Health In Tech Inc(HIT) - 2025 Q2 - Quarterly Results

Financial & Operational Highlights Health In Tech reported strong Q2 2025 revenue and Adjusted EBITDA growth, driven by network expansion and increased employee enrollment Q2 2025 Key Performance Indicators (YoY) | Metric | Q2 2025 Value | YoY Growth | | :--- | :--- | :--- | | Total Revenues | $9.3 million | 86% | | Adjusted EBITDA | $1.6 million | 134% | | Distribution Partners | 778 | 87% | | Billed Enrolled Employees | 24,839 | 30% (5,738 increase) | - The company demonstrates strong growth momentum, with first-half 2025 revenues of $17.3 million already representing 89% of the full-year 2024 revenue. Similarly, first-half adjusted EBITDA of $2.8 million is 1.2 times the full-year 2024 figure[5][6] - The company maintained a solid cash position with a balance of $8.1 million as of June 30, 2025[5] Management Commentary Management highlighted strategic network expansion and AI-powered service bundling, alongside disciplined financial management and improved profitability - CEO Tim Johnson emphasized the strategic focus on expanding the distribution network beyond traditional brokers to include TPAs, regional healthcare providers, and small business service platforms[4] - Partners are increasingly using the company's AI-powered platform to bundle healthcare insurance with their existing services, creating integrated solutions for small business employers[4] - CFO Julia Qian noted that first-half pretax income as a percentage of revenue improved by nearly 300 basis points year-over-year, demonstrating effective expense discipline and resource allocation[6] Recent Business Developments Health In Tech established key partnerships with TPAs and brokers to expand market reach and enhance service offerings - The company has formed strategic partnerships to broaden its distribution and service capabilities: - Verdegard Administrators: A TPA owned by MedImpact, aimed at reducing costs for small businesses - Unified Health Plans: A premier TPA in Kansas, providing access to its extensive provider network - HILB Group: A Top 25 U.S. insurance broker, partnering to co-develop and distribute self-funded health benefit solutions - Baily Insurance: An experienced agency and co-founder of Fusion Health Plans, leveraging HIT's platform for faster administration and scalability[11] Financial Statements The unaudited consolidated financial statements for the period ended June 30, 2025, detail the company's financial performance and position Consolidated Statements of Operations This section presents the unaudited consolidated statements of operations, detailing revenues, expenses, and net income for the specified periods Statement of Operations Highlights (Unaudited) | Metric (in millions) | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $9.31 | $5.00 | $17.33 | $10.13 | | Gross Profit | $6.31 | $4.03 | $11.67 | $8.16 | | Income Before Income Tax | $0.83 | $0.40 | $1.52 | $0.59 | | Net Income | $0.63 | $0.34 | $1.13 | $0.44 | - The significant increase in total revenues was primarily driven by 'Revenues from fees', which more than doubled from $3.4 million in Q2 2024 to $7.2 million in Q2 2025[15] - Operating expenses increased from $3.5 million in Q2 2024 to $5.6 million in Q2 2025, mainly due to higher General and Administrative expenses[15] Consolidated Balance Sheets This section presents the unaudited consolidated balance sheets, outlining assets, liabilities, and equity at specific points in time Balance Sheet Highlights (Unaudited) | Metric (in millions) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash | $8.14 | $7.85 | | Total Current Assets | $14.85 | $10.78 | | Total Assets | $22.18 | $15.77 | | Total Liabilities | $5.75 | $2.60 | | Total Stockholders' Equity | $16.42 | $13.17 | - Total assets grew by 40.6% from December 31, 2024, to June 30, 2025, primarily driven by increases in 'Other receivables' and 'Software'[18] - Total liabilities more than doubled, increasing from $2.6 million to $5.75 million, largely due to a significant rise in 'Accounts payable and accrued expenses'[18] Consolidated Statements of Cash Flows This section presents the unaudited consolidated statements of cash flows, summarizing cash inflows and outflows from operating, investing, and financing activities Cash Flow Summary for Six Months Ended June 30 (Unaudited) | Cash Flow (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2.01 | $0.59 | | Net cash used in investing activities | ($1.61) | ($0.23) | | Net cash used in financing activities | ($0.11) | ($0.61) | | Increase (decrease) in cash | $0.29 | ($0.25) | - Cash from operating activities significantly improved in the first half of 2025, driven by higher net income and favorable changes in working capital, particularly accounts payable[20] - Cash used in investing activities increased substantially to $1.6 million in H1 2025 from $0.2 million in H1 2024, reflecting higher investment in software development[20] Non-GAAP Financial Measures Adjusted EBITDA, a non-GAAP measure, clarifies operational performance by excluding specific non-cash and non-operating items - Adjusted EBITDA is defined as net income before net interest expense, taxes, depreciation, amortization, and adjusted to eliminate stock-based compensation expense[27] Adjusted EBITDA Reconciliation (Unaudited, in thousands) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $630.6 | $338.0 | $1,129.2 | $438.5 | | Total Net Adjustments | $938.4 | $331.7 | $1,668.0 | $698.4 | | Adjusted EBITDA | $1,569.0 | $669.7 | $2,797.2 | $1,136.9 | Components of Operating Results Revenues are generated by streamlining processes for TPAs, MGUs, and Brokers, with costs covering platform, technology, and personnel - Revenue is driven by offering solutions that streamline sales and service for TPAs, MGUs, and Brokers. Services from subsidiaries SMR (program services) and ICE (MGU activities) are interdependent and sold as a combined offering[22] - Cost of revenues consists of platform infrastructure costs (hosting), fees for third-party technology, and amortization of capitalized internal-use software[23] - Operating expenses are broken down into: - Sales and marketing: Personnel costs, commissions, and advertising - General and administrative: Executive, finance, legal, and HR personnel costs, plus professional fees - Research and development: Personnel costs for R&D staff and expenses for platform enhancement[24][25][26]