Health In Tech (HIT) 2026年第二季度业绩电话会：尽管收入确认时点变动仍重申业绩指引

核心要点

• 2026财年第二季度营收同比下降13.5%至810万美元。 管理层将这一下滑主要归因于在新承保商入驻过程中保单生效日期推迟到了后续季度，而非需求疲软或客户流失。
• 公司重申了2026财年全年营收指引，即4500万至5000万美元，这得到了已签约收入、正在推进的项目管线以及电话会议时剩余5个销售月份的支持。
• Health In Tech报告上半年已签约收入为3230万美元。其中1730万美元已确认，预计1400万美元将在2026财年下半年确认，100万美元将在2027财年确认。
• 截至7月31日，意向管线收入达到6630万美元。其中包括季度末后已签约的190万美元，以及预期转化率为15%至40%的6440万美元。
• 分销网络同比增长19.9%，扩展至933家经纪人、第三方管理者（TPA）和代理机构。管理层预期计划推出的HitRix以及潜在新增的A级评级承保商，将扩大大型雇主群体和经纪公司的接入渠道。
• 随着Health In Tech加大在销售、营销和技术方面的投资，盈利能力有所减弱。第二季度调整后EBITDA为负130万美元，同时公司录得250万美元净亏损。

核心财务数据

2026财年上半年，营收为1680万美元，去年同期为1730万美元。调整后EBITDA为负260万美元，去年同期为正280万美元；净亏损为140万美元（即稀释后每股亏损0.07美元），去年同期净利润为110万美元（即每股收益0.02美元）。

第二季度运营所用现金流从第一季度的330万美元改善至290万美元。截至季度末，总资产为2960万美元，股东权益为1940万美元。

业务与运营业绩

截至第二季度末，Health In Tech拥有933家分销合作伙伴，高于去年同期的778家。公司采用轻资产模式，其内部团队专注于入驻和激活经纪人、第三方管理者（TPA）及代理机构，而非直接向雇主销售。

截至2026年6月30日，平台成单计划价值（PPPV）总计达8400万美元。PPPV代表通过该平台完成的自负额止损计划的合同总价值，包括保费、赔付资金和管理费。该指标并不代表Health In Tech的营收或抽成率。

公司预计在通过用户验收测试后，于业绩电话会议后不久推出HitRix。HitRix面向大型自负额雇主群体，通常是参保人数至少在100人以上的群体。管理层表示，所有933家现有分销合作伙伴都将立即获得使用权限。

HitRix旨在实现理赔数据准备的自动化，将经纪人与多家总承保商（MGU）及承保公司连接起来，提供实时报价对比，并通过“即时购买”功能缩短谈判流程。管理层表示，产品演示获得了积极反馈，但在电话会议召开时，该产品尚未正式发布。

Health In Tech还为其三年期费率稳定计划锁定了首个雇主群体。公司及其计划合作伙伴已对销售团队进行了培训，预计每月将收到大约30份或更多的提交申请，主要来自自治市、县、市及其他政府组织。这仍属于管理层的预期，而非已签约业务量。

管理层业绩指引

Health In Tech重申了其2026财年4500万至5000万美元的营收指引。管理层表示，该前景展望包含了已签约并将在下半年确认的收入、预期的管线转化，以及在剩余5个销售月份内产生的新增业务。

截至7月31日的意向管线中，未签约的6440万美元部分的预期转化率为15%至40%。管理层还预计，随着销售团队增加更多分销合作伙伴，以及HitRix和新增承保能力的落地，管线规模将进一步扩大。

在问答环节中，管理层指出，由于转介合作伙伴在分销中占比增加以及HitRix改变了产品组合，未来的毛利率组合可能在45%至50%左右。随后的一次互动提到了45%至46%，使得更窄范围的指引存在一定模糊性。

管理层预计，与A级评级承保商的合作关系可能会在大约30天内达成，不过时间尚不能保证。首席执行官（CEO）表示，引入A级评级承保商可能会使内部预期提升至少20%至30%，具体取决于时间和销售周期的推进情况。这被视为一种有条件的机会，而非修正后的正式指引。

风险与关注要点

• 2026财年上半年应收账款周转天数从去年同期的20天增加至55天，反映了承保商过渡及相关资产组合转移的影响。
• 在6630万美元的意向管线中，季度末后仅有190万美元签署了合同。剩余管线面临转化风险，且预计转化率区间为15%至40%。
• 由于运营支出增加，公司调整后EBITDA由正转亏。现金及现金等价物也从去年同期的810万美元降至650万美元。
• 能否获得大型经纪公司的业务，部分取决于能否引入A级评级承保商。管理层表示，某些大型经纪商无法与缺乏该评级的承保商开展业务。
• HitRix的采纳率、转化率以及新增承保商的时间节点仍取决于执行情况。
• 收入确认可能落后于保单销售12至36个月，且保单生效日期的变动可能会造成公认会计准则（GAAP）报告收入的季度间波动。

分析师问答要点

分析师关注的重点包括承保商过渡、HitRix采纳情况、营收指引桥接以及管线转化。

管理层解释称，根据公司政策，某些较大的经纪公司要求承保商具备A级评级。因此，Health In Tech正转向能够提供A级评级的承保商，这可能会打开目前处于观望状态的业务渠道。预期的收益主要是前瞻性的，并没有对第二季度营收的具体影响进行量化。

关于HitRix，管理层表示，由于该产品使用相同的平台环境，现有的分销合作伙伴几乎不需要额外的培训。大型雇主群体的销售周期可能需要大约90天，而较小的群体可能会在1天内做出决定。

关于达成全年指引的具体路径，管理层表示，公布的已签约数据和7月份管线数据不包含2026财年最后5个月可能产生的销售额。预计小群体业务将在11月和12月走强，而大群体业务机会则与1月的续约周期挂钩。

管理层还明确指出，使用转介和分销合作伙伴可能会降低毛利率，但可以避免建立庞大的固定成本销售团队。公司认为这是一种权衡，有助于实现更快、更轻资产的分销增长。

业绩电话会议完整文字实录

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完整财报电话会议逐字稿

管理层陈述

Operator

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Health In Tech Second Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, we are recording today's call. [Operator Instructions]

Now I would like to turn the conference over to Ms. Lori Babcock, Chief of Staff for the company. Ms. Babcock, please proceed.

Lori Babcock

Thank you, operator, and hello, everyone. Welcome to Health In 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 10-Q 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 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 June 30, 2026, 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 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.

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 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 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 has 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, third-party administrators and carriers into one secured AI-enabled health insurance platform that's efficient, transparent and ultimately reduces cost through removing frictions. 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. 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, 2 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 Ciklum, 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 and 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 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 In Tech is today.

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. 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-month 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 GAAP 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 the 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 31 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. We made a genuine proof point this quarter on our 3-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 health care costs, often the second largest expense on the P&L for many corporations.

For large enterprises, particularly governmental agencies and municipalities, multiyear budget certainty is well received compared to the potential for unpredictable annual health care 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 HitRix in the second half of this year. 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 and a manual fragmented process that has not meaningfully changed in decades.

To put this in context, eDIYBS, our existing platform, serves the small group market where the process is very different. The small group 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 and the marketplace opportunity is much larger.

HitRix Introduces several first-of-the-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 week-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 In 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 0.1%. We believe the combination of these 4 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 accounts. 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. 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.

Julia Qian

Thank you, Tim, and good afternoon, everyone. I'm going to keep my remarks focused and brief because Tim has already walked you through certain of the consideration around this quarter's number. I want to use my time simply to talk through the figures itself through lenses of the metrics we introduced last quarter, contracted revenue and platform place-to-plan value because those are the numbers we believe quietly holistically reflect on the health of this business.

Contracted revenue means the revenue that is contractually committed under the active policies that simply has not been recognized under GAAP accounting. There are total $32.3 million for the first half of '26. Of that, $17.3 million was already recognized as GAAP 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 in quoting or binding stage or plus the policy contracted single quarter end stood at $66.3 million as of July 31, of which $1.9 million was contracted, the remaining $64.4 million with an expected conversion rate of 15% to 40%.

Now with 5 more months remaining in 2026, the expanded sales team will continue to sell to expand its pipeline revenue through adding more brokers, TPAs and our distribution partner. Together, these numbers, I would encourage you to assess for the future revenue visibility, and they underpin our decision to reaffirm full year 2026 revenue guidance of $45 million to $50 million. That is real forward revenue visibility extend well into next year, and we believe it provides a more extensive picture than just a single quarter top line print can tell you.

Now running to platform placed plan value or PPPV, which represents the aggregate contractual value of the self-funded stop-loss plan placed through our platform, including premium, claim funding and administrative fee. Measure our overall each plan's full contracted term, PPPV stood at $84 million as of June 30, 2026. I want to be clear that PPPV is a measurement of platform transaction value, not indicated our own revenue or take rate.

On reported GAAP 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. As Tim explained, this decrease reflects the timing of the new carrier onboarding that shifted certain policy effective date into the future period, not a change in underlying demand. The onboarding of the new carrier and certain related portfolio transfer between the carrier were designed to provide great options and flexibility to our employer customers.

As a result, the number of accounts receivable day or AR days in the first half of the year was 55 days versus 20 days in the first half of 2025, which is not uncommon to us. We have ample 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 in 2024 and further down 14 accounts receivable days in 2025. So it's a remarkable change in the improvement once the carrier was starting to work with us. We actively manage these financials as well. For the first 6 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. Adjusted EBITDA was negative $1.3 million for the quarter and negative $2.6 million for the first half of the year compared to the positive EBITDA of $1.6 million and $2.8 million, respectively. 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. And the net loss -- for the same period -- compared with the 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. This reflects our continued planned investment in sales, marketing and technology to support long-term growth, 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 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, the sales expanding has 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 $0.9 million, and we capitalized $0.8 million of the software development costs compared to $0.6 million and $0.9 million, respectively, for the same period of last year, reflecting continued investment in our technology platform under Sri's leadership.

Turning to our balance sheet. We ended the quarter with $6.5 million in cash and cash equivalents and $11.8 million in working capital compared to $8.1 million in cash and cash equivalents and $9.5 million in working capital a year ago. 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. Total assets at the quarter end were $29.6 million and total stockholder equity was $19.4 million compared to $22.2 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 GAAP revenue number reflects a timing shift, not a change in the trajectory for the business. And we believe contracted revenue, platform-based 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.

With that, now I turn it back to Lori.

Lori Babcock

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.

Operator

[Operator Instructions] And our first question for today will come from George Sutton with Craig-Hallum.

分析师问答

George Sutton

So Tim, a lot of this confusion on the timing, I think, relates to a stop-loss carrier change you made 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?

Tim Johnson

Sorry, guys, I was on mute. Yes. Good to talk to you, George. 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 the alpha houses, they require to -- under their corporate charter to only write business with A carriers. And we weren't with 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. 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.

George Sutton

And just help us understand the impact of having that A rating and what that might mean broadly for the business opportunity.

Tim Johnson

Yes. I mean, Zain, our Chief Growth Officer, is sitting on the sideline with a lot of business that people want to put with us. 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 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 -- 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. Most effective dates are in January. So we will -- yes, we're going to pick up a lot more business, and I'm trying to not be too direct with that answer. I don't think I'm supposed to be on here.

Julia Qian

Yes. So George, I want to add on a little bit, right, because the small group is really normally people pay less attention of the category of the carrier, which we add on one 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 to give a little bit of background, our software, we talk about HitRix is really real market in the large group. So not only just that we expand dramatically our addressable market, but also that means we can offer the total complete solution, including the small employers and the mid and large employers. So that will dramatically change how our business outlook is when we have a pipeline revenue, we do not even include that part.

George Sutton

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? What do you think that does for the business once it's up and running?

Tim Johnson

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 has pointed out, it's the larger market space. And they can now market to multiple MGUs 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. So all 933 brokers that are on it and TPAs and other access distribution points will have immediate access in the next -- it's supposed to be launched coming up and I'm looking at my calendar in the next 2, 3 weeks.

So that will 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 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.

George Sutton

Okay. And then lastly for me, the 3-year stabilization program, that's something we're very excited about and see great applicability, particularly in municipal governments, for example. Can you just give us a sense of what that pipeline looks like and what the feedback has been since you signed this first customer?

Tim Johnson

Yes. 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. We have trained our sales guys on it. The anticipation in the word is that we'll probably have about 30 submissions a month or more. And these are large, as you can imagine, they are 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. You would know everybody that we're already talking to and they are -- yes, there are 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.

Operator

The next question will come from Allen Klee with Maxim Group.

Allen Klee

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, not having that? Or I'm not sure.

Tim Johnson

Yes, because a lot of our growth in the large and small, I mean, the -- 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. 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. The faster we can get an A carrier on, the sooner we can start picking up more business from those alpha houses.

Allen Klee

Yes. 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 2Q by a certain amount? Or was it more like going forward, it has this opportunity?

Tim Johnson

It's more going forward.

Julia Qian

Yes. So we clearly mentioned on the call because of the adding additional carrier, it's not a demand problem. It's shifting, right? Because now within the new income carriers and the preparation and the old carriers, that's the reason we're reporting even the pipeline revenue to see what is pipeline here. It's a timing shift.

As you know, for the GAAP accounting, it's really based on the amortization upon effective date. When you shift a quarter, some revenue is going to shift a quarter to the next year. It's just the fact even you can sell the mostly you can sell. So that's why we reported the pipeline revenue when we're looking at -- we have 5 more months to continue to sell. So the revenue itself already give people pretty good indication on this year and what the possibility and the range and beyond.

Allen Klee

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 -- towards the end of the year. How do you feel like you're going to be fully able to work on that and be successful?

Tim Johnson

That's a very good question. So I never feel like I have enough time just between us. But this time frame right now, it needs to come out because everybody is starting to market their 1/1 business, 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 6 months ago. I want my tech bill yesterday. I always do. But we're going to by 1/1, we'll have a lot more opportunity running through it because of HitRix. 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 to get into that space because everybody is just now getting their groups out and everybody is starting to look at them, how they run it, what are they doing, and we'll be -- we're hitting it right, just 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 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. It's in drag and drop. We've made it so easy for them to submit the opportunity in the system. Yes, there should be no real training on it, people who are already using it. The new people, it's really quick. We do a lot of demos every day.

Allen Klee

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. And then you said pipeline revenue based on conversion rates could be $3 million to $8 million. So if you add those 2 pieces up, that gets you to $17 million 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 the $45 million. So what is -- is it just new business in addition that, as you mentioned, the pipeline? Or what gets you to the -- from what I just said to your target?

Julia Qian

Yes, that's a great question, Allen. What you're looking at is as of June and the 1 month of the pipeline. That's get us, right? So we have 5 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. And our conversion rate is the range of about 15% to 40%. So when you do the calculation and clearly, we were adding more salespeople with 5 more months to go. These number you provided do not have 5 more months, the sales. The pipeline we built is as of July.

Allen Klee

That makes perfect. That's what I thought. 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 other ways. Is -- so your gross margin this quarter was like 48.7% that 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?

Julia Qian

Yes. So when we offer the plan and work with various partners, inevitably, there will be the compromise of the gross margin. That's trade-off of spending through our distribution partner. But at least I want to point that this is a very asset-light of distribution. We do not have these people on payroll fixed. So it 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 team sell force but through the partner.

And they also, in future, we should be seeing when we have HitRix offering 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% on the gross margin, still pretty healthy considerably for our sectors.

Allen Klee

Okay. So 45% to 46% in the future is what you're thinking? Is that what I heard?

Julia Qian

Yes.

Allen Klee

Okay. Great. And one last question. On the 3-year stabilization, which I'm praying my company will do this next year. That's a side question. If a lot of that's going to municipalities, remind me the government year-end, 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?

Tim Johnson

Yes. Typically, they all run towards the year-end as well. A lot of them are in July. So -- 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. 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. Even if it's in place today, because we're agnostic to the carrier, even the effective date, but really -- even the effective date of their policy, it really works better if you do have it that way. But some of the people we're talking to, it's just math, and we can figure out how to move it around.

Operator

The next question will come from M. Marin with Zacks.

Marla Marin

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. And pipeline has reached the stage where you've already provided a quote or 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?

Julia Qian

Yes, that's absolutely, yes. And I want to remind everybody again, this pipeline revenue 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. So the pipeline revenue means there are the employer plan proposal being quoted, some at different stage of implementation, some in the stage of being reviewed. So this is really representing a huge part of opportunities run through our system.

And obviously, contracted revenue means through the effective date, 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 date of the next either 12 months or 36 months depends on the term of the policy.

Marla Marin

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. 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 touch point. So do you have a sense for what -- how long that process takes?

Julia Qian

I will let Tim to address that question.

Tim Johnson

Yes. So it 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 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 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 all the options are taken away from them. It's just easier for them to pick the cost versus what PBM, what TPA, all these other things.

So the larger groups, yes, 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 that fast.

Marla Marin

Okay. 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. You've touched upon already in your -- 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 would 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 go over the next year or 2 in terms of taking up some of these pipeline and contract figures?

Tim Johnson

I'll let Julia answer that. I'll get myself in trouble.

Julia Qian

Okay. And can you just reaffirm your question again, so I could...

Marla Marin

Yes. So the numbers you 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. 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.

Julia Qian

Yes, that's right. So one thing I want to just reemphasize, the contract revenue is the revenue we already contract from effective date in the last 6 months, right? So it's actual sales. It's not something it's going to sell, will be sold. It is contract is sold. We are collecting revenue for during the 12 months or 36 months.

Yes, with the new anticipated the platform launch and the carrier at 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 build out. As a matter of fact, if you ask me at the end of the August now, the revenue will be dramatically different, improved. Also, there will be some of the pipeline convert to sales and the $66 million on the pipeline, when we do the earnings call, we already have $1.9 million already inked to the contract. So with the sales cycle is about 3 months, it's for the large group, and we can ink the contract earlier, we have effective date in September, maybe October, but the contract already signed.

So those are included in the pipeline because it's not on the financial reporting period, then we were just able to say this is the pipeline $60.6 million and then $1.9 million 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, then we know the range, the lower end is 15%, the high end of 40%. But with all the improvements, that would drive 2 things. One is the pipeline will continue to build. There's 4 months -- 5 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, there 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.

Tim Johnson

Yes. The feedback is from the demos because, again, the product is getting launched here in the next 15, 20 days. If we're talking about HitRix, the 3-year one is already out there, but the HitRix one, 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 brokers' lives easier to do their job, and that's what they like about it.

Marla Marin

That is what I was trying to get at. In other words, the contracted revenue is already in hand. The pipeline revenue, there'll be a conversion rate, which could be significant. 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 -- 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. That was it, and I think you answered that.

And then my last question is, you mentioned a couple of times that there are 5 more selling months in the year. 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?

Tim Johnson

It will pick up in November and December for the small group for sure. Yes, for sure, because when the ACA happened, there was a lot of groups that moved because they wanted to get grandfathered in years ago before January 1, 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 will be moderate on the small group, they can change and they do frequently change or pull themselves out of fully insured, but it isn't as high as it's July, for example, June and July. August is a down month. But yes, we had a -- I think our August was -- I don't remember what our August was, to be honest with this time. But I know our September was pretty good and it's starting to pick up now as we transition to this new carrier.

Operator

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.

Tim Johnson

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. 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 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, that is real money staying in the pockets of businesses and employees who trust us with their health care plans. Collectively, our platform has already helped employers avoid hundreds of thousands of dollars in unnecessary costs and as we scale into larger employer groups and expand our carrier network, that number grows with us.

This team -- 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, 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. 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 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.

Lori Babcock

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 from our website in the Investors 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, sign up to our newsletter and explore our website at www.healthintech.com. Thank you, everyone, for participating and listening to the call today.

Operator

Thank you all again. This concludes the call. You may now disconnect.