Good day, and thank you for standing by. Welcome to the Ethos Technologies Inc. Q1 2026 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Aaron Turner, Vice President of Investor Relations. Please go ahead.

Good afternoon. Welcome everyone to the Ethos Technologies Inc. Q1 2026 Earnings Call. We will be discussing the results announced in our press release issued after the market closed today. With me today are Ethos Technologies Inc. CEO, Peter Colis, and our CFO, Christopher Capozzi. Today's call is being webcast and will also be available for replay on our Investor Relations website investors.ethos.com. A slide presentation that accompanies this call can be viewed in the Events section of our Investor Relations website. During this call, we will make forward-looking statements within the meaning of the federal securities laws, including statements regarding our financial outlook for 2026, our expectations regarding financial and business trends, impacts from go-to-market initiatives, growth strategy and business aspirations, and product initiatives, including future product releases and white label platform arrangements, and the expected benefits of such initiatives. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends. These forward-looking statements are subject to a number of risks and other factors. For a discussion of these risks and other factors, please see the information under forward statements in our financial results press release issued today and our presentation materials, as well as the more detailed discussion in our SEC filings available on our Investor Relations website and on the SEC website at www.sec.gov. Although we believe that the expectations reflected in the forward-looking statements are reasonable, our actual results may differ materially. All forward-looking statements made during this call are on information available to us as of today. We do not assume any obligation to update these statements as a result of new information or future events except as required by law. In addition to U.S. GAAP financials, we will discuss certain non-GAAP financial measures. While the company believes these non-GAAP financial measures provide useful information, the presentation of this information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. A reconciliation to the most directly comparable U.S. GAAP measures is available in the presentation that accompanies this call and can be found on our Investor Relations website. Now let me turn the call over to Peter.

Good afternoon, everyone, and welcome to our first quarter 2026 earnings call. Q1 is our seasonally strongest quarter and this was an exceptional one. We delivered $193 million in revenue, representing 104% year-over-year growth, more than doubling our top line year-over-year. This is on the back of three straight years of over 50% revenue growth. We generated adjusted EBITDA of $34 million and we protected over 88,000 new families, bringing our cumulative total to over 600,000 activated policies to date. We also achieved a Rule of 40 score of 121, a result that reflects both the velocity of our growth and the discipline of our execution. Put simply, this quarter demonstrated that Ethos Technologies Inc. is a business that gets better as it gets bigger. Our goal at Ethos Technologies Inc. is to become the largest provider of life insurance in the world and we built a vertically integrated platform that owns the full consumer journey from marketing and application through underwriting, policy issuance, policy administration, and long-term servicing. That control lets us deliver a level of speed, accessibility, and approval rates that simply do not exist in the legacy life insurance industry. Turning to the business highlights that drove this quarter's performance, in our direct channel, the virtuous data cycle is spinning faster than ever. By continuing to refine every layer of our vertical stack, from initial user experience to our core underwriting algorithms, we have driven meaningful compounding improvements in our conversion rates, and maintained strong unit economics at higher levels of ad spend. Q1's direct revenue growth of 136% reflects that compounding advantage. In our third-party channel, the agencies we added through 2025 are now ramping in a meaningful way. Those newer agencies now represent a double-digit percentage of third-party revenue, and their contributions are accelerating. Revenue in the third-party channel reached $47 million in Q1, representing 42% year-over-year growth, demonstrating that our agency recruitment strategy and onboarding is translating directly to results. On the product front, we saw early indicators of product-market fit for our accumulation indexed universal life insurance product, which continues to exhibit healthy growth in our third-party channel. And we deepened our relationship with Banner Life to launch two new whole life products, a simplified issue whole life and guaranteed issue whole life. These products expand our coverage of the final expense market. We also demonstrated our ability to rapidly launch new products as we went from concept to launching in market in under five months. With these additions, Ethos Technologies Inc. now offers 12 products across six carriers, including multiple term life, multiple whole life, and multiple IUL products. That breadth strengthens our value proposition to both consumers and agents and expands our addressable market, and improves the redundancy of our product portfolio. We also announced our new partnership with Liberty Mutual, one of the most recognized insurance brands in the country. Liberty Mutual will leverage Ethos Technologies Inc.'s proprietary underwriting engine and platform to deliver a digital-first life insurance experience—instant decisions, no medical exams, and just a few simple health questions. When companies with the scale, resources, and brand recognition of Liberty Mutual select Ethos Technologies Inc. as their partner, it speaks directly to the strength of what we have built. And most recently, we became the first life insurance provider to build a dedicated experience directly inside the world's most used AI, ChatGPT. We are focused on removing the friction that people experience throughout the life insurance purchase process and meeting people where they are to initiate that purchase. As more consumers turn to AI to get answers, Ethos Technologies Inc. will be there for them. As we look to the rest of 2026, we remain focused on three durable growth vectors. First, growing our ecosystem by bringing more consumers into our direct channel and recruiting more agents to our platform. Second, enhancing our platform by making agents more productive and increasing our share of their sales. And third, expanding our product portfolio to broaden our addressable market. Every new client improves our risk models, client and agent experience, and the machine learning models that power our advertising spend. Better risk models improve our pricing and unit economics for our clients, our carrier partners, and Ethos Technologies Inc. More scale and underwriting experience allows us to grow our product portfolio and carrier panel. A broader product portfolio enables us to capture more of an agent's sales and recruit different types of agencies. Our unified end-to-end platform captures and analyzes granular data across the consumer and agent journeys. And while the legacy industry is hindered by on-prem technology and manual processes, our vertically integrated digital platform fuels a virtuous data cycle that is spinning faster and faster. With that, I will pass it to Chris for a review of our first quarter 2026 financial results. Thanks, Peter, and good afternoon, everyone. I will begin with a review of our first quarter results, then walk through our outlook for the second quarter and the full year 2026 before opening up for questions.

As Peter noted, Q1 was an exceptional quarter. We more than doubled revenue year-over-year, achieved strong profitability, and raised full-year guidance, all while absorbing a one-time non-cash charge I will walk you through in detail. Before reviewing the details of our results, I would like to remind everyone that some of the financial measures and metrics I will discuss today are presented on a non-GAAP basis, which we believe provides additional insight into our performance. With that in mind, let me walk you through the details behind our results. In the first quarter, we delivered $193 million in revenue, representing 104% growth from the same period last year. In our direct channel, first quarter revenue increased to $146 million, representing 136% year-over-year growth. This performance reflects the compounding advantage of our vertically integrated platform. By continuously refining everything from the initial user experience to our core underwriting algorithms, we have expanded the universe of consumers that we can profitably reach. In the first quarter, we more than doubled our advertising spend versus 2025 while maintaining consistent efficiency, demonstrating that our unit economics scale with our growth. In our third-party channel, first quarter revenue was $47 million, representing 42% year-over-year growth. This growth was driven in part by new agencies onboarded throughout 2025, which accounted for a double-digit percentage of third-party revenue in Q1. Moving to our non-financial metrics, we activated 88,373 policies in the first quarter. The average revenue per policy was $2,185. Our first quarter contribution profit was $59 million, representing a 30% contribution margin. Included in this result is a one-time non-cash charge of $16.5 million related to third-party agent compensation expense, which flows through the sales and marketing line on the income statement. This charge reflects updates to our agent compensation expense and persistency estimates reflecting both maturing cohort experience and the impact of recent operational improvements. As these cohorts matured, and additional observed experience was accumulated, we were able to identify that early-stage policy persistency was better than had originally been projected, and that there were opportunities to increase the precision of our clawback billing and the methodology for estimating clawback events. Together, these factors resulted in lower agent compensation clawbacks and therefore higher agent compensation expense than had originally been projected for policies activated through the company's third-party channel in 2024 and throughout 2025. Collectively, these factors are positive developments for the long-term health of our third-party business. To understand why fewer compensation clawbacks lead to higher compensation expenses, it helps to briefly walk through the mechanics. When a third-party policy is activated, we record the gross compensation paid to the agent as an expense and then estimate and book an offsetting amount representing the portion of that gross compensation that we expect to recover through a clawback of unearned compensation if the policy lapses within the first year. That offsetting amount is carried on the balance sheet as a prepaid asset. As previously disclosed, these estimates and the process for arriving at them involve a degree of judgment and complexity, particularly in our third-party channel, which has scaled rapidly and where our ability to predict agent compensation clawbacks continues to mature alongside our growing cohort history. In this case, the combination of additional observed experience and a series of operational improvements resulted in a lower rate of estimated compensation clawbacks than we had originally projected for these cohorts, requiring a $16.5 million reduction in our prepaid asset balance, which is the source of the one-time non-cash charge. The updated agent compensation expense estimate is embedded in our go-forward guidance. For modeling purposes, we expect blended contribution margins to be in the mid-30% range going forward. Moving to adjusted EBITDA, our first quarter adjusted EBITDA was $34 million, representing a margin and reflecting year-over-year growth, both of which reflect the impact of the $16.5 million charge I discussed earlier. Combined with our 104% revenue growth, this quarter's Rule of 40 score of 121 demonstrates that even in a quarter that included a one-time charge of this magnitude, our underlying platform economics remain exceptionally strong. Regarding stock-based compensation, our Q1 SBC and related taxes were $196 million. Included in this amount, $183 million related to a vesting condition that was satisfied upon the completion of our IPO in January. As of 03/31/2026, our cash, cash equivalents, and investments totaled $224 million, including $33.5 million in net proceeds from the IPO. We ended the quarter with a commission receivable balance of $345 million, up 19% from the prior quarter, representing estimated future cash flows already earned but not yet received. This balance is a direct reflection of the scale and quality of our activated policy base. We view it as an important indicator of the embedded cash generation potential of our platform. Our Q1 cash flow from operating activities was $31 million, representing 189% year-over-year growth. During Q1, we amended the payment terms with one of our carrier partners, which provided a one-time $13.9 million timing benefit to CFOA. Excluding this item, CFOA was approximately $17 million. Now I will walk through our expectations for the second quarter and full fiscal year 2026. Our updated guidance reflects the revised agent compensation expense assumptions that I walked through earlier. The strength of our Q1 performance and our confidence in the trajectory of both channels give us the conviction to raise our full-year revenue and adjusted EBITDA outlook. For the second quarter of 2026, we expect total revenue in the range of $114 million to $118 million. At the midpoint, this represents 31% year-over-year growth. We also expect adjusted EBITDA in the range of $20 million to $22 million. For the full year 2026, we are raising our total revenue guidance and now expect revenue in the range of $561 million to $565 million. At the midpoint, this represents 45% year-over-year growth. We also expect adjusted EBITDA in the range of $103 million to $107 million. In 2026, we are focused on driving sustainable revenue growth by further diversifying our revenue sources through the continued ramp of our new product lines, the strategic expansion of our third-party channel, and the continued market share gains in our direct channel. Our new partnership with Liberty Mutual is an early proof point of a broader opportunity: licensing our proprietary underwriting engine and platform to established brands that want to compete in the digital-first life insurance market. By deepening our brand recognition and leveraging the inherent efficiencies of our vertically integrated platform, we are well positioned to capture significant market opportunity while meeting our profitability targets. With that, I will turn the call over to the operator to begin the Q&A session.

Thank you. We will now open the call for questions. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Our first question comes from the line of Colin Sebastian of Baird. Your line is now open.

Hey, guys. Thanks very much for taking the question. Impressive results in Q1. I was hoping you could unpack a bit more the incremental marketing spend or the unlocks that you were able to find that allowed you to add scale and customer acquisition spend. And I guess, given the Q2 guidance, that implies that maybe you sort of hit the upper limits of that ROAS or maybe there were more seasonality factors that I think Peter you might have mentioned. But if you could go into that, that would be helpful. Thank you. Got it. And maybe one quick follow-up on the average revenue per policy expanding. Was that specifically related to the new accumulation product or is there something broader in the platform that you are seeing?

Hi, Colin. Thanks for the question. It is important to remember that Q1 is one of our strongest seasonal quarters and Q2 one of the less strong ones. I will say that we have set a prudent guidance philosophy. We are still early into Q2, but we have seen continued strength and momentum throughout April and early May into Q2. Generally, when I think about what drove the outsized direct growth, it is more than just marketing innovations and spend unlocks in and of itself. Because we are a vertically integrated end-to-end technology company, we have a lot of real estate to keep optimizing. It could be marketing, but it also could be gains in data infrastructure, the end-to-end conversion funnel, underwriting, pricing, persistency, mortality—all these things eventually influence our unit economics, and then, as you described, our ability to reinvest in incremental spend. So we do not think that we are encountering the upper bounds of spend. In short.

Colin, that is primarily attributed to channel mix. As you note, if you contrast sequential performance Q4 to Q1, you will note that direct mixed up as a percentage of revenue, and that is generally going to be the driver of the increase in ARPU that you are seeing there. We have seen some early signs of product-market fit with that accumulation IUL product that we launched with Salmons back in the fourth quarter, but still too nascent to materially impact ARPU at this point.

Hey, guys. Two questions. Could we talk about the advertising cost in the first quarter, like what the expense was? And then the efficiency that you saw in the DTC channel—what was the key driver of that? I know we had sort of an easy comp from 1Q a year ago when Meta made some of those policy changes. So just walk us through the upside that you saw in DTC—what was the driver of that? And then I have to ask the obligatory ChatGPT question. So we saw the app-within-the-app concept from a couple days ago. Just overall thoughts on what you want to accomplish with this new channel and how important you think it will be to Ethos Technologies Inc. in the future. Thanks a lot.

Hey, Ross. Thanks for the question. I will take the ChatGPT one first. Generally, as the end-to-end digital buying platform, I think we are best positioned in the industry to capture any changes of consumer behavior. At the minimum, I expect large language models will play a bigger and bigger role in consumer research ahead of a purchase, and it could be one day a material source of client origination for us. We do have a sophisticated GEO initiative focused on taking advantage of this. We are excited about the app. We will have to wait and observe how the LLMs' monetization strategy evolves and how they augment the customer experience. What I would point to is historically, including the Meta change that you referenced last year, our data models and our intelligent acquisition engine have an exceptional track record of adapting quickly at the cutting edge of changes in the digital acquisition landscape, so I think we are best prepared for whatever does come at us. Life insurance funnels generally are very complex. We have identity verification, reflexive questioning, third-party data pulls for underwriting—really lengthy funnels where chat may not be the best interface for client engagement. So it is not necessarily intuitive that the entire transactional process will move into LLMs as the default, but we are excited to experiment with this and see where it goes.

Then Ross, in terms of the return on ad spend, we will plan to disclose that going forward on an annual basis. But to help frame up the Q1 performance, I would highlight that our return on ad spend was consistent on both a sequential and year-over-year basis. And as we noted earlier, we were really pleased by our ability to more than double the ad spend on a sequential basis while maintaining unit economics, demonstrating, of course, that we are not only able to scale revenue, but profits as well.

Alright. Thank you. Our next question comes from the line of Eric Sheridan of Goldman Sachs. Your line is now open.

Thanks so much for taking the question. I wanted to know if we can go a little bit deeper in how you are thinking about the product pipeline evolving over the next twelve to eighteen months. What visibility do you have into that pipeline today? How much might be assumed in some of your forward commentary and how much could potentially be upside, dynamic relative to forecast, and what you would expect the receptivity to that pipeline to be against the broader end-demand market? Thank you so much.

Thanks, Eric, for the question. We have a track record of launching around three to four new products per year. The team is hard at work on new products that we are not yet ready to disclose. What I would say is it is important to understand our guidance philosophy. We ascribe very little revenue in our forecast to newer, less-proven products. We like to see it before we put it into the plan. If we look at our last couple of products, accumulation IUL is off to a great start. It is demonstrating early signs of clear product-market fit within a variety of different third-party agencies. Just as a reminder, that is a permanent life insurance product with very compelling investment feature performance and delivering that Ethos Technologies Inc. ten-minute purchase process. And then we also recently launched a cancer insurance product with Aflac. That is still in the early innings of testing and iteration, so it is too early to make a judgment call on its impact. Cancer insurance is typically not sold outside of the workplace in the U.S., but we think it is a really compelling value proposition given the rate of cancer diagnoses. So more to come over the subsequent quarters on the new product front.

I wanted to follow up. I think, Peter, you were just talking about IUL off to a great start, particularly with the third-party partners here and other days with the cancer product. But talk to us a little bit more about IUL in terms of the results so far, what lessons learned you have here so that as newer products launch, you can implement to see continued overall strength. And when it comes to, obviously, direct had a pretty impressive quarter, and I know we talked about channel mix and marketing spend. Any additional insights on perhaps newer channels that you went after this quarter would be helpful.

Great questions. So on IUL, if you take a step back, IUL is the largest subcategory within life insurance. It combines the ability to grow investment returns with tax-deferred properties while also delivering protection for your family. It has been more of a product dedicated to the high-net-worth market, and with Ethos Technologies Inc., we are making it more and more accessible to the mass affluent market, which is really important because there is not only demand from clients, there is demand from agents for this. Whenever we launch a new complicated product like accumulation IUL, there is some period after launch of iteration and testing and refinement and then launching day-two features that are fast follows that are requested from agents. We have been going through all those motions and just watching very clear month-over-month sequential growth with the product. We are happy with the early experience. We are very happy with the agent receptivity. Also worth noting, we have a direct-to-consumer IUL selling initiative that we are excited to roll this product out to as well, which has been a nice growing part of our direct business. On the direct marketing mix, what I would say—we talked about last quarter—is over time, a larger and larger percentage of Ethos Technologies Inc.'s marketing spend has been shifted towards what I call top-of-funnel channels, where clients are not necessarily looking for life insurance, but we are approaching them and presenting the concept of life insurance and showing them that they can buy easily and quickly. These are channels like television, radio, social media, etc. In Q1, we saw a continued trend where more and more of the spend is able to shift into those upper-funnel channels while not compromising on ROAS and efficiency. We love that because it is really showing that it is a scalable model that is not constrained by the implicit number of people who have intent to buy life insurance on a given day. We are able to generate demand. Our teams are hard at work at continuing to improve marketing and open up more channel scale within those large top-of-funnel channels, and then continue to be the winner in all bottom-funnel channels, like search and affiliates.

Hey, guys. Thanks for taking my question. Could you just talk about the big beat in revenue that you had in Q1 relative to the rest of the full-year guidance, which kind of implies a deceleration in revenue growth from here? I hear you that you are not encountering the upper bound in marketing spend, but is there anything else driving a level of deceleration in revenue growth from here? Any sort of pull-forward or macro change or anything to call out there? Got it. Thank you. And can you speak to the Liberty Mutual partnership a little bit more when it comes to licensing your proprietary engine to them? And when does that layer into the model more meaningfully? And given it is such a meaningful carrier, can you just discuss how that impacts the flywheel overall from here? Thank you.

Nothing to call out on the macro front. We are really pleased to see the level of acceleration in both channels here in the first quarter. As Peter noted, the quarter is off to a strong start. We have got a good April behind us here. I think what you are seeing in the go-forward revenue guide is really just us navigating the seasonal deceleration as we transition from the first quarter to the second quarter and of course an appropriate level of prudence in terms of our forward guide.

Mike, great question. We are excited about it. Strategically, this allows us to reach more customers by utilizing Liberty Mutual's brand awareness and trust that they have built up in the marketplace, and it allows them to amortize the technology and the product suite and the incredible life insurance experience that we have built. Even though it is early days, it is contributing nicely. Both of us are excited to keep growing together. I think thematically, Ethos Technologies Inc. simplifies life insurance buying so much that it allows non-life insurance experts like Liberty Mutual to confidently sell the product, knowing that it is going to deliver a great experience. It is going to have high approval rates, great prices. It is going to be fast and easy, so they do not have to worry about disappointing their customers where they have an existing relationship and financial incentive to do well by. Ethos Technologies Inc. uniquely unlocks a lot of potential partnerships like this, and we are excited to keep digitally embedding our experience on other platforms, which we think is a fairly replicable model, and we will seek more partnerships like this in the future.

Hi. Good evening. First question, the change in assumption that resulted in the charge—did that have any effect on revenues, or are you using a different schedule for revenues and, I guess, agent comp? Makes sense. And then the question I had was on the guidance. So I think revenues, roughly speaking, went up—full-year revenue guidance went up by like 9% to 10%. EBITDA went up by 4% to 5%. Is the drag there mostly from this change in assumptions for clawbacks, or are there other parts of the operations, like marketing efficiency overall or just general investments, that are contributing to the drag in EBITDA? Thank you.

Yeah, Pablo, it did have a small effect on revenue this quarter. We did record a small favorable persistency adjustment to revenue. We did not call it out because it was not material—think of it as a low single-digit percentage effect on revenue. But then as you think about that $16.5 million one-time non-cash charge that we alluded to in our prepared remarks, improved early-stage persistency was one of multiple contributing factors to the charge. The largest factor, I would say, was just the absence of substantial experience, which of course we gained over the course of the first quarter and what ultimately informed our decision to update our estimate. Other contributing factors were some of the operational enhancements that I alluded to earlier in my comments specific to how we bill chargebacks to agents, as well as increasing the overall precision of our forecasting methodology now that we have a more substantial base of accumulated experience. That is correct on the EBITDA point. If you were to back out the one-time charge, contribution margins would have been 39%. You back that one-time charge out in the EBITDA line, we would have reported 26% EBITDA. And as we mentioned earlier, as you think about the go-forward run-rate contribution margins, we think mid-30% makes sense there, which reflects a couple of points of erosion due to the change in estimate. That is the go-forward run-rate impact. But otherwise, excluding that charge, incredibly strong margins here in Q1.

Yes. Hi. Just a quick follow-up on the Liberty Mutual deal. Can you comment if there is any exclusivity around this deal or do you think you can strike similar deals with other carriers? Thank you.

That is a great question. There is not exclusivity around this deal.

Thank you. I am showing no further questions at this time. I would now like to turn it back to management for closing remarks.

Great. Thank you all for joining us today, and we will speak with you again next quarter.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.