Aug 13, 2026 earnings call — Carrier timing and HitRix launch
Contracted revenue totaled $32.3 million and pipeline revenue stood at $66.3 million.
Revenue $0.0B (est $0.0B) · EPS $-0.04 (est $-0.03) · Next-quarter revenue outlook $0.0B–$0.1B
Key quotes
"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."
"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."
"We also remain on track to officially launch HitRix in the second half of this year."
Analyst Q&A 3
Stop-loss carrier change impact
Q (George Sutton · Craig-Hallum): He asked why they changed stop-loss carriers and what the outcome would be. He also asked how fast brokers and users will adopt HitRix and about the 3-year stabilization pipeline.
A: They are switching to a carrier that can support an A rating and expect to finish in the next 30 days. Management said an A carrier lets them win more business with large brokers and could bump projections “20% to 30% higher.” HitRix will be launched in the next 2, 3 weeks and give immediate access to the existing 933 brokers; the 3-year stabilization program has a pipeline of large municipal opportunities with about 30 submissions a month or more.
"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." — Tim Johnson (CEO)
Timing, sales prep, and margins
Q (Allen Klee · Maxim Group): He asked whether the lack of an A rating hurt 2Q results or mainly affected future growth. He also asked if the company has time to educate brokers for year-end renewals and about the path to guidance and gross margin outlook.
A: Management said the rating issue is about future growth and timing, not that it directly hurt 2Q results. They called it a timing shift because GAAP revenue is amortized on the effective date and they have 5 more months to sell; they expect pipeline conversion rates of about 15% to 40%. They said using referral partners lowers gross margin but keeps the business asset-light, and gross margin should be in the range of 45% to 50% going forward. They expect HitRix to be useful for January renewals and said demos and training are underway so brokers can use it quickly.
"Yes. So when we offer the plan and work with various partners, inevitably, there will be the compromise of the gross margin." — Julia Qian (CFO)
Pipeline vs contracted and sales timing
Q (Marla Marin · Zacks): She asked how pipeline revenue differs from contracted revenue and whether an A-rated partner would boost pipeline and conversions. She also asked how long the sales cycle is and what feedback they are getting.
A: They said pipeline revenue (reported as of July) is employer plan proposals at various stages and contracted revenue is signed and effective business recognized over 12 or 36 months. Management expects the pipeline to grow with an A carrier and HitRix; they noted the reported pipeline includes about $66 million and already $1.9 million inked to contract. Sales cycles vary: small groups can decide in a day, larger groups are about a 90-day turn, and feedback from demos on HitRix has been very positive.
"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." — Julia Qian (CFO)