increase YOY.
• Advanced AI-backed underwriting capabilities within the eDIYBS platform for mid-to large-sized businesses, with full-scale rollout planned for Q3.
• Strategic collaboration with DialCare to integrate virtual care services into self-funded health plan offerings.
• Expanded broker network to 459 active brokers, doubling from the prior year.
• Welcomed Sanjay Shrestha to the Board of Directors, leveraging his experience in scaling platform businesses and capital markets.

Total revenue for the first quarter reached $8 million, up 56% year-over-year. Revenue from the underwriting model grew 31.8% to $2.3 million, while program fee revenue surged 69.5% to $5.7 million. Gross profit was $5.3 million, translating to a gross margin of 66.8%. The number of enrolled employees on the platforms rose to 24,307, up from 20,802 in Q1 2024. Fee-based revenue outpaced underwriting revenue, reflecting employers' willingness to invest in higher-quality coverage and enhanced service offerings.

• Expect strong sales momentum to continue into the second quarter.
• Confident in achieving top line growth, operating leverage, and solid bottom line results.

Q: Should we think about the growth in enrolled employees in terms of seasonality?

A: January is typically the best month as many groups renew health insurance on 01/01, but the percentage increase is what's notable, and maintaining those percentages could lead to better results than last year.

Q: Can you give more color on the target market segmentation, especially for employers with 1,000 or more employees?

A: The technology being brought allows for more efficient communication between brokers and underwriters, improving speed and data parsing, which is a dramatic shift in the process.

Q: Explain the difference between underwriting and program fees revenue?

A: Revenue includes underwriting fees (earned as a percentage of premiums from underwritten premiums) and program fee revenue (earned when employers choose healthcare plans, with fees associated with tailored networks and benefits).

Q: Talk about the health of the self-funded market and trends?

A: Most larger groups are self-funded, with self-funded offering more flexibility than fully insured. The company mitigates risk through coverage limits and health management programs to help employers manage costs.

Q: Will the AI-powered underwriting platform have different pricing?

A: No, the new system improves the process by automatically parsing data for underwriters, making the process quicker and more efficient but not changing pricing.

Q: Explain the channel partners and their role?

A: Channel partners bring distribution and customers, allowing the company to reach out to brokers and distribution more effectively without significant sales and marketing spend.

Q: Compare the collaboration with DialCare to standard offerings?

A: DialCare has a proprietary health program with flat fees for specific services, which the company partners with to make underwriting and budgeting easier, with plans to do more business together.