Ethos Technologies Inc. Class A Common Stock 2026 Q2 Earnings Call

Please go ahead. Good afternoon, and welcome everyone to Ethos Technologies' second quarter of fiscal year 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 CEO Peter Colis and our CFO Chris Capozzi. Today's call is being webcast and will also be available for replay on our investor relations website at investors.ethos.com. A slide presentation accompanies this call and 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 potential share repurchases, our financial outlook for the third quarter and fiscal year 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 benefit 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-looking statements and 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 based 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 the U.S. GAAP financials, we will discuss certain non-GAAP financial measures.

While the company believes these non-GAAP financial measures provide useful information for investors, 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. Reconciliation to the most directly comparable U.S. GAAP measures is available in the presentation that accompanies this call, which can be found on our investor relations website. Let me turn the call over to Peter.

Good afternoon, everyone, and welcome to our second quarter 2026 earnings call. Q2 was another exceptional one. We delivered $190 million in revenue, representing 113% year-over-year growth, our second consecutive quarter of over 100% year-over-year growth. We are also on pace for our fourth consecutive year of over 50% annual growth, and our full year 2026 guidance implies accelerating growth for 2026. We generated adjusted EBITDA of $35 million, and we achieved a Rule of 40 score of 132, further demonstrating our ability to generate robust growth and profitability. We protected over 100,000 new families, bringing our cumulative total to over 700,000 activated policies to date. When we started Ethos, it took us 54 months to protect our first 100,000 families. Fast-forward to today. At our current scale, we activated 100,000 new policies in just three months.

As one of the largest volumetric underwriters in the life insurance industry, we continue to amass an ever-increasing data moat that gives our carrier partners and ourselves great confidence in our risk management capabilities. Ethos gets better as it gets bigger. Our goal at Ethos is to become the largest provider of life insurance in the world. 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. We believe that control enables us to deliver a level of speed, accessibility, and approval rates that simply do not exist in the legacy life insurance industry. Our automated data-driven underwriting engine processes hundreds of thousands of data points per application, leveraging pharmaceutical records, medical claims billing data, and more.

The engine applies over a million rules of logic and over 800 adaptive questions to make accurate risk-adjusted pricing decisions in real time. Our 95% instant decisioning rate would be tremendously difficult to achieve without our proprietary engine and the logic IP developed over the previous six years. A sample of these automated underwriting decisions are then audited by the Ethos human underwriting team, and then many of those outcomes are re-audited by our carrier partners' human underwriting teams, providing further validation and optimization of our underwriting engine. Turning to the business highlights that drove this quarter's performance. In our direct channel, the virtuous data cycle of our product and marketing experimentation continues to spin faster and deliver gains. Increased user volumes allowed us to scale experimentation, driving more unit economic improvements, which build on each other quarter after quarter.

We've been able to increase marketing spend on the back of these gains and continue to build our reputation and solidify our position as the leading D2C brand for the industry. This leads to more families protected, more learnings, and increased revenue. Q2's direct revenue growth of 131% reflects that compounding advantage. In our third-party channel, we're seeing continued growth from new and existing agencies, driven by both an increase in the number of agents using the platform and improving agent productivity. Revenue in the third-party channel reached $73 million in Q2, representing 90% year-over-year growth. That makes two sequential quarters of material acceleration. Importantly, this growth is broad-based, coming from wide product adoption across our existing agents and continued recruitment of new ones.

The combination of our agent technology and operating system, our instant transactional experience, and a differentiated product portfolio is what's driving the kind of product market fit that we're seeing within our large market. On the product front, we deepened our relationship with North American Sammons by expanding our Accumulation IUL product to include children, the first time Ethos has ever been able to support juveniles. This was one of the top product requests we received from our distribution network. More importantly, we were able to take what we were hearing from those agents and quickly bring that product to market. Last quarter, we discussed that annuities were a key market we are interested in. This quarter, we began investing in our nascent D2C annuities opportunity.

We are optimizing the client experience, growing our sales team, and expanding our annuity carrier panel, allowing us to broaden our selection and increase conversions. We're still in the early days of this initiative. We do not expect this product to materially contribute to our 2026 results. However, we believe annuities is a massive market opportunity. We're optimistic about its long-term potential for Ethos. I want to briefly touch on the evolving AI landscape. As we look across the broader life insurance market, we view the potential future shift towards agentic commerce as a material tailwind. Because we own a vertically integrated, fully digital technology stack and the leading direct-to-consumer distribution platform, we are uniquely positioned to benefit from AI-driven demand. We're already leaning into this transition, ensuring that our infrastructure integrates seamlessly into the emerging AI ecosystem.

While traditional insurance models must spend heavily to learn and adapt to these new consumer habits, our digital foundation allows us to efficiently capture demand, expand our data moat, and continue taking outsized market share. As we look to the rest of 2026, we are focused on our three durable growth vectors: ecosystem, platform, and product. On ecosystem, we are bringing more consumers into our direct channel and recruiting more agents onto our platform. On platform, we are making our distribution network more productive in capturing more of their sales. On product, we're broadening our portfolio to reach a wider addressable audience. These three reinforce each other. Every new client sharpens our risk model and improves the experience for both clients and agents. Those same models train the machine learning that powers our advertising spend.

More intelligent risk models mean better pricing and unit economics for our clients, our carriers, and for Ethos. That scale and underwriting experience is also what lets us expand our product portfolio and carrier panel. A wider product portfolio helps us win more of an agent's business and recruit new types of agencies. All of it runs through one platform that captures granular data across the entire consumer and agent journey. The legacy industry is still running on on-prem systems and manual processes. We have built a vertically integrated end-to-end technology platform specifically to make this cycle spin, and it keeps spinning faster. This compounding strength gives us the conviction to raise our full year outlook. I'll now turn the call over to Chris to walk you through our Q2 results and the details of our updated guidance.