Health In Tech, Inc. (HIT) Q1 2026 Earnings Report, Transcript and Summary

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Health In Tech First Quarter 2026 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 for the company. Ms. Babcock, please go ahead.

Thank you, operator, and hello, everyone. Welcome to Health In Tech's First Quarter 2026 Earnings Conference Call. Joining us today are Mr. Tim Johnson, Chief Executive Officer; Mr. Zain Hasan, Chief Growth 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 ended March 31, 2026, 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. Except as expressly required by the federal securities laws, 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 will now turn the call over to our CEO, Mr. Tim Johnson.

Thank you, Lori, and good afternoon, everybody. We appreciate you joining us today. Before discussing the quarter, I want to take a step back and frame how we are thinking about 2026. As we discussed during last quarter's call, we are operating within a massive opaque self-funded stop-loss insurance market. According to industry estimates, as of 2025, roughly 80% of large businesses had adopted self-funded health plans, while only about 27 of medium -- 27% of medium and small businesses had. Self-funded health care plans allow businesses to manage their costs better with a lot of flexibility. However, the complexity has made the implementation nearly unrealistic for many businesses. Our AI-powered solutions remove barriers and make it simple and easy. The self-funded health care market represents nearly $1 trillion stop-loss insurance premium a year, and the total number of insurance brokers exceeds 1 million according to industry estimates. In comparison, today, just about 900 distribution partners consisting primarily of insurance brokers drive the sale of self-funded plans and stop-loss policies through Health In Tech. Our modern information technology, in other words, our penetration of the broker pool remains well below 1/10 of 1%, which highlights the significant runway potential ahead, especially given the substantial benefits that our platform aims to deliver convenience, customization, cost effectiveness, clarity and condensed time to quote. 2025 was a year in which we demonstrated that our model could scale meaningfully and achieve strong profitability. And our plan is for 2026 to be a year of deliberate investment in sales, distribution and technology development to build our roster of distribution partners, expand our market presence, enhance our technology for new features, deliver new solutions and accelerate long-term revenue growth. In March 2026, we completed a private investment in public equity, of PIPE, which was -- which brought us approximately $7 million in gross proceeds that will, in part, support our growth initiatives. To be clear, this capital raise was not driven by an immediate need for working capital in our view as our business remains strong from a fundamental balance sheet perspective. Rather, we identified an opportunity to broaden our shareholder base with new institutional investors through a modestly sized raise that limited dilution and provided incremental fuel for growth. We intend to prudently deploy this new capital across several targeted areas, including expanding our sales distribution network, adding new carrier partners to our platform, enhancing our technology architecture and AI development, and advancing our service offerings and product development. First, expanding sales distribution. Our business scales through distribution with brokers serving as primary channel through which employers access self-funded health plans on eDIYBS, our innovative AI-powered marketplace. In 2026, we are increasing our investment in sales and marketing to expand our broker network, deepen engagement and build a more proactive, scalable go-to-market strategy. Historically, much of our growth has been driven organically by word of mouth and through our relatively small in-house sales team. Going forward, we plan to build our sales team and complement their efforts with more structured outreach, marketing initiatives and direct engagement within the broker community. Our Chief Growth Officer, Zain Hasan, has more than 15 years of experience in the employee benefits and insurance industry. He is a 5-time founder and a former Chief Executive Officer, who has successfully built and exited multiple companies. He brings a proven background in scaling revenue, leading both organic and inorganic growth initiatives, executing strategic acquisitions and driving disciplined well -- disciplined value creation. We will expand on growth efforts in a bit later in the call. We believe these investments are critical to capturing a larger share of a huge market in which our current penetration remains very low despite the compelling value-added benefits of our platform. Second, new carrier partners. On the other side of the platform, we will be focused on increasing the number of diversity of participating insurance carriers. I want to spend a moment explaining why adding carriers is important. Today, our platform generates bindable execution-ready quotes for employer groups through rapid underwriting that is based on carrier-specific risk criteria. While our technology significantly improves the speed, consistency and efficiency in the underwriting process, overall pricing to the employer reflects a combination of factors across the value chain, such as carriers' risk assessment, changes of underlying employees, health conditions, claims expense and administrative costs. Cost variability for the employer at renewal generally boils down to the carrier's underwriting criteria and risk assessment, which can fluctuate based on changes in claims experience or shifts in carriers' risk appetite. These fluctuations can lead to less competitive pricing or limited options for the employer renewal, even if the broker and the employer are otherwise delighted with our platform. By expanding our carrier network, we can provide brokers with greater underwriting perspectives for the same employer group, increasing the likelihood of finding a competitive and suitable option within our platform at renewal. In practical terms, more carriers means more choice for brokers, better alignment with employer needs and ultimately, a higher probability of successful placement, which we believe will drive greater platform utilization, enhanced employer stickiness and stronger revenue growth for Health In Tech. Third, Health In Tech's next-generation technology architecture and AI development. Sri Rajagopalan, our Chief Technology Officer, has spent the majority of his career at SAP and IBM, two of the world's leading enterprise software companies, where he held senior leadership roles in enterprise architecture and large-scale platform engineering. His experience spans global mission-critical systems, serving complex enterprise clients across multiple industries. As we expand our AI-enabled underwriting and benefits administration platforms, Sri will strengthen our core technology foundation, enhancing scalability, data intelligence, cybersecurity and operational resilience. Under Sri's leadership, we announced in March 2026, we engaged Ciklum, an Amazon Web-based service advanced tier service partner to expand both the front and back-end functionality of our technology platform. Our partnership with Ciklum is off to a strong start. Together, we are implementing a more integrated technology environment while streamlining data infrastructure and reporting processes. We expect to achieve enhanced platform capabilities, administrative functions that can aid our expansion into larger employer markets, improved integration of front and back-end workflows, consolidating quoting, underwriting, administration and analytics into a unified platform; and lastly, an advanced data and operational reporting capabilities to deliver deeper insights and improve decision-making for brokers. Third-party administrators, TPAs managing general underwriters, carriers and employer end-to-end clients. Fourth, advancing services and product development. To begin, I'm pleased to highlight that starting in January, we expanded our service scope with the launch of our enhanced self-funded plan administration offering. This new model delivers pre-configured end-to-end self-funded health benefit solutions that bundle plan design, administration and stop-loss coverage into a single streamlined framework. With years of experience, we have developed a comprehensive suite of more than 100 designed customized plans, and these are curated, bundled and directly supported by a network of specialized administrative vendors, enabling us to deliver consistent, high-quality solutions while maintaining flexibility to meet specific employer needs. This also reflects an evolution in how we engage with vendors. Historically, vendors primarily access our platform as independent participants while our role was focused on providing infrastructure and selecting appropriate vendors. We are now moving toward a more integrated and actively managed model where we curate, bundle and manage the vendors that compromise a self-funded health plan as part of a broader end-to-end solution. As of March 2026, these pre-configured options address the majority of employer use cases and can be rapidly deployed, significantly reducing plan design and administrative complexity. For our distribution partners, this translates into a more effective sales process. By taking a more hands-on approach to vendor management, we gain greater visibility into vendor performance, allowing us to continuously evaluate, refine and improve the quality of our network. Over time, we believe this will help us build a best-in-class vendor ecosystem, strengthen platform differentiation and support higher conversion and retention across our marketplace. In addition to expanding our service model, we recently rolled out a significant update to our eDIYBS platform, designed to make the quoting, underwriting and communication process faster, more transparent and more efficient for brokers. This update includes a refreshed platform interface, improved workflow design, enhanced census insights, expanded large group quoting functionality, improved underwriting status visibility, automated experience data parsing, AI-driven risk insights and broker to underwriter messaging directly within the platform. These enhancements are important because they directly address many of the friction points that have historically slowed down the self-funded quoting and underwriting process. For example, our enhanced census insights capability helps brokers identify data, quality and completeness issues before submission, which can reduce back and forth and help minimize underwriting delays. While our platform already supports large group quoting, the latest enhancements improve the workflow around larger and more complex cases, including better handling of census data, experience data and underwriting communication. We have also introduced broker to underwrite messaging. This keeps communications, files and updates tied directly to each opportunity rather than scattered across disconnected e-mail threads. Early feedback from the brokers has been very positive, particularly around the new messaging feature and overall workflow improvements. Brokers have responded well to having communications, files and updates tied directly to each opportunity rather than manage through disconnected e-mail chains. We are also hearing positive feedback on the RFP or request for proposal and document upload automation functions, with brokers noting that the process goes smoother, requires less feed back and forth and reduces manual steps. While the enhanced census insight tool continues to be well received, the strongest reaction so far has been around the broader efficiency improvements across the platform. Brokers are noticing the impact immediately in their day-to-day workflow, which we view as an encouraging sign for adoption and continued platform engagement. Overall, these updates reflect our broader strategy of continuously enhancing the eDIYBS platform to reduce manual work, improve visibility and support faster, more accurate quoting and underwriting outcomes. We believe these capabilities will further strengthen broker adoption, improve partner productivity and support scalability within our marketplace. Among new offerings currently under development, we're making significant progress with our 3-year rate stabilization program. We expect to complete market testing of this program late in the second quarter into the third quarter of 2026. This program is designed to address pricing volatility and provide greater cost predictability for employer groups, which we believe is a key differentiator in the market. Governmental agencies and municipalities, among many others stand out as a logical candidate for our 3-year rate stabilization program. In addition, in the second quarter of '26, we anticipate commencing initial beta testing of a new data-driven solution that integrates psychological data and claims data to generate actionable value insights for partners in our ecosystem and business employer end-to-end clients. I'm incredibly excited about the growth journey in front of us. We are addressing a vast market opportunity in self-funded health insurance with a comprehensive strategy to expand our ecosystem and democratize self-funded health insurance for all employers regardless of size. Based on our current operating momentum and growing pipeline, we are reiterating our guidance for full year 2026 revenue of between $45 million and $50 million, representing approximately 35% to 50% year-over-year growth. Before Julia reviews our first quarter financial results, I'll turn it over to Zain, who will provide some additional data -- additional detail on how we are scaling our sales and distribution strategy.

Thank you, Tim. From a sales perspective, one of our largest opportunities remains in a significant largely untapped broker and TPA distribution market, where many potential partners have yet to actively engage with our platform. We make it extremely easy for brokers and TPAs to join and onboard onto our platform, which they use at no cost. Unlike traditional models that rely on building large in-house sales teams, we leverage a capital-light partner-driven distribution strategy. In 2025 and with a relatively small in-house sales team of 6 professionals, we delivered $33 million in revenue. With the additional capital raised through our PIPE financing, we plan to further invest in and selectively expand our in-house sales team and broaden distribution partners to support continued growth. Importantly, our in-house sales team is primarily focused on onboarding and activating distribution partners rather than directly selling into employer accounts, which allows us to scale efficiently without significant fixed cost expansion. This efficiency is driven by our approach, which is empowering distribution partners with technology that significantly reduces their cost of doing business. By replacing a manual e-mail-driven process with a fully digitized and streamlined workflow, we save brokers a substantial amount of time and improve their ability to serve clients. In addition, adding more carriers and building an AI-driven solution to automate the length of manual processes continue to gain traction. As we continue to expand our technological capabilities, we intend to become the go-to marketplace for brokers to come to and offer a one-stop shop for the entire renewal process of a self-funded health plan. Scaling our expanded capabilities in the large employer accounts would increase our average contract value of a client, while bringing in additional carriers should improve close rates and renewal rates. At the same time, we are investing in analytics capabilities that provide brokers with greater visibility into their quoting pipeline, including win-loss trends, response times and actionable opportunities. This represents a meaningful shift toward a more data-driven sales management. While the industry has historically been relationship-driven, we see a significant opportunity to scale beyond that through more structured engagement. Our go-to-market strategy focuses on increasing direct broker engagement through conferences, through targeted outreach and brand awareness initiatives, creating a flywheel that drives more platform usage and increases deals per sales rep. We're working on building relationships whereby our tech stack becomes the infrastructure layer for how employee benefit brokers and TPAs serve their self-funded clients, a new strategy for distribution that we are very optimistic about. We'll be active at key industry conferences where our target buyers are concentrated using those as catalysts for executive level engagement and pipeline generation. Overall, while we are still early in this process, we are encouraged by the consistency we are seeing and we believe we are building a durable, scalable distribution engine that can support long-term growth without requiring linear headcount expansion. I'll now turn it over to Julia.

Thank you, Zain, and good afternoon, everybody. I appreciate you joining us today. Before we move on, I'd like to highlight an important update on how we present our business metrics, which we believe better reflects the underlying growth and the visibility of our platform. We are introducing a new KPIs, key performance indicator. I will first touch on contracted revenue, which represents contractually committed revenue under active policies. As a measurement day, this is expected to be recognized in future periods. Our policies are typically written for terms of 12 months. And under GAAP accounting, the reported revenue is recognized over the lifetime of the policy. For example, if a new employee is on board and have a policy effect on February 1, 2026, under 12 months policy, we recognize the revenue from the contract months from February '26 through January 2027. In this scenario, where only 2 months of revenue are recognized in the first quarter '26 reporting period, the remaining 10 months of the contractual committed revenue will be recognized in the 9 remaining months of '26 and 1 month in '27. By reporting contracted revenue, we are providing investors and shareholders with a greater transparency and visibility into the future revenue that is already locked in. That is contractually secured, but not yet recognized. We believe these changes align our disclosure more closely with how we manage the business internally and provides investors with a useful metric to evaluate the future revenue visibility. As of March 31, our contracted revenue for the remaining 3 quarters of this year total will be around $22.9 million. In addition to contract revenue, we are now disclosing platform placed plan value or PPPV. PPPV represents the aggregate contractual value of self-funded health plan with stop-loss insurance that is self-funded stop-loss plans placed through the company's platform that covering the duration of the plan's contractual term. The contracted term is typical 12 months from the plan's effective date. In the first quarter of 2026, our platform placed $82 million self-funded stop-loss plans. Platform placed value reflects the full value of the active policies facilitated through our platform, including the premium claims fund and administrative fees. We believe that PPPV provides a consistent comparable measurement of total ecosystem value flow through our platform. As our business continue to scale, particularly with expansion into larger employee groups and a more complex plan structure, we expect platform place value to increase with a faster rate, reflecting great deep of engagement in higher-value relationship. Historically, we have disclosed enrolled employees as the operating metric. Enrolled employee represents individual or family covered under company, the self-funded group plan. After carefully consideration, we have decided to discontinue this metric as we believe platform-based value and the contractual revenue better represent our business as the carriers in our platform offer 4 type of coverages: employees only, employees plus spouse, employee plus children and family. So then we have different plans, bronze, silver, gold and platinum. When previously calculated our new -- our now discontinued enrolled employee metric, a single individual employee versus a family, including employee as well as their spouse and children could each become as one enrolled employee. Although the difference of the cost and the premium between these 2 can be 3x or 4x difference. Furthermore, the employee can choose bronze will offer a lower monthly premium and a higher deductible cost, versus the platinum offer higher premium and the lowest deductible. These 2 enrolled employees will have dramatically different premium. Moreover, employers enrolled employee count can change during the period due to the factors such as resignation, layoff, new hire family situation change, birth and death. Even we continue -- when we continue to expand our business into a large size of the employees and grow our footprint aggressively. We believe the enrolled employee metric could not fully present complexity and the dynamic of underlying business. Move on. As Tim mentioned, we intend for this to be a year of target investment as we scale our distribution network, expand our product capability and position the company for the long-term growth. As a result, certain financial metrics in the near term reflect this intentional investment pace. Let me talk about the revenue. For the first quarter '26, the total revenue was $8.8 million, representing approximately 9% growth year-over-year. As of March, we estimate $31.7 million in revenue will be reported in the full year '26 fiscal year. With $8.8 million reporting first quarter and $22.9 million will be recognized in the report in the remaining of '26. This estimate figure is represented before monthly adjustment. So as to recognize the revenue for the remaining 2026 may differ slightly. While growth in the quarter was more moderate compared to the prior periods, this reflects the current stage of the scaling of the business rather than any change in underlying demand or platform scalability. At this stage, revenue growth is more close tied to the expansion of our distribution network, the ramping up of the broker activity and the conversion of the pipeline opportunity in which we are actively investing in during '26. Turning to profitability. Adjusted EBITDA for the first quarter was negative $1.3 million compared to positive $1.2 million in the prior year period. The net loss was $1.6 million compared to the net income of $0.5 million in the prior period. This reflects our planned increase in the investment across key growth initiatives, particularly in sales and marketing and product development. Turning to the operating expenses. Total operating expenses for the quarter was $6.7 million, approximately 76% of the revenue compared to $4.9 million or 41% of the revenue in the prior year. The breakdown here give you further detail. Sales and marketing expenses were $2.3 million, representing approximately 26% of the revenue. The investment was doubled compared to $1.1 million or 14% of the revenue of the prior year '25. This increase reflects our deliberate investment in expanding our sales distribution footprint, as Zain explained, including the broker marketing and building out a more scalable go-to-market infrastructure so we can really tap on the massive broker ecosystem. General and administrative expenses were $3.5 million, representing approximately 39% of the revenue compared to $3.2 million or 41% of revenue in the prior year. This increase primarily reflects we continue to build a stronger team, and we did manage lower percentage of the revenue to be more scalable when we grow. Research and development expenses were $0.9 million, representing approximately 10% of the revenue compared to $0.5 million or 7% of revenue in the prior year. This increase reflects continued investment in our technology capability and the new products initiative, including data-driven solutions as well as ongoing enhancement to our underwriting and workflow platform. In addition to these expenses in R&D investment, we capitalized approximately $0.6 million of the software development during the first quarter. Thus approximately $1.5 million was spent related to tech, out of which $0.6 million was reflected to developing new feature and new solution compared to $1.4 million and $0.9 million, respectively, in prior year. Overall, the increase in operating expenses reflected a purposeful shift in capital allocation towards growth initiatives. We are investing ahead of the revenue to expand distribution, enhance our product capabilities and position the company to capture a large share of the significant market opportunity. Importantly, we expect this elevated level of investment to continue throughout '26 as we execute on our strategy to scale the business and build a more robust growth engine. Turning to our cash balance. We ended the quarter with $10.3 million in cash and cash equivalents, reflecting the proceed from our recent private financing. We continue to maintain a disciplined approach to capital allocation with a focus on investing in the areas that we believe will deliver long-term growth and shareholder value. In summary, we continue to scale distribution, increase platform adoption and expand our product offering, we expect to drive high growth and improve operating leverage over time. We remain confident in the long-term trajectory of the business and our ability to scale to execute on our growth strategy. With that, now I turn it back to the operator for Q&A.

[Operator Instructions] The first question comes from George Sutton with Craig-Hallum.

And Zain, I'm excited to have you on the call. I wondered if you could walk through some of these key expansion areas, expanding sales, broadening the marketing activities, developing the new marketplace and enhancing the tech architecture. Can you just give us a picture of the progress that you're seeing? You had mentioned broker feedback that you've received thus far. I just wondered if you can go into more detail on those things.

Yes, sure. And I appreciate the kind remarks. So essentially, it's just a matter of -- like Tim mentioned, we penetrated a very, very small portion of the overall broker market. And so we've hired -- our intention to hire 2 to 3 sales reps that will focus on outbound and then to just drive overall marketing message that allows brokers to have a better understanding of what we do. And if we increase the brokers that have visibility into our platform, we've gotten a lot of positive feedback, and we're very optimistic that, that will lead to the growth.

So you mentioned you've rolled out this 100 pre-configured plan, set of options. And I know that greatly increases the simplicity versus the complexity of the traditional platforms. Can you just walk through with us kind of how that's working in the market thus far?

Sure. So I mean just taking a step back for brokers, as they're looking at fully insured health plans or the health plans that we provide through self-funded, a lot of the brokers have a hard time with self-funded health plans through our platform, though it makes it extremely easy. And the pre-configured health plans is -- it's a proven playbook for the health insurance world, where you have package plans that make it easier for the brokers to be able to evaluate those rates against whatever their employers' renewal is.

So Tim, our discussions with industry folks, there's a lot of potential excitement around your 3-year rate stabilization plan. I know that's coming later in the year. I wondered if you could just address kind of the progress you've made there. Are you indeed seeing the kind of potential demand that we're hearing about? And Julia, I wondered if you could just give us any sense if anything is built in for the back half of the year from that 3-year plan.

Yes. Thanks, George. Thanks for the question. As far as the demand, we're starting to see a lot of potential coming through. We have modified the program to where it's agnostic to really the carriers. We've changed some things in the plan to make it more open for -- more open so that we can give a financial presentation or proposal to just about anybody who is self-funded now. So it's even getting spread more broad. We are really just now getting out there. I mean, understanding self-funded health plans, they look 3 months, the larger groups do. They look 3 to 6 months out. So we're seeing a lot of people take a look at it. We're starting to give our proposals on those groups now. I hope that we have one. We think we have one. But until the ink is read on the paper, I will tell you that we are anticipating at least one in the second quarter.

Yes. So George, from the financial perspective on our forecast, we're very conservative. We were thinking about only start from the fourth quarter, we will be able to generate some sort of the sales because large group, usually, they purchase this type of plan in the end of the year. But we continue to make progress and the couple of quotes looks like we'll be able to get that done in the second quarter. But as Tim said, before we make the ink, we do not know and very sure by the time we will make the press release and announce to the market. So as we continue, just to reiterate, it still is a test, still getting a lot of traction. That's why we continue to refine the program based on the feedback.

I Understand. Tim, I assume these are done electronically, so there really isn't any ink involved, but maybe I'm naive.

Yes. Good point. Yes.

The next question comes from Allen Klee with Maxim Group.

Could you expand a little on your new metric of platform place land value of $82 million? How does that -- and that's over -- you said something about the next 12 months. How does that correlate to revenue? Is all that you guys capture? Or how do we think about that?

Allen, yes, it's a great question. So when our platform facilitate place the self-funded plan, you think about self-funded, one is the plan, the other stop loss all combined. So we bundle that together. And then our revenue is just the sum of the portion of that value. When we're looking at the planned placement, every contract is 12 months and our revenue -- contracted revenue will be recognized over the 12-month period of time. Even we did $82 million, you can see our revenue, we report $8.8 million for the first quarter, the remaining $22.9 million and totaled $31.6 million. So it's really the revenue mechanism because of GAAP accounting that's spread out. And however, when we wrote and facilitated those plans through the platform is for 12 months. So these give everybody a much better understanding of the flows and the plans and the revenue.

So does that mean if you have a plan on the books today, but it was actually written 6 months ago, in this number, you're including the 12-month value, not the 6 months left. Is that what you mean?

Yes. For instance, the January, just -- and I made the example, February, for instance, the February plan we wrote, our revenue will be recognized from the February to next year January over the month. In the first quarter, you will only have 2 months of revenue. However, we also -- we also reported the remaining revenue based on the contract will be recognized for the year, which is $22.9 million. So people kind of will have a much better idea. Even today, we report first quarter is $8.8 million, but we know $22.9 million will be reported in the remaining of the year. So you're adding on is $32 million. So that does give much, much better visibility in terms of revenue.

Okay. In terms of the 3-year rate plan, what happens if your underwriting performance is poor and it maxes out and you have to use the excess of loss insurance policy. It's maintained at or what impact -- what then happens for the remaining 2 years? And it also seems to me like if you're testing it at the end of 2Q and early 3Q, and it's going to take people a while to understand it, you may have some risk of missing this year's renewal season? Or how do you think about that?

The renewal season typically isn't -- in large group, most of the renewals happen, whether it's July or January. There's obviously exceptions to that. But January is the biggest date of the year by far. So we are testing it now so that we're ready to start the quoting. As I said, the demand is picking up. The brokers are looking right now at these kind of options. You can't finalize anything, but they'll give you a submission and they want you to quote it and start looking at it so that by the time the end of the year comes around, they've tested it, they've had all their questions. And finally, when all the data comes in and we can quote it to get a final, they're ready to have the entire conversation with the clients. So does that help answer your question?

Yes. It just -- it seemed like at the end of last year, you had some good products, but there wasn't -- it took longer for the brokers to figure out the new plan. So I was just afraid that might happen again. But let me -- one last question. It's on expenses for the quarter. Can you kind of give us an idea of how much the costs were associated with your Davos conference in 1Q? And also, how much of costs in 1Q were more like first -- like just things associated with the beginning of the year, maybe the audit and different things like that, that maybe are not recurring going forward?

That was approximately cost us about $200,000 and approximately, they are about $100,000, cost will probably will not carry forward going forward. If we look at the -- just operating expenses perspective for the quarter.

The next question comes from M. Marin with Zacks.

So I'm curious, I was wondering if we could get a little bit more color on the 3-year rate stabilization feature because obviously, that seems like it would be very attractive to employers, brokers, et cetera. Is that -- first of all, in terms of what you're seeing right now in terms of the level of interest, is it fair to think that there may be interest right now, but that would be a more extended sales cycle than what you've seen with prior plans that you've been selling traditionally?

Zain, do you want me to handle that one?

I can or you can. So I have no problem.

Go ahead.

Okay. Yes. So I appreciate the question. I mean yes, it's fair to say these are targeted towards larger employers. So there -- and there's typically a longer sales cycle of getting the employers and brokers comfortable and educated with the process. And yes, we are seeing a lot of -- really a lot of interest in the program. But it is also what was mentioned earlier where we iterated and got to the point where we're now carrier agnostic and being able to offer that to both new business and renewal opportunities makes it where we feel like there's a tremendous opportunity. It's a hard market and the stop-loss overall industry. And this is a very unique time to be able to have a program like a 3-year rate stabilization that we can offer.

And just in terms of the housekeeping, how would that work in terms of what kind of an upfront would we expect to see you place on your books? And then I'm guessing the mechanics of how you would recognize revenue would be similar to what Julia was describing before.

Yes, I can address the question about the revenue, Marin. So we recognize the revenue monthly from effective date. So even at the 3 years. And if we -- when we have a 3-year program, when we report contractual revenue, we are pointing out that beyond a 3-year program, means people will know the revenue will come in next 36 months. And when we do earnings, which are called GAAP accounting revenue were based on every month from the effective date. So nothing changes just like the 1-year program. We recognize every month, we service the client every month, revenue get reported. However, we give more visibility about what is the remaining longevity of the program, how much revenue we would earn recognized in future.

Yes. But I guess what I'm also trying to get at is, given that it would be -- obviously, the benefit to you would be the extended visibility and the benefit to the purchaser of the plan would be the locked-in rates. Would you -- because it's going to be a business line over 3 years versus 1 for the typical plan, would you require some sort of an upfront deposit that would be different from your normal approach to taking on new business or taking on a new plan with an existing customer?

No, we don't require upfront.

We don't...

Sorry.

We don't require an upfront deposit. Through the underwriting process, we float that across all 3 years. So you may have like -- yes, so if your first year would have been $10, we're going to float the overall increase and expand it across the 3 years. So your first year may be a little more, but you -- all things being equal, your third year would be less, but at least you could budget to those numbers.

Got it. Okay. And then switching topics, one final question on the analytics, which I think could be extremely interesting. You talked specifically about specific things that you think the analytics could be applied to, but it seems to me that there could be a lot of opportunity to take data analytics and package the data in such a way that it could really potentially extend beyond the target market that you originally described.

Yes. You're reading my mind. That's exactly what we're thinking.

Okay. So this is the right way to think about it is that this is your first step, but then there could be significant extension behind that once you've gotten in place with the first...

Significant.

The first one. Okay, great.

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

Sure. Thank you, operator, and thank you all. I appreciate everyone joining the call today. If anyone has any further questions, please do not hesitate to reach out to us. We appreciate your interest and look forward to keeping the dialogue open. Thanks, everybody. Have a good day.

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