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HI

Health In Tech, Inc. (HIT)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $9.314M, up 86% YoY; adjusted EBITDA was $1.569M (+134% YoY), and net income was $0.631M .
  • Revenue materially beat Wall Street consensus ($7.470M*) while EPS was in line at $0.01*; first-half revenue reached $17.329M, already 89% of FY2024 [$19.491M] .
  • Management highlighted distribution expansion to 778 partners (+87% YoY) and 24,839 billed enrolled employees (+30% YoY) as key growth drivers .
  • Operating leverage improved, but GAAP gross margin compressed to 67.7% (vs. 80.5% YoY) due to higher cost of revenue and public-company costs; CFO quantified ~$0.8M quarterly public-company expense .

Consensus values marked with * retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Revenue growth of 86% YoY to $9.314M and first-half revenue of $17.329M (89% of FY2024) demonstrated strong momentum and effective distribution-led expansion .
  • Adjusted EBITDA rose to $1.569M (+134% YoY) with first-half adjusted EBITDA of $2.797M (1.2x FY2024), reflecting positive operating leverage .
  • Partnerships expanded meaningfully (Verdegard/MedImpact, Unified Health Plans, HILB Group, Bailey Insurance), deepening channel reach and cost advantages (e.g., lower drug costs via MedImpact scale) .
  • Management emphasized rapid underwriting cycles (two minutes for small groups; five days to two weeks for mid/large) and on-track Q3 launch of enhanced large-group underwriting platform, supporting TAM expansion .

What Went Wrong

  • GAAP gross margin fell to 67.7% (vs. 80.5% YoY), indicating cost pressure from infrastructure and partner fees; CFO also cited ~$0.8M quarterly public-company costs raising G&A to 40.5% of revenue .
  • HI Card revenue was $0 in Q2 2025 (vs. $0.768M in Q2 2024), with management prioritizing reactivation timelines into late 2025/early 2026, pushing associated revenue into next year .
  • Sequential gross margin was broadly stable vs. Q1 2025 (66.8%), but remains materially below FY2023 levels, reflecting sustained higher cost of revenue and partner-related access fees noted in prior quarter/year .

Financial Results

Core P&L and Margins vs Prior Periods (oldest → newest)

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD)$4,904,564 $8,014,984 $9,313,849
Net Income ($USD)$(144,152) $498,592 $630,631
GAAP Gross Margin (%)77.4% 66.8% 67.7%
Pre-tax Income ($USD)$(110,748) $684,423 $833,268
Adjusted EBITDA ($USD)$500,000 $1,200,000 $1,569,016

EPS vs Prior Periods and Estimates

MetricQ4 2024Q1 2025Q2 2025
Diluted EPS (Actual)Not disclosed $0.01 $0.01
Diluted EPS Consensus Mean*N/AN/A$0.01*

Consensus values marked with * retrieved from S&P Global.

Actuals vs Wall Street Consensus (Q2 2025)

MetricConsensus*Actual
Revenue ($USD)$7,469,680*$9,313,849
Diluted EPS ($)$0.01*$0.01

Consensus values marked with * retrieved from S&P Global.
Result: Revenue beat; EPS in line.

Revenue Components (Segment-like disclosure)

Revenue Component ($USD)Q4 2024Q1 2025Q2 2025
Underwriting Modeling (ICE)$1,697,080 $2,351,984 $2,090,576
Fees – SMR$2,470,284 $5,663,000 $7,223,273
Fees – HI Card$737,200 $807,374 $0
Total Revenues$4,904,564 $8,014,984 $9,313,849

KPIs and Balance Sheet Metrics

KPI / MetricQ4 2024Q1 2025Q2 2025
Billed Enrolled Employees18,348 24,307 24,839
Distribution Partners—459 active brokers 778 partners
Cash$7,849,248 $7,575,037 $8,138,166
Accounts Receivable, net$1,647,103 $2,110,601 $1,281,131
Operating Cash Flow (Quarter)—$527,353 $1,481,276

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Large-group underwriting (enhanced platform)Q3 2025Beta demonstrated with 1,100+ lives; rollout targeted for Q3 On track for full Q3 launch; partner training planned Maintained timeline
HI Card program activityH2 2025 → Q1 2026Exploring reintroduction; timing TBD Implementation accelerating; partial build in Aug 2025, completion by year-end; revenue impact expected Q1 2026 Clarified timing; revenue deferred
Financial guidance (revenue/margins/EPS)2025None providedNone providedMaintained (no formal ranges issued)

Earnings Call Themes & Trends

TopicQ4 2024 (Prior-2)Q1 2025 (Prior-1)Q2 2025 (Current)Trend
AI/Technology underwritingFramed beta for large-group AI-backed underwriting; 3-month process reduced materially Continued beta; targeting Q3 rollout On-track Q3 full launch; 5-day cycles for large groups Execution progressing; efficiency gains
Distribution/channel strategyExecutive team expansion; partners and carriers broadened Active brokers up to 459; channel-led acquisition reduced S&M ratio 778 partners; partnerships (Verdegard/MedImpact, Unified, HILB, Bailey) Rapid expansion; diversified partners
Product performance & HI CardFY2024 HI Card contribution noted HI Card revenue present in Q1 HI Card $0 in Q2; reactivation underway; revenue expected Q1 2026 Transition; future ramp expected
Macro/regulatoryPositioning for efficiency tailwinds Self-funded value proposition emphasized ACA rate hikes (26%+), market uncertainty as opportunity Conditions favor alternatives
R&D execution/CapExInvestment year; IT/infosec strengthened Capitalizing software; margin supports investment $0.9M dev spend in Q2; $1.6M H1 dev Ongoing platform build
Regional trends—Kansas via Unified Health Plans highlighted Schools and regional niches via Unified; national reach via HILB Broader reach forming

Management Commentary

  • “We delivered a remarkable $9.3 million in total revenue… first half revenues… 89% of our entire 2024 fiscal year total… distribution network… 778 partners (+87% YoY)… demand… evident in the 30% increase in billed enrolled employees” — Tim Johnson, CEO .
  • “Adjusted EBITDA for the quarter was $1.6 million… first-half pretax income… 8.8% of revenue… ~300 bps improvement… $8.1 million cash position… focused on investing in high-impact initiatives” — Julia Qian, CFO .
  • “Our platform enables brokers to create customized health plans… underwritten… in about two minutes… partnerships with Verdegard (MedImpact), Unified Health Plans, and HILB Group” — Dustin Plantholt, CGO .
  • “Public-company specific costs… ~$0.8 million for the quarter… D&O, board comp, legal, audit, IR” — Julia Qian, CFO .

Q&A Highlights

  • Seasonality and momentum: Despite typical Q2/Q3 seasonality, small groups can move off effective dates; partnerships support intra-year traction .
  • Large-group underwriting rollout: Experience-based underwriting (EBU) reduces cycle times from months to ~5 days; full launch on track for Q3 .
  • Revenue mix: Underwriting fees scale with premiums; larger employers often select richer program services (PEPM), driving fee growth .
  • HI Card timeline: Accelerated build in Aug 2025 with completion by year-end; revenue expected to begin Q1 2026 .
  • Operating leverage: Revenue growth outpacing expense growth; technology replacing manual processes to sustain leverage .

Estimates Context

  • Q2 2025 revenue beat: Actual $9.314M vs. consensus $7.470M* (≈ +24.7%); EPS $0.01 in line with $0.01* .
  • Forward consensus: Q3 2025 revenue $7.050M*, Q4 2025 $7.319M*, Q1 2026 $9.209M*; EPS remains around $0.01* across periods; limited coverage (# of estimates = 1–2) suggests higher uncertainty*.

Consensus values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Strong top-line beat driven by rapid channel expansion and adoption across TPAs and brokers; fee revenue (SMR) is the primary growth engine .
  • Operating leverage evident (adjusted EBITDA +134% YoY), though GAAP gross margin remains below prior-year levels as partner/infrastructure costs and public-company expenses weigh on margins .
  • Execution milestones: Q3 launch of large-group underwriting and HI Card rebuild by year-end should broaden TAM and create new revenue streams into early 2026 .
  • Partnerships (Verdegard/MedImpact, Unified Health Plans, HILB) provide distribution scale and cost advantages (e.g., pharmacy savings), supporting sustained growth .
  • KPI momentum: Billed EEs up to 24,839; distribution partners at 778; H1 operating cash flow positive; AR days kept below 30, indicating healthy working capital discipline .
  • Near-term: Revenue upside catalysts from partner-driven pipeline and platform efficiency; monitor margin progression as scale offsets public-company costs .
  • Medium-term: Successful large-group platform rollout and HI Card relaunch can re-accelerate growth mix; watch for any formal financial guidance as coverage broadens .

Additional Notes and Cross-References

  • CFO’s remark that “Adjusted EBITDA for the first quarter was $1.6M” appears to be a misspeak; press release and tables show Q2 adjusted EBITDA of $1.569M and Q1 adjusted EBITDA of $1.2M .
  • Non-GAAP reconciliation identifies key adjustments: stock-based compensation ($0.708M in Q2), tax expense, and interest income; these underpin the $1.569M Q2 adjusted EBITDA result .
  • Relevant Q2-period press releases: earnings results (Jul 21), Verdegard partnership (Jul 24), Nasdaq bid-price compliance regained (Jul 24), Davos summit announcement (Jul 23) .