Health In Tech (NASDAQ:HIT) reported lower third-quarter revenue and a net loss as carrier onboarding delays, higher service costs and a credit loss provision weighed on results. The company updated its full-year 2026 revenue outlook to approximately $30 million and said it would provide a more detailed 2027 plan after completing a review under new Chief Executive Officer Sanjay Shrestha.
“We are not satisfied with our current revenue performance,” Shrestha said on the earnings call. He said product commercialization and the addition of carrier capacity had taken longer than expected, pushing the financial contribution from several initiatives beyond the company’s original expectations.
Revenue Falls as Credit Provision Weighs on Results
Chief Financial Officer Julia Qian said the nine-month decline was concentrated in premium-based revenue from the company’s ICE underwriting model, which fell to $3.37 million from $5.83 million. Revenue from enrollment-based SMR fees was essentially flat at $20.04 million, compared with $19.99 million a year earlier.
Qian said onboarding a new carrier temporarily slowed business intake and the conversion of quotes into contracts. She said the transition was substantially complete, though reconciliation with the prior carrier remained in progress.
Third-quarter gross margin declined to 46.5% from 60.6% a year earlier. Qian attributed part of the decrease to costs associated with an expanded self-funded plan offering that includes administration and vendor services. She said the company expects gross margin of 45% to 50% in coming quarters.
Operating expenses rose to $11.5 million from $4.7 million, primarily reflecting a $5.3 million provision for credit losses and higher sales and marketing spending. Qian said the provision reflected management’s updated assessment of collectability, including amounts associated with a legacy arrangement, carrier-transition reconciliation and a loan receivable.
The company posted a third-quarter net loss of $7.1 million, or $0.11 per share, compared with net income of $0.5 million, or $0.01 per diluted share, a year earlier. Adjusted EBITDA was negative $3.9 million, versus positive $1 million in the prior-year quarter.
New CEO Targets Pipeline Conversion
Shrestha, who previously served on the company’s board and as a strategic adviser, said his immediate priority is to restart growth in the existing business by improving conversion of quotes into policies. Founder Tim Johnson, now executive chairman, said he will remain focused on long-term strategy, technology innovation and product development.
As of Oct. 30, the platform had approximately $150 million in potential annualized revenue associated with quoting activity for policies expected to take effect in November, December and January, Shrestha said. Roughly 70% was associated with January effective dates.
He emphasized that the pipeline was not contracted or recognized revenue. Conversion depends on factors including underwriting, pricing, carrier capacity and decisions by brokers and employers. Qian cited an expected conversion rate of 3% to 7% for the uncontracted portion of a broader $156.4 million pipeline figure.
Asked about improving that rate, Shrestha said the company needed stronger follow-through and coordination with partners but declined to set a target. Johnson said the company needed to communicate more actively with brokers to understand why opportunities were not becoming sales.
The company ended September with 984 broker, third-party administrator and agency partners, up from 849 a year earlier.
Product Launches and 2027 Planning
Health In Tech is working on three initiatives intended to diversify its business. Its Three-Year Rate Stabilization Program is designed to give self-funded employers greater predictability in health insurance costs. The company has secured an initial client under a medical stop-loss agreement and is working on the associated capital-markets financing.
Management’s goal is to complete the first end-to-end launch by the end of 2026, although Shrestha cautioned that market conditions and the holiday season could affect timing. He said the company is prioritizing getting the first transaction right over speed.
Health In Tech also aims to launch a minimum viable version of HitRix, an AI-powered large-group insurance marketplace, in the first quarter of 2027. Shrestha said during the question-and-answer session that the earliest opportunity for customer and revenue contribution was likely the second quarter. A minimum viable version of HITChain, a platform intended to improve claims administration and payments, is targeted for the second half of 2027.
Shrestha said the company was working to secure an A-rated carrier but did not give a timeline. He also said acquisitions could be evaluated if compelling opportunities arise, although they are not an immediate priority in his first 90 days.
Cash Use Improves
Operating cash use narrowed to $1 million in the third quarter from $2.9 million in the second quarter and $3.3 million in the first. Qian attributed the sequential improvement in part to collections on accounts receivable. The company ended September with $10.1 million in cash and equivalents, compared with $7.7 million at the end of 2025.
Shrestha said the goal is to return to growth in 2027, but he declined to provide a revenue forecast or profitability timeline. The company expects to discuss its operating priorities and progress measures when it reports full-year 2026 results, subject to completing its review.
About Health In Tech (NASDAQ:HIT)
Health In Tech, Inc. is a U.S.-based insurance technology company that provides a digital platform for the self-funded health benefits market. Its technology is designed to connect employers, insurance brokers, third-party administrators and stop-loss carriers through a streamlined process for evaluating and administering health benefit plans. The company’s platform supports functions including plan quoting, comparison and enrollment, with the goal of simplifying interactions among participants in the employer-sponsored health insurance ecosystem.
