Health In Tech (NASDAQ:HIT) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below.
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Summary
Health In Tech reported Q2 2026 GAAP revenue of $8.1 million, a decline from $9.3 million a year ago, primarily due to a timing shift in policy effective dates caused by onboarding a new carrier partner.
The company emphasized contracted revenue, amounting to $32.3 million for 1H26, and pipeline revenue at $66.3 million as of July 31, as more accurate indicators of business momentum.
Strategic initiatives include the upcoming launch of the Hitrix platform aimed at the large-group self-funded stop-loss market and the first employer group secured under their three-year rate stabilization program.
The company reaffirmed its full-year 2026 revenue guidance of $45 million to $50 million, supported by continued sales efforts and an increase in distribution partners to 933, up 19.9% year-over-year.
Management highlighted ongoing investments in sales, marketing, and technology, reflected in increased operating expenses and a negative adjusted EBITDA of $1.3 million for the quarter.
Full Transcript
Julia
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 considerations around this quarter's numbers. I want to use my time simply to talk through the figures themselves through lenses of the metrics we introduced last quarter: contracted revenue and the platform placed plan value, because those are the numbers we believe quite holistically reflect the health of this business.
Contracted revenue means the revenue that is contractually committed under the active policies that simply has not been recognized under GAAP accounting. There are total 32.3 million for the first half of '26. 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. Beyond what’s already contracted, our pipeline revenue—policies current in quoting or binding stage or post 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 the expected conversion rate of 15% to 40%. Now, 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, this number 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 to $50 million.
That is real forward revenue visibility extending well into next year, and we believe it provides a more extensive picture than just the single-quarter top-line print can. Now, turning to platform placed plan value, or PPPV, which represents the aggregated contractual value of the self-funded stop-loss plans placed through our platform, including premium, current funding, and administrative fee measures. Our overall each plan's full contract term PPPV stood at 84 million as of June 30, 2026.
I want to be clear that PPPV is a measurement of platform transaction value, not indicating our 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. The dip reflects the timing of the new carrier onboarding that shifts certain policies effectively into the future period, not a change in underlying demand. The onboarding of the new carrier and the certain related portfolio transfer between the carriers were designed to provide greater options and flexibility to our employer customers.
As a result, the number of accounts receivable days, 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 days. For example, there were 42 days’ accounts receivable days in 2023, and then we bring down to 2924, and further down 14 accounts receivable days in 2025. So it's a remarkable change and improvement once the carrier was starting work with us.
We actively manage these financials as well. 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 profitability, adjusted EBITDA was negative 1.3 million for the quarter and negative 2.6 million for the first half of the year, compared to positive EBITDA of 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, and the net loss for the same period.
Compared with the same period, the net loss was 1.4 million for 1H26, or 0.07 per diluted share, compared to the net income of 1.1 million, or 0.02 per diluted share. These reflect 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 were 7.3 million, compared to 5.6 million for the same period of the year time 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 spending has been increased. General and administrative expenses were 4.3 million, compared to 3.8 million for the same period last year, and research and development expenses were 0.9 million, and we capitalized 0.8 million on software development costs, compared to 0.6 million and 0.9 million, respectively, for the same period of last year, reflecting continued investment in our technology platform under Sri's leadership.
Turning to our balance sheet, we ended the quarter with 6.5 million in cash and cash equivalents and 11.8 million in working capital, compared to 8.1 million in cash and cash equivalents 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 stockholders' 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, and we believe contracted revenue and platform placed revenue are clear windows into where the company is actually heading. We also reported pipeline revenue to give you more visibility of where the company trajectory is.
With that, now I turn it back to Rory.
Rory
Thank you, Julia and Tim, for these prepared remarks. And 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 touchtone 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. And 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. So, 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
Sorry, guys. I was on mute. Yeah. Good to talk to you, George. Thanks for the question. So, understanding how insurance carriers are rated—and even stop-loss carriers have A ratings—certain brokers around the country, and especially the bigger ones, we call them the alpha houses, they require under their corporate charter to only write business with A carriers. And we weren't with a carrier that—they were admitted—they just didn't have an A rating.
So 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. So 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
And just help us understand the impact of having that A rating and what that might mean broadly for the business opportunity.
Tim
Yeah, I mean, 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. So I would say that, you know, our projections—we try to be conservative in our projections—but it will bump our projections at least, I don't know, 20% to 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, January is our biggest time of the year by far. Most effective dates are in January. So we will—yeah, we're going to pick up a lot more business. And, you know, I'm trying to not be too direct with that answer. I don't think I'm supposed to be on here.
Julia
Yeah. So, George, I want to add a little bit, right, because the small group is really—normally people pay less attention to 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. So just to give a little bit of background, you know, our software we talk about, Hitrix, is really real market in the large group.
So not only just we expand dramatically our addressable market, but also that means we can offer the total completed solution including the small employers and the medium, the large employers. So that would dramatically change how our business outlook is when we have a pipeline revenue. We do not even include that part.
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 that does for the business once it's up and running?
Tim
Good question. Well, the existing 933 brokers are automatically—because we're, as I said in the discussion we just had, they're all going to get access to it immediately, which means, and Julia has pointed out, it's the larger market space, and they can now market to multiple MGUs at A. You know, as easy as it was to create a submission on the small group side, this marketplace that we've created is—it's 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's supposed to be launched coming up, and I'm looking at my calendar—in the next two, three weeks, so that'll come on. We're 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've done lots of demos of—we have a demo page we created, and we're doing demos for everybody now. So there's a lot of excitement on that product.
George Sutton, Analyst at Craig-Hallum
Okay, then lastly for me, the three-year stabilization program—that's something we're very excited about. 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's been since you signed this first customer?
Tim
Yeah, I can tell you the pipeline. One of our partners in the program, 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. And these are large, as you can imagine. They're municipalities, government agencies, counties, cities, all the—you know, everything in between.
They're not small. So 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. There are cities that everybody on this call would know for sure. Some probably live in them. So it's a big opportunity that's coming in really fast.
George Sutton, Analyst at Craig-Hallum
Beautiful. Thanks, guys.
Tim
Thanks, George.
OPERATOR
The next question will come from Alan Klee with Maxim Group. Please go ahead.
Alan 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 you thought that impacted your results by a certain amount, not having that, or—I'm not sure.
Rory
Yeah. Because a lot of our growth in the large and small — I mean, we call them Alpha, the bigger brokerage firms — they don't write anything if 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 it's, people say, it's in their E&O. 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.
Alan 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?
Julia
It's more going forward. Yeah. So we clearly mentioned on the call, because of adding additional carriers, it's not a demand problem, it's shifting. Because now, within the new incoming carriers and the preparation and the old carriers, that's the reason we're reporting even the pipeline revenue. It's a timing shift. As you know, for GAAP accounting, it's really based on the amortization upon the effective date. When you shift a quarter, some of the revenue is going to shift a quarter to the next year.
It just affects — even if you can sell the most, you can sell — so that's why we reported the pipeline revenue. When we're looking at, you know, we have five more months to continue to sell, the revenue itself already gives people a pretty good indication on this year and what is possible and the range and beyond.
Alan Klee, Analyst at Maxim Group
Okay, and how do you feel about your preparation with your offerings and having the time to educate the brokers and the clients for the big amount of renewals at the end of the year? Do you feel like you're going to be fully able to work on that and be successful?
Rory
That's a very good question. So I never feel like I have enough time, just between us. But, you know, this timeframe right now, it needs to come out because everybody's starting to market their 1/1 business. They go out with the larger groups. That's what Hitrix is. So that's a new product for them. I wish that it could have been done six months ago. I, you know, I want my tech built yesterday. I always do. But we're gonna — by 1/1, we'll have a lot more opportunity running through it because of Hitrix.
Again, I wish I could have 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 they run and what are they doing. And we're hitting it just right. I mean, 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, at this point, it's drag and drop. We've made it so easy for them to submit the opportunity in the system. Yeah, 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.
Alan Klee, Analyst at Maxim Group
That's great. And then if you could just help me understand the path to getting to your guidance a little bit. You said that contracted revenues that's going to show up in the second half, you believe, is going to be 14 million. And then you said pipeline revenue, based on conversion rates, could be 3 to 8. So if you add those two pieces up, that gets you to 17 to 22 million. And then in the first half, you did 17 million. So if you add both of them up, you're not quite at the 45.
So is it just new business in addition, as you mentioned, pipeline, or what gets you from what I just said to your target?
Julia
Yeah, that's a great question, Alan. What you're looking at is as of June and the one month of the pipeline that got us there, right? So we have five more months to continue to sell, to continue to build the pipeline, to convert to the business. So that's the reason we even give the range to look at that. And while the conversion rate is in the range of about 15 to 40%, when you do this calculation — and clearly, we are adding 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.
Alan Klee, Analyst at Maxim Group
That makes perfect — that's what I thought, thanks. And then 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 other ways. So your gross margin this quarter was like 48.7%. That compared to like 51.4% in the first quarter. Is it reasonable to think that that may kind of stay at a lower level than it had been in the past, based on this quarter?
Julia
Yes. So when we offer the plan and work with various partners, inevitably there will be the compromise of the gross margin. That's the trade-off of spending through our distribution partners. But at least I want to point out that this is a very asset-light 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. So we don't have all the sales team sell for us, but through the partner.
And also in future we should be seeing, when we have Hitrix offering the market, we have a different way. There will be a mix of the gross margin which should be around the range of 45 to 50% of the gross margin — still pretty healthy, considerably, for our sector.
Alan Klee, Analyst at Maxim Group
Okay, so 45 to 46% in the future is what you're thinking? That's what I heard. Okay, great. And one last question on the three-year stabilization, which I'm praying my company will do this next year — that's a science question. If a lot of that's going to municipalities, remind me, government year-ends — is that like 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?
Rory
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're talking to, none of these effective dates that we're talking to right now — I don't know, because we really don't talk to them a lot about their effective date on their stop-loss policy. They're more concerned about figuring out how to do this faster and get it above their existing one, even if it's in place today, because we're agnostic to the carrier, even the effective date.
But really, even the effective of their policy — it really works better if you do have it that way. But some of the people we're talking to, you know, it's just math and we can figure out how to move it around.
Alan Klee, Analyst at Maxim Group
That's great. That's exciting. Okay, thank you. Keep it up.
OPERATOR
The next question will come from M. Moran with Zacks. Please go ahead.
M. Moran, Analyst at Zacks
Thank you. So 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 or, you know, some other element that revolves around actual commitment. So 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
Yes, absolutely. And I want to remind everybody again, this pipeline revenue is as of July. So when we continue to execute and add the A carrier more, you should see a much higher pipeline and also a higher conversion rate. So the pipeline revenue means there are employer plan proposals being quoted — some at different stages of the implementation, some in the stage of being reviewed. So this is really representing a huge part of the opportunity running through our system.
And obviously, contracted revenue means, through the effective date, it's already contracted and the policy is bound and everything is signed. So we are really commissioned to recognize all the revenue through the effective date of the next either 12 months or 36 months, depends on the term of the policy.
M. Moran, Analyst at Zacks
Okay, that's helpful. And can you also give us a sense of what you would say the sales cycle is — how long it takes to get to 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 touch point. So do you have a sense of how long that process takes?
Rory
I would like to address that question. Yeah. So it depends on the size of the group — appreciate the question. Small groups will 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.
They already have their plan designs and everything in there. It's really just point and click. Here's all the options taken away from them. It's just easier for them to pick the cost versus what PBM, what TPA, all these other things. So the larger groups — yeah, it's a 90-day turn probably from a conversation. The smaller guys — I mean, 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.
M. Moran, Analyst at Zacks
Okay, thank you, that's helpful. And then those are quantitative numbers — I mean, 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 would give us a sense of the kind of positive feedback you're seeing, can you try to put some — not numbers around it — but, you know, where do you think that might go over the next year or two in terms of, you know, taking up some of these pipeline and contract figures?
Rory
I'll let Julia answer that. I'll get myself in trouble.
Julia
Okay, can you just re-form your question again so I could...
M. Moran, Analyst at Zacks
Yes, yes. So the numbers you've provided and termed contracted and pipeline — those are 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 — the qualitative number could grow significantly over the next, I don't know, several quarters?
Julia
Yes, that's right. So one thing I want to just reemphasize: the contracted revenue is the revenue we already contracted from the effective date in the last six months. Right? So it's actual sales. It's not something that is going to be sold — it is contracted and sold. We are collecting revenue for either 12 months or 36 months.
UNKNOWN Analyst
Okay, got it. 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, you know, could be significant. But beyond that, you know, there's probably, you know, before it even hits that stage of pipeline revenue, there's a lot of feedback that you're getting right now from partners. Right. And I'm just trying to gauge — you know, you've mentioned that it's positive. I'm 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. And then my last question is, you've 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?
Okay, thank you.
OPERATOR
And 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.
Mr. Johnson
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 health care plans. Collectively, our platform has already helped employers avoid hundreds of thousands of dollars in unnecessary costs. As we scale into larger employer groups and expand our carrier network, that number grows with us. 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, Investor Relations
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 [email protected]. 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 Investors 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. Thank you everyone for participating and listening to the call today.
OPERATOR
Thank you all again. This concludes the call. You may now disconnect.
Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.
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