Health In Tech, Inc. (HIT)·Q3 2025 Earnings Summary

Executive Summary

• Q3 revenue of $8.49M grew 90% YoY, but declined sequentially from Q2’s $9.31M as some employer buying shifted into January; diluted EPS was $0.01; GAAP gross margin compressed to 60.6% from 67.7% in Q2 due to mix and reinvestment timing . Management guided Q4 revenue growth ~50% YoY and FY25 revenue of ~$32–$33M with ~90% net income growth .
• Strength drivers: distribution partners expanded to 849 (+57% YoY), billed enrolled employees reached 25,248 (+7,654 YoY), and large-employer underwriting launched on eDIYBS, shrinking large-group quote cycle to ~two weeks (and moving toward ~5 days) .
• Strategic catalysts: three-year rate-hold program targeting 150+ life groups set for full launch in Q1’26 and blockchain claims platform (HITChain) under LOI with AlphaTON Capital to address $300B+ admin costs; management highlighted minimal HIT cash requirement given partner funding .
• Stock reaction catalysts: sustained revenue/EBITDA outperformance vs small-sample Street estimates, proof points in large-employer underwriting, initial FY25 guide, and enterprise blockchain commercialization milestones (LOI→definitive) .

What Went Well and What Went Wrong

• What Went Well

  • Distribution flywheel: partners (brokers/TPAs/agencies) reached 849 (+57% YoY); billed enrolled employees rose to 25,248 (+7,654 YoY) as adoption scaled across channels .
  • Large-employer underwriting launched: quotes for 150+ life groups in ~two weeks (moving toward ~5 days), expanding TAM and accelerating cycle time; showcased at SIIA to deepen broker engagement .
  • Strategic innovation pipeline: HITChain LOI with AlphaTON to tackle claims inefficiency and “minimum cash” draw for HIT; “Ask Tim” AI benefits counselor targeted for 2026; management positioning for thought leadership at Davos .

• What Went Wrong

  • Sequential deceleration: revenue fell from $9.31M in Q2 to $8.49M in Q3 and GAAP gross margin compressed to 60.6% (from 67.7%), as employers shifted decisions into Q1 and HIT reinvested in market expansion .
  • Mix/legacy product: HI Card delivered no revenue in Q3’25 (vs $0.68M in Q3’24); reactivation efforts are underway with revenue impact expected starting Q1’26 .
  • Coverage/estimates depth: limited sell-side coverage (1–2 estimates) reduces external validation and can amplify volatility around prints and guide updates (see Estimates Context below). Values retrieved from S&P Global.*

Financial Results

Overall P&L snapshot (USD Millions, EPS USD)

Commentary:

• YoY: Revenue +90.4% and Adjusted EBITDA +49.4% as reported; gross margin -17.4 pts YoY given mix/scale effects .
• QoQ: Revenue -8.8%, Adj. EBITDA -36.3%, gross margin -7.1 pts; management cited timing shifts into Q1 and planned reinvestment of gross profit in Q4 marketing/PR as drivers .

Segment/Line-item revenue detail (USD Millions)

KPIs and balance items

Estimates vs Actuals (S&P Global consensus; USD)

Values retrieved from S&P Global.*

Guidance Changes

Notes:

• No explicit prior numeric guidance in Q1/Q2 releases; FY25 guide introduced on Q3 call .

Earnings Call Themes & Trends

Management Commentary

• Strategic positioning: “This capability is a significant milestone, extending the speed and scalability of our small-business underwriting into the mid- and large-employer market.” — Tim Johnson, CEO .
• Blockchain rationale: “We’re developing HITChain—a decentralized, verifiable claims infrastructure designed to compress processing timelines, eliminate duplication, lower costs, and create a transparent system of record for all stakeholders.” — Tim Johnson .
• Investment and profitability: “Revenue grew 90% year over year and profit increased 48%… We continue to balance growth with strategic investments in technology and enhanced platform capabilities.” — Julia Qian, CFO .
• Funding efficiency: “With AlphaTon investment contribution, we expect to build this… with minimum cash requirement from our end.” — Julia Qian .
• Outlook discipline: “We intentionally reinvest a portion of our gross profit… We anticipate Q4 revenue growth of around 50% YoY… FY 2025 ~$32–$33M revenue; full-year net income growth near 90%.” — Julia Qian .

Q&A Highlights

• Large-employer uptake: Early quote activity has risen (from ~2/day to ~5/day), but binding typically lags 60–120 days; pipeline building as brokers get trained .
• Three-year rate hold: Multi-year rate stability backed by A-rated stop-loss carrier; case for insurers is improved profitability over time via targeted medical management with longer intervention windows .
• Blockchain commercialization: Intended customers span carriers, health plans, TPAs, providers, employers, and patients; goals include fewer fraudulent claims, faster processing, fewer disputes, and lower admin overhead .
• PBM update: No incremental progress in Q3; focus prioritized on underwriting and claims opportunities amid evolving policy landscape; revisit in 2026 .
• HI Card: Implementation accelerating for specific partner opportunities; revenue contribution expected from Q1 2026 .

Estimates Context

• Q3 beat on revenue: Actual $8.49M vs consensus $7.05M; EPS in-line at $0.01 with limited coverage (1 estimate) . Values retrieved from S&P Global.*
• Backdrop: HIT has consistently exceeded small-sample revenue estimates in 2025 (Q1, Q2, Q3) while EPS tracked $0.01 across periods. Limited estimate depth (1–2 analysts) increases sensitivity to company guidance and qualitative catalysts. Values retrieved from S&P Global.*

Key Takeaways for Investors

• Beat-and-raise cadence on revenue with in-line EPS: 2025 revenue has outpaced sparse Street forecasts; FY25 guide of ~$32–$33M underpins visibility into Q4/Q1 seasonality and distribution-led growth . Values retrieved from S&P Global.*
• Sequential Q3 softness is timing, not trend: Management explicitly flagged pull-forward into Q3 and decision delays into January; expect Q4 ~+50% YoY with momentum into Q1’26 .
• Structural TAM expansion: Large-employer underwriting launch materially broadens HIT’s addressable market and compresses sales cycles, a critical driver for 2026 bookings velocity .
• 2026 catalysts: Three-year rate-hold rollout and HI Card reactivation can deepen wallet share and retention; “Ask Tim” AI assistant and Davos platform enhance brand/institutional reach .
• Blockchain optionality: HITChain LOI targets a large admin-cost pool with partner funding; watch for definitive agreement, pilots, and monetization model disclosure .
• Margin watch: Gross margin compression and lower Adj. EBITDA QoQ reflect reinvestment and mix; monitor mix of fees vs ICE and operating leverage as volumes scale in peak season .
• Coverage build: Low analyst coverage implies wider estimate bands; company-provided guide and execution milestones (binding large-employer deals, HITChain progress) likely to be primary stock drivers. Values retrieved from S&P Global.*

Additional Primary Sources Read (Q3 2025)

• 8-K (Item 2.02) and Exhibit 99.1 press release with full financial statements .
• Q3’25 earnings call transcript (full) –.
• Related press releases in Q3 period: Web Summit HITChain session (Nov 11), eDIYBS upgrades and Davos planning (Sept/Oct) .

Footnote: Values retrieved from S&P Global.*