Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Health in Tech First Quarter of 2025 Earnings Conference Call. [Operator Instructions] As a reminder, we are recording today's call. [Operator Instructions] Now I will turn the call over to Lori Babcock, Chief of Staff of the company. Ms. Babcock, please proceed.

Thank you, operator, and hello, everyone. Welcome to Health in Tech's First Quarter of 2025 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 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 ending March 31, 2025, 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. 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?

Thanks, Lori. Good afternoon, everyone, and welcome to our first quarter 2025 earnings call. I'm excited to share that Q1 marked a strong start for 2025. We achieved $8 million in revenue, reflecting 56% year-over-year growth, and generated $0.7 million in income before income tax, a 257% increase compared to the same period last year. The number of enrolled employees on our platforms also rose to 24,307, up from 20,802 in Q1 2024. This performance underscores the strength of our platforms, the effectiveness of our strategic initiatives and the accelerating demand for our innovative self-funded healthcare solutions. One of the most pivotal developments this quarter was the continued advancement of our AI-backed underwriting capabilities within the eDIYBS platform, designed to support mid-to large-sized businesses with over 150 employees. Since initiating beta development of our large-group AI-backed underwriting solution in November '24, we've seen strong interest from the market. Even in its early stages, we successfully delivered solutions to large employers, including employers with over 1,000 employees. We're on track for a full-scale rollout in Q3, making a major step forward in expanding our market reach. This launch will not only elevate our technology and product offerings, it positions us to capture an entirely new segment of the self-funded market that often lacks comparable technology solutions. By bringing greater speed, intelligence and automation to underwriting at scale, we seek to unlock powerful new revenue opportunities and substantially increase our total addressable market in 2025 and beyond. In Q1, we also announced our strategic collaboration with DialCare, a leading provider of telehealth and virtual care solutions. Through this collaboration, DialCare's virtual primary care, therapy and psychiatric services will be integrated into Health In Tech's self-funded health plan offerings. Members across the U.S. will gain on-demand access to licensed physicians, therapists and psychiatric…

Thanks, Tim. Good afternoon, everyone. We kicked off '25 with strong momentum. I'd like to highlight two areas where the company truly excelled. First, we accelerated revenue growth to 56% year-over-year, driven by rising market demand and the continued strength of our platform. Second, we delivered $0.7 million in pre-tax income, representing a 257% increase, more than 3.5 times of the last year. This performance highlights the scalability of our model, the efficiency of our cost structure and our ability to drive meaningful profitability as we grow. Now, let's look at our first quarter financial results. Driven by strong demand for our new product offerings, and encouraging early results from beta testing with mid- to large-sized employers, total revenue for first quarter reached $8 million, up 56% year-over-year. This growth was fueled in partially by a 17% increase in total billable enrolled employees from our employee customers. The enrolled employees were 24,307, 3,505 employees more than last year same period, which was 20,802. Revenue from underwriting model grew 31.8% to $2.3 million, while program fee revenue surged 69.5% to $5.7 million. Fee-based revenue continues to outpace underwriting revenue as more employers prioritize higher-quality coverage and enhanced service offerings. This shift reflects a growing willingness among our clients to invest in programs that deliver stronger medical networks, richer benefits and improved employee experiences. Gross profit reached $5.3 million, translating to a strong gross margin of 66.8%. We expect to maintain the margins at this level, supported by our strategic pivot to a channel distribution model. By partnering with established distribution networks, we're expanding our market reach efficiently, without a corresponding rise in marketing costs. This approach positions us for a scalable, sustainable and cost-effective way to grow. Total operating expenses for first quarter were $4.9 million, an increase of $1.1 million…

Thank you. [Operator Instructions] And your first question of the day will come from M Marin with Zacks.

So obviously we saw significant growth in the first quarter, including in the number of enrolled employees. Should we think about that stat in terms of any seasonality there as you continue to grow?

Yes, this is Tim. This is a good question. January 1 is typically our best month. There's a lot of business that comes through. A lot of groups renew their health insurance on 01/01 as they renew their financial year. So yes, it does pick up on January, but the percentage increase is what we're noting, or trying to note. That percentage increase, if we maintain those percentage increases month over month this year, it'll be significantly better than last year.

Okay, great, thank you. And then one other question: Can you give us a little bit more color on how you're thinking about your market, your target market, in terms of how you're segmenting that market? Now that you're looking at potentially providing solutions for employers with 1,000 or more employees, are those types of employers traditionally ones that have not been able to offer self-funded benefits plans in the past?

No, good question. Our purpose for expanding beyond 150 enrolled employees from that 150 to 1,000 and beyond is purely from a convenience -- I was trying to note in here -- it's a little challenging because it's a short presentation, but I was trying to note that there really has been no significant increase or improvement in our market space on how we do business with each other. The technology that we're bringing is allowing brokers and underwriters to communicate way more efficiently, way more quick. In other words, it's all within one system. You don't lose e-mails, you don't lose any of this. And the technology that we're bringing allows for more -- I want to say data, or excuse me, AI, but it's more of some machine learning, some data parsing tools, to the table, that are going to help improve the speed and everything between the two as they communicate back and forth. It's a dramatic shift in that process.

Just one little bit, right? So it's still in the beta test, and we see there is encouraging results, and we're looking at the space, approximately will be 70% to 80% time reduction. Traditionally, those groups take about two to three months, and the way our system, and it's still in the test -- development testing stage, that already we can see 70% or 80% improvement in terms of efficiency.

[Operator Instructions] And your next question today will come from Allen Klee with Maxim Group.

When you split your revenues up from underwriting and from fees, could you just explain a little of the difference between the two, what's driving each one? Thank you.

Yes. Hi, Allen, happy to address the question. So our platform, the basic structure of our platform, there are two things. One is as a program manager, we create healthcare plans, program plans, for the small business owner employers. And then the other role is the underwriter for the insurance company. We earn revenue as a percentage of premiums from the premium we underwrite for the insurance company. And when employers choose the healthcare plan, we also earn the program fee. And then a different fee associated with the different program network and benefits is much more tailored, where employer can choose from. So these are the two features combined together for the small business from five employees to 150. We bundled together, sell it within about two minutes. The same thing for the larger employer. So when you look at our revenue, every sale, we earn the underwriting fee; we also earn the program fee revenue. When we look at the recent change where our employer is much more focused on the program, they have a little bit more fees, so they have a willingness to pay more for the employees to increase their benefits, which implies they're a better company, where they want to spend more for the better of the healthcare plan for the employees.

Thank you. Could you talk a little bit about just the health of the self-employed market of -- bigger picture. Do you think there's a trend moving toward it, or are there any other changes that are affecting the attractiveness of being self-employed?

Being self-employed, or self-funded? I'm sorry, Allen.

I'm sorry, what?

Did you say self-employed or self-funded?

Self-funded is what I meant, although I said the other.

Okay. All right, no, just want to make sure I got the question right. Yes, most of the larger groups in the country are self-funded today. They take advantage of a lot of proprietary programs that they can build and put in. They have a lot of flexibility with the program if they go self-funded. If they stay fully insured, they don't have a lot of flexibility at all. They get a -- basically they have to do whatever the carrier tells them to. So there's not -- I would say that groups of -- above 150, I don't, off the top of my head, know what the market space of that is, but I would bet that it's over 90% of every company with 150 lives or more on plan are already self-funded.

But aren't there management teams that are concerned about taking the risk, some of the loss risk?

There is, but what we do is we mitigate the risk -- everybody has a different risk appetite. You're exactly right. But we mitigate it through the use of different layers of coverage limits within the policy, so they don't have to take a lot. They can ease into it. So if they're -- let's say they're 200 lives, and they haven't been self-funded before. We'll use what's called a smaller specific deductible and we'll manage the claims within that and let them see year-over-year how they can take advantage of that. Because they're doing one of two things: They're either putting their own money in their claim bucket or they're paying premium, and you never get your premium back. So if you do better, the premium's gone. So we try to implement a lot of health management programs and -- to improve the health of the group so that they can retain that money. And next year maybe they want to take a higher specific deductible and pay less in premium so that they can retain more of the profit in the program.

Yes, Allen, we are the platform company. We don't take the risk, right? So what we do is we create the program and then we help the employers to manage their expenses, exposure, really looking at, is the market compared with fully insured versus self-insured, self-funded, and they look at total cost as one bucket. And also through the direct contracts, through a lot of the cost containment, with the program we create for the carrier, which will benefit to the employer as well. Those -- that's why -- explains why we also have much more fees generate, because we -- those are the fees we have programs to benefit the employer, help them to manage their cost. Meantime, we also have the carrier to manage their loss as well, if that's profitability [indiscernible], so there's always a way, when we're looking at how we can be using the technology to help the both sides as a platform, bring the transparency as well.

Thank you. When you talked about your AI-powered underwriting platform, that's in beta now and you hope to roll it out in the third quarter, would that be different on a pricing basis versus what you sell today?

It will not be. What our new system's going to be doing, Allen, is we're just improving the entire process with this, okay? So what Julie was referring to earlier where a normal submission, if you will, from a broker to an underwriter, trying to get them to quote the business, all the data comes in an e-mail in different formats and different everything -- Excel, PDFs. I mean, you name it, they just throw it all together in an e-mail. What we're going to do -- we're not necessarily changing the pricing. An underwriter is going to look at it, just like they do today. We, through our system, automatically parses out all that data and lays it up for the underwriters so that it's very quick, it's very efficient, it's in the format that they want to see it in already once they get it. So all they've got to do now is just their job of underwriting, versus trying to make heads or tails out of all this data that comes through in an e-mail. Does that make sense?

Yes. So the idea is that you'd be able to grow your market because it'll -- the value it has to your customers.

Exactly. The brokers don't want to mess with -- the underwriters don't want to mess with this, and they do it every month when they have a group that renews. Now, the system does it for them. It's going to alleviate a lot of work on both sides.

Okay, great. I heard you say how -- when you were talking about gross margins that you're also looking to -- I'm going to forget what you said -- distributors, perhaps, to use, but could you talk about what that actually means?

So Allen, that is the channel partners. So we have channel partners where they -- it's a part of critical program -- the partners, they bring the distribution; they also bring the customers, so that's why we don't really spend a lot on the sales and marketing. You can see our top line growth and our sales and marketing remain flat and probably even have a slight reduction. So that is just an effective way for us to reach out to the different parts of broker and the distribution more effectively.

Okay, thank you. My last question: You talked about your collaboration with DialCare where -- maybe I'm wrong -- it sounded like you're doing something a little different in this offering, or maybe you're not. Could you explain how this compares to what you've been doing -- what your standard offering is?

Yes. We were using them as a good example of some of the people that we're partnering with. They have a proprietary health program out in the marketplace where people will pay a flat fee for specific services and the hospital -- excuse me, the physicians that are in that program accept a flat fee, and they could -- you can use it all you want. So those particular programs that are in the marketplace, where that one specifically is growing around the country, we like to partner with people like that, because when you get a program where you know what the cost already is going in and the services that you're going to receive, it's easier for us to do the underwriting and budget accordingly. And DialCare is a great partner of ours. We're just getting started with them. We hope to do a lot of business with them.

Thank you. Seeing no more questions in the queue, let me turn the call back to Mr. Johnson for closing remarks.

Thank you, operator, and thank all of you. I appreciate everyone joining the call today. If anyone has any follow-up questions, please do not hesitate to reach out to us. We appreciate your interest and look forward to keeping the dialogue open. Thanks, everyone.

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