Q1 2026 Earnings Conference Call

2026 Earnings Conference Call

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Q&A Conference Code: 10208973

Good day, ladies and gentlemen. Thank you for standing by, and welcome

to the Health In Tech first quarter 2026 earnings conference call. Currently, all participants are in 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 will turn the call over to Lori Babcock, Chief of Staff for the

company, Ms. Babcock, please proceed.

Lori Babcock - Chief of Staff

Thank you, operator, and hello, everyone. Welcome to Health In Tech's

first quarter 2026 earnings conference call. Joining us today are Mr. Tim Johnson, Chief Executive Officer, Mr. Zain Hasan, Chief Growth

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 10-Q, to be 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 Litigation Reform 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 March

31, 2026, to be filed with the SEC. 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.

Except as expressly required by the federal securities laws, 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 will now turn the call over to our CEO, Mr. Tim Johnson.

Thank you, Lori, and good afternoon, everyone. We appreciate you joining

Before discussing the quarter, I want to take a step back and frame

how we are thinking about 2026.

As we discussed during last quarter's call, we are operating

within a massive, opaque self-funded stop loss insurance market. According to industry estimates, as of 2025, roughly 80% of large businesses

had adopted self-funded healthcare plans, while only about 27% of medium and small businesses had. Self-funded healthcare plans allow

businesses to manage their costs better with a lot of flexibility. However, the complexity has made implementation nearly unrealistic

for many businesses. Our AI-powered solutions remove barriers and make it simple and easy.

The self-funded healthcare market represents nearly a one trillion-dollar

stop loss insurance premium a year, and the total number of insurance brokers exceeds one million according to industry estimates.

In comparison, today just about 900 distribution partners-consisting

primarily of insurance brokers-drive the sale of self-funded plans and stop-loss policies placed through Health In Tech's

modern technology platform. In other words, our penetration of the broker pool remains well below one-tenth of one percent, which highlights

the significant runway potential ahead, especially given the substantial benefits that our platform aims to deliver: convenience, customization,

cost-effectiveness, clarity, and condensed time to quote.

2025 was a year in which we demonstrated that our model could scale

meaningfully and achieve strong profitability, and our plan is for 2026 to be a year of deliberate investment in sales distribution and

technology development to build our roster of distribution partners, expand our market presence, enhance our technology for new features,

deliver new solutions, and accelerate long-term revenue growth.

In March 2026, we completed a private investment in public equity (PIPE),

which brought us approximately $7 million in gross proceeds that will, in part, support our growth initiatives. To be clear, this capital

raise was not driven by an immediate need for working capital in our view as our business remains strong from a fundamental balance sheet

perspective. Rather, we identified an opportunity to broaden our shareholder base with new institutional investors through a modestly

sized raise that limited dilution and provided incremental fuel for growth.

We intend to prudently deploy this new capital across several targeted

areas, including expanding our sales distribution network, adding new carrier partners to our platform, enhancing our technology architecture

and AI development, and advancing our service offerings and product development.

First, expanding sales distribution.

Our business scales through distribution, with brokers serving as the

primary channel through which employers access self-funded health plans on eDYIBS, our innovative AI-powered marketplace.

In 2026, we are increasing our investment in sales and marketing to

expand our broker network, deepen engagement, and build a more proactive and scalable go-to-market strategy. Historically, much of our

growth has been driven organically by "word of mouth" and through our relatively small in-house sales team. Going forward,

we plan to build our sales team and complement their efforts with more structured outreach, marketing initiatives, and direct engagement

within the broader broker community. Our Chief Growth Officer, Zain Hasan, has more than 15 years of experience in the employee benefits

and insurance industry, he is a five-time founder and former Chief Executive Officer who has successfully built and exited multiple companies.

He brings a proven background in scaling revenue, leading both organic and inorganic growth initiatives, executing strategic acquisitions,

and driving disciplined value creation. He will expand on growth efforts a bit later in the call.

We believe these investments are critical to capturing a larger share

of a huge market, in which our current penetration remains very low despite the compelling value-added benefits of our platform.

Second, adding new carrier partners.

On the other side of our platform, we will be focused on increasing

the number and diversity of participating insurance carriers.

I want to spend a moment explaining why adding carriers is important.

Today, our platform generates bindable, execution-ready quotes for employer groups through rapid underwriting that is based on carrier-specific

risk criteria. While our technology significantly improves the speed, consistency, and efficiency of the underwriting process, overall

pricing to the employer reflects a combination of factors across the value chain, such as carrier's risk assessment, the changes

of underlying employees health condition, claims expense and administrative costs.

Cost variability for the employer at renewal generally boils down to

the carrier's underwriting criteria and risk assessment, which can fluctuate based on changes in claims experience or shifts in

the carrier's risk appetite. These fluctuations can lead to less competitive pricing or limited options for the employer at renewal,

even if the broker and employer are otherwise delighted with our platform.

By expanding our carrier network, we can provide brokers with greater

underwriting perspectives for the same employer group, increasing the likelihood of finding a competitive and suitable option within our

platform at renewal.

In practical terms, "more carriers" means more choice for

brokers, better alignment with employer needs, and ultimately a higher probability of successful placement, which we believe will drive

greater platform utilization, enhanced employer "stickiness,", and stronger revenue growth for Health In Tech.

Third, Health In Tech's next-generation technology architecture

and AI development. Sri Rajagopalan, our Chief Technology Officer has spent the majority of his career at SAP and IBM, two of the

world's leading enterprise software companies, where he held senior leadership roles in enterprise architecture and large-scale platform

engineering. His experience spans global, mission-critical systems serving complex enterprise clients across multiple industries. As we

expand our AI-enabled underwriting and benefits administration platform, Sri will strengthen our core technology foundation-enhancing

scalability, data intelligence, cybersecurity, and operational resilience.

Under Sri's leadership, we announced in March 2026, we engaged

Ciklum, an Amazon Web Service Advanced Tier Service Partner, to expand both the front- and back-end functionality of our technology platform.