Q2 2026 Health In Tech Inc Earnings Call
Speaker #1: To the Health In Tech, Q2, 2026, earnings conference call. Currently all participants are in a listen-only mode; later we will conduct a Q&A session and instructions will follow at that time.
Speaker #2: Later, we will conduct a question-and-answer session, and instructions will be given at that time. As a reminder, today's conference call is being recorded. I would now like to turn the call over to AmpliTech COO, George Flores.
Speaker #1: As a reminder, we are recording today's call. If you have any objections, you may disconnect at this time. Now, I would like to turn the conference over to Ms. Lori Babcock, Chief of Staff for the company.
Speaker #2: Please go ahead.
Speaker #1: Ms. Babcock, please proceed.
Speaker #3: Thank you, operator. Thank you for joining today's call to review AmpliTech's second quarter 2026 financial results, review of our company's outlook, and to answer investor questions.
Speaker #2: Thank you, Operator. And hello everyone. Welcome to Health In Tech, Q2, 2026, earnings conference call. Joining us today are Mr. Tim Johnson, Chief Executive Officer; and Ms. Julia Chen, Chief Financial Officer.
Speaker #3: Following initial management comments, we will open the call to investors' questions. An archive replay of today's call will be posted to the investors' relations section of the AmpliTech's corporate website.
Speaker #2: Full details of our results can be found in our earnings press release and in our related form, 10Q, recently filed with the SEC. These documents will be available on our investor relations website at healthintech.investorroom.com.
Speaker #3: This call is taking place on Thursday, August 13, 2026. Remarks that follow and answers to questions may include statements that the company believes to be forward-looking within the meaning of the private securities litigation reform act of 1995.
Speaker #2: As a reminder, today's call is being recorded and a replay will be available on our IR website as well. Before we continue, please note that today's discussion includes forward-looking statements made pursuant to the Safe Harbor Provisions of the U.S.
Speaker #3: This forward-looking statement generally includes words such as "anticipate," "believe," "expect," or words of Likewise, statements that describe future are also forward-looking. This forward-looking statements are subject to various risks that could cause actual results to be materially different than expected.
Speaker #2: Private Securities Liquidation Form, Act of 1995. These statements are based on information available as of today and involve risk uncertainties and assumptions that could cause actual results to differ materially from those expressed or implied, including those discussed in our quarterly report on Form 10Q for the period ended June 30, 2026, filed with the SEC.
Speaker #3: Such risks include among others matters that the company has described in its press releases and in its filings with securities and exchange commission. Except as described in its filings, the company disclaims any obligation to update forward-looking statements which are made as of today's date.
Speaker #2: Please review the forward-looking and cautionary statements section at the end of our earnings release for various factors that could cause actual results to differ materially from forward-looking statements made during our call today.
Speaker #3: With that, let me turn the call over to our CEO, Mr. Fawad Makboum.
Speaker #4: Thank you, George. Good afternoon, everyone. Thank you, everyone, for joining us today. Second quarter was an important.
Speaker #2: Except as expressly required by the Federal Securities Law, we undertake no obligation to update an expressly disclaimed obligation to update these forward-looking statements to reflect events or circumstances after the date of this call or to reflect new information or the occurrence of unanticipated events.
Speaker #2: We may also refer to certain financial measures not in accordance with generally accepted accounting principles such as adjusted EBITDA, for comparison purposes only. Our GAAP results and reconciliations of GAAP to non-GAAP measures can be found in our earnings press release.
Speaker #2: With that, I now turn the call over to our CEO, Mr. Tim Johnson.
Speaker #3: Thanks, Lori. And good afternoon, everyone. We appreciate you joining us today. Before I get into the quarter, I want to take some time to reiterate: because I think it's important for everyone on this call to understand exactly what kind of company we are building.
Speaker #3: Health In Tech is a young and very dynamic company. We are still early in our journey, but we operate with a business model, a technology foundation, and a market opportunity in front of us that we believe will continue to thrive enterprise value for the company.
Speaker #3: That is not about next quarter. It is a statement about the architecture and foundation of this business. And I want to spend some time explaining why we believe that.
Speaker #3: Because I think it matters, more than any single quarter's revenue print. Let's start with the macro picture. We are living through the most consequential technology shift in enterprise software in a generation.
Speaker #3: Every industry that is historically run on manual paper-based relationship-only processes is being rebuilt around artificial intelligence and insurance and self-funded health insurance specifically is one of the most underdeveloped, most opaque, corners of the broader economy.
Speaker #3: As we've discussed before, self-funding health plans are estimated to generate around 20 to 30 percent savings for business employers through actively managing vendors and customizing its health plans.
Speaker #3: It represents nearly $1 trillion self-funded insurance market. Distributed to through more than 1 million insurance brokers nationwide, and today our platform works with 933 of them.
Speaker #3: That is a fraction of 1 percent of the addressable distribution universe. Most AI implementations you read about in the news today are bolted onto legacy systems.
Speaker #3: Built to automate a single task or wrapped around a call center. That is not what we have built. We have built a marketplace that is connecting brokers, third-party administrators, and carriers into one secured AI-enabled health insurance platform that's efficient, transparent, and ultimately reduces cost through removing frictions.
Speaker #3: That distinction matters, enormously, in this market. I want to direct something not every company that says, "AI has actually built something differentiated." A lot of passes for AI in the financial services and insurance today is a thin layer of automation on top of decades-old infrastructure.
Let's start with the macro picture. We are living through the most consequential technology shift in enterprise software in a generation.
Speaker #3: What we have built in Health In Tech goes well beyond that. Our platform doesn't just speed up a form; it ingests senses data, parses experienced data automatically, enables the carrier to build its specific underwriting criteria, and system in real time and returns a bindable execution-ready quote in a fraction of the time it takes using legacy tools.
Official intelligence and insurance—and self-funded health insurance, specifically—is one of the most underdeveloped, most opaque corners of the broader economy.
Speaker #3: That is fundamentally different value proposition than what brokers have access to historically. And it is a fundamentally different value proposition than most of what our would-be competitors have brought to the market.
As we've discussed before, self-funding health plans are estimated to generate around 20% to 30% savings for business employers by actively managing vendors and customizing their health plans. It represents nearly a $1 trillion self-funded insurance market, distributed through more than 1 million insurance brokers nationwide. And today, our platform works with 933 of them. That is a fraction of 1% of the addressable distribution universe.
Speaker #3: I want to spend time here to talk about our Chief Technology Officer. Three Raja Gopan, and the engineering team he has built, Shree spent the majority of his career at SAP and IBM, two of the largest enterprise software companies in the world.
Speaker #3: Leading enterprise architecture and large-scale platform engineering for global mission-critical systems. That is exactly the caliber of technical leadership a company like ours needs as we scale from a promising platform serving hundreds of brokers to critical infrastructure serving thousands of brokers larger carriers and larger employer groups.
Most AI implementations you read about in the news today are bolted onto Legacy systems. Built to automate a single task or wrapped around a call center. That is not what we have built. We have built a Marketplace that is connecting Brokers, third party administrators and carriers into 1 Secours platform. That's efficient transparent and ultimately reduces cost through removing frictions that distinction matters enormously in this market.
Speaker #3: Under Shree's leadership and through our partnership with Siklam and Amazon Web Services Advanced Tier Service Partner, we have spent this year upgrading the front and back-end architecture of our platform.
Speaker #3: Consolidating quoting, underwriting administration, and analytics in a single unified environment, and building the data infrastructure that will allow us to layer in increasingly sophisticated AI capabilities without having to re-architecture the platform every time we do it.
Speaker #3: That is the kind of investment that doesn't always show up in a single quarter's income statement, but it's exactly the kind of investment that determines whether a platform company can actually scale or whether it's hitting a ceiling.
I want to direct something. Not every company that says AI has actually built something. Differentiated a lot of passes for AI in the um, financial services and insurance. Today is a thin layer of automation on top of decades old old infrastructure, what we have built in health and Tech goes, well beyond that. Our platform doesn't just speed up a form, it ingests census data parses experience data automatically and enables the carrier to build its specific underwriting criteria in systems in real time and returns a bindable execution ready. Quote in a fraction of the time it takes using Legacy tools. That is fundamentally different value proposition than what Brokers have access to historically.
Speaker #3: We do not intend to hit a ceiling. I am also proud of what this has translated into for our distribution partners in practice. In the second quarter, we grew our distribution partner network to 933 brokers.
And it is a fundamentally different value proposition than most of what I would-be competitors have brought to the market.
I want to spend time here to talk about our Chief Technology Officer.
3. Rada Goan and the engineering team he has built.
Speaker #3: Third-party administrators and agencies are up nearly 20 percent from a year ago. And we've rolled out a significant platform update that included enhanced census insights, expanded large-group quoting functionality, automated experience data parsing, AI-driven risk insights, and direct broker-to-underwriter messaging inside the platform itself.
Sheree spent the majority of his career at sap and IBM to the largest enterprise software companies in the world.
Speaker #3: Brokers are telling us in real time that this is changing how they work. They adopt the adoption curve is leading indicator for everything else we are going to talk about today.
Leading Enterprise architecture and large-scale platform engineering for Global Mission critical systems. That is exactly the caliber of technical leadership. A company like ours needs, as we scale from a promising platform, serving hundreds of Brokers to critical infrastructure serving thousands of Brokers larger carriers and larger, employer groups.
Speaker #3: Now I want to spend a meaningful amount of time on why we are changing how we talk about our business, because I think this is a single most important thing for investors to understand about where Health In Tech is today.
Speaker #3: For the last several quarters, we have talked about Health In Tech primarily as a revenue growth story. And to be fair, we earned that framing.
And there's leadership, and through our partnership with SCUM and Amazon Web Services, Advanced Tier Service Partner, we have spent this year upgrading the front- and back-end architecture of our platform, consolidating quoting, underwriting, administration, and analytics into a single unified environment, and building the data infrastructure that will allow us to layer in increasingly sophisticated AI capabilities without having to re-architect the platform every time we do it.
Speaker #3: But a revenue growth story on its own undersells what is actually happening inside the business. And frankly, we believe it paints a limited picture quarter to quarter, because of how gap revenue recognition and reacts with the way our policies are actually sold and onboarded.
That is the kind of investment that doesn't always show up in a single quarter's income statement, but it's exactly the kind of investment that determines whether a platform company can actually scale or whether it's hitting a ceiling. We do not intend to hit a ceiling.
I'm also proud of what this has translated into for our distribution partners in practice.
Speaker #3: Here is the reality. This is not a company we believe should be judged quarter by quarter on a single reported revenue line. This is a young still-evolving platform business.
In the second quarter, we grew our distribution partner, Network to 933 brokers.
Third party, administrator administrators and agencies are up nearly 20% from a year ago.
Speaker #3: Continuing to establish itself in the small-cap world with a business model that generates contractually locked-in revenue well ahead of when that revenue actually gets recognized on our income statement.
Speaker #3: When we sell a policy, we don't recognize that revenue all at once. It gets recognized radically month by month over the 12 to 36 months life of that policy.
And we've rolled out a significant platform update, that included. Enhanced census insights expanded large group, quoting functionality, automated experience data, parsing AI driven risk, insights and direct broker to underwrite messaging inside the platform itself.
Is changing how they work.
Speaker #3: That means the revenue we report in any given quarter is really a lagging indicator of the underlying momentum of the business. In our review, the leading indicator, the one that actually tells you where this company is headed, is what we've contracted and what we've sold.
They adopt uh the adoption curve is leading indicator for every, everything else we are going to talk about today.
Speaker #3: And what is already locked in and simply waiting to be recognized. That is precisely what happened this quarter. And I want to explain it plainly rather than let anyone read more into a single number than they should.
Now, I want to spend a meaningful amount of time on why we are changing how we talk about our business, because I think this is the single most important thing for investors to understand about where Health In Tech is today.
Speaker #3: During the second quarter, we onboarded a new carrier partner. And as part of that onboarding, the effective dates of a number of policies policy placements shifted into subsequent quarters.
Speaker #3: That timing shift is the primary reason our reported gap revenue for the second quarter came in at 8.1 million, down from 9.3 million a year ago.
For the last several quarters we have talked about health and Tech primarily as a revenue growth story. And to be fair, we earned that framing but a revenue growth story on its own under selves. What is actually happening inside the business? And frankly, we believe that paints a limited picture quarter to quarter because of how gaap Revenue recognition and reacts with the where policies are actually sold and on boarded
Here's the reality.
This is not a company we believe should be judged quarter by quarter on a single reported revenue line.
Speaker #3: I want to be unambiguous. This was not a demand problem. This was a churn problem. And it was not a platform problem. It was a timing factor tied to onboarding a new carrier into our platform.
This is a, this is a young still evolving platform business.
Speaker #3: The very kind of carrier expansion that we discussed in last quarter is core to our long-term growth strategy, because more carriers means more underwriting choice, better pricing outcomes for employers, and higher conversions for our brokers.
Continuing to establish itself in a in the small cap world with a business model, that generates contractually locked in Revenue. Well ahead of when that Revenue actually gets recognized on our income statement when we sell a policy, we don't recognize that Revenue all at once.
It gets recognized ratably month by month over the 12 to 36 months, life of that policy.
Speaker #3: This is exactly why we believe contracted revenue and pipeline revenue are metrics that actually help tell you what's happening inside the Health In Tech.
That means the revenue we report in any given quarter is really a lagging indicator of the underlying momentum of the business.
Speaker #3: And it's why you should expect us to highlight these metrics from this point forward. Contracted revenue, meaning revenue that is contractually committed under active policies and that simply has not yet been recognized under gap, totaled 32.3 million for the first half of '26.
In our review, the leading indicator – the one that actually tells you where this company is headed – is what we've contracted and what we've sold.
And what is already locked in and simply waiting to be recognized?
Speaker #3: Beyond what's already contracted, our pipeline revenue policies currently in quoting are binding status plus policies contracted since quarter end stood at 66.3 million as of July 31st, this year.
That is precisely what happened this quarter and I want to explain it plainly rather than let anyone read more into a single number than they should.
During the second quarter, we onboarded a new carrier partner.
and as part of that on boarding, the effective, dates of a number of policies,
Speaker #3: Julia is going to walk you through the details in a moment, because I want to spend more of our time today on where business is going, not rehashing a single quarter.
Speaker #3: Let me talk about what's coming. Because this is where I think the growth story really comes into focus. Excuse me. We made a genuine proof point this quarter on three on our three-year rate stabilization program.
Policy placements shifted into subsequent quarters. That timing shift is the primary reason our reported GAAP revenue for the second quarter came in at $8.13 million.
Speaker #3: We contracted secured our first employer group under that program. Taking it from concept to a live-bound plan. This is an important milestone as we advance toward the programs anticipated launch in the capital markets.
I want to be unambiguous. This was not a demand problem; this was a churn problem, and it was not a platform problem. It was a timely factor tied to onboarding a new carrier into our platform. The very kind of carrier expansion that we discussed last quarter is core to our long-term growth strategy, because more carriers mean more underwriting choice, better pricing outcomes for employers, and higher conversions for our program.
Speaker #3: The program is designed to provide budgetary certainties for healthcare costs often the second largest expense on the P&L for many corporations. For large enterprises, particularly governmental agencies and municipalities, multi-year budget certainty is well received compared to the potential for unpredictable annual healthcare cost hikes.
Speaker #3: We are certainly engaged currently engaged in several high-profile government organizations evaluating participation, and we expect to provide additional updates in the coming months. We also remain on track to officially launch HITRIX in the second half of this year.
This is exactly why we believe contracted revenue and pipeline revenue are metrics that actually help tell you what's happening inside Health In Tech. And it's why you should expect us to highlight these metrics from this point forward. Contracted revenue, meaning revenue that is contractually committed under active policies and that simply has not yet been recognized under GAAP, totaled $32.3 million for the first half of '26.
Beyond what’s already contracted, our pipeline revenue—policies currently in quoting or binding status, plus policies contracted since quarter-end—stood at $66.3 million as of July 31st this year.
Speaker #3: This platform is genuinely new, because HITRIX is not an incremental feature update. We believe it is the first true marketplace built for large group self-funded stop-loss market, which is a segment defined by claims data complexity, multiple managing general underwriters, and carriers competing for business.
Julia is going to walk you through the details in a moment, because I want to spend more of our time today on where business is going, not rehashing a single quarter.
Let me talk about what's coming because this is where I think the growth. The growth story really comes into Focus.
Excuse me.
Speaker #3: And a manual fragmented process that has not meaningfully meaningfully changed in decades. To put this in context, eDivs, our existing platform, serves the small group market where the process is very different.
We made a genuine proof point. This quarter on 3, on our 3-year rate stabilization program,
Speaker #3: The small groups market itself is highly concentrated with only a handful of stop-loss carriers. HITRIX, conversely, is purposely built for large groups, generally 100 lives on plan and above, where the underwriting process is fundamentally different in the marketplace opportunity is much larger.
We contracted and secured our first employer group. Under that program, we took it from concept to a live, bound plan. This is an important milestone as we advance toward the program's anticipated launch in the capital markets.
The program is designed to provide budgetary certainties for health care costs, which are often the second largest expense on the P&L for many corporations.
Speaker #3: HITRIX introduces several first-of-their-kind capabilities to this market. Proprietary data parsing that transforms hours of broker preparation into minutes. A competitive marketplace that lets brokers efficiently reach an unlimited number of underwriters simultaneously.
For large Enterprises, particularly governmental agencies and municipalities multi-year, budget certainty is well-received compared to the potential for unpredictable annual health care cost types.
Speaker #3: Real-time comparison and analytics tools that no other platform in the market offers today and a buy now function that can compress what has historically been a weeks-long negotiation into a single-day close.
we are certainly engaged currently engaged in several high-profile government organizations, evaluating participation and we expect to provide additional updates in the coming months
Contract to officially launch launch hit tricks in the second half of this year.
Speaker #3: It is a marketplace distinct from anything we have brought to the platform to date. And we believe it opens up a meaningful meaningful new growth avenue for this company.
Speaker #3: We expect and look forward to sharing more at launch. I also want to set the stage for how we intend to fund the next phase of growth.
This platform is genuinely knew because hetrick is not an incremental feature update. We believe it is the first true Marketplace built for large group, self-funded, stop-loss Market, which is a segment defined by claims data complexity, multiple managing General Underwriters and carriers competing for business.
Speaker #3: I want to close my remarks the way I opened them. Health In Tech is a fast-growing young company. We have a technology foundation built by world-class engineering teams, a business model that generates real contractually locked in revenue well ahead of recognition.
And a manual, fragmented process that has not meaningfully changed in decades.
This in context EDS, our existing platform. Serves the small group Market where the process is very different.
Speaker #3: A distribution network that is growing nearly 20% year over year and a market opportunity measured in the hundreds of billions of dollars where our current penetration remains below one-tenth of 1%.
The small groups market itself is highly concentrated, with only a handful of stop-loss carriers.
Speaker #3: We believe the combination of these four key things should help us continuously drive the enterprise value of the company. That is the story we are building, and I could not be more excited about where this is headed.
Titri, conversely, is purposely built for large groups—generally 100 lives on plan and above—where the underwriting process is fundamentally different. In the marketplace, the opportunity is much larger.
Speaker #3: Before Julia walks through the financials, let me give you a little bit more on how our distribution engine performed this quarter. To put a finer point on the partner number I mentioned earlier, we ended the second quarter at 933 distribution partners, brokers, third-party administrators, and agencies.
It tricks. Introduces several first of their kind capabilities to this Market, proprietary data parsing the transforms hours of broker preparation into minutes a competitive Marketplace that lets Brokers efficiently. Reach an unlimited number of Underwriters simultaneously real-time comparison and analytics tools that no other platform in the market offers today and a buy Now function that can compress. What is historically been?
Speaker #3: Up 19.9% from 778 a year ago. That growth came from the same way it has all year. Through a capital light partner-driven model where our in-house team focuses on onboarding and activating partners rather than selling directly into the employer accounts.
A weeks long negotiation into a single day clothes.
InMarketplace is distinct from anything we have brought to the platform today, and we believe it opens up a meaningful, meaningful new growth avenue for this company. We expect and look forward to sharing more at launch.
Speaker #3: That's why that's what allows us to keep growing our distribution footprint with a linear increase in fixed costs. The carrier onboarding that affected the timing of some of this quarter's revenue is a good example of the trade-off we were willing to make.
I also want to set the stage for how we intend to fund the next phase of growth.
Speaker #3: Short-term, it shifted some policy effective dates into later quarters. Long-term, it gives our brokers more underwriting choice on the same employer groups, which we believe improves close rates and strengthens retention.
Speaker #3: We will make that trade every time. We continue to see this industry as a relationship-driven today, but structurally underserved by technology. And that is the gap we intend to keep closing through direct broker engagement, industry conferences, and a platform that keeps getting easier for brokers to use and harder for them to walk away from.
I want to close my remarks the way I opened them health and Tech is a fast growing young company. We have a technology Foundation built by world-class engineering team. A business model that generates real contractually locked in Revenue. Well ahead of recognition a distribution Network that is growing nearly 20% year-over-year and in Market opportunity measured in the hundreds of billions of dollars where our current current penetration remains below 1 tenth of 1%.
We believe the combination of these four key things should help us continuously drive the enterprise value of the company.
That is the story. We are building and I could not be more excited about where this is headed.
Speaker #3: With that, I will now turn it over to Julia.
Uh, before Julia walks through the financials, let me give you a little bit more on how our distribution engine performed this quarter.
Speaker #1: Thank you, team. And good afternoon, everyone. I'm going to keep my remarks focused and brief, because team has already worked you through certain of the consideration around these quarter's number.
To put a finer point on the partner number. I mentioned earlier, we ended the second quarter at 933 distribution Partners Brokers. Third party, administrators and agencies up 19.9% from 778 a year ago.
Speaker #1: I want to use my time simply to talk through the figures itself through lenses of the metrics we introduce the last quarter. Contracted revenue and the platform place the plan value because those are the numbers we believe quietly holistically reflect on the health of these business.
That growth came in the same way it has all year, through a capital-light, partner-driven model where our in-house team focuses on onboarding and activating partners rather than selling directly into the employer accounts.
That's why that's what allows us to keep growing. Our distribution footprint with a linear increase in fixed costs.
Speaker #1: Contracted revenue means the revenue that is contractually committed under the active policies that simply has not been recognized on the gap accounting. There are total 32.3 million for the first half of '26.
The carrier onboarding that affected the timing of some of this quarter's revenue is a good example of a trade-off we were willing to make.
Speaker #1: Of that, 17.3 million was already recognized as the gap revenue in the first half of this year. With the remaining 14 million expected in the second half of this year and the 1 million in 2027.
Short-term, it shifted some policy effective dates into later quarters. Long-term, it gives our brokers more underwriting choice on the same employer groups, which we believe improves close rate and strengthens retention.
We will make that trade every time.
Speaker #1: Beyond what already contract, our pipeline revenue policies current encoding or binding stage or plus the policy contracted single quarter end stood at 80 66.3 million as of July 31st.
We continue to see this industry as relationship-driven, uh, today, but structurally underserved by technology, and that is the gap we intend to keep closing through direct brokerage engagement, industry conferences, and a platform that keeps getting easier for brokers to use—and harder for them to walk away from.
With that, I will now turn it over to Julia.
Speaker #1: Of which 1.9 million was contracted. The remaining 60 4.4 million was expected conversion rate of 15% to 40%. Now, with five more months remaining in 2026, the expanded sales team will continue to to sell to expand its pipeline revenue through adding more brokers, TPAs, and our distribution partner.
Thank you, team and good afternoon everyone. I'm going to keep my remarks focused and brief because team has already worked you through certain of the consideration around these quarters number. I want to use my time simply to talk through the figures itself through lenses of the metrics. We introduced the last quarter, contracted revenue and the platform.
Speaker #1: Together, this number, I would encourage you to assess for the future revenue visibility. And they underpin our decision to reaffirm four-year 2026 revenue guidance of 45 million to 50 million.
Speaker #1: That is real, forward revenue visibility extend well into next year. And we believe it provides a more extensive pictures that just a single quarter top line print can tell you.
There are total 32.
Speaker #1: Now, running to platform place the plan value, or PPPV, with which represents the aggregate contract contractual value of the self-funded stop loss plan placed through our platform.
3 million for the first half of 26, of that 17.3 million was already recognized as the Gap 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 already contract. Our pipeline Revenue policies, current encoding or binding stage of plaster, policy contracted
Speaker #1: Including premium, current funding, and administrative fee. Measure our overall each plan's full contractual term PPPV stood at 84 million as of June 30th, 2026.
Single quarter end stood at 8,663.31.
Speaker #1: I want to be clear, that PPPV is a measurement of platform transaction value, not indicator of own revenue or take rate. On reported gap 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.
Of which $1.9 million was contracted, the remaining $64.4 million with the expected conversion rate of 15% to 40%.
now, with 5 more months remaining in 2026, the expanded the sales team will continue to
Speaker #1: The team explained least decrease reflect the timing of the new carrier onboarding that shift certain policy effective date into the future period, not a change in underlying demand.
Speaker #1: The onboarding of the new carrier and the certain related performing transfer between the carrier were designed to provide a great options and flexibility to our employer customer.
To sell to expand its pipeline Revenue through adding more Brokers tpas and our distribution partner together. This number I would encourage you to assess for the future Revenue visibility and they underpin our decision to reaffirm 4 year, 2026 Revenue, guidance of 45 million to 50 million. That is real forward. Revenue visibility extend well into next year.
Speaker #1: As a result, the number of the accounts received AI days in the first half of the year was 55 days versus 20 days in the first half of 2025.
And we believe it provides a more extensive picture than just a single quarter topline print can tell you.
Speaker #1: Which is not uncommon to us, we have inferred experience and the track record of managing accounts received for example, there were 42 days accounts received in 2023, and then we bring down to 29 in '24, and the further down 14 accounts received dates in 2025.
Now, running to platform place, the plan value or PPPP, which represents the aggregate contractual value of the self-funded stop-loss plan.
Speaker #1: So it's remarkable change in the improvement once the carrier will starting work with us. We actively manage this 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 the profitability.
Places through our platform, including premium claim funding and administrative fee. Measure our overall each plan for contractual term, ppv stood at 84 million as of June 30th 2026. I want to be clear that the PPP is a measurement of platform. Transaction value, not indicated, our own revenue or take rate.
Speaker #1: Adjusted EBITDA was negative 1.3 million for the quarter, and the negative 2.6 million for the first half of the year, compared to the positive EBITDA 1.6 million and the 2.8 million respectively.
Speaker #1: 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.
On on reported the Gap 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 team explained least decreased reflect the timing of the new carrier on boarding that is shifted to certain policy. Effectively into the future period, not a change in online demand the on boarding of the new carrier and the certain related porting transfer between the carrier were designed to provide a great options and flexibility to our import, your customers as a result. The number of the accounts received they are AI Days, Inn
Speaker #1: And the net loss for the same period compared with same period, the net loss was 1.4 million for the first half of '26 or 0.07 per diluted share, compared to the net income of 1.1 million or 0.02 per diluted share.
Speaker #1: This 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.
Speaker #1: Our total operating expenses for the quarter was 7.3 million compared to 5.6 million for the same period of the year time. Last year. Sales and the marketing expenses were 2.2 million compared to 1.2 million for the same period last year.
The first half of the year was a 50 55 days versus 20 days in the first half of 2025, which is not uncommon to us, we have emperor experience and the track record of managing accounts receivable day. For example, there were 42 days accounts, receivable day in 2023. And then we bring down to 29 2024 and the further down 14 countries, uh, count to receive dates in 2025. So it's remarkable change in the Improvement. Once the carrier was starting to work with us, we actively manage this, uh, financials as well. For the first 6 months of 2026 total revenue was
Speaker #1: As we continue to invest in expanding our distribution footprint, the sales expanding has been increased. General and administrative expenses was 4.3 million, compared to 3.8 million for the same period last year.
16.8 million compared to 17.3 million for the first half of the year last year turning to the profitability adjusted. Even though with negative 1.3 million for the quarter, and the negative 2.6 million for the first half of the year, compared to the positive ibida, 1.6 million, and the 2.8 million respectively.
Speaker #1: And the research and development expenses were in 0.9 million, and we capitalized 0.8 million on the software development cost, compared to 0.6 million and 0.9 million respectively for the same period of last year.
in the prior period, net loss for the quarter was 2.5 million for
0.04 per diluted share compared to net income of, 0.6 million, or 0.01 per diluted share.
Speaker #1: Reflecting continued investment in our technology platform, industry's leadership. Pending to our balance sheet. We ended the quarter with 6.5 million in cash, and the cash equivalent.
And then the net loss.
Speaker #1: And 11.8 million in working capital, compared to 8.1 million in cash, and the cash equivalent, and 9.5 million in working capital a year ago.
For the same period compared with same period, the net loss was 1.4 million for the first half of 26 or 0.07 per diluted. Share compared to the net income of 1.1 million or 0.02 per diluted share.
Speaker #1: 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.
Speaker #1: Total assets at the quarter end were 29.6 million and total stockholder equity was 19.4 million, compared to 20. 2.2 million and the 16.4 million respectively for the same period of last year.
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 prior year.
Speaker #1: Our balance sheet remains healthy and positioned to execute on our product and development plan. In summary, these were the quarter of continued deliberate investment.
Speaker #1: The gap revenue number reflect a timing shift, not a change in the trajectory for the business. And we believe contracted revenue platform place revenue are clear windows into where the company is actually heading we also reported pipeline revenue give you more visibility of where the company the trajectory is.
Speaker #1: With that, now item it back to Rory.
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. Um, the sales expanding has been increased General and administrative expenses was 4.3 million compared to 3.8 million for the same period last year and the research and development expenses were in 0.9 million and we capitalized 0.8 million on the software development cost compared to 0.6 million and 0.9 million respectively for the same period of last year. Reflecting continued investment in our technology platform on the streets leadership.
Speaker #2: 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.
Speaker #3: Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchstone phone.
Turning to our balance sheet, we ended the quarter with $6.5 million in cash and cash equivalents, and the $1.148 million...
Operating cash used to improved.
Speaker #3: 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.
Speaker #3: And our first question for today will come from George Sutton with Craig Hallam. Please go ahead.
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
Speaker #4: 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.
Speaker #4: 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?
Speaker #4: You may be on mute.
Speaker #5: Sorry guys. I was on mute. Yeah. Good to talk to you, George. Thanks for the thanks for the question. So understanding how insurance carriers are rated and even stop loss carriers have a rating, certain brokers around the country and especially the bigger ones we call them the alpha houses, they require to under their corporate charter to only write business with a carriers.
Stockholder Equity was 19.4 Million compared to 20 2.2 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 Gap Revenue. Number reflect, a timing shift, not a change in the trajectory for the business and we believe contracted Revenue platform plays a revenue. A clear windows into where the company is actually heading. We also reported a pipeline Revenue, give you more visibility of where the company the trajectory is with that. Now, it turned it back to Rory.
Thank you, Julian, and Tim, for these prepared remarks. Now we would like to open the call up to our community for any questions they might have.
Speaker #5: And we weren't with and 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.
Thank you. We will now begin the question-and-answer session.
Speaker #5: 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.
To ask a question, you may press star then 1 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 2. Our first question for today will come from George Sutton with Craig Hallum. Please go ahead.
Speaker #4: And just help us understand the impact of having that A rating and what that might mean broadly for the business opportunity.
Speaker #5: 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.
Thank you. Hi, guys. So, um, Tim, a lot of this, uh, confusion on the timing I think relates to a stop-loss carrier change you made, and you were really improving the, uh, capabilities that your customers would have with a stop-loss carrier going forward. In the ratings involved, can you just kind of walk through that outcome?
Speaker #5: It's a significant amount of business. So I would say that 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.
You may be on mute.
Speaker #5: 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 get a once you start talking to a broker than a client, as we're coming up in January, January is our biggest time of the year, by far.
Speaker #5: Most effective dates are in January. So we will yeah. We're going to pick up a lot more business than I'm trying to not be too direct with that answer.
Sorry guys, I was on mute. Yeah. Um, good to talk to you, George. Thanks for the thanks for the question. So, understanding, how insurance carriers are, uh, rated and and even stop loss. Carries have a rating, um, certain certain Brokers around the country. And I'll, uh, especially the bigger ones who come in the alpha houses, they require to under their corporate charter to only write business with a carriers and we work with and
Speaker #5: I don't think I'm supposed to be on here.
Speaker #4: Gotcha.
Speaker #1: Yeah. So George, I want to add a little bit right? So because the small group is really normally people pay less attention of the category and the carrier, which we add on one more.
A carrier that uh, 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.
Speaker #1: 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.
I don’t know in the next, uh, 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.
Speaker #1: So just give a little bit of background. I'll software we talk about heat checks is really real market in the large group. So not only just that we expand dramatically our adjustable market, but but also that means we can offer the total complete solution including the small employees and the medium and the large employees.
And just help us understand the impact of having that A rating, and what that might mean broadly for the business opportunity.
Yeah, they I mean Zayn, our chief growth officer is sitting on the sidelines with a lot of business that uh people want to put with us.
Speaker #1: So that will dramatically change. How our business outlook is when we have a pipeline revenue, we do not even include that part. Just a little bit.
That, um, you know, our projections—we try to be conservative in our projections—but it will bump our projections, at least.
Speaker #4: Yeah. 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?
Speaker #4: What do you think that does for the business once it's up and running?
Speaker #5: That's a 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's pointed it out, it's the larger market space.
I don't know 20 to 30% higher. Um, 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 get a, 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. Um most effective dates are in January so we will um yeah we we're going to pick up a lot more businesses 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.
Speaker #5: And they can now market to multiple MGUs at a 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.
Speaker #5: So all 933 brokers that are on it and TPAs and other access distribution points, we'll have immediate access in the next it's supposed to be launched coming up in I'm looking at my calendar in the next two, three weeks.
Speaker #5: 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.
Speaker #5: 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.
Got you? Yeah. So Joe, I want to add a little bit, right? So because the small group is really normally people, um, pay less attention of the category of the carrier which we add on 1 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 give a little bit of background. I I'll, you know, our software, we talk about heat checks is really the real Market in the large group. So not only just that we expand the dramatically our adjustable Market, but also, um, that means we can offer the total complete solution, including the small employers, and the median, the large employers. So that would genetically change how our business Outlook is when we have a python Revenue. We do not even include that part.
Speaker #4: Okay. And 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.
Speaker #4: 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?
Now, on on the, on the hatrix platform, um, which I understand is a dramatic, uh, Improvement on what exists out there today? Can you just talk about how quickly you think, you can bring users on that platform? What what do you think that that does for the business once it's, uh,
Up and running.
Speaker #5: Yeah. I can tell you the pipeline one of our partners in the program, Ascend, that the actuary who helped create and build this program, they've hired specific salespeople for it.
Speaker #5: 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.
Speaker #5: And these are large as you can imagine. They're municipalities government agencies, counties, cities, all the everything in between. They're not small. So our pipeline is already I can't tell you who we're talking to.
Speaker #5: You would know everybody that we're already talking to and they are yeah. They're cities that everybody on this call would know for sure. Some probably live in them.
Speaker #5: So it's a big opportunity that's coming in really fast.
Speaker #4: Beautiful. Thanks, guys.
That's a good question. Um, well, the existing 933 brokers are automatically—because we're, um, as I said in the, uh, discussion we just had, they're all going to get access to it immediately, which means, and Julie is pointing it out, it's the larger market space and they, 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, um, 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, um—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, we have a demo page we created, and we're doing demos for everybody now. So there's—
Speaker #5: Thanks, George.
A lot of excitement on that product.
Speaker #3: The next question will come from Alan Klee with Maxim Group. Please go ahead.
Speaker #6: Yes. Hi. Hope all 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?
Speaker #6: Not having that or I'm not sure.
Okay, and then lastly, for me, the 3 year stabilization programming. That's something we're very excited about and see. Great applicability particularly in Municipal, uh, governments. For example. Um, can you just give us a sense of what that pipeline looks like and and what the feedback's been since you, uh, signed this first customer?
Speaker #5: 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.
Yeah, I can tell you the pipeline. Um, uh, one of our partners in the program, Ascend, that, uh, the actuary who helped create and build this program.
Speaker #5: It's just in their charter and it's people say it's in their E&O policy. There's different reasons for it. But that's why we're going to grow if we can get that A carrier on.
They've hired specific salespeople for it. We have trained our sales guys on it. Um, the anticipation and the word is that we'll probably have about 30 submissions a month.
Speaker #5: The faster we can get an A carrier on, the sooner we can start picking up more business from those alpha houses.
Speaker #6: Yeah. I mean, 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 to Q by a certain amount or was it more like going forward it has this opportunity?
Um, 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. Um, so our pipeline is already—it... I can't tell you who we're talking to. You would know everybody that we're already talking to, and they are, um, yeah. They're 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.
Speaker #5: It's more going forward.
Beautiful. Thanks guys.
Speaker #1: Yeah. And it's yeah. So we clearly mentioned on the call because of the adding additional carrier. It's not demand problem. It's a shifting, right?
Thanks George. The next question, will come from Alan Clee with Maxim group. Please go ahead.
Speaker #1: Because now within the new income carriers and the preparation and the old carriers, that's the reason we're reporting even a pipeline revenue to see in the what is pipeline here.
Speaker #1: It's a timing shift. As you know, for the gap accounting, it's really based on the amortization upon effective day when you shift a quarter.
Yes. Hi. Uh, hope everyone's well. Um, when you were talking about the change in the, um, insurance rating, did you make a comment that you thought that impacted your results by a certain amount?
not having that, or
Speaker #1: Some more revenue is going to shift a quarter to the next year. It's just the facts. Even you can sell the most you can sell.
I'm not sure, yeah, because a lot of our growth, um, is in both large and small. I mean, we call them Alphas—the bigger ones.
Speaker #1: So that's why we reported the pipeline revenue when we're looking at we have five more months to continue to sell. So the revenue itself already give people pre good indication on this year and what the possibility and the range and beyond.
Speaker #6: 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 the amount of renewals at the end of the towards the end of the year?
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 people say it's in their E&O policy. There are 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.
yeah, I mean
Speaker #6: How do you do you feel like you're going to be fully able to work on that? And be successful?
As a former Moody's senior analyst covering insurance companies, I appreciate it. So, the value of the higher ratings—um, but did you make a statement that that had hurt the particular quarter, Q2, by a certain amount, or was it more like, going forward it has this opportunity?
It's more going forward.
Speaker #5: That's it. That's a very good question. So I never feel like I have enough time. Just between us. But this timeframe right now, it needs to come out because everybody's starting to market their one-one business.
Speaker #5: 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.
Speaker #5: I want my tech bill yesterday. I always do. But we're going to by one-one, we'll have a lot more opportunity running through it because of HITRIX.
Speaker #5: 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.
Speaker #5: To get into the 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'll be we're hitting it right just right.
Yeah, so we clearly mentioned on the call, because the addition of additional carriers is not a demand problem. It's a shifting, right? Because now, with the new incoming carriers and the preparation and the old carriers, that's the reason we're reporting. Even in the P power revenue, to see what is in the pipeline here is a timing shift. As you know, for the GAAP accounting, it's really based on the amortization upon the effective day. When you shift the quarter, some of our revenue is going to shift according to the next year. It's just the facts. Even, you know, you can sell the most you can sell. So that's why we reported the pipeline revenue when we're looking at you, you know, we—
Speaker #5: 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.
We have five more months to continue to sell. So the revenue itself already gave people a pretty good indication on this year and what the possibility and the range and beyond.
Speaker #5: The people already using our system, they're going to see a better look, a better feel, a better flow, and really it's just point click.
Speaker #5: It's and 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.
Okay. And how, how do you feel about your preparation with your offerings, and having the time to—
Speaker #5: People who are already using it. The new people, it's really quick. We do a lot of demos every day.
Educate the brokers and the clients for the big, um, the amount of renewals that you have at the end of this, well, the end of the year. How do you—do you feel like you're going to be fully able to—
Speaker #6: That's great. And then if you could just help me understand the path to getting to your guidance a little. You said that contracted revenues that's going to show up in the second half, you believe is going to be $14 million.
To to work on that.
Speaker #6: 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.
Speaker #6: 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 what is is it just new business in addition that as you mentioned, pipeline or what gets you to the from what I just said to the your target?
Speaker #1: Yeah. That's a great question, Alan. What are you looking at is as of June. And the one month of the pipeline. That's get us, right?
By 1 1, we'll have a lot more opportunity running through it because of hit tricks, I again, I wish I could have built it a year ago. Um it just takes time to get it done but right now we have sufficient time to get into the 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 and we'll be we're hitting it, right? Just
Speaker #1: 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.
Speaker #1: And while conversion rate is the range about 15 to 40 percent, so when you do these calculation and I'll clearly we were adding a more salespeople with five more months to go.
Right. I mean again I wish it was done 3 months ago but we're hitting it at the right time, right now. It's so easy to use the, the the people already using our system. They're going to see a better look, a better feel, a better flow. And really it's just point. Click its and drag and drop it, we've made it so easy for them to, uh, submit the opportunity in the system. Um, yeah.
There should be no real training on it for people who are already using it. For new people, it's really quick. We do a lot of demos every day.
That's great. And then, if you could—
Speaker #1: This number you provided do not have five more months the sales. The pipeline we built is as of July.
In the past, to get to your guidance a little, I...
Speaker #6: 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.
Speaker #6: Your gross margin goes down, but you benefit in other ways. Is so your gross margin this quarter was like 48.7%. That compared to like 51.4% in the first quarter.
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 million. 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 45. So,
Speaker #6: Is it reasonable to think that that may kind of stay at a lower level than it had been like in the past based on this quarter?
Speaker #1: Yes. So when we offer the plan and work rates various partners inevitably there will be the compromise of the gross margin. That's trade-off of spending through our distribution partner.
What is is, is it just new business? In addition? That that, as you mentioned the pipeline or what, what gets you to the to the, from what I just said to the, your target. Yeah, that's a great question. Alan, what are you looking at is as of June and the 1 month of the pipeline.
Speaker #1: But the leases I want to point that these is very assets light top distribution. We do not have these people on payroll fixed. So it's really go through whatever we can grow quickly with very little investment we have into the sales team.
That's getters, right? So we have five more months to continue to sell, to continue to build the pipeline, to convert to the business.
Speaker #1: So we don't have all the sales team sell for us, but through the partner. And they also in future we should be seeing when we have HITRIX offer in the market, we have the different way.
People with five more months to go.
This number you provided does not have five more months.
The cells, the pipeline we built, is as of July.
Speaker #1: There will be a mixed of the gross margin which should be around the range of 45 to 50 percent of the gross margin. Still pretty healthy considerably for our sectors.
That, that makes perfect sense. 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 in other ways.
Speaker #6: Okay. So 45 to 46 percent in the future is what you're thinking? Is that what I heard?
Speaker #1: Yes.
Speaker #6: Okay. Great. And one last question. On the three-year stabilization which I'm praying my company will do it this next year. That's a sides question.
So your gross margin this quarter was like 48.7%. That's 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, like, in the past,
Based on this quarter.
Speaker #6: If a lot of that's going to municipalities, remind me government year-ends. Is that like September or when are the year-ends for a lot of these that kind of the focus is to try to win a lot of this?
Speaker #5: Yeah. 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, they're none of these effective dates that we're talking to right now.
Speaker #5: I don't know if they're 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.
Yes, so when we offered the plan and the work rate is very cornered, inevitably there will be the compromise of the gross margin—that’s traded off by spending through our distribution partner. But at least I want to point out that this is very asset-light distribution. We do not have these people on payroll, so it’s really go through whatever we can grow quickly with very little investment we have into the sales team. So, we don’t have all the sales teams and so forth—it goes through the partner.
Speaker #5: Even if it's in place today, because we're agnostic to the carrier, even the effective date. But it really even the effective date of their policy, it really works better if you do have it that way.
And also, in the future, we should be seeing—when we have heat tricks offered in 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.
Speaker #5: But some of the people we're talking to, it's just math and we can figure out how to move it around.
Still pretty healthy, considerably, for our sectors.
Okay, so 45% to 46% in the future is what you're thinking. Is that—
Speaker #6: That's great. That's exciting. Okay. Thank you. Keep it up.
Bigger. Yes.
Okay, great. And one last question on the—
Speaker #2: The next question will come from M. Marin ahead.
Speaker #1: 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.
Three-year stabilization, which I'm praying my company will do with this next year, um...
Besides the question that covers, um, if a lot of that is going to municipalities.
Speaker #1: And pipeline has reached the stage where you've already provided a quote where 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?
Remind me, the government year ends—is that like September, or where?
Where and when are the year-ends for a lot of these, and is the focus to try to win a lot of those?
Yeah, typically, they all run towards the year-end as well. A lot of them are in July.
Speaker #4: Yes. That's absolutely, yes.
Speaker #1: And I want to remind everybody again, this pipeline revenue is as of July. So when we continue to execute and adding on the a carrier more, you should see a much higher pipeline and also the higher conversion rate.
Speaker #1: So the pipeline revenue means there are the employer plan proposal being coded. Some are different stage of the implementation. Some in the stage of being reviewed.
So, but to be honest with you, the people we're talking to – none of these effective dates that we're talking about right now – I don't know if they're, um, 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, they – because we're agnostic to the carrier, even the effective date – it really, you know, even effectively with their other 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.
Speaker #1: So this is really representing a huge part of the opportunity run through our system. And obviously, contracted revenue means it's through the effective day.
That's great. That's exciting. Okay, thank you.
Keep it up.
The next question will come from M. Moran with Zach. Please go ahead.
Speaker #1: It's already contracted and the policy bonded and everything is signed. So we are really commissioned to recognize all the revenue through the effective day of the next either 12 months of 36 months depends on the term of the policy.
Thank you. So I I wanted to drill down a little bit on um, some of what you've already discussed during the Q&A, which is the difference between contracted revenue and pipeline revenue and pipeline has reached the stage where you've already provided a quote um where you know, some other element that you know, revolves around actual commitment.
Speaker #1: 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 that stage where something is placed in the pipeline revenue category?
Speaker #1: 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.
Um, so is it fair to say that, if you do get this new, um, partner that you've been talking about, that could have a significant impact on the pipeline revenue and then the conversion?
Yes, that's absolutely yes.
Speaker #1: And it doesn't happen with every touchpoint. So do you have a sense of for what how long that process takes?
And I want to remind everybody again, these pipeline revenues are as of July.
Speaker #4: I wouldn't assume we're just that question.
Speaker #5: Yeah. So depends on the size of the group. Appreciate the question. Small groups, small groups are they'll make a decision in a day. If it's a larger group, you're right.
Speaker #5: 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, we can our brokers are writing new business daily.
Speaker #5: Through simple conversations because of the way we set it up with they already have their plan designs and everything in there. It's really just point and click.
Run through our system, and obviously contracted revenue means it's through the effective date. It's already contracted, and the policy is bonded and everything is signed.
Speaker #5: Here's all the options are taken away from them. It's just easier for them to pick the cost versus what PBM, what TPA, all of these other things.
Speaker #5: 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 do it 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.
So, we are really commissioned to recognize all the revenue through the effective date of the next either 12 months or 36 months, depending on the term of the policy.
Speaker #1: 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.
Speaker #1: 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 were to give us a sense of the kind of positive feedback you're seeing, can you try to put some not numbers around it, but where do you think that might that might go over the next year or two in terms of taking up some of these pipeline and contract figures?
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 that stage where something is placed in the pipeline Revenue categories. I, I'm, you know, I'm thinking that it doesn't just happen on day 1, 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, um, uh, touch point. So do you have a sense of for what? How long that process takes?
I would seem to address that question.
Yeah, so depends on the size of the group. Appreciate the question small groups, small groups are, they'll make a decision in a day if it's a larger group, you're right. The, the conversation takes longer with talking about plan design, carriers people, everything that goes into it. Um, some of the smaller groups and and you can see that from the business that we have, we can, you know, our Brokers are writing, uh, new business.
Speaker #5: I'll let Julia answer that. I'll get myself in trouble.
Speaker #4: Okay. Can you just reaffirm your question again? So I could.
Speaker #1: Yes. Yes. So the numbers you've provided and you've 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.
Daily, um, through simple conversations because of the way we set it up with the they already have their plan designs and everything in there. It's really just point and click. Here's, here's all the options are taken away from them. It's just easier for them to pick, you know, the cost versus what pvm. What TPA, all these other things. So the larger groups. Yeah, it's a 90-day turn, probably, uh, from a conversation. The smaller guys, I mean, I, I've got, uh, producers that walk around with their computer and do a walk into a company and they'll sell it right while they're sitting there talking to them because the, the machine can quote it that fast.
Okay, thank you. That's helpful. And then those are quantitative numbers. I mean, you can actually identify—you know where a contract or potential contract is in the process.
You've touched upon this already in your Q&A. Um,
Speaker #1: 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 number, the qualitative number could grow significantly over the next I don't know, several quarters.
As well as, I think, in the prepared remarks. Um,
If you were to give us a sense of, you know, the kind of feedback you're getting given, you know. Um, all of the improvements improvements you made to the platform and your new products that are coming on online. Um, if you would give us a sense of the kind of positive feedback you're seeing, um, can you, you know, try to
Speaker #4: Yeah. Yes. That's right. So one thing I want to just reemphasize, the contract revenue is the revenue we already contract from effective day in the last six months, right?
Put some—not numbers around it—but, you know, where do you think that might, you know, that might go over the next year or two in terms of, you know, taking up some of these pipeline and contract figures?
I'll let Julia answer that. I'll get myself in trouble.
Speaker #4: So it's actual sales. It's not something it's going to sell well be sold. It is contracts done. It's sold. We are collecting revenue or doing the 12 months or 36 months.
Okay.
From your your question again.
So, so I could, yes, yes.
So, the numbers you've provided, um, and you, you know, termed—
Speaker #4: Yes. With the new anticipate the platform launch and the carrier ad, it rated you should be able to see the pipeline revenue increase because the pipeline revenue we reported is as of July.
Contracted and pipeline. Um, those are, those are, um, quantifiable.
Speaker #4: So we have five more months to building up. The matter of fact, if you ask me and at the end of the August to now, the revenue will be dramatically different improved.
Um, you have a certain number of potential contracts that are already, you know, in the stage where you're providing a quote or where it's moving forward. But given, you know, how early—early days.
Speaker #4: Also, there will be some of the pipeline convert to sales. And the 66 million of the pipeline when we do these earnings call, we already have 1.9 million already inked to the contract.
Speaker #4: So with the sales cycle, it's about three months. It's for the large group. And we can ink the contract earlier we have effective day and the September, maybe October, but the contract already signed.
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, you know, from the market—if you would give us a sense of the feedback that you're getting—that's the kind of qualitative number that could grow.
Significantly over the next, I don't know, several quarters.
Speaker #4: So those are including in the pipeline because it's not on the financial reporting period. Then we just able to say this is the pipeline 60.6 million.
Speaker #4: And then 1.9 is already sold. The rest is being sold with the conversion rate when we look at the conversion rate, we look back what is the conversion rate actual conversion rate from January to June.
Speaker #4: Then we know the range, the lower end is 15, the high end is 40. But with all the improvements, there will drive two things.
Speaker #4: One is pipeline will continue to build. There's a four month, five more months to go for the year. And the conversion rate should be a little bit higher because now we are offering a paper solution.
Speaker #4: They are other employees really like to enter into. So if I give some of the commentary about the trajectory of the business, this is a conservative review we're looking at the pipeline will be growing and the conversion rate will be higher.
Speaker #1: Okay. Got it.
Speaker #5: Yeah. Yeah. The feedback is from the demos because again, the product's getting launched here in the next 15, 20 days. If we're talking about hit tricks, the three-year ones already out there, but the hit tricks one if that's what you're talking about, the feedback is great.
Speaker #5: It just. We're really selling a lot of convenience here and it's making the brokers' lives easier to do their job. And that's what they like about it.
For doing the 12 months or 36 months. Yes. That with the new anticipate, um, the platform launched and the, the carrier, add a rated, you should be able to see the pipeline Revenue increase because the pipeline Revenue we reported is as of July. So we have 5 more months to building out. The matter of fact, if you ask me and at the end of the August, you know, the revenue will be dramatically different improved. Also there will be some of the pipeline convert to sales and 66 million of the pipeline. When we do these earnings call, we already have 1.9 million already Inked to the contract. So, with the sound cycle is about 3 months, we and it's for the large group and we can ink the contract. Earlier, we have effective day and the September, maybe October, but the contract already signed. So those are included in the pipeline.
Speaker #1: That is what I was trying to get out of the middle with the contracted revenue is already in hand. The pipeline revenue there'll be a conversion rate which could be significant.
Speaker #1: But beyond that, there's probably pre before it even hits that stage of pipeline revenue, there's a lot of feedback that you're getting right now from partners and right.
Speaker #1: And I'm just trying to gauge 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.
Because it's not on the financial reporting period. Then we were just able to see this as a pipeline—$60.6 million, uh, $60.66 million—and then $1.9 million is already. So, the rest is being sold with the conversion rate. When we look at the conversion rate, do we look back? What is the conversion rate, actually, the conversion rate from January to June? Then we know the range. The range is 15, the high end of the 40, but with all the improvements that would—
Speaker #1: 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 and year.
Speaker #1: Just remind us please in terms of the seasonality of your the selling of these products. Are we in a heavier selling period now in the back half of the year?
Drive 2 socket.
Speaker #5: It will pick up in November and December for the small group for sure. Excuse me. Yeah, for sure because when the ACA happened, there was a lot of groups that moved because they wanted to get grandfathered in.
Speaker #5: Years ago, before January 1st, or they would have to pay the price for the ACA plans and everything else. So we have a lot of business in November and December.
Okay, got it? Yeah, yeah. The feedback is from the demos because again, the products getting launched here in the next 15 20 days. Um, for, you know, if we're talking about hit tricks, the 3 year 1's already out there but the hit tricks 1, if that's what you're talking about, the feedback is great. It just we're really selling a lot of convenience here and it's making the broker's lives easier to do their job. Um, and that's what they like about it.
Speaker #5: But between now and then, it'll be moderate on the small group. They can change and they do frequently change their or pull themselves out of fully insured.
Speaker #5: But it isn't as high as it's July, for example, June and July. August is a down month, but yet we had a I think our August was I don't remember what our August was to be honest at this time, but I know our September was pretty good.
Speaker #5: And it's starting to pick up now as we transition to this new carrier.
Speaker #1: Okay. Thank you.
That is what I was trying to get. That was the contract. Contracted Revenue was already in hand the pipeline Revenue, they'll be a conversion rate, which, you know, could be significant. But beyond that, you know, there's probably, you know, pre before it even hits that stage and pipeline Revenue. There's a lot of feedback that you're getting right now from partners and partners and right, and I'm just trying to gauge, you know, um, you you've mentioned that it's positive. I'm just trying to gauge, you know what it
Speaker #5: Yep.
Speaker #2: 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.
Speaker #2: Please go ahead.
Speaker #5: 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.
Could mean to that pipeline as it develops, going forward, that that was it. And I think you answered that. Um, and then my last question is, you know, you mentioned a couple of times that there are five more selling months in the year. Just for my own understanding, in terms of the seasonality of your, you know, the selling of these products—are we in a heavier selling period now, in the back half of the year?
Speaker #5: 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.
Speaker #5: Every single day at scale. Every quote our platform generates in minutes instead of weeks. Every carrier we add widen competitive pricing. Every plan we streamline into a single transparent framework.
Speaker #5: That is real money staying in the pockets of businesses and employees who trust us with their healthcare plans. Collectively, our platform has already helped employers avoid hundreds of thousands of dollars in unnecessary costs as we and as we scale into larger employer groups and expand our carrier network.
Speaker #5: 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.
It it will pick up in November and December for the small group for sure. Excuse me, it'll yeah for sure because when the ACA happened, there was a lot of groups that moved because they wanted to get grandfathered in years ago, uh, before January 1st so they would have to pay the price for the ACA plans and everything else. So we have a lot of business in November and December but between now and then it'll be moderate on, uh, the small group, you know, they can change and they do frequently change their, um, or pull themselves out of fully insured, but it isn't as high as it's, you know, July, for example, June and July. Um, August is a down month, but yet we had a, you know, I think our August is, was I, I don't remember what our August was, to be honest with you at this time, but I know our September was pretty good, um, and it's starting to pick up now, as we transition to this new carrier,
Okay, thank you.
Speaker #5: And we have done it with capital discipline every step of the way. We are not asking to take we're not asking you to take our growth story on faith.
Yep.
Speaker #5: 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.
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.
Speaker #5: 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.
Speaker #1: 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.
Slow, opaque, and expensive for employers for decades. And we are doing exactly that every single day at scale.
Speaker #1: You can send your questions to us at ir@healthintech.com. We would like to thank our listeners, shareholders, analysts, and others who have taken the time to listen to our earnings call.
Every quote our platform generates in minutes instead of weeks. Every carrier we add widens competitive pricing. Every plan we've streamlined 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.
Speaker #1: We urge you to refer to our latest SEC filing for any information that you need. This call will be available from our website in the investor section and you will find the link there.
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.
Speaker #1: 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.
This team—uh, this team knows how to execute. We—we have grown this business profitably. We have built and shipped technology that most companies our size couldn't attempt, and we have done it with capital discipline every step of the way.
Speaker #1: Thank you everyone for participating and listening to the call today.
We are not asking to take. 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. Thank you all for your 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.
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 us at IR@healthintech.com.
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 on our website in the investor 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, signing up for our newsletter, and exploring our website at www.health.com.
Thank you, everyone, for participating and listening to the call today.
Thank you all again, this concludes the call, you may. Now disconnect
