By M. Marin
NASDAQ:HIT
READ THE FULL HIT RESEARCH REPORT
Lowering the costs & complexity of securing access to healthcare
Health in Tech (NASDAQ:HIT), an insurtech operating an AI-powered online marketplace platform to facilitate and improve employers’ ability to obtain health insurance, reported strong 2Q25 results this week. We believe the company’s solutions seem particularly timely amid the economic and regulatory uncertainty that could impact employers seeking healthcare solutions for employees, creating a positive tailwind, we believe, as the company continues to offer solutions to lower costs and complexities around securing healthcare. HIT also continues to deepen and broaden its product offering and engage with new and existing customers.
We believe the company’s 2Q25 results reflect its growing traction, as it expands its reach, offering suite and target markets. Revenue grew an impressive 86% year-over-year to $9.3 million, compared to $5.0 million in 2Q24 and ahead of our roughly $8 million forecast. Revenue in just the first half of 2025 equals almost 90% of total full year 2024 revenue. On the higher 2Q25 revenue, pretax income was $0.8 million and the pretax margin was 8.0% compared to $0.4 million and 3.7%, respectively, in 2Q24.
EEs up ~30% y/y as distribution network expands 87%; HIT notes strong adoption across the growing network
The company bills service fees per enrolled employee (EE) on a monthly basis. The number of EEs insured via its platform therefore is considered a critical indicator of growth and market penetration. In 2Q25, the company’s platform had 24,839 EEs billed for various services, up about 30% compared to 2Q24 EEs. The company believes the increase in billed EEs also reflects that HIT is expanding its market reach and seeing strong adoption across its growing network.
HIT’s distribution network has expanded 87% year-over-year to 778 partners, reflecting the company’s strategy to extend the network beyond traditional broker channels, according to management, including partnerships with Third-party Administrators (TPAs), regional healthcare benefit providers and service platforms supporting small businesses, combined with rising adoption. For example, highlights of new business affiliations includes with Verdegard Administrators, Unified Health Plans, Hilb Group, and Baily Insurance. Verdegard Administrators is an integrated TPA that is owned by MedImpact, which is a leading pharmacy benefit manager (PBM). MedImpact manages prescription benefits for more than 20 million members, according to HIT. Hilb Group ranks among the top 25 U.S. insurance brokers, according to Insurance Journal.
The company continues to expand its network and reach. Moreover, despite the recent 87% year-over-year distribution network expansion, HIT believes the size of the market implies significant opportunities to further expand its distribution, reflecting the anticipated benefits of its solutions.
Simplifying and facilitating the process for a broadening target market
HIT’s strategy is to continue to expand its reach and add additional partners to its platforms. Moreover, HIT believes its proprietary technology platform is highly scalable to support a growing customer base, as more businesses seek affordable and risk appropriate healthcare insurance solutions for the employees for organizations of a broad range of sizes. The majority of U.S. firms are characterized as small- to medium-business, which has been HIT’s primary target market.
The company believes the HIT platform can also make it easier for larger organizations to obtain insurance plans that are appropriate for their organizations. HIT is preparing to launch AI-powered solutions for mid-sized and larger businesses later in 2025 and is optimistic about its prospects, based on interest it has generated to-date. Concurrently, it continues to serve and expand offerings and reach for the SME (the small and medium-sized enterprises) market. The U.S. Small Business Association (SBA) notes that in 2022, small businesses with 500 or fewer employees made u 99.9% of all U.S. businesses and 99.7% of firms with paid employees. HIT expects to broaden its total addressable market (TAM) as it provides solutions that enhance efficiencies and streamline healthcare insurance processes for employers regardless of their size.
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