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HI

Health In Tech, Inc. (HIT)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered strong top-line acceleration: revenue grew 56.4% YoY to $8.015M, with Adjusted EBITDA up 163% to $1.2M; pretax income rose to $0.684M (8.5% of revenue), up 257% YoY .
  • Mix shift toward program fees (SMR) and scaled distribution drove operating leverage, though GAAP gross margin compressed to 66.8% (−13.9ppt YoY; −10.6ppt QoQ) on higher cost-of-revenue tied to channel partners and infrastructure .
  • Versus S&P Global consensus, revenue was a significant beat (+16.7% vs $6.869M*), while EPS was in line at $0.01*; low coverage (1 estimate) tempers signal strength [GetEstimates; S&P Global]*.
  • Management reaffirmed momentum into Q2 and is on track for a full Q3 rollout of the large‑group, third‑party AI‑powered underwriting platform—key potential catalysts alongside continued fee revenue growth and broker network expansion .
  • Near-term stock reaction catalysts: revenue beat, expanding TAM from large‑group underwriting (Q3 launch), and program-fee mix; risks include margin compression from partner costs and execution on AI underwriting scale-up .

What Went Well and What Went Wrong

  • What Went Well

    • “We’re off to a strong start in 2025… revenue grew 56%… income before income tax reached $0.7 million—8.5% of revenue” .
    • Program fee revenue surged 69.5% YoY to $5.663M; underwriting modeling rose 31.8% YoY—evidence of strong demand and willingness to pay for enhanced benefits .
    • Broker network scaled: active brokers reached 459, more than doubling from 192 YoY; EEs billed rose to 24,307 (+16.9% YoY), supporting pipeline strength .

  • What Went Wrong

    • GAAP gross margin fell to 66.8% from 80.7% YoY (−13.9ppt), reflecting higher partner/channel fees and platform costs; margin also declined sequentially from 77.4% in Q4 .
    • Cash decreased modestly to $7.575M from $7.849M at year‑end, as the company invested in software development and deferred offering costs; net cash from ops was $0.527M .
    • HI Card fee revenue was not broken out in Q1 (dash), contrasting with $0.807M in Q1 2024, limiting visibility into that optional add‑on’s trajectory .

Financial Results

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$5.125 $4.905 $8.015
GAAP Gross Margin (%)80.7% 77.4% 66.8%
Income Before Income Tax ($USD Millions)$0.192 $(0.111) $0.684
Net Income ($USD Millions)$0.101 $(0.144) $0.499
Diluted EPS ($USD)——$0.01
Adjusted EBITDA ($USD Millions)$0.5 $0.5 $1.2
Revenue Breakdown ($USD Millions)Q1 2024Q1 2025
Underwriting Modeling (ICE)$1.785 $2.352
Revenues from Fees (Total)$3.340 $5.663
SMR (within Fees)$2.533 $5.663
HI Card (within Fees)$0.807 —
Total Revenues$5.125 $8.015
KPIsQ1 2024Q4 2024Q1 2025
Enrolled Employees (EEs) Billed20,802 18,348 24,307
Active Brokers192 N/A459
AR Days29 29 28
Accounts Receivable ($USD Millions)1.647 1.647 2.111
Cash & Equivalents ($USD Millions)7.849 (YE 2024) 7.849 7.575

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue TrajectoryQ2 2025Not provided“We expect continued strong growth in Q2 2025” Qualitative Positive
GAAP Gross MarginFY 2025Not provided“We expect to maintain the margin at least level…” supported by channel partners Maintain level
Large-Group AI Underwriting RolloutQ3 2025Beta development began Nov 2024 On track for full Q3 rollout Timeline maintained
Sales & Marketing IntensityFY 2025Not providedS&M flat YoY; as % of revenue down to 13.6% in Q1 from 20.4% YoY Efficiency improving

Note: Company did not provide formal numeric guidance ranges (revenue, EPS, margins, OpEx, OI&E, tax rate, or dividends) in Q1 materials .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Current Period (Q1 2025)Trend
AI/Technology InitiativesBeta launched Nov 2024; platform integrates third‑party data/ML; focus on large‑group underwriting Delivered early solutions, including >1,000‑employee employer; on track for full Q3 rollout; 70–80% time reduction in underwriting process Accelerating execution
Distribution/Channel PartnersNew channel partner fees raised cost of revenue; pivot to distribution model S&M held flat; channel partners drive customer acquisition; margin discipline via channel strategy Efficiency improving
Product Performance & MixIntroduced Spec & Agg stop‑loss; fee revenue stable in Q4 Fee revenue surged (+69.5% YoY), underwriting also grew; clients willing to pay for richer benefits Mix shift to fees
Broker NetworkNot quantifiedActive brokers reached 459 vs 192 YoY; empowering brokers via eDiPS Strengthening
Macro/Cost FocusNoted foundational investments and moderation in 2024 Employers under cost pressure; HIT aims to manage healthcare costs efficiently Elevated focus
R&D ExecutionR&D up to $2.8M in 2024; platform enhancements R&D expense down in Q1 due to capitalization of eDiPS 3.0 development Capitalizing dev
Virtual Care PartnershipsCollaborations highlighted (Marpai/Vitable DPC) DialCare integration for VPC/therapy/psychiatry into self‑funded offerings Expanding care stack

Management Commentary

  • “Our momentum continues to build post‑IPO… Innovations in our platform, product development, and market expansion are driving meaningful results…” .
  • “We’re on track for a full rollout in Q3 [of the large‑group AI‑powered underwriting platform], marking a major milestone as we broaden our total addressable market” .
  • CFO: “Gross profit reached $5.3 million… We expect to maintain the margin at least level supported by our strategic pivot to a channel distribution model” .
  • CFO on operating leverage: “Operating expenses as a percentage of revenue decreased… to 61%… down from 74% a year ago” .
  • On broker strategy: “By equipping our broker partners with fast, accurate and customizable quoting tools, we aim to… close more deals quickly” .

Q&A Highlights

  • Seasonality: January 1 is typically the strongest month as many groups renew; growth emphasis on sustaining percentage increases month‑over‑month .
  • Market segmentation: Expanding beyond 150 lives into 1,000+ via AI‑enabled underwriting; focus is convenience and process efficiency, not pricing changes .
  • Revenue mix clarification: Underwriting earns a % of premium; program fees tied to plans and networks; employers increasingly prioritizing richer benefits (fee revenue outpacing underwriting) .
  • Self‑funded adoption and risk: Most >150‑life groups already self‑funded; HIT mitigates risk through coverage layering; HIT is a platform and does not take underwriting risk .
  • AI underwriting benefits: Data parsing and third‑party AI/ML reduce processing timelines by 70–80%, streamlining broker-underwriter workflows; pricing approach unchanged .
  • DialCare offering: Flat‑fee model improves budgeting predictability; early stages of partnership; underwriting benefits from cost certainty .

Estimates Context

MetricConsensus (S&P Global)*ActualSurprise
Revenue ($USD)$6,868,590*$8,014,984 +$1,146,394 (+16.7%)*
Primary EPS ($USD)$0.01*$0.01 In line*
# of Estimates (Rev / EPS)1 / 1*—Low coverage*

Values retrieved from S&P Global*.

Implications: The meaningful revenue beat against a single estimate supports momentum but carries limited statistical weight; EPS in line suggests operating leverage offset by margin compression. Expect sell‑side to raise revenue forecasts and reassess gross margin trajectory given channel‑partner impacts .

Key Takeaways for Investors

  • Revenue acceleration with strong fee mix is the core story; sequential revenue +63.5% QoQ and +56.4% YoY with Adjusted EBITDA up sharply to $1.2M .
  • Watch margins: GAAP gross margin compressed to 66.8% (−13.9ppt YoY; −10.6ppt QoQ) on partner/infrastructure costs; channel‑driven go‑to‑market improves S&M efficiency but shifts costs into COGS .
  • Structural catalysts: Q3 rollout of large‑group AI underwriting (process time −70–80%) broadens TAM and can drive quote volume, fee revenue, and operating leverage .
  • Distribution scale: Active brokers at 459 vs 192 YoY and EEs billed +16.9% YoY underpin pipeline health; continued onboarding of high‑performing brokers is key .
  • Cash discipline with investment: $7.575M cash and 28 AR days, net cash from ops $0.527M; continued software investment and capitalization align with platform build‑out .
  • Near‑term trading: Revenue beat vs consensus and Q3 platform launch updates are likely positive catalysts; monitor margin commentary and cost-of-revenue trajectory for stock sensitivity [GetEstimates; S&P Global]* .
  • Medium‑term thesis: If AI underwriting scales and fee revenue continues to outpace underwriting, HIT can compound top line while improving operating leverage; execution on partner economics and platform adoption will determine margin normalization .

Appendix: Source Coverage Notes

  • Q1 2025: 8‑K with Item 2.02 and Exhibit 99.1 press release; full earnings call transcript read .
  • Q4 2024: Press release and full earnings call transcript read for trend analysis .
  • Q3 2024: No earnings materials found in available catalog for Jun–Nov 2024 (searched, none returned) [ListDocuments Jun–Nov 2024: 0 results].
  • Additional Q1 press releases: DialCare collaboration; board appointment; earnings call announcement .