Health In Tech, Inc.

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Health and Tech second quarter 2026 earnings conference call. Currently, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. 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, Ms. Babcock, please proceed.

Thank you, operator, and hello, everyone. Welcome to Health and Tech's second quarter 2026 earnings conference call. Joining us today are Mr. Tim Johnson, Chief Executive Officer, and Ms. Julia Qian, Chief Financial Officer. 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. 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. Private Securities Liquidation Form Act of 1995. These statements are based on information available as of today and involve risks, 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 10-Q for the period ended June 30, 2026, filed with the SEC. Please review the forward-looking and cautionary statement 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. Except as expressly required by the federal securities law, we undertake no obligation to update and expressly disclaim the 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. 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. With that, I now turn the call over to our CEO, Mr. Tim Johnson.

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. Health & 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 drive enterprise value for the company. 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, 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. 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. As we've discussed before, self-funding health plans are estimated to generate around 20% to 30% savings for business employers through actively managing vendors and customizing its health plans. It represents nearly $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. 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, and others. 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. 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, enables the carrier to build its specific underwriting criteria in system, 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. And it is a fundamentally different value proposition than most of what our would-be competitors have brought to the market. I want to spend time here to talk about our Chief Technology Officer. Sri Rajagopalan and the engineering team he has built Sri spent the majority of his career at SAP and IBM, two of the largest enterprise software companies in the world, 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. Under Sri's leadership and through our partnership with Sikkim 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 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. 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. In the second quarter, we grew our distribution partner network to 933 brokers, Third-party administrators and agencies are up nearly 20% 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. Brokers are telling us in real time that this is changing how they work. The adoption curve is the leading indicator for everything else we are going to talk about today. 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 and tech is today. 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 undersells what is actually happening inside the business. And frankly, we believe it paints a limited picture quarter to quarter because of how GAAP revenue recognition and reacts with the way our policies are actually sold and onboarded. Here's 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. 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. 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. 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, 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. 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. 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. I want to be unambiguous. This was not a demand problem. This was a churn problem. and was not a platform problem. It was a timing factor tied to onboarding a new carrier into our platform. 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. This is exactly why we believe contracted revenue and pipeline revenue are metrics that actually help tell you what's happening inside of Health and 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. 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 story really comes into focus. Excuse me. We made a genuine proof point this quarter on our three-year rate stabilization program. 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 program's anticipated launch in the capital markets. 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 types. 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 Hittrix in the second half of this year. This platform is genuinely new because Hittrix 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. and a manual fragmented process that has not meaningfully changed in decades. To put this in context, eDevs, our existing platform, serves the small group market where the process is very different. The small groups market itself is highly concentrated with only a handful of stop loss carriers. Hittrix, conversely, is purposely built for large groups. generally 100 lives on plan and above where the underwriting process is fundamentally different and the marketplace opportunity is much larger. Citrix 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. 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. It is a marketplace distinct from anything we have brought to the platform to date, and we believe it opens up a meaningful new growth avenue for this company. 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. 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 a market opportunity measured in the hundreds of billions of dollars where our 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. 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, 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 account. 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 tradeoff we were willing to make. 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. 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. With that, I will now turn it over to Julia.